Business Wire | Aug 12, 2020 04:15PM EDT

CACI Reports Results for Its Fiscal 2020 Fourth Quarter and Full Year and Issues Fiscal Year 2021 Guidance

Aug. 12, 2020

ARLINGTON, Va.--(BUSINESS WIRE)--Aug. 12, 2020--CACI International Inc (NYSE: CACI), a leading provider of expertise and technology to government enterprise and mission customers, announced results today for its fiscal fourth quarter and full year ended June 30, 2020.

CEO Commentary and Outlook

John Mengucci, CACI's President and CEO, said, "Our fourth quarter performance was a strong finish to a great Fiscal Year 2020. Amid the headwinds from COVID-19, we achieved our financial commitments, delivering accelerating organic revenue growth, margin expansion, robust cash flow, and double-digit growth in contract awards and backlog. This strong performance is a testament to the resiliency of our company and the commitment of our employees. We are confident that we will continue to bring value to our customers and shareholders. Our winning strategy and record performance in Fiscal Year 2020 positions CACI for continued success in Fiscal Year 2021 and beyond."

Fourth Quarter Results

(in millions except per-share data) Q4, FY20 Q4, FY19 % Change

Revenue $1,495.6 $1,373.9 8.9%

Operating income $133.7 $81.1 64.8%

Net income $93.7 $50.0 87.3%

Diluted earnings per share $3.68 $1.96 87.2%

Net cash provided by operating activities excluding $154.4 $109.9 40.4%MARPA^1

Adjusted earnings before interest, taxes, depreciation $162.9 $109.5 48.8%and amortization (EBITDA), a non-GAAP measure^2

Days sales outstanding (DSO)^3 57 64

[Fourth quarter FY20 and fourth quarter FY19 net cash provided by operating activities exclude CACI's Master Accounts Receivable Purchase(1) Agreement (MARPA). For more details, see the Reconciliation of Net Cash Provided by Operating Activities to Net Cash Provided by Operating Activities Excluding MARPA on page 10 of this release.]

[See the Reconciliation of Net Income to Adjusted Earnings Before(2) Interest, Taxes, Depreciation and Amortization (EBITDA) on page 10 of this release.]

[The DSO calculations for fourth quarter FY20 and fourth quarter FY19(3) exclude the impact of the Company's MARPA, which was 9 days and 10 days, respectively.]

Revenue in Q4 FY20 increased 9% year-over-year as reported and 8% organically. The year-over-year increase in operating income was driven by higher revenue, especially in our technology business. The year-over-year increase in net income was due to higher operating income and lower interest expense, partially offset by a higher effective tax rate. The increase in cash from operations, excluding MARPA, was driven by higher net income and lower DSO as a result of enhanced billing and collections processes.

Fourth Quarter Awards

Contract awards in Q4 FY20 totaled $3.4 billion, with over 55% for new business to CACI. For the full year, contract awards totaled $11.6 billion, with over 55% for new business to CACI. These awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Some notable awards during the quarter were:

* A single-award IDIQ contract to provide mission technology, including transport and cybersecurity services to the National Geospatial-Intelligence Agency (NGA). The single award IDIQ has a base period of five years and five 1-year award term periods with a ceiling of $1.5 billion. This award is the largest in CACI's history. * A five-year, single-award task order, with a ceiling value of more than $465 million, to provide mission expertise and technology to the U.S. Army Combat Capabilities Development Command's (CCDC) Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR) center including research and development on cryptographic modernization, information security, and tactical network protection. * A five-year, single-award task order, with a ceiling value of $112 million, to provide mission expertise and technology to the U.S. Army's Systems Engineering, Architecture, Modeling and Simulations (SEAMS) Division including research and development on modeling and simulation, analysis, engineering, networking, and experimentation support. * A five-year task order, with a ceiling value of $63 million, to provide enterprise expertise and technology to upgrade U.S. Army infrastructure across the U.S. Indo-Pacific Command (INDOPACOM), including continued enterprise support for the relocation of the Army's garrison at Yongsan, Seoul, South Korea to Camp Humphreys. * An IDIQ contract by the U.S. Air Force Life Cycle Management Center/Chief Architect Integration Office for the maturation, demonstration and proliferation of capability across platforms and domains, leveraging open systems design, modern software and algorithm development in order to enable Joint All Domain Command and Control (JADC2). * A five-year, single-award task order, with a ceiling value of $128 million, to provide mission expertise on precision targeting and visual augmentation systems.

Total backlog as of June 30, 2020 was $21.6 billion compared with $16.9 billion a year ago, an increase of 28 percent. Funded backlog as of June 30, 2020 was $2.8 billion compared with $2.9 billion a year ago.

