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CACI Reports Record Results for Fiscal 2009 Fourth Quarter and Full Year

Posted on: Wednesday, 12 August 2009, 15:05 CDT

ARLINGTON, Va., Aug. 12 /PRNewswire-FirstCall/ -- CACI International Inc (NYSE: CACI), a leading professional services and information technology solutions provider to the federal government, announced results today for its fourth fiscal quarter and twelve months ended June 30, 2009. CACI provides innovative solutions to meet America's needs in national defense, intelligence, homeland security, and the improvement of government services, and is a leading strategic consolidator in its market space.

Fourth Quarter Results

For the fourth quarter of Fiscal Year 2009 (FY09), we reported record revenue of $728.9 million, up 11.3 percent over fourth quarter of Fiscal Year 2008 (FY08) revenue of $655.0 million. The increase in revenue during the quarter was driven by organic growth of 10.5 percent. Operating income for the quarter was a record $52.6 million, up 13.4 percent, compared with operating income of $46.4 million in the year earlier quarter. The operating margin was 7.2 percent compared with 7.1 percent in the fourth quarter of FY08. Our effective tax rate decreased to 38.8 percent from 40.8 percent in the year earlier quarter as a result of gains realized in the fourth quarter of FY09 on assets invested in our deferred compensation plan. Net income for the fourth quarter was a record $29.0 million, up 23.0 percent compared with $23.5 million for the fourth quarter of FY08. Diluted earnings per share were a record $0.95, up 24.5 percent, compared with $0.77 per diluted share in the year earlier quarter. Cash generated by operations was $56.6 million compared with $81.5 million in the year earlier quarter. Days sales outstanding at the end of the quarter were 59 compared with 60 days at the end of the fourth quarter of FY08. Diluted cash earnings per share, a non-GAAP measure, were $1.27, up 15.4 percent, compared with diluted cash earnings per share of $1.10 in the fourth quarter of FY08.

Fourth Quarter Contract Funding Orders and Awards

• Contract funding orders totaled $771.6 million, a 20.7 percent increase over the fourth quarter of FY08. Funded backlog was $1.6 billion, a 17.6 percent increase over the fourth quarter of FY08. Total backlog at the end of FY09 was $7.8 billion, 11.0 percent higher than the year-end FY08 backlog of $7.0 billion.
• Contract awards were an estimated value of $1.3 billion including:
  • A multiple-award indefinite delivery/indefinite quantity (IDIQ) contract with a ceiling value of $900 million to support the U.S. Army's Technical Engineering and Support Services (TESS) program, a recompete win with an estimated value of $500 million.
  • Awards totaling $179 million on the Strategic Services Sourcing (S3) contract vehicle with the Army.
  • A prime IDIQ contract with a ceiling value of $84 million to continue providing advertising, media, and marketing support to the Army National Guard (ARNG) State Media Services Program.
    

Fourth Quarter Appointments and Industry Recognition

• The Honorable James S. Gilmore III, former Governor of Virginia, and General William Scott Wallace, USA (Ret.), former Commanding General of the U.S. Army Training and Doctrine Command, were appointed to CACI's Board of Directors.
• Deborah Dunie, Executive Vice President and Chief Technology Officer, was named Chairperson of the Armed Forces Communications and Electronics Association (AFCEA) International's Technical Committee.
  

CEO Commentary

Commenting on the company's financial results, Paul Cofoni, CACI's President and CEO, said, "Our record results for both the quarter and the year validate our strategy to focus our solutions in the well-funded and critical areas of defense, intelligence, homeland security, and IT modernization. National security remains at the top of our government's greatest challenges, and we will continue to concentrate our resources to help our clients preserve the freedom and liberty of our nation's citizens. Even with multiple domestic issues facing our country, we cannot lose sight of ever-increasing threats from determined, persistent, and well-resourced terrorist organizations. There is no margin for error in our national security posture.

"Looking ahead we expect to see continued strong performance in CACI's U.S. operations. We anticipate continued demand for our valuable and proven solutions to keep our nation safe and implement efficient and cost-effective IT solutions to modernize federal agencies. We are positioned to expand our capabilities in defense healthcare logistics and IT modernization and address new opportunities in cyber security, smart power, and energy. We expect to see continued growth in our highly profitable U.K. operations, including greater penetration into the public sector.

