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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarter Ended December 31, 2003

 

Commission File Number 0-8401

 

CACI International Inc

(Exact name of registrant as

specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

54-1345888

(I.R.S. Employer Identification No.)

 

1100 North Glebe Road, Arlington, VA 22201

(Address of principal executive offices)

 

(703) 841-7800

(Registrant’s telephone number,

including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

   

Name of each exchange on which registered

None

    None

 

Securities registered pursuant to Section 12(g) of the Act:

 

CACI International Inc Common Stock, $0.10 par value

(Title of each class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes x No ¨.

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of December 31, 2003: CACI International Inc Common Stock, $0.10 par value, 29,121,218 shares.

 

 

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Table of Contents

CACI INTERNATIONAL INC AND SUBSIDIARIES

 

          PAGE
PART I: FINANCIAL INFORMATION

Item 1.

    Financial Statements     
     Consolidated Statements of Operations (Unaudited) for the Three Months Ended December 31, 2003 and 2002    3
     Consolidated Statements of Operations (Unaudited) for the Six Months Ended December 31, 2003 and 2002    4
     Consolidated Balance Sheets as of December 31, 2003 (Unaudited) and June 30, 2003    5
     Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended December 31, 2003 and 2002    6
     Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended December 31, 2003 and 2002    7
     Notes to Unaudited Condensed Consolidated Financial Statements    8

Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    15

Item 3.

    Quantitative and Qualitative Disclosures About Market Risk    20

Item 4.

    Controls and Procedures    20
PART II: OTHER INFORMATION

Item 1.

    Legal Proceedings    21

Item 2.

    Changes in Securities and Use of Proceeds    21

Item 3.

    Defaults Upon Senior Securities    21

Item 4.

    Submission of Matters to a Vote of Security Holders    21

Item 5.

    Other Information    21

Item 6.

    Exhibits and Reports on Form 8-K    22
     Signatures    23

 

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Table of Contents

PART 1

 

FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

CACI INTERNATIONAL INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands, except per share data)

 

    

Three Months Ended

December 31

  
     2003
     2002
  

Revenue

    $ 263,351     $ 204,511  

Costs and expenses

                 

Direct costs

      163,462       125,930  

Indirect costs and selling expenses

      72,548       58,859  

Depreciation and amortization

      4,165       2,922  
    
 

Total operating expenses

      240,175       187,711  
    
 

Operating income

      23,176       16,800  

Interest income

      (71 )     (163 )
    
 

Income before income taxes

      23,247       16,963  

Income taxes

      8,983       6,362  
    
 

Net income

    $ 14,264     $ 10,601  
    
 

Basic earnings per share

    $ 0.49     $ 0.37  
    
 

Diluted earnings per share

    $ 0.48     $ 0.36  
    
 

Average shares outstanding

      29,081       28,697  
    
 

Average shares and equivalent shares outstanding

      29,968       29,495  
    
 

 

See notes to condensed consolidated financial statements (unaudited)

 

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CACI INTERNATIONAL INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands, except per share data)

 

     Six Months Ended
December 31,
  
     2003
     2002
  

Revenue

    $ 499,096     $ 392,489  

Costs and expenses

                 

Direct costs

      309,289       240,611  

Indirect costs and selling expenses

      138,064       114,702  

Depreciation and amortization

      8,002       5,690  
    
 

Total operating expenses

      455,355       361,003  
    
 

Operating income

      43,741       31,486  

Interest income

      (419 )     (481 )
    
 

Income before income taxes

      44,160       31,967  

Income taxes

      16,930       11,991  
    
 

Net income

    $ 27,230     $ 19,976  
    
 

Basic earnings per share

    $ 0.94     $ 0.70  
    
 

Diluted earnings per share

    $ 0.91     $ 0.68  
    
 

Average shares outstanding

      28,970       28,571  
    
 

Average shares and equivalent shares outstanding

      29,844       29,399  
    
 

 

See notes to condensed consolidated financial statements (unaudited)

 

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CACI INTERNATIONAL INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

 

     December 31,
2003
     June 30,
2003
  
     (unaudited)        

ASSETS

                 

Current assets

                 

