CACI CACI International Inc

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 full fiscal year ended June 30, 2010.

Fourth Quarter Results

We are pleased to report record fourth quarter net income of $29.9 million, or $0.96 diluted earnings per share. Net income increased 8.8 percent over net income of $27.5 million, or $0.91 diluted earnings per share, for the same period last year. The 16.4 percent increase in revenue in the quarter was driven by organic growth of 14.3 percent, reflecting the continued strong performance of our defense and intelligence businesses. This performance was driven primarily by growth in our core competencies of C4ISR, Logistics and Material Readiness, and Integrated Security and Intelligence Solutions.

              (in millions except per-share data)   Q4, FY10   Q4, FY09   % Change Revenue   $848.7   $728.9   16.4% Operating income   $54.0   $52.6   2.7% Net income   $29.9   $27.5   8.8% Diluted earnings per share   $0.96   $0.91   6.5%      

Solid operating performance, lower interest expense and a lower tax rate drove our net income growth. Our strong annual net income growth drove higher variable stock compensation expense in the quarter, which had the effect of increasing our operating expense and moderating operating income growth. Our operating cash flow of $86.4 million in the quarter was 52.6 percent higher than in the fourth quarter of last year.

Fiscal Year 2010 Results

For the full year, our net income was a record $106.5 million, or $3.47 diluted earnings per share. This net income was an 18.7 percent increase over net income of $89.7 million, or $2.95 diluted earnings per share in Fiscal Year 2009 (FY09). The 15.3 percent increase in revenue in Fiscal Year 2010 (FY10) was driven by organic growth of 13.4 percent, reflecting the strong performance of our defense and intelligence businesses throughout the year.

              (in millions except per-share data)   12 Months, FY10   12 Months, FY09   % Change Revenue   $3,149.1   $2,730.2   15.3% Operating income   $194.8   $184.1   5.8% Net income   $106.5   $89.7   18.7% Diluted earnings per share   $3.47   $2.95   17.8%      

Our strong operating performance, lower interest expense and a significantly lower tax rate drove our net income growth. Our higher net income increased variable cash and stock compensation expense, which had the effect of increasing operating expense and moderating operating income growth. The corporate tax rate was favorably affected by gains in the investments in CACI’s deferred compensation plan and tax benefits related to software development. Our record operating cash flow of $209.3 million for the year was 38.7 percent higher than the amount reported in FY09.

CEO Commentary and Outlook

Commenting on the company’s financial results, Paul Cofoni, CACI’s President and CEO, said, “This marks the third consecutive year that we have met or exceeded our guidance in top and bottom-line performance. FY10 was a record year for revenue, net income, diluted earnings per share, operating cash flow and contract funding orders. In addition, we completed three strategic acquisitions that have added to our portfolio of cyber security and IT modernization solutions. Our growth continues to be driven by the key support we provide to the warfighter in the critical, well-funded national security priorities of C4ISR and intelligence.”

“We believe that FY11 will be another solid year for CACI. We expect to continue to generate strong operating cash flow, which will enhance our solid balance sheet and our ability to fund our future growth both organically and by acquisition. We believe our strengths are aligned with the government’s well funded, high priority areas in the proposed federal budget for the next fiscal year. The requested Operations and Maintenance part of the defense appropriations, where we derive the majority of our revenue, is 8.5 percent higher than Fiscal 2010. We believe there will be negligible impact on our operations from the Secretary of Defense’s recommendations to eliminate the Joint Forces Command, the office for Network and Information Integration and the J-6. We have been informed that the work we do for the Business Transformation Agency will continue following its transition to other organizations. During our FY11, we believe our operational excellence and our solid long-term customer relationships will continue to be contributing factors to maintaining our high recompete win rate, winning new business, and positioning us to provide our services to new customers in key growth areas of C4ISR and intelligence. This gives us the confidence to reiterate our guidance for FY11.”

“We expect to see a continuing strong demand for our services and solutions in FY11 and beyond. We believe the initiatives to improve efficiency and effectiveness recently announced by the Secretary of Defense and the Office of Management and Budget will present new opportunities for our services and solutions that support the warfighter and the modernization of government. We are confident that we will continue to execute our strategy, deliver on our commitments and enhance shareholder value.”

