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Dismal Q4 Earnings for CACI International

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CACI International Inc. (CACI - Free Report) reported fourth quarter fiscal 2013 (ended Jun 30, 2013) earnings of $37.9 million or $1.56 per share, down from $43.4 million or $1.59 in the year-earlier quarter. The year-over-year decrease in earnings was due to the fall in top line. The reported earnings missed the Zacks Consensus Estimate of $1.61.

On a non-GAAP basis, adjusted earnings stood at $2.06 per share versus $2.08 per share in the year-ago quarter. For fiscal 2013, CACI International reported earnings of $151.7 million or $6.35 per share compared with $167.5 million or $5.96 in fiscal 2012.

Quarter Details

Continued troubles in Afghanistan dragged the quarterly revenues down 3.8% year over year to $912.9 million, despite increased revenues in high-growth market areas of Business Systems, Cyberspace, Healthcare, and Integrated Security Solutions. For fiscal 2013, revenues declined 2.5% year over year to $3.7 billion.

Contract funding orders aggregated $722 million for the quarter, bringing the tally for fiscal 2013 to $3.42 billion. Total backlog at fiscal-end was $6.9 billion, while funded backlog was $1.7 billion.

In terms of customer mix, the Department of Defense accounted for about 72.1% of total revenue in the reported quarter. Federal Civilian Agencies contributed about 22.4%, while Commercial customers accounted for 5.0% and State and Local Governments added 0.5% to total revenue.

Operating income stood at $67.9 million in the reported quarter versus $76.5 million in the year-ago quarter, a year-over-year decrease of 11.2% primarily due to a $7 million one-time severance and facilities-related expense. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $81.9 million versus $90.9 million in the year-ago quarter.

CACI International received $561 million worth of contract awards in the quarter. During the reported quarter, CACI International procured awards in all 10 markets with half of them from the high-growth markets of Business Systems, Cyberspace, Healthcare and Integrated Security Solutions.

Balance Sheet and Cash Flows

The company ended fiscal 2013 with cash and cash equivalents of $64.3 million. Long-term debt (net of current portion) totaled $300.8 million, up from $527.3 million at fiscal-end 2012.

For the 12-month period ending Jun 30, 2013, net cash provided by operating activities aggregated $249.3 million versus $271.2 million in the prior-year period.


The company reiterated its guidance for fiscal 2014. The outlook is derived at by factoring the risks stemming from the challenging macroeconomic environment. Moving ahead, CACI International expects to diligently focus on its operating plans to reward its shareholders with attractive risk-adjusted returns.

For fiscal 2014, CACI International expects revenues to be in the range of $3.5 billion to $3.7 billion with earnings of $142 million to $152 million or $5.70 to $6.10 per share. Operating cash flow is expected to be approximately $225 million without assuming any impact of future acquisitions.

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. In addition, the company anticipates to significantly benefit from its cost-reduction program. 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 shareholders.

CACI International currently has a Zacks Rank #4 (Sell). Other stocks that look promising and are worth considering in the industry are Carbonite, Inc. (CARB - Free Report) , Computer Sciences Corporation and Lionbridge Technologies Inc. , each carrying a Zacks Rank #2 (Buy).

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