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, 1994
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, 1994: CACI International Inc Common
Stock, $0.10 par value, 10,012,000 shares.
<PAGE>
Page 2
CACI INTERNATIONAL INC AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION Page
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet as of
December 31, 1994 and June 30, 1994 3
Unaudited Consolidated Statement of Operations for the
Three Months Ended December 31, 1994 and 1993 5
Unaudited Consolidated Statement of Operations for the
Six Months Ended December 31, 1994 and 1993 6
Unaudited Consolidated Statement of Cash Flows for the
Six Months Ended December 31, 1994 and 1993 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 15
INDEX TO EXHIBITS 17
SIGNATURES
18
<PAGE>
Page 3
Item 1. FINANCIAL STATEMENTS
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
------
December 31, 1994 June 30, 1994
----------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash and equivalents $ 314,000 $ 941,000
Accounts receivable:
Billed 42,765,000 35,668,000
Unbilled 15,737,000 14,420,000
------------ -----------
Total accounts receivable 58,502,000 50,088,000
Prepaid expenses and other 5,111,000 5,067,000
------------ -----------
TOTAL CURRENT ASSETS 63,927,000 56,096,000
------------ -----------
PROPERTY AND EQUIPMENT, NET
Equipment and furniture 19,805,000 18,476,000
Leasehold improvements 1,780,000 1,648,000
------------ -----------
Property and equipment, at cost 21,585,000 20,124,000
Accumulated depreciation and
amortization (13,566,000) (12,369,000)
------------ -----------
TOTAL PROPERTY AND EQUIPMENT, NET 8,019,000 7,755,000
------------ -----------
GOODWILL, NET 5,670,000 5,921,000
OTHER ASSETS 831,000 1,001,000
DEFERRED INCOME TAXES 236,000 226,000
------------ -----------
TOTAL ASSETS $ 78,683,000 $ 70,999,000
============ ===========
</TABLE>
<PAGE>
Page 4
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
December 31, 1994 June 30, 1994
----------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Note payable $ 7,485,000 $ 2,745,000
Accounts payable and accrued expenses 15,347,000 14,848,000
Accrued compensation and benefits 10,927,000 10,712,000
Deferred rent expense 516,000 454,000
Income taxes payable 1,374,000 1,829,000
Deferred income taxes 611,000 181,000
------------- ------------
TOTAL CURRENT LIABILITIES 36,260,000 30,769,000
------------- ------------
DEFERRED RENT EXPENSES 2,418,000 2,353,000
DEFERRED INCOME TAXES 143,000 139,000
SHAREHOLDERS' EQUITY
Common stock - $.10 par value,
40,000,000 shares authorized,
13,538,000 and 13,490,000 shares issued 1,354,000 1,349,000
Capital in excess of par 4,880,000 4,591,000
Retained earnings 48,522,000 44,621,000
Cumulative currency translation adjustments (1,232,000) (1,315,000)
Treasury stock, at cost
(3,526,000 shares and 3,251,000 shares) (13,662,000) (11,508,000)
------------ -----------
TOTAL SHAREHOLDERS' EQUITY 39,862,000 37,738,000
------------ -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $78,683,000 $70,999,000
------------ -----------
See notes to consolidated financial statements (unaudited).
</TABLE>
<PAGE>
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CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended December 31,
1994 1993
-------------------------------
<S> <C> <C>
REVENUE $ 57,394,000 $ 43,966,000
COSTS AND EXPENSES:
Direct costs 31,333,000 22,596,000
Indirect costs and selling expenses 21,494,000 17,891,000
Depreciation and amortization 1,192,000 1,011,000
----------- -----------
Total Operating Expenses 54,019,000 41,498,000
----------- -----------
3,375,000 2,468,000
Interest expense 149,000 88,000
----------- ----------
INCOME BEFORE INCOME TAXES 3,226,000 2,380,000
INCOME TAXES 1,238,000 924,000
----------- ----------
NET INCOME $ 1,988,000 $1,456,000
=========== ==========
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE: $0.19 $0.14
=========== ==========
AVERAGE NUMBER OF SHARES AND
EQUIVALENT SHARES OUTSTANDING 10,600,000 10,516,000
=========== ==========
Dividends paid per share NONE NONE
=========== ==========
See notes to consolidated financial statements (unaudited).
