CACI International CACI reported solid fourth-quarter fiscal 2018 results with healthy year-over-year increase in both earnings and revenues. The company benefited from organic revenue growth and expanding margins.

Excluding the tax impact, earnings for the reported quarter were $1.84 per share compared with $1.16 in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.78.

Quarterly revenues were $1.170 billion compared with $1.137 billion in the year-ago quarter. The 2.9% revenue rise was primarily attributable to new business wins and on-contract growth, which aided organic growth. However, the reported revenues missed the Zacks Consensus Estimate of $1.174 billion.

For fiscal 2018, revenues were $4.467 billion compared with $4.354 billion a year ago.

CACI International, Inc. Price and Consensus

 

CACI International, Inc. Price and Consensus | CACI International, Inc. Quote

Other Significant Details

Contract awards in the reported quarter were worth $1.5 billion, of which approximately 70% came from new businesses. Contract funding orders were $1.4 billion, up 35% year over year. Total backlog as of Jun 30, 2018 was $11.3 billion. Funded backlog at June end was $2.1 billion.

In terms of customer mix, the Department of Defense accounted for about 67.8% of total revenues in the reported quarter. Federal Civilian Agencies contributed about 25.6% while Commercial and other customers accounted for 6.6% of revenues.

Operating income for the quarter came in at $80.3 million with a 0.3% increase from the year-ago quarter. This metric came in at $340.7 million for full-fiscal 2018, up 14.6% year over year. Improved program execution, higher profits from existing and new businesses, and one-time incentive fees contributed to the higher operating income. This, however, was offset by Shared Service Center investments and higher compensation as incentives.

Operating margin fell 10 basis points (bps) to 6.9% in the quarter. However, operating margin was 7.6%, up 80 bps for the full fiscal, exceeding the expected increase of 10-30 bps.

Adjusted EBITDA for the fiscal fourth quarter increased 3.3% from the year-ago quarter to $100.6  Adjusted EBITDA margin of 8.6% remained flat on a year-over-year basis.

For the full fiscal, the adjusted EBITDA increased 11.6% to $412.9 million.

Balance Sheet and Cash Flow

At quarter end, CACI International had cash and cash equivalents of $66.2 million compared with $55.9 million in the previous quarter.

Long-term debt (net of current portion) was reported to be $1,015.4 million.

Net cash from operations for the full fiscal was $325.1 million compared with $281.3 million a year ago.

Guidance

CACI International reiterated its guidance for fiscal 2019,. Revenues are expected in the range of $4,550 million to $4,750 million.

Net income is expected in the range of $230-$240 million. Earnings per share are expected to be between $8.98 and $9.38.

Zacks Rank and Other Stocks to Consider

CACI International currently carries a Zacks Rank #2 (Buy).

Few other top-ranked stocks in the broader Computer and Technology sector are Virtusa Corporation VRTU, Qualys, Inc. QLYS and Fortinet, Inc. FTNT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Virtusa, Qualys and Fortinet is projected to be 20%, 8% and 16.75%, respectively.

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