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CACI Reports Record Results for Its Fiscal 2012 First Quarter and Raises Fiscal 2012 Guidance

Dépèche transmise le 2 novembre 2011 par Business Wire

ARLINGTON, Va.--(BUSINESS WIRE)--CACI International Inc (NYSE: CACI), a leading professional services and information technology solutions provider to the federal government, announced results today for its first fiscal quarter ended September 30, 2011.

First Quarter Results

The following table summarizes results computed in accordance with Generally Accepted Accounting Principles (GAAP).

                         
(in millions except per share data)       Q1, FY12       Q1, FY11       % Change
Revenue       $924.4       $834.0       10.8%
Operating income       $75.7       $52.1       45.2%
Net income       $42.1       $28.7       47.1%
Diluted earnings per share       $1.41       $0.92       53.3%
                 

We are pleased to report record first quarter Fiscal Year 2012 (FY12) revenue of $924.4 million, an increase of 10.8 percent from the first quarter of Fiscal Year 2011 (FY11). The revenue increase was driven primarily by organic revenue growth of 8.3 percent.

Pro Forma First Quarter Results

In FY10, we completed two domestic acquisitions with acquisition-related contingent consideration, or earn-outs, which represent potential additional purchase consideration based on the acquired company’s performance post-acquisition. The fair values of the expected earn-outs were recorded as liabilities on the balance sheet as of each acquisition date, and are re-measured each quarter, with any change in the fair values of the liabilities reflected in the income statement. In the first quarter of our FY12, the liabilities decreased $0.6 million, with a corresponding increase to operating income, due to reductions in the fair values of the earn-out liabilities. In the first quarter of FY11, the liabilities increased, and operating income decreased, by $1.4 million. To provide a comparison of our results excluding these earn-out adjustments, pro forma results for the first quarter of FY12 and FY11 are shown below.

                         
(in millions except per share data)       Q1, FY12       Q1, FY11       % Change
Revenue       $924.4       $834.0       10.8%
Pro forma operating income, a non-GAAP measure       $75.1       $53.5       40.3%
Pro forma net income, a non-GAAP measure       $41.8       $29.5       41.6%
Pro forma diluted earnings per share, a non-GAAP measure       $1.40       $0.95       47.5%
                 

Pro forma operating income grew 40.3 percent over the prior year period to $75.1 million, driven primarily by strong growth of 12.2 percent in direct labor. We also completed a large, one-time commercial product sale this quarter that generated $12.0 million in revenue and $6.1 million in net income. Pro forma net income for the first quarter of FY12 was a record $41.8 million, or $1.40 pro forma diluted earnings per share, an increase of 41.6 percent over pro forma net income of $29.5 million, or $0.95 pro forma diluted earnings per share, for the same period in FY11. Net cash provided by operations in the quarter was $56.1 million. (See Reconciliation of Operating Income, Net Income and Diluted Earnings Per Share to Pro Forma Amounts on page 12.)

CEO Commentary and Outlook

Paul Cofoni, CACI's President and CEO, said, “Our record performance in the first quarter of the fiscal year confirms CACI’s strategy to position our solutions and services in support of our client’s greatest challenges in national security. We are winning business in our strategic focus areas of defense, intelligence, homeland security, and IT modernization and government transformation, where we continue to see growth opportunities. Across our enterprise we are delivering operational excellence, and we are agile in responding with innovative solutions to current and emerging client needs.

“In 13 out of the last 15 quarters, we have delivered on our financial goals of mid- to high-single-digit organic revenue growth and double-digit earnings growth. This quarter we again achieved our financial goals with record results in revenue, operating income, and EPS, and received $1.6 billion in contract funding orders in the quarter – the highest in CACI's history. We also generated record operating cash flow in the quarter. Our over $2 billion of contract awards included $635 million of S3 awards focused primarily in the C4ISR-related area, and approximately $350 million in intelligence contracts.”

Mr. Cofoni added, “Our mergers and acquisition program is accelerating our momentum in the high-growth cyber arena, with our recent strategic acquisitions of Pangia Technologies and Paradigm Holdings. Pangia and Paradigm expand CACI’s capabilities for cyber forensics and secure network operations, providing our clients with unique capabilities to respond to national security threats. We also completed the acquisition of Advanced Programs Group, a leading provider of Oracle e-Business services, significantly expanding our capabilities in the business systems and government transformation market.

"We are raising our guidance for Fiscal Year 2012 based on continued strength in our operating performance; the addition of acquisitions in the cyber and business systems areas; and a large commercial product sale. Our record performance in this first quarter of our 50th year in business provides a solid foundation and strong momentum for the rest of this fiscal year and beyond.”