</TABLE>
<PAGE>
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CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended December 31,
1994 1993
-----------------------------
<S> <C> <C>
REVENUE $112,275,000 $82,166,000
COSTS AND EXPENSES:
Direct costs 60,990,000 42,281,000
Indirect costs and selling expenses 42,277,000 33,202,000
Depreciation and amortization 2,355,000 1,899,000
------------ ----------
Total Operating Expenses 105,622,000 77,382,000
------------ ----------
6,653,000 4,784,000
Interest expense 291,000 179,000
------------ ----------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 6,362,000 4,605,000
INCOME TAXES 2,461,000 1,791,000
----------- ----------
INCOME BEFORE EXTRAORDINARY ITEM 3,901,000 2,814,000
----------- ----------
EXTRAORDINARY ITEM - COST OF SHAREHOLDER
LAWSUIT SETTLEMENT,
(NET OF $194,000 TAX BENEFIT) 0 (300,000)
----------- ----------
NET INCOME $ 3,901,000 $2,514,000
=========== ==========
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE:
Income before extraordinary item $0.37 $0.27
Extraordinary item 0.00 (0.03)
Net income 0.37 0.24
========== ==========
AVERAGE NUMBER OF SHARES AND
EQUIVALENT SHARES OUTSTANDING 10,598,000 10,450,000
========== ==========
Dividends paid per share NONE NONE
========== ==========
See notes to consolidated financial statements (unaudited).
</TABLE>
<PAGE>
Page 7
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended December 31,
1994 1993
----------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,901,000 $2,514,000
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,355,000 1,899,000
Provision for deferred income taxes 418,000 (494,000)
Loss (gain) on sale of property and equipment 0 2,000
Changes in operating assets and liabilities:
Accounts receivable (8,366,000) (5,166,000)
Prepaid expenses and other assets (209,000) (416,000)
Accounts payable and accrued expenses 379,000 3,620,000
Accrued compensation and benefits 263,000 1,084,000
Deferred rent expense 126,000 2,000
Income taxes payable (450,000) 313,000
----------- ----------
Net cash provided by (used in)
operating activities (1,583,000) 3,358,000
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (1,910,000) (1,987,000)
Acquisitions 0 (3,623,000)
Other, net (57,000) (305,000)
----------- ----------
Net cash used in investing activities (1,967,000) (5,915,000)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds under line-of-credit 49,605,000 42,031,000
Reductions under line-of-credit (44,865,000) (41,719,000)
Issuance of common stock 294,000 76,000
Purchase of common stock for treasury (2,154,000) 0
----------- ----------
Net cash provided by (used in)
financing activities 2,880,000 388,000
----------- ----------
EFFECT OF EXCHANGE RATES ON CASH AND
EQUIVALENTS: 43,000 (42,000)
---------- ----------
Net decrease in cash and equivalents (627,000) (2,211,000)
Cash and equivalents, beginning of period 941,000 2,725,000
----------- ---------
Cash and equivalents, end of period $314,000 $514,000
=========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Income taxes, net of refunds 2,627,000 482,000
=========== =========
Interest 280,000 175,000
=========== =========
See notes to consolidated financial statements (unaudited).
</TABLE>
<PAGE>
Page 8
CACI INTERNATIONAL INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in the
annual financial statements, prepared in accordance with generally accepted
accounting principles, have been condensed or omitted pursuant to those rules
and regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading.
In the opinion of management, the unaudited accompanying consolidated
financial statements reflect all necessary adjustments and reclassifications
(all of which are of a normal, recurring nature) that are necessary for fair
presentation for the periods presented. It is suggested that these
consolidated financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's latest
annual report to the Securities and Exchange Commission on Form 10-K for the
year ended June 30, 1994.
B. Accounts Receivable
Total accounts receivable are net of allowance for doubtful accounts of
$1,080,000 and $1,664,000 at December 31, 1994 and June 30, 1994,
respectively.
