Plain-text annual report
I N S I G H T F U L Breakthroughs. OU T S TA N D I N G Performance. 2 0 1 8 A N N U A L R E P O R T I N S I G H T F U L Breakthroughs | Our Culture is what makes us unique. IDEAS That Inspire. TECHNOLOGIES That Matter. EVER VIGILANT. CACI’s unwavering commitment to our customers’ missions has led to insightful break- throughs and outstanding performance, setting the stage for a bright future of sustained growth. For more than 56 years, CACI has delivered solutions and services that protect our nation’s interests and transform government operations. As we continue to attract new customers and advance the state of technology, we remain grounded in our foundational culture of ethics, integrity, and good character. Our strategy to win new business, deliver operational excellence, and deploy our capital for long-term growth opportunities has set us on a path to ever greater success. We are winning larger, more solutions-oriented business that meets our customers’ present requirements and anticipates emerging needs. Our talented employees continue to demonstrate the highest levels of professionalism and dedication to mission, garnering frequent accolades from our customers. This commitment to excellence has led to our fourth recognition as a Fortune magazine World’s Most Admired Company. CACI was also named a Washington Post Top Workplace in the greater Washington, D.C. area, and a Top Workplace in Memphis, TN; Baltimore, MD; and Colorado. Our support for veterans hiring has led to recognition from multiple sources, including a Best for Vets ranking by the Military Times. We continually foster an environment of mutual respect for our employees, partners, and customers. Our culture of innovation and good character has led us to success, and we take pride in upholding the highest standards of ethics and integrity. We remain ever vigilant in serving our customers and our nation, and look forward to continuing to provide our shareholders with enduring value. CACI Executive Officers Front left to right: Dr. J.P. London, Executive Chairman and Chairman of the Board Kenneth Asbury, President and Chief Executive Officer Back left to right: Gregory R. Bradford, President and Chief Executive, CACI Limited DeEtte Gray, President, U.S. Operations John S. Mengucci, Chief Operating Officer Thomas A. Mutryn, Executive Vice President, Chief Financial Officer, and Treasurer O U T S TA N D I N G Performance F Y 1 8 F I N A N C I A L H I G H L I G H T S REVENUE ($M) * NET INCOME ($M) DILUTED EARNINGS * SHAREHOLDERS’ EQUITY * ($M) ($M) 301 11.93 2,107 4,468 4,355 3,744 3,565 3,313 1,794 1,607 1,480 1,359 164 135 126 143 6.53 5.76 5.38 5.17 14 15 16 17 18 14 15 16 17 18 14 15 16 17 18 14 15 16 17 18 | Strengthening Our Position in Fiscal Year 2018. Income Statement Data (in thousands, except per share data and percentages) Year ended June 30 Revenue Operating Income Net Income Diluted Earnings per Share Weighted-average Diluted Shares Balance Sheet Data (in thousands, except percentages) Year ended June 30 Total Assets Working Capital Shareholders’ Equity Return on Equity * 2018 % Change 2017 $4,467,860 340,700 301,171 11.93 25,255 2.6% 14.6% 84.0% 82.7% * 2018 % Change $4,034,206 392,210 2,106,887 15.4% 3.1% 11.1% 17.5% $4,354,617 297,261 163,671 6.53 25,069 2017 $3,911,082 353,158 1,793,721 9.6% * Net income for FY18 benefited from a net reduction to income taxes of $103,273, or $4.09 per diluted share, related to the enactment of the Tax Cuts and Jobs Act in December 2017. WINNING new business. DRIVING operational excellence. INVESTING our capital for future growth. 2 0 1 8 C A C I A N N U A L R E P O R T | 1 To Our Fellow CACI SHAREHOLDERS Strengthening Our Position in Fiscal Year 2018. Our market position continued to improve in FY18, with another year of consistent and healthy organic revenue growth. We pursued and won larger, more complex work that expanded our customer base and solutions portfolio. We once again set records for revenue, net income, cash flow, and diluted earnings per share. We invested in critical technologies where our expertise is established and opportunities abound. We embarked on a path to drive further efficiencies with the opening of our Dr. J.P. (Jack) London Shared Services Center in Oklahoma City, OK. Our focus remains on the steady execution of our successful long-term, market-based strategy to win new business, drive operational excellence, and deploy our capital for future growth. Dr. J.P. (Jack) London Shared Services Center in Oklahoma City, OK 2 | 2 0 1 8 C A C I A N N U A L R E P O R T As we entered FY19, all forward indicators were strong. Our funded backlog was $2.1 billion and our total backlog was $11.3 billion. Almost 93 percent of our planned revenue for FY19 comes from contracts on which we currently perform. In addition, we had over $8.2 billion