CACI International Inc (NYSE: CACI), a leading information
solutions and services provider to the federal government,
announced results today for its second fiscal quarter ended
December 31, 2012:
- Revenue of $931.6 million
- Operating income of $69.6 million
- Net income attributable to CACI of
$39.7 million
- Diluted earnings per share of
$1.69
CEO Commentary and Outlook
Dan Allen, CACI’s President and CEO, said, “CACI’s second
quarter results demonstrate continued progress in executing our
market-driven strategy. During the quarter, we delivered solid net
income, secured a record level of second quarter funding,
maintained a strong backlog position, and expanded our new business
pipeline of opportunities. We experienced growth in four of our
addressable markets. We also completed two acquisitions this
quarter that expand our presence in the Healthcare market. Emergint
Technologies and IDL Solutions bring new customers and increase our
capabilities in the federal civilian healthcare and health
insurance areas with more cost-effective business processes,
enhanced customer service, and improved patient care.
“We began our Fiscal Year 2013 (FY13) with a planning assumption
that the government would be operating under a continuing
resolution (CR) for our entire fiscal year. In the back half of our
second quarter, we began to see our customers take a more cautious
approach to spending as well as awarding contracts, driven by the
uncertainties around sequestration. As we look to the second half
of our fiscal year, we expect our customers’ behavior to continue
with fewer contract awards than planned. Given these conditions, we
are revising our guidance for the remainder of this fiscal
year.
“We remain confident in our strategy to focus on the
government’s high priority missions. We continue to see new
business opportunities and our pipeline remains strong. Our
strategic mergers and acquisitions program is focusing on markets
in which we see the potential for growth. We are confident that our
ability to execute on a disciplined, balanced strategy will enable
us to identify competitive positions in our large addressable
market that will deliver long-term value to our shareholders.”
Second Quarter Comparisons
When analyzing our performance, we believe better insight and a
more meaningful comparison of our FY13 results with those of Fiscal
Year 2012 (FY12) can be made by adjusting for three material
one-time items that positively impacted our results last year. The
one-time item that impacted our second quarter FY12 results, which
we discussed when we released both our second quarter FY12 results
and our FY13 annual guidance, is greater-than-expected
profitability on a large fixed-price contract that generated $4.1
million in additional net income in the second quarter of FY12 and
$7.1 million during the full year of FY12.
Results for the second quarter of FY13 compared with results for
the second quarter of FY12, excluding the item described above, are
shown below:
(in millions except per share data) Q2,
FY13
Q2, FY12As Adjusted(see page 13)
% Change Revenue $931.6 $973.2 -4.3%
Operating income $69.6 $67.9 2.5% Net income
attributable to CACI $39.7 $36.9 7.4% Diluted
earnings per share $1.69 $1.35 24.5%
Revenue decreased 4.3 percent from revenue for the second
quarter of FY12 due to anticipated lower other direct costs
pass-throughs in C4ISR and Intelligence as a result of the draw
down in Afghanistan. We experienced growth in four of our markets,
with strong growth in Integrated Security Solutions and
Investigation and Litigation Support. Operating income increased
primarily as a result of a 5.1 percent growth in direct labor and
cost control. Net income attributable to CACI in the second quarter
of FY13 was $39.7 million, or $1.69 diluted earnings per share, an
increase of 7.4 percent over adjusted net income attributable to
CACI of $36.9 million, or $1.35 adjusted diluted earnings per
share, for the same period in FY12. The larger increase in diluted
earnings per share was due to share repurchase activity in FY12.
Net cash provided by operations in the quarter was $23.8 million.
(See Reconciliation of Revenue, Operating Income, Net Income, and
Diluted Earnings Per Share to Adjusted Amounts on page 13.)
For a comparison of our FY13 results to FY12 results reported in
accordance with generally accepted accounting principles (GAAP),
see the income statement on page 7 of this release.