C. Settlement of Shareholder Lawsuits
On September 2, 1993, the Company announced an agreement, subject to approval
by the courts, to settle its outstanding shareholder lawsuits. Under the
terms of the agreement, the Company agreed to reimburse the plaintiffs for
certain legal fees and expenses. The Company agreed to also establish a
"Fund" which would be available on a claims-made basis to cover certain
defined losses incurred by shareholders who sold their stock during the
covered period. The Company also agreed to make a self-tender offer for a
limited number of shares of its Common Stock at a price determined in the
agreement.
The Company and the plaintiffs subsequently agreed to amend the terms of the
self-tender because of the increase in the price of the Company's Common Stock
since the original agreement was announced. Under the amended terms, the
Company agreed to make a contingent self-tender for 1.3 million shares of
Common Stock at $6.00 per share in the event that the average closing price
for the Company's shares for twenty consecutive trading days prior to February
28, 1995 is below $6.00 per share. If the average closing price of the
Company's shares does not fall below $6.00 per share for twenty consecutive
trading days prior to that date, the contingent self-tender will expire.
Both the Delaware Chancery Court and the Federal District Court reviewed the
settlement during the past fiscal quarter, determined that all issues in the
respective cases were resolved by the settlement, and ordered that the cases
be dismissed on the merits with prejudice on the basis of the settlement. The
parties are now engaged in inplementing the terms of the settlement.
<PAGE>
Page 9
Since January 1994, the Company's Common Stock has traded above the $6.00 per
share tender price. Under the terms of the agreement, the Company is under no
obligation to increase the tender price and has no current plans to do so.
Accordingly, the Company cannot now predict how many shares, if any, it will
obtain through the tender.
The Company accrued $300,000 (net of $194,000 tax benefit) as of September 30,
1993 to cover the estimated future costs of the settlement after reimbursement
of certain costs by the Company's liability insurance carrier. This amount
was reported as an extraordinary item in the first quarter of FY 1994.
In reaching the settlement, the Board of Directors did not acknowledge any
wrongdoing. In its deliberations on these suits, the Board did not believe it
was productive to continue to incur legal expenses and divert senior
managements' attention at a time when the Company's plan to enhance
shareholder value was proving out and revenue and operating income were
growing.
<PAGE>
Page 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
The following table sets forth the relative percentages that the items of
expense and earnings bear to revenue for the three and six months ended
December 31, 1994 and 1993.
<TABLE>
<CAPTION>
Percentage of Revenue
Three Months Six Months
-------------------------------------
FY 1995 FY 1994 FY 1995 FY 1994
<S> <C> <C> <C> <C>
Revenue 100.0% 100.0% 100.0% 100.0%
Costs and Expenses
Direct Costs 54.6% 51.4% 54.3% 51.5%
Indirect Costs and Selling Expenses 37.4% 40.7% 37.7% 40.4%
Depreciation and Amortization 2.1% 2.3% 2.1% 2.3%
------ ------- ------ -------
Operating Expenses 94.1% 94.4% 94.1% 94.2%
------ ------- ------ -------
Operating Income 5.9% 5.6% 5.9% 5.8%
Interest Expense 0.3% 0.2% 0.3% 0.2%
------ ------- ------ -------
Income Before Income Taxes and
Extraordinary Items 5.6% 5.4% 5.6% 5.6%
Income Taxes 2.2% 2.1% 2.2% 2.2%
------ ------- ------ -------
Income Before Extraordinary Item 3.4% 3.3% 3.4% 3.4%
Extraordinary Item (Net of Tax Benefit) 0.0% 0.0% 0.0% 0.4%
------ ------- ------ -------
Net Income 3.4% 3.3% 3.4% 3.0%
====== ======= ====== =======
</TABLE>
THREE MONTHS ENDED 12/31/94 COMPARED WITH THREE MONTHS ENDED 12/31/93
Revenue for the current quarter was up $13.4 million or 31% to $57.4 million
from $44.0 million in last year's second fiscal quarter. The increase was the
result of a $6.9 million (30%) increase in revenue from the U.S. Department of
Defense ("DoD"), a $5.1 million increase (70%) in revenue from contracts with
the U.S. Department of Justice ("DoJ"), $0.5 million increase (42%) in revenue
from Federal agencies other than DoD or DoJ, and $1.0 million increase (91%)
in revenue from state governments.
