Intelligence sector drives CACI growth
- By John Moore
- Jan 26, 2006
A 26 percent rise in intelligence-related sales bolstered CACI International’s second fiscal quarter results, spurring the integrator to report $419.5 million in revenue for the quarter that ended Dec. 31, 2005. That marks a 7.7 percent increase compared with the $389.7 million CACI logged in the same quarter a year ago.
Net income grew 16.8 percent to $22.3 million, up from $19.1 million last year.
The company’s intelligence work, which now accounts for 28 percent of CACI’s business, helped drive the company’s revenue production in the quarter.
Jack London, CACI’s chairman, president and chief executive officer, said the intelligence growth trend continues in the current quarter, citing the recent award of the Army’s Engineering, Technical and Operations Support Services contract, which provides intelligence services. CACI is one of two companies vying for business under that contract, which has a ceiling of $450 million.
He noted that the company’s pending acquisition of Information Systems Support will also drive growth in the intelligence sector. London said 80 percent of ISS’ employees have security clearances. “We’re brining in a nice roster of skilled personnel in the intelligence area,” he noted.
That deal is expected to close Feb. 1. London said CACI will need to integrate ISS into CACI’s financial system before the acquisition will start to pay off. The company will complete that project by the end of June, he said.
The ISS transaction is the company’s second purchase in recent months. In October, CACI closed the acquisition of National Security Research.
The company said the delay of Defense Department budget legislation led to lower contract funding orders in the second quarter, a lag in contract awards and a slower initiation of new work. Accordingly, the company lowered its earnings expectations for the remainder of the year. CACI now anticipates full-year diluted earning per share, inclusive of stock option accounting, of $2.73 to $2.83. In October, the company forecast full-year diluted earnings per share of $2.84 to $2.98.
London said the funding situation should improve during the next 60 to 90 days in light of President Bush’s signing of the Defense Appropriations bill Dec. 30.