Record first quarter revenue of $1.09
billion, up 1.2 percent
Net income of $42.0 million, up 14.7
percent
Contract awards of $1.2 billion
Contract funding orders of $1.5 billion, up
26.6 percent
Fiscal Year 2018 guidance raised
CACI International Inc (NYSE:CACI), a leading information
solutions and service provider to the federal government, announced
results today for its first fiscal quarter ended September 30,
2017.
CEO Commentary and Outlook
Ken Asbury, CACI’s President and CEO, said, “I am very pleased
with our first quarter operating performance. We delivered our
third consecutive quarter of organic revenue growth and generated
strong cash flow. And we are increasing our net income and EPS
guidance as a result of a tax benefit in the quarter. Our
performance keeps us on pace to achieve our fiscal year guidance
and deliver long-term organic revenue and margin expansion
goals.”
First Quarter Results
(in millions
except per-share data) Q1, FY18 Q1, FY17 %
Change Revenue $1,085.8 $1,073.3 1.2%
Operating income $67.3 $69.7 (3.4%) Net income
$42.0 $36.7 14.7% Diluted earnings per share
$1.67 $1.47 13.3% Cash provided by operating
activities $79.7 $57.8 37.9%
Revenue for the first quarter of Fiscal Year 2018 (FY18)
increased compared to the first quarter of Fiscal Year 2017 (FY17)
driven primarily by new business wins. Operating income declined
with higher gross profit being offset by increased indirect
expenses related to investments in growth and efficiency
initiatives. The net income increase was driven by a
lower-than-planned tax rate as a result of excess tax benefits
under ASU 2016-09 (Improvements to Employee Share-Based Payment
Accounting). Cash provided by operations in the quarter was $79.7
million.
Additional Financial Metrics
Q1,
FY18 Q1, FY17 % Change Adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA), a non-GAAP
measure (in millions)* $84.0 $88.2 (4.8%)
Diluted adjusted earnings per share, a non-GAAP measure
$2.25 $2.07 8.7% Days sales outstanding 64
59 *See Reconciliation of Net Income to
Earnings before Interest, Taxes, Depreciation and Amortization and
to Adjusted New Income on page 9.
First Quarter Awards, Contract Funding Orders, and Other
Highlights
Our contract awards in the quarter were $1.2 billion, which
excludes ceiling values of multi-award, indefinite delivery,
indefinite quantity (IDIQ) contracts. Approximately 60 percent of
our awards were for new business.
Key awards in the quarter included:
- Two awards with the U.S. Army’s Night
Vision and Electronic Sensors Directorate (NVESD) representing both
new and continuing business in CACI’s Surveillance and
Reconnaissance market area:
- A prime position on an IDIQ contract,
with a ceiling value of $480 million, to assist NVESD in developing
and integrating technologies for military and national responders.
The five-year award represents new work for CACI.
- A task order, with a ceiling value of
$173 million, to perform modeling and simulation systems
development of sensor and imaging systems. This three-year award
under the Rapid Response – Third Generation contract vehicle
represents continuing business for CACI.
- A $91 million task order with the U.S.
Army Communications-Electronics Research, Development, and
Engineering Center Flight Activity to provide systems integration,
maintenance, and training and operations support for surveillance
and reconnaissance missions. This four-year task order, awarded
under the Rapid Response-Third Generation contract vehicle,
represents continuing business in CACI’s Surveillance and
Reconnaissance market area.
- A task order, with a ceiling value of
$54.5 million, to provide research and development and systems
engineering support to the U.S. Army’s Space and Terrestrial
Communications Directorate. This two-year, seven-month task order,
awarded under the Information Technology Enterprise Solutions - 2
Services contract vehicle, represents continued and expanded
business in CACI’s Communications market area.
- A $51 million task order to provide
software development support to the 90th Cyberspace Operations
Squadron, a subordinate unit of the 24th Air Force, the Air Force’s
component to U.S. Cyber Command. The three-year task order, awarded
under the Network-Centric Solutions-2 contract vehicle, represents
continuing business for CACI.
