Revenue of $1.5 billion, +5.2%
year-over-year
Net income of $106.5 million, +34.5%
year-over-year
Robust cash flow from operations
Contract awards of $2.1 billion
Reaffirms Fiscal Year 2021 Guidance
CACI International Inc (NYSE: CACI), a leading provider of
expertise and technology to government enterprise and mission
customers, announced results today for its second fiscal quarter
ended December 31, 2020.
CEO Commentary and Outlook
John Mengucci, CACI’s President and CEO, said, “We delivered
solid organic growth, and our focus on delivery and operational
excellence again drove strong profitability and robust cash flow.
We also won a healthy level of contract awards in what is typically
a seasonally light quarter. We are confident in our ability to
continue to deliver value to our customers and shareholders.”
Second Quarter Results
(in millions except earnings per share and DSO)
Q2, FY21
Q2, FY20
% Change
Revenue
$1,468.7
$1,395.5
5.2%
Operating income
$141.5
$110.2
28.5%
Net income
$106.5
$79.2
34.5%
Diluted earnings per share
$4.18
$3.11
34.4%
Net cash provided by operating activities excluding MARPA1
$189.8
$117.5
61.6%
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), a non-GAAP measure2
$174.6
$140.9
23.9%
Days sales outstanding (DSO)3
53
60
(1)
Second quarter FY21 and second
quarter FY20 net cash provided by operating activities exclude
CACI’s Master Accounts Receivable Purchase Agreement (MARPA). For
more details, see the Reconciliation of Net Cash Provided by
Operating Activities to Net Cash Provided by Operating Activities
Excluding MARPA on page 10 of this release.
(2)
See the Reconciliation of Net
Income to Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA) on page 10 of this release.
(3)
The DSO calculations for second
quarter FY21 and second quarter FY20 exclude the impact of the
Company’s MARPA, which was 10 days and 9 days, respectively.
Revenue in Q2 FY21 increased 5.2% year-over-year as reported and
4.3% organically. The year-over-year increase in operating income
was driven by higher revenue, strong operating performance,
favorable fixed-price contract performance, and lower indirect
costs. The year-over-year increase in net income was due to higher
operating income and lower interest expense, partially offset by a
higher effective tax rate. The increase in cash from operations,
excluding MARPA, was driven by higher net income and favorable
working capital management.
Second Quarter Contract Awards
Contract awards in Q2 FY21 totaled $2.1 billion. These awards
exclude ceiling values of multi-award, indefinite delivery,
indefinite quantity (IDIQ) contracts. Some notable awards during
the quarter were:
- A four-and-a-half year task order, with a ceiling value of $160
million, by the U.S. Air Force Central Command’s (AFCENT) Network
Operations and Security Center (NOSC) to provide enterprise
expertise including networking, technical, and cyber support to
multiple deployed AFCENT NOSC sites through U.S. Central Command
(CENTCOM).
- A five-year single award contract, with a ceiling value of $447
million, to provide acquisition mission technology.
- A seven-year task order, with a ceiling value of $376 million,
to provide mission technology to modernize a federal customer’s
web-based supply chain system.
- A three-year task order, with a ceiling value of $96 million,
to provide engineering and logistics expertise for the U.S. Army’s
Medical Communications for Combat Casualty Care (MC4) Program.
- A six-and-a-half year indefinite delivery/indefinite quantity
contract, with a ceiling of $1.5 billion, to continue providing
automated litigation support services to federal agencies.
Total backlog as of December 31, 2020 was $22.4 billion compared
with $20.3 billion a year ago, an increase of 10%. Funded backlog
as of December 31, 2020 was $2.9 billion compared with $2.8 billion
a year ago, an increase of 3%.
Additional Highlights
- CACI announced the delivery of a flight model laser
communications transmitter to the NASA Jet Propulsion Laboratory
(JPL) for use on-board the Psyche spacecraft, whose mission is to
study the origin of planetary cores in the asteroid belt.
- CACI Board Member, The Honorable Susan M. “Sue” Gordon, the
former Principal Deputy Director of National Intelligence (PDDNI),
will receive the Intelligence and National Security Alliance’s
(INSA) 2021 William Oliver Baker Award on September 25, 2021, in
recognition of her extraordinary contribution to U.S. intelligence
and national security affairs.
