CACI International Inc · 1100 North Glebe Road · Arlington Virginia 22201
CACI Reports Record Second Quarter and First Half Results
Guidance increased for Fiscal Year 2004
Net Income up 35% for the quarter to $14.3 million
Revenue up 29% for the quarter to $263.4 million
Arlington, VA, January 21, 2004 — CACI International Inc (NYSE:CAI), a leading information technology and network solutions provider to the federal government, announced today record results for its second fiscal quarter and first half ending December 31, 2003. Net income for the second quarter of Fiscal Year 2004 (FY04) increased 35 percent, while revenue was up 29 percent compared to the second quarter of Fiscal Year 2003 (FY03). For the first six months of FY04, net income was up 36 percent, while revenue was up 27 percent versus a year ago.
The increase in earnings and revenue in the quarter and for the first half of FY04 resulted from continuing growth in CACI's systems integration, engineering services, and knowledge management offerings of its domestic operations. This growth is a result of the company's strategic focus on national security and the reshaping of the way government agencies communicate, use and disseminate information, deliver services, and conduct business.
Second Quarter Margin Increase Driven by Mix of Business and Operational Efficiencies
Net income for the second quarter of FY04 was $14.3 million, or $0.48 per diluted share, an increase of 35 percent over net income of $10.6 million, or $0.36 per diluted share, reported in the second quarter of FY03. Revenue for the quarter was $263.4 million, an increase of 29 percent over second quarter FY03 revenue of $204.5 million. Operating income in the quarter was $23.2 million, an increase of 38 percent over second quarter FY03 operating income of $16.8 million. For the second quarter, the operating margin increased to 8.8 percent from 8.2 percent a year earlier.
The increased operating margin was driven primarily by a favorable mix of business and continued operational efficiencies. The growth of the company's operations, including recent acquisitions, continued to be driven by increased demand for mission-critical support for intelligence community customers, knowledge management, engineering and logistics, and systems integration support for the Department of Defense (DoD) and civilian agencies. Internal revenue growth for the company for the quarter was 15 percent.
Second Quarter Highlights
The following highlights occurred during the second fiscal quarter:
First Half FY04 Results Reflect Increasing Profitability and Growth in Key Areas
Net income for the first six months of FY04 was $27.2 million, or $0.91 per diluted share, an increase of 36 percent over net income of $20.0 million, or $0.68 per diluted share, reported for the first half of FY03. For the first half of FY04, revenue increased 27 percent, to $499.1 million, compared with $392.5 million reported in the same period of FY03. Operating income for the first six months of FY04 was $43.7 million, up 39 percent over operating income of $31.5 million reported a year earlier. The operating margin in the first six months of FY04 improved to 8.8 percent from 8.0 percent a year earlier. The higher operating margin was driven primarily by operational cost efficiencies, cost synergies associated with acquisitions, and a favorable mix of business.
Revenue growth was driven by increased demand from federal government customers, such as those noted above, in the second quarter. Internal revenue growth was 13 percent for the first half of the company's FY04.
Commenting on the results, Dr. J.P. London, CACI's Chairman, President, and Chief Executive Officer, said, "CACI's strong growth in the second quarter reflected the successful, ongoing implementation of our business strategy. We accelerated our strong operational performance, meeting the demands of our longtime customers and initiated new key customer relationships. We combined successful performance with key wins in government human resources and healthcare, the intelligence community and with the integration of our C-CUBED acquisition. We expanded our employee base and are now providing mission-critical support to customers around the world."
Dr. London continued, "As we move into the second half of our FY04, we believe that the operational tempo we have experienced in the first half of the fiscal year will continue. We believe that opportunities for us to continue to support our customers throughout the federal government remain robust. We are confident that our strategic focus on national security and information technology solutions for the transformation of the federal government's operations remains the key to our future growth and the enhancement of shareholder value."
Effective January 16, 2004, CACI acquired the outstanding shares of MTL Systems, Inc (MTL). Located in Dayton, Ohio, MTL provides engineering and integration services primarily for the Department of Defense, and had revenue of approximately $5 million during its last fiscal year. MTL's 55 employees have such areas of expertise as advanced imagery technology, remote sensing, algorithm development, modeling and simulation, and rapid change detection. Most of MTL's employees hold high-level security clearances. Terms of the transaction were not disclosed.
Company Guidance Increased for Remainder of FY04
The company also increased its guidance for its full year FY04, and issued initial guidance for its third and fourth fiscal quarters. This guidance excludes any revenue or income from additional acquisitions that might be closed prior to the end of FY04. The table below summarizes the guidance ranges for each of those periods and shows the change over the same periods in FY03:
Investors are reminded that actual results may differ from these estimates for the reasons described at the end of the release.
Conference Call Information
The company has scheduled a conference call for 8:30 AM Eastern time Thursday, January 22nd, during which management will be making a brief presentation focusing on second quarter results, operating trends and its expectations. A question-and-answer session will follow to allow further discussion of the results and the company's future expectations. Interested parties can listen to the conference call and view the accompanying exhibits over the Internet by logging on to CACI's Internet site at www.caci.com at the scheduled time. A replay of the call will also be available over the Internet beginning at 1:00 PM Eastern time Thursday, January 22nd, and can be accessed through CACI's homepage (www.caci.com) by clicking on the CACI Investor Info button.
CACI International Inc provides the IT and network solutions needed to prevail in today's new era of defense, intelligence, and e-government. From systems integration and managed network solutions to knowledge management, engineering, simulation, and information assurance, we deliver the IT applications and infrastructures our federal customers use to improve communications and collaboration, secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. Our solutions lead the transformation of defense and intelligence, assure homeland security, enhance decision-making, and help government to work smarter, faster, and more responsively. CACI, a member of the Russell 2000 and S&P SmallCap 600 indices, provides dynamic careers for approximately 7,200 employees working in over 100 offices in the U.S. and Europe. CACI is the IT provider for a networked world. Visit CACI on the web at www.caci.com.
Forward Looking Statements
There are statements made herein which may not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: regional and national economic conditions in the United States and United Kingdom, (the UK economy is experiencing a downturn that affects the Registrant's UK operations) including conditions that result from terrorist activities or war; changes in interest rates; currency fluctuations; failure to achieve contract awards in connection with recompetes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. Government or other public sector projects, particularly in the event of a priority need for funds, such as homeland security, the war on terrorism or rebuilding Iraq; government contract procurement (such as bid protest, small business set asides, etc.) and termination risks; the results of the amended appeal of CACI International Inc, ASBCA No. 53058; the financial condition of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and competition to hire and retain employees; our ability to complete and successfully integrate acquisitions appropriate to achievement of our strategic plans; our ability to complete performance of fixed price contracts within contract value; material changes in laws or regulations applicable to our businesses, particularly legislation affecting (i) outsourcing of activities that have been performed by the government; and (ii) competition for task orders under Government Wide Acquisition Contracts ("GWACs") and/or schedule contracts with the General Services Administration; our own ability to achieve the objectives of near term or long range business plans; and other risks described in the Company's Securities and Exchange Commission filings.
(Financial tables follow)
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