Revenues of $1.9 billion
Net income of $86.0 million and diluted EPS
of $3.76
Adjusted net income of $99.7 million and
adjusted diluted EPS of $4.36
Contract awards of $3.1 billion and
book-to-bill of 1.7x
CACI International Inc (NYSE: CACI), a leading provider of
expertise and technology to government customers, announced results
today for its fiscal first quarter ended September 30, 2023.
“Our first quarter results represent a great start to fiscal
year 2024 and underscore the exceptional execution of our
business,” said John Mengucci, CACI President and Chief Executive
Officer. “The business is performing well and ahead of our
expectations at this point in the year. We are strategically
positioned in the right markets with differentiated capabilities.
As a result, we continue to win high-value, enduring work that
supports our long-term value creation goals of delivering top-line
growth, strong profitability, and robust free cash flow. Our
financial strength enables us to opportunistically deploy capital,
most recently by repurchasing an additional $150 million of our
stock representing about two percent of our outstanding shares.
Given our year-to-date performance and strong position, we are
raising our fiscal year 2024 revenue, adjusted EPS, and free cash
flow guidance.”
First Quarter Results
(in millions, except earnings per share
and DSO)
Three Months Ended
9/30/2023
9/30/2022
% Change
Revenues
$
1,850.1
$
1,605.8
15.2
%
Income from operations
$
137.3
$
132.8
3.4
%
Net income
$
86.0
$
89.1
-3.5
%
Adjusted net income, a non-GAAP
measure1
$
99.7
$
103.3
-3.4
%
Diluted earnings per share
$
3.76
$
3.76
0.0
%
Adjusted diluted earnings per share, a
non-GAAP measure1
$
4.36
$
4.36
0.0
%
Earnings before interest, taxes,
depreciation and amortization (EBITDA), a non-GAAP measure1
$
174.2
$
170.0
2.5
%
Net cash provided by operating activities
excluding MARPA1
$
93.3
$
142.9
-34.8
%
Free cash flow, a non-GAAP measure1
$
79.3
$
130.2
-39.1
%
Days sales outstanding (DSO)2
49
48
(1)
This non-GAAP measure should not be
considered in isolation or as a substitute for measures prepared in
accordance with GAAP. For additional information regarding this
non-GAAP measure, see the related explanation and reconciliation to
the GAAP measure included below in this release.
(2)
The DSO calculations for three months
ended September 30, 2023 and 2022 exclude the impact of the
Company's Master Accounts Receivable Purchase Agreement (MARPA),
which was 5 days and 8 days, respectively.
Revenues in the first quarter of fiscal year 2024 increased 15
percent year-over-year, driven by organic growth, which included
approximately $100 million of higher-than-expected material
purchases by our customers. The higher material purchases
contributed approximately six points of revenue growth with no
material contribution to profit. The increase in income from
operations was driven by higher revenues and gross profit. Diluted
earnings per share and adjusted diluted earnings per share were
unchanged year-over-year, with higher income from operations, lower
tax provision, and share repurchases offset by higher interest
expense. Cash from operations, excluding MARPA was influenced
primarily by higher revenue and the associated temporary effect on
working capital.
First Quarter Contract Awards
Contract awards in the first quarter totaled $3.1 billion, with
over 50 percent for new business to CACI. Awards exclude ceiling
values of multi-award, indefinite delivery, indefinite quantity
(IDIQ) contracts. Some notable awards during the quarter were:
- CACI was awarded an eight-year, single-award technology task
order valued at up to $1.3 billion to provide global enterprise
network modernization to an Intelligence Community customer. CACI
recognized approximately $750 million of award and backlog value
based on current requirements in its first quarter of fiscal year
2024.
- CACI was awarded a five-year expertise contract, with a maximum
ceiling value of $917 million, to continue to provide complete life
cycle software and systems engineering to improve battlespace
awareness for the U.S. Air Force. This contract award significantly
expands CACI’s long-standing work. Under the contract, CACI will
implement Agile and adaptable processes to develop software and
data analysis capabilities to advance and modernize command,
control, communications, computers, cyber, intelligence,
surveillance, and reconnaissance (C5ISR) programs. These
capabilities will enhance information dissemination and
decision-making across the Air Force and intelligence community,
improve information security, and meet program mission
objectives.