- CACI Vice President and Army Client Executive Major General
(Ret.), Randolph (Randy) Strong was inducted into the Army’s
Command, Control, Communications, Computers, Cyber, Intelligence,
Surveillance, and Reconnaissance (C5ISR) Hall of Fame. The event
highlighted Mr. Strong’s military career and specifically his
service as Commanding General of the United States Army
Communications-Electronics Command (CECOM) from 2009 to 2012.
- CACI received multiple accolades for veteran efforts this
quarter including a Best Company for Veterans by Monster and
Military.com, a Best Employer for Veterans by Forbes.com, and
received the 2020 Northern Virginia Technology Council (NVTC)
Veterans Employment Initiative (VEI) Veteran Service Award for the
company’s longstanding commitment of both hiring and supporting
military veterans, their families, and the military community.
Reaffirming FY21 Guidance
The table below summarizes our FY21 guidance and represents our
views as of January 27, 2021.
(in millions except earnings per
share)
Current Fiscal Year 2021
Guidance
Revenue
$6,050 - $6,250
Net income
$372 - $392
Diluted earnings per share
$14.47 - $15.25
Diluted weighted average shares
25.7
Net cash provided by operating
activities
at least $600
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time
Thursday, January 28, 2021 during which members of our senior
management 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 webcast and view
the accompanying exhibits on CACI’s investor relations website at
http://investor.caci.com/news/#upcomingevent at the scheduled time.
A replay of the call will also be available on CACI’s investor
relations website at http://investor.caci.com/.
About CACI
CACI’s approximately 23,000 talented employees are vigilant in
providing the unique expertise and distinctive technology that
address our customers’ greatest enterprise and mission challenges.
Our culture of good character, innovation, and excellence drives
our success and earns us recognition as a Fortune World’s Most
Admired Company. As a member of the Fortune 1000 Largest Companies,
the Russell 1000 Index, and the S&P MidCap 400 Index, we
consistently deliver strong shareholder value. Visit us at
www.caci.com.
There are statements made herein that 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 risk
factors that could cause actual results to be materially different
from anticipated results. These risk factors include, but are not
limited to, the following: our reliance on U.S. government
contracts, which includes general risk around the government
contract procurement process (such as bid protest, small business
set asides, loss of work due to organizational conflicts of
interest, etc.) and termination risks; significant delays or
reductions in appropriations for our programs and broader changes
in U.S. government funding and spending patterns; legislation that
amends or changes discretionary spending levels or budget
priorities, such as for homeland security or to address global
pandemics like COVID-19; legal, regulatory, and political change
from successive presidential administrations that could result in
economic uncertainty; changes in U.S. federal agencies, current
agreements with other nations, foreign events, or any other events
which may affect the global economy, including the impact of global
pandemics like COVID-19; 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; competitive factors such as pricing pressures
and/or competition to hire and retain employees (particularly those
with security clearances); failure to achieve contract awards in
connection with re-competes for present business and/or competition
for new business; regional and national economic conditions in the
United States and globally, including but not limited to: terrorist
activities or war, changes in interest rates, currency
fluctuations, significant fluctuations in the equity markets, and
market speculation regarding our continued independence; our
ability to meet contractual performance obligations, including
technologically complex obligations dependent on factors not wholly
within our control; limited access to certain facilities required
for us to perform our work, including during a global pandemic like
COVID-19; changes in tax law, the interpretation of associated
rules and regulations, or any other events impacting our effective
tax rate; changes in technology; the potential impact of the
announcement or consummation of a proposed transaction and our
ability to successfully integrate the operations of our recent and
any future acquisitions; our ability to achieve the objectives of
near term or long-term business plans; the effects of health
epidemics, pandemics and similar outbreaks may have material
adverse effects on our business, financial position, results of
operations and/or cash flows; and other risks described in our
Securities and Exchange Commission filings.
