SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1998
Commission File Number 0-8401
-----------------------------
CACI International
Inc
- -----------------------------
(Exact name of registrant as
specified in its charter)
Delaware
---------------------------------
(State or other jurisdiction
of incorporation or
organization)
54-1345888
- ----------------------------------------
(I.R.S. Employer Identification No.)
1100 North Glebe Road, Arlington, VA
22201
- ------------------------------------------
(Address of principal executive offices)
(703)
841-7800
- -----------------------------------
(Registrant's telephone
number, including area
code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
CACI International Inc Common Stock, $0.10 par value
----------------------------------------------------
(Title of each class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
---- ----
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of March 31, 1998: CACI International Inc Common Stock,
$0.10 par value, 10,817,000 shares.
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
PART I: FINANCIAL
INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Statements of Operations for the
Three Months Ended March 31, 1998 and 1997
Unaudited Condensed Consolidated Statements of Operations for
the Nine Month Ended March 31, 1998 and 1997
Unaudited Condensed Consolidated Balance Sheets as of March 31,
1998 and June 30, 1997
Unaudited Condensed Consolidated Statements of Cash Flows for
the Nine Months Ended March 31, 1998 and 1997
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
Item 5. Forward Looking Statements
INDEX TO EXHIBITS
SIGNATURES
PAGE
<PAGE>
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended March 31,
1998 1997
------- --------
Revenues $85,239 $70,907
Costs and expenses
Direct costs 47,328 39,137
Indirect costs and selling expenses 30,449 24,594
Depreciation and amortization 2,116 1,857
------ ------
Total operating expenses 79,893 65,588
------ ------
Income from operations 5,346 5,319
Interest expense 627 428
------ ------
Income before income taxes 4,719 4,891
Income taxes 1,613 1,912
------ ------
Net income $3,106 $2,979
======
======
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Basic earnings per share $ 0.29 $ 0.28
====== ======
Diluted earnings per share $ 0.28 $ 0.27
====== ======
Average shares outstanding 10,813 10,633
====== ======
Average and equivalent shares outstanding 11,199 11,075
====== ======
See notes to condensed consolidated financial statements (unaudited).
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Nine Months Ended March 31,
1998 1997
------- -------
Revenues $235,053 $202,462
Costs and expenses
Direct costs 127,915 107,334
Indirect costs and selling expenses 86,039 75,207
Depreciation and amortization 6,482 4,825
------- -------
Total operating expenses 220,436 187,366
------- -------
Income from operations 14,617 15,096
Interest expense 1,344 889
------- -------
Income before income taxes 13,273 14,207
Income taxes 4,863 5,684
------- -------
Net income $8,410 $8,523
======= =======
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Basic earnings per share $0.78 $0.82
======= =======
Diluted earnings per share $0.76 $0.78
======= =======
Average shares outstanding 10,758 10,445
======= =======
Average & equivalent shares outstanding 11,134 10,981
======= =======
See notes to condensed consolidated financial statements (unaudited).
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
March 31, 1998 June 30, 1997
---------------- ---------------
ASSETS
Current assets
Cash & equivalents $ 1,498 $ 2,015
Accounts receivable:
Billed 74,395 59,294
Unbilled 11,165 11,549
-------
- ------- Total accounts receivable
85,560 70,843
-------
- ------- Income taxes
- - 2,984 Deferred income taxes
114 114
Prepaid expenses and other 2,957 3,576
Current portion of deferred
contract costs 2,609
- - -------
- -------
Total current assets 92,738 79,532
------- -------
Property and equipment, net 11,511 11,605
Accounts receivable, long term 6,034 7,015
Deferred contract costs, long term 206 -
Goodwill 38,013 15,459
Other assets 5,637 4,486
Deferred income taxes 719 763
------- -------
Total assets $ 154,858 $ 118,860
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable & accrued expenses $ 20,545 $ 19,854
Accrued compensation and benefits 15,871 12,527
Income taxes payable 820 -
Deferred income taxes 4,230 5,137
------- -------
Total current liabilities 41,466 37,518
------- -------
Note payable, long-term 31,100 8,800
Deferred rent expenses 1,373 1,627
Deferred income taxes 142 141
Shareholders' equity
Common stock -
$.10 par value, 40,000,000 shares
authorized, 14,343,000 and
14,215,000 shares issued 1,434 1,422
Capital in excess of par 11,993 10,595
Retained earnings 81,110 72,700
Cumulative currency translation
adjustments (98) (281)
Treasury stock, at cost
(3,526,000 shares) (13,662) (13,662)
-------
- -------
Total shareholders' equity 80,777 70,774
------- -------
Total liabilities &
shareholders' equity $154,858 $118,860
======= =======
See notes to condensed consolidated financial statements (unaudited).