in submitted proposals under evaluation, with almost 60 percent being new business to CACI. Our market-based strategy continues to show results in terms of steady top- and bottom-line growth. We are pursuing and winning larger, more solutions-based programs and delivering outstanding performance on existing contracts. Our customers are showing their appre- ciation for the work of CACI employees, and our programs are achieving high marks and financial recognition for strong performance. In terms of capital deployment, mergers and acquisitions remain our top priority. We made strategic acquisitions in cyber technology and enterprise IT in FY18 and began FY19 with the acquisition of a Navy systems engineering business, which allows CACI to take a leading role in the long-term operations and revitalization of the nation’s fleet. These purchases follow the successful pattern of acquisitions from the past several years, in which we gained technical and mission expertise that helped us win a broader array of high-value prime contracts. By adding new capabilities and new customers in strategic areas of our 12 markets, we are generating long-term revenue and predict- able, profitable growth to deliver significant shareholder value in FY19 and beyond. We purchased two companies under our United Kingdom (UK) operations, which had another year of record finan- cial performance. These additions provide geographic information systems software, information technology consulting, software engineering, and data analytics. Both enhance our position as a market-leading provider of IT products and services to commercial and government organizations in the UK. The passing of legislation for the funding of the U.S. federal government through its 2019 fiscal year has been positive news for our industry, company, and customers. Current priorities reflect a long-term commitment to national secu- rity and the modernization of systems and infrastructure. Steadier budgets allow government agencies to plan for the future, and CACI has the right experience and expertise to assist them as they make necessary changes. To ensure steady future growth, CACI is currently investing in several emerging technologies, including artificial intelligence and machine learning, robotic process automation, digital signals processing solutions, and innovative technologies within the electromagnetic spectrum. We continue to develop long-term industry partnerships with key commercial and other technology providers that enable us to win new business and expand our role as a systems integrator. To this end, CACI achieved a significant milestone with our designation as an Amazon Web Services Premier Consulting Partner. To attract new talent and retain our existing high performers, we are leveraging savings gained from tax reform and the efficiencies of our Shared Services Center to invest in upgrading benefits based on employee feedback and industry benchmarks. We are also investing in training and professional development to enable our employees to grow their careers within the company and differentiate our offerings to customers. We are very proud of the outstanding performance of our dedicated employees, and we thank them for their integrity and commitment to our customers’ missions and the success of our company. We also thank you, our fellow shareholders, for your continued support. Dr. J.P. (Jack) London Executive Chairman and Chairman of the Board, CACI International Inc Kenneth Asbury President and Chief Executive Officer, CACI International Inc | Financial Accomplishments Driving Shareholder Value Revenue of $4.47 billion, 2.6% greater than the $4.35 billion of last year. Operating income of $340.7 million, 14.6% greater than the $297.3 million of last year. Net income of $301.2 million, 84.0% greater than the $163.7 million of last year. Diluted earnings per share of $11.93, 82.7% greater than the diluted earnings per share of $6.53 reported in Fiscal 2017. Operating cash flow of $325.1 million, 15.6% greater than the $281.3 million of a year ago. Contract awards of $5.23 billion; 10 consecutive quarters of awards greater than $1 billion. Contract funding orders of $4.76 billion, 15.5% greater than the $4.12 billion of a year ago. Funded backlog at fiscal year-end of $2.14 billion. Total backlog at fiscal year-end of $11.27 billion. 