- A $34.5 million task order with the
U.S. Customs and Border Protection Air and Marine Operations
Surveillance System to provide technology updates and operations
and maintenance. This four-year task order, awarded under the
Department of Homeland Security’s Enterprise Acquisition Gateway
for Leading-Edge Solutions II contract vehicle, represents
continuing work in CACI’s Intelligence Services market area.
- A task order, with a ceiling value of
$28.7 million, to provide integration, sustainment, and deployment
services for the U.S. Air Force Civil Engineer Center’s NexGen IT
modernization program. This 19-month task order, awarded under the
GSA Alliant contract vehicle, represents continuing business in
CACI’s Business Systems market area.
Contract funding orders in the first quarter were $1.5 billion,
up almost 27% compared to the first quarter of FY17. Our total
backlog at September 30, 2017 was $11.1 billion compared to $11.5
billion a year ago. Funded backlog at September 30, 2017 was $2.3
billion compared with $2.4 billion in the first quarter last
year.
Other Highlights
- CACI appointed Executive Vice President
Nick Farah to lead its Mission Solutions and Services group
responsible for the company’s Command and Control; Communications;
Logistics and Material Readiness; and Surveillance and
Reconnaissance market areas. Mr. Farah is a highly credentialed
industry leader with a proven record of more than 26 years of
achievement in winning and executing large, complex programs in the
defense industry.
- On October 26, 2017, CACI held the 10th
symposium in the critical Asymmetric Threat symposia series on
national security challenges: “What Does It Take to Protect
America? Combatting Global Asymmetric Threats.” CACI established
the symposium series in 2008 and co-sponsored this year’s event
with the Center for Security Policy, the Institute for the Study of
War, and the Mitchell Institute for Aerospace Studies.
- CACI’s ranking on Bloomberg
Government’s annual BGOV200 listing rose seven spots from last
year, up to #21 in 2017. The BGOV200 study ranks the top 200
federal government contractors by value of prime, unclassified
contracts awarded by U.S. government agencies in fiscal 2016.
- CACI was recognized as a visionary
company at the inaugural GovCon Summit RecognizeDC Awards. CACI’s
strategy to win new business, deliver operational excellence, and
grow through M&A and organically has positioned the company as
a leader in the IT industry.
- CACI was named a Washington Technology
Industry Innovator winning the Strategic Hire category for the
leadership and quality of our senior management team.
CACI Updates Its FY18 Guidance
We are reiterating the FY18 revenue guidance we issued on August
17, 2017 and raising our guidance for net income and diluted
earnings per share as a result of the lower tax rate reported in
our first fiscal quarter. We are also updating our effective tax
rate for the year. The table below summarizes our FY18 expectations
and represents our views as of November 1, 2017:
Current Fiscal Year
Previous Fiscal Year
(In millions except for tax rate and
earnings per share)
2018 Guidance
2018 Guidance
Revenue $4,350 - $4,500 $4,350 - $4,500 Net income
$171 - $179 $165 - $173 Effective corporate tax rate
34.5% 36.5% Diluted earnings per share $6.76 -
$7.08 $6.52 - $6.84 Diluted weighted average shares
25.3 25.3
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time
Thursday, November 2, 2017 during which members of our senior
management team will be making a brief presentation focusing on
first 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, www.caci.com, at the scheduled time. A replay of
the call will also be available over the Internet and can be
accessed through our homepage (www.caci.com) by clicking on the
CACI Investor Info button.
CACI provides information solutions and services in support of
national security missions and government transformation for
Intelligence, Defense, and Federal Civilian customers. A Fortune
Magazine World’s Most Admired Company in the IT Services industry,
CACI is a member of the Fortune 1000 Largest Companies, the Russell
2000 Index, and the S&P SmallCap600 Index. CACI’s sustained
commitment to ethics and integrity defines its corporate culture
and drives its success. With approximately 18,600 employees
worldwide, CACI provides dynamic career opportunities for military
veterans and industry professionals to support the nation’s most
critical missions. Join us! www.caci.com.