Additional Financial Metrics
Q2, FY13
Q2, FY12As Adjusted
% Change
Earnings before interest, taxes,
depreciation and amortization (EBITDA),a non-GAAP measure (in
millions)
$83.5 $82.7 1.0% Diluted adjusted earnings per share,
a non-GAAP measure $2.22 $1.85 20.1% Days sales
outstanding 59 61
Second Quarter Awards and Contract Funding Orders
During the second quarter, which is a seasonal period of lower
levels of contracting activity, we experienced the effects of our
clients operating under a continuing resolution (CR) and the threat
of sequestration. As a result, contract awards for the quarter were
$512 million. Awards were received in all ten of our markets, led
by Business Systems, C4ISR, Enterprise IT, Integrated Security
Solutions, and Intelligence. FY13 year-to-date awards totaled $2.3
billion, led by Business Systems, C4ISR, Intelligence,
Investigation and Litigation Support, and Logistics and Material
Readiness.
Contract funding orders in the second quarter were $625 million,
and $2.0 billion year-to-date. Our total backlog at December 31,
2012 was $7.6 billion. Funded backlog at December 31, 2012 was $2.1
billion.
During the quarter we continued to expand our inventory of
indefinite delivery, indefinite quantity (IDIQ) contract vehicles
by being awarded prime positions on new multiple and single award
contracts, bringing our combined total to over 160 of these
vehicles. IDIQ contract vehicles support our growth plans across
our ten markets and provide us the flexibility to deliver on our
customers’ mission-critical requirements. Awards during the quarter
included:
- A $10 billion, five-year multiple-award
to develop, field, and sustain turnkey telecommunications solutions
on the U.S. Army Global Tactical Advanced Communications System
contract. This is new work for both the Department of Defense (DoD)
and civilian agencies that expands our strong presence in the C4ISR
market.
- A $5.6 billion, five-year
multiple-award contract supporting the Defense Intelligence
Agency’s Solutions for Intelligence Analysis (SIA) II program. This
is follow-on work to the original SIA program awarded to us in
2008. This work further expands our business in the Intelligence
market in the critical area of analysis.
- Within our C4ISR market, an $899
million, five-year multiple-award to support the U.S. Navy’s SPAWAR
Battlespace Awareness program. This new work further expands our
presence in the C4ISR market.
Other Second Quarter Highlights
- We completed the acquisition of
Emergint Technologies, Inc., a premier provider of emerging
technology solutions, including health data integration and
analysis and data and records management, that are focused on the
data driven needs of national health organizations. Emergint brings
to CACI relationships with key health-focused agencies, including
the Centers for Disease Control and Prevention, the National
Institutes of Health, and the U.S. Food and Drug Administration.
This acquisition builds upon our healthcare IT capabilities and
expands our presence in the growing healthcare market.
- We also completed the acquisition of
IDL Solutions, Inc., a leading provider of information solutions,
applications, data analytics and mission-critical systems support
to healthcare clients and other civilian agencies. The company
brings us relationships with the Centers for Medicare and Medicaid
Services and the Food and Drug Administration. IDL complements our
acquisition of Emergint Technologies and further expands our
presence in support of affordable healthcare and the federal health
insurance area.
Second Quarter Recognition
- CACI’s recruiting organization earned
significant recognition for our industry-leading programs
recruiting, hiring, and developing career opportunities for
military veterans:
- We won Best Industry Veteran Hiring
Program from the Coalition for Government Procurement, a national
trade association whose members account for 70 percent of
commercial services and products sold through GSA schedules.
- We were selected for the Top 100
Companies Recruiting Veterans list by U.S. Veterans magazine, a
print and online publication focusing on minority, disabled, and
transitioning veterans.
- CACI was listed as the 18th largest
public company in revenue in the Washington Post’s Top 200 local
companies, advancing from 20th last year.
