SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
----------------
January 16, 1996
CACI International Inc
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(Exact name of registrant as specified in its Charter)
Delaware
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(State or other jurisdiction of incorporation)
0-8401
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(Commission File Number)
54-1345888
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(IRS Employer Identification No.)
1100 N. Glebe Road
Arlington, Virginia 22201
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(Address of principal executive offices) (Zip Code)
(703) 841-7800
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective January, 1996, CACI, Inc., a wholly-owned subsidiary of the Company
(CACI) purchased all of the outstanding shares of the common stock of IMS
Technologies, Inc. (IMS) for $6.5 million in cash. The purchase was funded
through the Company's line of credit with Signet Bank, and, based upon current
forecasts, is expected to provide at least $0.05 in earnings per share during
the first full year of operations. The terms of the agreement also provide for
the payment of consulting fees of $1.5 million over three years to four
founders of IMS. The Company previously announced the signing of a Letter of
Intent to acquire IMS on October 27, 1995.
As a result of the acquisition, approximately 285 new employees, generating
approximately $21 million in annual revenue, have joined CACI. IMS provides a
wide range of computer services, including consulting, programming,
communications design and installation, software development, and systems
integration, for a variety of applications under U.S. Federal Government and
commercial contracts. Major government clients of IMS include the U.S. Navy,
the Departments of Justice and Education, the Drug Enforcement Agency, the
Social Security Administration, and the Internal Revenue Service. IMS has
major offices in Rockville, MD, Dahlgren, VA, Arlington, VA, New Orleans, LA
and Cherry Point, NC.
A copy of the Company's January 2, 1996 press release regarding the acquisition
of IMS is attached as an Exhibit to this Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a)(4)(iv) Consolidated Financial Statements of IMS for the years ended
September 30, 1995 and 1994 and Independent Auditors' Report;
and
Unaudited Financial Statements of IMS for the period ending
December 2, 1995.
(b) Pro forma financial information of the Company for the year
ended June 30, 1995; and
Pro forma financial information of the Company for the quarter
ended September 30, 1995.
The following pro forma condensed consolidated statements of
operations for the year ended June 30, 1995 and the quarter
ended September 30, 1995, and the pro forma consolidated
balance sheet as of September 30, 1995 are unaudited and have
been prepared on a pro forma basis to give effect to the
acquisition (accounted for as a purchase) of the business
and substantially all of the assets of IMS as if all
transactions had occurred on July 1, 1995.
The pro forma condensed consolidated statements of operations
do not purport to represent what the Company's result of
operations would actually have been had the transaction in fact
occurred at the beginning of the respective fiscal period, or
to project the Company's results of operations for any future
periods. The pro forma adjustments are based upon available
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information and upon certain assumptions that management
believes are reasonable under the circumstances.
(c) Exhibits.
Exhibit 99(a) Press Release dated January 2, 1996, completion of acquisition
of IMS.
<PAGE>
<PAGE>
Consolidated Financial Statements
IMS Technologies, Inc.
Years ended September 30, 1995 and 1994
with Report of Independent Auditors
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<PAGE>
IMS Technologies, Inc.
Consolidated Financial Statements
Years ended September 30, 1995 and 1994
CONTENTS
Report of Independent Auditors......................................1
Audited Consolidated Financial Statements
Consolidated Balance Sheets.......................................2-3
Consolidated Statements of Income...................................4
Consolidated Statements of Stockholders' Equity.....................5
Consolidated Statements of Cash Flow................................6
Notes to Consolidated Financial Statements..........................7
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<PAGE> 1
[logo of Ernst & Young LLP] 1225 Connecticut Avenue, N.W. Phone: 202 327-6000
Washington, D.C. 20036
Report of Independent Auditors
The Board of Directors and Stockholders
IMS Technologies, Inc.
We have audited the accompanying consolidated balance sheets of IMS
Technologies, Inc. as of September 30, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In accordance with the terms of our engagement, we did not audit the financial
statements of Information Management Systems, Inc., a foreign investment, for
the year ended September 30, 1995 and 1994. The Company accounts for this
interest in the foreign investment using the cost method. During 1994, the
investment should have been accounted for using the equity method (Note 4). The
effect of this departure from generally accepted accounting principles has not
been determined.
In our opinion, except for the effects on the September 30, 1994 financial
statements as discussed in the preceding paragraph, the consolidated financial
statements referred to above present fairly, in all material respects, the
consolidated financial position of IMS Technologies, Inc. at September 30, 1995
and 1994, and the consolidated results of their operations and their cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
/s/
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Ernst & Young LLP
December 1, 1995
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<PAGE> 2
IMS Technologies, Inc.
