CACI International Inc.
) reported second-quarter fiscal 2014 earnings of $35.0 million
or $1.38 per share, down from $39.7 million or $1.69 a share in
the year-earlier quarter. The year-over-year drop in earnings was
primarily attributable to a decline in revenues.
On a non-GAAP basis, adjusted earnings in the reported quarter
stood at $2.05 per share versus $2.22 in the year-ago quarter.
Although the adjusted earnings for second-quarter fiscal 2014
decreased year over year, it comfortably beat the Zacks Consensus
Estimate of $1.39.
Continued uncertainty related to budgetary constraints and 16-day
government shutdown in October dragged the quarterly revenues
down by 4.0% year over year to $894.2 million. The quarterly
revenues missed the Zacks Consensus Estimate of $901 million.
Contract funding orders aggregated $599 million in the quarter,
bringing the tally for total backlog to $7.6 billion in Dec 31,
2013 with a funded backlog of $1.8 billion.
In terms of customer mix, the Department of Defense accounted for
about 72.7% of total revenue in the reported quarter. Federal
Civilian Agencies contributed about 20.9%, while Commercial and
other customers accounted for 6.4% of total revenue.
Operating income stood at $66.5 million in the reported quarter
versus $69.6 million in the year-ago quarter. The decrease in
operating income was primarily due to a $9.7 million one-time
acquisition-related expense for Six3 Systems (Six3). Earnings
before interest, taxes, depreciation and amortization (EBITDA)
stood at $83.2 million versus $83.5 million in the year-ago
CACI International received contracts worth $717 million in the
quarter. During the reported quarter, CACI International procured
awards in all 10 markets with approximately 25% of awards in new
business and over 60% were recompete wins.
During the quarter, CACI International completed the $820 million
acquisition of Six3 Systems, Inc., which positions it as a leader
in advanced intelligence and cyber security offerings for
national security customers.
Balance Sheet and Cash Flows
The company ended the quarter with cash and cash equivalents of
$98.2 million. Long-term debt (net of current portion) totaled
Net cash provided by operations for the first six months of
fiscal 2014 was $44.6 million compared with $96.0 million in the
year-ago period, owing to cash utilized for Six3 acquisition.
For fiscal 2014, CACI International updated its previous revenue
guidance from $3500 million -$3,700 million to $3,650
million-$3,800 million. Net income is expected to be
$142 million to $152 million, which remains unchanged from
previous guidance. Earnings per share was updated from the
previous range of $5.70 -$6.10 to $5.59 to $5.98. The company
expects the acquisition of Six3 to generate $275 million to $325
million of revenues in FY14.
Moving ahead, CACI International expects to diligently focus on
its operating plans to reward its shareholders with attractive
CACI International intends to drive operational excellence by
intensively focusing on its organic and inorganic growth strategy
and strengthening its existing customer relationships while
building newer ones. CACI International also remains focused on
its strategy to grow in larger markets, drive operational
excellence, and leverage mergers and acquisitions to further
increase its market share and create long-term value for its
CACI International currently has a Zacks Rank #3 (Hold). Other
stocks that look promising and are worth considering in the
The KEYW Holding Corporation
), carrying a Zacks Rank #1 (Strong Buy), and
Lionbridge Technologies Inc.
), both carrying a Zacks Rank #2 (Buy).
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