SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1997
Commission File Number 0-8401
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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 or organization)
54-1345888
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(I.R.S. Employer Identification No.)
1100 North Glebe Road, Arlington, VA 22201
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(Address of principal executive offices)
(703) 841-7800
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(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
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None None
Securities registered pursuant to Section 12(g) of the Act:
CACI International Inc Common Stock, $0.10 par value
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(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 .
---- ----
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of August 15, 1997, was approximately $46,746,000.
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of August 15, 1997: CACI International Inc Common Stock,
$.10 par value, 10,692,000 shares.
Documents Incorporated by Reference
-----------------------------------
(1) The information relating to directors and officers contained in the proxy
statement of the Registrant to be filed in connection with its 1997 Annual
Meeting of Shareholders is incorporated by reference into Part III, Items 10,
11, 12, and 13 of this Form 10-K.
(2) The financial information required in Items 6, 7, and 8 of this form are
contained in the Annual Report to Shareholders for the fiscal year ended June
30, 1997 and is incorporated herein as Exhibit 13.
<PAGE>
BUSINESS INFORMATION
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Unless the context indicates otherwise, the terms "the Company" and "CACI" as
used in Parts I and II, include both CACI International Inc and its
wholly-owned subsidiaries. The term "the Registrant", as used in Parts I and
II, refers to CACI International Inc only.
PART I
ITEM 1. BUSINESS
Background
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CACI International Inc (the "Registrant") was organized as a Delaware
corporation under the name of "CACI WORLDWIDE, INC." on October 8, 1985. By a
merger effected on June 2, 1986, the Registrant became the parent of CACI,
Inc., a Delaware corporation, and CACI N.V., a Netherlands corporation.
The Registrant is a holding company and its operations are conducted through
wholly-owned subsidiaries which are located in the U.S. and Europe.
Overview
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CACI founded its business in 1962 in simulation technology, and has
strategically diversified within the information technology (IT) industry.
With 1997 revenues of $273 million, CACI serves clients in major segments of
government and commercial markets primarily throughout North America and
Western Europe, delivering client solutions for systems integration, year 2000
conversion, reengineering, logistics and engineering support, electronic
commerce, intelligent document management (IDM), product data management
(PDM), software development and reuse, communications planning, and market
analysis. Many of the Company's client relationships have existed for five
years or more.
The Company's service and value have enabled it not only to sustain high rates
of repeat business and long-term client relationships, but also to compete
effectively for new clients and new contracts. The Company is organized to
seek competitive business opportunities and has designed its operations to
support major programs through centralized business development and industry
alliances. CACI has structured its new business development organization to
respond to the globally competitive marketplace. The Company employs
full-time marketing, sales, communications, and proposal development
specialists who support Company marketing and sales activities.
The Company's primary markets -- both domestic and international -- are
agencies of national governments, major corporations, state and local
governments, and other business organizations. The market for CACI's
information systems and advanced technology services is created by the complex
systems and information environment in which clients operate, whether as a
result of governmentally mandated programs or commercial initiatives.
The Company offers marketing systems software and database products, targeted
to clients who need systems and analysis for retail sales of consumer
products, direct marketing campaigns, franchise or branch site location
projects, and similar requirements.
In its simulation technology business, the Company offers simulation
languages, software products, and services that enable clients to visualize
the impact of proposed changes or new technologies before implementation.
CACI's simulation offerings include solutions for military training and
war-gaming exercises; manufacturing; wide area communications networks (i.e.,
WANs), including satellites, land lines and metro area networks (i.e., MANs);
local area computer networks (i.e., LANs); the study of business processes;
and the design of distributed computer systems architectures.
CACI provides electronic commerce (EC) solutions to the federal government.
Its complete suite of EC products is available on a GSA schedule and provides
a flexible but fully-featured configuration to enable easy management of
purchases and contracts.
In CACI's Logistics business, the Company has generated commercial business
from solutions built on CACI's thirty-year history of logistics and
engineering support for the Department of Defense (DoD). CACI's proprietary
PDM product, C-GATE (TM), enables clients to standardize and improve the way
they manage the life cycle of systems, products, and material assets,
resulting in cost savings and increased productivity.
The Company's IDM solutions provide a range of enabling technologies -
imaging, document management, workflow, and groupware - that facilitate the
management of large document collections and allow organizations to achieve
higher operational efficiencies and mission effectiveness. CACI provides IDM
and related litigation support services to the Department of Justice (DoJ) and
commercial legal clients.
CACI's RENovate(TM) reengineering methodology combines technology tasks
and methodologies to plan, integrate, and manage technology change - without
losing existing investments in technology.
In response to the Year 2000 challenge, CACI offers a wide range of solutions,
including an independently validated conversion methodology based upon a
Software Engineering Institute Level 3-certified process reengineering
approach. CACI's systems integration solutions, applied throughout the
federal and commercial arenas, improve organizational performance by enhancing
system infrastructure through such activities as migrating legacy systems to
more powerful environments, automating procurement, and reusing legacy
software and data.
The Company operates through wholly-owned subsidiaries established to serve
specific market segments or conduct business in specific geopolitical
jurisdictions.
CACI's major operating subsidiary in Europe, CACI Limited, is headquartered in
London, England, and operates primarily in support of CACI's information
systems, marketing systems and simulation technology lines of business in the
U.K. and Western Europe.
At June 30, 1997, CACI employed approximately 3,450 people. This total
includes 350 part-time employees. The corporation currently operates from its
headquarters at Three Ballston Plaza, 1100 N. Glebe Road, Arlington,
Virginia. CACI has operating offices and facilities in over 60 other
locations throughout the U.S., Western Europe and Canada.
General Description of CACI Systems, Technologies and Products
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Representative systems applications include:
. Airport and airspace traffic planning
. Ammunition management information systems
. Automated procurement
. Business support systems
. Computer aided logistics/data information systems
. Configuration management
. Electronic commerce
. Electronic data interchange
. Engineering support
. Executive decision support systems
. Imaging services
. Information management systems
. Intelligent document management systems and services
. Legal systems and litigation support services
. Manufacturing planning systems
. Marketing and customer database management systems
. Process reengineering
. Product data management
. Retail market modeling
. Simulation and modeling languages, products and services
. Site location planning and analysis systems
. Software development and reuse
. Systems reengineering
. Systems integration
. State motor vehicle registration and related management information
systems
. Telecommunications network support
. Training
. Weapon systems/equipment configuration management systems
. Year 2000 date reconfiguration services
CACI products are installed in numerous locations worldwide, and many are
designed to run on a variety of commercially available computers.
Representative CACI software and marketing systems include:
Simulation Technology:
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SIMFACTORY (R) II.5 General Factory Simulator. A software product for factory
planners to study alternative plant and equipment configurations.
COMNET II.5 (R) Network Simulation Software. A software product for
communications engineers to study wide area networks of satellites, land
lines, switching systems, and protocols.
COMNET III (TM) Network Simulation Software. An object-oriented high-fidelity
wide area network, local area network and metro area network
telecommunications simulator for capacity planning and failure analysis.
COMNET Baseliner (TM) Telecommunications Simulation Software. An automatic
network traffic and topology-gathering tool.
COMNET Predictor (TM) Network Planning Software. An analytical capacity
planning tool for the day-to-day network manager that predicts the impact of
changes to very large telecommunications networks before implementation.
COMNET Profiler (TM) Telecommunications Simulation Software. A tool for
analyzing application traffic.
NETWORK II.5 (R) Computer Architecture Simulation Software. A software
product for engineers to study alternative combinations of computers and data
storage devices.
SIMSCRIPT II.5 (R) Simulation Programming Language. A language designed
especially for analysts to build computer-based representations ("models") of
complex activities, e.g., airways and airport traffic; maintenance procedures
for fleets of ships; warfare studies of military equipment and tactics; and
communications networks.
SIMPROCESS (R) III Object-oriented Analytical Simulation Software. A
prototyping tool for business process reengineering that enables managers to
model a current business process, then explore alternative approaches before
implementation.
MODSIM II (R) Simulation Programming Language. A computer programming and
graphics environment that provides an object-oriented approach to structuring
software. This approach provides an intuitive development framework to
programmers, one that allows code to be reused.
MODSIM III (TM) Simulation Programming Language. A graphical computer
programming and simulation environment that generates C++ code.
SIMOBJECT (R) Software System. A software framework for the reduction of
time and cost in building simulation models.
VeriSpec (TM) Simulation Validation Software. A tool for validation of the
performance of design specifications for sophisticated computed hardware and
software design.
Marketing Data and Information Products:
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InSite-USA (TM) and InSite (TM) for Windows 95 (U.S. and U.K. versions)
Marketing and Demographics Information Systems. PC-based geographic
information systems combining software, data and mapping capabilities to
enable planners to study markets to help determine the location of retail
outlets, branch networks, sales territories, potential customers, and
competitors. (Windows is a registered trademark of Microsoft Corporation.)
ACORN (SM) (A Classification of Residential Neighborhoods) Demographic
Information System. A system that analyzes consumers according to the type of
residential area in which they live, used to identify the prime prospects for
all types of consumer goods and services.
Market*Master (TM) Demographic Information System. A database marketing
system that enables companies to analyze their customer files by product
holding and usage for the purpose of cross-selling other products and
services.
SITE (R) Demographic Information Software and Reports. Detailed demographic
and applied market research database services for any geographic area, such as
county, zip code, TV broadcast area, congressional district, or retail trade
area.
UpFront (R) Graphical Interface Software. A graphical user interface that
enables software to be used in an object-oriented manner.
Electronic Commerce Products:
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SACONS (R) Automated Contracting System. A commercial off-the-shelf system
that provides clients an automated, cost effective, way to complete
procurement activities and improve productivity.
SACONS (R)-EDI Module. An automated, electronic commerce add-on module to
the SACONS system that creates and receives data transmissions using standard
protocols.
SACONS (R)-Gateway Module. An add-on module to the SACONS system that
centralizes protocols established by the U.S. Government as acceptable
standards for electronic procurement with the government.
QuickBid (R) Automated Bid/Contracting System. A contracting system that
allows commercial trading partners to effectively identify and compete for
U.S. Government business via electronic data interchange (EDI).
QuickBid (R) Net Automated Bid/Contracting System. A World Wide Web-based
value-added network (VAN) that allows identification and competition for U.S.
Government business via the Internet.
Imaging and Document Management Products:
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ADIIS (TM) Document Imaging Software System. A flexible document conversion
and management system that includes advanced imaging, document retrieval,
indexing, and workprocess management.
U.S. GOVERNMENT AGENCIES
CACI offers its entire range of information systems, technical services and
proprietary products to defense and civilian agencies of the U.S. Government.
These activities require CACI's expert knowledge of agency policies and
operations. These assignments may combine a wide range of CACI's skills in
information systems, systems engineering, logistics sciences, weapons systems,
simulation, and automated document management systems. CACI also contracts
with other national governments.
State and Local Governments
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CACI is a leader in the supply of automated information systems for state
governments' management of vehicle registration, licensing and wheeled vehicle
revenue support, and for local governments' management of false alarm billing
systems and housing registration systems. The Company also offers its software
and systems integration services to this market segment.
Major Corporations
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CACI's commercial market base consists primarily of large corporations
(nominally characterized as the "Fortune 1000"). This market is a primary
target of the Company's proprietary software and database products in its
marketing systems and simulation technology lines of business. The market for
CACI's proprietary simulation products is worldwide.
Other Services
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The Company operates a language training, translation and interpretation
organization.
CACI also provides information about its products and services on its World
Wide Web home page at http://www.caci.com.
CACI Employment and Benefits
- ----------------------------
CACI's business success is highly correlated with the Company's ability to
recruit, train, promote, and retain exceptional people at all levels of the
organization. The most valuable asset and resource the Company has is its
people. The Company is in continuing competition for highly skilled
professionals in virtually all its high technology areas.
For these reasons, the Company has endeavored to develop and maintain
competitive salary structures, incentive compensation programs, fringe
benefits, opportunities for growth, and individual recognition and award
programs to highlight the Company's intense interest in the success of its
people in their careers.
In order to compete effectively in attracting and retaining highly skilled
personnel, the Company and its subsidiaries provide substantial benefits to
their employees. These benefits vary among the Company's subsidiaries, but
generally include paid vacations and holidays, medical, dental, disability and
life insurance, incentive bonuses, tuition reimbursement for job-related
education and training, and other benefits under retirement and stock purchase
plans.
The Company recruits people from various populations, including experienced
professionals, university graduates, trade and technical school graduates,
seasoned technicians, and entry-level employees. The Company's employee
profile includes a high-percentage of college graduates, many with masters and
doctoral degrees. The Company seeks professionals with academically certified
credentials in computer-based information sciences, systems engineering,
telecommunications, management systems, market research, economics,
environmental sciences, military sciences, law, and other scientific and
research-oriented disciplines.
The Company has structured its promotion and advancement policies to meet the
current market environment. Individuals advance in relation to their
demonstrated abilities to perform their leadership skills or their managerial
achievements.
CACI's advancement criteria incorporate specific requirements to demonstrate a
"client-service orientation" and to work synergistically within the Company.
This philosophy is consistent with CACI's current market, and is a catalyst
for individuals to support Company objectives.
The Company also requires all of its employees, consultants, officers, and
directors to subscribe annually to and affirm the Company's published Code of
Ethics and Business Conduct Standards. The Company has published policies
that set high standards for the conduct of its business.
Marketplace, Description and Significant Activities
- ---------------------------------------------------
CACI operates in an industry which includes many highly competitive firms. At
the same time, CACI is one of the larger public corporations in its segment of
the IT services industry. Although the Company is a premier supplier of
proprietary computer-based simulation technology products worldwide, and is a
major supplier of proprietary marketing systems products in both the U.S. and
the U.K., CACI is not primarily a software product developer-distributor (See
discussion following on Patents, Trademarks, Trade Secrets and Licenses).
Competition for new contracts centers on reputation, responsiveness to
proposal requests, price, and many other factors. Competition for software
products and services focuses on reputation, applicability to client needs and
quality of product support and maintenance services, among other elements.
The Company has established the capability to combine knowledge of client
challenges with significant expertise in the design, development and
implementation of advanced IT solutions. This capability provides CACI with
important opportunities to support large equipment manufacturers with the
systems integration and software services they frequently require to compete
for multi-million dollar contracts issuing from the U.S. Government.
CACI has developed strategic business relationships with companies such as
Microsoft, Sun Microsystems, ComputerVision, Intergraph, Ingram Micro, PKS,
Viasoft, Computer Associates, AT&T Global Information Solutions, and Lotus
Development Corporation. These businesses have perspectives and objectives
compatible with those of the Company, and offer products and services that
complement CACI's. The Company intends to continue development of these
relationships wherever they support CACI's growth objectives. The Company
also seeks to expand its commercial business through these relationships.
Marketing and new business development is conducted by all the officers and
managers of the Company, including the Chief Executive Officer, executive
officers, vice presidents, and division and department managers. CACI's
proprietary software and data products are sold primarily by full-time
salespeople. For its information systems and services markets, the Company
employs several marketing professionals who support the Company's targeting of
major contract opportunities, primarily in the U.S. Government market. The
Company also has established agreements for the sale of certain third party
products in specified domestic and international markets.
CACI competes with a substantial number of firms, some of which are larger in
size and have greater financial resources than CACI. The Company obtains much
of its business on the basis of proposals submitted in response to requests
from potential and current customers, who may also request proposals from
other firms. Additionally, the Company faces indirect competition from
certain government agencies that perform services for themselves similar to
those marketed by CACI. The Company knows of no single competitor that is
dominant in its fields of technology. The Company has a relatively small
share of the available worldwide market for its products and services and has
a goal of achieving growth through increased market share.
CACI's sales of proprietary software and data products are generally effected
by limited duration or perpetual licenses. The Company generally prices its
products in catalog fashion and via the Internet. Often, product prices are
determined by the target computer on which the product will run, by the number
of users or by frequency of usage.
For CACI's information systems and professional services contracts, the
Company submits bids for work and products to be delivered. Commercial bids
are frequently negotiated as to terms and conditions for schedule,
specification, delivery, and payment. CACI's contracts and subcontracts
include a wide range of contractual types, including firm fixed-price, cost
reimbursement, labor-hour-and-materials expense, and variants thereof,
including fixed-unit price, performance, and delivery contracts.
Often, the form of contract and terms will be specified by the client. This
is especially the case with government clients. In these situations, the
Company may seek alternative arrangements or choose not to bid in those cases
where the contracting arrangement appears to expose the company to
inappropriate risk. By Company policy, fixed-price contracts require the
approval of a senior officer of the Company, and review and release approval
by the Chief Executive Officer.
At any one time, the Company may have several hundred separate contract
obligations. In 1997, the ten top revenue-producing contracts accounted for
43% of CACI's revenues, or $117 million. One contract for automated
litigation support to the Civil Division of DoJ, accounted for 13.2% of total
1997 Company revenues.
In 1997, seventy-seven percent (77%) of CACI's revenues came from U.S.
Government contracts, the remaining twenty-three percent (23%) coming from
commercial contracts and proprietary products sales. Fifty-two percent (52%)
of the Company's revenues came from DoD contracts, nineteen percent (19%) from
contracts with DoJ, and six percent (6%) from other civilian agency government
clients.
The Company is working to diversify its business portfolio. The Company
nonetheless, will aggressively seek additional work from DoD. In 1997, the
DoD revenues grew by 8% ($10.7 million) primarily as a result of the
September 1, 1995, acquisition of Automated Sciences Group, Inc. (ASG) and the
October 1, 1996, acquisition of Sunset Resources, Inc. (SRI).