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: legal, regulatory, and political change
as a result of transitioning to a new presidential administration
that could result in economic uncertainty; changes in U.S. federal
agencies, current agreements with other nations, foreign events, or
any other events which may affect the global economy; regional and
national economic conditions in the United States and globally;
terrorist activities or war; changes in interest rates; currency
fluctuations; significant fluctuations in the equity markets;
changes in our effective tax rate; failure to achieve contract
awards in connection with re-competes 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,
implementation of spending cuts (sequestration) under the Budget
Control Act of 2011, or any legislation that amends or changes
discretionary spending levels under that act; changes in budgetary
priorities or in the event of a priority need for funds, such as
homeland security; government contract procurement (such as bid
protest, small business set asides, loss of work due to
organizational conflicts of interest, etc.) and termination risks;
the results of government audits and reviews conducted by the
Defense Contract Audit Agency, the Defense Contract Management
Agency, or other governmental entities with cognizant oversight;
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); market speculation regarding our continued
independence; 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, and (iii) competition for task
orders under Government Wide Acquisition Contracts (GWACs) and/or
schedule contracts with the General Services Administration; the
ability to successfully integrate the operations of our recent and
any future acquisitions; our own ability to achieve the objectives
of near term or long range business plans; and other risks
described in our Securities and Exchange Commission filings.
CACI-Earnings Release
Selected Financial Data CACI International
Inc Condensed Consolidated Statements of Operations
(Unaudited) (Amounts in thousands, except per share amounts)
Quarter Ended 9/30/2017
9/30/2016 % Change Revenue $
1,085,814 $ 1,073,280 1.2 % Costs of revenue Direct
costs 739,678 728,221 1.6 % Indirect costs and selling expenses
261,244 257,338 1.5 % Depreciation and amortization 17,588
18,063 -2.6 % Total costs of revenue
1,018,510 1,003,622 1.5 % Operating income
67,304 69,658 -3.4 % Interest expense and other, net 11,247
12,489 -9.9 % Income before income taxes
56,057 57,169 -1.9 % Income taxes 14,011
20,506 -31.7 % Net income $ 42,046 $ 36,663
14.7 % Basic earnings per share $ 1.72 $ 1.51 14.0 % Diluted
earnings per share $ 1.67 $ 1.47 13.3 % Weighted average
shares used in per share computations: Basic 24,487 24,340 Diluted
25,243 24,928
Statement of Operations Data
(Unaudited) Quarter Ended 9/30/2017
9/30/2016 % Change Operating income
margin 6.2 % 6.5 % Tax rate 25.0 % 35.9 % Net income margin 3.9 %
3.4 % Adjusted EBITDA* $ 84,010 $ 88,239 -4.8 % Adjusted
EBITDA margin 7.7 % 8.2 %
Adjusted net income attributable to
CACI
$ 56,701 $ 51,522 10.1 % Diluted adjusted earnings per share $ 2.25
$ 2.07 8.7 % *See Reconciliation of Net Income to Earnings before
Interest, Taxes, Depreciation and Amortization and to Adjusted Net
Income on page 9.
