CACI International Inc (NYSE: CACI), a leading professional
services and information technology solutions provider to the
federal government, announced results today for its second fiscal
quarter ended December 31, 2011.
Second Quarter Results
The following table summarizes results computed in accordance
with Generally Accepted Accounting Principles (GAAP).
(in millions
except per share data) Q2, FY12 Q2, FY11 %
Change Revenue $973.2 $867.3 12.2% Operating
income $74.7 $59.4 25.7% Net income
attributable to CACI $41.1 $33.2 23.5% Diluted
earnings per share $1.51 $1.08 40.0%
We are pleased to report record second quarter Fiscal Year 2012
(FY12) revenue of $973.2 million, an increase of 12.2 percent from
the second quarter of Fiscal Year 2011 (FY11). The revenue increase
was driven primarily by higher volumes of intelligence,
surveillance and reconnaissance; business systems and cyber-related
work.
Pro Forma Second Quarter Results
During the year ended June 30, 2010, 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. There
were no earn-out adjustments in the second quarter of FY12. In the
second quarter of FY11, the liabilities decreased, and operating
income increased by $0.5 million. To provide a comparison of our
results excluding the FY11 earn-out adjustment, pro forma results
for the second quarter of FY11 are shown below.
(in millions
except per share data) Q2, FY12 Q2, FY11 %
Change Revenue $973.2 $867.3 12.2% Pro forma
operating income, a non-GAAP measure $74.7 $58.9
26.8% Pro forma net income attributable to CACI, a non-GAAP
measure $41.1 $32.9 24.8% Pro forma diluted
earnings per share, a non-GAAP measure $1.51 $1.06
41.4%
Pro forma operating income grew 26.8 percent over the prior year
period to $74.7 million, driven by strong growth of 11.8 percent in
direct labor and strong performance on a fixed price contract for
which work is nearing completion. Pro forma net income attributable
to CACI for the second quarter of FY12 was a record $41.1 million,
or $1.51 pro forma diluted earnings per share, an increase of 41.4
percent over pro forma net income attributable to CACI of $32.9
million, or $1.06 pro forma diluted earnings per share, for the
same period in FY11. Net cash provided by operations in the quarter
was $29.2 million. (See Reconciliation of Operating Income, Net
Income and Diluted Earnings Per Share to Pro Forma Amounts on page
13.)
CEO Commentary and Outlook
Paul Cofoni, CACI’s President and CEO, said, “Our record second
quarter performance confirms CACI’s strategy to align our solutions
with the government’s highest priorities in defense, intelligence,
homeland security, and government transformation. For years, we
have invested in our capabilities and client relationships, and
positioned our company in the growth areas of cyberspace,
counterterrorism, and intelligence, surveillance, and
reconnaissance (ISR) that are emphasized in the Department of
Defense’s recently released strategic guidance and proposed
five-year defense budget. With record results in revenue, operating
income, net income, and EPS, we continue to deliver on our
financial goals of mid- to high-single-digit organic revenue
growth, double-digit earnings growth, and strong cash flow.
“CACI’s ISR and government transformation drove our second
quarter revenue growth. Our ISR solutions are in demand to support
DoD’s stated priorities for innovative and advanced technologies to
counter asymmetric and global threats and build a modern force for
the 21st century. We also believe our ongoing support for the U.S.
Special Operations Command will grow as DoD increasingly turns to
these forces for worldwide operations. In addition, we recorded an
approximately 20 percent growth in our federal civilian business
over our FY11 second quarter, as clients continue to seek CACI’s
solutions in government transformation, cyberspace, and healthcare
IT.”
Mr. Cofoni continued, “CACI’s consistent track record of
performance, operational excellence, culture of teamwork, and
strong growth prospects are attracting talented professionals to
our top management team. We welcomed Krisstie Kondrotis as
Executive Vice President of Business Development and Dr. Lani Kass
as Corporate Strategic Advisor. They both bring exceptional skill
and experience to our company.
“CACI’s leadership team has, for many years, focused on
continually aligning our growth strategy and evolving our
innovative solutions to meet our clients’ critical needs. We manage
all our projects for operational excellence that sustains client
satisfaction and drives our high recompete win rate. Our contract
awards and contract funding orders continue to be strong, and
through the first six months of this fiscal year, the estimated
value of our contract awards is almost equal to all of our fiscal
year 2011 awards.
