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CACI Updates Fiscal Year 2014 Guidance

Stocks in this article: CACI

CACI International Inc (NYSE: CACI), a leading information solutions and services provider to the federal government, announced today that it is updating its Fiscal Year 2014 (FY14) annual guidance.

We are revising our guidance as a result of the impact of the continued uncertainty our customers are experiencing despite the passage of the omnibus appropriations bill in January. We continue to experience delays in contract awards for new business to CACI, lower run-rates on professional services contracts, and reductions in Afghanistan-related material purchases. We now expect revenue for FY14 to range between $3.5 billion and $3.6 billion. Net income is now expected to range between $130 million and $140 million, which includes approximately $13 million of one-time, pre-tax expenses associated with our acquisition of Six3 Systems.

According to President and Chief Executive Officer Ken Asbury, “Our lower FY14 guidance reflects reduced government spending and delays in award activity. We are disappointed that these factors have not been mitigated by the passing of the 2014 appropriations act, as we had anticipated. However, the operational performance across our company remains strong in this uncertain environment. We are seeing results from the strengthening of our business development initiatives, and we are very pleased with the progress of our integration of Six3 Systems and its performance. We remain confident in our market-driven strategy. Our commitment to winning business and delivering solutions and services aligned with our customers’ high-priority missions will enable us to continue to provide long-term value to our shareholders.”

The table below summarizes our revised FY14 guidance ranges and represents our views as of April 2, 2014:

             

(In millions except for earnings per share)

   

Current Fiscal Year 2014 Guidance

   

Previous Fiscal Year 2014 Guidance

Revenue     $3,500 - $3,600     $3,650 - $3,800
Net income attributable to CACI     $130 - $140     $142 - $152
Effective corporate tax rate     38%     39%
Diluted earnings per share     $5.12 - $5.51     $5.59 - $5.98
Diluted weighted average shares     25.4     25.4
       

Following are the key changes related to our revised FY14 guidance:

  • We expect that our direct labor costs will be flat to up slightly when compared with FY13, and our other direct costs will be 7 percent to 10 percent lower than FY13.
  • We expect that our indirect costs and selling expenses will be about the same as FY13, with the ongoing operating costs of Six3 Systems and the associated one-time transaction costs offset by cost efficiencies in our base business.
  • We expect that our fourth quarter net income will be higher than our third quarter due to higher award fees, greater contributions by Six3 Systems, increased volume of high margin product sales, modestly higher direct labor, and lower interest expense.

Six3 Systems continues to perform consistent with our earlier expectations, and there is no change from our previous guidance with respect to depreciation and intangible amortization, net interest expense and our diluted share count.

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