ARLINGTON, Va., April 30 /PRNewswire-FirstCall/ — CACI International Inc , a leading professional services and information technology solutions provider to the federal government, announced results today for its third fiscal quarter and nine months ended March 31, 2008. CACI provides innovative solutions to meet America’s needs in national defense, intelligence, homeland security, and the transformation of government, and is a leading strategic consolidator in its market space.
Third Quarter Results
For the third quarter of Fiscal Year 2008 (FY08), we reported record revenue of $634.2 million, up 34.1 percent over third quarter of Fiscal Year 2007 (FY07) revenue of $473.1 million. The increase during the quarter was driven by both organic and acquired revenue. Operating income for the quarter was $43.5 million, up 26.1 percent, compared with operating income of $34.5 million in the year earlier quarter. The operating margin was 6.9 percent compared with 7.3 percent in the third quarter of FY07. The change in the operating margin was primarily due to continued strong growth in subcontractor content integral to the solutions we deliver to our clients. Income before taxes for the quarter was $36.7 million, 24.3 percent higher than what was reported in the third quarter of FY07. Our tax rate increased to 39.3 percent from 37.6 percent in the year earlier quarter. Net income for the third quarter was $22.3 million, 20.9 percent higher than the $18.4 million reported in the third quarter of FY07. Diluted earnings per share were $0.73, a 24.1 percent increase over the $0.59 reported in the year earlier quarter. Operating cash flow in the quarter increased to $62.8 million from $50.3 million in the year earlier quarter. Days sales outstanding at the end of the quarter were 67, the same as at the end of the third quarter of FY07. Earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure, were $55.8 million in the quarter, an increase of 26.4 percent over EBITDA of $44.2 million in the third quarter of FY07. The EBITDA margin, a non-GAAP measure, was 8.8 percent compared with 9.3 percent in the year earlier quarter.
Third Quarter Highlights
Major highlights and accomplishments during the third quarter of FY08 include:
— Contract awards with an estimated value of $897 million. The awards in
the quarter include:
— Four awards, with a total estimated value of $93 million, won
through our Strategic Services Sourcing (S3) contract vehicle with
the U.S. Army: a four-year, $26.8 million contract to continue
engineering support for the C4ISR On-The-Move Product Management
Office, which enables us to help assess emerging technologies for
the Army’s Future Combat System; $30.6 million in new work added to
our contract with the Army’s Project Manager, Force XXI Battle
Command Brigade and Below, which expands the technical and
professional services we provide for Army command and control
systems; and two two-year awards, valued at $36 million, with the
Army’s Night Vision & Electronic Sensors Directorate, including a
recompete award with the directorate’s Science and Technology
Division, and a new contract for supporting advanced technology
sensor programs. With these awards, CACI has now won approximately
$1.2 billion in task orders since receiving the S3 contract in March
of 2006.
— A four-year indefinite delivery/indefinite quantity contract with an
estimated value of $82.8 million to continue providing professional
services for the Department of Navy Chief Information Officer (DON
CIO). CACI has been serving the DON CIO information management and
technology activities in this capacity since 1998.
— A five-year blanket purchase agreement with an estimated $54.8
million value to support the Defense Medical Logistics Standard
Support-Defense Logistics Agency program. This new award continues
our growth as a provider of healthcare logistics solutions for the
Department of Defense.
— A five-year, $49 million prime contract from the U.S. Navy’s Space
and Naval Warfare Systems Center (SPAWAR) in Charleston, SC to help
the Navy provide operational support to the Federal Bureau of
Investigation (FBI). This new award is the first prime contract
SPAWAR has awarded to CACI’s Charleston operations, substantially
increasing the scope and value of our SPAWAR business in Charleston
as well as our support for the FBI.
— Contract awards for the first nine months of FY08 with an estimated
total value of $2.3 billion, equal to the awards received during the
first nine months of FY07.
— Contract funding orders totaling $706 million, a 22 percent increase
over the third quarter of FY07. Contract funding orders for the first
nine months of FY08 totaled $1.9 billion, an increase of 12 percent
over the $1.7 billion received in the first nine months of FY07.
— Intelligence Community revenue 71 percent higher than the third quarter
of FY07, representing 36 percent of our revenue for the quarter. Over
4,000 CACI employees, or approximately 34 percent of our workforce,
hold Top Secret or higher security clearances.
— Recognition of CACI as a recipient of the “Best Overall Government
Contractor Ethics Program” rating from the Ethisphere Institute,
placing 3rd among the 100 largest government contractors. This is
strong confirmation of CACI’s solid commitment to the highest ethical
standards.