“Our strong operational performance in the second quarter gives
us the confidence to again raise our guidance for Fiscal Year 2012
as we continue to set the foundation for future growth.”
Additional Financial Metrics
(in millions
except per share data) Q2, FY12 Q2, FY11 %
Change Pro forma earnings before interest, taxes, depreciation and
amortization (EBITDA), a non-GAAP measure $89.5 $73.1
22.4% Pro forma diluted adjusted earnings per share, a
non-GAAP measure $2.00 $1.48 34.5% Days sales
outstanding 61 58
Second Quarter Contract Funding Orders and Awards
Subsequent to our Second Quarter Fiscal 2011 (Q2, FY11) earnings
release, we made two significant adjustments to the estimated value
of awards we received. As previously disclosed in our Third Quarter
Fiscal 2011 earnings release of May 4, 2011, we decreased the
estimated value of our FY11 awards by $450 million due to the
sustainment of the protest of the TASC award received in Q2, FY11.
As previously disclosed in our Fiscal Fourth Quarter earnings
release of August 17, 2011, we increased the estimated value of
awards we received during the first nine months of FY11 by $499
million due to the inclusion of previously unannounced awards. For
comparative purposes, the estimated value of awards received in the
first three quarters of FY11 was $1.65 billion, $512 million, and
$471 million, respectively, on an adjusted basis, and $550 million
in the last quarter of FY11, as reported.
- Contract funding orders in the second
quarter were $605 million, an increase of 17 percent, compared with
$515 million in the year earlier quarter. Funded backlog at
December 31, 2011 was $2.19 billion compared with $2.18 billion a
year earlier. Total backlog at December 31, 2011 was $8.0 billion
compared with $7.45 billion at the end of the year earlier
quarter.
- During the second quarter, we received
contract awards with an estimated value of $962 million, an
increase of 88 percent compared with $512 million in the year
earlier quarter. Over 75 percent of these awards were for
recompeted or extended business, indicative of our operational
excellence and ability to retain our base of business. Second
quarter awards included:
- A prime position on the U.S. Office of
Personnel Management (OPM) $2.5 billion, four-year 10 month,
indefinite delivery, indefinite quantity (IDIQ) contract to provide
background investigation field services. The award extends our
investigative support for OPM that began in 2004 and contributes
$250 million in estimated value to our second quarter awards total
reported above.
- Approximately $189 million in
previously unannounced intelligence awards for both new and
recompeted work.
- Approximately $175 million for a
five-year contract to continue to provide our integrated security
solutions consulting, training and related services in support of a
major joint organization.
- A $39 million task order for the
Defense Information System for Security to support the Defense
Logistics Agency in developing a standards-based IT system to
modernize and streamline the security clearance process. CACI will
develop a Service Oriented Architecture-based solution that will
increase the efficiency and timeliness of DoD’s security clearance
process.
- A five-year, $37 million contract to
provide technical support services that will help facilitate the
continued development, testing and deployment of the U.S. Navy’s
Enterprise Resource Planning Single Supply Solution program.
- Not included in the above estimated
value of awards in the quarter is:
- A prime position on a five-year,
multiple award, IDIQ contract with a $9.7 billion ceiling. This
award is to provide translation and interpretation services for the
U.S. Army’s Intelligence and Security Command (INSCOM).
Recent Strategic Mergers and Acquisitions
- 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
capabilities include financial and asset management, procurement,
and business solutions, that enhance productivity while saving
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 Second Quarter Highlights
- The appointment of Dan Allen as
President of U.S. Operations effective January 1, 2012. Mr. Allen
succeeds Bill Fairl. Mr. Fairl has assumed the position of Chief
Development Officer, where he is focusing on our mergers and
acquisition activity and providing executive oversight, including
customer interaction, for our major recompetes, and will be
retiring on September 1, 2012.
- The appointment of Krisstie Kondrotis
as Executive Vice President for Business Development. Ms. Kondrotis
assumed overall responsibility for the strategic and tactical
direction of our business development efforts to enhance our growth
in our large addressable market of approximately $230 to $250
billion.
- The appointment of Dr. Lani Kass as
Corporate Strategic Advisor and Senior Vice President. Dr. Kass,
who previously served as Senior Policy Advisor to the Office of the
Chairman of the Joint Chiefs of Staff, will provide advice to
CACI’s senior management on opportunities for organic growth,
support the development and evolution of our corporate strategy,
and play a central role in planning our participation in the annual
Asymmetric Threats symposia that we have co-sponsored since
2008.