Additional Financial Metrics

              ($ in millions, except per share data)   Q4, FY10   Q4, FY09   % Change Earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure   $67.7   $63.3   7.0% Diluted adjusted earnings per share, a non-GAAP measure   $1.55   $1.27   22.7% Days sales outstanding   55   59                         ($ in millions, except per share data)   12 Months, FY10   12 Months, FY09   % Change Earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure   $247.1   $230.0   7.4% Diluted adjusted earnings per share, a non-GAAP measure   $5.39   $4.46   20.7%  

Contract Funding Orders and Awards

• Contract funding orders in the fourth quarter were $895 million, a 16.0 percent increase over the fourth quarter of FY09. For FY10, contract funding orders totaled a record $3.4 billion, a 14.2 percent increase over FY09.
• Funded backlog at June 30th was $1.9 billion, a 17.2 percent increase over the fourth quarter of FY09. Total backlog at June 30th was $6.8 billion, a decrease of 12.4 percent from the fourth quarter of FY09, primarily as a result of a lower level of recompete activity during FY10.
• During the fourth quarter, we won a prime position on the multiple-award, five-year indefinite delivery, indefinite quantity (IDIQ) Global Battlestaff and Program Support (GBPS) contract with a ceiling of $1.5 billion to support the U.S. Special Operations Command (SOCOM). For FY10, we won prime positions on other IDIQ awards with total ceilings of approximately $1.1 billion. The work on these awards supports the warfighter through our core competencies of C4ISR and Integrated Security and Intelligence Solutions.
• During the fourth quarter, we won contract awards with an estimated value of $293 million. Fourth quarter awards included:
  • Approximately $107 million in previously unannounced national security-related awards.
  • Awards on the GBPS contract totaling $31 million. These awards support SOCOM’s mission of countering the asymmetric threat to our nation.
  • Awards on the Strategic Services Sourcing (S3) contract vehicle with the U.S. Army totaling $27 million. The work on these awards supports the warfighter through our C4ISR services.
• For FY10, the estimated value of contract awards received totaled $2.0 billion and we successfully retained all major recompetes. At the end of FY10, approximately $5 billion in submitted proposals, of which nearly 90 percent are for new business, were under evaluation. The majority of these proposals are currently scheduled to be awarded by the end of December 2010.
• Major awards during FY10 included:
  • A total of approximately $418 million in awards on the S3 contract vehicle, including those received in the fourth quarter. Since March 2006, we have been awarded approximately $2.5 billion in task orders on this vehicle.
  • A total of approximately $370 million in unannounced awards related to national security and from the Intelligence Community, including those received in the fourth quarter.
  • A $219 million award from the U.S. Navy to provide C4ISR business software and maintenance services to the SPAWAR Systems Center Atlantic for up to five years. This award expands our relationship with the customer.
  • A $190 million award from the U.S. Navy to provide technical services to support the Fleet Assistance and Shipboard Training (FAST) program for the Navy and the Marine Corps. This award demonstrates our expertise in logistics analysis and training and continues our over 20 year relationship with the command that oversees this program.

FY10 Recognition

• CACI was named Government Contractor of the Year for companies with revenue greater than $300 million at the 7th Annual Greater Washington Government Contractor Awards event.
• CACI’s U.S. Operations achieved an enterprise-wide Capability Maturity Model Integration (CMMI©) Level 3 rating, and our division in Norfolk, Virginia achieved CMMI Level 5, the highest CMMI rating, for the software work we are doing for the Norfolk Naval Shipyard. High-level CMMI recognition assures our current and potential clients of high quality, low risk, and best practices in systems integration.
• CACI’s Global Enterprise Network Services group became one of just 25 U.S. organizations certified by the International Organization for Standardization (ISO) for adhering to ISO 20000 best practices. Achieving ISO 20000 certification indicates the team meets top standards for measuring performance and offering clients continuous improvement.
• Forbes magazine listed CACI as a top company in the Washington, D.C. area for its “Best Places to Begin a Career.”
• CACI was named one of GI Jobs magazine’s Top 100 military-friendly employers for 2009, and one of CivilianJobs.com’s 2010 most valuable employers for the military.

CACI Reaffirms Its FY11 Guidance

We are reaffirming our Fiscal Year 2011 (FY11) guidance which we issued on June 29, 2010. The table below summarizes the guidance ranges for FY11:

      (In millions except for earnings per share)   Fiscal Year 2011 Revenue   $3,250 - $3,400 Net income   $116 - $122 Diluted earnings per share   $3.70 - $3.90 Diluted weighted average shares   31.3  

This guidance represents our views as of August 17, 2010. 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 Wednesday, August 18, 2010 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 877-303-9143 and enter the confirmation code 87216709. A replay of the call will also be available over the Internet beginning at 1:00 PM Eastern Time Wednesday, August 18, 2010 and can be accessed through our homepage (www.caci.com) by clicking on the CACI Investor Info button.

