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A National Asset for National Priorities 1 CACI International Inc Fourth Fiscal Quarter FY10 Earnings Conference Call August 18, 2010.

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Presentation on theme: "A National Asset for National Priorities 1 CACI International Inc Fourth Fiscal Quarter FY10 Earnings Conference Call August 18, 2010."— Presentation transcript:

1 A National Asset for National Priorities 1 CACI International Inc Fourth Fiscal Quarter FY10 Earnings Conference Call August 18, 2010

2 A National Asset for National Priorities Q4 FY10 2 Forward-looking Statements There are statements made herein which do not address historical facts, and therefore could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: regional and national economic conditions in the United States and the United Kingdom, including conditions that result from a prolonged recession; terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; in connection with business combinations, including valuation of contingent consideration; failure to achieve contract awards in connection with recompetes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. government or other public sector projects, based on a change in spending patterns, or in the event of a priority need for funds, such as homeland security, the war on terrorism or rebuilding Iraq, or an economic stimulus package; government contract procurement (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the results of government investigations into allegations of improper actions related to the provision of services in support of U.S. military operations in Iraq; the results of government audits and reviews conducted by the Defense Contract Audit Agency or other government entities with cognizant oversight; the insourcing of contractor positions by the government; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); market speculation regarding our continued independence; material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, and (iii) competition for task orders under Government Wide Acquisition Contracts (“GWACs”) and/or schedule contracts with the General Services Administration; the ability to successfully integrate the operations of our recent acquisitions; our own ability to achieve the objectives of near term or long range business plans; and other risks described in the company’s Securities and Exchange Commission filings.

3 A National Asset for National Priorities Q4 FY10 3 Participants  Participants for today’s call: — Paul Cofoni President & Chief Executive Officer — Tom Mutryn Chief Financial Officer — Bill Fairl President of U.S. Operations — Randy Fuerst Chief Operating Officer, U.S. Operations

4 A National Asset for National Priorities Q4 FY10 4 CEO Overview  Another year of meeting our major financial objectives: — Organic revenue growth of mid- to high-single digits — Double-digit earnings growth  Remain confident in our outlook — Initiatives announced by Secretary Gates will present new opportunities for CACI

5 A National Asset for National Priorities Q4 FY10  Excellent fourth quarter — Revenue grew over 16%; net income, nearly 9% — Record level of contract funding orders — Strong operating cash flow — DSOs at a record low level  Exceptional fiscal year for CACI — Grew in each of our core competencies — Record revenue, net income, diluted EPS, operating cash flow, and contract funding orders — Record year-end funded backlog — Revenue above $3 billion — Employee base over 13,000 5 CEO Overview

6 A National Asset for National Priorities Q4 FY10 6 CEO Overview  Confident that execution of our strategy will generate results projected in FY11 guidance — Asymmetric threat of global terrorism remains high  Secretary Gates initiatives and CACI: — CACI work at BTA to be shifted to other organizations — Negligible impact by elimination of The Joint Forces Command, OSD NII and J-6 organizations — Goal of initiatives is to apply savings to force structure and modernization—same areas of CACI’s focus

7 A National Asset for National Priorities Q4 FY10  Demand continues high for CACI services in C4ISR and Intelligence and Security Services  Vulnerability to cyber attacks will lead to more demand for our cyber solutions — CACI a recognized thought leader on cyber threats and solutions  Improving efficiency and effectiveness of DoD’s IT infrastructure — Aligns with CACI’s expertise in IT modernization and transformation of government — Already working with DoD customers to consolidate and streamline architectures — Consistent with other projects across the government 7 CEO Overview

8 A National Asset for National Priorities Q4 FY10  Demand drivers give us the confidence that FY11 will be another year of strong growth — Level of pending awards is higher than ever — Very full pipeline for next several years — Open personnel requisitions at a two-year high and growing  Achieved CMMI © Level 3 rating across entire company  Operational excellence drives our financial performance 8 CEO Overview

9 A National Asset for National Priorities Q4 FY10 9 Financial Overview Revenue Up 16.4% Revenue increase in quarter driven by: Organic revenue growth of 14.3%Organic revenue growth of 14.3% Direct labor growth of 9.0%Direct labor growth of 9.0% ODC growth of 25.8%ODC growth of 25.8% $ in millions Operating Income $ in millions Up 2.7% ositive effect of growth in direct labor and ODCs partially offset by higher stock compensation expense and higher depreciation and amortization Positive effect of growth in direct labor and ODCs partially offset by higher stock compensation expense and higher depreciation and amortization