The Company believes it is the largest supplier of litigation support and
related automation services to the U.S. Government. The Company intends to
seek additional litigation support work from the U.S. Government and offers
significant economies to the Government through its specialization in this
field.
During the past fiscal year, the Company examined a number of acquisition
opportunities. On October 1, 1996, CACI acquired the business and most of the
assets of SRI for $6.2 million. SRI has focused on logistics and engineering
support services to the Air Force, and is an expert in electronic data
interchange. The acquisition of this business complements CACI's 30-year
history of logistics and engineering support for DoD.
On January 3, 1997, CACI Limited acquired the business of Sales Performance
Analysis Limited (SPA) for $2.6 million. SPA develops and markets a range of
specialized software and services that enable companies to make more effective
use of their field forces through optimal configuration of sales and service
territories.
On May 14, 1997, the Company acquired the Simulation Engineering Division of
Statistica, Inc. for $0.8 million. This business focuses on building
training software and hardware for the U.S. military, and expands CACI's
presence in DoD simulation activities.
Seasonal Nature of Business
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The Company's business in general is not seasonal, although the summer and
winter holiday seasons affect both sales and revenue of the Company because
of their impact on the Company's labor sales and on product and service sales
by the Company's European operations. Variations in the Company's business
also may occur at the expiration of major contracts until such contracts are
renewed or new contracts obtained.
Research and Development
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During fiscal years 1997, 1996 and 1995, the Company spent $1,307,000,
$833,000, and $984,000 respectively for research and development on current
and future products.
Environmental Protection Requirements
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There has been no significant adverse impact on the Company's business as a
result of laws that have been enacted for the protection of the environment.
Patents, Trademarks, Trade Secrets and Licenses
- -----------------------------------------------
The Company believes that its business is dependent to a significant extent on
its technical and organizational knowledge, practices and procedures, in some
of which it claims proprietary interests.
CACI claims copyright, trademark and proprietary rights in each of its
proprietary computer software and data products and documentation. The
Company presently owns approximately 40 registered U.S. trademarks and service
marks. All of the Company's registered U.S. trademarks and service marks may
be renewed indefinitely. CACI also is a party to agreements which give it the
right to distribute computer software and other products owned by other
companies, and receive income therefrom.
CACI owns one U.S. patent. While the Company believes that its patent is
valid, it does not consider that its business is dependent on patent
protection in any material way.
The Company has developed and holds proprietary rights in a number of computer
software packages, databases and methodologies, including, but not limited
to: ACORN (SM), ADIIS (TM), C-GATE (TM)#, COMNET II.5 (R), COMNET III (TM),
COMNET Baseliner (TM), COMNET Predictor (TM), COMNET Profiler (TM), FAR-TRIEVE
(R), InSite-USA (TM)#, L-NET (R)#, Legal Workbench (TM), Market*Master (TM),
MODSIM II (R), MODSIM III (TM), NETOBJECT (TM), NETWORK II.5 (R), Perfect-Mail
(R)#, QuickBid (R), QuickBid (R) Net, RENovate (SM), RESTORE 2000 (SM), SACONS
(R), SACONS-FEDERAL (R), SIMANIMATION (R), SIMBASE (TM), SIMFACTORY (R) II.5,
SIMFLOW (R), SIMGRAPHICS (R), SIMLAB (R), SIMOBJECT (R), SIMPROCESS (R)III,
SIMSCENARIO (R), SIMSCRIPT II.5 (R), SIMSNIPS (R), SIMSTRUCTOR (R), SimTrainer
(R), SIMVIDEO (TM), SITELINE (R), Site-America (TM)#, SITE-POTENTIAL (R)#,
Site Reporter (TM) Sourcebook-America (TM)#, SUPERSITE (R), The Virtual
Consultant (TM), VeriSpec (TM), and ZIP-DEMOGRAPHICS (R)#.
[# The marks above indicated with a terminal pound sign (#) contain a hyphen
to represent the bullet point which is an integral component of each mark and
which cannot be printed due to electronic transmission limitations.]
In addition, subsidiaries of the Registrant claim foreign copyright,
trademark, and proprietary rights in computer software products and databases
including, but not limited to: ACORN (R) (and the related Arts*ACORN (R),
Change*ACORN (R), Custom*ACORN (R), Financial*ACORN (R), Holiday*ACORN (R),
Household*ACORN (R), Investor*ACORN (R), Property*ACORN (R), Scottish*ACORN
(R)), ACORN Lifestyles (R), ALEX (R), CACI MARKET MASTER (R), CACI National
Mortgage Database (R), CACI Savings Market Database (R), Charity Focus (TM),
FINPIN (R), GEO-MARKETING (R), GEOMATCH (R), GEOREAD (R), GEOTRIEVE (R),
InSite (TM), Lifestyle*Plus (TM)(and the related Auto*Plus (TM), Fuel*Plus
(TM), HouseAge*Plus (TM), and MailOrder*Plus (TM)), Listline (TM), MONICA (R),
PayCheck (TM), PIN (R), PINPOINT (R), PINPOINT ADDRESS CODE (R), ScoreBoards
(TM), SITE (R), TOTEM (TM), and UpFront (R).
Some of the Registrant's subsidiaries are parties to agreements pursuant to
which they may have the right to distribute computer software products owned
by others and obtain income therefrom.
Backlog
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The Company's backlog as of July 31, 1997 was $1.0 billion, of which $117
million was for orders believed to be firm. Total backlog as of July 31, 1996
was $705 million, of which $84 million represented firm orders. The source of
backlog is primarily contracts with the U.S. Government. It is presently
anticipated that all of the firm backlog will be filled during the fiscal year
ending June 30, 1998.
Business Segments, Foreign Operations, and Major Customer
- ---------------------------------------------------------
The business segment, foreign operations and major customer information
provided in the Company's Consolidated Financial Statements contained in this
Report are incorporated herein by reference. In particular, see Note 10,
Segment Information, to the Notes to Consolidated Financial Statements.
The following information is provided about the amounts of revenue
attributable to firm fixed-price contracts (including proprietary software
product sales), time-and-materials contracts, and cost reimbursable contracts
of the Company during each of the last three fiscal years: (dollars in
thousands)
Fiscal Year Firm Time-and- Cost
Ended June 30, Fixed-Price Materials Reimbursable Total
- -----------------------------------------------------------------------
1997 $67,627 $122,987 $82,370 $272,984
1996 56,813 109,429 78,373 244,615
1995 62,607 106,869 63,488 232,964
ITEM 2. PROPERTIES
As of June 30, 1997, CACI leased office space at 55 locations containing an
aggregate of approximately 650,000 square feet located in 21 states and the
District of Columbia. In five countries outside the U.S., CACI leased seven
offices containing about 26,500 square feet. CACI's leases expire primarily
over the next five years. In most cases, CACI anticipates that leases will be
renewed or replaced by other leases.
All of CACI's offices are in modern and well-maintained buildings. The
facilities are substantially utilized and adequate for present operations.
As of June 30, 1997, CACI International Inc maintained its corporate
headquarters in approximately 153,000 square feet of space at 1100 North Glebe
Road, Arlington, Virginia. See Note 8, Commitments and Contingencies, to the
Notes to Consolidated Financial Statements, for additional information
regarding the Company's lease commitments. It is also included in the
Company's 1997 Annual Report to the stockholders.
ITEM 3. LEGAL PROCEEDINGS
Ceridian Corporation v. CACI Systems Integration, Inc.
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Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1997, for the
most recently filed information concerning the suit filed on October 6, 1995
by Ceridian Corporation ("Ceridian") in the District Court for Hennepin
County, Minnesota, against Registrant's wholly-owned subsidiary, CACI Systems
Integration Inc. ("CACI"), alleging breach of contract, breach of warranty,
and repudiation by CACI in connection with a contract for the development of a
manufacturing system. In January 1996, CACI filed its answer and
counterclaims, denying Ceridian's allegations and seeking damages from
Ceridian for breach of contract, intentional and negligent misrepresentation,
and tortious interference with contract.
Since the filing of the Registrant's report indicated above, the parties have
continued discovery and begun processing discovery and dispositive motions.
CACI, INC.-FEDERAL v. Arizona Department of Transportation
- ------------------------------------------------------------
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1997, for the
most recently filed information concerning the lawsuit filed on June 25, 1996,
by CACI, INC.-FEDERAL ("CACI"), the Registrant's wholly-owned subsidiary, in
Superior Court for Maricopa County, Arizona, against the Arizona Department
of Transportation ("ADOT"). This suit seeks the following: (i) a declaratory
judgment that the disputes procedure mandated by the Arizona Procurement Code
is unconstitutional ; (ii) a declaratory judgment that ADOT cannot assert
claims against CACI under the mandated disputes procedure; (iii) a
declaratory judgment that ADOT is not entitled to recover consequential
damages in connection the dispute; (iv) $2,938,990 plus interest in breach of
contract damages; (v) the return of CACI property seized by ADOT in connection
with the termination of the contract; and (vi) lawyers fees.
Since the filing of Registrant's report indicated above, the status of the
case has changed as follows. On May 13, 1997, ADOT filed its answer denying
CACI's claims and asserting counterclaims seeking in excess of $100 million
against CACI, primarily in the form of consequential damages. CACI expects
the case to be placed on the inactive calendar while initial fact disclosures
and extended discovery are being completed. CACI anticipates that the case
will be ready for reinstatement to the active calendar in approximately nine
(9) months.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of the Registrant's fiscal year ended June 30, 1997, through the
solicitation of proxies or otherwise.
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Registrant's Common Stock became publicly traded on June 2, 1986,
replacing paired units of common stock of CACI, Inc. and beneficial interests
in common shares of CACI N.V. which had been traded in the over-the-counter
market.
From July 1, 1995, to June 30, 1997, common shares of the Registrant have been
quoted on the Nasdaq National Market System. The range of high and low sales
prices for each quarter during this period is included in Exhibit 13 to this
Report. It is also included in the Company's 1997 Annual Report to the
Shareholders.
The Registrant has never paid a cash dividend. The present policy of the
Registrant is to retain earnings to provide funds for the operation and
expansion of its business. The Registrant does not intend to pay any cash
dividends at this time.
At August 15, 1997, the number of record shareholders of the Registrant's
Common Stock was approximately 10,692,000.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is included in Exhibit 13 to this
Report. It is also included in the Company's 1997 Annual Report to
Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations is included in Exhibit 13 to this Report. It is also included in
the Company's 1997 Annual Report to Shareholders.
Forward Looking Statements
- --------------------------
This filing may contain "forward-looking" statements, as that term is defined
in the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements concerning expectations of the
Company's future performance in terms of revenue and earnings. The Company
cautions investors that there can be no assurance that actual results will not
differ materially from those projected or suggested in such forward-looking
statements. Factors which could cause a material difference in results
include, but are not limited to, the following: regional and national economic
conditions; changes in interest rates; changes in government spending policies
and/or decisions concerning specific programs; individual business decisions
of customers and clients; developments in technology; competitive factors and
pricing pressures; acts of God; our ability to achieve the objectives of our
business plans; and changes in government laws or regulations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included in Exhibit 13 to this
Report. It is also included in the Company's 1997 Annual Report to
Shareholders.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company had no disagreements with its independent accountant on accounting
principles, practices or financial statement disclosures.
PART III
The Information required by Items 10, 11, 12, and 13 of Part III of Form 10-K
has been omitted in reliance on General Instruction G(3) and is incorporated
herein by reference to the Company's definitive proxy statement to be filed
with the SEC pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report:
1. Financial Statements. The following financial statements, together with
the report of Deloitte and Touche LLP, is included in Exhibit 13 to this
Report. It is also included in the Company's 1997 Annual Report to
Shareholders.
A. Independent Auditors' Report
B. Consolidated Statement of Operations
C. Consolidated Balance Sheets
D. Consolidated Statement of Shareholders' Equity
E. Consolidated Statement of Cash Flows
F. Notes to Consolidated Financial Statements
G. Range of High and Low Stock Sales Prices
2. Financial Statement Schedules. The following additional financial data
should be read in conjunction with the Consolidated Financial Statements in
the Annual Report. Schedules other than those listed below have been omitted
because they are inapplicable or are not required.
Statement regarding computation of per
share earnings Exhibit 11
Valuation and Qualifying Accounts Schedule II to Exhibit 13
Selected Financial Information Exhibit 13
Management's Discussion and Analysis Exhibit 13
Independent Auditors' Consent to incorporation
of the financial information related to the
Independent Auditors' Report by reference
from the Annual Report to Shareholders Exhibit 13
Independent Auditors' Consent to incorporation by
reference of the financial information related to
the Independent Auditors' Report to the
Registration Statement dated January 24, 1997
of CACI International Inc on Form S-8 Exhibit 13
Independent Auditors' Report on Consolidated
Financial Statement Schedule Exhibit 13
(a)(3) Exhibits (listed by numbers corresponding to the exhibit table of Item
601 regulation S-K).
(3) Articles of Incorporation and By-laws:
3.1 Certificate of Incorporation of the Registrant, as amended to date.
3.2 By-laws of the Registrant, as amended to date.
(4) Instruments Defining the Rights of Security Holders:
4.1 Clause FOURTH of the Registrant's Certificate of Incorporation,
incorporated above as Exhibit 3.1.
(10) Material Contracts:
10.1 The 1986 Employee Stock Incentive Plan of the Registrant is incorporated
by reference to the Registration Statement on Form S-8 filed with the
Commission on October 13, 1987 (File No. 33-17864).
10.2 Employment Agreement between the Registrant and Dr. J. P. London dated
August 17, 1995, is incorporated by reference from Exhibit 10.3 of the
Registrant's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended June 30, 1995.
10.3 Form of Stock Option Agreement between the Registrant and certain
employees is incorporated by reference from Exhibit 10.6 of the Registrant's
Annual Report on Form 10-K filed with the Securities and Exchange Commission
for the fiscal year ended June 30, 1991.
10.4 The Stock Purchase Agreement dated September 1, 1995, between the
Registrant, CACI, Inc., Automated Sciences Group, Inc., and Conrad Hipkins, is
incorporated by reference from Exhibit 10.5 of the Registrant's Annual Report
of Form 10-K filed with the Securities and Exchange Commission for the fiscal
year ended June 30, 1996.
10.5 The Acquisition and Merger Agreement dated December 21, 1995, between
the Registrant, IMS Technologies, Inc., and certain other parties, is
incorporated by reference from Exhibit 10.6 of the Registrant's Annual Report
of Form 10-K filed with the Securities and Exchange Commission for the fiscal
year ended June 30, 1996.
10.6 The Revolving Credit Agreement dated July 26, 1996, between the
Registrant, NationsBank, N.A., and certain other parties, is incorporated by
reference from Exhibit 10.7 of the Registrant's Annual Report of Form 10-K
filed with the Securities and Exchange Commission for the fiscal year ended
June 30, 1996.
10.7 The 1996 Stock Incentive Plan of the Registrant is incorporated by
reference to the Registration Statement on Form S-8 filed with the Commission
on January 24, 1997.
(11) Computation of Earnings per Common and Common Equivalent Share.
(13) 1997 Annual Report to Shareholders, financial portions of which have been
incorporated by reference into this Form 10-K.
(21) The significant subsidiaries of the Registrant, as defined in Section
1-02(w) of regulation S-X, are:
CACI, Inc., a Delaware Corporation
CACI, INC.-FEDERAL, a Delaware Corporation
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
American Legal Services Corp., a Delaware Corporation
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a U.K. Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Technologies, Inc., a Delaware Corporation
(27) Financial Data Schedule
(b) - The Registrant filed a Current Report on 8-K on October 9, 1996, in
which the Registrant reported that it had acquired the business and most of
the assets of Sunset Resources, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the 8th day of
September, 1997.
CACI International Inc
By /s/
----------------------------
J. P. London
Chairman of the Board and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Chairman of the Board, President September 8, 1997
- ---------------------- and Director -----------------
J. P. London (Principal Executive Officer)
/s/ Executive Vice President, September 8, 1997
- ---------------------- Chief Financial Officer, and -----------------
James P. Allen Treasurer (Principal Financial
and Accounting Officer)
/s/ Director September 8, 1997
- ---------------------- -----------------
Richard L. Leatherwood
/s/ Director September 8, 1997
- ----------------------- -----------------
Alan S. Parsow
/s/ Director September 8, 1997
- ----------------------- -----------------
Larry L. Pfirman
/s/ Director September 8, 1997
- ----------------------- -----------------
Warren R. Phillips
/s/ Director September 8, 1997
- ---------------------- -----------------
Charles P. Revoile
/s/ Director September 8, 1997
- ---------------------- -----------------
William B. Snyder
/s/ Director September 8, 1997
- ---------------------- -----------------
Richard P. Sullivan
/s/ Director September 8, 1997
- ---------------------- -----------------
John M. Toups
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
of
CACI International Inc <FN1>
THE UNDERSIGNED INCORPORATOR(S), in order to form a corporation for
the purposes hereinafter stated, under and pursuant to the
provisions of the General Corporation Law of the State of Delaware,
do hereby certify as follows:
FIRST: The name of the corporation is CACI International Inc <FN1>
SECOND: The registered office of the corporation is to be located
at 306 South State Street, in the City of Dover in the County of
Kent, in the State of Delaware, 19901. The name of its registered
agent at the address is the United States Corporation Company.