"Our fundamentals are strong. We expect FY10 to be another year of double-digit earnings per share growth, mid to high single digit organic revenue growth and strong cash generation. We believe we are aligned with the priorities of the current administration, and perfectly positioned to win new business on complex, large-scale contracts. We are confident that our aggressive and experienced leadership team will continue to make CACI a leader in our markets, provide high-quality and best-value solutions to our clients, and build long-term shareholder value."

Full Year FY09 Results

For all of FY09, we reported record revenue of $2.73 billion, up 12.8 percent over FY08 revenue of $2.42 billion. Organic revenue growth for the year was 9.9 percent. Operating income in FY09 was a record $184.1 million, up 13.1 percent, compared with $162.8 million reported in FY08. Net income in FY09 was a record $95.5 million, 14.6 percent higher than net income of $83.3 million for FY08. Diluted earnings per share were a record $3.14, up 15.3 percent, compared with $2.72 per diluted share reported a year earlier. Operating cash flow for FY09 was $151.1 million, compared with $160.1 million for FY08. Diluted cash earnings per share were $4.46, up 9.7 percent, compared with diluted cash earnings per share of $4.07 in FY08.

FY09 Contract Funding Orders and Awards

• Contract funding orders totaled a record $3.0 billion, a 19.8 percent increase over contract funding orders of $2.5 billion received in FY08.
• Contract awards totaled a record $3.9 billion, up 37.0 percent over FY08, including:
  • Approximately $700 million in awards on the S3 contract vehicle throughout the year. At the end of our fiscal year, we had received more than $2 billion on this vehicle since its inception in March 2006.
  • GENESIS III, a prime contract with a $452 million ceiling to continue providing mission support services to the U.S. Army Intelligence and Security Command.
  • The General Service Administration's (GSA) ten-year, multiple award Alliant program with an initial estimated value to CACI of $350 million.
  • A five-year, single award prime task order of $150 million by the U.S. Navy's Naval Sea Systems Command to modernize shipyards and maintenance centers through information technology upgrades and software development.
• Additional major contract awards not included in the above total include prime positions on:
  • The Army's ten-year, multiple award Program Executive Office for Simulation, Training and Instrumentation (PEO STRI) Omnibus Contract II with an overall ceiling value of $17.5 billion.
  • The five-year, multiple award United States Strategic Command Systems and Mission Support II (USAMS II) program, with an overall ceiling value of $900 million.
  • The Army's five-year, multiple award Biometrics Operations and Support Services-Unrestricted (BOSS-U) contract with an estimated ceiling value of $500 million.
  • A five-year multiple award contract with a ceiling value of $260 million to support the Department of Defense Business Transformation Agency in the area of thought leadership and change management.
    

FY09 Industry Recognition

• CACI was rated by Fortune Magazine as among the Most Admired IT Companies in the world and the Most Admired Company in Virginia.
  

CACI Reaffirms Its FY10 Guidance

We are reaffirming our Fiscal Year 2010 (FY10) guidance which we issued on June 25, 2009. In addition to the assumptions supporting our FY10 guidance outlined at the time we issued it, every key performance metric trend for our U.S. Operations continues to point in a positive direction: contract awards, contract funding orders, our win rates for both new and recompeted business, the growth of our pipeline of qualified opportunities, and hiring and retention. This guidance also includes the adoption of Financial Accounting Standards Board Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement). The table below summarizes the guidance ranges for FY10:

(In millions except for earnings per share) Fiscal Year 2010 ------------------------------------------- ---------------- Revenue $2,850 - $2,950 ------- --------------- Net income $97.8 - $103.9 ---------- -------------- Diluted earnings per share $3.20 - $3.40 -------------------------- ------------- Diluted weighted average shares 30.6 ------------------------------- ----

This guidance does not include any contributions from future acquisitions.

