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CACI Beats on Q2 Earnings and Revenues, Updates Outlook

CACI International Inc.CACI reported second-quarter fiscal 2016 GAAP earnings of $30.3 million or $1.23 per share compared with $24.6 million or $1.01 per share in the prior-year quarter. The year-over-year increase in earnings was primarily driven by improvement in revenues.

On an adjusted basis, second-quarter fiscal 2016 earnings were $42.6 million or $1.73 per share, up from $37.4 million or $1.54 in the year-earlier quarter. The recurring earnings (with stock-based compensation adjustments) of $1.60 per share for the reported quarter comfortably beat the Zacks Consensus Estimate of $1.14.

The second-quarter fiscal 2016 revenues were up 1.8% year over year to $830.4 million. The year-over-year increase in revenues was driven by organic growth from existing contracts, new business and accretive effect from acquisitions. The reported revenues beat the Zacks Consensus Estimate of $812 million.

Other Significant Details

Contract awards were $671 million in the reported quarter, while contract funding orders were $541 million. Total order backlog as of Dec 31, 2015 was $10.4 billion versus $9.8 billion in the year-ago quarter. Funded backlog at Dec 31, 2015 was $2 billion versus $1.9 billion as of Dec 31, 2014.

In terms of customer mix, the Department of Defense accounted for about 65.5% of the total revenue in the reported quarter. Federal Civilian Agencies contributed about 28.0%, while Commercial and other customers accounted for 6.5% of revenues.

Operating income aggregated $55.5 million in the reported quarter versus $47.5 million in the year-ago quarter. The improvement in operating income was driven by increase in revenues, lower depreciation and fall in amortization expenses. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $70.4 million from $64.7 million in the year-ago quarter.

As of Dec 31, 2015, CACI International had cash and cash equivalents of $69.0 million with long-term debt (net of current portion) of $955.5 million.

Net cash from operating activities for the first six-months of fiscal 2016 was $134.7 million compared with $93.3 million in the year-ago period.

Others

During the reported quarter, the company announced an acquisition of the National Security Solutions (NSS) worth $550 million in cash. NSS is a premier supplier to the Defense and Intelligence agencies as well as the U.S. Federal Civilian Government. This acquisition is one of the largest in the history of CACI International, and will likely help expand opportunities in Enterprise IT, Intelligence Services and other key market areas. NSS is expected to generate revenues worth $1 billion in the near future and is anticipated to be accretive in fiscal 2016 and beyond.

Guidance

The company updated its fiscal 2016, guidance, where revenues are expected in the range of $3,700 - $3,900 million in comparison to what they had stated earlier which was $3,300 - $3,500 million. As per the present guidance the company is expecting net income to be in the range $133 - $143 million compared to $130 - $140 million earlier. Earnings per share are expected to be in the range $5.37 - $5.77 in comparison to the earlier stated range $5.24 - $5.65.

The company expects depreciation and amortization expenses to be approximately $65 million. Expected net interest expenses are likely to be around $42 million, whereas operating cash flow is expected to be in excess of $225 million.

CACI International carries a Zacks Rank #1 (Strong Buy). Other stocks worth a look include, LogMeIn, Inc. LOGM , Fortinet Inc. FTNT and USA Technologies Inc. USAT . LogMeIn carries the same Zacks Rank as CACI International; whereas both Fortinet and USA Technologies carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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