THIRD: The objects and purposes of the corporation are to engage
in any lawful business and activity for which a corporation may be
organized under the General Corporation Law of Delaware, including:
The corporation shall have the power to do any and all acts and
things necessary or useful to its business and purposes, and shall
have the general, specific and incidental powers and privileges
granted to it by statute, including:
To enter into and perform contracts; to acquire and exploit
patents, trademarks, rights of all kinds and related and other
interests; to acquire, use, deal in and with, encumber and dispose
of real and personal property without limitation including
obligations and/or securities; to borrow and lend money for its
corporate purposes; to invest and reinvest its funds, and take,
hold and deal with real and personal property as security for the
payment of funds loaned or invested, or otherwise; to vary any
investment or employment of capital of the corporation from time to
time; to create and/or participate with other corporations and
entities for the performance of all undertakings, as partner, joint
venturer, or otherwise, and to share or delegate control therewith
or thereto.
To pay pensions and establish and carry out pension, profit
sharing, stock option, stock purchase, stock bonus, retirement,
benefit, incentive or commission plans, trust and provisions for
any or all of its directors, officers and employees, and for any or
all of the directors, officers and employees of its subsidiaries;
and to provide insurance for its benefit on the life of any of its
directors, officers or employees, or on the life of a stockholder
for the purpose of acquiring at his death shares of its stock owned
by such stockholder.
To invest in and merge or consolidate with any corporation in such
manner as may be permitted by law; to aid in any manner any
corporation whose stocks, bonds or other obligations are held or in
any manner guaranteed by this corporation, or in which this
corporation is in any way interested; to do any other acts or
things for the preservation, protection, improvement or enhancement
of the value of any such stock, bonds or other securities; and
while owner of any such stock, bonds or other securities to
exercise all the rights, powers and privileges of ownership
thereof, and to exercise any and all voting powers thereon; and to
guarantee the indebtedness of others and the payment of dividends
upon any stock, the principal or interest or both of any bonds or
other securities, and the performance of any contracts.
To do all and everything necessary, suitable and proper for the
accomplishment of any of the purposes or the attainment of any of
the objects or the furtherance of any of the powers hereinbefore
set forth, either alone or in association with other corporations,
firms, partnerships or individuals, and to do every other act and
thing incidental or appurtenant to or growing out of or connected
with the aforesaid business or powers or any part or parts thereof,
to the extent permitted by the laws of Delaware under which this
corporation is organized, and to do all such acts and things and
conduct business and have one or more offices and exercise its
corporate powers in any and all places, without limitation.
FOURTH: <FN2> The total number of shares of all classes which the
corporation shall have the authority to issue is Ninety Million
(90,000,000), consisting of Forty Million (40,000,000) shares of
Class A Common Stock of the par value of $0.10 per share
(hereinafter called "Class A Common Stock"), Forty Million
(40,000,000) shares of Class B Common Stock of the par value of
$0.10 per share (hereinafter called "Class B Common Stock"), and
Ten Million (10,000,000) shares of preferred stock (hereinafter
called "Preferred Stock") of the par value of $0.10 per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, to
provide for the issuance of the shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law
of the State of Delaware, to establish from time to time the number
of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each
series and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such
voting rights;
(d) Whether that series shall have conversion privileges, and,
if the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the Board
of Directors shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and at
different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the corporation, and the relative rights of priority, if any, of
payment of shares of that series;
(h) Any other relative rights, preferences and limitations of
that series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be
paid or declared and set apart for payment on the common shares
with respect to the same dividend period.
If upon voluntary or involuntary liquidation, dissolution or
winding up of the corporation, the assets available for
distribution to holders of shares of Preferred Stock of all series
shall be insufficient to pay such holders the full preferential
amount to which they are entitled, then such assets shall be
distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts
(including unpaid cumulative dividends, if any) payable with
respect thereto.
The powers, preferences and rights, and the qualifications,
limitation and restrictions thereof, of each class of common stock,
are as follows:
1. Voting
(a) While any shares of Class B Common Stock are issued and
outstanding, and subject to the provisions of the following
paragraph (b), at every meeting of the stockholders every holder of
Class A Common Stock shall be entitled to one (1) vote in person or
by proxy for each share of Class A Common Stock standing in his
name on the stock transfer records of the corporation, and every
holder of Class B Common Stock shall be entitled to ten (10) votes
in person or by proxy for each share of Class B Common Stock
standing in his name on the stock transfer records of the
corporation, provided that at every meeting of the stockholders
called for the election of directors the holders of Class A Common
Stock, voting separately as a class, shall be entitled to elect
one-quarter (1/4) of the number of directors to be elected at such
meeting. If one-quarter (1/4) of such number of directors is not
a whole number, then the holders of Class A Common Stock, voting
separately as a class, shall be entitled to elect the next higher
whole number of directors to be elected at such meeting. The
holders of Class B Common Stock voting as a class shall be entitled
to elect the remaining number of directors constituting the full
board. Directors elected by the holders of a Class of Common
Stock, voting separately as a class, may be removed, with or
without cause, only by a vote of the holders of a majority of the
shares of such Class of Common Stock then outstanding, voting
separately as a class. If, during the interval between annual
meetings of stockholders for the election of directors, the number
of directors who have been elected by the holders of either Class
of Common Stock voting separately as a class shall, by reason of
resignation, death or removal, be reduced, the vacancy or vacancies
in the directors elected by the holders of such Class of Common
Stock voting separately as a class shall be filled by a majority
vote of the remaining directors representing such Class then in
office, even if less than a quorum, and if not so filled within
forty (40) days after the creation of such vacancy or vacancies,
the Secretary of the corporation shall call a special meeting of
the holders of such Class of Common Stock and such vacancy or
vacancies shall be filled at such special meeting. Any director
elected to fill any such vacancy by the remaining directors then in
office may be removed from office by vote of the holders of a
majority of the shares of the represented Class of Common Stock
then outstanding, voting separately as a class.
(b) If, while any shares of Class B Common Stock are issued and
outstanding, Herbert W. Karr shall cease to be a holder of Class B
Common Stock, or if any "Conversion Event", as defined in
subparagraph (c) of paragraph 4 below, shall occur as to Herbert W.
Karr, then and in any such event (a "Change-over Event"), the
number of directors which may be elected by each Class of Common
Stock shall be adjusted as follows:
(i) Prior to the first annual meeting of stockholders
following the first anniversary of the Changeover Event (the
"Second Annual Meeting"), the holders of Class A Common Stock and
Class B Common Stock shall be entitled to elect directors as
provided in the preceding paragraph (a).
(ii) Commencing with the Second Annual Meeting, and prior
to the annual meeting following the second anniversary of the
Change-over Event (the "Third Annual Meeting"), the holders of
Class B Common Stock shall be entitled to elect the largest whole
number of directors which is equal to or less than five-eighths
(5/8) of the full Board, and the holders of Class A Common Stock
shall be entitled to elect the remaining directors.
(iii) Commencing with the Third Annual Meeting, and prior
to the Conversion Date (defined hereinafter), the holders of Class
B Common Stock shall be entitled to elect the largest whole number
of directors which is equal to or less than one-half (1/2) of the
full Board, and the holders of Class A Common Stock shall be
entitled to elect the remaining directors.
(iv) At the close of business on the date (the
"Conversion Date") that is sixty-one (61) days prior to the date on
which the annual meeting following the third anniversary of the
Changeover Event would be held in accordance with the certificate
of incorporation and the by-laws of the corporation, all issued and
outstanding shares of Class B Common Stock, and all shares of Class
B Common Stock held in treasury, shall be deemed to be converted
into an equal number of shares of Class A Common Stock, immediately
and without further action; and thereafter no share of Class B
Common Stock shall be issued. Commencing on the Conversion Date
and continuing thereafter, the holders of Class A Common Stock
shall be entitled to elect all the directors of the corporation as
provided in subparagraph (d) of this paragraph 1.
(c) At any time when the number of issued and outstanding
shares of Class A Common Stock is less than 10% of the aggregate
number of issued and outstanding shares of Common Stock of both
Class A and Class B, then the provisions of the preceding
paragraphs (a) and (b) shall not be applicable to the election of
directors, and all holders of Common Stock of Class A and Class B
shall be entitled to vote as a single class for the election of
directors, with each share of Common Stock of either class having
one (1) vote. Directors elected by the holders of both Classes of
Common Stock may be removed, with or without cause, only by a vote
of the holders of a majority of both Classes of Common Stock voting
together as a single class.
(d) If and whenever there are no shares of Class B Common Stock
issued and outstanding, every holder of Class A Common Stock shall
be entitled to one (1) vote on all matters, including the election
of directors, for each share of Class A Common stock standing in
his name on the stock transfer records of the corporation.
(e) Every reference in this certificate of incorporation to a
majority or other proportion of shares of stock shall refer to such
majority or other proportion of the votes of such shares of stock
of any applicable class.
2. Dividends
(a) No cash dividend shall be declared or paid with respect to
shares of Class B Common Stock unless a cash dividend with respect
to Class A Common Stock, equal in amount per share to one hundred
ten per cent (110%) of the amount per share declared with respect
to the Class B Common Stock, is declared and paid for the same
dividend period.
(b) In the event of any stock split, stock dividend or similar
adjustment to either Class of Common Stock, the voting rights and
dividend preferences of such Class shall be proportionately
adjusted to maintain the voting rights and dividend rights of the
two Classes of Common Stock in the same proportions as they existed
immediately prior to said adjustment; provided, no such
proportionate adjustment shall be made on account of the 30% stock
dividend (the "Exchange Offer Dividend") described in the Form S-4
registration statement of the corporation filed with the Securities
and Exchange Commission in October 1985.
(c) In the event of any stock split, stock dividend (other than
the Exchange Offer Dividend) or similar adjustment to either Class
of Common Stock, the Offer Price (as defined in subparagraph (b) of
paragraph 4) and the conversion ratio for the conversion of Class
B Common Stock into Class A Common Stock shall be equitably
adjusted by the Board of Directors.
3. Restrictions on Transfer
(a) No person holding shares of Class B Common Stock
(hereinafter called a "Class B Holder") may transfer, and the
corporation shall not register the transfer of such shares of Class
B Common Stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a Permitted Transferee of such
Class B Holder, which term shall have the following meanings:
(i) Except as provided in the following clause (ii),
"Permitted Transferee" shall mean only a person who, immediately
before the registration of any such Transfer, is a holder of record
of one or more shares of Class B Common Stock.
(ii) With respect to shares of Class B Common Stock which
are the subject of the Shareholders' Agreement dated as of December
1, 1985 among the corporation, Herbert W. Karr ("Karr"), J.P.
London ("London"), and certain other holders of Class B Common
Stock (the "Shareholders' Agreement"), "Permitted Transferee" shall
mean a person to whom, in the opinion of counsel to the
corporation, shares of Class B Common Stock may be transferred in
conformity with the provisions of the Shareholders' Agreement.
(b) Notwithstanding anything to the contrary set forth herein,
any Class B Holder may pledge such Holder's shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such
shares as collateral security for indebtedness due to the pledgee,
provided that such shares shall not be transferred to or registered
in the name of the pledgee and shall remain subject to the
provisions of this paragraph 3. In the event of foreclosure or
other similar action by the pledgee, or the transfer, pursuant to
an attachment, lien or similar process, of Class B Common Stock to
a bona fide creditor of any Class B Holder in satisfaction of an
obligation owed to said creditor, such shares of Class B Common
Stock must, as soon as reasonably practicable, be either (i)
transferred to a Permitted Transferee of the pledger or creditor or
(ii) converted into shares of Class A Common Stock, as the pledgee
or creditor may elect, in accordance with the restrictions on
transfer and conversion as stated herein.
(c) Any purported transfer of shares of Class B Common Stock
not permitted hereunder shall be void and of no effect, and the
purported transferee shall have no rights as a stockholder of the
corporation and no other rights against or with respect to the
corporation. The corporation may, as a condition to the transfer
or the registration of transfer of shares of Class B Common Stock
to a purported Permitted Transferee, require the furnishing of such
affidavits or other proof as it deems necessary to establish that
such transferee is a Permitted Transferee. The corporation may
note on the certificates for shares of Class B Common Stock the
restrictions on transfer and registration of transfer set forth in
this paragraph 3.
4. Conversion of Class B to Class A
(a) Each share of Class B Common Stock may at any time be
converted into one (1) fully paid and nonassessable share of Class
A Common Stock subject to the provisions of this paragraph 4. Such
right shall be exercised by the surrender to the corporation of the
certificate representing such share of Class B Common Stock to be
converted, at any time during normal business hours at the
principal executive offices of the corporation, or if an agent for
the registration of transfer of shares of Class B Common Stock is
then duly appointed and acting (said agent being hereinafter called
the "Transfer Agent") then at the office of the Transfer Agent,
accompanied by (i) a written notice of the election by the holder
thereof to convert, (ii) evidence satisfactory to the corporation's
counsel of compliance with the provisions of the following
paragraph (b), and (iii) (if so required by the corporation or the
Transfer Agent) instruments of transfer in form satisfactory to the
corporation and to the Transfer Agent, duly executed by such holder
or his duly authorized attorney, and transfer tax stamps or funds
therefor, if required pursuant to subparagraph (i) below.
(b) No share of Class B Common Stock shall be converted to
Class A Common Stock unless the holder thereof has first offered to
sell that share to the other Class B Holders and to the
corporation, as follows:
(i) The Class B Holder wishing to convert (the "Converting
Holder") shall give to the Secretary of the corporation a written
notice (the "Notice") to that effect, which Notice shall be deemed
to constitute an offer to sell, to the Offerees, at the Offer Price
and upon the terms and conditions hereinafter set forth, the Class
B shares that the Converting Holder proposes to convert (the
"Offered Shares"). As promptly as practicable after the date on
which he receives the Notice (the "Date of Receipt"), and in any
event not more than five (5) days after the Date of Receipt, the
Secretary shall (x) establish a record date not more than sixty
(60) days prior to the Date of Receipt for purposes of determining
the record holders of Class B Common Stock entitled to purchase
their pro rata portion of the Offered Shares (the "Offerers"), and
(y) give written notice simultaneously to all Offerees, informing
each Offeree of the Converting Holder's offer to sell to that
Offeree a pro rata portion of the Offered Shares, at an "Offer
Price" per share equal to the mean between the high and low prices
(or, if applicable, the mean between the closing bid and asked
prices) for Class A Common Stock, as reported by NASDAQ or by any
national securities exchange on which the Class A Common Stock is
listed, on the business day immediately preceding the Date of
Receipt. Simultaneous notice shall be deemed to have been given to
all Offerees on the date (the "Offer Date") on which the Secretary
sends to all Offerees, by delivery in hand or by deposit in the
United States mail, registered or certified and postage prepaid,
addressed to each Offeree at that Offeree's address appearing in
the corporation's stock records as of the applicable record date,
written notice as aforesaid. For purposes of this paragraph (b),
the pro rata portion of Offered Shares to be offered to each
Offeree shall be determined by the proportion that the amount of
shares held of record by that Offeree as of the applicable record
date bears to the aggregate amount of shares held of record by all
Offerees as of that record date; provided, that the Secretary may
apply rounding to avoid offering fractional shares.
(ii) Each Offeree may elect to purchase any or all of the
shares offered to him by giving written notice thereof to the
Secretary and the Converting Holder within fifteen (15) days after
the Offer Date. Any shares so purchased shall be delivered against
tender of the Offer Price in cash, certified or bank check, or wire
transfer within seven (7) days after the giving of notice by the
Offeree.
(iii) Commencing on the sixteenth (16th) day after the
Offer Date, and continuing for fifteen (15) days until and
including the thirtieth day after the Offer Date, the Notice given
by the Converting Holder pursuant to the preceding clause (i) shall
be deemed to constitute an offer to sell to the corporation at the
Offer Price any and all of the Offered Shares that have been
offered to but not accepted by the Offerees. The corporation may
elect to purchase any or all of the Offered Shares within the
fifteen (15) days described in the immediately preceding sentence.
(iv) Any shares of Class B Common Stock which have been
offered to and have not been purchased by the Offerees and the
Company, as provided in the preceding clauses (i)-(iii), shall be
converted to shares of Class A Common Stock.
(c) Except as provided in clause (ii) of this paragraph (c),
upon the occurrence of a Conversion Event, as defined in clause (i)
of this paragraph (c), any and all shares of Class B Common Stock
held by the shareholder as to whom the Conversion Event occurs
shall be converted immediately and without further action into an
equal number of shares of Class A Common Stock. Thereafter, any
outstanding certificate representing any shares of Class B Common
Stock so converted shall represent the corresponding shares of
Class A Common Stock; and any holder of any such certificate shall
be entitled to surrender it for issue of a certificate or
certificates for shares of Class A Common Stock as provided in
subparagraph (f) of this paragraph 4.
(i) A "Conversion Event" shall mean, as to any holder of
Class B Common Stock, his death, or his permanent mental
incapacity, or his being adjudged bankrupt, or the appointment of
any receiver, agent, or other custodian of all or any part of his
property that may include Class B Common Stock under any insolvency
or similar law of any jurisdiction.
(ii) A Conversion Event shall not result in automatic
conversion of any shares under this paragraph (c) if, before the
occurrence of the Conversion Event, the affected shareholder had
entered into a binding agreement to sell those shares (including a
binding option to sell) to any Permitted Transferee, as defined in
paragraph 3 of this Article FOURTH; provided, however, that if the
sale is not consummated within sixty (60) days after the Conversion
Event, then the shares shall be automatically converted as provided
in this paragraph (c).