This guidance represents our views as of August 12, 2009. 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, August 13(th), during which members of our senior management team will be making a brief presentation focusing on fourth 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 1-800-967-7134 and enter the confirmation code 9640622. A replay of the call will also be available over the Internet beginning at 1:00 PM Eastern Time Thursday, August 13(th), and can be accessed through our homepage (www.caci.com) 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; cyber security, information assurance, and information operations; 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 and the Russell 2000 index. CACI provides dynamic careers for approximately 12,500 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 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: regional and national economic conditions in the United States and the United Kingdom, including conditions that result from a prolonged recession; terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; 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, rebuilding Iraq, 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 audit and reviews conducted by the Defense Contract Audit 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, (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.

Corporate Communications and Media: Jody Brown, Executive Vice President, Public Relations (703) 841-7801, jbrown@caci.com Investor Relations: David Dragics, Senior Vice President, Investor Relations (866) 606-3471, ddragics@caci.com

(Financial tables follow)

Selected Financial Data CACI International Inc Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share amounts) Quarter Ended Twelve Months Ended 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change -------- -------- ----- ---------- ---------- ----- Revenue $728,901 $655,016 11.3% $2,730,162 $2,420,537 12.8% -------- -------- ----- ---------- ---------- ----- Costs of revenue Direct costs 505,094 441,820 14.3% 1,871,884 1,625,591 15.2% Indirect costs and selling expenses 160,275 154,702 3.6% 627,572 584,600 7.4% Depreciation and amortization 10,959 12,128 -9.6% 46,592 47,517 -1.9% -------- -------- ----- ---------- ---------- ----- Total costs of revenue 676,328 608,650 11.1% 2,546,048 2,257,708 12.8% -------- -------- ----- ---------- ---------- ----- Operating income 52,573 46,366 13.4% 184,114 162,829 13.1% Interest expense and other, net 5,220 6,557 -20.4% 22,323 25,198 -11.4% -------- -------- ----- ---------- ---------- ----- Income before income taxes 47,353 39,809 19.0% 161,791 137,631 17.6% Income taxes 18,388 16,260 13.1% 66,311 54,308 22.1% -------- -------- ----- ---------- ---------- ----- Net income $28,965 $23,549 23.0% $95,480 $83,323 14.6% ======== ======== ===== ========== ========== ===== Basic earnings per share $0.97 $0.78 23.7% $3.19 $2.77 14.9% Diluted earnings per share $0.95 $0.77 24.5% $3.14 $2.72 15.3% Weighted average shares used in per share computations: Basic 29,965 30,133 29,976 30,058 Diluted 30,369 30,740 30,427 30,606

Statement of Operations Data (Unaudited) Quarter Ended Twelve Months Ended 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change -------- -------- ----- ---------- ---------- ----- Operating income margin 7.2% 7.1% 6.7% 6.7% Tax rate 38.8% 40.8% 41.0% 39.5% Net income margin 4.0% 3.6% 3.5% 3.4% EBITDA* $63,300 $58,093 9.0% $229,987 $209,871 9.6% EBITDA Margin 8.7% 8.9% 8.4% 8.7% Cash net income* $38,463 $33,733 14.0% $135,716 $124,429 9.1% Diluted cash earnings per share $1.27 $1.10 15.4% $4.46 $4.07 9.7% * See Reconciliation of Net Income to Earnings before Interest, Taxes, Depreciation and Amortization and to Cash Net Income on page 10

Selected Financial Data (Continued) CACI International Inc Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands) 6/30/2009 6/30/2008 ASSETS: --------- --------- Current assets Cash and cash equivalents $208,488 $120,396 Accounts receivable, net 477,025 441,732 Prepaid expenses and other current assets 39,319 40,697 --------- --------- Total current assets 724,832 602,825 Goodwill and intangible assets, net 1,181,579 1,193,500 Property and equipment, net 30,923 25,361 Other long-term assets 70,140 80,967 --------- --------- Total assets $2,007,474 $1,902,653 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities Current portion of long-term debt $9,464 $3,549 Accounts payable 87,300 74,175 Accrued compensation and benefits 137,843 126,649 Other accrued expenses and current liabilities 83,297 85,897 --------- --------- Total current liabilities 317,904 290,270 Long-term debt, net of current portion 628,125 639,074 Other long-term liabilities 68,117 55,424 --------- --------- Total liabilities 1,014,146 984,768 --------- --------- Shareholders' equity 993,328 917,885 --------- --------- Total liabilities and shareholders' equity $2,007,474 $1,902,653 ========== ==========