Six Months Results
The following are our results for the first six months of our
FY13:
- Revenue of $1.86 billion
- Operating income of $134.3 million
- Net income attributable to CACI of
$75.4 million
- Diluted earnings per share of
$3.17
Six Months Comparison
As mentioned on page 1 of this release, we believe better
insight and a more meaningful comparison of our FY13 results with
those of FY12 can be made by adjusting for three material one-time
items that positively impacted our results last year. These items,
which we discussed when we released both our six months FY12
results and our FY13 annual guidance, are:
- A large commercial product sale that
generated $12.0 million of revenue and $6.1 million of net income
in the first quarter of FY12
- Greater-than-expected profitability on
a large fixed-price contract that generated $4.7 million in
additional net income in the first six months of FY12 and $7.1
million during the full year of FY12
- A $0.4 million increase in net income
in the first quarter of FY12 associated with a reduction in the
fair value of contingent consideration related to a prior year
acquisition
Results for the first six months of FY13 compared with results
for the first six months of FY12, excluding the items described
above, are shown below:
(in millions except per share data) Six
Months, FY13
Six Months,FY12As Adjusted(see page
13)
% Change Revenue $1,862.9 $1,885.6
-1.2% Operating income $134.3 $132.0 1.8% Net
income attributable to CACI $75.4 $72.0 4.6%
Diluted earnings per share $3.17 $2.52 25.8%
Revenue decreased 1.2 percent from adjusted revenue for the
first half of FY12 due to anticipated lower other direct costs
pass-throughs in C4ISR and Intelligence as a result of the draw
down in Afghanistan. We experienced growth in five of our markets,
with strong growth in Business Systems, Healthcare, and
Investigation and Litigation Support. Operating income increased
primarily as a result of a 5.8 percent growth in direct labor. Net
income attributable to CACI in the first six months of FY13 was
$75.4 million, or $3.17 diluted earnings per share, an increase of
4.6 percent over adjusted net income attributable to CACI of $72.0
million, or $2.52 adjusted diluted earnings per share, for the same
period in FY12. The larger increase in diluted earnings per share
was due to two share repurchase programs largely executed in FY12.
Net cash provided by operations in the first half of FY13 was $91.5
million, an increase of 7.3 percent over the year earlier period
and a record for the first half. (See Reconciliation of Revenue,
Operating Income, Net Income, and Diluted Earnings Per Share to
Adjusted Amounts on page 13.)
For a comparison of our FY13 results to FY12 results reported in
accordance with GAAP, see the income statement on page 7 of this
release.
Additional Financial Metrics
SixMonths,FY13
Six Months,FY12 AsAdjusted
% Change
Earnings before interest, taxes,
depreciation and amortization (EBITDA),a non-GAAP measure (in
millions)
$161.6
$160.6
0.7% Diluted adjusted earnings per share, a non-GAAP measure
$4.19 $3.43 22.3%
CACI Revises Its FY13 Guidance
We are revising the FY13 guidance we issued on October 31, 2012.
Our previous guidance assumed that we would be operating in a CR
environment throughout our fiscal year. During our second quarter,
we saw greater than expected declines in contracting activity and
spending levels significantly below those of a typical CR
environment. As we look to the second half of our FY13, we expect
this pattern of behavior to continue. The table below summarizes
our FY13 guidance ranges:
(In millions except for tax rate and earnings per share)
FY 2013Guidance
Revenue $3,700 - $3,900 Net income attributable to CACI
$157 - $163 Diluted earnings per share $6.54 - $6.79
We are now assuming a lower effective tax rate of 38 percent as
a result of non-taxable gains in our deferred compensation plan and
certain tax credits. We are also reducing the number of diluted
weighted average shares to 24.0 million for FY13, mainly due to
equity award exercises and forfeitures. This information represents
our views as of January 30, 2013.
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time
Thursday, January 31, 2013 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 78657433. A
replay of the call will also be available over the Internet
beginning at 1:00 PM Eastern Time Thursday, January 31, 2013 and
can be accessed through our homepage (www.caci.com) by clicking on
the CACI Investor Info button.