                 

Additional Financial Metrics

                         
(in millions except per share data)       Q1, FY12       Q1, FY11       % Change
Pro forma earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure       $88.9       $66.7       33.2%
Pro forma diluted adjusted earnings per share, a non-GAAP measure       $1.82       $1.37       32.8%
Days sales outstanding       58       59        
 

First Quarter Contract Funding Orders and Awards

  • Contract funding orders in the first quarter were $1.60 billion compared with $1.46 billion in the year earlier quarter. Funded backlog at September 30, 2011 was $2.52 billion compared with $2.50 billion a year earlier. Total backlog at September 30, 2011 was $7.95 billion compared with $7.47 billion at the end of the year earlier quarter.
  • During the first quarter, we received contract awards with an estimated value of $2.04 billion. Approximately 40 percent of these awards were for new business. First quarter awards included:
    • Approximately $635 million in awards on our Strategic Services Sourcing (S3) contract. These awards are for both new and recompete work. To date, we have received $4.17 billion in S3 task order awards.
    • Approximately $350 million in previously unannounced intelligence awards for both new and recompete work.
    • More than $160 million in awards to provide healthcare IT support for both new and recompete work.
    • A three-year, $139 million delivery order to continue support of the U.S. Navy’s Naval Air Warfare Center-Aircraft Division. This award involves designing, testing and integrating mobile communications systems for the DoD and other federal agencies.
    • A five-year, $33.6 million task order to provide information operations and other support for the U.S. Navy’s Naval Surface Warfare Center Crane Division’s Irregular Warfare Technologies Division. This award is for new work in our cyber solutions area.
  • Not included in the above estimated value of awards in the quarter are:
    • A prime position on a five-year, multiple-award, indefinite delivery, indefinite quantity (IDIQ) contract with a $273 million ceiling. This award is for new work and includes services in support of recruiting and retention for the Army and other DoD activities.
    • A prime position on a five-year, IDIQ contract with a $100 million ceiling. This award is for new work and includes services in support of the federal government’s analysis of threat finance as well as its development and enforcement of sanctions.

Recent Strategic Mergers and Acquisitions

Our strategic mergers and acquisition program continues to be a critical part of our long-term growth strategy, adding established customer relationships and high demand capabilities to our existing portfolio of company capabilities. Since the beginning of our FY12, we have completed three strategic acquisitions that enhance our positions in high growth segments of our addressable market:

  • We acquired Pangia Technologies, LLC, to expand our cybersecurity solutions with critical services in cyber intelligence and computer network defense for the Intelligence Community. Pangia’s expertise in threat analysis, intrusion detection engineering, and information system architecture services expands our capabilities to deliver secure information systems infrastructure and ensure secure computer network operations.
  • The acquisition of Paradigm Holdings, Inc. brings us leading experts in the emerging field of cyber forensics and capabilities to monitor and protect critical information systems. Paradigm also expands our computer network defense customer base, adding new customers in the defense, intelligence and federal civilian customer space.
  • On October 3, 2011, we completed the acquisition of Advanced Programs Group, LLC (APG), a leading provider of Oracle e-Business services in the federal market. APG is a leading provider of financial and asset management, procurement, and business solutions, enabling enhanced productivity with reduced costs. This acquisition significantly increases CACI's already strong capabilities in the government transformation market, expanding our customer presence in the federal civilian, defense, and intelligence communities.

Other First Quarter Highlights

  • In August 2011, we repurchased four million shares of our stock under an accelerated share repurchase program.
  • We released Cyber Threats to National Security: Keeping the Nation’s Industrial Base Safe from Cyber Threats, a report co-sponsored by the U.S. Naval Institute and the Center for Security Policy which publishes recommendations from the fifth symposium in the Asymmetric Threat series on cybersecurity.

First Quarter Recognition

  • CACI was voted among ClearedJobs.net’s Best Recruiters of 2011, which is the fourth year in a row CACI has been recognized for its ongoing success in recruiting highly sought-after jobseekers with security clearances.
  • CACI was honored by the U.S. Navy Reserve and the Employer Support of the Guard and Reserve (ESGR) as a top employer of National Guard members and Navy Reservists.

CACI Raises Its FY12 Guidance

We are raising our FY12 guidance due to our stronger operating performance, the first quarter commercial product sale, and the completion of the Paradigm Holdings and APG acquisitions, both of which closed after we issued our previous guidance in August. This guidance also reflects the accelerated share repurchase transaction. The table below summarizes the new guidance ranges for FY12 based on expected GAAP results:

                 
(In millions except for earnings per share)       New

FY 2012 Guidance

      Previous

FY 2012 Guidance

Revenue       $3,850 - $4,050       $3,750 - $3,950
Net income       $157-$163       $147 - $153
Effective corporate tax rate       39.9%       39.5%
Diluted earnings per share       $5.55-$5.80       $4.70 - $4.90
Diluted weighted average shares       28.2       31.3
           

This guidance represents our views as of November 2, 2011. Investors are reminded that actual results may differ for the reasons described herein 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, November 3, 2011 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, or you may dial 877-303-9143 and enter the confirmation code 11443802. A replay of the call will also be available over the Internet beginning at 1:00 PM Eastern Time Thursday, November 3, 2011 and can be accessed through our homepage (www.caci.com) by clicking on the CACI Investor Info button.