CACI-Earnings Release
Selected Financial Data
CACI International Inc Condensed Consolidated Statements
of Operations (Unaudited) (Amounts in thousands, except per
share amounts)
Three Months Ended
Six Months Ended
12/31/2020 12/31/2019
% Change
12/31/2020 12/31/2019 %
Change Revenue
$
1,468,711
$
1,395,469
5.2%
$
2,928,217
$
2,758,861
6.1%
Operating costs and expenses:
Costs of revenue
947,131
904,867
4.7%
1,887,065
1,783,748
5.8%
Indirect costs and selling expenses
347,807
352,448
-1.3%
702,811
710,040
-1.0%
Depreciation and amortization
32,234
27,967
15.3%
62,378
54,729
14.0%
Total operating expenses
1,327,172
1,285,282
3.3%
2,652,254
2,548,517
4.1%
Operating income
141,539
110,187
28.5%
275,963
210,344
31.2%
Interest expense and other, net
9,087
14,714
-38.2%
19,067
31,525
-39.5%
Income before income taxes
132,452
95,473
38.7%
256,896
178,819
43.7%
Income taxes
25,974
16,278
59.6%
56,774
31,647
79.4%
Net income
$
106,478
$
79,195
34.5%
$
200,122
$
147,172
36.0%
Basic earnings per share
$
4.22
$
3.16
33.6%
$
7.95
$
5.89
35.0%
Diluted earnings per share
$
4.18
$
3.11
34.4%
$
7.86
$
5.78
36.1%
Weighted average shares used in per share computations:
Basic
25,225
25,065
25,162
24,979
Diluted
25,451
25,435
25,469
25,483
Statement of Operations Data
(Unaudited)
Three Months Ended
Six Months Ended
12/31/2020 12/31/2019
12/31/2020
12/31/2019
% Change
% Change
Operating income margin
9.6
%
7.9
%
9.4
%
7.6
%
Tax rate
19.6
%
17.1
%
22.1
%
17.7
%
Net income margin
7.2
%
5.7
%
6.8
%
5.3
%
Adjusted EBITDA*
$
174,580
$
140,902
23.9%
$
340,016
$
269,213
26.3%
Adjusted EBITDA Margin
11.9
%
10.1
%
11.6
%
9.8
%
* See
Reconciliation of Net Income to Adjusted Earnings before Interest,
Taxes, Depreciation and Amortization on page 10.
Selected
Financial Data (Continued)
CACI International Inc Condensed Consolidated
Balance Sheets (Unaudited) (Amounts in thousands)
12/31/2020
6/30/2020 ASSETS:
Current assets Cash and cash
equivalents
$
102,114
$
107,236
Accounts receivable, net
747,845
841,227
Prepaid expenses and other current assets
145,747
137,423
Total current assets
995,706
1,085,886
Goodwill and intangible
assets, net
4,141,597
3,813,995
Property and equipment, net
180,258
170,521
Operating lease right-of-use assets
374,310
330,767
Other long-term assets
159,614
141,303
Total assets
$
5,851,485
$
5,542,472
LIABILITIES AND
SHAREHOLDERS' EQUITY: Current
liabilities Current portion of
long-term debt
$
46,920
$
46,920
Accounts payable
60,683
89,961
Accrued compensation and benefits
379,978
338,760
Other accrued expenses and current liabilities
285,223
293,518
Total current liabilities
772,804
769,159
Long-term debt, net of
current portion
1,371,222
1,357,519
Other long-term liabilities
823,180
754,484
Total liabilities
2,967,206
2,881,162
Shareholders' equity
2,884,279
2,661,310
Total liabilities and shareholders' equity
$
5,851,485
$
5,542,472
Selected Financial
Data (Continued)
CACI International Inc Condensed Consolidated Statements
of Cash Flows (Unaudited) (Amounts in thousands)
Six Months
Ended 12/31/2020
12/31/2019 CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
200,122
$
147,172
Reconciliation of net income to net cash provided by operating
activities: Depreciation and
amortization
62,378
54,729
Non-cash lease expense
38,436
35,850
Amortization of deferred financing costs
1,163
1,176
Stock-based compensation expense
15,041
14,499
Deferred income taxes
(6,311
)
14,104
Changes in operating assets and liabilities, net of effect of
business acquisitions: Accounts
receivable, net
94,292
51,458
Prepaid expenses and other assets
(20,605
)
(28,921
)
Accounts payable and other accrued expenses
(30,087
)
8,121
Accrued compensation and benefits
39,461
1,529
Income taxes payable and receivable
11,107
(21,384
)
Operating lease liabilities
(37,916
)
(37,989
)
Long-term liabilities
15,206
(3,319
)
Net cash provided by operating activities
382,287
237,025
CASH FLOWS FROM
INVESTING ACTIVITIES: Capital
expenditures
(31,873
)