— Recognition of CACI as the 2nd Most Admired IT Services Company, as
well as the 2nd Most Admired Virginia Company in Fortune magazine’s
Most Admired Companies listing. These rankings demonstrate our
continued focus on making CACI the best workplace for talented people
to build a fulfilling career.
— Election of CACI Executive Chairman Dr. J.P. (Jack) London to the U.S.
Naval Institute Board of Directors, reflecting his outstanding lifetime
contributions in both defense and business leadership.
— Federal 100 recognition of CACI President and CEO Paul Cofoni by
Federal Computer Week, honoring his record as an industry leader who
has made a positive impact on federal information technology practices.
CEO Commentary
Commenting on the company’s financial results, Paul Cofoni, CACI’s President and CEO, said, “We are extremely pleased with CACI’s solid third- quarter performance. Our record revenue was fueled by both acquisitions and strong 20 percent organic growth. The performance of our four recent acquisitions in intelligence and security services exceeded our expectations and contributed to 71 percent growth in our intelligence business over the third quarter of fiscal 2007. We believe there will continue to be priority funding in national defense, intelligence, and government transformation. These national priorities are CACI’s priorities. We remain focused on expanding the value-added solutions we provide our clients in countering global terrorism and improving government services. CACI’s continuing progress in meeting long-term growth goals positions us well for the remainder of this fiscal year and throughout fiscal 2009.”
First Nine Months FY08 Results
For the first nine months of FY08, we reported record revenue of $1.77 billion, up 24.5 percent over the first nine months of FY07 revenue of $1.42 billion. Operating income in the first nine months of FY08 was $116.5 million, up 7.9 percent over $108.0 million reported in the first nine months of FY07. The operating margin was 6.6 percent for the first three quarters of FY08 compared with 7.6 percent for the same period in FY07. The effective tax rate for the first nine months of FY08 was 38.9 percent versus 36.9 percent for the same period of FY07. Net income for the first nine months of FY08 was $59.8 million, 3.6 percent higher than net income of $57.7 million for the first nine months of FY07. Diluted earnings per share were $1.96, a 6.3 percent increase over the $1.84 reported in the year earlier period. Operating cash flow for the first nine months of FY08 was $78.6 million compared with $120.7 million for the similar period in FY07. EBITDA was $151.9 million for the first nine months, an increase of 10.7 percent over the $137.2 million realized for the first nine months of FY07. The EBITDA margin for the first three quarters of FY08 was 8.6 percent compared to 9.7 percent for the same period of FY07.
CACI Revises its FY08 Guidance
We are revising our FY08 annual guidance, summarized in the table below:
(In millions except for earnings per share) Fiscal Year 2008
Revenue $2,375 - $2,425
Net income $81.0 - $84.1
Diluted earnings per share $2.65 - $2.75
Diluted weighted average shares 30.6
This guidance represents our views as of April 30, 2008. Investors are reminded that actual results may differ from these estimates for the reasons described below and in our filings with the Securities and Exchange Commission.
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time Thursday, May 1st, during which members of our senior management will be making a brief presentation focusing on third quarter results and operating trends followed by a question-and-answer session. You can listen to the conference call and view the accompanying exhibits over the Internet by logging on to our homepage, , at the scheduled time, or you may dial 1-877-719-9799 and enter the confirmation code 5383048. A replay of the call will also be available over the Internet beginning at 1:00 PM Eastern Time Thursday, May 1st, and can be accessed through our homepage () by clicking on the CACI Investor Info button.
About CACI
CACI International Inc provides the professional services and IT solutions needed to prevail in today’s defense, intelligence, homeland security and federal civilian government arenas. We deliver enterprise IT and network services; data, information, and knowledge management services; business system solutions; logistics and material readiness; C4ISR integration services; information assurance, information operations, and cyber security services; integrated security and intelligence solutions; and program management and SETA support services. CACI services and solutions help our federal clients provide for national security, improve communications and collaboration, secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. We add value to our clients’ operations, increase their skills and capabilities, and enhance their missions. CACI is a member of the Fortune 1000 Largest Companies of 2007 and the Russell 2000 index. CACI provides dynamic careers for approximately 11,800 employees working in over 120 offices in the U.S. and Europe. CACI is the IT provider for a networked world. Visit CACI on the web at .