(d) If and whenever the aggregate amount of shares of Class B
Common Stock held of record by Karr and London, plus the number of
shares of Class B Common Stock which Karr or London has a present
or future right to acquire pursuant to a binding agreement, is less
than twenty-five percent (25%) of the total amount of issued and
outstanding Class B Common Stock, plus the number of shares of
Class B Common Stock which Karr or London has a present or future
right to acquire pursuant to a binding agreement, then all issued
and outstanding shares of Class B Common Stock, and all shares of
Class B Common Stock held in treasury, shall be deemed to be
converted into an equal number of shares of Class A Common Stock,
immediately and without further action; and thereafter no share of
Class B Common Stock shall be issued.
(e) The Board of Directors may at any time declare that each
issued and outstanding share of Class B Common Stock is converted
into 1.3 shares of Class A Common Stock, immediately and without
further action, if the Board determines that such action is in the
best interest of the stockholders generally. Without limiting the
generality of the foregoing, the Board may do so if it determines
that the existence of classes of shares with unequal voting power
substantially impairs the maintenance of a public market for shares
of Class A Common Stock. The Board may make reasonable provision
to avoid conversion into fractional shares, including without
limitation provision for rounding of conversion amounts, or for
payment of cash in lieu of fractional shares.
(f) As promptly as practicable after the surrender for
conversion of a certificate representing shares of Class B Common
Stock, the corporation will deliver or cause to be delivered at the
office of the Transfer Agent to or upon the written order of the
holder of such certificate, a certificate or certificates
representing the number of full shares of Class A Common Stock
issuable upon such conversion, issued in such name or names as such
holder may direct. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of the
surrender of the certificate representing shares of Class B Common
Stock, and all rights of the holder of such shares as such holder
shall cease at such time and the person or persons in whose name or
names the certificate or certificates representing the shares of
Class A Common Stock are to be issued shall be treated for all
purposes as having become the record holder or holders of such
shares of Class A Common Stock at such time; provided, however,
that any such surrender and payment on any date when the stock
transfer books of the corporation shall be closed shall constitute
the person or persons in whose name or names the certificate or
certificates representing shares of Class A Common Stock are to be
issued as the record holder or holders thereof for all purposes
immediately prior to the close of business on the next succeeding
day on which such stock transfer books are open.
(g) No adjustments in respect of dividends shall be made upon
the conversion of any share of Class B Common Stock; provided,
however, that if a share shall be converted subsequent to the
record date for the payment of a dividend or other distribution on
shares of Class B Common Stock but prior to such payment, the
registered holder of such share at the close of business on such
record date shall be entitled to receive the dividend or other
distribution payable on such share on the payment date
notwithstanding the conversion thereof or the corporation's default
in payment of the dividend due on the payment date.
(h) The corporation covenants that it will at all times reserve
and keep available, solely for the purpose of issue upon conversion
of the outstanding shares of Class B Common Stock, such number of
shares of Class A Common Stock as shall be issuable upon the
conversion of all such outstanding shares; provided, that nothing
contained herein shall be construed to preclude the corporation
from satisfying its obligations in respect of the conversion of the
outstanding shares of Class B Common Stock by delivery of purchased
shares of Class A Common Stock which are held in the treasury of
the corporation. The corporation covenants that if any shares of
Class A Common Stock, required to be reserved for purposes of
conversion hereunder, require registration with or approval of any
governmental authority under any federal or state law before such
shares of Common Stock may be issued upon conversion the
corporation will cause such shares to be duly registered or
approved, as the case may be. The corporation will endeavor to
list the shares of Class A Common Stock required to be delivered
upon conversion prior to such delivery upon each national
securities exchange, if any, upon which the outstanding Class A
Common Stock is listed at the time of such delivery. The
corporation covenants that all shares of Class A Common Stock which
shall be issued upon conversion of the shares of Class B Common
Stock will, upon issue, be fully paid and nonassessable and not
subject to any preemptive rights.
(i) The issuance of certificates for shares of Class A Common
Stock upon conversion of shares of Class B Common Stock, shall be
made without charge for any stamp or other similar tax in respect
of such issuance. However, if any such certificate is to be issued
in a name other than that of the holder of the share or shares of
Class B Common Stock converted, the person or persons requesting
the issuance thereof shall pay to the corporation the any tax which
may be payable in respect of any transfer involved in such issuance
or shall establish to the satisfaction of the corporation that such
tax has been paid.
5. Further Issue
(a) Except as otherwise provided in this paragraph 5, the
directors may at any time and from time to time issue shares of
authorized and unissued Class A Common Stock and Class B Common
Stock upon such terms and for such lawful consideration as they may
determine.
(b) If any Change-over Event (as defined in subparagraph (b) of
paragraph 1 above) shall occur, then and thereafter no share of
Class B Common Stock shall be issued except pursuant to the
conversion or exercise, as the case may be, of convertible
securities, options, warrants or other rights to acquire such
shares that were outstanding or in existence on the date of the
Change-over Event.
(c) After the completion of the contemplated exchange offer
described in the Form S-4 registration statement of the corporation
filed with the Securities and Exchange Commission in October 1985,
no share of authorized and unissued Class B Common Stock, no
security convertible into or exchangeable for shares of Class B
Common Stock, and no option, warrant or other right to subscribe
for, purchase or otherwise acquire shares of Class B Common Stock
shall be issued except with the approval of the holders of a
majority of the issued and outstanding shares of Class B Common
Stock, voting as a class. The issuance of Class B Common Stock
pursuant to the conversion or exercise of convertible securities,
options, warrants or other rights previously approved in accordance
with the preceding sentence shall not require additional approval
at the time of such conversion or exercise.
(d) After the completion of the contemplated exchange offer
described in the Form S-4 registration statement of the corporation
filed with the Securities and Exchange Commission in October 1985,
no more than five million (5,000,000) shares of authorized and
unissued Class B Common Stock shall be issued except with the
approval of the holders of a majority of the issued and outstanding
shares of Class A Common Stock, voting as a class; provided,
however, that the following shares of Class B Common Stock shall
not be included in the limitation provided in this paragraph (d):
(i) previously issued and reacquired shares sold by the
Company from treasury shares;
(ii) shares issued and sold in exchange for a like number
of shares of Class A Common Stock or issued and sold for a
consideration per share not less than the fair market value of
Class A Common Stock, determined as the mean between the high and
low prices (or, if applicable, the mean between the closing bid and
asked prices) for Class A Common Stock, as reported by NASDAQ or by
any national securities exchange on which Class A Common Stock is
listed, on the business day of the issuance;
(iii) shares issued in connection with a stock split,
stock dividend, or other similar pro rata distribution made on
substantially equivalent terms to holders of Class A Common Stock
and holders of Class B Common Stock; and
(iv) shares issued pursuant to the terms of an employee
stock incentive plan or similar employee benefit plan of the
corporation.
6. No Preemptive Rights. No stockholder of the corporation
shall be entitled as of right to subscribe for, purchase, or take
any part of any new or additional issue of stock of any class.
7. Liquidation. Except as otherwise provided in this Article
FOURTH, shares of Common Stock of Class A and Class B shall be
equal in right. Without limiting the generality of the foregoing,
all shares of Common Stock of Class A and Class B shall be entitled
to share equally and ratably in the proceeds of any liquidation of
the corporation.
FIFTH: The corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever
and they shall not be personally liable for the payment of the
corporation's debts except as they may be liable by reason of their
own conduct or acts.
SEVENTH: The following provisions are inserted for the management
of the business and for the conduct of the affairs the corporation,
and for further definition, limitation and regulation of the powers
of the corporation and of its directors and stockholders.
(1) The number of directors comprising the Board of Directors
of the corporation shall be such as from time to time shall be
fixed by or in the manner provided in the by-laws, but shall not be
less than five (5). Election of directors need not be by ballot
unless the by-laws so provide.
(2) The Board of Directors shall have the power, unless and to
the extent that the Board may from time to time by Resolution
relinquish or modify the power, without the assent or vote of the
stockholders:
(a) To make, alter, amend, change, add to, or repeal the
by-laws of the corporation, except any by-law which pursuant to law
or the by-laws of the corporation is required to be adopted,
amended or repealed by the stockholders; to fix and vary the amount
of capital of the corporation to be reserved for any proper
purpose; to authorize and cause to be executed mortgages and liens
upon all or any part of the property of the corporation; to
determine the use and disposition of any surplus or net profits;
and to fix the times for the declaration and payments of dividends,
and
(b) To determine from time to time whether, and to what
extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the corporation (other than
the stock ledger) or any of them shall be open to the inspection of
the stockholders.
(3) The Board of Directors in its discretion may submit any
contract or act for approval or ratification at any annual meeting
of the stockholders or at any meeting of the stockholders called
for the purpose of considering such act or contract, and any
contract or act that shall be approved or be ratified by the vote
of the holders of a majority of the stock of the corporation which
is represented in person or by proxy at such meeting and entitled
to vote thereat (provided that a lawful quorum of stockholders be
there represented in person or by proxy) shall be as valid and
binding upon the corporation and upon all stockholders as though it
had been approved or ratified by every stockholder of the
corporation, whether or not the contract or act would otherwise be
open to legal attack because of directors' interest, or for any
other reason.
(4) No contract or transaction between this corporation an one
or more of its directors or officers, or between this corporation
and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void
or voidable solely for this reason or solely because the director
or officer is present at or participates in the meeting of the
board of committee thereon which authorizes the contract or
transaction, or solely because his or their votes are counted for
such purpose, if the contract or transaction is fair as to the
corporation and/or if the material facts relating thereto are
disclosed to and/or known by the directors and/or stockholders
and/or approved thereby, pursuant to Section 144 of Title 8 of the
Delaware Code.
(5) In addition to the powers and authorities hereinbefore or
by statute expressly conferred upon them, the Board of Directors is
hereby empowered to exercise all such powers and to do all such
acts and things as may be exercised or done by the corporation;
subject, nevertheless, to the provisions of the statutes of
Delaware, of this certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-law so made
shall invalidate any prior act of the Board which would have been
valid if such by-law had not been made.
3/ (6) No director of the Board of Directors of the corporation
shall be held liable for the monetary damages for breach of
fiduciary duty while acting as a director on behalf of the
corporation, except for:
1. Breach of the director's duty of loyalty to the
corporation or its stockholders;
2. Acts or omissions not committed in good faith;
3. Acts or omissions which involve intentional misconduct
or a knowing violation of law;
4. Acts taken in violation of Section 174 of Title 8,
Delaware Code, as amended from time to time (dealing with the
distribution of dividends and stock repurchases); or
5. Transactions from which the director derived an
improper personal benefit.
<FN3> EIGHTH: The corporation may, to the full extent permitted by
Section 145 of the Delaware General Corporation Law, as amended
from time to time, indemnify or advance the expenses of all persons
whom it may indemnify or for whom it may advance expenses.
NINTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware
may, on the application in a summary way of this corporation or of
any receiver or receivers appointed for this corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on
the application of trustees in dissolution or of any receiver or
receivers appointed for this corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of this corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority
in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall,
if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
TENTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in this certificate of
incorporation in the manner now or hereafter prescribed by law, and
all rights and powers conferred herein on stockholders, directors
and officers are subject to this reserved power.
ELEVENTH: The name(s) and addresses of the incorporator(s) are as
follows:
Charles P. Revoile 1815 North Fort Myer Drive
Arlington, Virginia 22209
The powers of the incorporators shall terminate upon filing the
certificate of incorporation, and the name and address of each
person who is to serve as a director until the first annual meeting
of stockholders or until his or their successors are elected and
qualify, shall be as follows:
Joseph S. Annino 1815 North Fort Myer Drive
Arlington, Virginia 22209
J. H. Berkson 1815 North Fort Myer Drive
Arlington, Virginia 22209
Herbert W. Karr 1815 North Fort Myer Drive
Arlington, Virginia 22209
J. P. London 1815 North Fort Myer Drive
Arlington, Virginia 22209
Robert F. McIntosh 1815 North Fort Myer Drive
Arlington, Virginia 22209
Warren R. Phillips 1815 North Fort Myer Drive
Arlington, Virginia 22209
John DeNigris 1815 North Fort Myer Drive
Arlington, Virginia 22209
IN WITNESS WHEREOF, I have hereunto set my hand and seal, this 3rd
day of October, 1985.
/s/ (L.S.)
----------------------------
Charles P. Revoile
<FN1> Name changed from CACI Worldwide, Inc. to CACI, Inc. by
Amendment to the Certificate of Incorporation dated June 2, 1986;
and from CACI, Inc. to CACI International Inc by Amendment to the
Certificate of Incorporation dated December 23, 1986.
<FN2> Article FOURTH amended December 23, 1986.
<FN3> Article SEVENTH (6) and Article EIGHTH amended December 23, 1986.
EXHIBIT 3.2
Revised as of December 17, 1993
BY-LAWS
of
CACI International Inc
(A Delaware Corporation)
ARTICLE I. OFFICES
Section 1. PRINCIPAL OFFICE
The principal office for the transaction of business of the
Corporation is hereby fixed and located at 1100 North Glebe Road,
County of Arlington, Commonwealth of Virginia. The Board of
Directors is hereby granted full power and authority to change said
principal office from one location to another in said County.
Section 2. OTHER OFFICES
Branch of subordinate offices may at any time be established by the
Board of Directors at any place or places where the Corporation is
qualified to do business.
ARTICLE II. MEETING OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS
All annual and other meetings of shareholders shall be held either
at the principal office of the Corporation or at any other place
which may be designated either by the Board of Directors pursuant
to authority hereafter granted to said Board, or by written consent
of all shareholders entitled to vote thereat, given either before
or after the meeting and filed with the Secretary of the Corporation.
Section 2. ANNUAL MEETING
The annual meetings of the shareholders shall be held on the third
Friday of October of each year, at 9:00 o'clock a.m. or at such
other date and time, not inconsistent with Delaware law, as may be
approved by the Board of Directors; provided, however, should said
day fall upon a legal holiday, then such annual meeting of
shareholders shall be held at the same time and place on the next
day thereafter which is not a legal holiday.
Written notice of each annual meeting shall be given to each
shareholder entitled to vote thereat, either personally or by mail
or other means of written communication, charges prepaid, addressed
to such shareholder at his or her address appearing on the books of
the Corporation or given by him or her to the Corporation for the
purpose of notice. If a shareholder gives no address, notice shall
be deemed to have been given him or her if sent by mail or other
means of written communication addressed to the place where the
principal office of the Corporation is situated, or if published at
least once in some newspaper of general circulation in the county
in which said office is located. All such notices shall be sent to
such shareholder entitled thereto, not less than twenty (20) days
nor more than sixty (60) days before such annual meeting, and shall
specify the place, day, and hour of such meeting, and shall also
state the general nature of the business or proposal to be
considered or acted upon at such meeting before action may be taken
at such meeting on:
(a) A proposal to sell, lease, convey, exchange, transfer, or
otherwise dispose of all or substantially all of the property or
assets of the Corporation, except under Section 272 of the Delaware
General Corporation Law, and except for a transfer to a
wholly-owned subsidiary;
(b) A proposal to merge or consolidate with another corporation,
domestic or foreign;
(c) A proposal to reduce the stated capital of the Corporation;
(d) A proposal to amend the Articles of Incorporation;
(e) A proposal to wind up and dissolve the Corporation; and
(f) A proposal to adopt a plan of distribution of shares,
securities, or any consideration other than money in the process of
winding up.
Advance Notice of Stockholder Proposed Business at Annual Meeting:
At an Annual Meeting of the Shareholders, only such business
shall be conducted as shall have been properly brought before the
meeting:
(a) As specified in the notice of the meeting (or any
supplement thereto);
(b) By, or at the direction of, the Board of Directors; or
(c) Otherwise properly brought before the meeting by a
stockholder.
In addition to any other applicable requirements, for business to
be properly brought before an Annual Meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice
must be delivered to or mailed and received at the offices of the
Secretary of the Corporation, not less than sixty (60) days prior
to the first anniversary of the date of the last Annual Meeting of
stockholders of the Corporation. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder
purposes to bring before the Annual Meeting (i) a brief description
of the business desired to be brought before the Annual Meeting and
reasons for conducting such business at the Annual Meeting; (ii)
the name and record address of the stockholder proposing such
business; (iii) the class and number of shares of the Corporation
which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business.
Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at the Annual Meeting except in
accordance with the procedures set forth in this section, provided,
however, that nothing in this section shall be deemed to preclude
discussion by any stockholder of any business properly brought
before the Annual Meeting in accordance with said procedure.
The Chairman of the Annual Meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the provisions of
this section, and if he should so determine, he shall so declare to
the meeting that any such business not properly brought before the
meeting shall not be transacted.
Section 3. SPECIAL MEETINGS
Special Meetings of the shareholders, for any propose or purposes
whatsoever, may be called any time by the Chairman of the Board,
the President, or by the Board of Directors. Except in special
cases where other express provision is made by statute, notice of
such special meetings shall be given in the same manner as for
annual meetings of shareholders.
Notices of any special meeting shall specify, in addition to the
place, day and hour of such meeting, the general nature of the
business to be transacted.
Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not a
quorum is present, may be adjourned from time to time by vote of a
majority of the shares, the holders of which are either present in
person or by proxy, but in the absence of a quorum, no other
business may be transacted at such meeting.
When any shareholders' meeting, either annual or special, is
adjourned for thirty (30) days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting. In
all other instances of adjournment, it shall not be necessary to
give any notice of an adjournment or of the business to be
transacted ad an adjourned meeting, other than by announcement at
the meeting at which such adjournment is taken.
Section 5. ENTRY OF NOTICE
Whenever any shareholder entitled to vote has been absent from any
meeting or shareholders, whether annual or special, an entry in the
minutes to the effect that notice has been duly given shall be
sufficient evidence that due notice of such meeting was given to
such shareholder, as required by the law and the By-laws of the
Corporation.