Fourth Quarter Highlights

* The U.S. Army's Joint Counter-Small Unmanned Aircraft Systems (C-sUAS) Office (JCO) has selected CACI's CORIAN(tm) system to protect DoD personnel and facilities against threats from unmanned aircraft systems/drones. * CACI has partnered with RigNet, Inc. to add new capabilities to CACI's secure mobile communications application for U.S. Government agencies, SteelBox(tm), which is the first secure and certified mobile communications app that enables government officials to use smartphones to text and make calls without fear of eavesdropping or data compromise. With the partnership of RigNet, CACI's SteelBox now also has the ability to "Break Out" and connect securely even with users who don't have the app. * CACI has been named a Top Workplace in Washington, D.C. by The Washington Post for the sixth consecutive year, and in New Jersey by NJ.com for the first time. The rankings are based on employee responses evaluating CACI's leadership, culture, and benefits. * CACI was named to the Best of the Best Top Veteran-Friendly Companies list by U.S. Veterans Magazine. The magazine polls Fortune 1000 companies and evaluates respondents based on the opportunities the companies offer for veteran employees. * WashingtonExec named Steve Tolbert, CACI Executive Vice President of Business Systems, to its Top 25 DOD Execs to Watch in 2020 list, and Kevin McNeill, CACI Senior Vice President of Cyberspace Solutions, to its Top 25 Cyber Execs to Watch in 2020 list.

Twelve Months Results

Twelve Twelve %(in millions except per-share data) Months, Months, Change FY20 FY19

Revenue $5,720.0 $4,986.3 14.7%

Operating income $457.7 $377.9 21.1%

Net income $321.5 $265.6 21.0%

Diluted earnings per share $12.61 $10.46 20.6%

Net cash provided by operating activities excluding $511.2 $362.8 40.9%MARPA^1

Adjusted earnings before interest, taxes, depreciation $573.6 $467.5 22.7%and amortization (EBITDA), a non-GAAP measure^2

[FY20 and FY19 net cash provided by operating activities exclude CACI's Master Accounts Receivable Purchase Agreement (MARPA). For more details,(1) see the Reconciliation of Net Cash Provided by Operating Activities to Net Cash Provided by Operating Activities Excluding MARPA on page 10 of this release.]

[See the Reconciliation of Net Income to Adjusted Earnings Before(2) Interest, Taxes, Depreciation and Amortization (EBITDA) on page 10 of this release.]

Revenue in FY20 increased 15% year-over-year as reported and 8% organically. The year-over-year increase in operating income was driven by the contribution from higher margin acquisitions and organic margin expansion. The year-over-year increase in net income was due to higher operating income, partially offset by higher interest expense and a higher effective tax rate. The increase in cash from operations, excluding MARPA, was driven by higher net income and lower DSO as a result of enhanced billing and collections processes.

FY21 Guidance

The table below summarizes our FY21 guidance and represents our views as of August 12, 2020. Our FY21 guidance includes the acquisition of Ascent Vision Technologies, LLC (AVT) announced today. In addition, our FY21 guidance assumes continued impact from COVID-19 through December 31, 2020 and that support currently provided under Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is extended through that period.



Fiscal Year 2021 Guidance(In millions except for earnings per share)

Revenue $6,000 - $6,200

Net income $347 - $367

Diluted earnings per share $13.50 - $14.28

Diluted weighted average shares 25.7

Net cash provided by operating activities at least $580

Conference Call Information

We have scheduled a conference call for 8:30 AM Eastern Time Thursday, August 13, 2020 during which members of our senior management will be making a brief presentation focusing on fourth quarter and full year results and operating trends, followed by a question-and-answer session. You can listen to the webcast and view the accompanying exhibits on CACI's investor relations website at http://investor.caci.com/events/default.aspx at the scheduled time. A replay of the call will also be available on CACI's investor relations website at http://investor.caci.com/.

About CACI

CACI's 23,000 talented employees are vigilant in providing the unique expertise and distinctive technology that address our customers' greatest enterprise and mission challenges. Our culture of good character, innovation, and excellence drives our success and earns us recognition as a Fortune World's Most Admired Company. As a member of the Fortune 1000 Largest Companies, the Russell 1000 Index, and the S&P MidCap 400 Index, we consistently deliver strong shareholder value. Visit us at www.caci.com.