Second Quarter Recognitions
- President and CEO Paul Cofoni was named
Executive of the Year by the Greater Washington Government
Contractor Awards for companies with annual revenue greater than
$300 million. The award recognized his outstanding contributions to
CACI, the community, and the government contracting industry.
- Executive Chairman Dr. J.P. (Jack)
London was inducted into the Naval Postgraduate School Hall of Fame
honoring his lifelong support for the nation and the school.
- CACI was ranked the 20th largest public
company in The Washington Post’s Top 200 largest businesses in the
national capital region.
Six Months Results
The following table summarizes GAAP results, including the
effects of earn-out adjustments.
(in millions
except per share data) 6 Months, FY12 6 Months, FY11
% Change Revenue $1,897.6 $1,701.2
11.5% Operating income $150.4 $111.5 34.8% Net
income attributable to CACI $83.2 $61.9 34.4%
Diluted earnings per share $2.91 $2.00 46.0%
Revenue grew 11.5 percent in the first half of FY12, with the
strongest increases in our ISR and other intelligence related
solutions. Operating income and net income increased in the first
half of FY12 as a result of solid growth in both direct labor and
other direct costs, ongoing cost control, product sales, and strong
performance on a fixed price contract for which work is nearing
completion. Revenue, operating income and net income attributable
to CACI all reached record levels in the first half of FY12.
Pro Forma Six Months Results
As a result of the earn-out adjustment described on page one of
this release, during the first half of FY12, liabilities decreased
$0.6 million with a corresponding increase to operating income, due
to reductions in the fair value of the earn-out liabilities, and
during the first half of FY11, liabilities increased, and operating
income decreased, by $0.9 million. To provide a comparison of our
results excluding these earn-out adjustments, pro forma results for
the first six months of FY12 and FY11 are shown below.
(in millions
except per share data) 6 Months, FY12 6 Months, FY11
% Change Revenue $1,897.6 $1,701.2
11.5% Pro forma operating income, a non-GAAP measure $149.8
$112.4 33.2% Pro forma net income attributable to
CACI, a non-GAAP measure $82.8 $62.4 32.7% Pro
forma diluted earnings per share, a non-GAAP measure $2.90
$2.01 44.1%
Pro forma operating income increased 33.2 percent in the first
six months of FY12 to $149.8 million for the reasons cited above.
Pro forma net income attributable to CACI for the first half of
FY12 was $82.8 million, or $2.90 diluted earnings per share, an
increase of 32.7 percent over pro forma net income attributable to
CACI of $62.4 million, or $2.01 pro forma diluted earnings per
share, in FY11. Net cash provided by operations in the first six
months of FY12 was $85.3 million, an increase of 24.6 percent over
net cash provided by operations in the first six months of FY11 of
$68.5 million. Revenue, pro forma operating income, pro forma net
income attributable to CACI, and operating cash flow all reached
record levels in the first half of FY12 (See Reconciliation of
Operating Income, Net Income and Diluted Earnings Per Share to Pro
Forma Amounts on page 13.)
Additional Financial Metrics
(in millions
except per share data)
6 Months,FY12
6 Months,FY11
% Change Pro forma earnings before interest, taxes,
depreciation and amortization (EBITDA), a non-GAAP measure
$178.4 $139.9 27.5% Pro forma diluted adjusted
earnings per share, a non-GAAP measure $3.81 $2.85
33.4%
CACI Raises its FY12 Guidance
We are raising our FY12 guidance due to our
strong second quarter performance and continued confidence in the
remainder of our fiscal year. 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
PreviousFY
2012Guidance
Revenue $3,850 - $4,050 $3,850 - $4,050 Net income
attributable to CACI $162 - $168 $157 - $163
Effective corporate tax rate 39.8% 39.9% Diluted
earnings per share $5.72 - $5.94 $5.55 - $5.80
Diluted weighted average shares 28.3 28.2
This guidance represents our views as of February 1, 2012.