Section 6. VOTING
At all meetings of shareholders, every shareholder entitled to vote
shall have the right to vote in person or by proxy the number of
shares standing in his or her name on the stock records of the
Corporation. Such vote may be given viva voce or by ballot;
provided, however, that all elections for directors must be by
ballot upon demand made by a shareholder at any election and before
the voting begins.
Section 7. QUORUM.
The presence in person or by proxy of the holders of a majority of
the shares entitled to vote at any meeting shall constitute a
quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. When
a quorum is present at any meeting, a majority in interest of the
stock represented thereat shall decide any question brought before
such meeting, unless the question is one upon which by express
provision of law, the Articles of Incorporation, or these By-laws,
a larger or different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 8. CONSENT OF ABSENTEES
The proceedings and transactions of any meeting of shareholders,
either annual or special, however called and noticed, shall be as
valid as though had at a meeting duly held after regular call and
notice, if a quorum be present either in person or by proxy, and
if, either before or after the meeting, each of the shareholders
entitled to vote, not present in person or by proxy, sign a written
waiver of notice, a consent to the holding of such meeting, or an
approval of the minutes thereof. All such waivers, consents, or
approvals shall be filed with the corporate records or made apart
of the minutes of the meeting.
Section 9. ACTION WITHOUT MEETING
Any action, which under the provisions of Section 228 of the
Delaware General Corporation Law may be taken at a meeting of the
shareholders, may be taken without a meeting if authorized by a
writing signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to
authorize or take such action at any meeting at which all shares
entitled to vote thereon were present and voted, and filed with the
Secretary of the Corporation.
Section 10. PROXIES
Every person entitled to vote or execute consents shall have the
right to do so either in person or by an agent or agents authorized
by a written proxy executed by such person or his or her duly
authorized agent and filed with the Secretary of the Corporation;
provided, that no such proxy shall be valid after the expiration of
eleven (11) months from the date of its execution, unless the
shareholder executing it specifies therein the length of time for
which such proxy is to continue in force, which in no case shall
exceed seven (7) years from the date of its execution.
ARTICLE III. DIRECTORS
Section 1. POWERS
Subject to limitations of the Articles of Incorporation, of the
By-laws, and particularly Article II, Section 6 of these By-laws,
and Section 141 of the Delaware General Corporation Law as to
action to be authorized or approved by the shareholders, and
subject to the duties of directors as prescribed by the By-laws,
all corporate power shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be
controlled by, the Board of Directors. Without prejudice to such
general powers, but subject to the same limitations, it is hereby
expressly declared that the directors shall have the following
powers, to-wit:
First: To select and remove all other officers, agent, and
employees of the Corporation, prescribe such powers and duties for
them as may not be inconsistent with law, the Articles of
Incorporation or by By-laws, fix their compensation, and require
from them security for faithful service.
Second: To conduct, manage, and control the affairs and business
of the Corporation, and to make such rules and regulations
therefore not inconsistent with law, the Articles of Incorporation
or the By-laws, as they may deem best.
Third: To change the principal office for the transaction of the
business of the Corporation from one location to another within the
same county as provided in Article I, Section 1 hereof; to fix and
locate from time to time, one or more branch or subsidiary offices
of the Corporation within or without the State of Delaware as
provided in Article I, Section 2 hereof; to designate any place
within or without the State of Delaware for the holding of any
shareholders' meetings; and to adopt, make, and use a corporate
seal, and to prescribe the form of certificates of stock, and to
alter the form of such seal and of such stock certificates from
time to time, as in their judgment they may deem best; provided,
such seal and such certificates shall at all times comply with the
provisions of the law.
Fourth: To authorize the issuance of stock of the Corporation
from time to time, upon such terms as may be lawful, in
consideration of money paid, labor done, or services actually
rendered, debts or securities canceled, or tangible or intangible
property actually received, or in case of shares issued as a
dividend, against amounts transferred from surplus to stated
capital.
Fifth: To borrow money and incur indebtedness for the purposes of
the Corporation and to cause to be executed and delivered
therefore, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecations, or
other evidence of debt and securities therefore.
Sixth: To appoint an executive committee and other committees,
and to delegate to the executive committee any of the powers and
authority of the Board in the management of the business and
affairs of the Corporation, except the power to declare dividends
and to adopt, amend, or repeal By-laws. The executive committee
shall be composed of two or more directors.
Seventh: To impose such restriction(s) on the transfer of the
stock of the Corporation, specifically including by way of
illustration only, and not of limitation, e.g., the requirement
that such stock not be transferable on the books of the Corporation
except with a simultaneous transfer of the stock of any other
corporation(s), as is or may be permitted by law, and to remove any
such restriction(s) thereon.
Section 2. NUMBER AND QUALIFICATIONS OF DIRECTORS
The authorized number of directors of the Corporation shall be
a number between five (5) and nine (9) inclusive, as the Board of
Directors from time to time by vote of a supermajority (a majority
plus one) may set, until changed by amendment of the Articles of
Incorporation or by a by-law amending this Section 2, Article III
of these By-laws duly adopted by the vote or written assents of the
shareholders entitled to exercise fifty-one percent (51%) of the
voting power of the Corporation.
Section 3. ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of the
shareholders, but if any such annual meeting is not held, or the
directors are not elected thereat, the directors may be elected at
any special meeting of the shareholders held for that purpose. All
directors shall hold office at the pleasure of the shareholders or
until their respective successors are elected. The shareholders may
at any time, either at a regular or special meeting, remove any
director and elect his or her successor.
NOMINATIONS OF DIRECTORS
Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors. Nominations
of candidates for election as directors of the Corporation at any
meeting of shareholders may be made (a) by, or at the direction of,
a majority of the Board of Directors, or (b) by any shareholder of
that class of stock entitled to vote for the election of directors
of that class of stock. Only persons nominated in accordance with
the procedures set forth in this section shall be eligible for
election as directors. Such nomination, other than those made by,
or at the direction of the board, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and
received at the office of the Secretary of the Corporation not less
than sixty (60) days prior to the first anniversary of the date of
the last meeting of stockholders of the Corporation called for the
election of directors. Such stockholder's notice to the Secretary
shall set forth (a) as to each person whom the stockholder proposes
to nominate for election or reelection as a director: (i) the name,
age, business address, and residence address of the person; (ii)
the principal occupation of the employment of the person; (iii) the
class and number of shares of capital stock of the Corporation
which are beneficially owned by the person; and (iv) any other information
related to the person that is required to be disclosed in solicitations for
proxies for elections of directors pursuant to Rule 14a under the Securities
Exchange Act of 1934, as amended; and (b) as to the stockholder giving the
notice: (i) the name and record address of the stockholder, and (ii) the
class and number of shares of capital stock of the Corporation which are
beneficially owned by the stockholder. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as director of the Corporation. No person shall be
eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting that the defective
nomination shall be disregarded.
Section 4. VACANCIES
Vacancies in the Board of Directors may be filled by the remaining
directors, though less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until his
or her successor is elected at an annual or special meeting of the
shareholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation, or removal of any
director, or if the authorized number of directors be increased, or
if the shareholders fail at any annual or special meeting of the
shareholders at which any director or directors are elected, to
elect the full authorized number of directors to be voted for at
that meeting.
The shareholders may elect a director of directors at any time to
fill any vacancy or vacancies of a director tendered to take effect
at a future time; the Board or the shareholders shall have the
power to elect a successor to take office when the resignation is
to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his or
her term of office.
Section 5. PLACE OF MEETING
Regular meetings of the Board of Directors shall be held at any
place within or without the State of Delaware which has been
designated from time to time by resolution of the Board or by
written consent of all members of the Board. In the absence of such
designation, regular meetings shall be held at the principal office
of the Corporation. Special meetings of the Board may be held
either at a place so designated or at the principal office.
Section 6. ORGANIZATION MEETING
Immediately following each annual meeting of shareholders, the
Board of Directors shall hold a regular meeting for the purpose of
organization, election of officers, and the transaction of other
business. Notice of such meetings is hereby dispensed with.
Section 7. OTHER REGULAR MEETINGS
Other regular meetings of the Board of Directors shall be held on
the third Friday of January, April, and July of each year at 9:00
o'clock a.m. thereof; provided, however, that should said day fall
upon a legal holiday, then said meeting shall be held at the same
time and place on the next day thereafter which is not a legal
holiday. Notice of regular meetings of the Board of Directors is
required and shall be given in the same manner as notice of special
meetings of the Board of Directors.
Section 8. SPECIAL MEETINGS
Special meetings of the board of Directors for any purpose or
purposes may be called at any time by the President, by the
Executive Committee, or by any three (3) members of the Board.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by
mail or other form or written communication, charges prepaid,
addressed to him or her at his or her address as it is shown upon
the records of the Corporation, or if it is not shown on such
records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held. In case such notice
is mailed or telegraphed, it shall be deposited in the U.S. Mail or
delivered to the telegraph company in the place in which the
principal office of the Corporation is located at least one hundred
twenty (120) hours prior to the time of holding of the meeting. In
case such notice is delivered personally as above provided, it
shall be so delivered at least forty eight (48) hours prior to the
time of the holding of the meeting. Such mailing, telegraphing, or
delivery as above provided, shall be due, timely, legal and
personal notice to such director.
NOTICE FOR A PARTICULAR SPECIFIED ACTION
Notwithstanding the above requirements for regular or special
meetings, the Chairman of the Board, the Chief Executive Officer,
or any two directors may require at least thirty (30) calendar days
notice of any action, by writing delivered to the Secretary of the
Corporation, before or during any regular or special meeting, and
if such notice is given, no vote or written consent may be taken
upon such action until the passage of such time (at another special
meeting or by written consent). Provided, however, if eighty
percent (80%) of the directors agree to waive such notice, the
meeting or vote of consent on such action shall proceed without the
requirement for extended notice.
Section 9. NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting need
not be given to absent directors if the time and place be fixed at
the meeting adjourned.
Section 10. ENTRY OF NOTICE
Whenever any director has been absent from any special meeting of
the Board of Directors, any entry in the minutes as to the effect
that notice has been duly given shall be sufficient evidence that
due notice of such special meeting was given to such director, as
required by law and the By-laws of the Corporation.
Section 11. WAIVER OF NOTICE
The transactions of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice, if a
quorum be present, and if either before or after the meeting, each
of the directors not present, signs a written waiver of notice or
a consent to holding such meeting or an approval of the minutes
thereof. All such waivers, consents, or approvals shall be filed
with the corporate records or made a part of the minutes of the
meeting.
Section 12. QUORUM
A majority of the authorized number of directors shall be necessary
to constitute a quorum for the transaction of business, except to
adjourn as hereinafter provided. With the exception of Section 4 of
this Article, an action of the directors shall be regarded as the
act of the Board of Directors only if a majority of the entire
authorized number of directors shall vote affirmatively on such
action.
Section 13. ADJOURNMENT
A quorum of the directors may adjourn any directors' meeting to
meet again at a stated time, place, and hour; provided, however,
that in the absence of a quorum, the directors present at any
directors' meeting, either regular or special, may adjourn from
time to time, until the time fixed for the next regular meeting of
the Board.
Section 14. ACTION WITHOUT MEETING
Any action required or permitted to be taken by the Board of
Directors under any provision of law or these By-laws may be taken
without a meeting if all members shall individually or collectively
consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board.
Such action by written consent shall have the same force and effect
as a unanimous vote of such directors, any certificate or other
document filed under any provisions of the Delaware General
Corporation Law which related to action so taken shall state that
the action was taken by unanimous written consent of the Board of
Directors without a meeting and that the By-laws authorize the
directors to so act, and such statement shall be prima facie
evidence of such authority.
Section 15. FEES AND COMPENSATION
Directors shall not receive any stated salary for their services as
directors, but, by resolution of the Board of Directors, a fixed
fee, with or without expenses of attending, may be allowed for
attendance at each meeting. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in
any other capacity as an officer, agent, employee, or otherwise,
and receiving compensation therefore.
ARTICLE IV. OFFICERS
Section 1. OFFICERS
The officers of the Corporation shall be:
1. Chairman of the Board
2. President
3. Vice President
4. Secretary
5. Treasurer
The Corporation may also have, at the discretion of the Board of
Directors, one or more additional vice presidents, one or more
assistant secretaries, one or more assistant treasurers, and such
other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Officers other than the
President and Chairman of the Board of Directors need not be
directors. One person may hold two or more offices, except those of
President and Secretary.
Section 2. ELECTIONS
The officers of the Corporation, except such officers as may be
appointed in accordance with the provisions of Sections 3 or 5 of
this Article, shall be chosen annually by the Board of Directors,
and each shall hold his or her office at the pleasure of the Board
of Directors, who may, either at a regular or special meeting,
remove any such officers and appoint his or her successor.
Section 3. SUBORDINATE OFFICERS, ETC
The Board of Directors may appoint such other officers as the
business of the Corporation may require, each of whom shall hold
office for such period, have such authority, and perform such
duties as are provided in the By-laws or as the Board of Directors
may from time to time determine.
Section 4. REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at a regular or
special meeting of the Board, or, except in the case of an officer
chosen by the Board of Directors, by any officer upon whom such
power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Board of Directors or to the President, or to the Secretary of the
Corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein;
and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, or any other cause shall be filled in the manner
prescribed in the By-laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD
The Chairman of the Board, if there shall be such an officer,
shall, if present, preside at all meetings of the Board of
Directors, and exercise and perform such other powers and duties as
may be from time to time assigned to him or her by the Board of
Directors as prescribed by the By-laws.
Section 7. PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chairman of the Board, if there be such
an officer, the President shall be the Chief Executive Officer of
the Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction, and control of the
business and affairs of the Corporation. He shall preside at all
meetings of the shareholders, and in the absence of the Chairman of
the Board, or if there be none, at all meetings of the Board of
Directors. He shall be ex-officio a member of all the standing
committees, including the Executive Committee, if any, and shall
have the general powers and duties of management usually vested in
the office of president of a Corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or
by the By-laws.
Section 8. VICE PRESIDENT
In the absence or disability of the President, the Chairman of the
Board or in the event of his absence or disability, the Vice
Presidents in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the
Board of Directors, shall perform all the duties of the President,
and when so acting shall have all the powers of, and be subject to
all restrictions upon, the President. Absence and disability are
defined as follows: absence is physical absence from the
Corporation's principal place of business and unreachable by
telephone for a period of forty-eight (48) hours. Disability is the
inability of the President to perform his duties on an ongoing
basis.
The Senior Vice President and each other Vice President shall have
such other powers and perform such duties as are authorized by the
laws of Delaware and as are delegated to them respectively from
time to time by the board of Directors or the By-laws.
Section 9. SECRETARY
The Secretary shall keep, or cause to be kept, a book of minutes at
the principal office or such other place as the Board of Directors
may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if
special, how authorized, the notice thereof given, the names of
those directors and shareholders present, the names of those
present at the directors' meeting, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The Secretary shall keep or cause to be kept, at the principal
office or at the office of the Corporation's transfer agent, a
share register or a duplicate share register showing the names of
the shareholders and their addresses; the number and classes of
shares held by each; the number and the date of certificates issued
for the same; and the number and date of cancellation of every
certificate surrendered for cancellation.
The Secretary shall give or cause to be given, notice of all
meetings of shareholders and the Board of Directors, as required by
the By-laws or by law to be given, and he or she shall keep the
seal of the Corporation in safe custody, and shall have such other
powers and perform such other duties as may be prescribed by the
Board of Directors or the By-laws.
Section 10. TREASURER
The Treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses,
capital surplus, and surplus shares. Any surplus, including earned
surplus, paid-in surplus, and surplus arising from a reduction of
stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all times be
open for inspection by any director.
The Treasurer shall deposit all monies and other valuables in the
name and to the credit of the Corporation with such depositories as
may be designated by the Board of Directors. He or she shall
disburse the funds of the Corporation as may be ordered by the
Board of Directors and shall render to the President and directors,
when they request it, an account of all of his or her transactions
as Treasurer and of the financial condition of the Corporation, and
shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or the By-laws.
ARTICLE V. MISCELLANEOUS
Section 1. RECORD DATE AND CLOSING STOCK BOOKS
A. Fixed Date
The Board of Directors may fix a time, in the future, not less than
twenty (20) nor more than sixty (60) days preceding the date of any
meeting of shareholders, and not more than sixty (60) days
preceding the date fixed for the payment of any dividend or
distribution, or for the allotment of rights, or when any change,
conversion, or exchange of shares shall go into effect, as a record
date for the determination of the shareholders entitled to notice
of and to vote at any such meeting, or entitled to receive any such
dividend or distribution, or any such allotment of rights, or to
exercise the rights in respect to any such change, conversion, or
exchange of shares, and in such case only shareholders of record on
the date so fixed shall be entitled to notice of and to vote at
such meeting, or to receive such rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against transfer
of shares during the whole, or any part of any such period.
B. No Fixed Date
As an alternative to an action taken under Subsection A of this
Section 1 of Article V, if no record date has been or is fixed for
the purpose of determining shareholders entitled to receive payment
of any dividend, the record date for such purpose shall be at the
close of business of the date on which the Board of Directors
adopts the resolution relating thereto.
Section 2. INSPECTION OF CORPORATE RECORDS
The share register or duplicate share register, the books of
account, and minutes of proceedings of the shareholders and
directors shall be open to inspection upon the written demand of
any shareholder or the holder of a voting trust certificate, at any
reasonable time, and for a purpose reasonably related to his or her
interests as a shareholder, and shall be exhibited at any time when
required by the demand of ten percent (10%) of the shares
represented at any shareholders' meeting. Such inspection may be
made in person or by an agent or attorney, and shall include the
right to make extracts. Demand of inspection other than at a
shareholders' meeting shall be made in writing upon the President,
Secretary, or Assistant Secretary of the Corporation.
