Business Wire | Jan 27, 2021 04:15PM EST

CACI Reports Results for Its Fiscal 2021 Second Quarter

Jan. 27, 2021

ARLINGTON, Va.--(BUSINESS WIRE)--Jan. 27, 2021--CACI International Inc (NYSE: CACI), a leading provider of expertise and technology to government enterprise and mission customers, announced results today for its second fiscal quarter ended December 31, 2020.

CEO Commentary and Outlook

John Mengucci, CACI's President and CEO, said, "We delivered solid organic growth, and our focus on delivery and operational excellence again drove strong profitability and robust cash flow. We also won a healthy level of contract awards in what is typically a seasonally light quarter. We are confident in our ability to continue to deliver value to our customers and shareholders."

Second Quarter Results

(in millions except earnings Q2, FY21 Q2, FY20 %per share and DSO) Change

Revenue $1,468.7 $1,395.5 5.2%

Operating income $141.5 $110.2 28.5%

Net income $106.5 $79.2 34.5%

Diluted earnings per share $4.18 $3.11 34.4%

Net cash provided by $189.8 $117.5 61.6%operating activities excluding MARPA^1Adjusted earnings beforeinterest, taxes, depreciation $174.6 $140.9 23.9% and amortization (EBITDA), anon-GAAP measure^2Days sales outstanding (DSO)^ 3 53 60

(1)

Second quarter FY21 and second quarter FY20 net cash provided by operating activities exclude CACI's Master Accounts Receivable Purchase 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.

(2)

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

(3)

The DSO calculations for second quarter FY21 and second quarter FY20 exclude the impact of the Company's MARPA, which was 10 days and 9 days, respectively.

Revenue in Q2 FY21 increased 5.2% year-over-year as reported and 4.3% organically. The year-over-year increase in operating income was driven by higher revenue, strong operating performance, favorable fixed-price contract performance, and lower indirect costs. 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 favorable working capital management.

Second Quarter Contract Awards

Contract awards in Q2 FY21 totaled $2.1 billion. These awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Some notable awards during the quarter were:

* A four-and-a-half year task order, with a ceiling value of $160 million, by the U.S. Air Force Central Command's (AFCENT) Network Operations and Security Center (NOSC) to provide enterprise expertise including networking, technical, and cyber support to multiple deployed AFCENT NOSC sites through U.S. Central Command (CENTCOM). * A five-year single award contract, with a ceiling value of $447 million, to provide acquisition mission technology. * A seven-year task order, with a ceiling value of $376 million, to provide mission technology to modernize a federal customer's web-based supply chain system. * A three-year task order, with a ceiling value of $96 million, to provide engineering and logistics expertise for the U.S. Army's Medical Communications for Combat Casualty Care (MC4) Program. * A six-and-a-half year indefinite delivery/indefinite quantity contract, with a ceiling of $1.5 billion, to continue providing automated litigation support services to federal agencies.

Total backlog as of December 31, 2020 was $22.4 billion compared with $20.3 billion a year ago, an increase of 10%. Funded backlog as of December 31, 2020 was $2.9 billion compared with $2.8 billion a year ago, an increase of 3%.

Additional Highlights

* CACI announced the delivery of a flight model laser communications transmitter to the NASA Jet Propulsion Laboratory (JPL) for use on-board the Psyche spacecraft, whose mission is to study the origin of planetary cores in the asteroid belt. * CACI Board Member, The Honorable Susan M. "Sue" Gordon, the former Principal Deputy Director of National Intelligence (PDDNI), will receive the Intelligence and National Security Alliance's (INSA) 2021 William Oliver Baker Award on September 25, 2021, in recognition of her extraordinary contribution to U.S. intelligence and national security affairs. * CACI Vice President and Army Client Executive Major General (Ret.), Randolph (Randy) Strong was inducted into the Army's Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR) Hall of Fame. The event highlighted Mr. Strong's military career and specifically his service as Commanding General of the United States Army Communications-Electronics Command (CECOM) from 2009 to 2012. * CACI received multiple accolades for veteran efforts this quarter including a Best Company for Veterans by Monster and Military.com, a Best Employer for Veterans by Forbes.com, and received the 2020 Northern Virginia Technology Council (NVTC) Veterans Employment Initiative (VEI) Veteran Service Award for the company's longstanding commitment of both hiring and supporting military veterans, their families, and the military community.

Reaffirming FY21 Guidance

The table below summarizes our FY21 guidance and represents our views as of January 27, 2021.

Second quarter FY21 and second quarter FY20 net cash provided by(1) operating activities exclude CACI's Master Accounts Receivable Purchase 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.