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Nine Months Ended March 31,
1998 1997
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 8,410 $ 8,523
Reconciliation of net income to net
cash provided by operating activities
Depreciation and amortization 6,482 4,825
Provision for deferred income taxes (863) 473
Loss (gain) on sale of property & equipment (49) 17
Changes in operating assets and liabilities
Accounts receivable (3,589) (2,686)
Prepaid expenses and other assets 336 566
Accounts payable and accrued expenses (1,750) (3,726)
Accrued compensation and benefits 2,893 (1,246)
Deferred rent expense (987) (429)
Income taxes 3,831 123
Deferred contract costs 1,831 -
------- -------
Net cash provided by operating activities 16,545 6,440
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment (4,148) (4,629)
Purchase of businesses (36,490) (9,386)
Proceeds from sale of property & equipment 411 9
Other (598) (946)
------- -------
Net cash used in investing activities (40,825) (14,952)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds under line-of-credit 124,850 90,272
Payments under line-of-credit (102,550) (85,258)
Proceeds from stock options 1,411
4,282 -------
- -------
Net cash provided by financing activities 23,711 9,296
Effect of changes in currency
rates on cash and equivalents 52 100
------- -------
Net (decrease) increase in cash & equivalents (517) 884
Cash and equivalents, beginning of period 2,015 1,776
------- -------
Cash and equivalents, end of period $ 1,498 $ 2,660
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
for income taxes, net $ 820 $ 1,764
======= =======
Interest paid during the period $ 1,159 $ 784
======= =======
See notes to condensed consolidated financial statements (unaudited).
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures normally
included in the annual financial statements, prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to those rules and regulations, although the Company believes that
the disclosures made are adequate to make the information presented not
misleading.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all necessary adjustments and
reclassifications (all of which are of a normal, recurring nature) that are
necessary for fair presentation for the periods presented. It is suggested
that these condensed consolidated financial statements be read in conjunction
with the consolidated financial statements and the notes there to included in
the Company's latest annual report to the Securities and Exchange Commission
on Form 10-K for the year ended June 30, 1997.
Certain reclassifications have been made to the prior period's financial
statements to conform to the current presentation.
B. Accounts Receivable
Total accounts receivable are net of allowance for doubtful accounts of
$3,301,000 and $2,988,000 at March 31, 1998, and June 30, 1997, respectively.
Accounts receivable are classified as follows:
(Dollars in thousands) March 31, 1998 June 30, 1997
---------------- ---------------
Billed and billable receivables
Billed receivables $ 65,724 $ 52,159
Billable receivables at end of period 8,671 7,135
------- -------
Total billed receivables 74,395 59,294
Unbilled receivables
Unbilled pending receipt of
contractual documents authorizing billing 11,015 11,374
Unbilled retainages & fee withholds
expected to be billed
within the next 12 months 150 175
------- -------
11,165 11,549
Unbilled retainages & fee
withholds expected to be billed
beyond the next 12 months 6,034 7,015
-------
- -------
Total unbilled receivables 17,199 18,564
------- -------
Total accounts receivable $ 91,594 $ 77,858
======= =======
PAGE
<PAGE>
C. Deferred Contract Costs
Deferred contract costs include the cost of equipment acquired by the Company
to provide communications services under contract. The costs are charged to
expense as the associated service revenues are billed to the customer. As of
March 31, 1998, approximately $2.6 million is classified as a current asset as
this represents the amount to be recovered within the next twelve months.
D. Earnings per Share
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings Per Share"
("EPS") which simplifies the standards for computing EPS previously found in
APB Opinion No. 15 and makes them comparable to international EPS standards.
SFAS No. 128 became effective during the period ended December 31,1997 and
therefore, all prior periods presented have been restated in conformity with
this Statement.
The table below reconciles the effect that potentially dilutive securities
have on earnings per share.