Consolidated Balance Sheets
September 30
1995 1994
----------- -----------
ASSETS
Current assets:
Accounts receivable, net (Note 3) $ 8,625,867 $ 8,914,417
Prepaid expenses 92,744 93,993
Prepaid income taxes 156,296 -
Deferred income tax benefit (Note 11) 110,000 271,000
Inventory - 160,586
----------- -----------
Total current assets 8,984,907 9,439,996
----------- -----------
Property and equipment (Note 2):
Data processing equipment and software 1,662,211 1,632,162
Office furniture and equipment 706,976 730,217
Leasehold improvements 154,608 155,558
Vehicles 84,771 84,771
Land 83,980 83,980
----------- -----------
2,692,546 2,686,688
Less accumulated depreciation
and amortization 2,406,854 2,304,300
----------- -----------
Net property and equipment 285,692 382,388
----------- -----------
Deferred income tax benefit (Note 11) 274,000 292,000
Cash surrender value of officers' life insurance 420,254 399,228
Investment in and advances to
foreign entity (Note 4) 131,198 131,198
Other assets 26,102 27,002
----------- -----------
851,554 849,428
----------- -----------
Total assets $10,122,153 $10,671,812
=========== ===========
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<PAGE> 3
IMS Technologies, Inc.
Consolidated Balance Sheets (cont'd)
September 30
1995 1994
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit (Note 5) $ 1,428,952 $ 622,564
Accounts payable 1,344,345 2,535,941
Accrued compensation 900,172 1,009,068
Payroll taxes and benefits accrued 215,698 350,357
Income taxes payable - 71,191
Other 5,886 25,811
----------- -----------
3,895,053 4,614,932
----------- -----------
Long-term liabilities:
Deferred compensation (Note 7) 575,253 575,253
Other - 2,380
----------- -----------
Total long-term liabilities 575,253 577,633
----------- -----------
Total liabilities 4,470,306 5,192,565
----------- -----------
Stockholders' equity:
Class B common stock, issued and
outstanding shares of 70,483 as of
September 30, 1995 and 1994 750 750
Additional paid-in capital 199,427 199,427
Treasury stock (Note 8 & 13) (299,432) (299,432)
Retained earnings 5,751,102 5,578,502
----------- -----------
Total stockholders' equity 5,651,847 5,479,247
----------- -----------
Total liabilities and stockholders' equity $10,122,153 $10,671,812
=========== ===========
See accompanying notes.
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<PAGE> 4
IMS Technologies, Inc.
Consolidated Statements of Income
Year ended September 30
1995 1994
----------- -----------
Revenue $21,734,544 $22,939,203
----------- -----------
Cost of revenue:
Direct labor 9,977,040 10,273,848
Operational overhead 4,887,045 5,175,330
Other direct costs:
Subcontractors 2,346,743 2,150,923
Other, principally equipment
and supplies 1,601,844 2,381,546
Travel 295,025 269,603
----------- -----------
Total cost of revenue 19,107,697 20,251,250
----------- -----------
Gross profit 2,626,847 2,687,953
General and administrative expense 2,247,983 2,343,913
----------- -----------
Income from operations 378,864 344,040
----------- -----------
Interest income (expense):
Interest income 778 935
Interest expense (98,266) (77,480)
----------- -----------
Net interest expense (97,488) (76,545)
----------- -----------
Income before income taxes 281,376 267,495
Provision for income taxes (Note 11) 108,776 113,155
----------- -----------
Net income $ 172,600 $ 154,340
=========== ===========
See accompanying notes.
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IMS Technologies, Inc.
Consolidated Statements of Stockholders' Equity
<TABLE>
Class B Additional
Common Paid-in Treasury
Retained
Stock Capital Stock
Earnings Total
------- ---------- ---------
- ---------- ----------
<S> <C> <C> <C> <C>
<C>
Balance at September 30, 1993 $750 $199,427 $(299,432)
$5,424,162 $5,324,907
Net income for year ended
September 30, 1994 - - -
154,340 154,340
------- ---------- ---------
- ---------- ----------
Balance at September 30, 1994 750 199,427 (299,432)
5,578,502 5,479,247
Net income for year ended
September 30, 1995 - - -
172,600 172,600
------- ---------- ---------
- ---------- ----------
Balance at September 30, 1995 $750 $199,427 $(299,432)
$5,571,102 $5,651,847
======= ========== =========
========== ==========
</table/
See accompanying notes.
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<PAGE> 6
IMS Technologies, Inc.
Consolidated Statements of Cash Flows
Year ended September 30
1995 1994
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OPERATING ACTIVITIES
Net income $ 172,600 $154,340
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 135,345 180,201
Deferred compensation expense - 40,706
Gain on disposal - (131)
Decrease in receivables of foreign entity - 180,000
Changes in operating assets & liabilities:
Accounts receivable 288,550 659,212
Other assets 162,735 187,684
Accounts payable and
other accrued expenses (1,474,585) (478,312)
Deferred income taxes (31,358) (99,695)
---------- ---------
Net cash (used) provided by
operating activities (746,713) 824,005
---------- ---------
INVESTING ACTIVITIES
Purchases of property and equipment (39,424) (98,265)
Proceeds from disposition of property
and equipment 775 1,890
Increase in cash surrender value of
officers' life insurance (21,026) (23,947)
---------- ---------
Net cash used in investing activities (59,675) (120,322)
---------- ---------
FINANCING ACTIVITIES
Net borrowings on line of credit 806,388 (690,162)
Payments on long-term notes payable - (13,521)
---------- ---------
Net cash provided (used) in
financing activities 806,388 (703,683)
---------- ---------
Change in cash - -
Cash at beginning of year - -
---------- ---------
Cash at end of year $ - $ -
========== =========
See accompanying notes.