About CACI

CACI provides professional services and IT solutions needed to prevail in the 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 services; cyber solutions; 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. CACI is a member of the Fortune 1000 Largest Companies and the Russell 2000 index. CACI provides dynamic careers for approximately 13,200 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: 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; 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 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 audits and reviews conducted by the Defense Contract Audit Agency or other government entities with cognizant oversight; the insourcing of contractor positions by the government; 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 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)

            Selected Financial Data   CACI International Inc Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share amounts)   Quarter Ended Twelve Months Ended 6/30/2010 6/30/2009 6/30/2010 6/30/2009   As adjusted* % Change   As adjusted* % Change Revenue $ 848,717   $ 728,901   16.4 % $ 3,149,131   $ 2,730,162   15.3 % Costs of revenue Direct costs 602,726 505,094 19.3 % 2,207,574 1,871,884 17.9 % Indirect costs and selling expenses 177,887 160,275 11.0 % 693,736 627,572 10.5 % Depreciation and amortization   14,133     10,959   29.0 %   53,039     46,592   13.8 % Total costs of revenue   794,746     676,328   17.5 %   2,954,349     2,546,048   16.0 % Operating income 53,971 52,573 2.7 % 194,782 184,114 5.8 % Interest expense and other, net   5,479     7,426   -26.2 %   26,353     31,125   -15.3 % Income before income taxes 48,492 45,147 7.4 % 168,429 152,989 10.1 % Income taxes   18,198     17,431   4.4 %   61,171     62,572   -2.2 %

Net income before noncontrolling interest in earnings of joint venture

30,294 27,716 9.3 % 107,258 90,417 18.6 %

Noncontrolling interest in earnings of joint venture

  (394 )   (232 ) 69.8 %   (743 )   (719 ) 3.3 % Net income attributable to CACI $ 29,900   $ 27,484   8.8 % $ 106,515   $ 89,698   18.7 %   Basic earnings per share $ 0.99 $ 0.92 7.8 % $ 3.53 $ 2.99 18.1 % Diluted earnings per share $ 0.96 $ 0.91 6.5 % $ 3.47 $ 2.95 17.8 %   Weighted average shares used in per share computations: Basic 30,241 29,965 30,138 29,976 Diluted 31,022 30,369 30,676 30,427  

*Certain balances for the period ended June 30, 2009 have been adjusted to reflect the retroactive application of new accounting standards related to convertible debt and minority interest.

  Statement of Operations Data (Unaudited) Quarter Ended Twelve Months Ended 6/30/2010 6/30/2009 6/30/2010 6/30/2009   As adjusted* % Change   As adjusted* % Change Operating income margin 6.4 % 7.2 % 6.2 % 6.7 % Tax rate 37.8 % 38.8 % 36.5 % 41.1 % Net income margin 3.5 % 3.8 % 3.4 % 3.3 %   EBITDA** $ 67,710 $ 63,300 7.0 % $ 247,078 $ 229,987 7.4 % EBITDA margin 8.0 % 8.7 % 7.8 % 8.4 %   Adjusted net income** $ 48,215 $ 38,463 25.4 % $ 165,207 $ 135,716 21.7 % Diluted adjusted earnings per share $ 1.55 $ 1.27 22.7 % $ 5.39 $ 4.46 20.7 %  

*Certain balances for the period ended June 30, 2009 have been adjusted to reflect the retroactive application of new accounting standards related to convertible debt and minority interest.

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

      Selected Financial Data (Continued)   CACI International Inc Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands)   6/30/2010 6/30/2009   as adjusted* ASSETS: Current assets Cash and cash equivalents $ 254,543 $ 208,488 Accounts receivable, net 531,033 477,025 Prepaid expenses and other current assets   55,170   39,319 Total current assets 840,746 724,832   Goodwill and intangible assets, net 1,270,159 1,181,579 Property and equipment, net 58,666 30,923 Other long-term assets   75,195   68,745 Total assets $ 2,244,766 $ 2,006,079   LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities Current portion of long-term debt $ 278,653 $ 9,464 Accounts payable 98,421 87,300 Accrued compensation and benefits 152,790 137,843 Other accrued expenses and current liabilities   128,559   83,297 Total current liabilities 658,423 317,904   Long-term debt, net of current portion 252,451 570,078 Other long-term liabilities   160,737   88,489 Total liabilities   1,071,611   976,471   Shareholders' equity   1,173,155   1,029,608 Total liabilities and shareholders' equity $ 2,244,766 $ 2,006,079   *Certain balances as of June 30, 2009 have been adjusted to reflect the retroactive application of new accounting standards related to convertible debt and minority interest.       Selected Financial Data (Continued)   CACI International Inc Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands)   Twelve Months Ended 6/30/2010 6/30/2009       as adjusted* CASH FLOWS FROM OPERATING ACTIVITIES:

Net income before noncontrolling interest in earnings of joint venture

$ 107,258 $ 90,417

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

Depreciation and amortization 53,039 46,592 Non-cash interest expense 10,499 9,809 Amortization of deferred financing costs 2,356 2,553 Stock-based compensation expense 30,750 16,821 (Benefit) provision for deferred income taxes (4,703 ) 9,624

Changes in operating assets and liabilities, net of effect of business acquisitions:

Accounts receivable, net (49,291 ) (36,055 ) Prepaid expenses and other current assets (11,628 ) (5,555 ) Accounts payable and accrued expenses 49,910 12,330 Accrued compensation and benefits 9,423 5,030 Income taxes receivable and payable 3,288 2,177 Other liabilities   8,443     (2,825 ) Net cash provided by operating activities   209,344     150,918     CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (22,503 ) (12,369 ) Purchases of businesses, net of cash acquired (87,943 ) (26,532 ) Other   (2,431 )   133   Net cash used in investing activities   (112,877 )   (38,768 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net payments under credit facilities (53,600 ) (3,919 ) Proceeds from employee stock purchase plans 4,501 5,550 Proceeds from exercise of stock options 5,589 2,129 Purchases of common stock (3,496 ) (23,705 ) Other   (7 )   (1,156 ) Net cash used in financing activities   (47,013 )   (21,101 ) Effect of exchange rate changes on cash and cash equivalents   (3,399 )   (2,957 ) Net increase in cash and cash equivalents 46,055 88,092 Cash and cash equivalents, beginning of period   208,488     120,396   Cash and cash equivalents, end of period $ 254,543   $ 208,488     *Certain balances for the period ended June 30, 2009 have been adjusted to reflect the retroactive application of new accounting standards related to convertible debt and minority interest.     Selected Financial Data (Continued)             Revenue by Customer Type (Unaudited) Quarter Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Department of Defense $ 663,617 78.2 % $ 563,917 77.4 % $ 99,700 17.7 % Federal Civilian Agencies 142,059 16.7 % 136,971 18.8 % 5,088 3.7 % Commercial 39,752 4.7 % 21,853 3.0 % 17,899 81.9 % State and Local Governments   3,289   0.4 %     6,160   0.8 %     (2,871 )   -46.6 % Total $ 848,717   100.0 %   $ 728,901   100.0 %   $ 119,816     16.4 %   Twelve Months Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Department of Defense $ 2,450,463 77.8 % $ 2,078,338 76.1 % $ 372,125 17.9 % Federal Civilian Agencies 535,467 17.0 % 542,090 19.9 % (6,623 ) -1.2 % Commercial 146,839 4.7 % 88,228 3.2 % 58,611 66.4 % State and Local Governments   16,362   0.5 %     21,506   0.8 %     (5,144 )   -23.9 % Total $ 3,149,131   100.0 %   $ 2,730,162   100.0 %   $ 418,969     15.3 %   Revenue by Contract Type (Unaudited) Quarter Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Time and materials $ 384,228 45.3 % $ 343,687 47.2 % $ 40,541 11.8 % Cost reimbursable 285,240 33.6 % 246,625 33.8 % 38,615 15.7 % Fixed price   179,249   21.1 %     138,589   19.0 %     40,660     29.3 % Total $ 848,717   100.0 %   $ 728,901   100.0 %   $ 119,816     16.4 %   Twelve Months Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Time and materials $ 1,467,556 46.6 % $ 1,310,001 48.0 % $ 157,555 12.0 % Cost reimbursable 1,033,480 32.8 % 875,653 32.1 % 157,827 18.0 % Fixed price   648,095   20.6 %     544,508   19.9 %     103,587     19.0 % Total $ 3,149,131   100.0 %   $ 2,730,162   100.0 %   $ 418,969     15.3 %   Revenue Received as a Prime versus Subcontractor (Unaudited) Quarter Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Prime $ 721,625 85.0 % $ 608,178 83.4 % $ 113,447 18.7 % Subcontractor   127,092   15.0 %     120,723   16.6 %     6,369     5.3 % Total $ 848,717   100.0 %   $ 728,901   100.0 %   $ 119,816     16.4 %   Twelve Months Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Prime $ 2,677,553 85.0 % $ 2,261,801 82.8 % $ 415,752 18.4 % Subcontractor   471,578   15.0 %     468,361   17.2 %     3,217     0.7 % Total $ 3,149,131   100.0 %   $ 2,730,162   100.0 %   $ 418,969     15.3 %         Selected Financial Data (Continued)   Contract Funding Orders Received (Unaudited) Quarter Ended         (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Contract Funding Orders $ 895,373   $ 771,605   $ 123,768   16.0 % Twelve Months Ended         (dollars in thousands)   6/30/2010     6/30/2009   $ Change   % Change   Contract Funding Orders $ 3,422,206   $ 2,996,471   $ 425,735   14.2 %             Direct Costs by Category (Unaudited) Quarter Ended (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Direct labor $ 211,760 35.1 % $ 194,277 38.5 % $ 17,483 9.0 % Other direct costs   390,966   64.9 %     310,817   61.5 %     80,149   25.8 % Total direct costs $ 602,726   100.0 %   $ 505,094   100.0 %   $ 97,632   19.3 %   Twelve Months Ended (dollars in thousands) 6/30/2010   6/30/2009  