The $6.9 million increase in revenue from DoD contracts was primarily from the
acquisition of the government services business of SofTech, Inc. on December
1, 1993. DoD-derived revenue accounted for 51.4% of total revenue during the
current quarter, compared to 51.5% of total revenue during the last year's
second quarter.
<PAGE>
Page 11
The DoJ growth was a result of new litigation brought by DoJ, which the
Company is supporting. For the quarter, DoJ revenue accounted for 22% of
total company revenue versus last year's 17% for the same period. Although
revenue from DoJ is dependent upon the level of DoJ litigation case load the
Company is supporting at any period in time and can flucuate from quarter to
quarter, the Company believes DoJ-derived revenue will remain constant for the
balance of this fiscal year.
The $0.5 million revenue growth from Federal agencies other than DoD and DoJ
was primarily from the Federal Aviation Administration. The increase in
revenue from state governments is attributable to new contracts with North
Carolina and Arizona.
For the quarter, Commercial revenue remained stable in overall revenue
dollars; however, as a percentage of total revenue, it decreased to 20% versus
last year's 27%. Within this sector, sales of proprietary simulation software
were up 27%, but this increase was offset by a decline in revenue from
commercial litigation support contracts. Revenue from the United Kingdom
operation, which accounts for approximately half of commercial revenue, was up
5%.
Direct contract costs grew by $8.7 million (39%) to $31.3 million from $22.6
million. Direct labor, the principal driving component of contract revenue,
was up $3.9 million or 24%, while non-labor direct costs increased $4.9
million or 76%. Direct costs, as a percentage of revenue, increased to 54.6%
from 51.4%. This increase was attributable to the relative increase in less
profitable non-labor direct costs, which increased from 15% to 20% of revenue.
Indirect costs grew by $3.6 million or 20% to $21.5 million from $17.9 million
but, as a percentage of revenue, declined to 37.4% from 40.7%. The decrease
reflects the Company's continuing emphasis on reducing administrative indirect
costs while increasing funds for marketing and bid and proposal (B&P) efforts.
As a result of this management emphasis and despite the 31% increase in
revenue, indirect labor increased by only $0.8 million or 24.5% and, as a
percentage of revenue, decreased from 7.7% to 7.4%.
Indirect costs also increased in B&P labor, incentive compensation and fringe
benefits. B&P labor increased in response to increases in the volume of
actual and planned proposals for the year. Incentive compensation (profit
bonuses, sales commission and other pay for performance) grew because of the
increased revenue and profit. Fringe benefits, the largest category of
indirect expenses (34.6% of total), increased in proportion to the increase in
total payroll (direct labor, B&P labor, indirect labor and incentive
compensation).
Depreciation and amortization increased by $181,000 to $1.192 million from
$1.011 million. An increased level of fixed assets (primarily computing and
network equipment), necessitated by internal growth and obtained through
acquisitions, accounted for 80% of the growth. The other 20% of the growth
was the result of the Goodwill amortization.
<PAGE>
Page 12
Income before interest, income taxes and extraordinary item grew $907,000 or
37% from $2.5 million to $3.4 million. The increase resulted primarily from
the increase in revenue.
Interest costs totalled $149,000 (0.3% of revenue) and were up $61,000 (69%)
from last year's $88,000. The increase is a result of (i) a $1.2 million or
18% increase in average borrowings from $7.2 million to $8.4 million; and
(ii) a 44% increase in the effective interest rate from 4.8% to 6.9%. The
increase in borrowings was caused by the Company's current high growth rate,
the acquisitions made since last year's first quarter, and the stock buy back
program discussed under "Liquidity and Capital Resources" (see below).
Income before income taxes and extraordinary item rose to $3.2 million from
last year's earnings of $2.4 million. The $846,000 (36%) increase was
primarily attributable to the growth in operating income with a slight offset
by the increase in interest expense.
Income tax expense of $1.2 million is consistent with the growth in income
before income tax as the effective tax rate has remained constant from year to
year.
