FINANCE

CACI optimistic about 2013 results

Looks to mitigate risks from sequestration, budget cuts

CACI International paints an optimistic picture as it sets the expectations for the next six months of its fiscal 2013.

In reporting its results today, CACI had revenue of $1.863 billion for the six months ended Dec. 31, compared to $1.898 billion for the same period a year ago, a drop of 1.8 percent

But the company’s guidance going forward is that it will end fiscal 2013, on June 30, with revenue even or slightly higher than fiscal 2012. It’s guidance for revenue is in the $3.7 billion to $3.9 billion range. In fiscal 2012, the company had $3.8 billion in annual revenue.

One reason cited by CEO Dan Allen for the optimism is that when the company looks at risk factors going forward it sees that 97 percent of its current work is under contract. Only 2 percent is up for recompete and 1 percent is new business.

This puts the company in a strong position to mitigate risk that can come up as the federal government moves through sequestration and gains more certainty over the budget, he said.

While Allen said he is happy with the company’s results to date, he knows there are areas that need special focus going forward.

Health care, business systems and litigation support have all been experiencing double digit growth rates, he said, but C4ISR and intelligence work has suffered as the draw down continues in Afghanistan, he said.

Another area is enterprise IT, where CACI tracking the shift to cloud computing and its impact on opportunities, Allen said.

The company’s geospatial business also faces challenges as a major contract opportunity at the National Geospatial Intelligence Agency has been pulled back to be restructured, he said.

Among the positives Allen sees is the shift away from time and material contracts toward fixed price and cost-reimbursable contracts. Time and materials contracts fell from 30.4 percent of the revenue to 24.1 percent, while fixed price rose to 28.1 percent from 27 percent and cost reimbursable rose to 47.8 percent, compared to 42.6 percent for the first six months of fiscal 2011.

The shift is expected to continue as the government looks to buy more solutions and end-item type systems. The shift is good for CACI because it represents higher margin work than time and materials contracts, he said.

As CACI looks to finish out the next six months of its fiscal year, Allen said the company is focused on winning recompetes and tracking new opportunities that align with the company’s key market areas and solutions.

“You have to win new business because the number of opportunities for new work is dwindling,” he said.

A third part of his strategy is focused on the contract level – CACI has 2,100 contracts. “We want to know where they are going with their programs and their funding as they move through all this uncertainty,” Allen said. “We don’t want to just be reactive.”

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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