U.S. SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form 8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of
the
Securities Exchange Act of 1934
November
1, 2017
(Date
of Report)
CACI
International Inc
(Exact name of registrant as
specified in its Charter)
Delaware |
001-31400 |
54-1345888 |
(State or other jurisdiction
of incorporation) |
(Commission File Number) | (IRS Employer Identification Number) |
1100 N. Glebe Road
Arlington,
Virginia 22201
(Address of Principal executive
offices)(ZIP code)
(703)
841-7800
(Registrant’s telephone number, including area
code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ⃞
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⃞
ITEMS 2.02
and 7.01: |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION; REGULATION FD DISCLOSURE |
On November 1, 2017, the Registrant released its financial results for the first quarter fiscal year 2018.
A copy of the Registrant’s press release announcing the financial results as well as the schedule for a conference call and “web cast” on November 2, 2017 is attached as Exhibit 99 to this current report on Form 8-K.
ITEM 9.01: | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CACI International Inc | |
Registrant |
By: |
/s/ J. William Koegel, Jr. |
|
J. William Koegel, Jr. |
||
Executive Vice President, |
||
General Counsel and Secretary |
Exhibit 99
CACI Reports Results for Its Fiscal 2018 First Quarter
Record first quarter revenue of $1.09 billion, up 1.2 percent
Net income of $42.0 million, up 14.7 percent
Contract awards of $1.2 billion
Contract funding orders of $1.5 billion, up 26.6 percent
Fiscal Year 2018 guidance raised
ARLINGTON, Va.--(BUSINESS WIRE)--November 1, 2017--CACI International Inc (NYSE:CACI), a leading information solutions and service provider to the federal government, announced results today for its first fiscal quarter ended September 30, 2017.
CEO Commentary and Outlook
Ken Asbury, CACI’s President and CEO, said, “I am very pleased with our first quarter operating performance. We delivered our third consecutive quarter of organic revenue growth and generated strong cash flow. And we are increasing our net income and EPS guidance as a result of a tax benefit in the quarter. Our performance keeps us on pace to achieve our fiscal year guidance and deliver long-term organic revenue and margin expansion goals.”
First Quarter Results
(in millions except per-share data) | Q1, FY18 | Q1, FY17 | % Change | |||
Revenue | $1,085.8 | $1,073.3 | 1.2% | |||
Operating income | $67.3 | $69.7 | (3.4%) | |||
Net income | $42.0 | $36.7 | 14.7% | |||
Diluted earnings per share | $1.67 | $1.47 | 13.3% | |||
Cash provided by operating activities | $79.7 | $57.8 | 37.9% | |||
Revenue for the first quarter of Fiscal Year 2018 (FY18) increased compared to the first quarter of Fiscal Year 2017 (FY17) driven primarily by new business wins. Operating income declined with higher gross profit being offset by increased indirect expenses related to investments in growth and efficiency initiatives. The net income increase was driven by a lower-than-planned tax rate as a result of excess tax benefits under ASU 2016-09 (Improvements to Employee Share-Based Payment Accounting). Cash provided by operations in the quarter was $79.7 million.
Additional Financial Metrics
Q1, FY18 | Q1, FY17 | % Change | ||||
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure (in millions)* | $84.0 | $88.2 | (4.8%) | |||
Diluted adjusted earnings per share, a non-GAAP measure | $2.25 | $2.07 | 8.7% | |||
Days sales outstanding | 64 | 59 |
*See Reconciliation of Net Income to Earnings before Interest, Taxes, Depreciation and Amortization and to Adjusted New Income on page 9. |
First Quarter Awards, Contract Funding Orders, and Other Highlights
Our contract awards in the quarter were $1.2 billion, which excludes ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Approximately 60 percent of our awards were for new business.
Key awards in the quarter included:
Contract funding orders in the first quarter were $1.5 billion, up almost 27% compared to the first quarter of FY17. Our total backlog at September 30, 2017 was $11.1 billion compared to $11.5 billion a year ago. Funded backlog at September 30, 2017 was $2.3 billion compared with $2.4 billion in the first quarter last year.
