CACI Reports Results for Its Fiscal 2021 Second Quarter

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

ARLINGTON, Va.–(BUSINESS WIRE)–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.

Contacts

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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