SIX MONTHS ENDED 12/31/94 COMPARED WITH SIX MONTHS ENDED 12/31/93
Revenue grew $30.1 million (37%) to $112.3 million from $82.2 million. DoD
revenue for the first six months grew $16.8 million (40%) of which $10.8
million is a result of the acquisition of government services business of
SofTech, Inc. on December 1, 1993, with the remainder derived from new
contracts and additions to existing contracts. An $8.6 million (63%) increase
in DoJ revenue was the result of new cases and an expansion of support to
existing cases brought by DoJ. Commercial revenue grew $1.9 million (8%) as a
result of a $2.6 million (25%) increase in U.K.-based revenue. Finally, as a
result of new contract awards, revenue from federal agencies other than DoD or
DoJ grew by $1.3 million (80%) and revenue from state and local governments
increased $1.5 million (49%).
Direct contract costs grew by $18.7 million (44%) to $61.0 million from $42.3
million. Direct labor, the principal driving component of contract revenue,
was up $10.0 million or 35%, while non-labor direct costs increased $8.7
million or 64%. Direct costs, as a percentage of revenue, increased to 54.3%
from 51.5%. This increase was primarily attributable to a relative increase
in less profitable non-labor direct costs, which increased from 16.5% to 19.8%
of revenue.
Indirect costs grew by $9.1 million or 27% to $42.3 million from $33.2 million
but, as a percentage of revenue, declined to 37.7% from 40.4%. The decrease
reflects the Company's continuing emphasis on reducing administrative indirect
costs while increasing funds for marketing and bid and proposal (B&P) efforts.
As a result of this management emphasis and despite the 37% increase in
revenue, indirect labor increased by only $1.7 million or 26% and, as a
percentage of revenue, decreased from 8.0% to 7.3%.
<PAGE>
Page 13
Indirect costs also increased in B&P labor, incentive compensation and fringe
benefits. B&P labor increased in response to increases in the volume of
actual and planned proposals for the year. Incentive compensation (profit
bonuses, sales commission and other pay for performance) grew because of the
increased revenue and profit. Fringe benefits, the largest category of
indirect expenses (33.8% of total), increased in proportion to the increase in
total payroll (direct labor, B&P labor, indirect labor and incentive
compensation).
Depreciation and amortization increased by $0.456 million to $2.355 million
from $1.899 million. An increased level of fixed asset acquisitions accounted
for 76% of the growth. The other 24% of the growth was the result of the
Goodwill amortization.
Interest costs grew by $112,000 to $291,000 from $179,000. The increase is a
result of i) a $2.0 million or 29% increase in average borrowings from $6.8
million to $8.8 million; and ii) a 33% increase in effective interest rates
from 4.9% to 6.5%. As discussed previously, the increased borrowings were
caused by the Company's current high growth rate, coupled with the
acquisitions made since last year's second quarter, along with the stock buy-
back program discussed under "Liquidity and Capital Resources" (see below).
Income before income taxes and extraordinary item rose to $6.4 million from
last year's $4.6 million. The $1.8 million (38%) increase was primarily
attributable to the growth in operating income, offset by the increase in
interest expense.
Income tax expense of $2.5 million is consistent with the growth in income
before income tax as the effective tax rate has remained constant from year to
year.
The FY 1994 extraordinary item reflects a provision at September 30, 1993 to
cover the cost of settling the outstanding shareholder lawsuits. The
provision equates to a $494,000 pre-tax expense, and $300,000 net of tax
expense. See Note C to the Unaudited Consolidated Financial Statements.
Also, see comments under "Liquidity and Capital Resources" below.
LIQUIDITY AND CAPTIAL RESOURCES
The Company's principal source of cash is from operating activities and bank
borrowings. The Company's primary requirement for working capital is to carry
billed and unbilled receivables, a majority of which are due under prime
contracts with the U.S. Federal Government, or subcontracts thereunder.
During the first half of FY 1995, the Company purchased for Treasury Stock
275,000 shares of Common Stock at an aggregate price of $2.2 million. In
addition, the Company is pursuing a strategy of small, synergistic, niche
acquisitions designed to broaden its client and product base in its
Information Technology business portfolio. Although no acquisitions were made
in the current quarter, the Company continues to seek and review potential
candidates.