Selected Financial Data
(Continued) CACI International Inc Condensed
Consolidated Balance Sheets (Unaudited) (Amounts in thousands)
9/30/2017 6/30/2017
ASSETS: Current assets Cash and cash equivalents $ 67,043 $
65,539 Accounts receivable, net 788,788 757,341 Prepaid expenses
and other current assets 77,398 57,022 Total current
assets 933,229 879,902 Goodwill and intangible assets, net
2,806,538 2,812,806 Property and equipment, net 94,920 91,749 Other
long-term assets 131,326 126,625 Total assets $
3,966,013 $ 3,911,082
LIABILITIES AND SHAREHOLDERS'
EQUITY: Current liabilities Current portion of long-term debt $
67,456 $ 53,965 Accounts payable 125,111 62,874 Accrued
compensation and benefits 241,162 239,741 Other accrued expenses
and current liabilities 175,495 170,164 Total current
liabilities 609,224 526,744 Long-term debt, net of current
portion 1,101,724 1,177,598 Other long-term liabilities
420,579 413,019 Total liabilities 2,131,527
2,117,361 Shareholders' equity 1,834,486
1,793,721 Total liabilities and shareholders' equity $ 3,966,013 $
3,911,082
Selected Financial Data (Continued)
CACI International Inc Condensed Consolidated
Statements of Cash Flows (Unaudited) (Amounts in thousands)
Three Months Ended 9/30/2017
9/30/2016 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $ 42,046 $ 36,663
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 17,588 18,063 Amortization of
deferred financing costs 1,108 1,128 Loss on disposal of fixed
assets - 727 Stock-based compensation expense 6,351 4,897 Provision
for deferred income taxes 10,738 11,846 Equity in earnings of
unconsolidated ventures - (103)
Changes in operating assets and
liabilities, net of effect of business acquisitions:
Accounts receivable, net (30,027) 63,292 Prepaid expenses and other
assets (14,302) (13,012) Accounts payable and accrued expenses
67,689 (41,642) Accrued compensation and benefits (12,696) (11,418)
Income taxes receivable and payable (12,237) (14,421) Other
liabilities 3,435 1,757 Net cash provided by
operating activities 79,693 57,777
CASH
FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,512)
(11,235) Purchase of business, net of cash acquired (406) (2,921)
Proceeds from net working capital refund - 13,619 Proceeds from
equity method investments - 4,681 Other 217 481 Net
cash (used in) provided by investing activities (7,701)
4,625
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments under credit facilities (63,491) (58,491) Payment of
contingent consideration (3,581) - Proceeds from employee stock
purchase plans 1,300 1,182 Repurchases of common stock (1,210)
(1,085) Payment of taxes for equity transactions (4,384)
(2,848) Net cash used in financing activities
(71,366) (61,242) Effect of exchange rate changes on cash
and cash equivalents 878 (574) Net increase in cash
and cash equivalents 1,504 586 Cash and cash equivalents, beginning
of period 65,539 49,082 Cash and cash equivalents,
end of period $ 67,043 $ 49,668
Selected Financial Data (Continued)
Revenue by Customer Type (Unaudited) Quarter
Ended (dollars in thousands)
9/30/2017 9/30/2016
$ Change
% Change
Department of Defense $ 714,053 65.8 % $ 692,203 64.5 % $ 21,850
3.2 % Federal Civilian Agencies 306,536 28.2 % 313,793 29.2 %
(7,257 ) -2.3 % Commercial and other 65,225 6.0 %
67,284 6.3 % (2,059 )
-3.1 % Total $ 1,085,814 100.0 % $ 1,073,280
100.0 % $ 12,534 1.2 %
Revenue by
Contract Type (Unaudited) Quarter Ended
(dollars in thousands)
9/30/2017
9/30/2016
$ Change
% Change Cost reimbursable $ 553,729 51.0 % $ 534,582
49.8 %
$
19,147 3.6 % Fixed price 358,746 33.0 % 343,313 32.0 % 15,433 4.5 %
Time and materials 173,339 16.0 %
195,385 18.2 %
(22,046 ) -11.3 % Total $ 1,085,814 100.0 % $
1,073,280 100.0 % $ 12,534 1.2 %
Revenue Received as a Prime versus Subcontractor (Unaudited)
Quarter Ended (dollars in
thousands)
9/30/2017 9/30/2016
$ Change
% Change Prime $ 1,013,203 93.3 % $ 996,457 92.8 % $
16,746 1.7 % Subcontractor 72,611 6.7 %
76,823 7.2 % (4,212 ) -5.5 % Total $
1,085,814 100.0 % $ 1,073,280 100.0 % $
12,534 1.2 %
Selected Financial Data