Selected Financial Data (Continued) CACI International Inc Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands) Twelve Months Ended 6/30/2009 6/30/2008 CASH FLOWS FROM OPERATING ACTIVITIES: --------- --------- Net income $95,480 $83,323 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 46,592 47,517 Amortization of deferred financing costs 2,841 2,531 Stock-based compensation expense 16,821 17,639 Deferred income tax expense 13,363 6,087 Changes in operating assets and liabilities, net of effect of business acquisitions: Accounts receivable, net (36,055) (27,001) Prepaid expenses and other current assets (5,555) 578 Accounts payable and accrued expenses 10,745 1,597 Accrued compensation and benefits 5,030 22,237 Income taxes receivable and payable 2,177 902 Other liabilities (359) 4,676 ------- ------- Net cash provided by operating activities 151,080 160,086 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (12,369) (13,589) Purchases of businesses, net of cash acquired (26,532) (315,855) Other 133 101 ------- ------- Net cash used in investing activities (38,768) (329,343) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Net payments under credit facilities (3,919) (3,352) Proceeds from employee stock purchase plans 5,550 4,231 Proceeds from exercise of stock options 2,129 4,079 Purchases of common stock (23,705) (1,972) Other (1,318) 1,088 ------- ------- Net cash (used in) provided by financing activities (21,263) 4,074 ------- ------- Effect of exchange rate changes on cash and cash equivalents (2,957) (103) ------- ------- Net increase (decrease) in cash and cash equivalents 88,092 (165,286) Cash and cash equivalents, beginning of period 120,396 285,682 ------- ------- Cash and cash equivalents, end of period $208,488 $120,396 ======== ========

Selected Financial Data (Continued) Revenue by Customer Type (Unaudited) (dollars in Quarter Ended thousands) 6/30/2009 6/30/2008 $Change %Change Department of Defense $563,917 77.4% $496,494 75.8% $67,423 13.6% Federal Civilian Agencies 136,971 18.8% 127,564 19.5% 9,407 7.4% Commercial 21,853 3.0% 25,101 3.8% (3,248) -12.9% State and Local Governments 6,160 0.8% 5,857 0.9% 303 5.2% Total $728,901 100.0% $655,016 100.0% $73,885 11.3% (dollars in Twelve Months Ended thousands) 6/30/2009 6/30/2008 $Change %Change Department of Defense $2,078,338 76.1% $1,807,546 74.7% $270,792 15.0% Federal Civilian Agencies 542,090 19.9% 491,275 20.3% 50,815 10.3% Commercial 88,228 3.2% 101,839 4.2% (13,611) -13.4% State and Local Governments 21,506 0.8% 19,877 0.8% 1,629 8.2% Total $2,730,162 100.0% $2,420,537 100.0% $309,625 12.8% Revenue by Contract Type (Unaudited) (dollars in Quarter Ended thousands) 6/30/2009 6/30/2008 $Change %Change Time and materials $343,687 47.2% $327,969 50.1% $15,718 4.8% Cost reimbursable 246,625 33.8% 190,341 29.0% 56,284 29.6% Fixed price 138,589 19.0% 136,706 20.9% 1,883 1.4% Total $728,901 100.0% $655,016 100.0% $73,885 11.3% (dollars in Twelve Months Ended thousands) 6/30/2009 6/30/2008 $Change %Change Time and materials $1,310,001 48.0% $1,232,942 50.9% $77,059 6.3% Cost reimbursable 875,653 32.1% 672,950 27.8% 202,703 30.1% Fixed price 544,508 19.9% 514,645 21.3% 29,863 5.8% Total $2,730,162 100.0% $2,420,537 100.0% $309,625 12.8% Revenue Received as a Prime versus Subcontractor (Unaudited) (dollars in Quarter Ended thousands) 6/30/2009 6/30/2008 $Change %Change Prime $608,178 83.4% $535,630 81.8% $72,548 13.5% Subcontractor 120,723 16.6% 119,386 18.2% 1,337 1.1% Total $728,901 100.0% $655,016 100.0% $73,885 11.3% (dollars in Twelve Months Ended thousands) 6/30/2009 6/30/2008 $Change %Change Prime $2,261,801 82.8% $1,982,341 81.9% $279,460 14.1% Subcontractor 468,361 17.2% 438,196 18.1% 30,165 6.9% Total $2,730,162 100.0% $2,420,537 100.0% $309,625 12.8% Selected Financial Data (Continued) Contract Funding Orders Received (Unaudited) (dollars in Quarter Ended thousands) 6/30/2009 6/30/2008 $Change %Change Contract Funding Orders $771,605 $639,163 $132,442 20.7% (dollars in Twelve Months Ended thousands) 6/30/2009 6/30/2008 $Change %Change Contract Funding Orders $2,996,471 $2,501,513 $494,958 19.8%