2 0 1 8 C A C I A N N U A L R E P O R T | 3 Pioneering National Security Solutions. Transforming Government. Dominance across all domains. The proliferation of threats the United States faces has made the national security mission increasingly complex. As defense and intelligence leaders adapt to this dynamic scenario, they are in need of response options that span all the domains: land, sea, air, space, and cyberspace. CACI is pushing to the forefront of this new multi-domain paradigm, delivering flexible, rapid-response solutions that meet the needs of government customers from headquarters to the field. We have expanded our suite of counter- unmanned aircraft systems (C-UAS) that protect lives and infrastructure in both civil and military environments. Our long experience in digital and foreign instrumentation signals processing and full-spectrum cyber has led to the develop- ment of new software-defined electronic warfare systems to thwart and exploit adversarial surveillance and reconnaissance, cellular, radio, and command and control systems. Equally important is our expertise in bolstering the resiliency of these platforms and protecting them from attack. When operations tempo increases, leaders from the strategy room to the front lines must remain informed. CACI engineers cybersecure networks and provides enterprise IT operations to customers in a multitude of environments that reach across the globe. We produce and deploy high-quality, interoperable electronic communications and command and control systems that span satellite, audio- visual, UHF, VHF, and radio technologies. | MISSION MATTERS to us and our customers. We have pioneered widely used intel- ligence fusion solutions, as well as a full array of visualization and decision- making tools that promote situational awareness and aid in selecting the optimal course of action in any domain – even space. Our intelligence analysts turn collected data into actionable products, using CACI’s specialized tools and systems, including those that leverage artificial intelligence capabilities, to speed delivery. Our launch of the CACI All-Source Tradecraft Academy ensures our professionals continuously access training that is relevant, timely, and comprehensive. 4 | UAS DETECTED Precision Technologies for evolving threats. AIR SEA Amplifying Efficiency with next-generation technology.
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- Corporate Governance | C AC I I N T ER N AT I O N A L I N C Consolidated Statements of Operations (amounts in thousands, except per share data) 2018 2017 2016 Year ended June 30 REVENUE Costs of revenue: Direct costs Indirect costs and selling expenses Depreciation and amortization Total costs of revenue Income from operations Interest expense and other, net Income before income taxes Income tax (benefit) expense Net income EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Basic: Weighted-average shares outstanding Earnings per share Diluted: Weighted-average shares outstanding Earnings per share $4,467,860 $4,354,617 $3,744,053 2,978,608 1,076,356 72,196 2,934,804 1,050,792 71,760 2,487,633 926,918 64,752 $4,127,160 $4,057,356 $3,479,303 340,700 42,036 298,664 (2,507) $301,171 24,616 $12.23 25,255 $11.93 297,261 48,642 248,619 84,948 $163,671 24,401 $6.71 25,069 $6.53 264,750 41,138 223,612 80,813 $142,799 24,262 $5.89 24,802 $5.76 The financial information above should be read in conjunction with the consolidated financial statements and notes thereto included in CACI’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC). 6 | 2 0 1 8 C A C I A N N U A L R E P O R T | C AC I I N T ER N AT I O N A L I N C Consolidated Balance Sheets (amounts in thousands, except per share data) 2018 2017 June 30 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net Prepaid expenses and other current assets Total current assets Goodwill Intangible assets, net Property and equipment, net Supplemental retirement savings plan assets Accounts receivable, long-term Other long-term assets Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt Accounts payable Accrued compensation and benefits Other accrued expenses and current liabilities Total current liabilities Long-term debt, net of current portion Supplemental retirement savings plan obligations, net of current portion Deferred income taxes Other long-term liabilities Total liabilities Shareholders’ equity: Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued Common stock $0.10 par value, 80,000 shares authorized, 42,139 and 24,704 outstanding at June 30, 2018 and 41,896 issued and 24,462 outstanding at June 30, 2017 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost (17,434 and 17,435 shares, respectively) Total CACI shareholders’ equity Noncontrolling interest Total shareholders’ equity Total liabilities and shareholders’ equity 66,194 806,871 58,126 $931,191 2,620,835 241,755 101,140 91,490 8,620 39,175 65,539 757,341 57,022 $879,902 2,577,435 235,371 91,749 91,367 7,886 27,372 $4,034,206 $3,911,082 46,920 82,017 259,442 150,602 53,965 62,874 239,741 170,164 $538,981 $526,744 1,015,420 86,851 200,880 85,187 1,177,598 81,823 273,320 57,876 $1,927,319 $2,117,361 — — 4,214 570,964 2,126,790 (19,030) (576,186) $2,106,752 135 $2,106,887 $4,034,206 4,190 569,080 1,825,619 (29,116) (576,187) $1,793,586 135 $1,793,721 $3,911,082 The financial information above should be read in conjunction with the consolidated financial statements and notes thereto included in CACI’s Annual Report on Form 10-K filed with the SEC. There are statements made herein which reflect our intent, belief or current expectations and do not address historical facts. Such statements could be interpreted to be forward-looking statements within the meaning of federal securities laws. Please refer to CACI’s Annual Report on Form 10-K as well as CACI’s other filings with the SEC, for a description of the substantial risks and uncertainties related to the forward-looking statements included herein. 