Other Highlights
CACI Updates Its FY18 Guidance
We are reiterating the FY18 revenue guidance we issued on August 17, 2017 and raising our guidance for net income and diluted earnings per share as a result of the lower tax rate reported in our first fiscal quarter. We are also updating our effective tax rate for the year. The table below summarizes our FY18 expectations and represents our views as of November 1, 2017:
|
Current Fiscal Year |
Previous Fiscal Year |
||
(In millions except for tax rate and earnings per share) |
2018 Guidance |
2018 Guidance |
||
Revenue | $4,350 - $4,500 | $4,350 - $4,500 | ||
Net income | $171 - $179 | $165 - $173 | ||
Effective corporate tax rate | 34.5% | 36.5% | ||
Diluted earnings per share | $6.76 - $7.08 | $6.52 - $6.84 | ||
Diluted weighted average shares | 25.3 | 25.3 | ||
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time Thursday, November 2, 2017 during which members of our senior management team 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 conference call and view the accompanying exhibits over the Internet by logging on to our homepage, www.caci.com, at the scheduled time. A replay of the call will also be available over the Internet and can be accessed through our homepage (www.caci.com) by clicking on the CACI Investor Info button.
CACI provides information solutions and services in support of national security missions and government transformation for Intelligence, Defense, and Federal Civilian customers. A Fortune Magazine World’s Most Admired Company in the IT Services industry, CACI is a member of the Fortune 1000 Largest Companies, the Russell 2000 Index, and the S&P SmallCap600 Index. CACI’s sustained commitment to ethics and integrity defines its corporate culture and drives its success. With approximately 18,600 employees worldwide, CACI provides dynamic career opportunities for military veterans and industry professionals to support the nation’s most critical missions. Join us! www.caci.com.
There are statements made herein which 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 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: legal, regulatory, and political change as a result of transitioning to a new presidential administration 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; regional and national economic conditions in the United States and globally; terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; failure to achieve contract awards in connection with re-competes 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, based on a change in spending patterns, implementation of spending cuts (sequestration) under the Budget Control Act of 2011, or any legislation that amends or changes discretionary spending levels under that act; changes in budgetary priorities or in the event of a priority need for funds, such as homeland security; government contract procurement (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; 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; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); market speculation regarding our continued independence; material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, and (iii) competition for task orders under Government Wide Acquisition Contracts (GWACs) and/or schedule contracts with the General Services Administration; the ability to successfully integrate the operations of our recent and any future acquisitions; our own ability to achieve the objectives of near term or long range business plans; 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) | |||||||||||
Quarter Ended | |||||||||||
9/30/2017 | 9/30/2016 | % Change | |||||||||
Revenue | $ | 1,085,814 | $ | 1,073,280 | 1.2 | % | |||||
Costs of revenue | |||||||||||
Direct costs | 739,678 | 728,221 | 1.6 | % | |||||||
Indirect costs and selling expenses | 261,244 | 257,338 | 1.5 | % | |||||||
Depreciation and amortization | 17,588 | 18,063 | -2.6 | % | |||||||
Total costs of revenue | 1,018,510 | 1,003,622 | 1.5 | % | |||||||
Operating income | 67,304 | 69,658 | -3.4 | % | |||||||
Interest expense and other, net | 11,247 | 12,489 | -9.9 | % | |||||||
Income before income taxes | 56,057 | 57,169 | -1.9 | % | |||||||
Income taxes | 14,011 | 20,506 | -31.7 | % | |||||||
Net income | $ | 42,046 | $ | 36,663 | 14.7 | % | |||||
Basic earnings per share | $ | 1.72 | $ | 1.51 | 14.0 | % | |||||
Diluted earnings per share | $ | 1.67 | $ | 1.47 | 13.3 | % | |||||
Weighted average shares used in per share computations: | |||||||||||
Basic | 24,487 | 24,340 | |||||||||
Diluted | 25,243 | 24,928 | |||||||||
Statement of Operations Data (Unaudited) | |||||||||||
Quarter Ended | |||||||||||