Cash and equivalents

    $ 35,575     $ 73,735  

Marketable securities

      5,758       15,291  

Accounts receivable, net:

                 

Billed

      226,984       179,202  

Unbilled

      19,439       18,891  
    
 

Total accounts receivable, net

      246,423       198,093  
    
 

Deferred income taxes

      1,164       462  

Prepaid expenses and other

      9,122       10,329  
    
 

Total current assets

      298,042       297,910  
    
 

Property and equipment, net

      19,000       18,634  

Accounts receivable, long term, net

      8,715       8,083  

Goodwill

      201,514       182,313  

Other assets

      24,563       18,715  

Intangible assets

      40,147       36,395  
    
 

Total assets

    $ 591,981     $ 562,050  
    
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                 

Current liabilities

                 

Notes payable

    $ 2,101     $ 4,558  

Accounts payable

      13,832       20,739  

Accrued compensation and benefits

      44,525       44,460  

Other accrued expenses

      38,085       32,569  

Income taxes payable

      1,172       12,999  
    
 

Total current liabilities

      99,715       115,325  
    
 

Notes payable, long-term

      553       —    

Deferred rent expenses

      4,582       4,463  

Deferred income taxes

      4,142       6,108  

Other long-term obligations

      21,591       14,619  

Shareholders’ equity

                 

Common stock - $.10 par value, 80,000 shares authorized, 36,924 and 36,509 shares issued, respectively

      3,692       3,651  

Capital in excess of par

      215,136       204,144  

Retained earnings

      261,704       234,474  

Accumulated comprehensive income

      3,229       388  

Treasury stock, at cost (7,803 and 7,774 shares respectively)

      (22,363 )     (21,122 )
    
 

Total shareholders’ equity

      461,398       421,535  
    
 

Total liabilities & shareholders’ equity

    $ 591,981     $ 562,050  
    
 

 

See notes to condensed consolidated financial statements (unaudited)

 

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CACI INTERNATIONAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in thousands)

 

     Six Months Ended
December 31,
  
     2003
     2002
  

CASH FLOWS FROM OPERATING ACTIVITIES

                 

Net income

    $ 27,230     $ 19,976  

Reconciliation of net income to net cash (used in) provided by operating activities

                 

Depreciation and amortization

      8,002       5,690  

Benefit for deferred income taxes

      (2,668 )     (322 )

Changes in operating assets and liabilities, net of effect of acquisitions

                 

Increase in accounts receivable, net

      (35,685 )     (10,266 )

Increase in prepaid expenses and other assets

      (3,344 )     (2,959 )

Decrease in accounts payable and accrued expenses

      (2,207 )     (931 )

Decrease in accrued compensation and benefits

      (2,958 )     (1,488 )

Increase in other long-term obligations

      5,319       3,736  

Increase in deferred rent expense

      213       121  

Decrease in income taxes payable

      (6,794 )     (1,059 )
    
 

Net cash (used in) provided by operating activities

      (12,892 )     12,498  
    
 

CASH FLOWS FROM INVESTING ACTIVITIES

                 

Capital expenditures

      (3,001 )     (3,876 )

Cash paid for purchase of businesses

      (38,037 )     (42,782 )

Purchase of marketable securities

      (95 )     (16,786 )

Proceeds from sale of marketable securities

      10,142       10,009  

Other assets

      (1,231 )     8  
    
 

Net cash used in investing activities

      (32,222 )     (53,427 )
    
 

CASH FLOWS FROM FINANCING ACTIVITIES

                 

Proceeds from employee stock purchase plans

      1,573       —    

Proceeds from exercise of stock options

      6,164       3,170  

Purchase of common stock for treasury

      (2,029 )     (105 )
    
 

Net cash provided by financing activities

      5,708       3,065  
    
 

Effect of changes in currency rates on cash and equivalents

      1,246       843  
    
 

Net decrease in cash and equivalents

      (38,160 )     (37,021 )

Cash and equivalents, beginning of period

      73,735       131,049  
    
 

Cash and equivalents, end of period

    $ 35,575     $ 94,028  
    
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

                 

Cash paid during the period for income taxes, net

    $ 25,767     $