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

(3) The DSO calculations for second quarter FY21 and second quarter FY20 exclude the impact of the Company's MARPA, which was 10 days and 9 days, respectively.

Revenue in Q2 FY21 increased 5.2% year-over-year as reported and 4.3% organically. The year-over-year increase in operating income was driven by higher revenue, strong operating performance, favorable fixed-price contract performance, and lower indirect costs. 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 favorable working capital management.

Second Quarter Contract Awards

Contract awards in Q2 FY21 totaled $2.1 billion. These awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity (IDIQ) contracts. Some notable awards during the quarter were:

* A four-and-a-half year task order, with a ceiling value of $160 million, by the U.S. Air Force Central Command's (AFCENT) Network Operations and Security Center (NOSC) to provide enterprise expertise including networking, technical, and cyber support to multiple deployed AFCENT NOSC sites through U.S. Central Command (CENTCOM). * A five-year single award contract, with a ceiling value of $447 million, to provide acquisition mission technology. * A seven-year task order, with a ceiling value of $376 million, to provide mission technology to modernize a federal customer's web-based supply chain system. * A three-year task order, with a ceiling value of $96 million, to provide engineering and logistics expertise for the U.S. Army's Medical Communications for Combat Casualty Care (MC4) Program. * A six-and-a-half year indefinite delivery/indefinite quantity contract, with a ceiling of $1.5 billion, to continue providing automated litigation support services to federal agencies.

Total backlog as of December 31, 2020 was $22.4 billion compared with $20.3 billion a year ago, an increase of 10%. Funded backlog as of December 31, 2020 was $2.9 billion compared with $2.8 billion a year ago, an increase of 3%.

Additional Highlights

* CACI announced the delivery of a flight model laser communications transmitter to the NASA Jet Propulsion Laboratory (JPL) for use on-board the Psyche spacecraft, whose mission is to study the origin of planetary cores in the asteroid belt. * CACI Board Member, The Honorable Susan M. "Sue" Gordon, the former Principal Deputy Director of National Intelligence (PDDNI), will receive the Intelligence and National Security Alliance's (INSA) 2021 William Oliver Baker Award on September 25, 2021, in recognition of her extraordinary contribution to U.S. intelligence and national security affairs. * CACI Vice President and Army Client Executive Major General (Ret.), Randolph (Randy) Strong was inducted into the Army's Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR) Hall of Fame. The event highlighted Mr. Strong's military career and specifically his service as Commanding General of the United States Army Communications-Electronics Command (CECOM) from 2009 to 2012. * CACI received multiple accolades for veteran efforts this quarter including a Best Company for Veterans by Monster and Military.com, a Best Employer for Veterans by Forbes.com, and received the 2020 Northern Virginia Technology Council (NVTC) Veterans Employment Initiative (VEI) Veteran Service Award for the company's longstanding commitment of both hiring and supporting military veterans, their families, and the military community.

Reaffirming FY21 Guidance

The table below summarizes our FY21 guidance and represents our views as of January 27, 2021.



Current Fiscal Year 2021 Guidance(in millions except earnings per share)

Revenue $6,050 - $6,250

Net income $372 - $392

Diluted earnings per share $14.47 - $15.25

Diluted weighted average shares 25.7

Net cash provided by operating activities at least $600

Conference Call Information

We have scheduled a conference call for 8:30 AM Eastern Time Thursday, January 28, 2021 during which members of our senior management will be making a brief presentation focusing on second quarter 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/news/#upcomingevent 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 approximately 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 CACI International IncCondensed Consolidated Statements of Operations (Unaudited)(Amounts in thousands, except per share amounts) Three Months Ended Six Months Ended % % 12/31/2020 12/31/2019 Change 12/31/2020 12/31/2019 Change

Revenue $ 1,468,711 $ 1,395,469 5.2% $ 2,928,217 $ 2,758,861 6.1%

Operating costs and expenses: Costs of 4.7% 5.8% revenue 947,131 904,867 1,887,065 1,783,748

Indirect costs and 347,807 352,448 -1.3% 702,811 710,040 -1.0% selling expenses Depreciation 15.3% 14.0% and 32,234 27,967 62,378 54,729 amortizationTotal 3.3% 4.1%operating 1,327,172 1,285,282 2,652,254 2,548,517 expensesOperating 28.5% 31.2%income 141,539 110,187 275,963 210,344

Interest -38.2% -39.5%expense and 9,087 14,714 19,067 31,525 other, netIncome before 38.7% 43.7%income taxes 132,452 95,473 256,896 178,819