<PAGE>
Page 14
As noted earlier, under the terms of the shareholder litigation settlement
agreement, the Company agreed to initiate a contingent self-tender for 1.3
million of its Common Shares at a price of $6.00 per share in the event that
the average closing price for the Company's shares for twenty consecutive
trading days, between July 22, 1994 and February 28, 1995, is below $6.00 per
share. If the Company's shares do not trade below $6.00 per share in twenty
consecutive days prior to February 28, 1995, the contingent self-tender will
expire. If the tender is accomplished as announced and fully subscribed, the
Company's debt will increase by approximately $7.8 million, and its
shareholder equity will decrease by a like amount. Hence, the Company's
capital structure would be significantly changed if the self-tender is fully
subscribed. As of January 31, 1995, the Company's stock price was
substantially above the $6.00 per share tender price and has been above $6.00
per share for one year. Under the terms of the agreement, the Company is
under no obligation to increase the tender price and has no current plans to
do so. Accordingly, the Company cannot now predict how many shares, if any,
it will obtain through the tender, or whether a tender will occur.
The Company maintains a $20 million unsecured line of credit with Signet Bank
in the U.S., and a 500,000 pounds sterling unsecured line with the National
Westminster Bank in London, England. These credit lines expire on March 31,
1995 and in November, 1995 respectively. The Company believes they can be
renewed and increased as necessary to cover the transactions described above.
Accordingly, the Company believes that the combination of internally generated
funds, available bank credit and cash on hand will provide the required
liquidity and capital resources for the foreseeable future.
<PAGE>
Page 15
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Pfirman and Chrysogelos Litigation
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1991 for a
description of the two shareholder suits against the Registrant, and against
the directors of the Registrant entitled "Pfirman v. London, et al.", and
"Chrysogelos v. London, et al". Reference is also made to Part I, Item 3 in
the Registrant's Annual Report on Form 10-K for the year ending June 30, 1994
for the major components of settlement for both lawsuits. Since the
aforementioned filing of the Registrant's reports, on which Part I, Item 3,
Legal Proceedings, was current, the information reported therein on pending
legal proceedings instituted against the Registrant has changed as set forth
below and in the Registrant's current report on Form 8-K, dated December 18,
1994.
By orders dated November 15, 1994, and December 1, 1994, respectively, the
Delaware Chancery Court and the Federal District Court for the District of
Columbia officially ordered that all issues of the litigations have been
resolved by the settlement, and ordered that the cases be dismissed on the
merits with prejudice. The terms of the settlement, which have been reported
previously, are being implemented by the parties. Registrant anticipates that
the settlement will be fully implemented within the next sixty to ninety days.
Pentagen Technologies International, Ltd. v. CACI International Inc, et al.
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending September 30, 1994 for the
most recently filed information concerning the lawsuit filed on July 1, 1993,
against the Registrant by Pentagen Technologies International, Ltd.
("Pentagen") in the Supreme Court for the State of New York alleging
conversion of intellectual property and violation of statutory duties as to
appropriation of computer software, and the lawsuit filed December 10, 1993
against the Registrant in the United States District Court for the Southern
District of New York alleging copyright and trademark infringement and
violation of the Major Fraud Against the United States Act. Since the filing
of the Registrant's report indicated above, the information reported therein
on pending legal proceedings has not changed.
The Registrant believes that the allegations of these cases are without merit
and intends to vigorously defend itself.
<PAGE>
Page 16
CACI International Inc, et al. v. Pentagen Technologies, Ltd., et al.
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending September 30, 1994 for the
most recently filed information concerning the lawsuit filed on December 22,
1993, in the United States District Court for the Eastern District of Virginia
against Pentagen Technologies International, Ltd., Baird Technologies, Inc.,
John C. Baird and Mitchell R. Leiser (principals of Pentagen and Baird).
The lawsuit was brought by the Registrant in order to provide an expeditious
redress of Pentagen's unfounded allegations including the allegations in the
lawsuits brought by Pentagen in New York as described above, and to compensate
the Registrant for any damage it may have suffered because of the defendants'
unfounded accusations.
