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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CACI International Inc | NYSE:CACI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
3.99 | 0.97% | 414.95 | 416.94 | 410.665 | 413.79 | 115,526 | 01:00:00 |
Revenue of $1.5 billion, +15.9% year-over-year
Net income of $80.6 million, +18.2% year-over-year
Robust cash flow from operations
Contract awards of $1.4 billion
Reiterates Fiscal 2020 Guidance
CACI International Inc (NYSE: CACI), a leading provider of expertise and technology to government enterprise and mission customers, announced results today for its third fiscal quarter ended March 31, 2020.
CEO Commentary and Outlook
John Mengucci, CACI’s President and CEO, said, “As our nation navigates the COVID-19 pandemic, CACI is focused on taking all necessary actions to ensure the health and safety of our employees, to continue our unwavering commitment to our customers, to continue to operate the company in a fiscally responsible manner, and to support the communities in which we work and live.”
Mr. Mengucci continued, “Our third quarter financial results were strong with robust revenue growth, strong profitability, healthy cash flow, and high levels of contract awards. We are well-positioned in a large addressable market, serving stable government customers with enduring national security priorities under long-term contracts. We remain confident in delivering on our commitments of organic growth, margin expansion, and creating enduring shareholder value.”
COVID-19: Impact and Resiliency
We estimate the impact from COVID-19 in our third quarter was approximately $10 million of revenue, $6 million of operating income, and $4.5 million of net income. This was driven primarily by CACI employees and subcontractors unable to access facilities due to COVID-19 and who could not telework.
Despite challenges from COVID-19, CACI’s business remains operationally and financially resilient. CACI has a healthy balance sheet, holds appropriate debt levels at 2.8 times our trailing twelve-months EBITDA, and generates strong cash flow. In addition, CACI has access to significant liquidity of about $835 million through its credit facility with very manageable covenants.
Third Quarter Results
(in millions except earnings per share and DSO)
Q3, FY20
Q3, FY19
% Change
Revenue
$1,465.6
$1,265.0
15.9%
Operating income
$113.7
$94.9
19.8%
Net income
$80.6
$68.1
18.2%
Diluted earnings per share
$3.16
$2.69
17.6%
Net cash provided by operating activities excluding MARPA1
$124.7
$113.3
10.1%
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure2
$141.4
$118.0
19.9%
Days sales outstanding (DSO)3
57
66
(1)
Third quarter FY19 and third 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 9 of this release.
(2)
See the Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) on page 9 of this release.
(3)
The DSO calculations for third quarter FY19 and third quarter FY20 exclude the impact of the Company’s MARPA, which was 9 days and 8 days, respectively.
The year-over-year increase in Q3 FY20 net income was due to higher revenue and operating income, partially offset by higher interest expense and a higher effective tax rate. The increase in cash from operations, excluding MARPA, was driven by higher net income and lower DSO as a result of enhanced billing and collections processes.
Third Quarter Contract Awards
Contract awards in Q3 FY20 totaled $1.4 billion. Approximately 50% of contract award value is for new business to CACI. These awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Some notable awards during the quarter were:
Total backlog as of March 31, 2020 was $19.9 billion compared with $14.9 billion a year ago, an increase of 34%. Funded backlog as of March 31, 2020 was $3.0 billion compared with $2.9 billion a year ago, an increase of 3%.
Additional Highlights
Reiterating FY20 Guidance
CACI’s business continues to perform well despite the COVID-19 pandemic. While there are some impacts and uncertainties as a result of COVID-19, we believe these effects are reflected in our previously-provided guidance ranges. The table below summarizes our FY20 guidance and represents our views as of April 29, 2020.