59.6% 79.4%Income taxes 25,974 16,278 56,774 31,647

$ $ 34.5% $ $ 36.0%Net income 106,478 79,195 200,122 147,172



Basic earnings $ $ 33.6% $ $ 35.0%per share 4.22 3.16 7.95 5.89

Diluted $ $ 34.4% $ $ 36.1%earnings per 4.18 3.11 7.86 5.78 share

Weightedaverage shares used in per sharecomputations: Basic 25,225 25,065 25,162 24,979

Diluted 25,451 25,435 25,469 25,483



Statement of Operations Data (Unaudited)

Three Months Ended Six Months Ended

12/31/2020 12/31/2019 12/31/2020 12/31/2019

% % Change Change

Operating 9.6 % 7.9 % 9.4 % 7.6 % income marginTax rate 19.6 % 17.1 % 22.1 % 17.7 %

Net income 7.2 % 5.7 % 6.8 % 5.3 % margin

Adjusted $ $ 23.9% $ $ 26.3%EBITDA* 174,580 140,902 340,016 269,213

Adjusted 11.9 % 10.1 % 11.6 % 9.8 % 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) 12/31/2020 6/30/2020ASSETS: Current assets Cash and cash equivalents $ 102,114 $ 107,236

Accounts receivable, net 747,845 841,227

Prepaid expenses and other current assets 145,747 137,423

Total current assets 995,706 1,085,886

Goodwill and intangible assets, net 4,141,597 3,813,995

Property and equipment, net 180,258 170,521

Operating lease right-of-use assets 374,310 330,767

Other long-term assets 159,614 141,303

Total assets $ 5,851,485 $ 5,542,472

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

Accounts payable 60,683 89,961

Accrued compensation and benefits 379,978 338,760

Other accrued expenses and current liabilities 285,223 293,518

Total current liabilities 772,804 769,159

Long-term debt, net of current portion 1,371,222 1,357,519

Other long-term liabilities 823,180 754,484

Total liabilities 2,967,206 2,881,162

Shareholders' equity 2,884,279 2,661,310

Total liabilities and shareholders' $ 5,851,485 $ 5,542,472equity Selected Financial Data (Continued) CACI International IncCondensed Consolidated Statements of Cash Flows (Unaudited)(Amounts in thousands) Six Months Ended 12/31/2020 12/31/2019CASH FLOWSFROM OPERATING ACTIVITIES:Net income $ 200,122 $ 147,172

Reconciliationof net incometo net cash provided byoperatingactivities: Depreciation 62,378 54,729 and amortization Non-cash 38,436 35,850 lease expense Amortization of deferred 1,163 1,176 financing costs Stock-based 15,041 14,499 compensation expense Deferred (6,311 ) 14,104 income taxesChanges inoperatingassets andliabilities, net of effectof businessacquisitions: Accounts 94,292 51,458 receivable, net Prepaid (20,605 ) (28,921 ) expenses and other assets Accounts payable and (30,087 ) 8,121 other accrued expenses Accrued 39,461 1,529 compensation and benefits Income taxes 11,107 (21,384 ) payable and receivable Operating (37,916 ) (37,989 ) lease liabilities Long-term 15,206 (3,319 ) liabilitiesNet cashprovided by 382,287 237,025 operatingactivities CASH FLOWSFROM INVESTING ACTIVITIES:Capital (31,873 ) (41,035 )expendituresCash paid forbusiness (355,127 ) (102,056 )acquisitions, net of cashacquired Other - -

Net cash used (387,000 ) (143,091 )in investing activities CASH FLOWSFROM FINANCING ACTIVITIES:Net borrowings(payments) 12,540 (68,460 )under creditfacilitiesProceeds from 4,664 3,665 employee stock purchase plansRepurchases of (4,420 ) (3,596 )common stockPayment oftaxes for (18,649 ) (29,083 )equitytransactionsNet cash used (5,865 ) (97,474 )in financing activitiesEffect ofexchange rate 5,456 157 changes on cash and cashequivalentsNet decreasein cash and (5,122 ) (3,383 )cashequivalentsCash and cashequivalents, 107,236 72,028 beginning ofperiodCash and cash $ 102,114 $ 68,645 equivalents, end of period Selected Financial Data (Continued) Revenue by Customer Group (Unaudited) Three Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) ChangeDepartment of 68.9% 71.0% $ 22,494 2.3%Defense 1,012,875 990,381

Federal 26.6% 24.5% 14.0%Civilian 390,034 342,029 48,005 AgenciesCommercial 4.5% 4.5% 4.3%and other 65,802 63,059 2,743