CACI provides information solutions and services in support of
national security missions and government transformation for
Intelligence, Defense, and Federal Civilian clients. A member of
the Fortune 1000 Largest Companies and the Russell 2000 Index, CACI
provides dynamic careers for approximately 15,500 employees working
in over 120 offices worldwide. Visit www.caci.com.
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; failure to achieve
contract awards in connection with re-competes 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,
implementation of spending cuts (sequestration) under the Budget
Control Act of 2011, changes in budgetary priorities or in the
event of a priority need for funds, such as homeland security or
the war on terrorism; 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 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, 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 our Securities
and Exchange Commission filings.
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 12/31/2012 12/31/2011 %
Change
12/31/2012 12/31/2011 % Change Revenue $
931,627 $ 973,243 -4.3 % $ 1,862,863 $
1,897,638 -1.8 % Costs of revenue Direct costs 639,649
679,398 -5.9 % 1,285,286 1,314,329 -2.2 % Indirect costs and
selling expenses 209,068 204,541 2.2 % 416,691 404,823 2.9 %
Depreciation and amortization 13,328 14,598
-8.7 % 26,567 28,126 -5.5 %
Total costs of revenue 862,045 898,537
-4.1 % 1,728,544 1,747,278 -1.1 %
Operating income 69,582 74,706 -6.9 % 134,319 150,360 -10.7 %
Interest expense and other, net 6,231 6,538
-4.7 % 13,013 12,138 7.2 %
Income before income taxes 63,351 68,168 -7.1 % 121,306 138,222
-12.2 % Income taxes 23,371 26,888
-13.1 % 45,336 54,829 -17.3 % Net
income including portion attributable to noncontrolling interest in
earnings of joint venture 39,980 41,280 -3.1 % 75,970 83,393 -8.9 %
Noncontrolling interest in earnings of joint venture (304 )
(219 ) (586 ) (192 ) Net income attributable
to CACI $ 39,676 $ 41,061 -3.4 % $ 75,384 $
83,201 -9.4 % Basic earnings per share $ 1.74 $ 1.55
11.8 % $ 3.29 $ 3.01 9.3 % Diluted earnings per share $ 1.69 $ 1.51
12.0 % $ 3.17 $ 2.91 8.9 % Weighted average shares used in
per share computations: Basic 22,852 26,450 22,942 27,683 Diluted
23,537 27,270 23,758 28,556
Statement of Operations Data
(Unaudited) Quarter Ended Six Months Ended
12/31/2012 12/31/2011 % Change
12/31/2012
12/31/2011 % Change Operating income margin 7.5 % 7.7 % 7.2
% 7.9 % Tax rate 37.1 % 39.6 % 37.6 % 39.7 % Net income margin 4.3
% 4.2 % 4.0 % 4.4 % Adjusted EBITDA* $ 83,499 $ 82,682 1.0 %
$ 161,619 $ 160,570 0.7 % Adjusted EBITDA Margin 9.0 % 8.5 % 8.7 %
8.5 % Adjusted net income* $ 52,145 $ 50,319 3.6 % $ 99,558
$ 97,862 1.7 % Diluted adjusted earnings per share $ 2.22 $ 1.85
20.1 % $ 4.19 $ 3.43 22.3 % *See Reconciliation of Net
Income to Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization and to Adjusted Net Income on page 12.