(in millions except earnings per share)
Current Fiscal Year 2020 Guidance
Previous Fiscal Year 2020 Guidance
Revenue
$5,600 - $5,800
$5,600 - $5,800
Net income
$305 - $325
$305 - $325
Diluted earnings per share
$11.91 - $12.70
$11.91 - $12.70
Diluted weighted average shares
25.6
25.6
Net cash provided by operating activities
at least $430
at least $430
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time Thursday, April 30, 2020 during which members of our senior management will be making a brief presentation focusing on third 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 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
CACI International Inc Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share amounts)Quarter Ended
Nine Months Ended
3/31/2020
3/31/2019
% Change
3/31/2020
3/31/2019
% Change
Revenue$
1,465,600
$
1,264,958
15.9%
$
4,224,461
$
3,612,463
16.9%
Costs of revenue Direct costs
953,630
824,024
15.7%
2,737,378
2,397,633
14.2%
Indirect costs and selling expenses
371,135
324,828
14.3%
1,081,175
859,262
25.8%
Depreciation and amortization
27,159
21,198
28.1%
81,888
58,797
39.3%
Total costs of revenue
1,351,924
1,170,050
15.5%
3,900,441
3,315,692
17.6%
Operating income
113,676
94,908
19.8%
324,020
296,771
9.2%
Interest expense and other, net
14,087
13,466
4.6%
45,612
31,773
43.6%
Income before income taxes
99,589
81,442
22.3%
278,408
264,998
5.1%
Income taxes
19,012
13,297
43.0%
50,659
49,424
2.5%
Net income$
80,577
$
68,145
18.2%
$
227,749
$
215,574
5.6%
Basic earnings per share$
3.21
$
2.74
17.2%
$
9.11
$
8.69
4.8%
Diluted earnings per share$
3.16
$
2.69
17.6%
$
8.94
$
8.50
5.2%
Weighted average shares used in per share computations: Basic
25,078
24,866
25,012
24,819
Diluted
25,478
25,348
25,481
25,369
Statement of Operations Data (Unaudited)
Quarter Ended
Nine Months Ended
3/31/2020
3/31/2019
3/31/2020
3/31/2019
% Change
% Change
Operating income margin
7.8%
7.5%
7.7%
8.2%
Tax rate
19.1%
16.3%
18.2%
18.7%
Net income margin
5.5%
5.4%
5.4%
6.0%
Adjusted EBITDA*$
141,432
$
117,966
19.9%
$
410,645
$
357,983
14.7%
Adjusted EBITDA Margin
9.7%
9.3%
9.7%
9.9%
* See Reconciliation of Net Income to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization on page 9 Selected Financial Data (Continued) CACI International Inc Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands)3/31/2020
6/30/2019
ASSETS: Current assets Cash and cash equivalents$
77,156
$
72,028
Accounts receivable, net
839,135
869,840
Prepaid expenses and other current assets
158,075
89,652
Total current assets
1,074,366
1,031,520
Goodwill and intangible assets, net
3,829,084
3,772,194
Property and equipment, net
169,378
149,676
Operating lease right-of-use assets
339,292
0
Other long-term assets
134,355
133,453
Total assets$
5,546,475
$
5,086,843
LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities Current portion of long-term debt$
46,920
$
46,920
Accounts payable
174,641
118,917
Accrued compensation and benefits
287,570
290,274
Other accrued expenses and current liabilities
270,034
235,611
Total current liabilities
779,165
691,722
Long-term debt, net of current portion
1,464,664
1,618,093
Other long-term liabilities
739,016
405,562
Total liabilities
2,982,845
2,715,377
Shareholders' equity
2,563,630
2,371,466
Total liabilities and shareholders' equity$
5,546,475
$
5,086,843
Selected Financial Data (Continued) CACI International Inc Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands)Nine Months Ended
3/31/2020
3/31/2019
CASH FLOWS FROM OPERATING ACTIVITIES: Net income$
227,749
$
215,574
Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization
81,888
58,797
Non-cash lease expense
54,493
-
Amortization of deferred financing costs
1,762
1,796
Stock-based compensation expense
22,204
18,351
Deferred income taxes
39,527
(1,193
)
Changes in operating assets and liabilities, net of effect of business acquisitions: Accounts receivable, net
36,433
85,995
Prepaid expenses and other assets
(35,461
)
(13,284
)
Accounts payable and other accrued expenses
27,638
101,473
Accrued compensation and benefits
(4,522
)
(18,536
)
Income taxes payable and receivable
(42,383
)
(1,945
)
Operating lease liabilities
(56,240
)
-
Long-term liabilities
4,737
5,813
Net cash provided by operating activities
357,825
452,841
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures
(54,331
)
(29,545
)
Cash paid for business acquisitions, net of cash acquired
(102,437
)
(1,071,023
)
Other
-
1,875
Net cash used in investing activities
(156,768
)
(1,098,693
)
CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (payments) under credit facilities
(155,190
)
693,424
Payment of contingent consideration
(8,700
)
(616
)
Proceeds from employee stock purchase plans
5,463
4,265
Repurchases of common stock
(5,584
)
(4,310
)
Payment of taxes for equity transactions
(30,616
)
(18,837
)
Net cash provided by (used in) financing activities
(194,627
)
673,926
Effect of exchange rate changes on cash and cash equivalents
(1,302
)
(462
)
Net increase in cash and cash equivalents
5,128
27,612
Cash and cash equivalents, beginning of period
72,028
66,194
Cash and cash equivalents, end of period
$
77,156
$
93,806
Selected Financial Data (Continued) Revenue by Customer Type (Unaudited)
Quarter Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Department of Defense$
1,037,242
70.8%
$
887,030
70.1%
$
150,212
16.9%
Federal Civilian Agencies
361,320
24.7%
318,374
25.2%
42,946
13.5%
Commercial and other
67,038
4.6%
59,554
4.7%
7,484
12.6%
Total$
1,465,600
100.0%
$
1,264,958
100.0%
$
200,642
15.9%
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Department of Defense$
2,965,263
70.2%
$
2,540,093
70.3%
$
425,170
16.7%
Federal Civilian Agencies
1,067,342
25.3%
898,491
24.9%
168,851
18.8%
Commercial and other
191,856
4.5%
173,879
4.8%
17,977
10.3%
Total$
4,224,461
100.0%
$
3,612,463
100.0%
$
611,998
16.9%
Revenue by Contract Type (Unaudited) Quarter Ended (dollars in thousands) 3/31/2020 3/31/2019 $ Change % Change Cost reimbursable$
852,700
58.2%
$
704,627
55.7%
$
148,073
21.0%
Fixed price
405,736
27.7%
374,006
29.6%
31,730
8.5%
Time and materials
207,164
14.1%
186,325
14.7%
20,839
11.2%
Total$
1,465,600
100.0%
$
1,264,958
100.0%
$
200,642
15.9%
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Cost reimbursable$
2,418,891
57.3%
$
2,003,204
55.5%
$
415,687
20.8%
Fixed price
1,212,579
28.7%
1,055,384
29.2%
157,195
14.9%
Time and materials
592,991
14.0%
553,875
15.3%
39,116
7.1%
Total$
4,224,461
100.0%
$
3,612,463
100.0%
$
611,998
16.9%
Revenue Generated as a Prime versus Subcontractor (Unaudited)
Quarter Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Prime$
1,344,315
91.7%
$
1,153,599
91.2%
$
190,716
16.5%
Subcontractor
121,285
8.3%
111,359
8.8%
9,926
8.9%
Total$
1,465,600
100.0%
$
1,264,958
100.0%
$
200,642
15.9%
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Prime$
3,849,561
91.1%
$
3,335,427
92.3%
$
514,134
15.4%
Subcontractor
374,900
8.9%
277,036
7.7%
97,864
35.3%
Total$
4,224,461
100.0%
$
3,612,463
100.0%
$
611,998
16.9%
Selected Financial Data (Continued) Contract Awards Received (Unaudited)Quarter Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Contract Awards$
1,448,035
$
2,665,317
$
(1,217,282
)
-45.7
%
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
$ Change
% Change
Contract Awards$
8,176,742
$
6,512,352
$
1,664,390
25.6
%
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 $200.0 million. The Company provides net cash provided by operating activities excluding MARPA to allow investors to more easily compare current period results to prior period results and to results of our peers. This non-GAAP measure should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.
Quarter
Ended
Quarter
Ended
(dollars in thousands)3/31/2020
3/31/2019
Net cash provided by operating activities$
120,800
$
313,301
Cash used (provided) by MARPA
3,938
(200,000
)
Net cash provided by operating activities excluding MARPA$
124,738
$
113,301
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.
Quarter Ended
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
% Change
3/31/2020
3/31/2019
% Change
Net income$
80,577
$
68,145
18.2%
$
227,749
$
215,574
5.6%
Plus: Income taxes
19,012
13,297
43.0%
50,659
49,424
2.5%
Interest income and expense, net
14,087
13,466
4.6%
45,612
31,773
43.6%
Depreciation and amortization expense, including depreciation within direct costs
27,656
21,958
25.9%
83,625
60,912
37.3%
Earnout adjustments
100
1,100
-90.9%
3,000
300
900.0%
Adjusted EBITDA$
141,432
$
117,966
19.9%
$
410,645
$
357,983
14.7%
Quarter Ended
Nine Months Ended
(dollars in thousands)3/31/2020
3/31/2019
% Change
3/31/2020
3/31/2019
% Change
Revenue, as reported$
1,465,600
$
1,264,958
15.9%
$
4,224,461
$
3,612,463
16.9%
Adjusted EBITDA
141,432
117,966
19.9%
410,645
357,983
14.7%
Adjusted EBITDA margin
9.7%
9.3%
9.7%
9.9%
View source version on businesswire.com: https://www.businesswire.com/news/home/20200429005882/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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