9/30/2017 | 9/30/2016 | % Change | |||||||||
Operating income margin | 6.2 | % | 6.5 | % | |||||||
Tax rate | 25.0 | % | 35.9 | % | |||||||
Net income margin | 3.9 | % | 3.4 | % | |||||||
Adjusted EBITDA* | $ | 84,010 | $ | 88,239 | -4.8 | % | |||||
Adjusted EBITDA margin | 7.7 | % | 8.2 | % | |||||||
Adjusted net income attributable to CACI |
$ | 56,701 | $ | 51,522 | 10.1 | % | |||||
Diluted adjusted earnings per share | $ | 2.25 | $ | 2.07 | 8.7 | % |
*See Reconciliation of Net Income to Earnings before Interest, Taxes, Depreciation and Amortization and to Adjusted Net Income on page 9. |
Selected Financial Data (Continued) | ||||||
CACI International Inc | ||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||
(Amounts in thousands) | ||||||
9/30/2017 | 6/30/2017 | |||||
ASSETS: | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 67,043 | $ | 65,539 | ||
Accounts receivable, net | 788,788 | 757,341 | ||||
Prepaid expenses and other current assets | 77,398 | 57,022 | ||||
Total current assets | 933,229 | 879,902 | ||||
Goodwill and intangible assets, net | 2,806,538 | 2,812,806 | ||||
Property and equipment, net | 94,920 | 91,749 | ||||
Other long-term assets | 131,326 | 126,625 | ||||
Total assets | $ | 3,966,013 | $ | 3,911,082 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||
Current liabilities | ||||||
Current portion of long-term debt | $ | 67,456 | $ | 53,965 | ||
Accounts payable | 125,111 | 62,874 | ||||
Accrued compensation and benefits | 241,162 | 239,741 | ||||
Other accrued expenses and current liabilities | 175,495 | 170,164 | ||||
Total current liabilities | 609,224 | 526,744 | ||||
Long-term debt, net of current portion | 1,101,724 | 1,177,598 | ||||
Other long-term liabilities | 420,579 | 413,019 | ||||
Total liabilities | 2,131,527 | 2,117,361 | ||||
Shareholders' equity | 1,834,486 | 1,793,721 | ||||
Total liabilities and shareholders' equity | $ | 3,966,013 | $ | 3,911,082 | ||
Selected Financial Data (Continued) | ||||||
CACI International Inc | ||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||
(Amounts in thousands) | ||||||
Three Months Ended | ||||||
9/30/2017 | 9/30/2016 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income | $ | 42,046 | $ | 36,663 | ||
Reconciliation of net income to net cash provided by operating activities: |
||||||
Depreciation and amortization | 17,588 | 18,063 | ||||
Amortization of deferred financing costs | 1,108 | 1,128 | ||||
Loss on disposal of fixed assets | - | 727 | ||||
Stock-based compensation expense | 6,351 | 4,897 | ||||
Provision for deferred income taxes | 10,738 | 11,846 | ||||
Equity in earnings of unconsolidated ventures | - | (103) | ||||
Changes in operating assets and liabilities, net of effect of business acquisitions: |
||||||
Accounts receivable, net | (30,027) | 63,292 | ||||
Prepaid expenses and other assets | (14,302) | (13,012) | ||||
Accounts payable and accrued expenses | 67,689 | (41,642) | ||||
Accrued compensation and benefits | (12,696) | (11,418) | ||||
Income taxes receivable and payable | (12,237) | (14,421) | ||||
Other liabilities | 3,435 | 1,757 | ||||
Net cash provided by operating activities | 79,693 | 57,777 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Capital expenditures | (7,512) | (11,235) | ||||
Purchase of business, net of cash acquired | (406) | (2,921) | ||||
Proceeds from net working capital refund | - | 13,619 | ||||
Proceeds from equity method investments | - | 4,681 | ||||
Other | 217 | 481 | ||||
Net cash (used in) provided by investing activities | (7,701) | 4,625 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Net payments under credit facilities | (63,491) | (58,491) | ||||
Payment of contingent consideration | (3,581) | - | ||||
Proceeds from employee stock purchase plans | 1,300 | 1,182 | ||||
Repurchases of common stock | (1,210) | (1,085) | ||||
Payment of taxes for equity transactions | (4,384) | (2,848) | ||||
Net cash used in financing activities | (71,366) | (61,242) | ||||
Effect of exchange rate changes on cash and cash equivalents | 878 | (574) | ||||
Net increase in cash and cash equivalents | 1,504 | 586 | ||||
Cash and cash equivalents, beginning of period | 65,539 | 49,082 | ||||
Cash and cash equivalents, end of period | $ | 67,043 | $ | 49,668 | ||
Selected Financial Data (Continued) | ||||||||||||||||||||
Revenue by Customer Type (Unaudited) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 |
$ Change |
% Change |
||||||||||||||||
Department of Defense | $ | 714,053 | 65.8 | % | $ | 692,203 | 64.5 | % | $ | 21,850 | 3.2 | % | ||||||||
Federal Civilian Agencies | 306,536 | 28.2 | % | 313,793 | 29.2 | % | (7,257 | ) | -2.3 | % | ||||||||||