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<PAGE> 7
IMS Technologies, Inc.
Notes to Consolidated Financial Statements
September 30, 1995 and 1994
1. NATURE OF BUSINESS
IMS Technologies, Inc. (IMS Tech) was formed in fiscal year 1992 as a holding
company for Integrated Microcomputer Systems, Inc. (IMS) and IMS Services, Inc.
(IMSS), collectively referred to as the Company. The Company engages in the
business of providing a complete range of computer services, including
consulting, programming, communications design and installment, software
engineering, and systems integration, for a variety of applications under U.S.
Government and commercial contracts.
The majority of the Company's revenue is generated from contracts with the U.S.
Government and its related departments or agencies.
The Company has an investment in a foreign entity that performs similar types
of software engineering and systems integration work in the Taiwan market.
2. SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies of the Company is as follows:
Principles of Consolidation and Investment in Foreign Entity
- ------------------------------------------------------------
The consolidated financial statements of the Company include the accounts of
IMS Tech and its wholly owned subsidiaries, IMS and IMSS. All significant
intercompany balances have been eliminated in consolidation.
The Company's foreign investment is subject to exchange restrictions and other
foreign controls. In view of the uncertainty regarding the availability of and
access to its assets, the Company accounts for this investment under the cost
method which recognizes income from the foreign entity when dividends are
received and records the investment in the foreign entity at the lower of cost
or estimated net realizable value.
Revenue and Cost Recognition
- ----------------------------
Revenue from "cost-plus-fixed-fee" contracts is recognized on the basis of
reimbursable contract costs incurred during the period plus an estimate of the
fee earned, measured by the cost-to-cost method. Revenue from "fixed-price-
labor-hour" and "time and material" contracts is recognized on the basis of
hours utilized plus other reimbursable contract costs incurred during the
period.
Revenue from "firm-fixed-price" contracts is recognized on the basis of the
percentage-of-completion method. Under this method, individual contract revenue
earned is measured by the percentage relationship that contract costs incurred
bear to management's estimate of total contract costs.
Contract costs include direct costs and allocations of operational overhead.
General and administrative costs are charged to expense as incurred. Provisions
for estimated losses on uncompleted contracts are made in the period in which
such losses are determined. Changes in job performance, job conditions, and
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<PAGE> 8
estimated profitability may result in revisions to costs and revenue and are
recognized using the cumulative catch up method in the period in which the
revisions are determined.
An allowance is provided for the estimated amount of accounts receivable for
which collection is uncertain due to pending final settlement of total contract
costs with Federal government customers. This allowance is a component of
accounts receivable. Accounts receivable are written off when, in the opinion
of management, the amounts are determined to be uncollectible.
Inventory
- ---------
Inventory is valued at the lower of cost (specific identification method) or
market for September 30, 1994. There is no inventory at September 30, 1995.
Property and Equipment
- ----------------------
Property and equipment are recorded at cost. Depreciation and amortization are
computed principally using accelerated methods at rates calculated to amortize
the cost of the related assets over their estimated useful lives (software -
three years; data processing equipment, and vehicles - five years; office
furniture and equipment - seven years). Leasehold improvements are amortized
over the lesser of the useful life of the improvement or the term of the
related lease.
During fiscal years 1995 and 1994, the Company disposed of data processing
equipment, software, and office furniture and equipment which was considered to
be damaged or obsolete which had an original cost of approximately $34,000 and
$23,000, respectively. This property and equipment was either fully or
substantially depreciated at the date of disposal.
Accrued Health Insurance Claims
- -------------------------------
The Company provides a self-funded group major medical insurance plan for
regular full-time status employees and their eligible dependents. If an
employee elects coverage for medical and dental insurance, coverage begins on
the first day of employment. Costs of medical and dental care, including an
estimate of costs incurred but not reported, are expensed in the period that
services are rendered. Accrued health insurance claims have been included in
accounts payable on the balance sheet.
Income Taxes
- ------------
The Company uses the liability method as required by SFAS 109 to account for
income taxes. Deferred income taxes reflect net tax effects of temporary
differences in the recognition of expenses for tax reporting and financial
statement purposes. The sources of these differences include allowances for
accounts receivable, accrued health insurance claims, accrued vacation,
retainages in accounts receivable, deferred compensation, depreciation and
certain other items. There is no valuation allowance for deferred tax assets.
<PAGE>
<PAGE> 9
3. ACCOUNTS RECEIVABLE
Accounts receivable at September 30, 1995 and 1994 consist of the following:
1995 1994
---------- ----------
Contract receivables:
Billed $5,722,150 $3,862,511
Unbilled 2,855,265 4,881,036
Other accounts receivable 48,452 170,870
---------- ----------
$8,625,867 $8,914,417
========== ==========
Unbilled receivables include billable costs incurred prior to fiscal year-end,
but not invoiced until the subsequent period. The excess of actual costs
incurred over the agreed upon billing rates generally are not billable until
the completion of the contract and final incurred costs audits have been
completed by the DCAA.