100.0% 100.0% $ 73,242 5.2%Total 1,468,711 1,395,469

Six Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) ChangeDepartment of 68.9% 69.9% $ 89,049 4.6%Defense 2,017,070 1,928,021

Federal 26.6% 25.6% 10.5%Civilian 780,213 706,022 74,191 AgenciesCommercial 4.5% 4.5% 4.9%and other 130,934 124,818 6,116

100.0% 100.0% $ 169,356 6.1%Total 2,928,217 2,758,861

Revenue by Contract Type (Unaudited) Three Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 57.5% 58.6% $ 25,107 3.1%Cost-plus-fee 843,584 818,477

30.0% 27.9% 13.4%Fixed price 440,821 388,867 51,954

Time and 12.5% 13.5% -2.0%materials 184,306 188,125 (3,819)

100.0% 100.0% $ 73,242 5.2%Total 1,468,711 1,395,469

Six Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 56.9% 56.8% $ 101,002 6.4%Cost-plus-fee 1,667,193 1,566,191

29.9% 29.2% 8.4%Fixed price 874,635 806,843 67,792

Time and 13.2% 14.0% 0.1%materials 386,389 385,827 562

100.0% 100.0% $ 169,356 6.1%Total 2,928,217 2,758,861

Revenue by Prime or Subcontractor (Unaudited) Three Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 90.4% 90.8% $ 60,370 4.8%Prime 1,327,025 1,266,655

9.6% 9.2% 10.0%Subcontractor 141,686 128,814 12,872

100.0% 100.0% $ 73,242 5.2%Total 1,468,711 1,395,469

Six Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 90.6% 90.7% $ 152,103 6.1%Prime 2,653,863 2,501,760

9.4% 9.3% 6.7%Subcontractor 274,354 257,101 17,253

100.0% 100.0% $ 169,356 6.1%Total 2,928,217 2,758,861

Revenue by Expertise or Technology (Unaudited) Three Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 49.9% 53.2% $ (9,758) -1.3%Expertise 732,276 742,034

50.1% 46.8% 12.7%Technology 736,435 653,435 83,000

100.0% 100.0% $ 73,242 5.2%Total 1,468,711 1,395,469

Six Months Ended (dollars in 12/31/2020 12/31/2019 $ Change % thousands) Change 50.3% 53.1% $ 8,572 0.6%Expertise 1,472,959 1,464,387

49.7% 46.9% 160,784 12.4%Technology 1,455,258 1,294,474

100.0% 100.0% $ 169,356 6.1%Total 2,928,217 2,758,861

Selected Financial Data (Continued) Contract Awards Received (Unaudited) Three Months Ended (dollars %in 12/31/2020 12/31/2019 $ Change Change thousands)Contract $ $ $ -21.5%Awards 2,129,108 2,711,484 (582,376)

Six Months Ended (dollars %in 12/31/2020 12/31/2019 $ Change Change thousands)Contract $ $ $ (2,764,841) -41.1%Awards 3,963,866 6,728,707

Reconciliation of Net Cash Provided by Operating Activities toNet Cash Provided by Operating Activities Excluding MARPA(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.

Three Months Three Months Ended Ended(dollars in thousands) 12/31/2020 12/31/2019Net cash provided by operating activities $ 205,387 $ 133,821

Cash used (provided) by MARPA (15,553) (16,334)

Net cash provided by operating activities $ 189,834 $ 117,487excluding 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.

Three Months Ended Six Months Ended(dollars in 12/31/2020 12/31/2019 % 12/31/2020 12/31/2019 %thousands) Change Change $ 106,478 $ 34.5% $ 200,122 $ 147,172 36.0%Net income 79,195

Plus: 25,974 59.6% 56,774 79.4% Income taxes 16,278 31,647

Interest 9,087 -38.2% 19,067 -39.5% income and 14,714 31,525 expense, net Depreciation and amortization expense, 33,041 28,615 15.5% 64,053 55,969 14.4% including amounts within direct costs Earnout -100.0% -100.0% adjustments - 2,100 - 2,900

Adjusted $ 174,580 $ 140,902 23.9% $ 340,016 $ 269,213 26.3%EBITDA Three Months Ended Six Months Ended(dollars in 12/31/2020 12/31/2019 % 12/31/2020 12/31/2019 %thousands) Change ChangeRevenue, as $ 1,468,711 $ 1,395,469 5.2% $ 2,928,217 $ 2,758,861 6.1%reportedAdjusted 174,580 23.9% 340,016 26.3%EBITDA 140,902 269,213

Adjusted 11.9% 10.1% 11.6% 9.8% EBITDA margin View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005924/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