There are statements made herein which do not address historical facts and, therefore could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: the accretiveness of the Dragon Development Corporation and Athena Innovative Solutions, Inc. transactions to our earnings; regional and national economic conditions in the United States and the United Kingdom, including conditions that result from terrorist activities or war; changes in interest rates; currency fluctuations; failure to achieve contract awards in connection with recompetes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. government or other public sector projects, based on a change in spending patterns, or in the event of a priority need for funds, such as homeland security, the war on terrorism or rebuilding Iraq; government contract procurement (such as bid protest, small business set asides, etc.) and termination risks; the results of government investigations into allegations of improper actions related to the provision of services in support of U.S. military operations in Iraq; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, (iii) competition for task orders under Government Wide Acquisition Contracts (”GWACs”) and/or schedule contracts with the General Services Administration; and (iv) accounting for convertible debt instruments; our own ability to achieve the objectives of near term or long range business plans; and other risks described in the company’s Securities and Exchange Commission filings.
For investor information contact:
David Dragics, Senior Vice President, Investor Relations
866-606-3471,
For other information contact:
Jody Brown, Executive Vice President, Public Relations
(703) 841-7801,
Selected Financial Data
CACI International Inc
Condensed Consolidated Statements of Operations (Unaudited)
(Amounts in thousands, except per share amounts)
Quarter Ended
03/31/2008 03/31/2007 % Change
Revenue $634,157 $473,055 34.1%
Costs of revenue
Direct costs 424,946 307,688 38.1%
Indirect costs and selling expenses 153,406 121,201 26.6%
Depreciation and amortization 12,334 9,687 27.3%
Total costs of revenue 590,686 438,576 34.7%
Operating income 43,471 34,479 26.1%
Interest expense and other, net 6,751 4,934 36.8%
Income before income taxes 36,720 29,545 24.3%
Income taxes 14,428 11,103 29.9%
Net income $22,292 $18,442 20.9%
Basic earnings per share $0.74 $0.60 23.9%
Diluted earnings per share $0.73 $0.59 24.1%
Weighted average shares used in per
share computations:
Basic 30,076 30,835
Diluted 30,587 31,410
Nine Months Ended
03/31/2008 03/31/2007 % Change
Revenue $1,765,521 $1,417,587 24.5%
Costs of revenue
Direct costs 1,183,771 919,879 28.7%
Indirect costs and selling expenses 429,898 360,482 19.3%
Depreciation and amortization 35,389 29,247 21.0%
Total costs of revenue 1,649,058 1,309,608 25.9%
Operating income 116,463 107,979 7.9%
Interest expense and other, net 18,641 16,505 12.9%
Income before income taxes 97,822 91,474 6.9%
Income taxes 38,048 33,766 12.7%
Net income $59,774 $57,708 3.6%
Basic earnings per share $1.99 $1.88 5.9%
Diluted earnings per share $1.96 $1.84 6.3%
Weighted average shares used in per
share computations:
Basic 30,034 30,719
Diluted 30,562 31,376
Statement of Operations Data (Unaudited)
Quarter Ended
03/31/2008 03/31/2007
Operating income margin 6.9% 7.3%
Tax rate 39.3% 37.6%
Net income margin 3.5% 3.9%
EBITDA* $55,805 $44,166
EBITDA margin* 8.8% 9.3%
Nine Months Ended
03/31/2008 03/31/2007
Operating income margin 6.6% 7.6%
Tax rate 38.9% 36.9%
Net income margin 3.4% 4.1%
EBITDA* $151,852 $137,226
EBITDA margin* 8.6% 9.7%
* See Reconciliation of Net Income and Earnings before Interest, Taxes,
Depreciation and Amortization on page 9
Selected Financial Data (Continued)
CACI International Inc
Condensed Consolidated Balance Sheets (Unaudited)
(Amounts in thousands)
03/31/2008 06/30/2007
ASSETS:
Current assets
Cash and cash equivalents $52,270 $285,682
Accounts receivable, net 476,221 386,150
Prepaid expenses and other current assets 40,519 37,171
Total current assets 569,010 709,003
Goodwill and intangible assets, net 1,182,253 962,090
Property and equipment, net 25,070 22,695
Other long-term assets 87,943 98,159
Total assets $1,864,276 $1,791,947
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities
Current portion of long-term debt $3,548 $7,643
Accounts payable 79,656 59,827
Accrued compensation and benefits 115,731 96,978
Other accrued expenses and current
liabilities 95,488 130,573