2 0 1 8 C A C I A N N U A L R E P O R T | 7 CACI Board of Directors Dr. J.P. London (1981) 3*, 4, 5, 7, 8 Executive Chairman and Chairman of the Board, CACI International Inc; Chief Executive Officer, 1984-2007. Director, Friends of the National World War II Memorial, U.S. Navy Memorial Foundation, Naval Historical Foundation, and CAUSE (Comfort for America’s Uniformed Services) Kenneth Asbury (2013) 3 President and Chief Executive Officer, CACI International Inc; former President and Chief Executive Officer of ASRC Federal Holding Company; former President of the Civil business of Lockheed Martin; served in the U.S. Army Security Agency Michael A. Daniels (2013) 2, 4, 5, 6, 7 Director of Blackberry and Mercury Systems, Inc.; Chairman of the Logistics Management Institute; former Chairman of the Board and Chief Executive Officer of Mobile 365, Inc.; former Director of Sybase, Inc., Verisign, Telcordia Technologies, and Luna Innovations; former senior executive at Science Applications International Corporation; former Chairman and Chief Executive Officer of Network Solutions, Inc; former Chairman of GlobalLogic Hon. James S. Gilmore III (2009) 1, 2, 4, 5, 8* Former Governor of the Commonwealth of Virginia; President and Chief Executive Officer of the American Opportunity Foundation; former Chairman, U.S. Congressional Advisory Panel to Assess Domestic Response Capabilities Involving Terrorism and Weapons of Mass Destruction William L. Jews (2013) 1, 2, 4, 5, 8 Director of Choice Hotels International, Inc.; former Director of Fortress International Group, Inc., the Ryland Group, Inc. and the CalAtlantic Group, Inc.; former President and Chief Executive Officer of CareFirst, Inc., CareFirst of Maryland, Inc., Group Hospitalization and Medical Services, Inc., and Blue Cross Blue Shield of Maryland, Inc.; former Chief Executive Officer of Blue Cross Blue Shield of Delaware Admiral Gregory G. Johnson (2006) 2, 3, 5*, 7, 8 Founder, Snow Ridge Associates; Admiral, U.S. Navy (Ret.); former Commander, U.S. Naval Forces Europe and Africa; Commander in Chief, Allied (NATO) Forces Southern Europe 8 | 2 0 1 8 C A C I A N N U A L R E P O R T James L. Pavitt (2008) 1, 2, 5, 7*, 8 President of JLP Associates, LLC; former Principal of The Scowcroft Group; former Deputy Director for Operations, head of America’s Clandestine Services, and Chief of the Counterproliferation Division, Central Intelligence Agency; former Senior Intelligence Advisor, National Security Council team for President George H.W. Bush Dr. Warren R. Phillips (1974) 1*, 3, 5, 6*, 7 Former Chief Financial Officer, Albanian- Macedonian-Bulgarian Oil Pipeline Corporation; former Professor of Government and Politics, Vice President for Academics, and Assistant Vice President for Administration for the University of Maryland; former Executive Vice Chairman and Chief Financial Officer, Maryland Moscow, Inc.; former Chief Executive Officer and Chairman of the Board of Directors, Advanced Blast Protection, Inc. Debora A. Plunkett (2018) 1, 4, 5 Director of J.C. Penney Company, Inc.; Adjunct Professor at the University of Maryland University College; former Director, Information Assurance Directorate, Deputy Director of Information Assurance, and Senior Advisor to the Director of the U.S. National Security Agency; former Director, Office of Transnational Threats, United States National Security Council Charles P. Revoile (1993) 1, 2*, 3, 4, 6 Legal and business consultant; former Senior Vice President, General Counsel and Secretary, CACI International Inc; former Vice President and General Counsel of Stanwick Corporation; former Counsel, Communications Division, Westinghouse Electric Corporation General William S. Wallace (2009) 1, 4*, 5, 7, 8 General, U.S. Army (Ret.); former Commander, Fifth U.S. Corps during Operation Iraqi Freedom; former Commander, Joint Warfighting Center and Commanding General, 4th Infantry Division; former Commanding General of Army Combined Arms Center and National Training Center Front left to right: Dr. Warren R. Phillips, Dr. J.P. London, Kenneth Asbury Middle left to right: Charles P. Revoile, Admiral Gregory G. Johnson, James L. Pavitt, General William S. Wallace Back left to right: Honorable James S. Gilmore