Section 3. CHECKS, DRAFTS, ETC.
All checks, drafts, or other orders for payment of money, notes, or
other evidence of indebtedness issued in the name of or payable to
the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be
determined by resolution of the Board of Directors.
Section 4. CONTRACTS, ETC.: HOW EXECUTED
The Board of Directors, except as the By-laws or Articles of
Incorporation otherwise provide, may authorize any officer or
officers, agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances;
and unless so authorized by the Board of Directors, no officer,
agent, or employee shall have any power or authority to bind the
Corporation by any contract or agreement or to pledge its credit to
render it liable for any purpose or to any amount.
Section 5. ANNUAL REPORTS
The Board of Directors shall cause an annual report or statement to
be sent to the shareholders of this Corporation not later than one
hundred and twenty (120) days after the close of the fiscal or
calendar year.
Section 6. CERTIFICATES OF STOCK
A certificate or certificates for shares of the capital stock of
the Corporation shall be issued to each shareholder when any such
shares are fully paid up. All such certificates shall be signed by
the President or a Vice President and the Secretary or an Assistant
Secretary. Such certificates may be paired with, deemed to
represent, and subjected to restrictions on transfer without
simultaneous transfer of, certificates for: (a) shares of stock of
any other corporation(s), (b) beneficial interests in such shares,
(c) interests in voting trust(s), or (d) other kinds of interests
in any other kind of entity.
Certificates for shares may be issued prior to full payment
thereof, under such restrictions and for such purposes as the Board
of Directors or the By-laws may provide; provided, however, that
any such certificate so issued prior to full payment shall state
the amount remaining unpaid and the terms of payment thereof.
Section 7. REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The President or any Vice President and the Secretary or Assistant
Secretary of this Corporation are authorized to vote, represent,
and exercise on behalf of this Corporation all rights incident to
any and all shares of any other corporation or corporations
standing in the name of this Corporation. The authority herein
granted to said officers to vote or represent on behalf of this
Corporation any and all shares held by this Corporation or
corporations, may be exercised either by such officers in person or
by any person authorized to do so by proxy or power of attorney.
Section 8. INSPECTION OF BY-LAWS
The Corporation shall keep in its principal office for the
transaction of business the original or a copy of the By-laws as
amended or otherwise altered to date, certified by the Secretary,
which shall be open to inspection by the shareholders at all
reasonable times during business hours.
Section 9. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Every person who was or is a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the
fact that he or a person of whom he is the legal representative is
or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director or officer
of another corporation, shall be indemnified and held harmless to
the fullest extent legally permissible under the General
Corporation Law of the state of Delaware from time to time against
all expense, liability, and loss (including attorneys' fees,
judgments, fines, and, if approved by the Board of Directors,
amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith.
If authorized by the Board of Directors, expenses incurred in
connection with the defense of any civil or criminal action, suit,
or proceeding may be paid by the Corporation in advance of the
disposition of the action, suit, or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay
such amounts if it shall be ultimately determined that he is not
entitled to be indemnified by the Corporation.
The foregoing right of indemnification shall be in addition to, and
not exclusive of, all other rights to which such director or
officer may be entitled. Payments pursuant to the Corporation's
indemnification of any person hereunder shall be reduced by any
amounts such person may collect as indemnification under any policy
of insurance purchased and maintained on his behalf by this or any
other Corporation.
ARTICLE VI. AMENDMENTS
Section 1. POWER OF SHAREHOLDERS
New By-laws may be adopted or these By-laws may be amended or
repealed by the vote of shareholders entitled to exercise fifty-one
percent (51%) of the voting power of the Corporation or by the
written assent of such shareholders.
Section 2. POWERS OF DIRECTORS
Subject to the right of shareholders as provided in Section 1 of
this Article VI to adopt, amend, or repeal By-laws, By-laws other
than a By-law or amendment thereof changing the authorized number
of directors may be adopted, amended, or repealed by the Board of
Directors.
ARTICLE VII. SEAL
The Corporation shall have a common seal, and shall have inscribed
thereon the name of the Corporation, the year of its incorporation,
and the word Delaware.
EXHIBIT 11
CACI INTERNATIONAL INC AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
(dollars in thousands)
<TABLE>
<CAPTION>
Year ended June 30, 1997 1996 1995
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $10,072 $ 9,851 $ 8,156
Average shares outstanding
during the period 10,504 10,140 10,020
Dilutive effect of stock
options after application
of treasury stock method 501 576 591
------ ------ ------
Average number of shares
and equivalent shares out-
standing during the period 11,005 10,716 10,611
------ ------ ------
Earnings per common and
common equivalent share $ 0.92 $ 0.92 $ 0.77
====== ====== ======
</TABLE>
EXHIBIT 13
FINANCIAL CONTENTS
Selected Financial Information
Management's Discussion and Analysis
Schedule II: Valuation and Qualifying Accounts
Independent Auditors' Consent to incorporation of the financial information
related to the Independent Auditors' Report by reference from the Annual
Report to Shareholders
Independent Auditors' Consent to incorporation by reference of the financial
information related to the Independent Auditors' Report to the Registration
Statement dated January 24, 1997 of CACI International Inc on Form S-8
Independent Auditors' Report on Consolidated Financial Statement Schedule
Report of Independent Auditors
Statements of Operations
Balance Sheets
Statements of Cash Flows
Statements of Shareholders' Equity
Notes to Financial Statements
Quarterly Results
<PAGE>
CACI INTERNATIONAL INC
FIVE-YEAR SELECTED FINANCIAL INFORMATION
(dollars in thousands, except per share)
INCOME STATEMENT DATA
Year ended June 30, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Revenues $272,984 $244,615 $232,964 $183,700 $145,148
Costs and expenses
Direct costs 148,433 133,184 126,442 97,584 75,804
Indirect costs and
selling expenses 99,808 89,160 87,688 71,126 57,797
Depreciation and
amortization 6,852 5,510 4,981 4,341 3,367
------- ------- ------- ------- -------
Total operating expenses 255,093 227,854 219,111 173,051 136,968
Income from operations 17,891 16,761 13,853 10,649 8,180
Interest expense 1,105 605 478 420 471
Shareholder lawsuit &
merger costs - - - 494 901
Excess facilities and
lease termination cost - - - - 1,921
------- ------- ------- ------- -------
Income before income taxes 16,786 16,156 13,375 9,735 4,887
Income taxes 6,714 6,305 5,219 3,699 1,907
------- ------- ------- ------- -------
Net income $ 10,072 $ 9,851 $ 8,156 $ 6,036 $ 2,980
======= ======= ======= ======= =======
Earnings per share $ 0.92 $ 0.92 $ 0.77 $ 0.57 $ 0.29
======= ======= ======= ======= =======
</TABLE>
BALANCE SHEET DATA
June 30, 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Total assets $118,860 $103,308 $74,642 $70,999 $58,417
Long-term obligations 10,568 2,414 2,340 2,492 2,898
Working capital 42,014 28,675 26,517 22,009 21,937
Shareholders' equity 70,774 55,338 44,485 37,738 30,497
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION & RESULTS OF OPERATIONS
The following discussion and analysis is provided to enhance the understanding
of, and should be read in conjunction with, the Financial Statements and the
related Notes. All years refer to the Company's fiscal year which ends on
June 30.
REVENUES
The table below sets forth, for the periods indicated, the customer mix in
revenues with related percentages of total revenues.
(dollars in thousands, except as percents)
1997 1996 1995
--------------- --------------- ---------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Department of Defense $141,172 51.7% $130,432 53.3% $120,104 51.6%
Federal Civilian
Agencies 69,615 25.5 59,178 24.2 55,541 23.8
Commercial 55,132 20.2 47,479 19.4 48,286 20.7
State & Local
Governments 7,065 2.6 7,526 3.1 9,033 3.9
------- ---- ------- ---- ------- ----
Total $272,984 100.0% $244,615 100.0% $232,964 100.0%
======= ==== ======= ==== ======= ====
</TABLE>
Total revenues in 1997 increased by $28.4 million, or 12%, from $244.6 million
to $273.0 million, primarily due to 1996 and 1997 acquisitions coupled with
internal growth in Federal Civilian Agencies and increased demand for
commercial products and services.
All of the acquisitions have been accounted for as a purchase and the results
of their operations included in the Company's revenues since the date of
acquisition. The following reflects the year-to-year effect of applying this
accounting treatment. Acquisitions made during the last two years accounted
for $21.6 million of the 1997 revenue growth. On September 1, 1995, the
Company acquired Automated Sciences Group, Inc. (ASG) which contributed
approximately $2.8 million to 1997 first quarter revenues versus $1.2 million
for the same quarter last year. On January 1, 1996, IMS Technologies, Inc.
(IMS) was acquired and contributed $8.3 million to the first six months ending
December 31, 1996. On October 1, 1996, the Company acquired the majority of
the business and assets of Sunset Resources, Inc. (SRI), which added 1997
revenues of approximately $11.5 million. On May 14, 1997, the Company
acquired the Simulation Engineering Division of Statistica, Inc. which added
revenues of approximately $0.2 million.
Total revenues in 1996 increased by 5% from $233.0 million to $244.6 million,
primarily due to the ASG and IMS acquisitions discussed above, which
contributed approximately $12.0 million and $8.6 million to 1996 revenues,
respectively. Lack of internal growth in 1996 was partially attributable to
the extensive delays in approval of federal government budgets during the
year, which resulted in delays in new federal procurements.
The Department of Defense (DoD) revenue increase in 1997 was primarily
attributable to the ASG and SRI acquisitions discussed above. The 1996 DoD
revenue increase was primarily attributable to the ASG and IMS acquisitions
partially offset by the give-back to the prime contractor of a Navy contract
by the Company on April 1, 1995. This subcontract generated approximately
$6.2 million in revenues in 1995, but was breakeven in terms of its
profitability.
Federal Civilian Agencies revenues are primarily derived from Department of
Justice (DoJ) litigation support efforts. The litigation support business
with DoJ has grown substantially over many years. However, these services are
dependent on the level of DoJ litigation that the Company is supporting at any
period of time and have significant year-to-year fluctuations. Revenues from
DoJ were $53.2 million, $47.4 million and $49.2 million in 1997, 1996 and
1995, respectively. The year-to-year comparisons of revenues from Federal
Civilian Agencies were enhanced by $7.1 million and $8.3 million from the ASG
and IMS acquisitions in 1997 and 1996, respectively.
Commercial revenues are derived primarily from the Company's Marketing Systems
Group located in the U.K., to a lesser degree from the Simulation Systems
Group, and from commercial litigation support. In 1997, Commercial revenues
increased by $7.7 million primarily in the Marketing Systems Group, where
increased demand for services raised revenues to $33.0 million from $28.8
million in 1996. In 1996, revenues declined $0.8 million largely as a result
of a delay in the introduction of a Windows 95 version of its InSite™
product until mid-year. Revenues from the Simulation Systems Group increased
by 16% in 1997 to $11.2 million. The nature of the Company's proprietary
software products business is inherently less predictable than the Company's
longer-term contract work with the U.S. Government and may fluctuate from
year-to-year.
State & Local Governments revenues were $7.1 million and $7.5 million in 1997
and 1996, respectively. The $0.4 million revenue decline in 1997 was
principally due to reduced demand from various state motor vehicle
departments. The $1.5 million decline in 1996 revenues resulted primarily
from an early termination of one of these efforts.
The Company's total backlog at July 31, 1997, increased to $1.0 billion, or
42%, from prior year's $705 million.
RESULTS OF OPERATIONS
In 1997, income from operations grew $1.1 million to $17.9 million, or 6.6% of
revenues. There were several unusual or infrequently recurring items included
in 1997 operating income which in the aggregate offset each other. On the
positive side, the Company recovered $1.5 million on several old contract
claims and prior year indirect rate settlements on its government contracts.
A $0.3 million pretax gain was recognized on the sale of a small,
non-strategic software product business that had generated approximately $1.5
million of annual revenues. Offsetting these were $1.7 million of losses from
productivity problems experienced in fixed unit price document management work
in the litigation support business. This loss included a $0.5 million
provision to cover anticipated losses in 1998 before productivity improvements
can be fully effected to return the activity to a profitable condition.
In 1996, income from operations grew $2.9 million to $16.8 million, and as a
percent of revenues improved to 6.8% from 5.9%. This margin improvement was
the result of increased revenues, management's control of discretionary costs,
$0.9 million in favorable settlements of contract claims, and a shift in
contract mix from lower to higher margin business.
The following table sets forth the relative percentages that certain items of
expense and earnings bear to revenues.
1997 1996 1995
----------------------------------------
Revenues 100.0% 100.0% 100.0%
Costs and expenses
Direct costs 54.4 54.4 54.3
Indirect & selling
expenses 36.6 36.5 37.7
Depreciation &
amortization 2.4 2.3 2.1
----- ----- -----
Total operating
expenses 93.4 93.2 94.1
Income from
operations 6.6 6.8 5.9
Interest expense 0.5 0.2 0.2
----- ----- -----
Income before income
taxes 6.1 6.6 5.7
Income taxes 2.4 2.6 2.2
----- ----- -----
Net income 3.7% 4.0% 3.5%
===== ===== =====
During the last three years, as a percentage of revenues, total direct costs
remained relatively stable at 54.4%, 54.4% and 54.3%. Direct costs include
direct labor and other direct costs (i.e., non-labor) which are generally
passed through to the customer without significant mark-up. Direct labor, the
principal device of profit-bearing revenues, was 63.1%, 65.9% and 63.3% of
total direct costs in 1997, 1996 and 1995, respectively. The higher 1996
percentage partially contributed to the higher overall margins in that year.
Indirect costs & selling expenses include fringe benefits, marketing and bid &
proposal costs, indirect labor, and other indirect discretionary costs. From
1995 to 1997, fringe benefits, representing the largest category of indirect
expenses, have been increasing as a percentage of revenues from 12.1% to 12.5%
to 12.8%, respectively. The primary contributors to the fringe costs
increases are higher-than-proportional increases in insurance and holiday &
vacation benefits costs. However, indirect costs as a percentage of revenues
remained relatively stable in 1997, 36.6% versus 36.5% in 1996. In 1996
indirect costs as a percentage of revenues declined to 36.5% from the previous
year's 37.7%, principally due to control in the growth of management costs
while revenues were increasing sharply. The decline in indirect costs as a
percent of revenues in 1996 was due primarily to management's efforts to
reduce discretionary costs by $1.5 million to offset the negative effects on
revenues resulting from delays in the 1996 federal government budget process.
Throughout these periods, the Company has maintained a high level of marketing
and bid & proposal activity.
Depreciation & amortization expenses increased by $1.3 million in 1997 to $6.9
million. Approximately $0.3 million of the increase is the result of the
additional goodwill amortization associated with the ASG, IMS and SRI
acquisitions. The remainder of the increase is the result of the increased
level of fixed asset acquisitions, primarily purchases of computing and
network equipment. Approximately half of the 1996 depreciation & amortization
expense increase of $0.5 million was the result of the increased level of
fixed asset acquisitions, primarily purchases of computing and network
equipment, coupled with the addition of ASG and IMS fixed assets. The
remainder of the growth was the result of ASG and IMS goodwill amortization.
Interest expense increased in 1997 and 1996 by $0.5 million and $0.1 million,
respectively. The increases were the result of higher average borrowings
during these periods to $15.6 million and $8.6 million, respectively, from the
1995 average of $6.9 million. The increased borrowings were primarily the
result of the acquisitions previously discussed.
The effective income tax rates in 1997, 1996 and 1995 were 40%, 39% and 39%,
respectively. The increase in the effective tax rate in 1997 is primarily the
result of the increase in certain non-deductible amortization of goodwill
expense associated with acquisitions.
EFFECTS OF INFLATION
Approximately 30% of the Company's business is conducted under
cost-reimbursable contracts which automatically adjust revenues to cover
increased costs from inflation. About 45% of the business is under
time-and-materials contracts where labor rates are often fixed for several
years. The Company generally is able to price these contracts in a manner to
accommodate rates of inflation as experienced in recent years. The remaining
portion of the Company's business is fixed-price and is primarily for product
sales or other short-term efforts that would not be adversely affected by
inflation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of cash are 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. Government.
During the past three years, the Company has consistently generated positive
cash flow from operations sufficient to meet its normal working capital
requirements and capital expenditures. In 1997 and 1996, the Company drew on
its revolving line of credit to fund the previously mentioned acquisitions.
In January 1997 and 1996, due primarily to the mid-year acquisitions of Sales
Performance Analysis Limited (SPA) and IMS, respectively, borrowings under
the line of credit peaked at $19.2 million and $15.2 million, respectively.
However, as a result of internally generated cash flows, the year-end 1997 and
1996 line of credit balances were reduced to $8.8 million and $10.0 million,
respectively. Also see Note 9, Business Acquisitions, to the Notes of the
Consolidated Financial Statements.
In anticipation of continuing its strategy of acquisitions, on July 26, 1996,
the Company entered into a new three-year unsecured revolving line of credit.
The new agreement permits borrowings of up to $50 million, with a sublimit of
$30 million in the first year and $40 million in the second year available for
acquisitions. Also see Note 4, Note Payable, of the Notes to the
Consolidated Financial Statements.