Selected Financial Data (Continued)
CACI International Inc Condensed
Consolidated Balance Sheets (Unaudited) (Amounts in thousands)
12/31/2012 6/30/2012 ASSETS:
Current assets Cash and cash equivalents $ 37,509 $ 15,740 Accounts
receivable, net 609,969 628,842 Prepaid expenses and other current
assets 51,857 41,210 Total current assets 699,335
685,792 Goodwill and intangible assets, net 1,601,337
1,521,769 Property and equipment, net 70,393 67,449 Other long-term
assets 128,501 113,212 Total assets $ 2,499,566 $
2,388,222
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities Current portion of long-term debt $ 7,500 $
7,500 Accounts payable 132,210 149,549 Accrued compensation and
benefits 161,669 180,871 Other accrued expenses and current
liabilities 134,947 147,009 Total current liabilities
436,326 484,929 Long-term debt, net of current portion
695,237 527,307 Other long-term liabilities 239,592
211,541 Total liabilities 1,371,155 1,223,777
Shareholders' equity 1,128,411 1,164,445 Total
liabilities and shareholders' equity $ 2,499,566 $ 2,388,222
Selected Financial Data (Continued)
CACI International Inc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands)
Six Months Ended
12/31/2012 12/31/2011 CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income including portion attributable
to noncontrolling interest in earnings of joint venture
$ 75,970 $ 83,393
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 26,567 28,126 Non-cash interest
expense 6,325 5,910 Amortization of deferred financing costs 1,012
1,248 Stock-based compensation expense 5,901 7,243 Provision for
deferred income taxes 9,866 14,162 Distribution of earnings from
unconsolidated joint venture 3,545 - Equity in earnings of
unconsolidated joint venture (1,319 ) (661 )
Changes in operating assets and
liabilities, net of effect of business acquisitions
Accounts receivable, net 39,114 (69,232 ) Prepaid expenses and
other assets (14,749 ) (1,385 ) Accounts payable and accrued
expenses (26,794 ) 47,861 Accrued compensation and benefits (32,219
) (24,263 ) Income taxes receivable and payable (13,940 ) (10,091 )
Supplemental retirement savings plan
obligations and other long term liabilities
12,267 3,030
Net cash provided by operating
activities
91,546 85,341
CASH FLOWS FROM
INVESTING ACTIVITIES: Capital expenditures (10,032 ) (7,138 )
Purchases of businesses, net of cash acquired (100,062 ) (171,811 )
Investment in unconsolidated joint venture (1,421 ) - Other
(1,012 ) (765 ) Net cash used in investing activities
(112,527 ) (179,714 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Net borrowings under credit facilities 160,638
180,001 Payment of contingent consideration - (20,255 ) Proceeds
from employee stock purchase plans 2,495 2,205 Proceeds from
exercise of stock options 4,742 2,700 Repurchases of common stock
(125,411 ) (209,680 ) Other (120 ) (695 ) Net cash
provided by (used in) financing activities 42,344
(45,724 ) Effect of exchange rate changes on cash and cash
equivalents 406 (675 ) Net increase (decrease)
in cash and cash equivalents 21,769 (140,772 ) Cash and cash
equivalents, beginning of period 15,740
164,817 Cash and cash equivalents, end of period $ 37,509
$ 24,045
Selected Financial
Data (Continued)
Revenue by Customer Type
(Unaudited) Quarter Ended (dollars
in thousands)
12/31/2012 12/31/2011
$ Change
% Change Department of Defense $ 703,479 75.5
% $ 768,667 79.0 % $ (65,188 ) -8.5 % Federal Civilian Agencies
175,773 18.9 % 159,132 16.3 % 16,641 10.5 % Commercial 48,398 5.2 %
41,723 4.3 % 6,675 16.0 % State and Local Governments 3,977
0.4 % 3,721 0.4 %
256 6.9 % Total $ 931,627
100.0 % $ 973,243 100.0 %
