UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission File Number 001-31400

CACI International Inc

(Exact name of registrant as specified in its charter)

Delaware	54-1345888
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1100 North Glebe Road, Arlington, VA 22201

(Address of principal executive offices)

(703) 841-7800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CACI	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

As of April 14, 2020, there were 25,086,341 shares outstanding of CACI International Inc’s common stock, par value $0.10 per share.

CACI INTERNATIONAL INC

		PAGE
PART I:	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended March 31, 2020 and 2019	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended March 31, 2020 and 2019	4
	Consolidated Balance Sheets (Unaudited) as of March 31, 2020 and June 30, 2019	5
	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended March 31, 2020 and 2019	6
	Consolidated Statements of Shareholder’s Equity (Unaudited) for the Three and Nine Months Ended March 31, 2020 and 2019	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II:	OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signatures	33

2

PART I

FINANCIAL INFORMATION

Item 1.  Financial Statements

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands, except per share data)

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2020		2019		2020		2019
Revenue	$	1,465,600	$	1,264,958	$	4,224,461	$	3,612,463
Costs of revenue:
Direct costs		953,630		824,024		2,737,378		2,397,633
Indirect costs and selling expenses		371,135		324,828		1,081,175		859,262
Depreciation and amortization		27,159		21,198		81,888		58,797
Total costs of revenue		1,351,924		1,170,050		3,900,441		3,315,692
Income from operations		113,676		94,908		324,020		296,771
Interest expense and other, net		14,087		13,466		45,612		31,773
Income before income taxes		99,589		81,442		278,408		264,998
Income tax expense		19,012		13,297		50,659		49,424
Net income	$	80,577	$	68,145	$	227,749	$	215,574
Basic earnings per share	$	3.21	$	2.74	$	9.11	$	8.69
Diluted earnings per share	$	3.16	$	2.69	$	8.94	$	8.50
Weighted-average basic shares outstanding		25,078		24,866		25,012		24,819
Weighted-average diluted shares outstanding		25,478		25,348		25,481		25,369

See Notes to Unaudited Consolidated Financial Statements

3

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(amounts in thousands)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2020			2019			2020			2019
Net income	$	80,577		$	68,145		$	227,749		$	215,574
Other comprehensive income (loss):
Foreign currency translation adjustment		(10,570	)		3,059			(4,663	)		(2,372	)
Change in fair value of interest rate swap agreements,    net of tax		(21,173	)		(2,075	)		(22,402	)		(5,636	)
Other comprehensive income (loss), net of tax		(31,743	)		984			(27,065	)		(8,008	)
Comprehensive income	$	48,834		$	69,129		$	200,684		$	207,566

See Notes to Unaudited Consolidated Financial Statements

4

CACI INTERNATIONAL INC

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(amounts in thousands, except per share data)

	March 31,			June 30,
	2020			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		3,407,551			3,336,079
Intangible assets, net		421,533			436,115
Property and equipment, net		169,378			149,676
Operating lease right-of-use assets		339,292			—
Supplemental retirement savings plan assets		91,269			92,736
Accounts receivable, long-term		9,471			7,381
Other long-term assets		33,615			33,336
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
Supplemental retirement savings plan obligations, net of current portion		97,956			92,291
Deferred income taxes		235,350			205,339
Operating lease liabilities, noncurrent		315,702			—
Other long-term liabilities		90,008			107,932
Total liabilities	$	2,982,845		$	2,715,377
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:
Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued or    outstanding		—			—
Common stock $0.10 par value, 80,000 shares authorized; 42,518 shares    issued and 25,086 outstanding at March 31, 2020 and 42,314 shares    issued and 24,880 outstanding at June 30, 2019		4,252			4,231
Additional paid-in capital		567,732			576,277
Retained earnings		2,637,913			2,410,164
Accumulated other comprehensive loss		(70,221	)		(43,156	)
Treasury stock, at cost (17,432 and 17,434 shares, respectively)		(576,181	)		(576,185	)
Total CACI shareholders’ equity		2,563,495			2,371,331
Noncontrolling interest		135			135
Total shareholders’ equity		2,563,630			2,371,466
Total liabilities and shareholders’ equity	$	5,546,475		$	5,086,843

See Notes to Unaudited Consolidated Financial Statements

5

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in thousands)

	Nine Months Ended
	March 31,
	2020			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
Amortization of deferred financing costs		1,762			1,796
Non-cash lease expense		54,493			—
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
Proceeds from borrowings under bank credit facilities		1,438,500			2,109,500
Principal payments made under bank credit facilities		(1,593,690	)		(1,414,690	)
Payment of financing costs under bank credit facilities		—			(1,386	)
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 at beginning of period		72,028			66,194
Cash and cash equivalents at end of period	$	77,156		$	93,806
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for income taxes, net of refunds	$	46,895		$	55,967
Cash paid during the period for interest	$	41,151		$	31,083
Non-cash financing and investing activities:
Landlord sponsored tenant improvement	$	1,630		$	3,518
Accrued capital expenditures	$	3,687		$	3,557

See Notes to Unaudited Consolidated Financial Statements

6

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(amounts in thousands)

	Common Stock Shares        Amount				Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock Shares        Amount						Total CACI Shareholders’ Equity			Noncontrolling Interest		Total Shareholders’ Equity
BALANCE, June 30, 2019		42,314	$	4,231	$	576,277		$	2,410,164	$	(43,156	)		17,434		$	(576,185	)	$	2,371,331		$	135	$	2,371,466
Net income		—		—		—			227,749		—			—			—			227,749			—		227,749
Stock-based compensation expense		—		—		22,204			—		—			—			—			22,204			—		22,204
Tax withholdings on restricted share vestings		204		21		(30,460	)		—		—			—			—			(30,439	)		—		(30,439	)
Change in fair value of interest rate swap agreements, net		—		—		—			—		(22,402	)		—			—			(22,402	)		—		(22,402	)
Currency translation adjustment		—		—		—			—		(4,663	)		—			—			(4,663	)		—		(4,663	)
Repurchases of common stock		—		—		(369	)		—		—			24			(5,215	)		(5,584	)		—		(5,584	)
Treasury stock issued under stock purchase plans		—		—		80			—		—			(26	)		5,219			5,299			—		5,299
BALANCE, March 31, 2020		42,518	$	4,252	$	567,732		$	2,637,913	$	(70,221	)		17,432		$	(576,181	)	$	2,563,495		$	135	$	2,563,630
BALANCE, June 30, 2018		42,139	$	4,214	$	570,964		$	2,126,790	$	(19,030	)		17,434		$	(576,186	)	$	2,106,752		$	135	$	2,106,887
Net income		—		—		—			215,574		—			—			—			215,574			—		215,574
Cumulative effect adjustment of ASC 606, net of taxes		—		—		—			17,770		—			—			—			17,770			—		17,770
Stock-based compensation expense		—		—		18,351			—		—			—			—			18,351			—		18,351
Tax withholdings on restricted share vestings		165		16		(18,812	)		—		—			—			—			(18,796	)		—		(18,796	)
Change in fair value of interest rate swap agreements, net		—		—		—			—		(5,636	)		—			—			(5,636	)		—		(5,636	)
Currency translation adjustment		—		—		—			—		(2,372	)		—			—			(2,372	)		—		(2,372	)
Repurchases of common stock		—		—