Revenue of $1.5 billion, +7.0%
year-over-year
Net income of $93.6 million, +37.8%
year-over-year
Robust cash flow from operations
Contract awards of $1.8 billion
Raises Fiscal Year 2021 Guidance
CACI International Inc (NYSE: CACI), a leading provider of
expertise and technology to government enterprise and mission
customers, announced results today for its first fiscal quarter
ended September 30, 2020.
CEO Commentary and Outlook
John Mengucci, CACI’s President and CEO, said, “Our first
quarter performance was a strong start to Fiscal Year 2021. We
delivered solid organic growth, and our focus on delivery and
operational excellence drove strong profitability and robust cash
flow, even as we continued to address the challenges of COVID-19.
Based on our performance across the business and continued
execution against our growing backlog, we’re increasing our
guidance for the year. We are confident in our ability to continue
to deliver value to our customers and shareholders.”
First Quarter Results
(in millions except earnings per share and DSO) Q1, FY21 Q1, FY20 %
Change Revenue
$1,459.5
$1,363.4
7.0%
Operating income
$134.4
$100.2
34.2%
Net income
$93.6
$68.0
37.8%
Diluted earnings per share
$3.67
$ 2.66
38.0%
Net cash provided by operating activities excluding MARPA1
$192.7
$114.6
68.2%
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), a non-GAAP measure2
$165.4
$128.3
28.9%
Days sales outstanding (DSO)3
54
59
(1)
First quarter FY21 and first quarter FY20 net cash provided by
operating activities exclude CACI’s Master Accounts Receivable
Purchase Agreement (MARPA). For more details, see the
Reconciliation of Net Cash Provided by Operating Activities to Net
Cash Provided by Operating Activities Excluding MARPA on page 9 of
this release.
(2)
See the Reconciliation of Net Income to Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) on page 9
of this release.
(3)
The DSO calculations for first quarter FY21 and first quarter
FY20 exclude the impact of the Company’s MARPA, which was 7 days
and 6 days, respectively.
Revenue in Q1 FY21 increased 7.0% year-over-year as reported and
6.1% organically. The year-over-year increase in operating income
was driven by higher revenue, strong operating performance,
favorable fixed-price contract performance, and lower indirect
costs. The year-over-year increase in net income was due to higher
operating income and lower interest expense, partially offset by a
higher effective tax rate. The increase in cash from operations,
excluding MARPA, was driven by higher net income and favorable
working capital management.
First Quarter Contract Awards
Contract awards in Q1 FY21 totaled $1.8 billion. These awards
exclude ceiling values of multi-award, indefinite delivery,
indefinite quantity (IDIQ) contracts. Some notable awards during
the quarter were:
- A five-year, $450 million single-award Blanket Purchase
Agreement (BPA) to provide enterprise technology in support of
Desktop Support Services to the Department of Homeland Security
(DHS) Headquarters. This represents both recompete and expansion of
prior work.
- A six-year single-award contract, with a ceiling value of more
than $152 million, by the Department of Veteran Affairs to provide
enterprise expertise in support of the department's Financial
Management Business Transformation Program (FMBT).
- A four-year, 10-month task order, with a ceiling value of more
than $59 million, to provide enterprise expertise and technology to
the Office of Under Secretary of Defense (Comptroller) (OUSD(C)) in
support of the Defense Finance and Accounting Service's Comptroller
critical mission systems.
- A five-year task order, with a ceiling value of $86.5 million,
by the Department of Homeland Security (DHS) to provide mission
expertise in support of the Homeland Security Investigation (HSI)
division.
Total backlog as of September 30, 2020 was $21.9 billion
compared with $19.5 billion a year ago, an increase of 13%. Funded
backlog as of September 30, 2020 was $3.4 billion compared with
$3.3 billion a year ago, an increase of 4%.
Additional Highlights
- Acquired Ascent Vision Technologies, LLC (AVT), a leading
provider of electro-optical, infrared (EO/IR) imaging technology
and solutions for multi-domain intelligence, surveillance, and
reconnaissance (ISR), unmanned aircraft system (UAS), air defense,
and counter-unmanned aircraft system (c-UAS) operations.
- Received the Secretary of Defense Employer Support Freedom
Award, the highest U.S. government honor bestowed to employers for
support of National Guard and Reserve employees. CACI was one of 15
recipients from 2,623 nominations submitted by Guards and Reserve
members.