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, February 2, 2012 during which members of our senior
management team will be making a brief presentation focusing on
second 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 32989928. A
replay of the call will also be available over the Internet
beginning at 1:00 PM Eastern Time Thursday, February 2, 2012, 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 14,400
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 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
Six Months Ended 12/31/2011 12/31/2010 %
Change
12/31/2011 12/31/2010 % Change Revenue $
973,243 $ 867,278 12.2 % $ 1,897,638 $
1,701,249 11.5 % Costs of revenue Direct costs 679,398
608,536 11.6 % 1,314,329 1,198,006 9.7 % Indirect costs and selling
expenses 204,541 185,247 10.4 % 404,823 364,569 11.0 % Depreciation
and amortization 14,598 14,060 3.8 %
28,126 27,142 3.6 % Total costs of
revenue 898,537 807,843 11.2 %
1,747,278 1,589,717 9.9 % Operating income
74,706 59,435 25.7 % 150,360 111,532 34.8 % Interest expense and
other, net 6,538 5,991 9.1 %
12,138 11,824 2.7 % Income before income taxes
68,168 53,444 27.6 % 138,222 99,708 38.6 % Income taxes
26,888 19,945 34.8 % 54,829
37,384 46.7 %
Net income including portion attributable
to noncontrolling interest in earnings of joint venture
41,280 33,499 23.2 % 83,393 62,324 33.8 %
Noncontrolling interest in earnings of
joint venture
(219 ) (264 ) (192 ) (434 ) Net income
attributable to CACI $ 41,061 $ 33,235 23.5 % $
83,201 $ 61,890 34.4 % Basic earnings per
share $ 1.55 $ 1.10 41.5 % $ 3.01 $ 2.04 47.1 % Diluted earnings
per share $ 1.51 $ 1.08 40.0 % $ 2.91 $ 2.00 46.0 % Weighted
average shares used in per share computations: Basic 26,450 30,288
27,683 30,296 Diluted 27,270 30,906 28,556 31,004
Statement of Operations Data (Unaudited) Quarter
Ended Six Months Ended 12/31/2011
12/31/2010 % Change
12/31/2011 12/31/2010 %
Change Operating income margin 7.7 % 6.8 % 7.9 % 6.5 % Tax rate
39.6 % 37.5 % 39.7 % 37.7 % Net income margin 4.2 % 3.8 % 4.4 % 3.6
% Pro forma EBITDA* $ 89,482 $ 73,133 22.4 % $ 178,363 $
139,870 27.5 % Pro forma EBITDA Margin 9.2 % 8.4 % 9.4 % 8.2 %
Pro forma adjusted net income attributable
to CACI
$ 54,448 $ 45,886 18.7 % $ 108,668 $ 88,439 22.9 %
Pro forma diluted adjusted earnings per
share
$ 2.00 $ 1.48 34.5 % $ 3.81 $ 2.85 33.4 % *See
Reconciliation of Net Income to Pro Forma Earnings before Interest,
Taxes, Depreciation and Amortization and to Pro Forma Adjusted Net
Income on page 12.
Selected Financial Data
(Continued) CACI International Inc Condensed
Consolidated Balance Sheets (Unaudited) (Amounts in thousands)
12/31/2011 6/30/2011 ASSETS: Current assets
Cash and cash equivalents $ 24,045 $ 164,817 Accounts receivable,
net 658,736 573,042 Prepaid expenses and other current assets
41,084 44,219 Total current assets 723,865 782,078
Goodwill and intangible assets, net 1,517,661 1,374,387
Property and equipment, net 64,718 62,755 Other long-term assets
106,893 100,911 Total assets $ 2,413,137 $ 2,320,131
LIABILITIES AND SHAREHOLDERS' EQUITY: Current
liabilities Current portion of long-term debt $ 7,500 $ 7,500
Accounts payable 136,467 98,893 Accrued compensation and benefits
158,939 173,586 Other accrued expenses and current liabilities
143,140 157,242 Total current liabilities 446,046
437,221 Long-term debt, net of current portion 589,597
402,437 Other long-term liabilities 191,029 170,857
Total liabilities 1,226,672 1,010,515
Shareholders' equity 1,186,465 1,309,616 Total
liabilities and shareholders' equity $ 2,413,137 $ 2,320,131
Selected Financial Data (Continued)