Total current liabilities 294,423 295,021
Long-term debt, net of current portion 633,512 635,772
Other long-term liabilities 49,849 47,307
Total liabilities 977,784 978,100
Shareholders’ equity 886,492 813,847
Total liabilities and shareholders’
equity $1,864,276 $1,791,947
Selected Financial Data (Continued)
CACI International Inc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands)
Nine Months Ended
03/31/2008 03/31/2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $59,774 $57,708
Reconciliation of net income to net
cash provided by operating activities:
Depreciation and amortization 35,389 29,247
Amortization of deferred financing costs 1,845 1,065
Stock-based compensation expense 13,684 9,959
Provision for deferred income taxes 3,657 1,952
Changes in operating assets and liabilities,
net of effect of business acquisitions:
Accounts receivable, net (61,809) 30,448
Prepaid expenses and other current assets (1,328) (4,045)
Accounts payable and accrued expenses 14,043 (1,730)
Accrued compensation and benefits 11,598 (3,501)
Income taxes receivable and payable (1,056) (5,184)
Other liabilities 2,758 4,795
Net cash provided by operating activities 78,555 120,714
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (10,289) (5,593)
Purchases of businesses, net of cash
acquired (303,305) (4,629)
Other 161 (1,240)
Net cash used in investing activities (313,433) (11,462)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments made under bank
credit facilities (2,797) (27,657)
Proceeds from employee stock purchase plans 3,300 4,437
Proceeds from exercise of stock options 1,988 8,261
Purchase of common stock (975) (3,661)
Other 63 7,707
Net cash provided by (used in)
financing activities 1,579 (10,913)
Effect of exchange rate changes on
cash and cash equivalents (113) 740
Net (decrease) increase in cash and
cash equivalents (233,412) 99,079
Cash and cash equivalents, beginning
of period 285,682 24,650
Cash and cash equivalents, end of period $52,270 $123,729
Selected Financial Data (Continued)
Revenue by Customer Type (Unaudited)
Quarter Ended
(dollars in thousands) 3/31/2008 3/31/2007
Department of Defense $474,903 74.9% $339,651 71.8%
Federal Civilian Agencies 129,404 20.4% 105,241 22.3%
Commercial 25,550 4.0% 23,409 4.9%
State and Local Governments 4,300 0.7% 4,754 1.0%
Total $634,157 100.0% $473,055 100.0%
(dollars in thousands) $ Change % Change
Department of Defense $135,252 39.8%
Federal Civilian Agencies 24,163 23.0%
Commercial 2,141 9.1%
State and Local Governments (454) -9.5%
Total $161,102 34.1%
Nine Months Ended
(dollars in thousands) 3/31/2008 3/31/2007
Department of Defense $1,311,052 74.3% $1,016,752 71.7%
Federal Civilian Agencies 363,711 20.6% 319,639 22.6%
Commercial 76,738 4.3% 66,508 4.7%
State and Local Governments 14,020 0.8% 14,688 1.0%
Total $1,765,521 100.0% $1,417,587 100.0%
(dollars in thousands) $ Change % Change
Department of Defense $294,300 28.9%
Federal Civilian Agencies 44,072 13.8%
Commercial 10,230 15.4%
State and Local Governments (668) -4.5%
Total $347,934 24.5%
Revenue by Contract Type (Unaudited)
Quarter Ended
(dollars in thousands) 3/31/2008 3/31/2007
Time and materials $314,201 49.5% $252,421 53.4%
Cost reimbursable 181,775 28.7% 127,429 26.9%
Fixed price 138,181 21.8% 93,205 19.7%
Total $634,157 100.0% $473,055 100.0%
(dollars in thousands) $ Change % Change
Time and materials $61,780 24.5%
Cost reimbursable 54,346 42.6%
Fixed price 44,976 48.3%
Total $161,102 34.1%
Nine Months Ended
(dollars in thousands) 3/31/2008 3/31/2007
Time and materials $904,973 51.3% $735,154 51.9%
Cost reimbursable 482,609 27.3% 390,515 27.5%
Fixed price 377,939 21.4% 291,918 20.6%
Total $1,765,521 100.0% $1,417,587 100.0%
(dollars in thousands) $ Change % Change
Time and materials $169,819 23.1%
Cost reimbursable 92,094 23.6%
Fixed price 86,021 29.5%
Total $347,934 24.5%
Revenue Received as a Prime versus Subcontractor (Unaudited)
Quarter Ended
(dollars in thousands) 3/31/2008 3/31/2007
Prime $516,273 81.4% $388,022 82.0%
Subcontractor 117,884 18.6% 85,033 18.0%
Total $634,157 100.0% $473,055 100.0%
(dollars in thousands) $ Change % Change
Prime $128,251 33.1%
Subcontractor 32,851 38.6%
Total $161,102 34.1%
Nine Months Ended
(dollars in thousands) 3/31/2008 3/31/2007
Prime $1,446,711 81.9% $1,158,941 81.8%
Subcontractor 318,810 18.1% 258,646 18.2%
Total $1,765,521 100.0% $1,417,587 100.0%
(dollars in thousands) $ Change % Change
Prime $287,770 24.8%
Subcontractor 60,164 23.3%
Total $347,934 24.5%