Three Months Ended Nine Months
Ended March 31, March
31,
1998 1997 1998
1997 ------ ------ ------
- ------
Net Income $ 3,106 $ 2,979 $ 8,410 $ 8,523
======= ======= ======= =======
Average shares outstanding 10,813 10,633 10,758 10,445
Basic earnings per share $ 0.29 $ 0.28 $ 0.78 $ 0.82
======= ======= ======= =======
Net Income $ 3,106 $ 2,979 $ 8,410 $ 8,523
======= ======= ======= =======
Average share outstanding 10,813 10,633 10,758 10,445
Dilutive effect of stock
options after application
of treasury stock method 386 442 376 536
------- ------- ------- -------
Average and equivalent
shares outstanding 11,199 11,075 11,134 10,981
======= ======= ======= =======
Diluted earnings per share $ 0.28 $ 0.27 $ 0.76 $ 0.78
======= ======= ======= =======
E. Commitments and Contingencies
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.
F. Acquisitions
On November 1, 1997, the Company acquired the business and net assets of
Government Systems, Inc. ("GSI"), a subsidiary of Infonet Services
Corporation, a multinational communications network provider headquartered in
El Segundo, California, for $28 million in cash, plus an additional $5.5
million to pay off existing debt of GSI, which has been recorded using the
purchase method of accounting. GSI delivers international communications and
network-related services to meet the networking needs of the U.S. Government
and other organizations. These services include full implementation of
dedicated private networks, integrated public and private networks, network
installation, maintenance, and management and operations. GSI's major
customers include the Department of Defense, the Federal Aviation
Administration and Globalstar Limited Partnership. GSI's annual revenues,
prior to acquisition, approximated $36 million. Approximately $23 million of
the purchase consideration has been preliminarily allocated to goodwill,
based upon the excess purchase price over the estimated fair value of net
assets acquired, and will be amortized over 20 years.
The preliminary purchase price allocation may change during the year ending
June 30,1998 as additional information concerning the net asset valuation is
obtained. GSI contributed revenues of $13.5 million for the period from
November 1, 1997 to March 31, 1998.
In order to meet the financing requirements of the above acquisition, on
October 28, 1997, the Company amended its existing credit facility, extending
its term from July 1, 1999 to July 1, 2000 and increasing the facility from
$50 million to $70 million. All other significant terms and conditions remain
the same.
Also in November 1997, CACI Limited in London, England, acquired 100% of the
share capital of AnaData Limited ("AnaData"), which was recorded under the
purchase method of accounting. The total consideration paid was $1.9 million
in cash, which was financed from CACI Limited's working capital. AnaData
develops and markets software products for managing marketing databases, and
historically generated annual revenues of approximately $2.5 million. Based
upon estimated fair values, $1 million of the purchase consideration has been
allocated to software intellectual property rights which will be amortized
over five years, and $0.4 million has been allocated to goodwill which will be
amortized over 10 years. Since its acquisition, the operations of AnaData
have generated $1.0 million in revenue through March 31, 1998.
G. Recent Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130")
and Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131"). SFAS No.
130 establishes standards for the reporting and presenting of comprehensive
income and its components (revenue, expenses, gains and losses) in a full set
of general-purpose financial statements. SFAS No. 131 establishes standards
for the manner in which public business enterprises report information about
operating segments and the related disclosures about products and services,
geographic area, and major customers. Both statements are effective for
financial statements issued for fiscal years beginning after December 15,
1997. The Company is currently reviewing what effect the new standards will
have on future reporting.
PAGE
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial condition
and Results of Operations.
Results of Operations for the Three and Nine Months Ended March 31, 1998 and
1997.
