CACI International Inc. - 10-K Summary (Fiscal Year Ended June 30, 1994)
Business Context and Reporting Period
Company: CACI International Inc.
Reporting Period: Fiscal Year ended June 30, 1994.
Industry: Information Technology (IT) services, systems integration, and proprietary software.
Operations: The Company serves U.S. Federal Government agencies (primarily DoD and DoJ), state/local governments, and commercial markets in North America and Western Europe. It does not manufacture equipment but provides custom software, simulation technology, and litigation support services.
Employees: Approximately 3,069 as of June 30, 1994.
Key Financial Metrics
| Metric | FY 1994 | FY 1993 | Change |
|---|---|---|---|
| Revenue | $183.7 million | $145.1 million | +26.6% |
| Net Income | $6.0 million | $3.0 million | +102.6% |
| Earnings Per Share (Diluted) | $0.57 | $0.29 | +96.6% |
| Operating Margin | 5.8% | 5.6% | +0.2 pts |
| Net Profit Margin | 3.3% | 2.1% | +1.2 pts |
| Operating Cash Flow | $9.1 million | $4.1 million | +125.8% |
| Total Assets | $71.0 million | $58.4 million | +21.6% |
| Long-term Debt | $2.5 million | $2.9 million | -13.7% |
| Working Capital | $25.3 million | $21.9 million | +15.5% |
| Backlog (Total) | $726.5 million | $570.0 million | +27.5% |
Material Changes vs. Prior Period
- Revenue Growth: Driven by a 19.6% increase in DoD revenue (partially due to the SofTech acquisition), a 40.5% increase in DoJ revenue, and a 22.7% increase in commercial revenue (led by a 48% surge in U.K. operations).
- Acquisitions: Completed acquisition of SofTech's Government Services business (Dec 1993), adding $13.8 million in revenue. Also acquired Pinpoint Analysis Ltd. and Miracle Products Ltd. in the U.K.
- Cost Structure: Direct costs rose 29% to $97.6 million, increasing slightly as a percentage of revenue (53.1% vs 52.3%) due to competitive pressure on federal contract markups. Indirect costs as a percentage of revenue improved to 38.7% from 39.8%.
- Legal Settlements: FY 1993 included $2.8 million in one-time costs (shareholder lawsuits and lease termination). FY 1994 included a $300,000 extraordinary charge (net of tax) for shareholder lawsuit settlement provisions.
- Backlog: Firm orders increased to $77.2 million from $53.0 million, with total backlog rising to $726.5 million.
Guidance, Outlook, and Risks
- Outlook: Management expects continued growth in DoJ revenue and U.K. sales. The SofTech acquisition is projected to add approximately $25 million in annual revenue and $750,000 in annual earnings going forward.
- Shareholder Litigation Settlement: A settlement regarding shareholder suits (Pfirman and Chrysogelos) is pending court approval. It includes a contingent self-tender offer for 1.3 million shares at $6.00/share if the stock price averages below $6.00 for 20 consecutive days between July 1994 and February 1995. As of August 1994, the stock price was above this threshold.
- Legal Contingencies: CACI successfully defended against infringement claims by Pentagen Technologies, with the court awarding CACI fees and damages for defamation. Pentagen has appealed.
- Liquidity: The Company maintains a $20 million unsecured line of credit with Signet Bank (expiring Jan 1995). Management believes internal cash flow and credit lines are sufficient to fund operations and potential tender offers.
- Risks: High dependence on U.S. Federal Government contracts (71% of revenue); currency fluctuation risks regarding U.K. operations; and the potential capital impact of the contingent stock tender.
Investor Verification Checklist
- Stock Price vs. Tender Trigger: Monitor the 20-day average closing price to determine if the $6.00/share contingent tender offer is triggered.
- DoD Contract Renewals: Verify the status of the top 10 contracts, which accounted for 42% of FY 1994 revenue.
- U.K. Currency Impact: Assess the impact of Pound Sterling fluctuations on reported revenue, as U.K. operations grew significantly in local currency terms.
- Legal Appeals: Track the status of the Pentagen Technologies appeal regarding the defamation and interference judgment.
- Acquisition Integration: Confirm that the SofTech acquisition is delivering the projected $25 million annual revenue run-rate.