- The Washington Times - Monday, June 25, 2001

CACI International Inc. shares are jumping to record highs, amid steady business with the federal government, while many other information technology companies are suffering.

Buoyed by a string of recent government contract wins and strong management, shares of the Arlington-based CACI jumped to an all-time high of $44.62 in early June, and then settled back a bit. It closed Friday at $39.38.

"Our financial performance has been improving steadily," says CACI's Chief Financial Officer Stephen Waechter. "We've got a steady program. We've been growing 20 percent a year. We've focused on areas where there will be increased spending."

CACI in May won a $14.5 billion contract along with 21 other contractors to deploy Web technology to help the Naval Sea Systems Command with the financial management and logistics of engineering, building and supporting Navy ships.

Also last month, CACI nabbed a $21 million contract with Sverdrup Technology, Inc. to support that company's Technical and Engineering Acquisition Support contract for an Air Force Armament Center in Florida.

Meanwhile, CACI's steady business with the General Services Administration also has helped the company grow. CACI on May 9 announced a 10-year, $17.6 million task contract under GSA to provide technological support to the Air Force Technical Applications Center at Patrick Air Force Base in Florida. Fully 80 percent of CACI's business comes from the federal government, giving investors a sense of security at a time when most tech stocks are on shaky ground.

"The new administration has a focus on defense," Mr. Waechter says. "There is a general recognition on both sides of the House and Senate that we have underspent in some areas."

He says that the government wants to improve intelligence and devote more attention to things like cyber-warfare and Internet security.

Unlike other companies, CACI is "insulated" from a possible recession because so much of its business is with the government, says Michael Coady, a business analyst for Sidoti & Co.

"Institutional interest is surging," Mr. Coady says. "Some big institutions may have driven [CACI's stock] up quite a bit. It's experiencing growth a little ahead of the industry right now [while] its competitors are larger and not quite as focused."

There are a number of factors working to CACI's benefit, says Mr. Coady. "They've been preaching network security and integrity for a long time … It's catching up."

CACI did experience a slowdown after it completed its work involving the potential year-2000 computer problem. But it has since rebounded.

CACI had a record third quarter in 2001, boosted its net sales to $148.19 in the third quarter, compared with $122.11 in the like quarter last year.

CACI is growing because, unlike other tech companies, it delivers results investors are looking for, says William Loomis, analyst for Baltimore's Legg Mason Wood Walker.

"The industry is growing in low single digits," Mr. Loomis says. "CACI has been able to grow much faster than that. Many tech companies are missing numbers."

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