- CACI was awarded a five-year expertise task order worth up to
$420 million to continue to provide program management,
engineering, administration, procurement, logistics, mechanical,
and technical support to the Department of Defense (DoD).
- CACI was awarded a five-year technology task order valued at up
to $219 million to provide cyber defense and C5ISR support to the
DoD.
- CACI was awarded a four-year single-award, IDIQ expertise
contract worth up to $150 million to continue its support of
spaceflight systems, simulation, and software for NASA Johnson
Space Center (JSC). The program provides advanced aerospace
engineering for crewed spacecraft systems, development of
simulation and Virtual Reality (VR) applications, and software in
support of human space flight. This award builds on more than three
decades of CACI’s dedicated support for JSC’s mission.
Total backlog as of September 30, 2023 was $26.7 billion
compared with $24.9 billion a year ago, an increase of 7 percent.
Funded backlog as of September 30, 2023 was $4.2 billion compared
with $3.7 billion a year ago, an increase of 14 percent.
Additional Highlights
- CACI appointed Stanton D. Sloane to its Board of Directors
where he will serve as an independent director on the Board. Sloane
began his career in 1984 with General Electric Aerospace, which
subsequently merged to become a business of Martin Marietta, then
Lockheed Martin, in the 1990s. He held a variety of executive roles
including engineering, program management, and business
development. In 2004, he was promoted to Executive Vice President,
Integrated Systems and Solutions, one of the major divisions of
Lockheed Martin.
- CACI was named to Forbes’ Best Employers for Women 2023 for the
second consecutive year. Separately, CACI was named a Top Workplace
in San Antonio by employee engagement technology partner Energage,
LLC. for a fifth consecutive year.
- CACI announced a new, multi-year Strategic Collaboration
Agreement (SCA) with Amazon Web Services (AWS) to further advance
the company’s application of AWS services as a trusted provider of
secure, agile, innovative solutions that can be rapidly adopted by
customers in the U.S. government. CACI will build on its successful
Agile-at-scale delivery execution model by applying a similar
approach to enhance and scale cloud adoption through this SCA.
Fiscal Year 2024 Guidance
The table below summarizes our fiscal year 2024 guidance and
represents our views as of October 25, 2023. Our revenue guidance
now reflects approximately $200 million of higher-than-expected
material purchases by our customers, split evenly between the first
and second quarters of fiscal year 2024. This revenue has no
material contribution to profit. Our guidance also now reflects
lower diluted weighted average shares due to the effect of the
share repurchases made during the first quarter. Higher free cash
flow reflects first quarter results and confidence in our
expectations for the year.
(in millions, except earnings per
share)
Fiscal Year 2024
Current Guidance
Prior Guidance
Revenues
$7,200 - $7,400
$7,000 - $7,200
Adjusted net income, a non-GAAP
measure1
$440 - $465
$440 - $465
Adjusted diluted earnings per share, a
non-GAAP measure1
$19.38 - $20.48
$19.13 - $20.22
Diluted weighted average shares
22.7
23.0
Free cash flow, a non-GAAP measure2
at least $410
at least $400
(1)
Adjusted net income and adjusted diluted
earnings per share are defined as GAAP net income and GAAP diluted
EPS, respectively, excluding intangible amortization expense and
the related tax impact. This non-GAAP measure should not be
considered in isolation or as a substitute for measures prepared in
accordance with GAAP. For additional information regarding this
non-GAAP measure, see the related explanation and reconciliation to
the GAAP measure included below in this release.
(2)
Free cash flow is defined as net cash
provided by operating activities excluding MARPA, less payments for
capital expenditures (capex). This non-GAAP measure should not be
considered in isolation or as a substitute for measures prepared in
accordance with GAAP. Fiscal year 2024 free cash flow guidance
assumes approximately $75 million in tax payments related to
Section 174 of the Tax Cuts and Jobs Act of 2017. For additional
information regarding this non-GAAP measure, see the related
explanation and reconciliation to the GAAP measure included below
in this release.