- Named Todd Probert as President of CACI's National Security and
Innovative Solutions sector. Mr. Probert brings 20+ years of
strategy and experience to support customer requirements with
advanced and differentiated solutions and technologies, which will
advance the company’s growth strategy.
- National Association of Corporate Directors (NACD) recognized
CACI Board member William Jews among the 2020 NACD Directorship
100, a list of the most influential leaders in the boardroom and
corporate governance community. Mr. Jews' inclusion on this list
marks CACI's third consecutive year with a Board member recognized
by NACD.
- CACI held the 13th symposium in the Asymmetric Threat Symposium
series on national security challenges, titled "Cyber, Electronic
Warfare, and Spectrum Operations: Critical Capabilities for
Protecting America," which was broadcast live from the National
Press Club in Washington, DC. The event highlighted CACI’s thought
leadership in critical areas of national security.
- CACI President and CEO John Mengucci was named to Virginia
Business Magazine's Virginia 500 Power List in the Federal
Contractors category. The inaugural list honors powerful and
successful leaders in Virginia's business, government, and academia
communities.
Raising FY21 Guidance
We are raising our FY21 guidance to account for the Company’s
strong operating performance. The table below summarizes our FY21
guidance and represents our views as of October 28, 2020.
(in millions except earnings per
share)
Current Fiscal Year 2021
Guidance
Previous Fiscal Year 2021
Guidance
Revenue
$6,050 - $6,250
$6,000 - $6,200
Net income
$372 - $392
$347 - $367
Diluted earnings per share
$14.47 - $15.25
$13.50 - $14.28
Diluted weighted average shares
25.7
25.7
Net cash provided by operating
activities
at least $600
at least $580
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time
Thursday, October 29, 2020 during which members of our senior
management 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 webcast and view
the accompanying exhibits on CACI’s investor relations website at
http://investor.caci.com/news/#upcomingevent at the scheduled time.
A replay of the call will also be available on CACI’s investor
relations website at http://investor.caci.com/.
About CACI
CACI’s approximately 23,000 talented employees are vigilant in
providing the unique expertise and distinctive technology that
address our customers’ greatest enterprise and mission challenges.
Our culture of good character, innovation, and excellence drives
our success and earns us recognition as a Fortune World’s Most
Admired Company. As a member of the Fortune 1000 Largest Companies,
the Russell 1000 Index, and the S&P MidCap 400 Index, we
consistently deliver strong shareholder value. Visit us at
www.caci.com.
There are statements made herein that 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 risk
factors that could cause actual results to be materially different
from anticipated results. These risk factors include, but are not
limited to, the following: our reliance on U.S. government
contracts, which includes general risk around the government
contract procurement process (such as bid protest, small business
set asides, loss of work due to organizational conflicts of
interest, etc.) and termination risks; significant delays or
reductions in appropriations for our programs and broader changes
in U.S. government funding and spending patterns; legislation that
amends or changes discretionary spending levels or budget
priorities, such as for homeland security or to address global
pandemics like COVID-19; legal, regulatory, and political change
from successive presidential administrations 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, including the impact of global
pandemics like COVID-19; 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; competitive factors such as pricing pressures
and/or competition to hire and retain employees (particularly those
with security clearances); failure to achieve contract awards in
connection with re-competes for present business and/or competition
for new business; regional and national economic conditions in the
United States and globally, including but not limited to: terrorist
activities or war, changes in interest rates, currency
fluctuations, significant fluctuations in the equity markets, and
market speculation regarding our continued independence; our
ability to meet contractual performance obligations, including