There are statements made herein that 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 risk factors that could cause actual results to be materially different from anticipated results. These risk factors include, but are not limited to, the following: our reliance on U.S. government contracts, which includes general risk around the government contract procurement process (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; significant delays or reductions in appropriations for our programs and broader changes in U.S. government funding and spending patterns; legislation that amends or changes discretionary spending levels or budget priorities, such as for homeland security or to address global pandemics like COVID-19; legal, regulatory, and political change from successive presidential administrations that could result in economic uncertainty; changes in U.S. federal agencies, current agreements with other nations, foreign events, or any other events which may affect the global economy, including the impact of global pandemics like COVID-19; the results of government audits and reviews conducted by the Defense Contract Audit Agency, the Defense Contract Management Agency, or other governmental entities with cognizant oversight; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); failure to achieve contract awards in connection with re-competes for present business and/or competition for new business; regional and national economic conditions in the United States and globally, including but not limited to: terrorist activities or war, changes in interest rates, currency fluctuations, significant fluctuations in the equity markets, and market speculation regarding our continued independence; our ability to meet contractual performance obligations, including technologically complex obligations dependent on factors not wholly within our control; limited access to certain facilities required for us to perform our work, including during a global pandemic like COVID-19; changes in tax law, the interpretation of associated rules and regulations, or any other events impacting our effective tax rate; changes in technology; the potential impact of the announcement or consummation of a proposed transaction and our ability to successfully integrate the operations of our recent and any future acquisitions; our ability to achieve the objectives of near term or long-term business plans; the effects of health epidemics, pandemics and similar outbreaks may have material adverse effects on our business, financial position, results of operations and/or cash flows; and other risks described in our Securities and Exchange Commission filings.

CACI-Earnings Release

Selected Financial Data CACIInternationalIncCondensed ConsolidatedStatements of Operations(Unaudited)(Amounts inthousands,except pershareamounts) Quarter Ended Twelve Months Ended 6/30/2020 6/30/2019 % 6/30/2020 6/30/2019 % Change ChangeRevenue $ 1,495,581 $ 1,373,878 8.9 % $ 5,720,042 $ 4,986,341 14.7 %

Costs ofrevenueDirect costs 981,678 906,420 8.3 % 3,719,056 3,304,053 12.6 %

Indirectcosts and 351,427 359,282 -2.2 % 1,432,602 1,218,544 17.6 %sellingexpensesDepreciation 28,800 27,080 6.4 % 110,688 85,877 28.9 %andamortizationTotal costs 1,361,905 1,292,782 5.3 % 5,262,346 4,608,474 14.2 %of revenueOperating 133,676 81,096 64.8 % 457,696 377,867 21.1 %incomeInterest 10,447 18,185 -42.6 % 56,059 49,958 12.2 %expense andother, netIncome before 123,229 62,911 95.9 % 401,637 327,909 22.5 %income taxesIncome taxes 29,498 12,881 129.0 % 80,157 62,305 28.7 %

Net income $ 93,731 $ 50,030 87.3 % $ 321,480 $ 265,604 21.0 %

Basic $ 3.74 $ 2.01 85.8 % $ 12.84 $ 10.70 20.1 %earnings pershareDiluted $ 3.68 $ 1.96 87.2 % $ 12.61 $ 10.46 20.6 %earnings pershare Weightedaverageshares usedin per sharecomputations:Basic 25,089 24,875 25,031 24,833

Diluted 25,496 25,472 25,485 25,395

Statement of Operations Data (Unaudited) Quarter Ended Twelve Months Ended 6/30/2020 6/30/2019 6/30/2020 6/30/2019 % % Change ChangeOperating 8.9 % 5.9 % 8.0 % 7.6 %income marginTax rate 23.9 % 20.5 % 20.0 % 19.0 %

Net income 6.3 % 3.6 % 5.6 % 5.3 %margin Adjusted $ 162,940 $ 109,487 48.8 % $ 573,585 $ 467,470 22.7 %EBITDA*Adjusted 10.9 % 8.0 % 10.0 % 9.4 %EBITDA Margin * See Reconciliation of Net Income to Adjusted Earnings before Interest, Taxes,Depreciation and Amortization on page 10

Selected Financial Data (Continued) CACI International IncCondensed Consolidated Balance Sheets (Unaudited)(Amounts in thousands) 6/30/2020 6/30/2019ASSETS:Current assetsCash and cash equivalents $ 107,236 $ 72,028

Accounts receivable, net 841,227 869,840

Prepaid expenses and other current assets 137,423 89,652

Total current assets 1,085,886 1,031,520

Goodwill and intangible assets, net 3,813,995 3,772,194

Property and equipment, net 170,521 149,676

Operating lease right-of-use assets 330,767 0

Other long-term assets 141,303 133,453

Total assets $ 5,542,472 $ 5,086,843

LIABILITIES AND SHAREHOLDERS' EQUITY:Current liabilitiesCurrent portion of long-term debt $ 46,920 $ 46,920