III, William L. Jews, Michael A. Daniels, Debora A. Plunkett ( ) Denotes year elected/appointed a director of the Company * Denotes Chairmanship of Committee 1 Member of Audit Committee 2 Member of Compensation Committee 3 Member of Executive Committee 4 Member of Investor Relations Committee 5 Member of Strategic Assessment Committee 6 Member of Corporate Governance and Nominating Committee 7 Member of Security and Risk Assessment Committee 8 Member of Culture, Character, Integrity, and Ethics Committee CACI provides information solutions and services in support of national security missions and government transformation for Intelligence, Defense, and Federal Civilian customers. A Fortune World’s Most Admired Company, CACI is a member of the Fortune 1000 Largest Companies, the Russell 2000 Index, and the S&P SmallCap600 Index. CACI’s sustained commitment to ethics and integrity defines its corporate culture and drives its success. CACI provides dynamic career opportunities for military veterans and industry professionals to support the nation’s most critical missions. Corporate Headquarters CACI International Inc 1100 North Glebe Road, Arlington, VA 22201 (703) 841-7800 www.caci.com European Headquarters CACI House – Kensington Village Avonmore Road London, England W14 8TS (01144207) 602-6000 www.caci.co.uk Visit our website at: www.caci.com Find career opportunities at: careers.caci.com Connect with us through social media: CACI (NYSE: CACI) is a member of the Russell 2000 Index and the S&P SmallCap 600 Index and can be found on the web at www.caci.com Adobe and Amazon Web Services are registered trademarks. CACI and CACI Ever Vigilant are registered trademarks of CACI. © CACI 2018 Shareholder Information Corporate Headquarters CACI International Inc 1100 North Glebe Road, Arlington, VA 22201 (703) 841-7800 Annual Meeting The 2018 annual meeting will be held at 9:30 am EST, November 15, 2018 at: Sheraton Tysons Hotel 8661 Leesburg Pike, Tysons, VA 22182 Common Stock CACI International Inc is listed on the New York Stock Exchange (NYSE) under the symbol CACI. Daily quotes on the common stock can be obtained in most daily newspapers and online services. Quarter High Low High Low 2018 2017 1st 2nd 3rd 4th $142.85 $147.31 $159.40 $174.80 $118.10 $121.60 $133.00 $147.15 $103.21 $133.70 $135.35 $132.45 $87.67 $96.05 $117.25 $112.10 As of August 7, 2018, there were approximately 229 holders of record of CACI International Inc common stock, and 24,705,478 shares outstanding. Shareholder Services All questions concerning registered shareholder accounts and stock transfer matters, including name or address changes, transfers, and other services, should be directed to CACI’s transfer agent and registrar: Computershare P.O. Box 30170 College Station, TX 77842-3170 (800) 736-3001/(781) 575-3100 www.computershare.com/investor Independent Auditor Ernst & Young LLP 1775 Tysons Boulevard, Tysons, VA 22102 Annual Report on Form 10-K The annual report on Form 10-K to the Securities and Exchange Commission may be obtained without charge by addressing a request to: CACI International Inc Investor Relations 1100 North Glebe Road, Arlington, VA 22201 The CACI International Inc 2018 Annual Report is available from the CACI website at www.caci.com. An Adobe Acrobat Portable Document Format (PDF) file of the print version can be downloaded from this location. In addition, other documents can also be obtained at the same location. CACI on the Internet Information on CACI’s solutions and services can be found via the CACI website (www.caci.com). Financial results, corporate news releases, and other CACI activities can also be found there. Additional Information Inquiries from institutional investors, financial analysts, and portfolio managers should be directed to: Daniel Leckburg, Vice President, Investor Relations (866) 606-3471, dleckburg@caci.com Inquiries from individual shareholders and registered representatives should be directed to: Mary Peevy, Investor Relations (866) 606-3471, mpeevy@caci.com Inquiries from the financial and other media should be directed to: Jody Brown, Executive Vice President, Public Relations (703) 841-7801, jbrown@caci.com Driven by CHARACTER For more than 56 years, CACI’s culture of ethics, integrity, excellence, and innovation has been the driving force behind our success. Our daily commitment to these values inspires our delivery of leading-edge information solutions and services in support of defense, intelligence, and federal civilian customers. As we answer our customers’ most pressing needs to safeguard our nation and serve the American people, we remain rigorously dedicated to acting with good character. CORPORATE HEADQUARTERS CACI International Inc 1100 North Glebe Road Arlington, VA 22201 (703) 841-7800 www.caci.com
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