technologically complex obligations dependent on factors not wholly
within our control; limited access to certain facilities required
for us to perform our work, including during a global pandemic like
COVID-19; changes in tax law, the interpretation of associated
rules and regulations, or any other events impacting our effective
tax rate; changes in technology; the potential impact of the
announcement or consummation of a proposed transaction and our
ability to successfully integrate the operations of our recent and
any future acquisitions; our ability to achieve the objectives of
near term or long-term business plans; the effects of health
epidemics, pandemics and similar outbreaks may have material
adverse effects on our business, financial position, results of
operations and/or cash flows; 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)
Three
Months Ended 9/30/2020 9/30/2019 % Change Revenue
$
1,459,506
$
1,363,392
7.0%
Operating expenses: Costs of revenue
939,934
878,881
6.9%
Indirect costs and selling expenses
355,004
357,592
-0.7%
Depreciation and amortization
30,144
26,762
12.6%
Total operating expenses
1,325,082
1,263,235
4.9%
Operating income
134,424
100,157
34.2%
Interest expense and other, net
9,980
16,811
-40.6%
Income before income taxes
124,444
83,346
49.3%
Income taxes
30,800
15,369
100.4%
Net income
$
93,644
$
67,977
37.8%
Basic earnings per share
$
3.73
$
2.73
36.6%
Diluted earnings per share
$
3.67
$
2.66
38.0%
Weighted average shares used in per share computations:
Basic
25,099
24,894
Diluted
25,486
25,532
Statement of Operations Data (Unaudited) Three
Months Ended 9/30/2020 9/30/2019 % Change
Operating income margin
9.2
%
7.3
%
Tax rate
24.8
%
18.4
%
Net income margin
6.4
%
5.0
%
Adjusted EBITDA*
$
165,436
$
128,311
28.9%
Adjusted EBITDA Margin
11.3
%
9.4
%
*See Reconciliation of Net Income to Adjusted 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)
9/30/2020
6/30/2020 ASSETS: Current assets Cash and cash
equivalents
$
124,862
$
107,236
Accounts receivable, net
820,157
841,227
Prepaid expenses and other current assets
155,853
137,423
Total current assets
1,100,872
1,085,886
Goodwill and intangible assets, net
4,148,666
3,813,995
Property and equipment, net
169,115
170,521
Operating lease right-of-use assets
381,484
330,767
Other long-term assets
150,231
141,303
Total assets
$
5,950,368
$
5,542,472
LIABILITIES AND SHAREHOLDERS' EQUITY: Current
liabilities Current portion of long-term debt
$
46,920
$
46,920
Accounts payable
79,343
89,961
Accrued compensation and benefits
316,480
338,760
Other accrued expenses and current liabilities
310,611
293,518
Total current liabilities
753,354
769,159
Long-term debt, net of current portion
1,567,371
1,357,519
Other long-term liabilities
857,874
754,484
Total liabilities
3,178,599
2,881,162
Shareholders' equity
2,771,769
2,661,310
Total liabilities and shareholders' equity
$
5,950,368
$
5,542,472
Selected Financial Data (Continued) CACI
International Inc Condensed Consolidated Statements of Cash
Flows (Unaudited) (Amounts in thousands)
Three Months
Ended 9/30/2020 9/30/2019 CASH FLOWS FROM
OPERATING ACTIVITIES: Net income
$
93,644
$
67,977
Reconciliation of net income to net cash provided by operating
activities: Depreciation and amortization
30,144
26,762
Non-cash lease expense
19,056
17,825
Amortization of deferred financing costs
583
589
Stock-based compensation expense
7,847
7,038
Deferred income taxes
2,339
5,485
Changes in operating assets and liabilities, net of effect of
business acquisitions: Accounts receivable, net
20,987
21,589
Prepaid expenses and other assets
(21,420
)
(25,989
)
Accounts payable and other accrued expenses
21,109
3,477
Accrued compensation and benefits
(23,882
)
(1,267
)
Income taxes payable and receivable
8,384
4,463
Operating lease liabilities
(19,364
)
(17,450
)
Long-term liabilities
37,473
(7,295
)
Net cash provided by operating activities
176,900
103,204
CASH FLOWS FROM INVESTING ACTIVITIES: Capital
expenditures
(16,282
)
(22,536
)
Cash paid for business acquisitions, net of cash acquired
(354,095
)
(1,351
)
Net cash used in investing activities
(370,377
)
(23,887
)
CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings
(payments) under credit facilities
209,270
(66,730
)
Proceeds from employee stock purchase plans
2,431
1,852
Repurchases of common stock
(2,074
)
(1,717
)
Payment of taxes for equity transactions
(688
)
(467
)
Net cash provided by (used in) financing activities