Accounts payable 89,961 118,917

Accrued compensation and benefits 338,760 290,274

Other accrued expenses and current liabilities 293,518 235,611

Total current liabilities 769,159 691,722

Long-term debt, net of current portion 1,357,519 1,618,093

Other long-term liabilities 754,484 405,562

Total liabilities 2,881,162 2,715,377

Shareholders' equity 2,661,310 2,371,466

Total liabilities and shareholders' equity $ 5,542,472 $ 5,086,843



Selected Financial Data (Continued) CACI International IncCondensed Consolidated Statements of Cash Flows(Unaudited)(Amounts in thousands) Twelve Months Ended 6/30/2020 6/30/2019

CASH FLOWS FROM OPERATING ACTIVITIES:Net income $ 321,480 $ 265,604

Reconciliation of net income to net cash providedby operating activities:Depreciation and amortization 110,688 85,877

Non-cash lease expense 73,248 -

Amortization of deferred financing costs 2,346 2,406

Loss on extinguishment of debt - 363

Loss on disposal of assets 190 70

Stock-based compensation expense 29,302 25,272

Deferred income taxes 17,874 (1,009 )

Changes in operating assets and liabilities, net ofeffect of business acquisitions:Accounts receivable, net 34,550 96,754

Prepaid expenses and other assets (38,432 ) (5,372 )

Accounts payable and other accrued expenses (24,406 ) 70,692

Accrued compensation and benefits 46,769 8,387

Income taxes payable and receivable (25,118 ) 1,119

Operating lease liabilities (74,928 ) -

Deferred rent - (538 )

Long-term liabilities 45,142 5,672

Net cash provided by operating activities 518,705 555,297

CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures (72,303 ) (47,902 )

Cash paid for business acquisitions, net of cash (106,226 ) (1,082,809 )acquiredOther - 2,729

Net cash used in investing activities (178,529 ) (1,127,982 )

CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings (payments) under credit facilities (262,920 ) 599,903

Payment of contingent consideration (8,700 ) (616 )

Proceeds from employee stock purchase plans 7,432 5,702

Repurchases of common stock (7,806 ) (5,838 )

Payment of taxes for equity transactions (31,400 ) (19,595 )

Net cash provided by (used in) financing activities (303,394 ) 579,556

Effect of exchange rate changes on cash and cash (1,574 ) (1,037 )equivalentsNet increase in cash and cash equivalents 35,208 5,834

Cash and cash equivalents, beginning of period 72,028 66,194

Cash and cash equivalents, end of period $ 107,236 $ 72,028

Selected Financial Data (Continued) Revenue by Customer Type (Unaudited) Quarter Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeDepartment of Defense $ 1,033,998 69.1 % $ 949,760 69.1 % $ 84,238 8.9 %

Federal Civilian 400,459 26.8 % 365,190 26.6 % 35,269 9.7 %AgenciesCommercial and other 61,124 4.1 % 58,928 4.3 % 2,196 3.7 %

Total $ 1,495,581 100.0 % $ 1,373,878 100.0 % $ 121,703 8.9 %

Twelve Months Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeDepartment of Defense $ 3,999,261 69.9 % $ 3,489,854 70.0 % $ 509,407 14.6 %

Federal Civilian 1,467,801 25.7 % 1,263,681 25.3 % 204,120 16.2 %AgenciesCommercial and other 252,980 4.4 % 232,806 4.7 % 20,174 8.7 %

Total $ 5,720,042 100.0 % $ 4,986,341 100.0 % $ 733,701 14.7 %

Revenue by Contract Type (Unaudited) Quarter Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeCost reimbursable $ 855,816 57.2 % $ 761,088 55.4 % $ 94,728 12.4 %

Fixed price 416,896 27.9 % 410,174 29.9 % 6,722 1.6 %

Time and materials 222,869 14.9 % 202,616 14.7 % 20,253 10.0 %

Total $ 1,495,581 100.0 % $ 1,373,878 100.0 % $ 121,703 8.9 %

Twelve Months Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeCost reimbursable $ 3,274,707 57.2 % $ 2,764,291 55.4 % $ 510,416 18.5 %

Fixed price 1,629,475 28.5 % 1,465,559 29.4 % 163,916 11.2 %

Time and materials 815,860 14.3 % 756,491 15.2 % 59,369 7.8 %

Total $ 5,720,042 100.0 % $ 4,986,341 100.0 % $ 733,701 14.7 %

Revenue Generated as a Prime versus Subcontractor (Unaudited) Quarter Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangePrime $ 1,371,739 91.7 % $ 1,250,903 91.0 % $ 120,836 9.7 %

