CACI International ( CACI Quick Quote CACI - Free Report) reported mixed results for the fourth quarter of fiscal 2022, wherein earnings topped the Zacks Consensus Estimate, while revenues fell short of the same. The national security-related IT solutions and services provider reported non-GAAP earnings of $4.54 per share, beating the Zacks Consensus Estimate by a penny.
However, the bottom line declined by 27.5% from the year-ago quarter’s figure of $6.26 per share. This decline in earnings was primarily due to the higher tax rate compared with the year-ago quarter.
In the fourth quarter of fiscal 2022, CACI reported revenues of $1.64 billion, missing the Zacks Consensus Estimate of $1.66 billion. However, the top line increased 5% from the prior-year quarter, primarily driven by acquisitions completed earlier this year and an increase of 2% in organic revenues.
In the fourth quarter, contract awards totaled $1.5 billion, with approximately 70% for the new business. Revenues from contract awards excluded the ceiling values of multi-award, indefinite-delivery indefinite-quantity contracts.
CACI ended the quarter with a backlog of $23.3 billion, down 4% on a year-over-year basis. As of Jun 30, 2022, the funded backlog decreased by 3% to $3.2 billion.
In terms of customer mix, the Department of Defense contributed 71.6% to total revenues in the reported quarter. Federal Civilian Agencies made up 23.3%, while Commercial and other customers accounted for 5.1% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 89.4% and 10.6% of total revenues, respectively.
In terms of contract type, cost-plus-fee type contracts, fixed-price contracts and time and material type contracts contributed 58.4%, 29.2% and 12.4%, respectively, to total revenues.Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 46.5% and 53.5% of total revenues, respectively.
The operating income for the quarter amounted to $119.8 million, up 6.9% year over year. The operating margin expanded by 10 basis points (bps) to 7.3%. Adjusted EBITDA increased 8.4% year over year to $157.1 million. The adjusted EBITDA margin expanded by 30 bps to 9.6%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, CACI had cash and cash equivalents of $114.8 million compared with the previous quarter’s $125.1 million. The total long-term (net of the current portion) debt was $1.7 billion, down from $1.82 billion as of Mar 31, 2022.
The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $152.4 million in the fourth quarter, improving by 53% from the year-ago quarter. During fiscal 2022, CACI generated $769.8 million of operating cash flow (excluding MARPA).
Free cash flow was $116.6 million during the quarter under review and $695.2 million in fiscal 2022.
Fiscal 2023 Guidance
CACI projects revenues between $6.475 billion and $6.675 billion in fiscal 2023. Adjusted earnings are projected in the range of $17.65-$18.49 per share.
The company expects the fiscal 2023 adjusted net income in the range of $420-440 million. It estimates free cash flow of at least $415 million.
Zacks Rank & Key Picks
CACI currently carries a Zacks Rank #4 (Sell). Shares of CACI have increased 4.8% year to date (“YTD”).
Some better-ranked stocks worth considering from the broader technology sector are
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