208,939
(67,062
)
Effect of exchange rate changes on cash and cash equivalents
2,164
(1,101
)
Net increase (decrease) in cash and cash equivalents
17,626
11,154
Cash and cash equivalents, beginning of period
107,236
72,028
Cash and cash equivalents, end of period
$
124,862
$
83,182
Selected Financial Data (Continued) Revenue
by Customer Group (Unaudited) Three Months Ended
(dollars in thousands)
9/30/2020 9/30/2019 $
Change % Change Department of Defense
1,004,195
68.8
%
937,640
68.8
%
$
66,555
7.1
%
Federal Civilian Agencies
390,179
26.7
%
363,993
26.7
%
26,186
7.2
%
Commercial and other
65,132
4.5
%
61,759
4.5
%
3,373
5.5
%
Total
1,459,506
100.0
%
1,363,392
100.0
%
$
96,114
7.0
%
Revenue by Contract Type (Unaudited) Three Months
Ended (dollars in thousands)
9/30/2020 9/30/2019
$ Change % Change Cost-plus-fee
823,609
56.5
%
747,714
54.8
%
$
75,895
10.2
%
Fixed price
433,814
29.7
%
417,976
30.7
%
15,838
3.8
%
Time and materials
202,083
13.8
%
197,702
14.5
%
4,381
2.2
%
Total
1,459,506
100.0
%
1,363,392
100.0
%
$
96,114
7.0
%
Revenue by Prime or Subcontractor (Unaudited)
Three Months Ended (dollars in thousands)
9/30/2020
9/30/2019 $ Change % Change Prime
1,326,838
90.9
%
1,235,105
90.6
%
$
91,733
7.4
%
Subcontractor
132,668
9.1
%
128,287
9.4
%
4,381
3.4
%
Total
1,459,506
100.0
%
1,363,392
100.0
%
$
96,114
7.0
%
Revenue by Expertise or Technology (Unaudited)
Three Months Ended (dollars in thousands)
9/30/2020
9/30/2019 $ Change % Change Expertise
740,683
50.7
%
722,353
53.0
%
$
18,330
2.5
%
Technology
718,823
49.3
%
641,039
47.0
%
77,784
12.1
%
Total
1,459,506
100.0
%
1,363,392
100.0
%
$
96,114
7.0
%
Selected Financial Data (Continued)
Contract Awards Received (Unaudited) Three Months
Ended (dollars in thousands)
9/30/2020
9/30/2019
$ Change
% Change
Contract Awards
$
1,834,758
$
4,017,223
$
(2,182,465
)
-54.3
%
Reconciliation of Net Cash Provided by
Operating Activities to Net Cash Provided by Operating Activities
Excluding MARPA (Unaudited)
The Company defines net cash provided by operating activities
excluding CACI’s Master Accounts Receivable Purchase Agreement
(MARPA) as net cash provided by operating activities calculated in
accordance with GAAP, adjusted to exclude net cash received from
CACI’s MARPA for the sale of certain designated eligible U.S.
government receivables. Under the MARPA, the Company can sell
eligible receivables, including certain billed and unbilled
receivables up to a maximum amount of $200.0 million. The Company
provides net cash provided by operating activities excluding MARPA
to allow investors to more easily compare current period results to
prior period results and to results of our peers. This non-GAAP
measure should not be considered in isolation or as a substitute
for performance measures prepared in accordance with GAAP.
Three Months Ended Three Months Ended (dollars
in thousands)
9/30/2020 9/30/2019 Net cash provided
by operating activities
$
176,900
$
103,204
Cash used (provided) by MARPA
15,795
11,424
Net cash provided by operating activities excluding MARPA
$
192,695
$
114,628
Reconciliation of Net Income to Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) (Unaudited)
The Company views Adjusted EBITDA and Adjusted EBITDA margin,
both 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 expense, including depreciation
within direct costs, 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. These non-GAAP measures should not be
considered in isolation or as a substitute for performance measures
prepared in accordance with GAAP.
Three Months Ended (dollars in thousands)
9/30/2020
9/30/2019 % Change Net income
$
93,644
$
67,977
37.8
%
Plus: Income taxes
30,800
15,369
100.4
%
Interest income and expense, net
9,980
16,811
-40.6
%
Depreciation and amortization expense, including amounts within
direct costs
31,012
27,354
13.4
%
Earnout adjustments
-
800
-100.0
%
Adjusted EBITDA
$
165,436
$
128,311
28.9
%
Three Months Ended (dollars in thousands)
9/30/2020 9/30/2019 % Change Revenue, as
reported
$
1,459,506
$
1,363,392
7.0
%
Adjusted EBITDA
165,436
128,311
28.9
%
Adjusted EBITDA margin
11.3
%
9.4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201028006135/en/
Corporate Communications and Media: Jody Brown, Executive Vice
President, Public Relations (703) 841-7801, jbrown@caci.com
Investor Relations: Dan Leckburg, Senior Vice President,
Investor Relations (703) 841-7666, dleckburg@caci.com
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