Conference Call Information
We have scheduled a conference call for 8:00 AM Eastern Time
Thursday, October 26, 2023 during which members of our senior
management will be making a brief presentation focusing on first
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/events/default.aspx 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
At CACI International Inc (NYSE: CACI), our 23,000 talented and
dynamic employees are ever vigilant in delivering distinctive
expertise and differentiated technology to meet our customers’
greatest challenges in national security and government
modernization. We are a company of good character, relentless
innovation, and long-standing excellence. Our culture drives our
success and earns us recognition as a Fortune World's Most Admired
Company. CACI is a member of the Fortune 1000 Largest Companies,
the Russell 1000 Index, and the S&P MidCap 400 Index. For more
information, 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 International Inc
Consolidated Statements of
Operations (Unaudited)
(in thousands, except per share
data)
Three Months Ended
9/30/2023
9/30/2022
% Change
Revenues
$
1,850,147
$
1,605,759
15.2
%
Costs of revenues:
Direct costs
1,272,918
1,055,772
20.6
%
Indirect costs and selling expenses
404,633
382,081
5.9
%
Depreciation and amortization
35,247
35,103
0.4
%
Total costs of revenues
1,712,798
1,472,956
16.3
%
Income from operations
137,349
132,803
3.4
%
Interest expense and other, net
25,571
16,193
57.9
%
Income before income taxes
111,778
116,610
-4.1
%
Income taxes
25,731
27,485
-6.4
%
Net income
$
86,047
$
89,125
-3.5
%
Basic earnings per share
$
3.80
$
3.81
-0.3
%
Diluted earnings per share
$
3.76
$
3.76
0.0
%
Weighted average shares used in per share
computations:
Weighted-average basic shares
outstanding
22,647
23,420
-3.3
%
Weighted-average diluted shares
outstanding
22,894
23,678
-3.3
%
CACI International Inc
Consolidated Balance Sheets
(Unaudited)
(in thousands)
9/30/2023
6/30/2023
ASSETS
Current assets:
Cash and cash equivalents
$
125,546
$
115,776
Accounts receivable, net
1,002,638
894,946
Prepaid expenses and other current
assets
238,227
199,315
Total current assets
1,366,411
1,210,037
Goodwill
4,078,368
4,084,705
Intangible assets, net
489,126
507,835
Property, plant and equipment, net
196,579
199,519
Operating lease right-of-use assets
313,812
312,989
Supplemental retirement savings plan
assets
94,211
96,739
Accounts receivable, long-term
13,296
11,857
Other long-term assets
185,668
177,127
Total assets
$
6,737,471
$
6,600,808
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt
$
53,594
$
45,938
Accounts payable
356,439
198,177
Accrued compensation and benefits
281,838
372,354
Other accrued expenses and current
liabilities
408,256
377,502
Total current liabilities
1,100,127
993,971
Long-term debt, net of current portion
1,735,677
1,650,443
Supplemental retirement savings plan
obligations, net of current portion
108,712
104,912
Deferred income taxes
101,513
120,545
Operating lease liabilities,
noncurrent
332,675
329,432
Other long-term liabilities
194,734
177,171
Total liabilities
3,573,438
3,376,474
Total shareholders’ equity
3,164,033
3,224,334
Total liabilities and shareholders’
equity
$
6,737,471
$
6,600,808
CACI International Inc
Consolidated Statements of
Cash Flows (Unaudited)
(in thousands)
Three Months Ended
9/30/2023
9/30/2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
86,047
$
89,125
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
35,247
35,103
Amortization of deferred financing
costs
547
564
Non-cash lease expense
16,932
17,319
Stock-based compensation expense
10,024
8,439
Deferred income taxes
(7,812
)
(31,177
)
Changes in operating assets and