About CACI

Celebrating our 50th year in business, CACI sustains an exceptional record of success by providing professional services and IT solutions needed to prevail in the areas of defense, intelligence, homeland security, and IT modernization and government transformation. We deliver enterprise IT and network services; data, information, and knowledge management services; business system solutions; logistics and material readiness; C4ISR solutions and services; cyber solutions; integrated security and intelligence solutions; and program management and SETA support services. CACI solutions help federal clients provide for national security, improve communications and collaboration, secure information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. A member of the Fortune 1000 Largest Companies and the Russell 2000 index, CACI provides dynamic careers for approximately 14,300 employees working in over 120 offices in the U.S. and Europe. Visit CACI on the web at www.caci.com and www.asymmetricthreat.net.

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: economic conditions in the United States and globally (including the impact of uncertainty regarding U.S. debt limits and actions taken related thereto); terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; valuation of contingent consideration in connection with business combinations; 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 an economic stimulus package; 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 investigations into allegations of improper actions related to the provision of services in support of U.S. military operations in Iraq; the results of government audits and reviews conducted by the Defense Contract Audit Agency, the Defense Contract Management Agency, or other government 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 the company’s Securities and Exchange Commission filings.

(Financial Tables follow)

CACI-Financial

 
Selected Financial Data
 
CACI International Inc
Condensed Consolidated Statements of Operations (Unaudited)
(Amounts in thousands, except per share amounts)
 
 
    Quarter Ended    
9/30/2011     9/30/2010 % Change
Revenue $ 924,395   $ 833,971   10.8 %
Costs of revenue
Direct costs 634,931 589,470 7.7 %
Indirect costs and selling expenses 200,282 179,322 11.7 %
Depreciation and amortization   13,528     13,082   3.4 %
Total costs of revenue   848,741     781,874   8.6 %
Operating income 75,654 52,097 45.2 %
Interest expense, net   5,600     5,833   -4.0 %
Income before income taxes 70,054 46,264 51.4 %
Income taxes   27,941     17,439   60.2 %

Net income before noncontrolling interest in earnings of joint venture

42,113 28,825 46.1 %

Noncontrolling interest in earnings of joint venture

  27     (170 )
Net income attributable to CACI $ 42,140   $ 28,655   47.1 %
 
Basic earnings per share $ 1.46 $ 0.95 54.1 %
Diluted earnings per share $ 1.41 $ 0.92 53.3 %
 
Weighted average shares used in per share computations:
Basic 28,915 30,304
Diluted 29,842 31,102
 
 
Statement of Operations Data (Unaudited)
 
Quarter Ended
9/30/2011 9/30/2010 % Change
Operating income margin 8.2 % 6.2 %
Tax rate 39.9 % 37.8 %
Net income margin 4.6 % 3.4 %
 
Pro forma EBITDA* $ 88,881 $ 66,737 33.2 %
Pro forma EBITDA margin 9.6 % 8.0 %
 
Pro forma adjusted net income* $ 54,220 $ 42,552 27.4 %

Pro forma diluted adjusted earnings per share

$ 1.82 $ 1.37 32.8 %
 

*See Reconciliation of Net Income to Pro Forma Earnings before Interest, Taxes, Depreciation and Amortization and to Pro Forma Adjusted Net Income on page 11.

 
Selected Financial Data (Continued)
 
CACI International Inc
Condensed Consolidated Balance Sheets (Unaudited)
(Amounts in thousands)
 
 
    9/30/2011     6/30/2011
ASSETS:
Current assets
Cash and cash equivalents $ 28,582 $ 164,817
Accounts receivable, net 597,696 573,042
Prepaid expenses and other current assets   48,084   44,219
Total current assets 674,362 782,078
 
Goodwill and intangible assets, net 1,466,152 1,374,387
Property and equipment, net 62,393 62,755
Other long-term assets   100,517   100,911
Total assets $ 2,303,424 $ 2,320,131
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities
Current portion of long-term debt $ 7,500 $ 7,500
Accounts payable 112,927 98,893
Accrued compensation and benefits 154,147 173,586
Other accrued expenses and current liabilities   174,797   157,242
Total current liabilities 449,371 437,221
 
Long-term debt, net of current portion 528,496 402,437
Other long-term liabilities   184,444   170,857
Total liabilities   1,162,311   1,010,515
 
Shareholders' equity   1,141,113   1,309,616
Total liabilities and shareholders' equity $ 2,303,424 $ 2,320,131
 

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Selected Financial Data (Continued)
       
CACI International Inc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands)
 
 
Three Months Ended
9/30/2011 9/30/2010
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income before noncontrolling interest in earnings of joint venture

$ 42,113 $ 28,825

Reconciliation of net income to net cash provided by operating activities:

Depreciation and amortization 13,528 13,082
Non-cash interest expense 2,934 2,742
Amortization of deferred financing costs 809 740
Stock-based compensation expense 3,212 4,906
Provision for deferred income taxes