Subcontractor 123,842 8.3 % 122,975 9.0 % 867 0.7 %

Total $ 1,495,581 100.0 % $ 1,373,878 100.0 % $ 121,703 8.9 %

Twelve Months Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangePrime $ 5,221,300 91.3 % $ 4,586,330 92.0 % $ 634,970 13.9 %

Subcontractor 498,742 8.7 % 400,011 8.0 % 98,731 24.7 %

Total $ 5,720,042 100.0 % $ 4,986,341 100.0 % $ 733,701 14.7 %



Contract Awards Received (Unaudited) Quarter Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeContract Awards $ 3,387,343 $ 3,743,062 $ (355,719 ) -9.5 %

Twelve Months Ended(dollars in thousands) 6/30/2020 6/30/2019 $ Change % ChangeContract Awards $ 11,564,085 $ 10,255,414 $ 1,308,671 12.8 %

Reconciliation of Net Cash Provided by Operating Activities to Net Cash Provided by Operating Activities Excluding MARPA Facility (Unaudited)

The Company defines net cash provided by operating activities excluding CACI's Master Accounts Receivable Purchase Agreement (MARPA) as net cash provided by operating activities calculated in accordance with GAAP, adjusted to exclude net cash received from CACI's MARPA for the sale of certain designated eligible U.S. government receivables. Under the MARPA, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million. The Company provides net cash provided by operating activities excluding MARPA to allow investors to more easily compare current period results to prior period results and to results of our peers. This non-GAAP measure should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.

Quarter Quarter Twelve Twelve Ended Ended Months Months Ended Ended(dollars in thousands) 6/30/2020 6/30/2019 6/30/2020 6/30/2019Net cash provided by $ 160,880 $ 102,456 $ 518,705 $ 555,297 operating activitiesCash used (provided) by MARPA (6,501 ) 7,473 (7,473 ) (192,527 )

Net cash provided by $ 154,379 $ 109,929 $ 511,232 $ 362,770 operating activitiesexcluding MARPA

Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (Unaudited)

The Company views Adjusted EBITDA and Adjusted EBITDA margin, both of which are defined as non-GAAP measures, as important indicators of performance, consistent with the manner in which management measures and forecasts the Company's performance. Adjusted EBITDA is a commonly used non-GAAP measure when comparing our results with those of other companies. We define Adjusted EBITDA as GAAP net income plus net interest expense, income taxes, depreciation and amortization expense, including depreciation within direct costs, and earnout adjustments. We consider Adjusted EBITDA to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of non-cash items such as depreciation of tangible assets, amortization of intangible assets primarily recognized in business combinations, as well as the effect of earnout gains and losses, which we do not believe are indicative of our core operating performance. Adjusted EBITDA margin is adjusted EBITDA divided by revenue. These non-GAAP measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.

Quarter Ended Twelve Months Ended(dollars in 6/30/2020 6/30/2019 % Change 6/30/2020 6/30/2019 %thousands) ChangeNet income $ 93,731 $ 50,030 87.3 % $ 321,480 $ 265,604 21.0 %

Plus: Income taxes 29,498 12,881 129.0 % 80,157 62,305 28.7 %

Interest 10,447 18,185 -42.6 % 56,059 49,958 12.2 % income and expense, net Depreciation and amortization expense, 29,264 27,691 5.7 % 112,889 88,603 27.4 % including depreciation within direct costs Earnout - 700 -100.0 % 3,000 1,000 200.0 % adjustmentsAdjusted $ 162,940 $ 109,487 48.8 % $ 573,585 $ 467,470 22.7 %EBITDA Quarter Ended Twelve Months Ended(dollars in 6/30/2020 6/30/2019 % Change 6/30/2020 6/30/2019 %thousands) ChangeRevenue, as $ 1,495,581 $ 1,373,878 8.9 % $ 5,720,042 $ 4,986,341 14.7 %reportedAdjusted 162,940 109,487 48.8 % 573,585 467,470 22.7 %EBITDAAdjusted 10.9 % 8.0 % 10.0 % 9.4 %EBITDA margin

View source version on businesswire.com: https://www.businesswire.com/news/home/20200812005688/en/

CONTACT: Corporate Communications and Media: Jody Brown, Executive Vice President, Public Relations (703) 841-7801, jbrown@caci.com

CONTACT: Investor Relations: Dan Leckburg, Senior Vice President, Investor Relations (703) 841-7666, dleckburg@caci.com