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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 March 31, 2005

 

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 May 9, 2005: CACI International Inc Common Stock, $0.10 par value, 29,940,690 shares.

 

CACI INTERNATIONAL INC AND SUBSIDIARIES

 

          PAGE

PART I: FINANCIAL INFORMATION

     

Item 1.

    Financial Statements     
     Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2005 and 2004    3
     Consolidated Statements of Operations (Unaudited) for the Nine Months Ended March 31, 2005 and 2004    4
     Consolidated Balance Sheets as of March 31, 2005 (Unaudited) and June 30, 2004    5
     Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended March 31, 2005 and 2004    6
     Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended March 31, 2005 and 2004    7
     Notes to Unaudited Condensed Consolidated Financial Statements    8

Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    16

Item 3.

    Quantitative and Qualitative Disclosures About Market Risk    23

Item 4.

    Controls and Procedures    23

PART II: OTHER INFORMATION

     

Item 1.

    Legal Proceedings    24

Item 2.

    Changes in Securities and Use of Proceeds    25

Item 3.

    Defaults Upon Senior Securities    25

Item 4.

    Submission of Matters to a Vote of Security Holders    25

Item 5.

    Other Information    25

Item 6.

    Exhibits and Reports on Form 8-K    26
     Signatures    27

 

2

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

March 31,

  
     2005
    2004
  

Revenue

    $ 414,946    $ 288,411  

Costs and expenses

                

Direct costs

      259,738      179,440  

Indirect costs and selling expenses

      108,827      79,377  

Depreciation and amortization

      8,075      4,382  
    
  

Total costs and expenses

      376,640      263,199  
    
  

Income from operations

      38,306      25,212  

Interest expense (income), net

      3,652      (212 )
    
  

Income before income taxes

      34,654      25,424  

Income taxes

      13,018      9,662  
    
  

Net income

    $ 21,636    $ 15,762  
    
  

Basic earnings per share

    $ 0.72    $ 0.54  
    
  

Diluted earnings per share

    $ 0.71    $ 0.53  
    
  

Average shares outstanding

      29,913      29,126  
    
  

Average shares and equivalent shares outstanding

      30,681      29,935  
    
  

 

See notes to condensed consolidated financial statements (unaudited).

 

3

CACI INTERNATIONAL INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands, except per share data)

 

    

Nine Months Ended

March 31,

  
     2005
    2004
  

Revenue

    $ 1,193,284    $ 787,507  

Costs and expenses

                

Direct costs

      741,193      488,729  

Indirect costs and selling expenses

      317,216      217,441  

Depreciation and amortization

      24,072      12,384  
    
  

Total costs and expenses

      1,082,481      718,554  
    
  

Income from operations

      110,803      68,953  

Interest expense (income), net

      10,945      (631 )
    
  

Income before income taxes

      99,858      69,584  

Income taxes

      37,945      26,592  
    
  

Net income

    $ 61,913    $ 42,992  
    
  

Basic earnings per share

    $ 2.09    $ 1.48  
    
  

Diluted earnings per share

    $ 2.03    $ 1.44  
    
  

Average shares outstanding

      29,579      29,022  
    
  

Average shares and equivalent shares outstanding

      30,459      29,875  
    
  

 

See notes to condensed consolidated financial statements (unaudited).

 

4

CACI INTERNATIONAL INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

 

     March 31,
2005
     June 30,
2004
  
     (unaudited)        

ASSETS

                 

Current assets

                 

Cash and cash equivalents

    $ 74,838     $ 63,029  

Marketable securities

      —         515  

Accounts receivable, net:

                 

Billed

      330,287       320,041  

Unbilled

      24,050       28,326  
    
 

Accounts receivable, net

      354,337       348,367  
    
 

Deferred income taxes

      6,403       3,392  

Prepaid expenses and other

      15,461       17,153  
    
 

Total current assets

      451,039       432,456  
    
 

Property and equipment, net

      24,502       25,489  

Accounts receivable, long term, net

      11,101       9,438  

Goodwill

      557,918       551,851  

Intangible assets, net

      85,013       99,624  

Other assets

      38,181       35,446  
    
 

Total assets

    $ 1,167,754     $ 1,154,304  
    
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                 

Current liabilities

                 

Notes payable

    $ 3,637     $ 20,829  

Accounts payable

      27,561       37,662  

Accrued compensation and benefits

      76,473       72,387  

Other accrued expenses

      78,703       86,263  

Income taxes payable

      218       7,120  
    
 

Total current liabilities

      186,592       224,261  
    
 

Notes payable, long-term

      343,746       391,401  

Deferred rent expenses

      7,019       5,968  

Deferred income taxes

      15,566       12,307  

Other long-term obligations

      26,280       22,095  

Shareholders’ equity

                 

Common stock - $.10 par value, 80,000 shares authorized,
37,735 and 36,956 shares issued, respectively

      3,773       3,696  

Additional paid-in-capital

      242,294       215,645  

Retained earnings

      360,056       298,143  

Accumulated comprehensive income

      5,300       3,660  

Treasury stock, at cost (7,815 shares)

      (22,872 )     (22,872 )
    
 

Total shareholders’ equity

      588,551       498,272  
    
 

Total liabilities & shareholders’ equity

    $ 1,167,754     $ 1,154,304  
    
 

 

See notes to condensed consolidated financial statements (unaudited).

 

5

CACI INTERNATIONAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in thousands)

 

     Nine Months Ended
March 31,
  
     2005
     2004
  

CASH FLOWS FROM OPERATING ACTIVITIES

                 

Net income

    $ 61,913     $ 42,992  

Reconciliation of net income to net cash provided by operating activities:

                 

Amortization of deferred financing costs

      1,008       —    

Depreciation and amortization

      24,072       12,384  

Stock-based compensation expense

      1,908       —    

Deferred income tax expense (benefit)

      269       (3,173 )

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

                 

Accounts receivable, net

      (9,913 )     (39,830 )

Prepaid expenses and other assets

      1,714       (5,650 )

Accounts payable and accrued expenses

      (18,608 )     (707 )

Accrued compensation and benefits

      3,587       6,073  

Deferred compensation and other long term obligations

      4,969       7,426  

Income taxes payable

      4,944       (6,568 )
    
 

Net cash provided by operating activities

      75,863       12,947  
    
 

CASH FLOWS FROM INVESTING ACTIVITIES

                 

Capital expenditures

      (6,727 )     (5,598 )

Cash paid for purchase of businesses, net of cash acquired

      (7,267 )     (79,014 )

Purchase of marketable securities

      —         (62 )

Proceeds from sale of marketable securities

      515       15,290  

Other assets

      (257 )     (2,133 )
    
 

Net cash used in investing activities

      (13,736 )     (71,517 )
    
 

CASH FLOWS FROM FINANCING ACTIVITIES

                 

Payments made under credit facilities

      (64,847 )     —    

Proceeds from employee stock purchase plan

      5,255       2,485  

Proceeds from exercise of stock options

      14,483       6,911  

Purchase of common stock for treasury

      (5,954 )     (3,667 )
    
 

Net cash provided by (used in) financing activities

      (51,063 )     5,729  
    
 

Effect of changes in currency rates on cash and cash equivalents

      745       1,740  
    
 

Net increase (decrease) in cash and cash equivalents

      11,809       (51,101 )

Cash and cash equivalents, beginning of period

      63,029       73,735  
    
 

Cash and cash equivalents, end of period

    $ 74,838     $ 22,634  
    
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

                 

Cash paid for income taxes, net

    $ 32,481     $ 35,905  
    
 

Cash paid for interest

    $ 10,630     $ 236