REVENUES. The table below sets forth the customer mix in revenues with
related percentages of total revenues for the three months and nine months
ended on March 31, 1998 (FY98) and March 31, 1997 (FY97), respectively:
(Dollars in thousands, except as percents)
<TABLE>
<CAPTION>
Third
Quarter First Nine Months
FY98
FY97 FY98 FY97
---------------- ----------------
- ----------------- -----------------
<S> <C> <C> <C> <C>
<C> <C> <C> <C>
Department of Defense $40,851 47.9% $36,718 51.8%
$116,398 49.5% $105,203 52.0%
Federal Civilian Agencies 25,213 29.6% 18,221 25.7%
64,840 27.6% 50,611 25.0%
Commercial 16,613 19.5% 14,639 20.6%
47,726 20.3% 41,240 20.4%
State & Local Governments 2,562 3.0% 1,329 1.9%
6,089 2.6% 5,408 2.6%
------- ------ ------- ------
- -------- ------ -------- ------
Total $85,239 100.0% $70,907 100.0%
$235,053 100.0% $202,462 100.0%
======= ====== ======= ======
======== ====== ======== ======
</TABLE>
For the three months ("quarter") and nine months ended March 31, 1998, the
Company's total revenues increased by 20%, or $14.3 million, and by 16%, or
$32.6 million, respectively, over the same periods last year. The increases
were primarily the result of the acquisitions described below and increases in
revenue from Year 2000 software renovation services.
On November 1, 1997, the Company acquired the business and net assets of
Government Systems, Inc. ("GSI") which contributed approximately $8.7 million
and $13.5 million of incremental revenues for the three and nine months ended
March 31, 1998, respectively. In addition, in November 1997, CACI Limited in
London England, acquired 100% of the share capital of AnaData Limited
("AnaData") which contributed $0.6 million and $1.0 million of incremental
revenues for three and nine months ended March 31, 1998, respectively. In the
prior year, the company purchased the net assets of Sunset Resources, Inc.
("SRI") on October 1, 1996, which generated incremental revenues of $4.4
million for the first three months of FY98.
Revenues from the Department of Defense ("DoD") increased 11.3%, or $4.1
million, for the quarter, and 10.6%, or $11.2 million, for the first nine
months. The GSI and SRI acquisitions accounted for $4.3 million and $10.8
million of the growth, respectively.
A significant portion of the Federal civilian agencies revenue is derived from
the Department of Justice ("DoJ") litigation support efforts. A significant
portion of the services are dependent on the level of DoJ litigation that the
Company is supporting at any period of time and have fluctuated from quarter
to quarter. DoJ revenue for the third quarter of FY98 decreased slightly to
$14.6 million versus $15.4 million for the same period last year. For the
first nine months of FY98, revenue from DoJ was $43.6 million compared to
$39.1 million for the same period last year due to a higher level of case
support. Revenues from Federal civilian agencies also rose $3.7 million and
$5.9 million for the third quarter and nine months end March 31, 1998,
respectively as a result of the GSI acquisition. In addition, revenues
increased $1.6 million and $2.3 million for the third quarter and nine months
of FY98, respectively, over the same periods last year due to efforts in our
Year 2000 business.
During the quarter and nine months ended March 31, 1998, commercial revenues
increased by 13%, or $2.0 million, and 16%, or $6.5 million, respectively,
over the same periods last year. These increases are primarily the result of
growth in sales of territory optimization and marketing analysis software
products and services in the United Kingdom. The nature of the Company's
proprietary software products business is inherently less predictable than the
Company's longer-term contract work with the Federal Government and may
fluctuate from quarter to quarter.
On a year-to-date basis, revenues from State and Local governments have
remained consistent at 2.6% of revenues for FY98 and FY97. The increase of
$1.2 million to revenues of $2.6 million for the quarter ended March 31, 1998,
as compared to the quarter a year ago, was largely due to Year 2000 business.
The following table sets forth the relative percentages that certain items of
expense and earnings bear to revenues for the quarter and nine months ended
March 31, 1998 and March 31, 1997, respectively.