Reconciliation of Total Revenue Growth and Organic Revenue Growth (Unaudited) We are presenting organic revenue growth to reflect the effect of acquisitions on total revenue growth. Revenue generated from the date a business is acquired through the first anniversary of that date is considered acquired revenue growth. All remaining revenue growth is considered organic. We believe that this non-GAAP financial measure provides investors with useful information to evaluate the growth rate of our core business. This non-GAAP measure should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. (dollars in Quarter Ended Twelve Months Ended thousands) 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change Revenue, as reported $728,901 $655,016 11.3% $2,730,162 $2,420,537 12.8% Less: Acquired revenue 5,293 - 68,794 - Organic revenue $723,608 $655,016 10.5% $2,661,368 $2,420,537 9.9%

Selected Financial Data (Continued) Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and to Cash Net Income (Unaudited) The Company views EBITDA, EBITDA margin, Cash Net Income and Diluted Cash Earnings Per Share as important indicators of performance, consistent with the manner in which management measures and forecasts the Company's performance. EBITDA is a commonly used non-GAAP measure when comparing our results with those of other companies. We believe Cash Net Income is a significant driver 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. EBITDA is defined by us as GAAP net income plus net interest expense, income taxes, and depreciation and amortization. EBITDA margin is EBITDA divided by revenue. Cash Net Income is defined by us as GAAP net income plus stock-based compensation expense, depreciation and amortization, and amortization of financing costs, net of related tax effects. Diluted Cash Earnings Per Share is Cash Net Income divided by diluted weighted-average shares, as reported. EBITDA and Cash 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. (dollars in Quarter Ended Twelve Months Ended thousands) 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change Net income, as reported $28,965 $23,549 23.0% $95,480 $83,323 14.6% Plus: Income taxes 18,388 16,260 13.1% 66,311 54,308 22.1% Interest income and expense, net 4,988 6,156 -19.0% 21,604 24,723 -12.6% Depreciation and amortization 10,959 12,128 -9.6% 46,592 47,517 -1.9% EBITDA $63,300 $58,093 9.0% $229,987 $209,871 9.6% (dollars in Quarter Ended Twelve Months Ended thousands) 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change Revenue, as reported $728,901 $655,016 11.3% $2,730,162 $2,420,537 12.8% EBITDA $63,300 $58,093 9.0% $229,987 $209,871 9.6% EBITDA margin 8.7% 8.9% 8.4% 8.7% (dollars in Quarter Ended Twelve Months Ended thousands) 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change Net income, as reported $28,965 $23,549 23.0% $95,480 $83,323 14.6% Plus: Stock-based compensation 3,737 3,955 -5.5% 16,821 17,639 -4.6% Depreciation and amortization 10,959 12,128 -9.6% 46,592 47,517 -1.9% Amortization of financing costs 944 686 37.6% 2,841 2,531 12.2% Less: Related tax effect (6,142) (6,585) -6.7% (26,018) (26,581) -2.1% Cash net income $38,463 $33,733 14.0% $135,716 $124,429 9.1% (dollars in Quarter Ended Twelve Months Ended thousands) 6/30/2009 6/30/2008 % Change 6/30/2009 6/30/2008 % Change Diluted weighted average shares, as reported 30,369 30,740 30,427 30,606 Diluted earnings per share, as reported $0.95 $0.77 24.5% $3.14 $2.72 15.3% Diluted cash earnings per share $1.27 $1.10 15.4% $4.46 $4.07 9.7%

SOURCE CACI International Inc

Source: PR Newswire

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