(41,035
)
Cash paid for business acquisitions, net of cash acquired
(355,127
)
(102,056
)
Other
-
-
Net cash used in investing activities
(387,000
)
(143,091
)
CASH FLOWS FROM
FINANCING ACTIVITIES: Net
borrowings (payments) under credit facilities
12,540
(68,460
)
Proceeds from employee stock purchase plans
4,664
3,665
Repurchases of common stock
(4,420
)
(3,596
)
Payment of taxes for equity transactions
(18,649
)
(29,083
)
Net cash used in financing activities
(5,865
)
(97,474
)
Effect of exchange rate changes on cash and cash equivalents
5,456
157
Net decrease in cash and cash equivalents
(5,122
)
(3,383
)
Cash and cash equivalents, beginning of period
107,236
72,028
Cash and cash equivalents, end of period
$
102,114
$
68,645
Selected Financial
Data (Continued)
Revenue by Customer
Group (Unaudited) Three Months
Ended (dollars
in thousands)
12/31/2020
12/31/2019 $ Change %
Change Department of Defense
1,012,875
68.9%
990,381
71.0%
$
22,494
2.3%
Federal Civilian Agencies
390,034
26.6%
342,029
24.5%
48,005
14.0%
Commercial and other
65,802
4.5%
63,059
4.5%
2,743
4.3%
Total
1,468,711
100.0%
1,395,469
100.0%
$
73,242
5.2%
Six Months Ended
(dollars in
thousands)
12/31/2020
12/31/2019 $ Change %
Change Department of Defense
2,017,070
68.9%
1,928,021
69.9%
$
89,049
4.6%
Federal Civilian Agencies
780,213
26.6%
706,022
25.6%
74,191
10.5%
Commercial and other
130,934
4.5%
124,818
4.5%
6,116
4.9%
Total
2,928,217
100.0%
2,758,861
100.0%
$
169,356
6.1%
Revenue by Contract Type (Unaudited)
Three Months Ended
(dollars in thousands)
12/31/2020 12/31/2019
$ Change % Change
Cost-plus-fee
843,584
57.5%
818,477
58.6%
$
25,107
3.1%
Fixed price
440,821
30.0%
388,867
27.9%
51,954
13.4%
Time and materials
184,306
12.5%
188,125
13.5%
(3,819)
-2.0%
Total
1,468,711
100.0%
1,395,469
100.0%
$
73,242
5.2%
Six Months Ended
(dollars in
thousands)
12/31/2020
12/31/2019 $ Change %
Change Cost-plus-fee
1,667,193
56.9%
1,566,191
56.8%
$
101,002
6.4%
Fixed price
874,635
29.9%
806,843
29.2%
67,792
8.4%
Time and materials
386,389
13.2%
385,827
14.0%
562
0.1%
Total
2,928,217
100.0%
2,758,861
100.0%
$
169,356
6.1%
Revenue by Prime or Subcontractor
(Unaudited) Three Months
Ended (dollars
in thousands)
12/31/2020
12/31/2019 $ Change %
Change Prime
1,327,025
90.4%
1,266,655
90.8%
$
60,370
4.8%
Subcontractor
141,686
9.6%
128,814
9.2%
12,872
10.0%
Total
1,468,711
100.0%
1,395,469
100.0%
$
73,242
5.2%
Six Months Ended
(dollars in
thousands)
12/31/2020
12/31/2019 $ Change %
Change Prime
2,653,863
90.6%
2,501,760
90.7%
$
152,103
6.1%
Subcontractor
274,354
9.4%
257,101
9.3%
17,253
6.7%
Total
2,928,217
100.0%
2,758,861
100.0%
$
169,356
6.1%
Revenue by Expertise or Technology
(Unaudited) Three Months
Ended (dollars
in thousands)
12/31/2020
12/31/2019 $ Change %
Change Expertise
732,276
49.9%
742,034
53.2%
$
(9,758)
-1.3%
Technology
736,435
50.1%
653,435
46.8%
83,000
12.7%
Total
1,468,711
100.0%
1,395,469
100.0%
$
73,242
5.2%
Six Months Ended
(dollars in
thousands)
12/31/2020
12/31/2019 $ Change %
Change Expertise
1,472,959
50.3%
1,464,387
53.1%
$
8,572
0.6%
Technology
1,455,258
49.7%
1,294,474
46.9%
160,784
12.4%
Total
2,928,217
100.0%
2,758,861
100.0%
$
169,356
6.1%
Selected Financial Data (Continued)
Contract Awards
Received (Unaudited) Three
Months Ended
(dollars in thousands)
12/31/2020 12/31/2019
$ Change % Change Contract
Awards
$
2,129,108
$
2,711,484
$
(582,376)
-21.5%
Six Months Ended
(dollars in thousands)
12/31/2020
12/31/2019 $ Change
% Change Contract Awards
$
3,963,866
$
6,728,707
$
(2,764,841)
-41.1%
Reconciliation of Net Cash Provided by
Operating Activities to Net Cash Provided by Operating
Activities Excluding MARPA (Unaudited)
The Company defines net cash provided by operating activities
excluding CACI’s Master Accounts Receivable Purchase Agreement
(MARPA) as net cash provided by operating activities calculated in
accordance with GAAP, adjusted to exclude net cash received from
CACI’s MARPA for the sale of certain designated eligible U.S.