Commercial and other | 65,225 | 6.0 | % | 67,284 | 6.3 | % | (2,059 | ) | -3.1 | % | ||||||||||
Total | $ | 1,085,814 | 100.0 | % | $ | 1,073,280 | 100.0 | % | $ | 12,534 | 1.2 | % | ||||||||
Revenue by Contract Type (Unaudited) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 |
$ Change |
% Change | ||||||||||||||||
Cost reimbursable | $ | 553,729 | 51.0 | % | $ | 534,582 | 49.8 | % |
$ |
19,147 | 3.6 | % | ||||||||
Fixed price | 358,746 | 33.0 | % | 343,313 | 32.0 | % | 15,433 | 4.5 | % | |||||||||||
Time and materials | 173,339 | 16.0 | % | 195,385 | 18.2 | % |
|
(22,046 | ) | -11.3 | % | |||||||||
Total | $ | 1,085,814 | 100.0 | % | $ | 1,073,280 | 100.0 | % | $ | 12,534 | 1.2 | % | ||||||||
Revenue Received as a Prime versus Subcontractor (Unaudited) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 |
$ Change |
% Change | ||||||||||||||||
Prime | $ | 1,013,203 | 93.3 | % | $ | 996,457 | 92.8 | % | $ | 16,746 | 1.7 | % | ||||||||
Subcontractor | 72,611 | 6.7 | % | 76,823 | 7.2 | % | (4,212 | ) | -5.5 | % | ||||||||||
Total | $ | 1,085,814 | 100.0 | % | $ | 1,073,280 | 100.0 | % | $ | 12,534 | 1.2 | % | ||||||||
Selected Financial Data (Continued) | |||||||||||||
Contract Funding Orders Received (Unaudited) | |||||||||||||
Quarter Ended | |||||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 |
$ Change |
% Change | |||||||||
Contract Funding Orders | $ | 1,472,373 | $ | 1,162,891 | $ | 309,482 | 26.6 | % | |||||
Direct Costs by Category (Unaudited) | ||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 |
$ Change |
% Change | ||||||||||||||||||
Direct labor | $ | 321,555 | 43.5 | % | $ | 334,928 | 46.0 | % | $ | (13,373 | ) | -4.0 | % | |||||||||
Other direct costs | 418,123 | 56.5 | % | 393,293 | 54.0 | % | 24,830 | 6.3 | % | |||||||||||||
Total direct costs | $ | 739,678 | 100.0 | % | $ | 728,221 | 100.0 | % | $ | 11,457 | 1.6 | % | ||||||||||
Selected Financial Data (Continued) | ||
Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation | ||
and Amortization (EBITDA) and to Adjusted Net Income | ||
(Unaudited) | ||
The Company views Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Diluted Adjusted Earnings Per Share, all 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, 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. We define Adjusted Net Income as GAAP net income plus stock-based compensation expense, depreciation and amortization, amortization of financing costs, and earnout adjustments, net of related tax effects. We believe Adjusted Net Income is an important measure of long-term value and is used by investors to measure our performance. This measure in particular assists readers in further understanding our results and trends from period-to-period by removing certain non-cash items that do not impact the cash flow performance of our business. Diluted Adjusted Earnings Per Share is Adjusted Net Income divided by diluted weighted-average shares, as reported. Adjusted EBITDA and Adjusted Net Income as defined by us may not be computed in the same manner as similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. |
||
Quarter Ended | |||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 | % Change | ||||||||
Net income | $ | 42,046 | $ | 36,663 | 14.7 | % | |||||
Plus: | |||||||||||
Income taxes | 14,011 | 20,506 | -31.7 | % | |||||||
Interest expense, net | 11,247 | 12,593 | -10.7 | % | |||||||
Depreciation and amortization | 17,588 | 18,063 | -2.6 | % | |||||||
Earnout adjustments | (882 | ) | 414 | ||||||||
Adjusted EBITDA | $ | 84,010 | $ | 88,239 | -4.8 | % | |||||
Quarter Ended | |||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 | % Change | ||||||||
Revenue, as reported | $ | 1,085,814 | $ | 1,073,280 | 1.2 | % | |||||
Adjusted EBITDA | $ | 84,010 | $ | 88,239 | -4.8 | % | |||||
Adjusted EBITDA margin | 7.7 | % | 8.2 | % | |||||||
Quarter Ended | |||||||||||
(dollars in thousands) | 9/30/2017 | 9/30/2016 | % Change | ||||||||
Net income | $ | 42,046 | $ | 36,663 | 14.7 | % | |||||
Plus: | |||||||||||
Stock-based compensation | 6,351 | 4,897 | 29.7 | % | |||||||
Depreciation and amortization | 17,588 | 18,063 | -2.6 | % | |||||||
Amortization of financing costs | 1,108 | 1,128 | -1.8 | % | |||||||
Earnout adjustments | (882 | ) | 414 | ||||||||
Less: | |||||||||||
Related tax effect | (9,510 | ) | (9,643 | ) | -1.4 | % | |||||
Adjusted net income | $ | 56,701 | $ | 51,522 | 10.1 | % | |||||
CONTACT:
CACI International Inc
Corporate Communications and Media:
Jody
Brown, Executive Vice President, Public Relations
703-841-7801
jbrown@caci.com
or
Investor
Relations:
David Dragics, Senior Vice President, Investor Relations
866-606-3471
ddragics@caci.com