Caci reports results for its fiscal 2013 fourth quarter and full year
Arlington, va.--(business wire)--caci international inc (nyse: caci), a leading information solutions and services provider to the federal government, announced results today for its fourth fiscal quarter and full fiscal year ended june 30, 2013: revenue of $912.9 million for the fourth quarter and $3.68 billion for the year operating income of $67.9 million for the fourth quarter and $270.8 million for the year net income attributable to caci of $37.9 million for the fourth quarter and $151.7 million for the year diluted earnings per share of $1.56 for the fourth quarter and $6.35 for the year ceo commentary and outlook ken asbury, caci’s president and ceo, said, “our fourth quarter results were in line with our guidance expectations and reflect our ability to adapt to an uncertain market. we grew revenue in our high-growth market areas of business systems, cyberspace, healthcare, and integrated security solutions, and received half of our awards in the quarter from those same areas. in addition, we reduced our cost structure, which will drive efficiencies and preserve our margins. these actions position us to continue to be successful in meeting our customers’ high-priority mission requirements in an ongoing, sequestered environment. “since the beginning of our new fiscal year, we are encouraged that we have won a number of significant new business and recompete awards. in addition, we have strengthened our business development organization with the addition of two key executives. we will continue to execute our strategy that is focused on winning business in support of the government’s high-priority missions, delivering operational excellence to our customers, and making acquisitions that bring us new customers and new capabilities. all of this gives us the confidence to reiterate our fy14 guidance.” fourth quarter comparisons when analyzing our performance, we believe better insight and a more meaningful comparison of our fiscal year 2013 (fy13) results with those of fiscal year 2012 (fy12) can be made by adjusting for three material one-time items that positively impacted our results last year. the one-time item that impacted our fourth quarter fy12 results, which we discussed when we released both our fourth quarter fy12 results and our fy13 annual guidance, is greater-than-expected profitability on a large fixed-price contract that generated $0.1 million in additional net income in the fourth quarter of fy12 and $7.1 million during the full year of fy12. results for the fourth quarter of fy13 compared with results for the fourth quarter of fy12, excluding the item described above, are shown below: revenue decreased 3.8 percent from revenue for the fourth quarter of fy12. our 4.3 percent increase in direct labor was offset by a reduction of material purchases and subcontract labor. operating income in the fourth quarter of fy13 was negatively impacted by $7 million in one-time severance and facilities-related expenses. net income attributable to caci in the fourth quarter of fy13 was $37.9 million, or $1.56 diluted earnings per share, a decrease of 12.3 percent over adjusted net income attributable to caci of $43.3 million, or $1.59 adjusted diluted earnings per share, for the same period in fy12. net cash provided by operations in the quarter was $106.9 million. (see reconciliation of revenue, operating income, net income, and diluted earnings per share to adjusted amounts on page 13.) for a comparison of our fy13 results to fy12 results reported in accordance with generally accepted accounting principles (gaap), see the income statement on page 7 of this release. additional financial metrics fourth quarter awards and contract funding orders during the fourth quarter, we received awards in all ten of our markets with approximately one-half of those in our high-growth markets of business systems, cyberspace, healthcare and integrated security solutions. our contract awards were $561 million in the quarter. approximately two-thirds of our awards in the quarter were either contract modifications or recompete wins, which assures us that we continue to serve critical missions of our customers. fy13 awards totaled $3.4 billion, led by business systems, c4isr, and intelligence. this amount also includes more than $425 million in contracts with federal government clients in the intelligence community. contract funding orders in the fourth quarter were $722 million and $3.42 billion for fy13. our total backlog at june 30, 2013 was $6.9 billion. funded backlog at june 30, 2013 was $1.7 billion. we continued to expand our inventory of indefinite delivery, indefinite quantity (idiq) contract vehicles during the quarter by being awarded prime positions on new multiple and single award contracts, resulting in a combined total of over 160 of these vehicles. idiq contract vehicles support our growth plans across our ten markets and provide us the flexibility to deliver on our customers’ mission-critical requirements. awards during the quarter included: a $45 million, two-year award to provide a wide range of business it and command and control solutions to support the u.s. navy’s spawar space and warfare systems center atlantic (ssc atlantic). this ongoing work expands our presence in the business system solutions and logistics and material readiness market areas. a $26.7 million, five-year award to provide a wide array of training and logistics support for a customer in our integrated security solutions market area. this new work grows our business in that area. idiq awards during the quarter included: an $899 million, five-year multiple award to provide business and force support services to the ssc atlantic business portfolio. this new work is one of three “pillar” contracts that we have been awarded, and supports the entire spectrum of non-inherently governmental solutions and services associated with the ssc atlantic business portfolios. it further expands our presence in the c4isr, business systems, cyber, and enterprise it market areas. an $899 million, five-year multiple award to provide decision support services