4. INVESTMENT IN FOREIGN ENTITY AND RELATED PARTIES
During 1994, the Company reduced its investment in Information Management
Systems, Inc., located in Taipei, Taiwan, from 33 percent to 16 percent. At
September 30, 1995 and 1994, the Company's interest on the investment was 16
percent, which is carried at the lower of cost or market value. No dividends
were received from the foreign entity for the years then ended. Revenue and
expenses recognized by the Company as a result of subcontractor work performed
by the foreign entity represent less than one percent of the consolidated net
income for 1995 and 1994.
The following is a summary of the foreign entity's unaudited balance sheets as
of September 30, 1995 and 1994:
1995 1994
(Unaudited) (Unaudited)
-------------------------
Assets $2,685,244 $2,606,042
========== ==========
Liabilities $1,618,565 $1,056,721
Stockholders' equity 1,066,679 1,549,321
---------- ----------
$2,685,244 $2,606,042
========== ==========
Net (loss) before taxes $ (429,134) $ (588,975)
========== ==========
The Company was either a prime or subcontractor in two contracts during fiscal
year 1995 and 1994 with IMS International, an unaffiliated entity which is
owned by an IMS Tech stockholder. One contract was completed in March 1994 and
the second as of May 1995. These two contracts in total comprise 3 percent and
8 percent of contract revenue in fiscal year 1995 and 1994, respectively.
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<PAGE> 10
5. LINE OF CREDIT
The Company has a bank line of credit which provides certain operating and
financial restrictions on the Company and is subject to renewal annually. The
line of credit is renewable annually in February. The Company's approved line
of credit was $3.25 million for fiscal year 1995. The line of credit is secured
by the Company's billed accounts receivable. The line of credit bears interest
at the bank's prime rate, which was 8.75 percent at September 30, 1995.
Interest paid on the line of credit during the years ended September 30, 1995
and 1994 approximated $95,000 and $71,000, respectively.
6. LEASING ARRANGEMENTS
The Company leases its offices and certain equipment and software under
noncancelable operating lease agreements which expire at various dates through
1998. The total minimum rental commitments under these leases at September 30
are as follows:
Year ending September 30 Amount
------------------------ ----------
1996 $ 945,000
1997 712,000
1998 477,000
1999 18,000
----------
$2,152,000
==========
The total rental expense charged to operations was approximately $1,157,000 and
$1,265,000 for the years ended September 30, 1995 and 1994, respectively. These
amounts include payments to related parties for leased office space of
approximately $437,000 each for the years ended September 30, 1995 and 1994.
7. COMPENSATION
The Company has a profit-sharing plan for eligible employees of IMS and IMSS.
The annual contribution to the plan is at the discretion of the Board of
Directors and is limited to that which is deductible under the Internal Revenue
Code. The Company can terminate the plan at any time by giving written notice
to the trustee and administrator. During 1993, the Company restructured the
profit sharing plan for its IMS employees to a 401(k) matching plan. The amount
charged to operations under this plan was $79,000 and $110,000 for the years
ended September 30, 1995 and 1994, respectively.
The Company had deferred compensation agreements with its key executives
providing for annual payments over a period of 10 years upon retirement, death,
or disability. On April 8, 1994, the executives waived their rights to further
benefits, accordingly the liability recorded has remained fixed. These
agreements do not qualify under the Internal Revenue Code and, therefore, tax
deductions are allowable only when the benefits are paid.
8. STOCKHOLDERS' EQUITY
The Company has entered into stock repurchase agreements with its stockholders.
The Company has the right of first refusal for transfers of the Company's
common stock. In addition, the Company may purchase shares in cases in which a
stockholder terminates employment with the Company. The purchase price would be
based on the most recent audited consolidated balance sheet prior to the date
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<PAGE> 11
of repurchase. Pursuant to these stock repurchase agreements, the Company
repurchased shares from stockholders during the year ended September 30, 1993.
However, during the years ended September 30, 1995 and 1994, the Company
elected not to repurchase shares offered for sale. Shares of stock repurchased
in 1993 were classified as treasury stock on the financial statements as a
reduction to stockholders' equity.
9. PREFERRED AND COMMON STOCK
IMS Technologies, Inc. is authorized to issue two classes of common stock,
which are designated "Class A Common Stock" and "Class B Common Stock", and one
class of preferred stock which is designated "Preferred Stock." The total
number of shares of Class A Common Stock which the company is authorized to
issue is 400,000 shares, and each share has a par value of one cent ($0.01).
The total number of shares of Class B Common Stock which the Company is
authorized to issue is 125,000 shares, and each share has a par value of one
cent ($0.01). The total number of shares of Preferred Stock which the Company
is authorized to issue is 25,000 shares and each share has a par value of one
dollar ($1.00). The Company issued shares of its Class B Common Stock in
forming IMS Technologies, Inc. as a holding company. There were no shares of
Class A Common Stock or Preferred Stock issued and outstanding as of September
30, 1995 and 1994.
Each holder of Class A Common Stock is entitled to one vote while each holder
of Class B Common Stock is entitled to 10 votes for each share held on all
matters submitted to stockholders of the Company. Outstanding shares of Class B
Common Stock are convertible into shares of Class A Common Stock, on a share-
for-share basis, at the option of the holder, on and subject to certain terms
and conditions.