In 1997, operations provided $15.0 million of cash compared to $6.6 million in
1996. The $8.4 million increase in 1997 is largely the result of a change in
accounts receivable balances in the two years. In 1996, receivables increased
by $5.5 million, thus reducing cash available from operations in that year due
to late payment practices in several customer accounts. This situation
improved in 1997 and permitted the Company to grow without an increase in
receivables. There were only minor increases in working capital requirements
in 1997 to detract from earnings before depreciation and amortization.
Investing activities used cash of approximately $17.8 million in 1997, versus
$18.0 million for the same period last year. Acquisitions, discussed above,
accounted for the majority of the investments, with most of the remaining
investments allocated to the purchase of office and computer-related
equipment.
During 1997, the Company's financing activities provided cash of approximately
$3.2 million, primarily from a $1.2 million decrease in borrowings under the
Company's revolving line of credit and from $4.4 million in proceeds and
derived income tax benefits from exercises of stock options. In 1996, the
Company's financing activities provided $11.2 million, primarily from a $10.0
million increase in borrowings under the Company's revolving line of credit
and from a $1.2 million in proceeds and derived income tax benefits from
exercises of stock options.
On October 1, 1996, the Company completed its acquisition of the business and
most of the assets of SRI for an adjusted purchase price of $6.2 million. On
January 3, 1997, the Company acquired the business of SPA for $2.6 million.
On May 14, 1997, the Company purchased the Simulation Engineering Division of
Statistica, Inc. for $0.8 million. All acquisitions were financed with
borrowings under the existing line of credit.
The Company maintains a $50 million unsecured revolving credit facility in the
U.S., and a 500,000 pound sterling unsecured line of credit in London,
England. These credit facilities expire on July 1999, and December 1997,
respectively. At June 30, 1997, the Company had approximately $42 million
available for borrowing under its revolving lines of credit.
While the Company did not purchase any of its shares in 1996 and 1997, it has
repurchased its shares in the open market in prior years. The Company has
never paid any cash dividends as its policy is to invest earnings in the
growth of the Company.
The Company believes that the combination of internally generated funds,
available bank credit and cash on hand will provide for the required liquidity
and capital resources for the foreseeable future.
<PAGE>
SCHEDULE II
CACI INTERNATIONAL INC AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR YEARS ENDED JUNE 30, 1997, 1996 AND 1995
(dollars in thousands)
Other
Balance at Changes Balance
Beginning Additions Add at End
Description of Period at Cost Deductions (Deduct) of Period
- ----------- --------- --------- ---------- -------- ---------
1997
- ----
<TABLE>
<S> <C> <C> <C> <C> <C>
Reserves deducted
from assets to which
they apply:
Allowances for
doubtful receivables $2,245 $1,006 $(590) $327 $2,988
===== ===== ===== === =====
1996
- ----
Reserves deducted
from assets to which
they apply:
Allowances for
doubtful receivables $1,415 $ 382 $(103) $551 $2,245
===== === ===== === =====
1995
- ----
Reserves deducted
from assets to which
they apply:
Allowances for
doubtful receivables $1,664 $ 493 $(754) $ 12 $1,415
===== === ===== === =====
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Annual Report of CACI
International Inc and subsidiaries on Form 10-K of our report dated August 12,
1997, appearing in the 1997 Annual Report to Shareholders of CACI
International Inc and subsidiaries for the year ended June 30, 1997.
/s/
Deloitte & Touche LLP
Washington, D.C.
September 12, 1997
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
dated January 24, 1997, of CACI International Inc on Form S-8 of our reports
dated August 12, 1997, appearing in the Annual Report to Shareholders and
incorporated by reference in this Annual Report on Form 10-K of CACI
International Inc for the year ended June 30, 1997.
/s/
Deloitte & Touche LLP
Washington, D.C.
September 12, 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
CACI International Inc
Arlington, Virginia
We have audited the consolidated financial statements of CACI International
Inc and subsidiaries (the Company) as of June 30, 1997 and 1996, and for each
of the three years in the period ended June 30, 1997, and have issued our
report thereon dated August 12, 1997; such consolidated financial statements
and report are included in the 1997 Annual Report to Shareholders of CACI
International Inc and subsidiaries and are incorporated herein by reference.
Our audits also included the consolidated financial statement schedule of the
Company, listed in the index at Item 14(a)2. This consolidated financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
/s/
Deloitte & Touche LLP
Washington, D.C.
August 12, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
CACI International Inc
Arlington, Virginia
We have audited the accompanying consolidated balance sheets of CACI
International Inc and subsidiaries (the Company) as of June 30, 1997, and
1996, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended June 30, 1997.
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 our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of June 30, 1997, and 1996,
and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1997, in conformity with generally accepted
accounting principles.
/s/
Deloitte & Touche LLP
Washington, D.C.
August 12, 1997
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
Year ended June 30, 1997 1996 1995
- ---------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Revenues $272,984 $244,615 $232,964
Costs and expenses
Direct costs 148,433 133,184 126,442
Indirect costs and
selling expenses 99,808 89,160 87,688
Depreciation and
amortization 6,852 5,510 4,981
------- ------- -------
Total 255,093 227,854 219,111
Income from operations 17,891 16,761 13,853
Interest expense 1,105 605 478
------- ------- -------
Income before income taxes 16,786 16,156 13,375
Income taxes 6,714 6,305 5,219
------- ------- -------
Net income $ 10,072 $ 9,851 $ 8,156
======= ======= =======
Earnings per share $ 0.92 $ 0.92 $ 0.77
======= ======= =======
Weighted average shares
outstanding 11,005 10,716 10,611
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
June 30, 1997 1996
- -----------------------------------------------------------------
Current assets
Cash and equivalents $2,015 $1,778
Accounts receivable
Billed 59,294 59,330
Unbilled 11,549 7,770
------ -------
Total accounts receivable 70,843 67,100
Income taxes receivable 2,984 1,627
Deferred income taxes 114 133
Prepaid expenses and other 3,576 3,593
------ -------
Total current assets 79,532 74,231
Property and equipment, net 11,605 9,055
Accounts receivable, long-term 7,015 7,289
Goodwill 15,459 10,548
Other assets 4,486 1,813
Deferred income taxes 763 372
------- -------
Total assets $118,860 $103,308
======= =======
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED BALANCE SHEETS (continued)
(dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, 1997 1996
- --------------------------------------------------------------------
Current liabilities
Note payable $ - $ 9,987
Accounts payable and accrued expenses 19,854 19,920
Accrued compensation and benefits 12,527 13,406
Deferred income taxes 5,137 2,243
------- -------
Total current liabilities 37,518 45,556
Note payable, long-term 8,800 -
Deferred rent expenses 1,627 2,274
Deferred income taxes 141 140
Shareholders' equity
Common stock
$.10 par value, 40,000,000 shares
authorized, 14,215,000 and 13,755,000
shares issued 1,422 1,376
Capital in excess of par 10,595 6,239
Retained earnings 72,700 62,628
Cumulative currency translation adjustments (281) (1,243)
Treasury stock, at cost (3,526,000 shares) (13,662) (13,662)
------- -------
Total shareholders' equity 70,774 55,338
------- -------
Total liabilities and shareholders'
equity $118,860 $103,308
======= =======
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Year ended June 30, 1997 1996 1995
- -----------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<TABLE>
<S> <C> <C> <C>
Net income $10,072 $9,851 $8,156
Reconciliation of net income
to net cash provided by
operating activities
Depreciation and amortization 6,852 5,510 4,981
(Gain) loss on sale of property
and equipment (657) 11 (12)
Provision (benefit) for deferred
income taxes 392 811 (516)
Changes in operating assets and
liabilities
Accounts receivable (275) (5,636) (1,534)
Prepaid expenses and other
assets 354 177 426
Accounts payable and accrued
expenses (873) 1,558 (4,811)
Accrued compensation and vacation (990) (1,667) 2,664
Deferred rent expense (638) (462) (49)
Income taxes payable (receivable) 791 (3,571) 64
------- ------- ------
Net cash provided by operating
activities 15,028 6,582 9,369
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and
equipment (6,544) (4,198) (4,172)
Proceeds from sale of property
and equipment 373 62 91
Purchase of businesses (10,351) (13,372) -
Capitalized software costs and
other (1,292) (463) 133
------- ------ ------
Net cash used in investing
activities (17,814) (17,971) (3,948)
</TABLE>
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(dollars in thousands)
Year ended June 30, 1997 1996 1995
- ---------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
<TABLE>
<S> <C> <C> <C>
Proceeds under line of credit $116,472 $109,173 $ 79,684
Payments under line of credit (117,658) (99,186) (82,429)
Proceeds from stock options 4,401 1,205 470
Purchase of common stock for treasury - - (2,154)
Net cash provided by (used in) financing
activities 3,215 11,192 (4,429)
Effect of exchanges rates on cash and
equivalents (195) (21) 63
------- ------- ------
Net increase (decrease) in cash and
equivalents 237 (218) 1,055
Cash and equivalents, beginning of year 1,778 1,996 941
------- ------- ------
Cash and equivalents, end of year $ 2,015 $ 1,778 $ 1,996
======= ======= ======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the year for income
taxes, net of refunds $ 924 $ 7,240 $ 4,632
======= ======= ======
Cash paid during the year for interest $ 1,035 $ 609 $ 515
======= ======= ======
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(amounts in thousands)
<TABLE>
<CAPTION>
Cumulative
Common stock Capital
currency Treasury stock Total
----------------- in excess Retained
translation ---------------- shareholder's
Shares Amount of par earnings
adjustments Shares Amount equity
- --------------------------------------------------------------------------------
- --------------
<S> <C> <C> <C> <C>
<C> <C> <C> <C>
BALANCE, July 1, 1994 13,490 $1,349 $4,591 $44,621
$(1,315) 3,251 $(11,508) $37,738
Net income - - -
8,156 - - - 8,156
Currency translation adjustments - - -
- - 275 - - 275
Exercise of stock options
(including $184 income tax
benefit) 78 8 462
- - - - - 470
Treasury shares purchased - - -
- - - 275 (2,154) (2,154)
------ ----- -----
- ------ ------ ----- ------- ------
BALANCE, June 30, 1995 13,568 1,357 5,053
52,777 (1,040) 3,526 (13,662) 44,485
Net income - - -
9,851 - - - 9,851
Currency translation adjustments - - -
- - (203) - - (203)
Exercise of stock options
(including $618 income tax
benefit) 187 19 1,186
- - - - - 1,205
------ ----- -----
- ------ ------ ------ ------- ------
BALANCE, June 30, 1996 13,755 1,376 6,239
62,628 (1,243) 3,526 (13,662) 55,338
Net income - - -
10,072 - - - 10,072
Currency translation adjustments - - -
- - 962 - - 962
Exercise of stock options
(including $2,720 income tax
benefit) 460 46 4,356
- - - - - 4,402
------ ----- -----
- ------ ------ ------ ------- ------
BALANCE, June 30, 1997 14,215 $ 1,422 $10,595 $72,700
$ (281) 3,526 $(13,662) $ 70,774
======= ====== ======
====== ====== ====== ======= ======
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITIES
The Company is an international information systems and high technology
services corporation. It is a leader in computer-based information technology
systems, custom software, integration and operations, imaging and document
management, simulation, and proprietary database and software products. The
Company provides worldwide services in support of U.S. national defense and
civilian agencies, state governments, and commercial enterprises.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the statements of CACI
International Inc and its wholly-owned subsidiaries (the "Company"). All
significant intercompany balances and transactions have been eliminated in
consolidation.
REVENUE RECOGNITION
Revenues on cost-plus-fee contracts are recognized to the extent of costs
incurred plus a proportionate amount of the fee earned. Revenues on
fixed-price contracts are recognized on the percentage-of-completion method
based on costs incurred in relation to total estimated costs. Revenues on
time-and-material contracts are recognized to the extent of billable rates
times hours delivered plus material expenses incurred. Revenues from software
license sales are recognized upon delivery when there is no significant
obligation to perform after the sale, but are recognized under the
percentage-of-completion method when there is significant obligation for
production, modification or customization after the sale. Revenues from
maintenance support services on these products are nonrefundable and generally
recognized on a straight-line basis over the term of the service agreement.
Provisions for estimated losses on uncompleted contracts are recorded in the
period such losses are determined.
The Company's U.S. Government contracts (approximately 77% of total revenues
in 1997) are subject to subsequent government audit of direct and indirect
costs. The majority of such incurred cost audits have been completed through
June 30, 1995. Management does not anticipate any material adjustment to the
consolidated financial statements for subsequent periods.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. Depreciation of equipment has
been provided over the estimated useful life of the respective assets of
three-to-ten years, using the straight-line method. Leasehold improvements
are generally amortized using the straight-line method over the respective
remaining lease term or the useful life of the improvements, whichever is
shorter.
<PAGE>
(dollars in thousands)
June 30, 1997 1996
- --------------------------------------------------------------------
Equipment and furniture $30,553 $24,007)
Leasehold improvements 2,198 2,186
------ ------
Property and equipment, at cost 32,751 26,193
Less accumulated depreciation
and amortization (21,146) (17,138)
------ ------
Total property and equipment, net $11,605 $ 9,055
====== ======
CAPITALIZED SOFTWARE COSTS
Costs incurred internally in creating a computer software product are charged
to expense when incurred as research and development until technological
feasibility has been established for the product. Technological feasibility
is established upon completion of a detailed program design or, in its
absence, completion of a working model. Thereafter, all software development
costs are capitalized and subsequently reported at the lower of unamortized
cost or estimated net realizable value. Capitalized costs are amortized based
on current and future revenues for each product with annual minimum
amortization equal to the straight-line amortization over the remaining
estimated economic life of the product, which ranges from three-to-five years.
INCOME TAXES
The Company accounts for income taxes based upon the requirements of Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes." Under SFAS 109, the Company's deferred income taxes are recognized
for the future tax consequences of differences between tax bases of assets and
liabilities and financial reporting amounts, based upon enacted tax laws and
statutory rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to amounts expected to be realized.
Income tax expense is the tax payable for the period and the change during the
period in deferred tax assets and liabilities.
U.S. income taxes have not been provided on $17,714,000 in undistributed
earnings of foreign subsidiaries that have been permanently reinvested outside
the United States.
CURRENCY TRANSLATION
The assets and liabilities of the Company's foreign subsidiaries whose
functional currency is other than the U.S. dollar are translated at the
exchange rates in effect on the reporting date, and income and expenses are
translated at the weighted average exchange rate during the period. The net
effect of such translation gains and losses is not included in determining net
income, but is accumulated as a separate component of shareholders' equity.
Foreign currency transaction gains and losses are included in determining net
income.
EARNINGS PER SHARE
Earnings per common share (EPS) are computed by dividing net earnings by the
weighted average number of shares and equivalent shares outstanding during
each of the years ended June 30, 1997, 1996 and 1995, of 11,005,000;
10,716,000; and 10,611,000, respectively. The weighted averages include the
number of shares issuable upon exercise of stock options granted under the
Employee Stock Incentive Plan after the assumed repurchase of shares with the
related proceeds.
In March 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share" which simplifies the standards for computing EPS
previously found in Accounting Principles Board Opinion No. 15 and makes them
comparable to international EPS standards. The Statement is effective for
financial statements issued for periods ending after December 15, 1997. Had
this statement been effective for the years ended June 30, 1997, 1996 and
1995, earnings per share would have been presented as follows:
Year ended June 30, 1997 1996 1995
- -------------------------------------------------------------
EPS $0.96 $0.97 $0.81
EPS-assuming dilution 0.92 0.92 0.77
STATEMENT OF CASH FLOWS
For purposes of the Statement of Cash Flows, short-term investments with an
original maturity of three months or less are considered cash equivalents.
GOODWILL
The excess of cost over fair market value of net assets acquired is being
amortized using the straight-line method, generally over 15 years.
Accumulated amortization was $2,952,000 and $1,855,000 at June 30, 1997, and
June 30, 1996, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
Effective for fiscal 1997, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation," and, as permitted by this standard, will continue
to apply the recognition and measurement principles of Accounting Principles
Board Opinion No. 25 to its stock options. This statement requires footnote
disclosure of the pro forma impact on net income and earnings per share of the
compensation cost that would have been recognized if the fair value of all
stock-based awards was recorded in the income statement. (See Note 6).
In June 1997, the Financial Accounting Standards Board (FASB) issued two
SFASs: SFAS No. 130, "Reporting Comprehensive Income," and SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." As
specified by these statements, the Company will apply these statements
beginning in fiscal 1999 and reclassify its financial statements for earlier
periods provided for comparative purposes.
SFAS 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains, and losses) in a full
set of general-purpose financial statements. This Statement requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements.
SFAS 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. This Statement supersedes FASB
Statement No. 14, "Financial Reporting for Segments of a Business Enterprise,"
but retains the requirement to report information about major customers. It
amends FASB No. 94, "Consolidation of All Majority-Owned Subsidiaries," to
remove the special disclosure requirements for previously unconsolidated subsidi
aries.
At this point, the Company has not determined the impact of adopting SFAS 130
nor SFAS 131.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's accounts payable and accrued expenses
approximate their fair value. The line of credit has a floating interest rate
that varies with current indices and, as such, its recorded value approximates
fair value.
USE OF ESTIMATES
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements in order for them to conform to the current presentation.
