- The Washington Times - Tuesday, August 20, 2002

The last several days have been filled with a flurry of good news for CACI International Inc. and its shareholders.
Shares of the Arlington-based technology provider to the government spiked more than $5.50, or 9 percent last week. Yesterday, they shot up an additional $3.04 to close at $38.09, their highest level in five months.
Much of the price increase came on the heels of CACI's announcement of record earnings, along with the official listing of the stock on the New York Stock Exchange after decades on the Nasdaq.
CACI said it earned $9.3 million (32 cents per share) in the quarter ending June 30, compared with $7.6 million (28 cents) during the like quarter last year. Revenues also increased about $38 million, or 25 percent, to $191 million. About $178 million, or 92 percent of the quarterly revenue, came from the federal government.
Analysts credit CACI's strong relationship with the government for its earnings improvements, and said the ongoing war on terrorism has led to increased spending on CACI's products by Pentagon and other defense-related agencies.
The company said most of the new revenue stemmed from systems integration and support of the government's intelligence agencies. It earned $744 million in new contracts, about $500 million of which came from one contract to support the global solutions network for the Defense Information Systems Agency.
Last week, the company added another small contract to its roster an $11.3 million deal to support the Air Force Materiel Command's Electronic Systems Center at Hanscom Air Force Base in Massachusetts.
"The business is strong because of what [the United States has] had to do on the defense side," said Christopher Penny, an analyst with Friedman, Billings and Ramsey in Arlington. "The [Pentagon] is making up a large portion of their revenues."
Traditional defense contractors like Lockheed Martin, Northrop Grumman and General Dynamics have all increased earnings and seen their share prices soar in the past year. But, unlike larger defense firms, investors haven't sold shares recently to make quick profits.
Part of the reason for this, analysts said, is because CACI is smaller and not an integral player in most mutual funds. Many fund managers have recently been selling off shares of Lockheed Martin, Northrop Grumman and other high-flying defense firms in a scramble to get cash, but CACI has been relatively immune to this, analysts said.
In addition, CACI investors have been patient in waiting for a possible war in Iraq to boost earnings and, perhaps more importantly, the formation of the new Department of Homeland Security.
"Homeland security hasn't really manifested its results yet you've got further expectations," Mr. Penny said. "That spending, to a large degree, hasn't started. That'll be the next kick for CACI."
Furthermore, Mr. Penny said, CACI has done a solid job in balancing its older businesses, like logistics and engineering, with newer sectors like network services and electronic business.
"It's a combination of both old and new," he said.
CACI said it expects earnings for the upcoming quarter to fall between $8.9 million (31 cents per share) and $9.4 million (33 cents), with revenues between $182 million and $184 million.


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