The shares of Preferred Stock may be issued in one or more series. The Board of
Directors is vested with authority to fix the dividend rate, conversion rights,
redemption price, and liquidation preference of any series of shares of
Preferred Stock, to fix the number of shares constituting any such series, and
to increase or decrease the number of shares of any such series. None of the
holders of Preferred Stock of any series have any voting power for any purpose
except as determined by the Board of Directors prior to issuance of any shares
of such series.
Any dividends on the capital stock of the Company will be paid by the Company
as determined by the Board of Directors. During the fiscal years ending
September 30, 1995 and 1994, no dividends were declared.
10. STOCK OPTIONS
During fiscal years 1994 and 1993, the Company granted 1,550 and 2,836 stock
options, respectively, to purchase its common stock at a price equal to the
book value at the date of grant. The options granted in 1993 shall become
exercisable in two equal annual installments beginning in the year of grant and
shall expire 10 years from such date. The options granted in 1994 shall become
exercisable in three equal annual installments beginning in the year of grant
and shall expire 10 years from such date. There has been no exercise of any of
these options as of September 30, 1995. The Company has recorded compensation
expense related to these options. There were no stock options granted during
fiscal year 1995.
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<PAGE> 12
11. INCOME TAXES
The provision for income taxes consists of the following for the years ended
September 30, 1995 and 1994:
1995 1994
-------- --------
Current income tax (benefit) provision $(75,975) $212,850
Deferred income tax provision (benefit) 183,751 (99,695)
-------- --------
$108,776 $113,155
======== ========
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the company's deferred tax liabilities and assets as of September 30 are as
follows:
1995 1994
-------- --------
Deferred tax liabilities:
Retainage $110,000 $ 84,000
Prepaid expenses - 21,000
-------- --------
Total deferred tax liabilities $110,000 $105,000
-------- --------
Deferred tax assets:
Allowance for bad debt $105,000 $112,000
Self insurance claim reserve 15,000 126,000
Accrued vacations 100,000 138,000
Deferred compensation 219,000 214,000
IMS investment writedown 55,000 55,000
Book and tax property, plant and
equipment differences - 23,000
-------- --------
Total deferred tax assets $494,000 $668,000
-------- --------
Net deferred tax assets $384,000 $563,000
======== ========
12. CONTINGENCIES
The Company is subject to various claims and legal proceedings that arise in
the ordinary course of its business activities. Management believes that any
liability that may ultimately result from the resolution of these matters will
not have a material adverse effect on the operations or financial position of
the Company.
13. SUBSEQUENT EVENTS
On October 10, 1995, the Company's board of directors decided that
consideration be given to the cumulative expenses and efforts provided by a
non-employee director for his past seven years serving the Corporation. The
Board decided that 2,000 shares of Class B Common Stock, held in treasury, be
issued, at no cost to the director, for his services and expenses.
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<PAGE> 13
On October 21, 1995, the principal stockholders of the Company signed a letter
of intent with CACI International Inc to sell all of the outstanding shares of
the Company's common stock. The agreement calls for a cash payment for the
outstanding shares and provides for certain consultant agreements with the
Company's principal stockholders. The closing date is scheduled for January 1,
1996. As a result of the letter of intent, the Company has begun to take
actions toward sale of the Company, which among other things includes
negotiating a early termination of its lease for its headquarters facility and
other related costs which may be associated with the intended sale. The
estimate of these possible future costs is approximately $180,000 for the
termination of the lease and an amount, which has not been quantified by
management, for the other related costs.<PAGE>
<PAGE>
IMS Technologies, Inc.
Financial Statements
Period Ending December 2, 1995<PAGE>
<PAGE>
1. Before Final Adjustment
2. After Final Adjustment
Excluding:
Land
Investment in Foreign Subsidiary
Deferred Compensation Related Asset and Liability
<PAGE>
<PAGE>
IMS Technologies, Inc.
Statements of Income
For the 2nd Accounting Period Ending 12/02/95
(Before Final Adjustments)
Revenues $2,765,504
Cost of Revenue
Direct labor $1,410,311
Operational overhead $ 946,816
Other direct costs:
Subcontracting $ 203,916
Other, principally equipment & supplies $ 155,611
Travel $ 11,232
----------
Total cost of revenue $2,727,855
Gross profit $ 37,619
General and administrative expenses $ 532,895
Income from operations $ (495,276)
Other income (expenses):
Interest income $ (279)
Interest expenses $ 11,019
----------
Net other income (expenses) $ 10,740
Income before income taxes $ (506,016)
Provision from income taxes $ (61,744)
Net income $ (444,272)
<PAGE>
<PAGE>
IMS Technologies, Inc.
