- The Washington Times - Monday, September 24, 2001

Shares of Arlington-based CACI International, Inc. skyrocketed last week in the wake of terrorist attacks that have sparked an immediate boost in defense spending and talk of further increases down the road.

When markets reopened last Monday, shares of CACI shot up $9.12, or 22 percent, to close at $50.47, a 52-week high at the time. The company's stock continued to climb until Friday, when it settled down to $50.56. Overall, shares increased $9.21 during the week.

CACI Chief Executive J.P. "Jack" London said in an interview late last week that he anticipated such a terrorist attack could occur, and positioned the company's business in keeping with that thinking. In the past several years CACI has increased its focus on technology, while offering a host of intelligence services.

"We started making some changes in the early '90s. We saw it was a networked world out there," Mr. London says. "That led us into the world of security. It led us into intelligence. We've been moving and positioning the company to have some distributions in that arena."

The 1998 acquisition of QuesTech, a company that supplied information technology services to the government, was the key move in that direction, analysts say.

Mr. London, a Naval Academy graduate and former Navy aviator, says that among his defense industry friends, there was talk that an attack could happen.

"My first reaction was shock and outrage. It's the most dastardly thing I've seen in my lifetime, for sure," Mr. London says. "On a different level [my reaction] was as a guy who spent a career in the defense industry. We've been having some feelings that this might be brewing. We'd been thinking and talking about that in defense seminars for some time now."

Investors may have noticed CACI's intelligence service and products (which include electronic warfare sensors and weapons testing), but analysts have been a fan of the company for some time.

"CACI is one we've always liked there," says Thomas Meagher, an analyst with BB&T; capital markets.

Legg Mason analyst William Loomis upgraded CACI's year-end closing price estimate from $54 to $57 per share last week.

"CACI has missed earnings once in recent years, and that was in June of 1997," Mr. Loomis says. "They've been very consistent, and that's been attracting investors."

The company announced record earnings in its most recent quarter, with revenues of $153.9 million.

Recent contracts for CACI include a $40 million deal to deliver worldwide logistics support for the General Services Administration and a $17.6 million contract to supply information systems support for the U.S. Air Force.

Mr. London says his company is now geared to work on a systems integration project that could have helped prevent the Sept. 11 attacks. He says the Pentagon, CIA and the FBI lacked an efficient system by which they could share information.

"All of their information needs to be fed into a system that would put out some high-level warnings," Mr. London says.

Such a project would be a massive undertaking, but for the time being CACI is looking to help the country any way it can.

"We're positioned to stand up and be of service. And I think the investment community is picking up on that," Mr. London says.

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