CACI International Inc Condensed Consolidated Statements
of Cash Flows (Unaudited) (Amounts in thousands)
Six
Months Ended 12/31/2011 12/31/2010 CASH FLOWS
FROM OPERATING ACTIVITIES:
Net income including portion attributable
to noncontrolling interest in earnings of joint venture
$ 83,393 $ 62,324
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 28,126 27,142 Non-cash interest
expense 5,910 5,522 Amortization of deferred financing costs 1,248
1,762 Stock-based compensation expense 7,243 8,413 Provision for
deferred income taxes 14,162 7,084 Undistributed earnings of
unconsolidated joint venture (661 ) (753 )
Changes in operating assets and
liabilities, net of effect of business acquisitions
Accounts receivable, net (69,232 ) (17,458 ) Prepaid expenses and
other current assets (1,385 ) (8,962 ) Accounts payable and accrued
expenses 47,861 (3,651 ) Accrued compensation and benefits (24,263
) (13,430 ) Income taxes receivable and payable (10,091 ) (8,584 )
Other liabilities 3,030 9,108 Net cash
provided by operating activities 85,341 68,517
CASH FLOWS FROM INVESTING ACTIVITIES: Capital
expenditures (7,138 ) (5,767 ) Purchases of businesses, net of cash
acquired (192,066 ) (126,387 ) Investment in unconsolidated joint
venture, net - (4,265 ) Other (765 ) 1,019 Net
cash used in investing activities (199,969 ) (135,400
)
CASH FLOWS FROM FINANCING ACTIVITIES: Net
borrowings (repayments) under credit facilities 180,001 (134,666 )
Proceeds from employee stock purchase plans 2,205 2,393 Proceeds
from exercise of stock options 2,700 10,275 Repurchases of common
stock (209,680 ) (20,016 ) Other (695 ) 456
Net cash used in financing activities (25,469 )
(141,558 ) Effect of exchange rate changes on cash and cash
equivalents (675 ) 569 Net decrease in cash
and cash equivalents (140,772 ) (207,872 ) Cash and cash
equivalents, beginning of period 164,817
254,543 Cash and cash equivalents, end of period $ 24,045
$ 46,671
Selected Financial Data
(Continued)
Revenue by Customer Type (Unaudited) Quarter Ended
(dollars in thousands)
12/31/2011 12/31/2010
$ Change % Change
Department of Defense $ 768,667 79.0 % $ 686,706 79.2 % $
81,961 11.9 % Federal Civilian Agencies 159,132 16.3 % 133,353 15.4
% 25,779 19.3 % Commercial 41,723 4.3 % 43,384 5.0 % (1,661 ) -3.8
% State and Local Governments 3,721 0.4 %
3,835 0.4 % (114 ) -3.0 % Total
$ 973,243 100.0 % $ 867,278 100.0 % $
105,965 12.2 %
Six Months Ended
(dollars in thousands)
12/31/2011 12/31/2010
$ Change % Change
Department of Defense $ 1,501,934 79.2 % $ 1,343,231 78.9 %
$ 158,703 11.8 % Federal Civilian Agencies 293,141 15.4 % 269,902
15.9 % 23,239 8.6 % Commercial 94,705 5.0 % 81,262 4.8 % 13,443
16.5 % State and Local Governments 7,858 0.4 %
6,854 0.4 % 1,004 14.6 %
Total $ 1,897,638 100.0 % $ 1,701,249 100.0 %
$ 196,389 11.5 %
Revenue by Contract
Type (Unaudited) Quarter Ended
(dollars in thousands)
12/31/2011
12/31/2010
$ Change % Change Time and
materials $ 283,891 29.2 % $ 356,143 41.1 % $ (72,252 ) -20.3 %
Cost reimbursable 433,341 44.5 % 287,230 33.1 % 146,111 50.9 %
Fixed price 256,011 26.3 % 223,905
25.8 % 32,106 14.3 % Total $
973,243 100.0 % $ 867,278 100.0 % $
105,965 12.2 %
Six Months Ended
(dollars in thousands)
12/31/2011 12/31/2010
$ Change % Change
Time and materials $ 576,494 30.4 % $ 736,492 43.3 % $
(159,998 ) -21.7 % Cost reimbursable 807,954 42.6 % 551,003 32.4 %
256,951 46.6 % Fixed price 513,190 27.0 %
413,754 24.3 % 99,436
24.0 % Total $ 1,897,638 100.0 % $ 1,701,249
100.0 % $ 196,389 11.5 %
Revenue
Received as a Prime versus Subcontractor (Unaudited) Quarter
Ended (dollars in thousands)
12/31/2011 12/31/2010
$ Change % Change