Balance Sheet
For the 2nd Accounting Period Ending 12/02/95
(Before Final Adjustments)
ASSETS
Current Assets
Cash $ -
Accounts receivable $ 7,434,968
Inventory $ -
Prepaid income taxes $ 487,735
Prepaid expenses $ 113,141
-----------
Total current assets $ 8,035,844
Property and equipment:
Data processing equipment & software $ 1,309,680
Office furniture and equipment $ 703,130
Leasehold improvements $ 154,608
Vehicles $ 35,952
Land $ 83,980
-----------
Total property and equipment $ 2,287,350
Less accumulated depreciation & amortization $(2,040,207)
-----------
Net property and equipment $ 247,143
Other assets:
Cash surrender value of officers'
life insurance $ 420,254
Investment in foreign subsidiary $ 131,198
Deferred income tax benefit $ 274,000
Other assets $ 26,102
-----------
Total other assets $ 851,554
Total assets $ 9,134,541
<PAGE>
<PAGE>
IMS Technologies, Inc.
Balance Sheet (cont'd)
For the 2nd Accounting Period Ending 12/02/95
(Before Final Adjustments)
LIABILITIES AND EQUITY
Current liabilities:
Line of credit $1,033,620
Accounts payable $ 652,188
Accrued compensation $ 937,858
Payroll taxes & benefit withheld & accrued $ 320,693
Income taxes payable $ 73,140
Other $ 68,207
----------
Total current liabilities $3,085,705
Long-term liabilities:
Deferred compensation $ 575,252
Deferred income tax payable $ 105,634
Other $ -
----------
Total long-term liabilities $ 680,886
Total liabilities $3,766,592
Stockholders' equity
Issued and outstanding shares: 72,483
as of October 10, 1995 and 75,000
as of September 30, 1992 $ 750
Additional paid-in capital $ 227,221
Treasury stock $ (166,852)
Retained earnings $5,306,830
----------
Total stockholders' equity $5,367,950
Total liabilities and stockholder's equity $9,134,541
Total stockholders' equity at 8/25/95 $5,586,662
Increase (decrease) of total
stockholders' equity $ (218,712)
<PAGE>
<PAGE>
IMS Technologies, Inc.
Statements of Income
For the 2nd Accounting Period Ending 12/02/95
(After Final Adjustments)
Revenues $2,765,504
Cost of revenue
Direct labor $1,410,311
Operational overhead $ 946,816
Other direct costs:
Subcontracting $ 203,916
Other, principally equipment & supplies $ 155,611
Travel $ 11,232
----------
Total cost of revenue $2,727,885
Gross profit $ 37,619
General and administrative expenses $ 593,075
Income from operations $ (555,456)
Other income (expenses):
Interest income $ (279)
Interest expenses $ 11,019
----------
Net other income (expenses) $ 10,740
Income before income taxes $ (566,195)
Provision from income taxes $ (61,744)
Net income $ (504,451)
<PAGE>
<PAGE>
IMS Technologies, Inc.
Balance Sheet
For the 2nd Accounting Period Ending 12/02/95
(After Final Adjustments)
ASSETS
Current Assets
Cash $ -
Accounts receivable $ 7,434,968
Inventory $ -
Prepaid income taxes $ 487,735
Prepaid expenses $ 113,141
-----------
Total current assets $ 8,035,844
Property and equipment:
Data processing equipment & software $ 1,309,680
Office furniture and equipment $ 703,130
Leasehold improvements $ 154,608
Vehicles $ 35,952
Land $ -
-----------
Total property and equipment $ 2,203,370
Less accumulated depreciation & amortization $(2,040,207)
-----------
Net property and equipment $ 163,163
Other assets:
Cash surrender value of officers'
life insurance $ -
Investment in foreign subsidiary $ -
Deferred income tax benefit $ 274,000
Other assets $ 26,102
-----------
Total other assets $ 300,102
Total assets $ 8,499,109
<PAGE>
<PAGE>
IMS Technologies, Inc.
Balance Sheet (cont'd)
For the 2nd Accounting Period Ending 12/02/95
(After Final Adjustments)
LIABILITIES AND EQUITY
Current liabilities:
Line of credit $1,033,620
Accounts payable $ 652,188
Accrued compensation $ 937,858
Payroll taxes and benefit withheld and accrued $ 320,693
Income taxes payable $ 73,140
Other $ 68,207
----------
Total current liabilities $3,085,705
Long-term liabilities:
Deferred compensation $ -
Deferred income tax payable $ 105,634
Other $ -
----------
Total long-term liabilities $ 105,634
Total liabilities $3,191,339
Stockholders' equity
Issued and outstanding shares: 72,483
as of October 10, 1995 and 75,000
as of September 30, 1992 $ 750
Additional paid-in capital $ 227,221
Treasury stock $ (166,852)
Retained earnings $5,246,651
----------
Total stockholders' equity $5,307,770
Total liabilities and stockholder's equity $8,499,109
Total stockholders' equity at 8/25/95 $5,586,662
Increase (decrease) of total
stockholders' equity $ (278,892)
<PAGE>
<PAGE>
CACI International Inc
Unaudited Pro-Forma Financial Information
For the Year ended June 30, 1995<PAGE>
<PAGE>
CACI INTERNATIONAL INC
UNAUDITED PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995
</TABLE>
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS PRO-FORMA
----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $232,964,000 $21,735,000 (1) $254,699,000
----------- ---------- -----------
COST AND EXPENSES
Direct costs 126,442,000 14,221,000 (1) 140,663,000
Indirect cost &
selling expenses 87,688,000 6,427,000 (1)(2) 94,115,000
Depreciation & amortization 4,981,000 299,000 (3) 5,280,000
----------- ---------- -----------
Total operating expenses 219,111,000 20,947,000 240,058,000
----------- ---------- -----------
13,853,000 788,000 14,641,000
Interest expense 478,000 98,000 (1) 576,000
----------- ---------- ----------
INCOME BEFORE INCOME TAXES 13,375,000 690,000 14,065,000
INCOME TAXES 5,219,000 267,000 (1)(4) 5,486,000
----------- ---------- ----------
NET INCOME $ 8,156,000 $ 423,000 $ 8,579,000
=========== ========== ==========
EARNINGS PER COMMON &
COMMON EQUIVALENT SHARE $0.77 $0.04 $0.81
AVERAGE NUMBER OF SHARES &
EQUIVALENT SHARES
OUTSTANDING 10,611,000 10,611,000 10,611,000
=========== ========== ==========
</TABLE>
(1) Represents the appropriate historical results of IMS for the year ended
June 30, 1995. Assumed the purchase took place 7/1/94.