$ (41,616 ) -4.3 %
Six Months
Ended (dollars in thousands)
12/31/2012 12/31/2011
$ Change
% Change Department of Defense $ 1,408,540
75.6 % $ 1,501,934 79.2 % $ (93,394 ) -6.2 % Federal Civilian
Agencies 350,427 18.8 % 293,141 15.4 % 57,286 19.5 % Commercial
96,599 5.2 % 94,705 5.0 % 1,894 2.0 % State and Local Governments
7,297 0.4 % 7,858
0.4 % (561 ) -7.1 % Total
$ 1,862,863 100.0 % $ 1,897,638
100.0 % $ (34,775 ) -1.8 %
Revenue by Contract Type (Unaudited) Quarter
Ended (dollars in thousands)
12/31/2012 12/31/2011
$ Change
% Change Cost reimbursable $ 454,564 48.8 % $
433,341 44.5 % $ 21,223 4.9 % Fixed price 259,505 27.9 % 256,011
26.3 % 3,494 1.4 % Time and materials 217,558
23.3 % 283,891 29.2 %
(66,333 ) -23.4 % Total $ 931,627
100.0 % $ 973,243 100.0 %
$ (41,616 ) -4.3 %
Six Months
Ended
(dollars in thousands)
12/31/2012
12/31/2011
$ Change
% Change Cost reimbursable $ 891,371 47.8 % $
807,954 42.6 % $ 83,417 10.3 % Fixed price 523,442 28.1 % 513,190
27.0 % 10,252 2.0 % Time and materials 448,050
24.1 % 576,494 30.4 %
(128,444 ) -22.3 % Total $ 1,862,863
100.0 % $ 1,897,638 100.0
% $ (34,775 ) -1.8 %
Revenue
Received as a Prime versus Subcontractor (Unaudited) Quarter
Ended (dollars in
thousands)
12/31/2012 12/31/2011
$ Change
% Change Prime $ 815,668 87.6 % $ 865,332 88.9
% $ (49,664 ) -5.7 % Subcontractor 115,959
12.4 % 107,911 11.1 %
8,048 7.5 % Total $ 931,627
100.0 % $ 973,243 100.0 %
$ (41,616 ) -4.3 %
Six Months
Ended (dollars in
thousands)
12/31/2012 12/31/2011
$ Change
% Change
Prime $ 1,639,399 88.0 % $ 1,676,565 88.4 % $ (37,166 ) -2.2 %
Subcontractor 223,464 12.0 %
221,073 11.6 % 2,391
1.1 % Total $ 1,862,863 100.0 %
$ 1,897,638 100.0 % $
(34,775 ) -1.8 %
Selected Financial Data (Continued) Contract
Funding Orders Received (Unaudited) Quarter Ended
(dollars in thousands)
12/31/2012
12/31/2011
$ Change
% Change Contract Funding Orders $ 625,481 $
604,671 $ 20,810 3.4 %
Six Months Ended
(dollars in thousands)
12/31/2012 12/31/2011
$ Change
% Change Contract Funding Orders $ 2,038,727 $
2,208,600 $ (169,873 ) -7.7 %
Direct Costs by Category (Unaudited)
Quarter Ended (dollars in thousands)
12/31/2012 12/31/2011
$ Change
% Change Direct labor $ 249,012 38.9 % $ 236,851 34.9
% $ 12,161 5.1 % Other direct costs 390,637 61.1 %
442,547 65.1 % (51,910 )
-11.7 % Total direct costs $ 639,649 100.0 % $
679,398 100.0 % $ (39,749 ) -5.9 %
Six Months Ended (dollars in thousands)
12/31/2012
12/31/2011
$ Change
% Change Direct labor $ 501,054 39.0 % $ 473,616 36.0
% $ 27,438 5.8 % Other direct costs 784,232 61.0 %
840,713 64.0 % (56,481 )
-6.7 % Total direct costs $ 1,285,286 100.0 % $
1,314,329 100.0 % $ (29,043 ) -2.2 %
Reconciliation of Total Revenue Growth
and Organic Revenue Growth
(Unaudited)
We are presenting organic revenue growth, on both an as
reported and as adjusted basis, 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)
12/31/2012 12/31/2011 % Change
12/31/2012 12/31/2011 %
Change
Revenue, as reported
$ 931,627 $ 973,243 -4.3 % $ 3,739,699 $ 3,774,169 -0.9 % Less:
Acquired revenue
25,062 120,691
Organic revenue $ 906,565 $
973,243 -6.9 % $ 3,619,008 $ 3,774,169
-4.1 %
Quarter Ended Twelve Months
Ended (dollars in thousands)
12/31/2012
12/31/2011 % Change 12/31/2012
12/31/2011*
% Change
Revenue, as adjusted*
$ 931,627 $ 973,243 -4.3 % $ 3,739,699 $ 3,762,134 -0.6 % Less:
Acquired revenue 25,062
120,691 Organic revenue $
906,565 $ 973,243 -6.9 % $ 3,619,008 $
3,762,134 -3.8 % * Revenue for the quarter ended
September 30, 2011 is adjusted. See Reconciliation of Revenue,
Operating Income, Net Income and Diluted Earnings Per Share to
Adjusted Amounts on page 13.
