CACI International Inc.
) reported strong fiscal 2013 second quarter results (ended Dec
31, 2012) with earnings of $1.69 per share compared to $1.51 in
the year-earlier quarter. The reported earnings marginally beat
the Zacks Consensus Estimate by a penny.
However, net income for the reported quarter decreased 3.4% year
over year to $39.7 million as the year-ago quarter was positively
affected by a one-time incremental net income of $4.1 million due
to a large fixed-price contract.
Revenue came in at $931.6 million, down 4.3% year over year due
to continued troubles in Afghanistan. However, the company
registered strong growth in Integrated Security Solutions, and
Investigation and Litigation Support. As of Dec 31, 2012, total
funded backlog was $2.1 billion, while total backlog amounted to
In terms of a customer mix, the Department of Defense accounted
for about 75.5% of total revenue in the reported quarter. Federal
Civilian Agencies contributed about 18.9%, while Commercial
customers accounted for 5.2% and State and Local Governments
added 0.4% to total revenue.
Significant Quarter Developments
CACI received $512 million worth of contract awards in the
quarter, bringing its year to date tally to $2.3 billion. The
company also procured a $10 billion, five-year multiple-award to
develop, field, and sustain turnkey telecommunications solutions
on the U.S. Army Global Tactical Advanced Communications System
contract. This is expected to augment its presence in the C4ISR
(Command, Control, Communications, Computers, Intelligence,
Surveillance and Reconnaissance) market.
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In addition, CACI received a $5.6 billion, five-year
multiple-award contract supporting the Defense Intelligence
Agency's Solutions for Intelligence Analysis (SIA) II program.
The company also obtained an $899 million, five-year
multiple-award to support the U.S. Navy's SPAWAR Battlespace
Awareness program in order to further supplement its foothold in
the C4ISR market.
During the reported quarter, CACI completed two acquisitions to
expand its footprint in the Healthcare market. These include
Emergint Technologies, Inc., a premier provider of emerging
technology solutions for national health organizations, and IDL
Solutions Inc., a leading provider of information solutions and
data analytics for healthcare clients and other civilian
agencies. While bringing on board new customers, the acquired
companies increase CACI's capabilities in the federal civilian
healthcare and health insurance areas with superior
cost-effective business processes and improved patient care.
Balance Sheet and Cash Flows
The company ended the quarter with cash and cash equivalents of
$37.5 million. Long-term debt totaled $695.2 million, up from
$527.3 million at fiscal-end 2012.
In the second quarter of fiscal 2013, net cash provided by
operating activities was $91.5 million versus $85.3 million in
the previous year period.
With a continued decline in contracting activity and spending
levels, management has revised its guidance for fiscal 2013. The
company presently expects net income to be within the range of
$157 million to $163 million, down from the prior expectations of
$160 million to $167 million. Revenues are projected to be
between $3,700 million and $3,900 million, down from the earlier
projections of $3,800 million and $4,000 million. Earnings are
expected to be within $6.54 and $6.79 compared to the previous
range of $6.64 and $6.93 per share.
At the same time, the company needs to be wary of tough
competition from other players in the industry such as
ICF International Inc.
), each carrying a Zacks Rank #2 (Buy). CACI presently has a
Zacks Rank #4 (Sell).