No. 17: CACI hits its stride

Cofoni's first year as CEO is marked by organic growth, acquisitions

CACI International

Top 100 revenue: $1.3 billion

2007 revenue: $1.9 billion

2007 net earnings: $78.5 million

2006 revenue: $1.8 billion

2006 net earnings: $84.8 million

Employees: 11,800

http://www.caci.com

Paul Cofoni can look back on his first year as
chief executive officer at CACI International
Inc. with a sense of accomplishment, highlighted
by the company's four acquisitions in 10
months.

The government contractor, based in
Arlington, Va., recorded $1.3 billion in prime
contracting revenue in 2007 compared to
about $1 billion the previous year. This year,
CACI lands at No. 17 on the Top 100 list.

CACI's acquisitions of Dragon Development
Corp., Athena Innovative Solutions Inc.,
Wexford Group International and the Institute
for Quality Management Inc. added about
$260 million in revenue and between 800 and
900 new employees in 2007, Cofoni said.

CACI's business plans for the four companies
are being successfully implemented, he said.
"We're actually seeing that they're beating projections
in terms of financial
performance. That's really
rewarding because we were
very careful in looking for
companies that would contribute
higher revenue
growth and earnings
growth."

Cofoni said attracting and
retaining qualified information
technology professionals,
especially those with high-level security
clearances, has been a struggle during the past
several years. "But in the last year, we've turned
the corner on that, and we had our best-ever
hiring year, with a net [organic] growth of
almost 800 people."

CACI will continue to seek annual growth
rates of 15 percent to 20 percent and
make additional acquisitions in the areas
of intelligence and security services, he
said, although those companies are expensive
because they are in high demand.

"That's where our last four acquisitions
have been," Cofoni added. "It is the primary
focus area for us."

"Intelligence is a good market to be in,"
said Philip Finnegan, director of corporate
analysis at Teal Group Corp., a provider of
aerospace and defense industry market
intelligence in Fairfax, Va.

"The customer is very loyal to companies
it employs," he said. "Intelligence agencies
don't like to change the companies they
are dealing with. That creates a high barrier
of entry for competitors." And that is
good for profit margins, he added.

"We're quite pleased to see that the
company has a well-defined initiative to
increase its intelligence
exposure," said
Michael Lewis, senior vice
president at BB&T Capital
Markets Inc. "We've essentially
seen it double over the
past two years, and I anticipate
that we will continue
to see the acquisition strategy
focused more in that
area than elsewhere."

"CACI's growth strategy appears sound, and
they've done a really good job of hitting their
revenue targets in the past and making good
acquisitions," Finnegan said.

The company has also set its sights on
expanding its services into the health care, energy
and environmental markets, but not immediately.
"We're continuing to look at those three
areas," Cofoni said. But until there are strong
national policies to support and expand those
areas, "it's hard to start implementing things."
Lewis said he is also "pleasantly surprised
that the company has been very successful in
holding on to current contracts and when they
are up for re-compete seeing, most importantly,
an expansion in scope" of services.

He said CACI's management team has a
well-defined strategy to grow into a larger IT
services firm. "Over the last two years, there
have been some significant speed bumps that
have gotten in the way," Lewis said, which have
caused the stock price to decline. "However, I
believe that Paul has corrected these issues."

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