Selected Financial Data
(Continued)
Reconciliation of Net Income to
Adjusted 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. We are presenting
FY12 EBITDA, EBITDA margin, Adjusted Net Income and Diluted
Adjusted Earnings Per Share on an adjusted basis, to remove the
impact of three material items that positively impacted our FY12
results as we believe these adjusted measures provide a better
comparison to our ongoing, recurring operations. Adjusted EBITDA is
defined by us as GAAP net income plus net interest expense, income
taxes, and depreciation and amortization, and less the three
material items described earlier in this release. Adjusted EBITDA
margin is adjusted EBITDA divided by adjusted 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, and less the three material items
described earlier in this release; net of related tax effects
computed using an assumed marginal tax rate of 39.3 percent.
Diluted Adjusted Earnings Per Share is Adjusted Net Income divided
by diluted weighted-average shares, as reported. Adjusted 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 Six Months Ended (dollars in thousands)
12/31/2012 12/31/2011 % Change
12/31/2012 12/31/2011 %
Change
Net income attributable to CACI, as
reported
$ 39,676 $ 41,061 -3.4 % $ 75,384 $ 83,201 -9.4 % Plus: Income
taxes 23,371 26,888 -13.1 % 45,336 54,829 -17.3 % Interest income
and expense, net 7,124 6,935 2.7 % 14,332 12,799 12.0 %
Depreciation and amortization 13,328 14,598 -8.7 % 26,567 28,126
-5.5 % Less: Product sale adjustment - - - (10,093 ) Fixed price
contract adjustment - (6,800 ) - (7,700 ) Earn-out adjustment
- -
- (592 ) Adjusted EBITDA $
83,499 $ 82,682 1.0 % $ 161,619
$ 160,570 0.7 %
Quarter
Ended Six Months Ended (dollars in thousands)
12/31/2012 12/31/2011 % Change
12/31/2012 12/31/2011 %
Change Revenue, as adjusted $ 931,627 $ 973,243 -4.3 % $
1,862,863 $ 1,885,603 -1.2 % Adjusted EBITDA $ 83,499
$ 82,682 1.0 % $ 161,619 $
160,570 0.7 % Adjusted EBITDA margin 9.0 %
8.5 % 8.7 %
8.5 %
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2012
12/31/2011 % Change 12/31/2012
12/31/2011 % Change
Net income attributable to CACI, as
reported
$ 39,676 $ 41,061 -3.4 % $ 75,384 $ 83,201 -9.4 % Plus: Stock-based
compensation 3,501 4,031 -13.1 % 5,901 7,243 -18.5 % Depreciation
and amortization 13,328 14,598 -8.7 % 26,567 28,126 -5.5 %
Amortization of financing costs 518 439 18.0 % 1,012 1,248 -18.9 %
Non-cash interest expense 3,185 2,976 7.0 % 6,325 5,910 7.0 % Less:
Product sale adjustment - - - (10,093 ) Fixed price contract
adjustment - (6,800 ) - (7,700 ) Earn-out adjustment - - - (592 )
Related tax effect (8,063 ) (5,986 )
34.7 % (15,631 ) (9,481 ) 64.9 %
Adjusted net income $ 52,145 $ 50,319
3.6 % $ 99,558 $ 97,862 1.7 %
Quarter Ended Six Months Ended (shares
in thousands)
12/31/2012 12/31/2011
% Change 12/31/2012 12/31/2011
% Change
Diluted weighted average shares, as
reported
23,537 27,270 23,758 28,556 Diluted earnings per share, as reported