(Continued) Contract
Funding Orders Received (Unaudited) Quarter Ended
(dollars in thousands)
9/30/2017
9/30/2016
$ Change
% Change Contract Funding Orders $ 1,472,373 $
1,162,891 $ 309,482 26.6 %
Direct
Costs by Category (Unaudited)
Quarter Ended (dollars in thousands)
9/30/2017
9/30/2016
$ Change
% Change Direct labor $ 321,555 43.5 %
$ 334,928 46.0 % $ (13,373 ) -4.0 % Other
direct costs 418,123 56.5 % 393,293
54.0 % 24,830 6.3 % Total direct
costs $ 739,678 100.0 % $ 728,221 100.0 %
$ 11,457 1.6 %
Selected
Financial Data (Continued) Reconciliation of
Net Income to Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA) and to Adjusted Net Income
(Unaudited)
The Company views Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted Net Income and Diluted Adjusted
Earnings Per Share, all of which are defined as non-GAAP measures,
as important indicators of performance, consistent with the manner
in which management measures and forecasts the Company’s
performance. Adjusted EBITDA is a commonly used
non-GAAP measure when comparing our results with those of other
companies. We define Adjusted EBITDA as GAAP net income
plus net interest expense, income taxes, depreciation and
amortization, and earnout adjustments. We consider
Adjusted EBITDA to be a useful metric for management and investors
to evaluate and compare the ongoing operating performance of our
business on a consistent basis across reporting periods, as it
eliminates the effect of non-cash items such as depreciation of
tangible assets, amortization of intangible assets primarily
recognized in business combinations, as well as the effect of
earnout gains and losses, which we do not believe are indicative of
our core operating performance. Adjusted EBITDA margin
is adjusted EBITDA divided by revenue. We define
Adjusted Net Income as GAAP net income plus stock-based
compensation expense, depreciation and amortization, amortization
of financing costs, and earnout adjustments, net of related tax
effects. We believe Adjusted Net Income is an important
measure of long-term value and is used by investors to measure our
performance. This measure in particular assists readers
in further understanding our results and trends from
period-to-period by removing certain non-cash items that do not
impact the cash flow performance of our
business. Diluted Adjusted Earnings Per Share is
Adjusted Net Income divided by diluted weighted-average shares, as
reported. Adjusted EBITDA and Adjusted Net Income as
defined by us may not be computed in the same manner as similarly
titled measures used by other companies. These non-GAAP
measures should not be considered in isolation or as a substitute
for performance measures prepared in accordance with GAAP.
Quarter Ended (dollars in thousands)
9/30/2017 9/30/2016 % Change Net
income $ 42,046 $ 36,663 14.7 % Plus: Income taxes
14,011 20,506 -31.7 % Interest expense, net 11,247 12,593 -10.7 %
Depreciation and amortization 17,588 18,063 -2.6 % Earnout
adjustments (882 ) 414
Adjusted EBITDA $ 84,010 $ 88,239 -4.8
%
Quarter Ended (dollars in thousands)
9/30/2017 9/30/2016 % Change
Revenue, as reported $ 1,085,814 $ 1,073,280 1.2 % Adjusted EBITDA
$ 84,010 $ 88,239 -4.8 % Adjusted
EBITDA margin 7.7 % 8.2 %
Quarter Ended (dollars in thousands)
9/30/2017
9/30/2016 % Change Net income $ 42,046 $
36,663 14.7 % Plus: Stock-based compensation 6,351 4,897 29.7 %
Depreciation and amortization 17,588 18,063 -2.6 % Amortization of
financing costs 1,108 1,128 -1.8 % Earnout adjustments (882 ) 414
Less: Related tax effect (9,510 ) (9,643 )
-1.4 % Adjusted net income $ 56,701 $ 51,522
10.1 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171101006687/en/
CACI International IncCorporate Communications and Media:Jody
Brown, Executive Vice President, Public
Relations703-841-7801jbrown@caci.comorInvestor Relations:David
Dragics, Senior Vice President, Investor
Relations866-606-3471ddragics@caci.com
CACI (NYSE:CACI)
Historical Stock Chart
From Jun 2024 to Jul 2024
CACI (NYSE:CACI)
Historical Stock Chart
From Jul 2023 to Jul 2024