$ Change

  % Change Direct labor $ 810,643 36.7 % $ 751,000 40.1 % $ 59,643 7.9 % Other direct costs   1,396,931   63.3 %     1,120,884   59.9 %     276,047   24.6 % Total direct costs $ 2,207,574   100.0 %   $ 1,871,884   100.0 %   $ 335,690   17.9 %    

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.             Quarter Ended   Twelve Months Ended (dollars in thousands) 6/30/2010   6/30/2009   % Change   6/30/2010   6/30/2009   % Change Revenue, as reported $ 848,717 $ 728,901 16.4 % $ 3,149,131 $ 2,730,162 15.3 % Less: Acquired revenue   15,642             54,133         Organic revenue $ 833,075   $ 728,901   14.3 %   $ 3,094,998   $ 2,730,162   13.4 %    

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 EBITDA, EBITDA margin, Adjusted Net Income and Diluted Adjusted 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 Adjusted 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. Adjusted 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 Adjusted Earnings Per Share is Adjusted Net Income divided by diluted weighted-average shares, as reported. 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   Twelve Months Ended (dollars in thousands) 6/30/2010   6/30/2009   % Change   6/30/2010   6/30/2009   % Change Net income, as reported $ 29,900 $ 27,484 8.8 % $ 106,515 $ 89,698 18.7 % Plus: Income taxes 18,198 17,431 4.4 % 61,171 62,572 -2.2 % Interest income and expense, net 5,479 7,426 -26.2 % 26,353 31,125 -15.3 % Depreciation and amortization   14,133       10,959     29.0 %     53,039       46,592     13.8 % EBITDA $ 67,710     $ 63,300     7.0 %   $ 247,078     $ 229,987     7.4 %   Quarter Ended   Twelve Months Ended (dollars in thousands) 6/30/2010   6/30/2009   % Change   6/30/2010   6/30/2009   % Change Revenue, as reported $ 848,717 $ 728,901 16.4 % $ 3,149,131 $ 2,730,162 15.3 % EBITDA $ 67,710     $ 63,300     7.0 %   $ 247,078     $ 229,987     7.4 % EBITDA margin   8.0 %     8.7 %         7.8 %     8.4 %       Quarter Ended   Twelve Months Ended (dollars in thousands) 6/30/2010   6/30/2009   % Change   6/30/2010   6/30/2009   % Change Net income, as reported $ 29,900 $ 27,484 8.8 % $ 106,515 $ 89,698 18.7 % Plus: Stock-based compensation 12,800 3,737 242.5 % 30,750 16,821 82.8 % Depreciation and amortization 14,133 10,959 29.0 % 53,039 46,592 13.8 % Amortization of financing costs 537 872 -38.4 % 2,356 2,553 -7.7 % Non-cash interest expense 2,688 2,510 7.1 % 10,499 9,809 7.0 % Less: Related tax effect   (11,843 )     (7,099 )   66.8 %     (37,952 )     (29,757 )   27.5 % Adjusted net income $ 48,215     $ 38,463     25.4 %   $ 165,207     $ 135,716     21.7 %   Quarter Ended   Twelve Months Ended (shares in thousands) 6/30/2010   6/30/2009   % Change   6/30/2010   6/30/2009   % Change

Diluted weighted average shares, as reported

31,022 30,369 30,676 30,427 Diluted earnings per share, as reported $ 0.96     $ 0.91     6.5 %   $ 3.47     $ 2.95     17.8 % Diluted adjusted earnings per share $ 1.55     $ 1.27     22.7 %   $ 5.39     $ 4.46     20.7 %