<TABLE>
<CAPTION>
Dollar Amount (in
thousands) Percentage of
Revenue Third
Quarter First Nine Months Third Quarter First Nine Months
FY98 FY97 FY98 FY97
FY98 FY97 FY98 FY97
------- ------- ------- -------
- ------- ------ ------- ------
<S> <C> <C> <C> <C>
<C> <C> <C> <C>
Revenues $85,239 $70,907 $235,053 $202,462
100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Direct costs 47,328 39,137 127,915 107,334
55.5% 55.2% 54.4% 53.0%
Indirect costs 30,449 24,594 86,039 75,207
35.7% 34.7% 36.6% 37.2%
Depreciation & amortization 2,116 1,857 6,482 4,825
2.5% 2.6% 2.8% 2.3%
------ ------ ------- -------
- ------ ------ ------ ------
Total operating expenses 79,893 65,588 220,436 187,366
93.7% 92.5% 93.8% 92.5%
------ ------ ------- -------
- ------ ------ ------ ------
Income from operations 5,346 5,319 14,617 15,096
6.3% 7.5% 6.2% 7.5%
Interest expense 627 428 1,344 889
0.7% 0.6% 0.6% 0.5%
------ ------ ------- -------
- ------ ------ ------ ------
Earnings before income taxes 4,719 4,891 13,273 14,207
5.6% 6.9% 5.6% 7.0%
Income taxes 1,613 1,912 4,863 5,684
1.9% 2.7% 2.0% 2.8%
------ ------ ------- -------
- ------ ------ ------ ------
Net income $ 3,106 $ 2,979 $ 8,410 $ 8,523
3.7% 4.2% 3.6% 4.2%
====== ====== ======= ========
====== ====== ====== ======
</TABLE>
INCOME FROM OPERATIONS. Operating income, as a percentage of revenues, in
the FY98 periods was lower than in the comparable periods in FY97 primarily as
a result of several income items in FY97, which did not recur in FY98. These
items, which included a gain from the favorable rate settlement of prior year
indirect cost audits, a gain on the sale of a non-strategic software product
line and gains on several old contract claim settlements, added 1.1% and 0.7%
to operating margins in the third quarter and nine-month periods of FY97,
respectively. Higher depreciation and amortization expense, primarily related
to acquisitions, further reduced the nine-month operating margin by 0.5% for
FY98.
Direct costs, as a percentage of revenues, fluctuate from period to period due
to changes in the contract mix between direct labor, which usually yields a
higher margin, and other direct costs. On a quarter to quarter basis, the
level of other direct costs was relatively consistent. For the nine-month
periods, other direct costs are higher in FY98 primarily due to the
acquisition of GSI.
Indirect costs include fringe benefits, indirect labor, marketing, and bid and
proposal costs, and other discretionary costs. When excluding the impact, of
the non-recurring gains discussed above, of $0.8 million and $1.5 million for
the third quarter and nine months of FY97, respectively, indirect costs, as a
percentage of revenues, remained consistent on a quarter to quarter
comparison. For the first nine months of FY98 as compared to FY97, indirect
costs, as a percentage of revenues, have declined due to the effect on total
revenues of direct costs noted above.
The increase in depreciation and amortization of $0.3 million and $1.6 million
for the quarter and the nine months ended March 31, 1998, respectively, is
primarily attributable to the acquisitions discussed above which resulted in
additional goodwill of $26.4 million.
INTEREST EXPENSE. Interest expense has increased by $0.2 million and $0.5
million for the quarter and nine months ended March 31, 1998, respectively, as
compared to the same periods in the previous year. This is directly
attributable to the increased borrowings of $33.5 million necessary to
complete the GSI acquisition.
INCOME TAXES. The effective income tax rate for the nine months ended March
31, 1998 was 36.6% versus 40.0% for the same period last year. The decrease
is primarily the result of a projected lower effective state income tax rate
for FY98.
NET INCOME. Net income increased slightly to $3.1 million for the quarter and
decreased slightly to $8.4 million for the nine months of FY98, as compared to
the same periods in the previous year for the various reasons discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company's positive cash flow from operations and available
credit facilities provided adequate liquidity and working capital to fully
fund the Company's operational needs and support the acquisition activities.
Working capital was $51.3 million and $42.0 million as of March 31, 1998 and
June 30, 1997, respectively. The increase in working capital in the first
nine months of FY98 is primarily related to the GSI acquisition. Operating
activities provided cash of $16.5 million and $6.4 million for the nine months
ended March 31, 1998 and 1997, respectively. The increase in cash provided by
operating activities is primarily due to the receipt of $3.3 million in income
tax refunds, $2.9 million less in the timing of funds disbursed for accrued
compensation and $2.0 million less in timing requirements for disbursements to
vendors in the ordinary course of business.
The Company used $40.8 million in investing activities for the nine months
ended March 31,1998 versus $15.0 million for the same period a year ago. This
is due primarily to the GSI acquisition for $33.5 million.
The Company financed its investing activities from operating cash flows and
from a net increase in borrowings of $28.1 million under its line of credit.
Since the acquisition of GSI, the Company has paid down approximately $10.0
million of amounts borrowed.