NOTE 2. CAPITALIZED SOFTWARE DEVELOPMENT COSTS
The costs capitalized and amortized for the years ended June 30, 1997, 1996
and 1995, included on the Balance Sheets as other assets, were as follows:
<PAGE>
(dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------
Annual activity
Balance, beginning-of-year $1,229 $1,068 $ 865
Capitalized during year 1,399 422 478
Amortized during year (599) (261) (275)
----- ----- -----
Balance, end-of-year $2,029 $1,229 $1,068
===== ===== =====
NOTE 3. ACCOUNTS RECEIVABLE
Total accounts receivable are net of allowance for doubtful accounts of
$2,988,000 and $2,245,000 at June 30, 1997, and June 30, 1996,
respectively. Accounts receivable are classified as follows:
(dollars in thousands) 1997 1996
- ------------------------------------------------------------------
Billed and billable receivables
Billed receivables $52,159 $53,836
Billable receivables at end of period 7,135 5,494
------ ------
Total 59,294 59,330
Unbilled receivables
Unbilled pending receipt of contractual
documents authorizing billing 11,374 7,598
Unbilled retainages and fee withholds
expected to be billed within the next
12 months 175 172
------ ------
11,549 7,770
Unbilled retainages and fee withholds
expected to be billed beyond the next
12 months 7,015 7,289
------ ------
Total unbilled receivables 18,564 15,059
------ ------
Total accounts receivable $77,858 $74,389
====== ======
NOTE 4. NOTE PAYABLE
On July 26, 1996, the Company entered into a new revolving credit agreement
which permits loans of up to $50 million, with sublimits of $30 million in the
first year for acquisitions and $10 million for dividends and repurchase of
Company stock. The agreement permits various borrowing options based on
London Interbank Offered Rate (LIBOR), Prime Rate and Federal Funds. The
current LIBOR option is at the applicable LIBOR rate plus 0.80%. In addition,
the Company pays a fee of 0.09% on the unused portion of the facility. The
interest rate and unused fee can increase based on increases in the debt
leverage ratio. At June 30, 1997, the Company's calculated $34 million
tangible net worth, as defined by the credit agreement, exceeded the base
requirement by approximately $17 million. The agreement contains customary
financial covenants and ratios related to debt leverage ratios, fixed charges
coverage, and working capital. Under these agreements, the Company had
outstanding borrowings of $8,800,000 and $9,987,000 at June 30, 1997, and
1996, respectively. The applicable interest rate on the loan balance was 6.7%
and 5.9% at June 30, 1997, and 1996, respectively.
In prior periods, the Company had a $25 million revolving credit agreement
scheduled to expire on March 31, 1997. Interest was charged on the
outstanding borrowings at the lower of the bank's daily prime commercial
lending rate or the Federal Funds rate plus 0.90% at June 30, 1996, and 1995.
The credit agreement required, among other provisions, the maintenance of
certain levels of net worth and working capital and placed certain
restrictions on cash dividends and additional debt.
NOTE 5. INCOME TAXES
The provision (benefit) for income taxes for the years ended June 30, consists
of:
(dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------
Current
Federal $2,911 $3,668 $3,649
State and local 675 802 798
Foreign 597 1,024 291
----- ----- -----
Total current 4,183 5,494 4,738
----- ----- -----
Deferred
Federal 2,050 693 207
State and local 454 152 46
Foreign 27 (34) 228
----- ----- -----
Total deferred 2,531 811 481
----- ----- -----
Total $6,714 $6,305 $5,219
===== ===== =====
<PAGE>
A reconciliation of the income tax provision (benefit) and the amount
computed by applying the statutory U.S. income tax rate of 34% is as
follows for the years ended June 30:
(dollars in thousands) 1997 1996 1995
- ------------------------------------------------------------------
Amount at statutory U.S. rate $5,707 $5,493 $4,548
State taxes, net of U.S. income
tax benefit 745 630 557
Taxes on foreign earnings at
different effective rates 29 (25) 102
Other expenses not deductible
for tax purposes 74 130 63
Non-deductible goodwill 209 147 64
Foreign and research & develop-
ment tax credits (50) (70) (115)
----- ----- -----
Total $6,714 $6,305 $5,219
===== ===== =====
Effective tax rate 40.0% 39.0% 39.0%
The tax effects of temporary differences that give rise to significant
deferred tax assets and deferred tax liabilities at June 30, 1997, and 1996,
are as follows:
(dollars in thousands) 1997 1996
- ------------------------------------------------------------
Deferred tax assets
Accrued vacation and other expenses $3,973 $3,685
Deferred rent 968 785
Foreign transactions 114 167
Pension 280 163
Other 270 -
------ ------
Total deferred tax assets 5,605 4,800
Deferred tax liabilities
Unbilled revenues (8,651) (5,679)
Depreciation (205) (540)
Capitalized software (562) (176)
Other (588) (283)
------ -----
Total deferred tax liabilities (10,006) (6,678)
------ ------
Net deferred tax liability $(4,401) $(1,878)
====== ======
NOTE 6. STOCK INCENTIVE PLAN
Until September 24, 1996, the Company had an Employee Stock Incentive Plan
("1986 Plan") which provided that key employees could be awarded some or all
of the following: non-qualified stock options; incentive stock options within
the meaning of the Internal Revenue Code; and common stock. The stock option
exercise prices were at fair market value on the date of grant. Accordingly,
no compensation cost has been recognized for the incentive stock option
grants. Had compensation cost for the Company's stock-based compensation
plans been determined based on the fair value at grant dates for awards under
those plans consistent with the method of accounting under SFAS 123, the
Company's net income and earnings per share would have been reduced to the pro
forma amounts indicated below:
(dollars in thousands, except per share) 1997 1996
- ---------------------------------------------------------------------
Net income
As reported $10,072 $9,851
Pro forma 9,681 9,683
Earnings per share
As reported $ 0.92 $ 0.92
Pro forma 0.88 0.90
The fair value of each option is estimated on the date of grant using the
Black-Sholes option-pricing model with the following additional assumptions:
Year ended June 30, 1997 1996
- ----------------------------------------------------------------------
Dividend yield 0% 0%
Volatility rate 47% 40%
Discount rate 6.2% 6.6%
Expected term (years) 3 3
At the Company's 1996 Annual Meeting on November 14, 1996, the shareholders
approved a new Stock Incentive Plan ("1996 Plan"). The 1996 Plan permits
award of incentive and non-qualified stock options, stock appreciation rights
and stock grants to officers and employees of the Company, and would limit
total awards and stock grants to 1,500,000 shares over the life of the Plan.
Options for 114,000 shares have been granted under the 1996 Plan through June
30, 1997, and are exercisable for a period of ten years from the date of
grant.
The period during which each option is exercisable is determined when granted,
but in no event could options be granted under the 1986 Plan exercisable
after December 31, 2000. Pursuant to the terms of the 1986 Plan, no grants
of options or other securities could be made after September 24, 1996.
<PAGE>
Stock option activity and price information regarding the Plan follows:
(shares in thousands) Number of shares Exercise price
- --------------------------------------------------------------------------
Shares under option, July 1, 1994 1,381 $ 1.87 - $ 5.94
Granted 133 8.56 - 10.88
Exercised (78) 1.87 - 5.94
Forfeited (22) 1.87 - 4.44
-----
Shares under option, June 30, 1995 1,414 1.87 - 10.88
Granted 198 10.00 - 14.44
Exercised (187) 1.87 - 5.94
Forfeited (46) 3.50 - 13.44
-----
Shares under option, June 30, 1996 1,379 1.87 - 14.44
Granted 188 11.06 - 19.31
Exercised (460) 1.87 - 13.44
Forfeited (46) 1.87 - 14.63
-----
Shares under option, June 30, 1997 1,061 1.87 - 19.31
=====
Options exercisable, June 30, 1997 745 1.87 - 14.44
=====
Exercise prices are based on the market price of the Company's common stock at
the date the options are granted.
NOTE 7. PENSION PLAN
Through 1997, the Company had a defined contribution pension plan covering
approximately 85% of its employees. The Company contributed to a trust an
amount equal to 2.5% of a qualified employee's total fiscal year cash
compensation, up to $35,000 per year, and an amount equal to 5% of cash
compensation in excess of $35,000 per year subject to maximum contribution
limitations. The total consolidated pension expense for the years ended June
30, 1997, 1996 and 1995 was $3,117,000, $2,745,000 and $2,565,000,
respectively. The Company funded current pension costs as they accrued
annually.
Effective July 1, 1997, the Company merged its pension plan and voluntary
401(k) Plan into a single plan, the CACI $MART Plan. Current Company
employees, who participated in the prior pension plan, had all their prior
Company contributions become fully vested on June 30, 1997, and their balances
transferred to the new CACI $MART Plan.
Effective July 1, 1997, employees will be immediately eligible to join the
CACI $MART Plan. Employees can contribute up to 15% (subject to certain
limitations and annual vesting) of their total compensation. For employees of
participating subsidiaries, the Company will match contributions equal to 50%
of the amount of the employee's contribution, up to 6% of the employee's total
fiscal year cash compensation. In addition, the Company may also make
discretionary profit sharing contributions to the plan. Employer
contributions vest to the employees according to a vesting schedule entitling
full vesting after five years of employment. Both plans are qualified under
the Internal Revenue Code, as determined by the Internal Revenue Service.
NOTE 8. COMMITMENTS AND CONTINGENCIES
The Company conducts its operations from leased office facilities, all of
which are classified as operating leases and expire primarily over the next
five years.
The following is a schedule of future minimum lease payments under
non-cancelable leases with a remaining term greater than one year as of June
30, 1997:
Year ended Operating leases
June 30, (dollars in thousands)
-----------------------------------------
1998 $10,559
1999 8,878
2000 6,671
2001 5,275
2002 3,094
Later years 33
------
Total minimum lease payments $34,510
======
Operating leases reflect the minimum lease payments net of a minimal amount of
sub-lease income. Rent expense incurred from operating leases for the years
ended June 30, 1997, 1996 and 1995 amounted to $9,778,000, $8,938,000 and
$8,376,000, respectively.
The Company is involved in various lawsuits, claims and administrative
proceedings arising in the normal course of business. Management is of the
opinion that any liability or loss associated with such matters will not have
a material adverse effect on the Company's operations and liquidity.
NOTE 9. BUSINESS ACQUISITIONS
All of the acquisitions were made in either 1997 or 1996 and have been
accounted for as a purchase, and the results of their operations have been
included in the Company's statement of operations since the date of
acquisition. The purchase price for each acquisition was allocated to the
acquired assets and liabilities using their respective fair values at the date
of acquisition. The excess, if any, has been recorded as goodwill and is
being amortized on a straight line basis over 15 years. All of the
acquisition purchases have been primarily financed through borrowings under
the Company's existing line of credit.
1997 ACQUISITIONS
On October 1, 1996, the Company acquired the business and most of the assets
of Sunset Resources, Inc. (SRI) for $6.2 million. SRI is an engineering and
information technology firm that has focused on logistics and engineering
support services to the Air Force and is an expert in electronic commerce.
The excess of the purchase price over the fair value of the net assets
acquired was $4.6 million.
On January 3, 1997, the Company acquired the business of Sales Performance
Analysis Limited (SPA), including the intellectual property rights to certain
software products, for $2.6 million. SPA develops and markets a unique range
of specialized software products and services that enable companies to make
more effective use of their field forces through the optimal configuration of
sales and services territories. SPA's annual revenues prior to acquisition
were $2.0 million. The excess of the purchase price over the fair value of
the net assets acquired is $0.7 million. In addition, $1.7 million was
allocated to software which will be amortized over five years.
On May 14, 1997, the Company purchased the Simulation Engineering Division of
Statistica, Inc., which specializes in computer modeling and simulation. The
purchase price of $0.8 million was based on the value of the tangible assets
acquired. Consequently there was no goodwill recorded with this purchase.
1996 ACQUISITIONS
Effective September 1, 1995, the Company purchased all of the outstanding
stock of Automated Sciences Group, Inc. (ASG) for $4.9 million, payable in
cash over four years. ASG provides information technology, engineering and
environmental science services to the Department of Defense (DoD) and the
Department of Energy. The purchase price is subject to a maximum $500,000
holdback contingent on the collection of certain receivables to be determined
by August 31, 1998.
Effective January 1, 1996, the Company purchased all of the outstanding stock
of IMS Technologies, Inc. (IMS) for $6.5 million in cash payable at closing,
plus $1.5 million in cash payable to the four founders of IMS over three
years. IMS provides a wide range of computer systems development and systems
integration for a variety of applications. These services are provided to DoD
as well as Department of Justice, Department of Education, Internal Revenue
Service, and Drug Enforcement Agency.
The goodwill, the amount that the purchase prices exceeded the fair values of
the net assets acquired, was $2.8 million for ASG and $3.1 million for IMS.
PRO FORMA INFORMATION (UNAUDITED)
The following unaudited pro forma combined condensed statements of operations
set forth the consolidated results of operations of the Company for the years
ended June 30, 1997, 1996 and 1995, as if the above mentioned acquisitions had
occurred at the beginning of both the year of acquisition and the year prior
to the acquisition. This unaudited pro forma information does not purport to
be indicative of the actual financial position or the results that would
actually have occurred if the combinations had been in effect for the years
ended June 30:
<PAGE>
(dollars in thousands, except per share) 1997 1996 1995
- --------------------------------------------------------------------------
Revenues $275,698 $265,234 $274,605
Net income 10,338 9,335 7,500
Earnings per share 0.94 0.87 0.71
NOTE 10. SEGMENT INFORMATION
Revenues from contracts with the U.S. Government for 1997, 1996 and 1995
amounted to approximately $211,000,000 (77% of revenues), $190,000,000 (78% of
revenues) and $176,000,000 (75% of revenues), respectively.
Information about operations in the U.S. and foreign countries (primarily in
Western Europe), after the elimination of intercompany transactions, as of and
for the years ended June 30, consists of:
(dollars in thousands) 1997 1996 1995
- ---------------------------------------------------------------------
Revenues
United States $239,645 $215,311 $202,943
Foreign 33,339 29,304 30,021
------- ------- -------
Combined $272,984 $244,615 $232,964
======= ======= =======
Income before income taxes
United States $ 14,853 $ 13,518 $ 11,512
Foreign 1,933 2,638 1,863
------- ------- -------
Combined $ 16,786 $ 16,156 $ 13,375
======= ======= =======
Net income
United States $ 8,837 $ 8,215 $ 6,908
Foreign 1,235 1,636 1,248
------- ------- -------
Combined $ 10,072 $ 9,851 $ 8,156
======= ======= =======
Identifiable assets
United States $ 97,847 $ 86,762 $ 58,716
Foreign 21,013 16,546 15,926
------- ------- -------
Combined $118,860 $103,308 $ 74,642
======= ======= =======
NOTE 11. COMMON STOCK DATA (UNAUDITED)
The Company's stock trades on the Nasdaq National Market System. The range of
high and low sales prices for each quarter during this period are as follows:
<PAGE>
1997 1996
Quarter High Low High Low
- ------- ------------- -------------
First $18 5/8 $12 $13 7/8 $11 1/4
Second 22 16 13 1/2 11 1/4
Third 23 5/8 16 1/8 12 1/4 9 1/2
Fourth 19 5/8 13 5/8 15 3/4 9 7/8
NOTE 12. QUARTERLY FINANCIAL DATA (UNAUDITED)
The quarterly financial data is unaudited, but in the opinion of management,
all adjustments necessary for a fair presentation of the selected data for
these interim periods have been included.
The 1997 fourth quarter results from operations include a $0.6 million after
tax loss resulting from certain productivity problems experienced in a fixed
unit price document management contract in the litigation support business.
This loss includes a $0.3 million net income provision to cover anticipated
losses in 1998, before productivity improvements can be fully effected to
return the activity to a profitable condition.
(dollars in thousands, except per share)
First Second Third Fourth
------- -------- ------- --------
Year ended June 30, 1997
Revenues $62,734 $68,821 $70,907 $70,522
Costs and expenses 58,200 64,039 66,016 67,943
Income taxes 1,836 1,936 1,912 1,030
Net income 2,698 2,846 2,979 1,549
Earnings per share 0.25 0.26 0.27 0.14
Year ended June 30, 1996
Revenues $57,610 $59,332 $62,324 $65,349
Costs and expenses 53,989 55,457 58,080 60,933
Income taxes 1,397 1,528 1,657 1,723
Net income 2,224 2,347 2,587 2,693
Earnings per share 0.21 0.22 0.24 0.25
EXHIBIT 21
The significant subsidiaries of the Registrant, as defined in Section
1-02(w) of regulation S-X, are:
CACI, Inc., a Delaware Corporation
CACI, INC.-FEDERAL, a Delaware Corporation
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
American Legal Services Corp., a Delaware Corporation
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a U.K. Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Technologies, Inc., a Delaware Corporation
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
EXHIBIT 13 TO FORM 10-K FOR FY1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,015,000
<SECURITIES> 0
<RECEIVABLES> 73,831,000
<ALLOWANCES> (2,988,000)
<INVENTORY> 0
<CURRENT-ASSETS> 79,532,000
<PP&E> 32,751,000
<DEPRECIATION> (21,146,000)
<TOTAL-ASSETS> 118,860,000
<CURRENT-LIABILITIES> 37,518,000
<BONDS> 8,800,000
0
0
<COMMON> 1,422,000
<OTHER-SE> 69,352,000
<TOTAL-LIABILITY-AND-EQUITY> 118,860,000
<SALES> 0
<TOTAL-REVENUES> 272,984,000
<CGS> 0
<TOTAL-COSTS> 148,433,000
<OTHER-EXPENSES> 105,618,000
<LOSS-PROVISION> 1,042,000
<INTEREST-EXPENSE> 1,105,000
<INCOME-PRETAX> 16,786,000
<INCOME-TAX> 6,714,000
<INCOME-CONTINUING> 10,072,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,072,000
<EPS-PRIMARY> $0.92
<EPS-DILUTED> $0.92
</TABLE>