Prime $ 865,332 88.9 % $ 753,006 86.8 % $ 112,326 14.9 %
Subcontractor 107,911 11.1 % 114,272
13.2 % (6,361 ) -5.6 % Total $ 973,243
100.0 % $ 867,278 100.0 % $ 105,965
12.2 %
Six Months Ended
(dollars in thousands)
12/31/2011
12/31/2010
$ Change % Change Prime $
1,676,565 88.4 % $ 1,464,089 86.1 % $ 212,476 14.5 % Subcontractor
221,073 11.6 % 237,160 13.9 %
(16,087 ) -6.8 % Total $ 1,897,638
100.0 % $ 1,701,249 100.0 % $ 196,389
11.5 %
Selected Financial Data
(Continued) Contract Funding
Orders Received (Unaudited) Quarter Ended
(dollars in thousands)
12/31/2011
12/31/2010 $ Change
% Change Contract Funding Orders $ 604,671
$ 514,990 $ 89,681 17.4 %
Six Months
Ended (dollars in thousands)
12/31/2011 12/31/2010 $
Change % Change Contract Funding Orders
$ 2,208,600 $ 1,972,285 $ 236,315 12.0 %
Direct Costs by Category (Unaudited)
Quarter Ended
(dollars in thousands)
12/31/2011
12/31/2010 $
Change % Change Direct labor $ 236,851
34.9 % $ 211,814 34.8 % $ 25,037
11.8 % Other direct costs 442,547 65.1 %
396,722 65.2 % 45,825 11.6 %
Total direct costs $ 679,398 100.0 % $ 608,536
100.0 % $ 70,862 11.6 %
Six Months
Ended (dollars in
thousands)
12/31/2011
12/31/2010 $ Change
% Change Direct labor $ 473,616 36.0 % $
422,892 35.3 % $ 50,724 12.0 % Other direct costs 840,713
64.0 % 775,114 64.7 %
65,599 8.5 % Total direct costs $ 1,314,329 100.0 %
$ 1,198,006 100.0 % $ 116,323 9.7 %
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)
12/31/2011 12/31/2010 %
Change 12/31/2011
12/31/2010 % Change Revenue, as
reported $ 973,243 $ 867,278 12.2 % $ 3,774,169 $ 3,334,135 13.2 %
Less: Acquired revenue 29,019
84,392 Organic revenue $
944,224 $ 867,278 8.9 % $ 3,689,777 $
3,334,135 10.7 %
Selected Financial Data
(Continued) Reconciliation of Net Income to Pro Forma
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and to Pro Forma Adjusted Net Income
(Unaudited)
The Company views EBITDA, EBITDA margin,
Adjusted Net Income attributable to CACI 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 attributable to CACI 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. We are presenting
EBITDA, EBITDA margin, Adjusted Net Income Attributable to CACI and
Diluted Adjusted Earnings Per Share on a pro forma basis, to remove
the impact of the earn-out adjustments described on page 1 of this
release, as we believe these pro forma measures are a better
indicator of our ongoing, recurring operations. Pro forma EBITDA is
defined by us as GAAP net income attributable to CACI plus net
interest expense, income taxes, and depreciation and amortization,
and less the earn-out adjustment described on page 1. Pro forma
EBITDA margin is pro forma EBITDA divided by revenue. Pro forma
Adjusted Net Income attributable to CACI is defined by us as GAAP
net income attributable to CACI plus stock-based compensation
expense, depreciation and amortization, and amortization of
financing costs, and less the earn-out adjustment described on page
1; net of related tax effects computed using an assumed marginal
tax rate of 39.3 percent. Pro forma Diluted Adjusted Earnings Per
Share is Pro forma Adjusted Net Income attributable to CACI divided
by diluted weighted-average shares, as reported. Pro forma EBITDA
and Pro forma Adjusted Net Income attributable to CACI 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 Six
Months Ended (dollars in thousands)
12/31/2011
12/31/2010 % Change 12/31/2011
12/31/2010 % Change
Net income attributable to CACI, as
reported
$ 41,061 $ 33,235 23.5 % $ 83,201 $ 61,890 34.4 %
Income taxes 26,888 19,945 34.8 % 54,829 37,384 46.7 %
Interest income and expense, net 6,935 6,430 7.9 % 12,799 12,577