The suit seeks declaratory judgements that the Registrant and its subsidiary
have not infringed on Pentagen's copyright and trademark rights, damages for
the defendants' defamation of the Registrant and for their tortuous
interference with the Registrant's contracts, and damages for Baird
Technologies' breach of its contractual obligation to indemnify the Registrant
against any infringement claims.
As previously reported, the Court granted Summary Judgement in favor of the
Registrant holding that: (i) Registrant's marketing of certain work to the
United States Army Material Command did not infringe Pentagen's MENTIX
copyright or infringe any trademark held by Pentagen; (ii) Registrant's
proprietary RENovate software reengineering methodology does not infringe
Pentagen's MENTIX copyright; (iii) Registrant's work on the Army's Sustaining
Base Information Services (SBIS) contract does not infringe Pentagen's MENTIX
copyright; and (iv) Pentagen and its principals, John C. Baird and Mitchell R.
Leiser, are liable for both compensatory and punitive damages for defamation
per se.
Since the filing of the Registrant's report indicated above, the information
reported therein on pending legal proceedings has changed as set forth below:
Each party to the Appeal to the Fourth Circuit Court of Appeals has filed its
initial brief, and briefing is scheduled to continue into March, 1995.
The parties are engaged in discovery proceedings in connection with
Registrant's efforts to enforce the monetary award previously obtained by
Registrant in the District Court.
<PAGE>
Page 17
CACI INTERNATIONAL INC AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Title
11 Computation of Earnings per Common and
Common Equivalent Share
27 Financial Data Schedule
<PAGE>
Page 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CACI International Inc
----------------------
(Registrant)
Date: February 6, 1995 By: /s/
--------------------------------------
Dr. J.P. London
Chairman of the Board,
President, and Director
(Principal Executive Officer)
Date: February 6, 1995 By: /s/
--------------------------------------
Samuel R. Strickland
Executive Vice President,
Chief Financial Officer, and Treasurer
(Principal Financial and Accounting Officer)
EXHIBIT 11
CACI INTERNATIONAL INC AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
<TABLE>
<CAPTION>
Three Months Ended December 31, Six Months Ended December 31,
1994 1993 1994 1993
------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net Income before
extraordinary item $1,988,000 $1,456,000 $3,901,000 $2,814,000
Extraordinary item 0 0 0 (300,000)
---------- ---------- ---------- ----------
Net income $1,988,000 $1,456,000 $3,901,000 $2,514,000
========== ========== ========== ==========
Average shares outstanding
during the period 10,007,000 10,029,000 10,002,000 10,022,000
Dilutive effect of stock
options after application
of treasury stock method 593,000 487,000 595,000 428,000
---------- ---------- ---------- ----------
Average number of shares
outstanding during the period 10,600,000 10,516,000 10,598,000 10,450,000
========== ========== ========== ==========
Earnings per common and
common equivalent share:
Before extraordinary item $ .19 $ .14 $ .37 $ .27
Extraordinary item .00 .00 .00 (.03)
---------- ---------- ---------- ----------
Net income $ .19 $ .14 $ .37 $ .24
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-Q FOR FY95 QUARTER ENDED DECEMBER 31, 1994, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 314,000
<SECURITIES> 0
<RECEIVABLES> 59,582,000
<ALLOWANCES> (1,080,000)
<INVENTORY> 0
<CURRENT-ASSETS> 63,927,000
<PP&E> 21,585,000
<DEPRECIATION> (13,566,000)
<TOTAL-ASSETS> 78,683,000
<CURRENT-LIABILITIES> 36,260,000
<BONDS> 0
<COMMON> 1,354,000
0
0
<OTHER-SE> 38,508,000
<TOTAL-LIABILITY-AND-EQUITY> 78,683,000
<SALES> 0
<TOTAL-REVENUES> 112,275,000
<CGS> 0
<TOTAL-COSTS> 60,990,000
<OTHER-EXPENSES> 42,110,000
<LOSS-PROVISION> 167,000
<INTEREST-EXPENSE> 291,000
<INCOME-PRETAX> 6,362,000
<INCOME-TAX> 2,461,000
<INCOME-CONTINUING> 3,901,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,901,000
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.37
</TABLE>