(2) Adjustments include certain officers compensation of $573,000 eliminated
due to purchase.
(3) Includes goodwill amortization of $164,000 for the year.
(4) To record $64,000 tax benefit for goodwill amortization, and an
additional $223,000 of tax expense for certain officer compensation
reduction.
<PAGE>
<PAGE>
CACI International Inc
Unaudited Pro-Forma Financial Information
For the Quarter ended September 30, 1995<PAGE>
<PAGE>
CACI INTERNATIONAL INC
UNAUDITED PRO-FORMA CONSOLIDATED BALANCE SHEET
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
ASSETS
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS PRO-FORMA
---------- ----------- ------------
<S> <C> <C> <C> <C>
Current assets
Cash $ 775,000 $ 0 $ 775,000
Accounts receivable, net 59,192,000 8,626,000 (1) 67,818,000
Deferred income taxes 156,000 110,000 (1) 266,000
Prepaid expenses 4,161,000 249,000 (1) 4,410,000
----------- ---------- -----------
Total current assets 64,284,000 8,985,000 73,269,000
----------- ---------- -----------
Fixed assets, net of
accumulated depreciation
& amortization 8,943,000 286,000 (1) 9,229,000
----------- ---------- -----------
Accounts receivable,
long term 6,470,000 0 6,470,000
Goodwill, net 7,653,000 2,435,000 (1)(4) 10,088,000
Deferred income taxes 215,000 0 215,000
Other assets 1,186,000 636,000 (1)(3) 1,822,000
----------- ---------- -----------
TOTAL ASSETS 88,751,000 12,342,000 101,093,000
=========== ========== ===========
</TABLE>
(1) Represents the allocation of the total purchase cost of $8,000,000:
purchase price of $6,500,000 plus consulting fees of $1,500,000 to all of
the assets, liabilities and intangible assets of IMS Technologies, Inc.
The excess of the purchase price over the fair value of the net assets
acquired was estimated at $2,476,000 and will be amortized on a straight
line basis over 15 years. The preliminary purchase price allocation may
change during the year ending June 30, 1996 as additional information
concerning the net asset valuations is obtained.
(2) Includes a $6,833,000 payment for IMS acquisition.
(3) Eliminated investment in foreign subsidiary and land (not included in
purchase).
(4) Includes goodwill amortization of $41,000 for the first quarter.
(5) Includes $1,167,000 accrued for the remaining amount due for consulting
fees associated with the purchase of IMS.
(6) To record $16,000 tax benefit for goodwill amortization, and a $56,000
expense for certain officers compensation reduction.
(7) Adjustments include certain officers compensation of $143,000 eliminated
due to purchase.
<PAGE>
<PAGE>
CACI INTERNATIONAL INC
UNAUDITED PRO-FORMA CONSOLIDATED BALANCE SHEET
FOR THE QUARTER ENDED SEPTEMBER 30, 1995 - Continued
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS PRO-FORMA
---------- ----------- -----------
<S> <C> <C> <C> <C>
Current liabilities
Notes payable $ 9,090,000 $ 8,119,000 (2)(7) $17,209,000
Accounts payable 15,512,000 2,733,000 (1)(5) 18,245,000
Accrued compensation
& benefits 10,588,000 900,000 (1) 11,488,000
Deferred rent expense 823,000 0 (1) 823,000
Income taxes payable 1,793,000 40,000 (1)(6) 1,833,000
Deferred income taxes 1,123,000 0 (1) 1,123,000
---------- ---------- -----------
Total current
liabilities 38,929,000 11,792,000 50,721,000
---------- ---------- -----------
Long-term liabilities
Deferred rent expense 2,587,000 0 2,587,000
Deferred compensation 0 575,000 (1) 575,000
Deferred income taxes 143,000 0 143,000
---------- ---------- -----------
TOTAL LIABILITIES 41,659,000 12,367,000 54,026,000
---------- ---------- -----------
Stockholder's equity 47,092,000 (25,000) 47,067,000
---------- ---------- -----------
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $88,751,000 $12,342,000 $101,093,000
========== ========== ===========
</TABLE>
(1) Represents the allocation of the total purchase cost of $8,000,000:
purchase price of $6,500,000 plus consulting fees of $1,500,000 to all of
the assets, liabilities and intangible assets of IMS Technologies, Inc.