liabilities, net of effect of business acquisitions:
Accounts receivable, net
(111,159
)
126,859
Prepaid expenses and other assets
(37,343
)
(34,438
)
Accounts payable and other accrued
expenses
154,469
(52,598
)
Accrued compensation and benefits
(90,511
)
(31,048
)
Income taxes payable and receivable
23,803
35,514
Operating lease liabilities
(17,800
)
(19,903
)
Long-term liabilities
7,644
1,084
Net cash provided by operating
activities
70,088
144,843
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures
(13,991
)
(12,771
)
Acquisitions of businesses, net of cash
acquired
(347
)
—
Other
1,974
—
Net cash used in investing activities
(12,364
)
(12,771
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings under bank credit
facilities
732,500
378,000
Principal payments made under bank credit
facilities
(640,156
)
(483,656
)
Proceeds from employee stock purchase
plans
3,156
2,791
Repurchases of common stock
(140,364
)
(2,647
)
Payment of taxes for equity
transactions
(697
)
(584
)
Net cash used in financing activities
(45,561
)
(106,096
)
Effect of exchange rate changes on cash
and cash equivalents
(2,393
)
(4,144
)
Net change in cash and cash
equivalents
9,770
21,832
Cash and cash equivalents, beginning of
period
115,776
114,804
Cash and cash equivalents, end of
period
$
125,546
$
136,636
Revenues by Customer Group
(Unaudited)
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
$ Change
% Change
Department of Defense
$
1,352,306
73.1
%
$
1,095,320
68.2
%
$
256,986
23.5
%
Federal Civilian agencies
407,344
22.0
%
424,087
26.4
%
(16,743
)
-3.9
%
Commercial and other
90,497
4.9
%
86,352
5.4
%
4,145
4.8
%
Total
$
1,850,147
100.0
%
$
1,605,759
100.0
%
$
244,388
15.2
%
Revenues by Contract Type
(Unaudited)
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
$ Change
% Change
Cost-plus-fee
$
1,134,435
61.4
%
$
934,746
58.2
%
$
199,689
21.4
%
Fixed-price
502,077
27.1
%
481,773
30.0
%
20,304
4.2
%
Time-and-materials
213,635
11.5
%
189,240
11.8
%
24,395
12.9
%
Total
$
1,850,147
100.0
%
$
1,605,759
100.0
%
$
244,388
15.2
%
Revenues by Prime or
Subcontractor (Unaudited)
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
$ Change
% Change
Prime contractor
$
1,649,362
89.1
%
$
1,450,310
90.3
%
$
199,052
13.7
%
Subcontractor
200,785
10.9
%
155,449
9.7
%
45,336
29.2
%
Total
$
1,850,147
100.0
%
$
1,605,759
100.0
%
$
244,388
15.2
%
Revenues by Expertise or
Technology (Unaudited)
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
$ Change
% Change
Expertise
$
878,094
47.5
%
$
734,203
45.7
%
$
143,891
19.6
%
Technology
972,053
52.5
%
871,556
54.3
%
100,497
11.5
%
Total
$
1,850,147
100.0
%
$
1,605,759
100.0
%
$
244,388
15.2
%
Contract Awards
(Unaudited)
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
$ Change
% Change
Contract Awards
$
3,069,243
$
3,245,622
$
(176,379
)
-5.4
%
Reconciliation of Net Income to Adjusted Net
Income and Diluted EPS to Adjusted Diluted EPS (Unaudited)
Adjusted net income and Adjusted diluted EPS are non-GAAP
performance measures. We define Adjusted net income and Adjusted
diluted EPS as GAAP net income and GAAP diluted EPS, respectively,
excluding intangible amortization expense and the related tax
impact as we do not consider intangible amortization expense to be
indicative of our operating performance. We believe that these
performance measures provide management and investors with useful
information in assessing trends in our ongoing operating
performance, provide greater visibility in understanding the
long-term financial performance of the Company, and allow investors
to more easily compare our results to results of our peers. These
non-GAAP measures should not be considered in isolation or as a
substitute for performance measures prepared in accordance with
GAAP.