1.8 % Depreciation and amortization 14,598 14,060 3.8 % 28,126
27,142 3.6 % Earn-out adjustment - (537
) (592 ) 877
Pro forma EBITDA $ 89,482 $ 73,133
22.4 % $ 178,363 $ 139,870
27.5 %
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2011
12/31/2010 % Change 12/31/2011
12/31/2010 % Change Revenue, as
reported $ 973,243 $ 867,278 12.2 % $ 1,897,638 $ 1,701,249 11.5 %
Pro forma EBITDA $ 89,482 $ 73,133 22.4
% $ 178,363 $ 139,870 27.5 % Pro
forma EBITDA margin 9.2 % 8.4 %
9.4 % 8.2 %
Quarter Ended Six Months Ended (dollars in
thousands)
12/31/2011 12/31/2010 %
Change 12/31/2011 12/31/2010
% Change
Net income attributable to CACI, as
reported
$ 41,061 $ 33,235 23.5 % $ 83,201 $ 61,890 34.4 %
Stock-based compensation 4,031 3,507 14.9 % 7,243 8,413 -13.9 %
Depreciation and amortization 14,598 14,060 3.8 % 28,126 27,142 3.6
% Amortization of financing costs 439 1,022 -57.0 % 1,248 1,762
-29.2 % Non-cash interest expense 2,976 2,780 7.1 % 5,910 5,522 7.0
% Earn-out adjustment - (537 ) (592 ) 877 Related tax effect
(8,657 ) (8,181 ) 5.8 % (16,468
) (17,167 ) -4.1 %
Pro forma adjusted net income attributable
to CACI
$ 54,448 $ 45,886 18.7 % $
108,668 $ 88,439 22.9 %
Quarter Ended Six Months Ended (shares in
thousands)
12/31/2011 12/31/2010 %
Change 12/31/2011 12/31/2010
% Change
Diluted weighted average shares, as
reported
27,270 30,906 28,556 31,004 Diluted earnings per share, as reported
$ 1.51 $ 1.08 40.0 % $ 2.91
$ 2.00 46.0 % Pro forma diluted
adjusted earnings per share $ 2.00 $ 1.48
34.5 % $ 3.81 $ 2.85 33.4
%
Selected Financial Data (Continued)
Reconciliation of Operating Income, Net Income and Diluted
Earnings Per Share to Pro Forma Amounts
(Unaudited)
As described on page 1, the Company is
presenting pro forma Operating Income, Net Income attributable to
CACI, and Diluted Earnings per Share to present results excluding
the impact of earn-out adjustments. For periods in which the
earn-out adjustment resulted in income statement recognition, the
adjustment was recorded within indirect costs and selling expenses.
The Company believes that presenting the key measures of Operating
Income, Net Income attributable to CACI, and Diluted Earnings per
Share without the impact of these adjustments to indirect costs and
selling expenses provides readers a better indicator of our
ongoing, recurring operations. These non-GAAP measures should not
be considered in isolation or as a substitute for performance
measures prepared in accordance with GAAP.
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2011
12/31/2010 % Change 12/31/2011
12/31/2010 % Change Operating income,
as reported $ 74,706 $ 59,435 25.7 % $ 150,360 $
111,532 34.8 % Earn-out adjustment - (537 )
(592 ) 877
Pro forma operating income $ 74,706 $ 58,898
26.8 % $ 149,768 $ 112,409
33.2 %
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2011
12/31/2010 % Change 12/31/2011
12/31/2010 % Change
Net income attributable to CACI, as
reported
$ 41,061 $ 33,235 23.5 % $ 83,201 $ 61,890 34.4 % Earn-out
adjustment - (537 ) (592 ) 877 Related tax effect* -
211 234
(344 )
Pro forma net income attributable to
CACI
$ 41,061 $ 32,909 24.8 % $ 82,843
$ 62,423 32.7 %
Quarter Ended Six Months Ended (shares in
thousands)
12/31/2011 12/31/2010 %
Change 12/31/2011 12/31/2010
% Change
Diluted weighted average shares, as
reported
27,270 30,906 28,556 31,004 Diluted earnings per share, as reported
$ 1.51 $ 1.08 40.0 % $ 2.91
$ 2.00 46.0 % Pro forma diluted earnings per
share $ 1.51 $ 1.06 41.4 % $ 2.90
$ 2.01 44.1 % * Computed using
an assumed marginal tax rate of 39.3 percent.
CACI-Financial
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