10 A National Asset for National Priorities Q4 FY10  Non-cash stock compensation expense: — Revised in 2009 to provide performance-based restricted stock — Stock vesting ratably over three to four years — 2009 and 2010 grants based on FY10 net income FY10 net income performance metrics exceeded FY10 net income performance metrics exceeded — Expense for equity grants with performance metrics and graded vesting must be recorded on an accelerated basis Expense previously recorded on straight-line basis Expense previously recorded on straight-line basis — Impact on FY10: $14 million of additional stock-based compensation in FY10 compared to FY09, $9 million in 4 th quarter $14 million of additional stock-based compensation in FY10 compared to FY09, $9 million in 4 th quarter Reduced operating margin in quarter by 110 bps, full year by 45 bps Reduced operating margin in quarter by 110 bps, full year by 45 bps 10 Financial Overview

11 A National Asset for National Priorities Q4 FY10  Treatment of acquisition-related contingent consideration (earnouts): — In FY10, acquired three companies, all with 2 year earnouts — New accounting rules require: Determination of fair value of expected earnout as of acquisition date; record on balance sheet Determination of fair value of expected earnout as of acquisition date; record on balance sheet Re-evaluation of fair value of expected earnout each quarter; reflect changes in income statement Re-evaluation of fair value of expected earnout each quarter; reflect changes in income statement — Earnout reduced by $3 million in 4 th quarter Reflected as a reduction in indirect costs and selling expenses Reflected as a reduction in indirect costs and selling expenses 11 Financial Overview

12 A National Asset for National Priorities Q4 FY10 12 Financial Overview CACI Net Income Effective tax rate—37.8% for the quarter, 36.5% for the year Diluted EPS Up 6.5% $ in millions $0.91 $0.96 Up 8.8% UK operations:UK operations: Revenue up 41.8% in quarter, 47.1% for the yearRevenue up 41.8% in quarter, 47.1% for the year Net income up 42.0% in quarter, 59.7% for the yearNet income up 42.0% in quarter, 59.7% for the year

13 A National Asset for National Priorities Q4 FY10 13  Cash and equivalents at 6/30 of $255 million  Cash flow from operations at $209 million for the year, $86 million for the quarter  Free cash flow (operating cash flow – capital expenditures) = $187 million  Diluted adjusted EPS in FY10 of $5.39 vs diluted GAAP EPS OF $3.47 — Diluted adjusted EPS in 4 th quarter of $1.55 vs diluted GAAP EPS of $0.96  Net debt of $277 million at 6/30 Financial Overview DSOs

14 A National Asset for National Priorities Q4 FY10 14 CACI Guidance for FY11 (As of August 17, 2010) This guidance represents our views as of August 17, Investors are reminded that actual results may differ from these estimates for reasons described in our Safeharbor Statement and our filings with the SEC. FY11 Guidance FY11 Guidance Revenue (millions)$3,250 - $3,400 Net Income (millions) $116 - $122 Diluted EPS $ $3.90 Diluted shares (millions) 31.3 FY11 revenue expected to be 3 – 8% over ’10 FY11 net income expected to be 9 – 15% over ’10 FY11 diluted EPS expected to be % over ’10

15 A National Asset for National Priorities Q4 FY10 15 Operations Overview  Contract funding orders grew 16% in the quarter; 14% for the year — 80% of projected FY11 business to come from contracts already held; 20% from recompetes and new business  Received approximately $293 million in awards; $2 billion for the year — Won all major recompetes in FY10 — Recompete win rate equal to FY09; best rate over the past 6 years  Prime position on $2.6 billion in estimated ceiling value on other multiple-award IDIQ contracts won in FY10

16 A National Asset for National Priorities Q4 FY10 Operations Overview  U.S. Operations achieved CMMI © Level 3 rating — Norfolk division achieved CMMI Level 5 rating — High-level CMMI recognition assures our clients of high quality and best practices in software and systems engineering  Intelligence business grew 20.4% in the quarter, 21.2% for the year — Represents 39.8% of our revenue  At the end of June: — $5 billion in proposals submitted for evaluation Majority currently scheduled for award by the end of December Majority currently scheduled for award by the end of December — Expect to submit > $8 billion in new proposals by the end of December 16

17 A National Asset for National Priorities Q4 FY10 Operations Overview  Open hiring requisitions > 400  Total of approximately 20 employees working at JFCOM, OSD NII and J-6  Approximately 160 people at BTA — Will see no negative impact as a result of closure  FY10 voluntary attrition rate lowest in 6 years 17

18 A National Asset for National Priorities Q4 FY10 Operations Overview  Performance metrics of U.S. Operations point in right direction: — Contract funding orders and funded backlog — Recompete win rate — Opportunity pipeline — Hiring — Retention 18

19 A National Asset for National Priorities Q4 FY10 19 CEO Closing Comments  Expect to deliver another year of strong financial performance in FY11  Our services and solutions are vital to the most critical missions — Demand remains strong  Our services are aligned with funding priorities of proposed FY11 budget — Will support government’s transformation efforts  Confident that we can meet our major financial goals for FY11 and beyond


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