$ 1.69 $ 1.51 12.0 % $ 3.17
$ 2.91 8.9 % Diluted adjusted earnings
per share $ 2.22 $ 1.85 20.1 % $
4.19 $ 3.43 22.3 %
Selected Financial Data
(continued)
Reconciliation of Revenue, Operating
Income, Net Income and Diluted Earnings Per Share
to Adjusted Amounts
(Unaudited)
As described earlier in this release, the Company is
presenting adjusted Revenue, Operating Income, Net Income and
Diluted Earnings per Share to present results excluding the impact
of three material items recorded during the fiscal year ended June
30, 2012. During the second quarter of FY12, only the fixed price
contract adjustment impacted the income statement, as follows: $6.8
million reduction of direct costs. These items were recorded in the
income statement for the first six months of FY12, as follows:
product sale -- $12.0 million of revenue and $1.9 million of
indirect costs and selling expenses; fixed price contract
adjustment-- $7.7 million reduction of direct costs; and earn-out
adjustment -- $0.6 million reduction in indirect costs and selling
expenses. The Company believes that presenting the key measures of
Revenue, Operating Income, Net Income, and Diluted Earnings per
Share without the impact of these material items recorded in FY12
provides readers a better comparison to 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)
12/31/2012 12/31/2011 % Change
12/31/2012 12/31/2011 %
Change Revenue, as reported $ 931,627 $ 973,243 -4.3 % $
1,862,863 $ 1,897,638 -1.8 % Less: Product sale adjustment -
- -
(12,035 ) Revenue, as adjusted $ 931,627 $
973,243 -4.3 % $ 1,862,863 $ 1,885,603
-1.2 %
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2012
12/31/2011 % Change 12/31/2012
12/31/2011 % Change Operating income,
as reported $ 69,582 $ 74,706 -6.9 % $ 134,319 $ 150,360 -10.7 %
Less: Product sale adjustment - - - (10,093 ) Fixed price contract
adjustment - (6,800 ) - (7,700 ) Earn-out adjustment -
- -
(592 ) Operating income, as adjusted $ 69,582
$ 67,906 2.5 % $ 134,319 $ 131,975
1.8 %
Quarter Ended Six
Months Ended (dollars in thousands)
12/31/2012
12/31/2011 % Change 12/31/2012
12/31/2011 % Change
Net income attributable to CACI, as
reported
$ 39,676 $ 41,061 -3.4 % $ 75,384 $ 83,201 -9.4 % Less: Product
sale adjustment - - - (10,093 ) Fixed price contract adjustment -
(6,800 ) - (7,700 ) Earn-out adjustment - - - (592 ) Plus: Related
tax effect* - 2,672
- 7,225 Net
income, as adjusted $ 39,676 $ 36,933 7.4 %
$ 75,384 $ 72,041 4.6 %
Quarter Ended Six Months Ended (shares in
thousands)
12/31/2012 12/31/2011 %
Change 12/31/2012 12/31/2011
% Change
Diluted weighted average shares, as
reported
23,537 27,270 23,758 28,556 Diluted earnings per share, as reported
$ 1.69 $ 1.51 12.0 % $ 3.17 $
2.91 8.9 % Diluted earnings per share, as adjusted $
1.69 $ 1.35 24.5 % $ 3.17 $ 2.52
25.8 % * Computed using an assumed marginal
tax rate of 39.3 percent for the period ended 12/31/2011.
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