On October 28, 1997, the Company increased its unsecured revolving credit
agreement from $50 million to $70 million and extended the term to July 1,
2000. The Company also maintains a 500,000 pound sterling unsecured line of
credit in London, England, which expires in November 1998. At March 31, 1998,
the Company had approximately $39.7 million available for borrowings under its
lines of credit. On March 31, 1998, the Company signed a commitment letter
with NationsBank to increase the revolving unsecured credit agreement from $70
million to $125 million and to secure lower interest rates for a five-year
term. The new facility, which will contain certain financial covenants
similar to those currently maintained, is expected to be in place by the end
of May 1998. Accordingly, the Company believes that the combination of
internally generated funds, available credit and cash on hand will provide the
required liquidity and capital resources for the foreseeable future.
YEAR 2000
Many computer systems will experience problems handling dates beyond the year
1999 and therefore will need to be modified prior to the year 2000 in order to
remain functional.
The Company has been taking actions to ensure both the internal readiness of
its computer systems and the compliance of its computer software products for
handling dates beyond December 31, 1999. The Company is also assessing the
year 2000 readiness of its key suppliers and subcontractors.
While these ongoing efforts will involve additional costs, the Company
believes, based on information currently available, that it will be able to
manage its total Year 2000 transition without any material adverse effect on
its business operations, products or financial prospects.
PAGE
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings
CACI, Inc. - Federal v. Arizona Department of Transportation
- ------------------------------------------------------------
Reference is made to Part I, Item 3, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending December 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 with 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 not changed.
ITEM 5. OTHER INFORMATION-FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain statements included in "Liquidity and
Capital Resources" and information contained in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission, which should be
read in conjunction with this Quarterly Report, may be considered
forward-looking. 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:
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; changes in
government laws or regulations; unusually intense competition for employees
with cutting-edge technical skills; and our ability to manage the business to
achieve forecast results.
PAGE
<PAGE>
CACI INTERNATIONAL INC AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
Number Title
- ------ -----
11 Computation of Basic and Diluted Earnings Per Share
27 Financial Data Schedule
PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CACI International
Inc
- ------------------------------
(Registrant)
Date: May 13, 1998 By: /s/
----------------------------- --------------------------------
Dr. J.P. London
Chairman of the Board,
Chief Executive Officer, & Director
(Principal Executive Officer)
Date: May 13, 1998 By: /s/
----------------------------- --------------------------------
James P. Allen
Executive Vice President,
Chief Financial Officer, & Treasurer
(Principal Financial
and Accounting Officer)
EXHIBIT 11
CACI INTERNATIONAL INC AND
SUBSIDIARIES COMPUTATION OF EARNINGS
PER SHARE
Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997 1998 1997
------- ------- ------- -------
Net income $ 3,106 $ 2,979 $ 8,410 $ 8,523
======= ======= ======= =======
Average shares
outstanding during the period 10,813 10,633 10,758 10,445
Dilutive effect of stock
options after application
of treasury stock method 386 442 376 536
------- ------- ------- -------
Average number of shares
outstanding during the period 11,199 11,075 11,134 10,981
======= ======= ======= =======
Basic earnings per share $ 0.29 $ 0.28 $ 0.78 $ 0.82
======= ======= =======
=======
Diluted earnings per share $ 0.28 $ 0.27 $ 0.76 $ 0.78
======= ======= ======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10Q FOR THE PERIOD ENDING MARCH 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 1498000
<SECURITIES> 0
<RECEIVABLES> 88861000
<ALLOWANCES> (3301000)
<INVENTORY> 0
<CURRENT-ASSETS> 92738000
<PP&E> 38251000
<DEPRECIATION> (26740000)
<TOTAL-ASSETS> 154858000
<CURRENT-LIABILITIES> 34637000
<BONDS> 31100000
0
0
<COMMON> 1434000
<OTHER-SE> 79343000
<TOTAL-LIABILITY-AND-EQUITY> 154858000
<SALES> 0
<TOTAL-REVENUES> 235053000
<CGS> 0
<TOTAL-COSTS> 127915000
<OTHER-EXPENSES> 91474000
<LOSS-PROVISION> 1047000
<INTEREST-EXPENSE> 1344000
<INCOME-PRETAX> 13273000
<INCOME-TAX> 4863000
<INCOME-CONTINUING> 4863000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8410000
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0.78
</TABLE>