for the ssc atlantic business portfolio. this new work, another of the three “pillar” contracts from ssc atlantic that we have been awarded, further expands our command and control presence, a part of our c4isr market, as well as our presence in the business systems, cyber, and enterprise it market areas. fourth quarter highlights michael a. daniels and william l. jews and were appointed to caci’s board of directors. mr. daniels brings more than 25 years of experience in global information solutions and services, with a strong track record in building and growing profitable organizations. mr. jews is a senior business and healthcare executive whose over 25 years of experience includes leading organizational growth and completing successful mergers and acquisitions. larry clifton was named executive vice president and chief human resources officer. a company veteran and human capital innovator, mr. clifton provides strategic direction for our human capital functions, with an emphasis on employee and leadership development and talent management. caci was identified by the general services administration as one of five recommended vendors to provide enterprise-wide mobile device management and mobile application management services to federal government agencies. this identification positions caci to help agencies develop and securely manage mobile devices and applications, and positions us to expand our business in our c4isr market area. fourth quarter recognition caci was ranked 12th on washington technology’s list of top 100 federal prime contractors (up from 14th last year). our continued placement among the industry’s leaders reflects caci’s sustained ability to compete at the highest levels despite challenging economic conditions in our sector. comparison of twelve months results as noted on page 1 of this release, we believe better insight and a more meaningful comparison of our fy13 results with those of fy12 can be made by adjusting for three material one-time items that positively impacted our results last year. these items, which we discussed when we released both our full year fy12 results and our fy13 annual guidance, are: a large commercial product sale that generated $12.0 million of revenue and $6.1 million of net income in the first quarter of fy12 greater-than-expected profitability on a large fixed-price contract that generated $7.1 million of net income during the full year of fy12 a $0.4 million increase in net income in the first quarter of fy12 associated with a reduction in the fair value of contingent consideration related to a prior year acquisition results for fy13 compared with results for fy12, excluding the items described above, are shown below: revenue decreased 2.1 percent from adjusted revenue for fy12 primarily due to increases in direct labor being offset by a reduction of material purchases tied to the draw down in afghanistan as well as sequestration-related reductions in other material purchases. operating income in the second half of fy13 was negatively impacted by $10 million in one-time severance and facilities-related expenses. net income attributable to caci for fy13 was $151.7 million, or $6.35 diluted earnings per share, a decrease of 1.4 percent from adjusted net income attributable to caci of $153.9 million, or $5.47 adjusted diluted earnings per share, for fy12. net cash provided by operations in fy13 was $249.3 million. (see reconciliation of revenue, operating income, net income, and diluted earnings per share to adjusted amounts on page 13.) for a comparison of our fy13 results to fy12 results reported in accordance with gaap, see the income statement on page 7 of this release. additional financial metrics subsequent events since july 1, 2013 donald fulop was appointed executive vice president for business development, reporting directly to president and ceo ken asbury. this strategic new hire supports our aggressive business development strategy and brings an experienced industry veteran to our leadership team. suzan zimmerman was appointed senior vice president, strategic campaigns, reporting directly to president and ceo ken asbury. ms. zimmerman will lead caci’s focus on evaluating, bidding, and capturing large market opportunities and brings a proven track record of significant success in this area. dr. anthony hess was appointed senior vice president of our healthcare solutions group. the strategic new hire of this health solutions innovator reflects our continued focus on our high-growth market of healthcare and the expansion of our capabilities in that market area. caci reiterates its fy14 guidance we are reiterating the fy14 guidance we issued on june 26, 2013. we expect that operating cash flow for the year will be approximately $225 million. the guidance does not include the impact of future acquisitions. the table below summarizes our fy14 guidance ranges and represents our views as of august 14, 2013: fy 2014guidance conference call information we have scheduled a conference call for 8:30 am eastern time thursday, august 15, 2013 during which members of our senior management team 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 conference call and view the accompanying exhibits over the internet by logging on to our homepage, www.caci.com, at the scheduled time, or you may dial 877-303-9143 and enter the confirmation code 18383571. a replay of the call will also be available over the internet beginning at 1:00 pm eastern time thursday, august 15, 2013 and can be accessed through our homepage (www.caci.com) by clicking on the caci investor info button. caci provides information solutions and services in support of national security missions and government transformation for intelligence, defense, and federal civilian clients. a member of the fortune 1000 largest companies and the russell 2000 index, caci provides dynamic careers for approximately 14,900 employees working in over 120 offices worldwide. visit www.caci.com. there are statements made herein which 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 factors that could cause actual results to differ materially from anticipated results. the factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: regional and national economic conditions in the united states and globally (including the impact of uncertainty regarding u.s. debt limits and actions taken related thereto); terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; failure to achieve contract awards in connection with re-competes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of u.s. government or other public sector projects, based on a change in spending patterns, implementation of spending cuts (sequestration) under the budget control act of 2011, changes in budgetary priorities or in the event of a priority need for funds, such as homeland security or the war on terrorism; government contract procurement (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the results of government investigations into allegations of improper actions related to the provision of services in support of u.s. military operations in iraq; 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; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); market speculation regarding our continued independence; material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, and (iii) competition for task orders under government wide acquisition contracts (gwacs) and/or schedule contracts with the general services administration; the ability to successfully integrate the operations of our recent and any future acquisitions; our own ability to achieve the objectives of near term or long range business plans; and other risks described in our securities and exchange commission filings. caci-financial net income before noncontrolling interest in earnings of joint venture noncontrolling interest in earnings of joint venture * see reconciliation of net income to adjusted earnings before interest, taxes, depreciation and amortization and to adjusted net income on page 12. net income including portion attributable to noncontrolling interest in earnings of joint venture reconciliation of net income to net cash provided by operating activities: changes in operating assets and liabilities, net of effect of business acquisitions: proceeds from employee stock purchase plans $ change $ change $ change $ change $ change $ change $ change $ change $ change $ change we are presenting organic revenue growth, on both an as reported and as adjusted basis, to reflect the effect of acquisitions on total revenue growth. revenue generated from the date a business is acquired through the first anniversary of that date is considered acquired revenue growth. all remaining revenue growth is considered organic. we believe that this non-gaap financial measure provides investors with useful information to evaluate the growth rate of our core business. this non-gaap measure should not be considered in isolation or as a substitute for performance measures prepared in accordance with gaap. the company views ebitda, ebitda margin, adjusted net income and diluted adjusted earnings per share as important indicators of performance, consistent with the manner in which management measures and forecasts the company’s performance. ebitda is a commonly used non-gaap measure when comparing our results with those of other companies. we believe adjusted net income is a significant driver of long-term value and is used by investors to measure our performance. this measure in particular assists readers in further understanding our results and trends from period-to-period by removing certain non-cash items that do not impact the cash flow performance of our business. we are presenting fy12 ebitda, ebitda margin, adjusted net income and diluted adjusted earnings per share on an adjusted basis, to remove the impact of three material items that positively impacted our fy12 results as we believe these adjusted measures provide a better comparison to our ongoing, recurring operations. adjusted ebitda is defined by us as gaap net income plus net interest expense, income taxes, and depreciation and amortization, and less the three material items described earlier in this release. adjusted ebitda margin is adjusted ebitda divided by adjusted revenue. adjusted net income is defined by us as gaap net income plus stock-based compensation expense, depreciation and amortization, and amortization of financing costs, and less the three material items described earlier in this release; net of related tax effects computed using an assumed marginal tax rate of 39.3 percent. diluted adjusted earnings per share is adjusted net income divided by diluted weighted-average shares, as reported. adjusted ebitda and adjusted net income as defined by us may not be computed in the same manner as similarly titled measures used by other companies. these non-gaap measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with gaap. net income attributable to caci, as reported net income attributable to caci, as reported diluted weighted average shares, as reported as described earlier in this release, the company is presenting adjusted revenue, operating income, net income and diluted earnings per share to present results excluding the impact of three material items recorded during the fiscal year ended june 30, 2012. during the fourth quarter of fy12, only the fixed price contract adjustment impacted the income statement as follows: $0.2 million reduction of direct costs. these items were recorded in the income statement for the twelve months ended june 30, 2012, as follows: product sale -- $12.0 million of revenue and $1.9 million of indirect costs and selling expenses; fixed price contract adjustment -- $11.7 million reduction of direct costs; and earn-out adjustment -- $0.6 million reduction in indirect costs and selling expenses. the company believes that presenting the key measures of revenue, operating income, net income, and diluted earnings per share without the impact of these material items recorded in fy12 provides readers a better comparison to our ongoing, recurring operations. these non-gaap measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with gaap. net income attributable to caci, as reported diluted weighted average shares, as reported
