CACI International [CACI] on Wednesday posted strong overall results in its fourth quarter on a double-digit earnings gain, helping drive solid results overall for the company’s fiscal year 2023.
Net income in the quarter increased 16 percent to $107.8 million, $4.68 earnings per share (EPS), from $93 million ($3.93 EPS) a year ago, and operating margin was 10.9 percent. Excluding intangible amortization expense, adjusted net earnings of $121.9 million ($5.30 EPS) topped consensus estimates by 40 cents per share.
Sales in the quarter increased nearly 4 percent to $1.7 billion from $1.6 billion a year ago on work for the Defense Department. Sales to DoD customers accounted for just over 74 percent of CACI’s business in the quarter versus nearly 72 percent a year ago. Sales to federal civilian agencies declined in the quarter.
For the fiscal year, net income rose 5 percent to $384.7 million ($16.43 EPS) from $366.8 million ($15.49 EPS) a year ago. Adjusted net income was $440.9 million ($18.83 EPS). CACI said its 10.7 percent operating margin for the year was “sector leading.”
Orders in the quarter were $2.3 billion, nearly 70 percent of which is new business, and for the year totaled $10.1 billion, driving backlog to $25.8 billion, up 11 percent from $23.2 billion a year ago. The backlog represents about four years of annuals sales for the company, Jeff MacLauchlan, CACI’s chief financial officer, said Thursday on the company’s earnings call.
In FY ’24, CACI expects sales to increase between 4.5 percent and 7.5 percent to a range of between $7 billion and $7.2 billion. The lower end of the guidance assumes the federal government will operate under a continuing resolution (CR) for the entirety of the government’s fiscal year and the higher end assumes a three-month CR, John Mengucci, CACI’s president and CEO, said on the earnings call.
CACI’s “expectation” is that the CR lasts for one quarter, he said.
Adjusted net income in FY ’24 is projected to be between $440 million ($19.13 EPS) and $465 million ($20.22 EPS) and operating margin is expected to be in the high 10 percent range. Free cash flow is forecast to be at least $400 million. Free cash flow in the fourth quarter was $101.9 million and for the year $282.1 million.
CACI has $11 billion in submitted bids under evaluation, 70 percent of which would be new business for the company, MacLauchlan said. The value of submitted bids is about $4 billion more than in the third quarter, he said.
During the next two quarters CACI expects to submit bids potentially worth $9 billion, with 70 percent of the work being new business, he said.