The excess of the purchase price over the fair value of the net assets
acquired was estimated at $2,476,000 and will be amortized on a straight
line basis over 15 years. The preliminary purchase price allocation may
change during the year ending June 30, 1996 as additional information
concerning the net asset valuations is obtained.
(2) Includes a $6,833,000 payment for IMS acquisition.
(3) Eliminated investment in foreign subsidiary and land (not included in
purchase).
(4) Includes goodwill amortization of $41,000 for the first quarter.
(5) Includes $1,167,000 accrued for the remaining amount due for consulting
fees associated with the purchase of IMS.
(6) To record $16,000 tax benefit for goodwill amortization, and a $56,000
expense for certain officers compensation reduction.
(7) Adjustments include certain officers compensation of $143,000 eliminated
due to purchase.
<PAGE>
<PAGE>
CACI INTERNATIONAL INC
UNAUDITED PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS PRO-FORMA
----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $57,610,000 $5,195,000 (1) $62,805,000
----------- ---------- -----------
COST AND EXPENSES
Direct costs 31,469,000 3,353,000 (1) 34,822,000
Indirect cost &
selling expenses 21,237,000 1,621,000 (1)(2) 22,858,000
Depreciation & amortization 1,242,000 75,000 (3) 1,317,000
----------- ---------- ----------
Total operating expenses 53,948,000 5,049,000 58,997,000
----------- ---------- ----------
3,662,000 146,000 3,808,000
Interest expense 41,000 24,000 (1) 65,000
----------- ---------- ----------
INCOME BEFORE INCOME TAXES 3,621,000 122,000 3,743,000
INCOME TAXES 1,397,000 41,000 (1)(4) 1,438,000
----------- ---------- ----------
NET INCOME $2,224,000 $81,000 $2,305,000
=========== ========== ==========
EARNINGS PER COMMON &
COMMON EQUIVALENT SHARE $0.21 $0.01 $0.22
AVERAGE NUMBER OF SHARES &
EQUIVALENT SHARES
OUTSTANDING 10,693,000 10,693,000 10,693,000
=========== ========== ==========
</TABLE>
(1) Represents the historical results of IMS for the quarter ended September
30, 1995. Assumed the purchase took place 7/1/95.
(2) Adjustments include certain officers compensation of $143,000 eliminated
due to purchase.
(3) Includes goodwill amortization of $41,000 for the first quarter.
(4) To record $16,000 tax benefit for goodwill amortization, and an
additional $56,000 of tax expense for certain officer compensation
reduction.
<PAGE>
<PAGE>
SIGNATURE
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 hereunto duly authorized.
CACI International Inc
- ----------------------------
(Registrant)
By: /s/ Dated: January 16, 1996
-----------------------------------
Jeffrey P. Elefante
Sr. Vice President, General Counsel
and Corporate Secretary
Exhibit 99(a)
CACI Completes Acquisition of IMS Technologies, Inc.
-- Transaction expected to bring approximately $21M in revenue and
at least $0.05 earnings per share for the first full year --
Arlington, Va. -- CACI International Inc (NASDAQ: CACI) announced today that
they had acquired IMS Technologies, Inc. (IMS) for $6.5 million in cash. The
agreement also calls for the payment of consulting fees of $1.5 million over
3 years to four founders of IMS. The transaction was effective January 1,
1996.
IMS has approximately 375 employees, and generates approximately $21 million
per year in revenue. IMS solves complex management and technical problems
through the effective use of information systems and services. Specialty
areas include re-engineering, telecommunications, multi-media data
management, mission support and full systems life cycle management. IMS
provides a wide range of computer services including consulting, programming,
communications design and installation, software development and systems
integration for a variety of applications. These services are provided to
the U.S. Navy, the Departments of Justice and Education, the Drug Enforcement
Agency, the Social Security Administration and the IRS. IMS is headquartered
in Rockville, MD and has major offices in Dahlgren, VA, Arlington, VA, New
Orleans, LA, and Cherry Point, NC. Based upon current forecasts, the
acquisition should provide at least $0.05 in earnings per share during the
first full year of operations. The acquisition will be financed through
CACI's line of credit.
CACI Chairman and CEO Dr. Jack London said, "We are extremely pleased to have
the people of IMS Technologies join CACI. They are well management, and have
received numerous technological achievement awards. We are optimistic that
IMS will make a significant contribution to our future growth." Dr. London
also noted, "The addition of IMS is a continuation of our business plan
calling for synergistic, anti-dilutive niche acquisitions. Along with
Automated Sciences Group, Inc. in September 1995, this is our second
acquisition this year. We will now be looking for additional deals in the
back half of our fiscal year (ending June 30, 1996)."
CACI is an international information technology products and services
corporation. The company specializes in developing and integrating systems,
software, and simulation products in support of government agencies and
commercial enterprises worldwide.
*****
For further information contact: Jeff Elefante, CACI International Inc
(703) 841-7800
Douglas Poretz, Douglas Poretz, Ltd.
(703) 506-1778