(in thousands, except per share data)
Three Months Ended
9/30/2023
9/30/2022
% Change
Net income, as reported
$
86,047
$
89,125
-3.5
%
Intangible amortization expense
18,366
19,114
-3.9
%
Tax effect of intangible amortization1
(4,684
)
(4,950
)
-5.4
%
Adjusted net income
$
99,729
$
103,289
-3.4
%
Three Months Ended
9/30/2023
9/30/2022
% Change
Diluted EPS, as reported
$
3.76
$
3.76
0.0
%
Intangible amortization expense
0.80
0.81
-1.2
%
Tax effect of intangible amortization1
(0.20
)
(0.21
)
-4.8
%
Adjusted diluted EPS
$
4.36
$
4.36
0.0
%
FY24 Guidance Range
(in millions, except per share data)
Low End
High End
Net income, as reported
$
386
---
$
411
Intangible amortization expense
72
---
72
Tax effect of intangible amortization1
(18
)
---
(18
)
Adjusted net income
$
440
---
$
465
FY24 Guidance Range
Low End
High End
Diluted EPS, as reported
$
17.00
---
$
18.11
Intangible amortization expense
3.17
---
3.17
Tax effect of intangible amortization1
(0.79
)
---
(0.80
)
Adjusted diluted EPS
$
19.38
---
$
20.48
(1)
Calculation uses an assumed full year
statutory tax rate of 25.5% and 25.9% on non-GAAP tax deductible
adjustments for September 30, 2023 and 2022, respectively.
Note: Numbers may not sum due to
rounding.
Reconciliation of Net Income to Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(Unaudited)
The Company views EBITDA and 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. EBITDA is a
commonly used non-GAAP measure when comparing our results with
those of other companies. We define EBITDA as GAAP net income plus
net interest expense, income taxes, and depreciation and
amortization expense (including depreciation within direct costs).
We consider 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, which we do not believe are
indicative of our operating performance. EBITDA margin is 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
(in thousands)
9/30/2023
9/30/2022
% Change
Net income
$
86,047
$
89,125
-3.5
%
Plus:
Income taxes
25,731
27,485
-6.4
%
Interest income and expense, net
25,571
16,193
57.9
%
Depreciation and amortization expense,
including amounts within direct costs
36,889
37,231
-0.9
%
EBITDA
$
174,238
$
170,034
2.5
%
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
% Change
Revenues, as reported
$
1,850,147
$
1,605,759
15.2
%
EBITDA
174,238
170,034
2.5
%
EBITDA margin
9.4
%
10.6
%
Reconciliation of Net Cash Provided by
Operating Activities to Net Cash Provided by Operating Activities
Excluding MARPA and to Free Cash Flow (Unaudited)
The Company defines Net cash provided by operating activities
excluding MARPA, a non-GAAP measure, as net cash provided by
operating activities calculated in accordance with GAAP, adjusted
to exclude cash flows from CACI’s Master Accounts Receivable
Purchase Agreement (MARPA) for the sale of certain designated
eligible U.S. government receivables up to a maximum amount of
$200.0 million Free cash flow is a non-GAAP liquidity measure and
may not be comparable to similarly titled measures used by other
companies. The Company defines Free cash flow as Net cash provided
by operating activities excluding MARPA, less payments for capital
expenditures. The Company uses these non-GAAP measures to assess
our ability to generate cash from our business operations and plan
for future operating and capital actions. We believe these measures
allow investors to more easily compare current period results to
prior period results and to results of our peers. Free cash flow
does not represent residual cash flows available for discretionary
purposes and should not be used as a substitute for cash flow
measures prepared in accordance with GAAP.
Three Months Ended
(in thousands)
9/30/2023
9/30/2022
Net cash provided by operating
activities
$
70,088
$
144,843
Cash used in (provided by) MARPA
23,167
(1,904
)
Net cash provided by operating activities
excluding MARPA
93,255
142,939
Capital expenditures
(13,991
)
(12,771
)
Free cash flow
$
79,264
$
130,168
(in millions)
FY24 Guidance
Current
Prior
Net cash provided by operating
activities
$
500
$
490
Cash used in (provided by) MARPA
—
—
Net cash provided by operating activities
excluding MARPA
500
490
Capital expenditures
(90
)
(90
)
Free cash flow
$
410
$
400
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025368084/en/
Corporate Communications and Media: Lorraine Corcoran, Executive
Vice President, Corporate Communications (703) 434-4165,
lorraine.corcoran@caci.com
Investor Relations: George Price, Senior Vice President,
Investor Relations (703) 841-7818, george.price@caci.com
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