CACI International Inc First Fiscal Quarter FY11
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Transcript of CACI International Inc First Fiscal Quarter FY11
CACI International IncFirst Fiscal Quarter FY11
Earnings Conference Call
October 28, 2010
CACI Proprietary Information 2
Forward-looking Statements
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: regional and national economic conditions in the United States and the United Kingdom, including
conditions that result from a prolonged recession; terrorist activities or war; changes in interest rates; currency
fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; finalization of
accounting for business combinations, including valuation of intangibles and contingent consideration; failure to
achieve contract awards in connection with recompetes 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, or
in the event of a priority need for funds, such as homeland security, the war on terrorism or rebuilding Iraq, or an
economic stimulus package; 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
investigations into allegations of improper actions related to the provision of services in support of U.S. military
operations in Iraq; the results of government audits and reviews conducted by the Defense Contract Audit Agency
or other government entities with cognizant oversight; the insourcing of contractor positions by the government;
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 or any future acquisitions; our own ability to achieve the
objectives of near term or long range business plans; and other risks described in the company’s
Securities and Exchange Commission filings.
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Participants
—Paul Cofoni President & Chief Executive Officer
—Tom Mutryn Chief Financial Officer
—Bill FairlPresident of U.S. Operations
—Greg Bradford Chief Executive of CACI Limited UK
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Record First Quarter Results
RECORDSRECORD } Revenue of $834.0M ………………………………………………………….. up 12.8%
RECORD } Operating income of $52.1M …….…………………..…. up 13.2%
RECORD } Net income of $28.7M ………………………………………………..…. up 20.1%
RECORD } Diluted EPS of $0.92 …………………………………………………..……. up 17.7%
RECORD } Contract funding orders of $1.46B …..…. up 39.9%
RECORD } Contract awards of $1.48B …………………..........…...…. up 102.6%
Raising FY 2011 revenue guidance by
$200 million and EPS guidance by $0.20
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Signed agreements to acquire TechniGraphics and ASR – Moves us into the geospatial intelligence market– Strengthens end-to-end solutions for Intelligence Community– Both expected to close on November 1, 2010
Strong Execution of Growth Strategy
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Aligned With Government Priorities
Leadership in our market space Mission-critical warfighter support in priority
areas− Less vulnerable to DoD’s spending reprioritization
initiatives
Already performing on IT modernization
Aligned With Government Priorities
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Strong first quarter performance Record funding orders and contract wins Strong funded backlog Successful retention of existing business Operational excellence
Raising Guidance
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Record Financial Results
Total Revenue Up 12.8%
Record revenue driven by:
Organic revenue growth of 10.8%
Direct labor growth of 7.3%
ODC growth of 20.6%
Operating Income Up 13.2%
Record operating income driven by:
Strong growth in direct costs
Continued control of indirect costs
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Record Bottom-Line Results
Net Income Up 20.1% Diluted EPS Up 17.7%
Q1 effective tax rate of 37.8%; FY 2011 projection of 38.1%
Repurchased 395,000 shares at an average price of $42.62
Record diluted adjusted EPS of $1.34
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Cash and equivalents of $110 million Net debt of $295 million New credit facility
− $150 million term loan and $600 million revolving credit facility− Provides additional financial flexibility for years to come
Strong Balance Sheet
DSOs
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Raising Guidance for FY11
This guidance represents our views as of October 27, 2010. Investors are reminded that actual results may differ from these estimates for reasons described
in our Safe Harbor Statement and our filings with the SEC.
Current FY11 Previous FY11
Guidance Guidance
Revenue (millions) $3,450 - $3,600 $3,250 - $3,400
Net Income (millions) $121 - $128 $116 - $122 Diluted EPS $3.90 - $4.10 $3.70 - $3.90
Diluted shares (millions) 31.1 31.3
FY11 revenue expected to be 10 – 14% over ’10
FY11 net income expected to be 14 – 20% over ’10
FY11 diluted EPS expected to be 12 – 18% over ’10
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Record Funding Orders and Awards
Operational excellence drives performance— Contract funding orders grew 39.9% to $1.46 billion— Funded backlog of $2.5 billion— Awards of $1.48 billion increased 102.6% over last year
70% of awards were for new business Average period of contract performance 2+ years Providing increased growth in FY 2011
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Extraordinary Customer Wins
Two large, single-award wins in Healthcare IT— Department of Veterans Affairs $91 million Virtual
Lifetime Electronic Record (VLER) contract— Selected for Department of Defense’s $75 million Virtual
Interactive Processing System (VIPS) contract
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Extraordinary Customer Wins (cont’d)
Two biometrics awards totaling $239 million— Experimentation, demonstration, and fielding of biometric
and information management capabilities— Development of biometrics tools that recognize and track
individuals
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Large IDIQ contracts— Army Rapid Response – Third Generation:
5-year award with ceiling value of $16.4 billion— Centers for Disease Control and Prevention:
10-year award with a ceiling value of $1 billion
Extraordinary Customer Wins (cont’d)
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Opportunities Remain Attractive
Pipeline remains strong— $3.8 billion in submitted proposals, scheduled for award
by the end of March 2011— Expect to submit approximately $7.5 billion new
proposals during the next two quarters About half are recompetes
Continued strength in new hiring— Approximately 200 net new hires— Open hiring requisitions grew to more than 400
Operating margin improvement plans continue— Margin improvement training programs for our managers— Added a margin improvement element to our Incentive
Compensation plan— Key component of Bid and Proposal investment decisions
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CEO Closing Comments
First quarter demonstrates success of focused growth strategy
Record awards show our innovation and differentiation
Strategic M&A complementing our strengths and adding depth to our solutions
Positioned in areas of highest priority for our nation
Consistently achieving our financial goals
Raising our FY11 guidance