government receivables. Under the MARPA, the Company can sell
eligible receivables, including certain billed and unbilled
receivables up to a maximum amount of $200.0 million. The Company
provides net cash provided by operating activities excluding MARPA
to allow investors to more easily compare current period results to
prior period results and to results of our peers. This non-GAAP
measure should not be considered in isolation or as a substitute
for performance measures prepared in accordance with GAAP.
Three Months Ended Three Months Ended (dollars
in thousands)
12/31/2020 12/31/2019 Net
cash provided by operating activities
$
205,387
$
133,821
Cash used (provided) by MARPA
(15,553)
(16,334)
Net cash provided by operating activities excluding MARPA
$
189,834
$
117,487
Reconciliation of Net Income to Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) (Unaudited)
The Company views Adjusted EBITDA and Adjusted EBITDA margin,
both of which are defined as non-GAAP measures, as important
indicators of performance, consistent with the manner in which
management measures and forecasts the Company’s performance.
Adjusted EBITDA is a commonly used non-GAAP measure when comparing
our results with those of other companies. We define Adjusted
EBITDA as GAAP net income plus net interest expense, income taxes,
depreciation and amortization expense, including depreciation
within direct costs, and earnout adjustments. We consider Adjusted
EBITDA to be a useful metric for management and investors to
evaluate and compare the ongoing operating performance of our
business on a consistent basis across reporting periods, as it
eliminates the effect of non-cash items such as depreciation of
tangible assets, amortization of intangible assets primarily
recognized in business combinations, as well as the effect of
earnout gains and losses, which we do not believe are indicative of
our core operating performance. Adjusted EBITDA margin is adjusted
EBITDA divided by revenue. These non-GAAP measures should not be
considered in isolation or as a substitute for performance measures
prepared in accordance with GAAP.
Three Months Ended Six
Months Ended (dollars in thousands)
12/31/2020
12/31/2019 % Change 12/31/2020
12/31/2019 % Change Net income
$
106,478
$
79,195
34.5%
$
200,122
$
147,172
36.0%
Plus:
Income taxes
25,974
16,278
59.6%
56,774
31,647
79.4%
Interest income and expense, net
9,087
14,714
-38.2%
19,067
31,525
-39.5%
Depreciation and amortization expense, including amounts
within direct costs
33,041
28,615
15.5%
64,053
55,969
14.4%
Earnout adjustments
-
2,100
-100.0%
-
2,900
-100.0%
Adjusted EBITDA
$
174,580
$
140,902
23.9%
$
340,016
$
269,213
26.3%
Three Months Ended
Six Months Ended (dollars in thousands)
12/31/2020 12/31/2019 % Change
12/31/2020 12/31/2019 % Change Revenue, as
reported
$
1,468,711
$
1,395,469
5.2%
$
2,928,217
$
2,758,861
6.1%
Adjusted EBITDA
174,580
140,902
23.9%
340,016
269,213
26.3%
Adjusted EBITDA margin
11.9%
10.1%
11.6%
9.8%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210127005924/en/
Corporate Communications and Media: Jody Brown, Executive Vice
President, Public Relations (703) 841-7801, jbrown@caci.com
Investor Relations: Dan Leckburg, Senior Vice President,
Investor Relations (703) 841-7666, dleckburg@caci.com
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