- The Washington Times - Monday, May 6, 2002

CACI International Inc., which maintains computer networks for the U.S. military and intelligence agencies, is having a strong growth year fueled by the Bush administration's aggressive defense spending.
The Arlington-based company's performance has reflected in its stock, which has traded between $30 and $40 since September 11. It closed at $29.57 Friday on Nasdaq.
The dip in the price resulted from a confusion among analysts following the company's earnings report April 23. The company said that for its third fiscal quarter ended March 31 net income rose 54.5 percent to $8.6 million (33 cents per share) from $5.6 million (24 cents) a year earlier.
CACI had forecast earnings of 29 cents to 32 cents a share, while the consensus of 11 analysts surveyed by Thomson Financial/First Call was for earnings of 31 cents to 38 cents a share. The downgrade hurt the stock, which dipped a few dollars on the day the earnings were released.
Since then the shares have picked up, after the company explained that analysts did not properly calculate the effect of the company's recent secondary stock offering. Last month CACI sold 4.25 million shares, raising $148 million to pay off debt, says Jack London, CACI's chairman, president and chief executive.
"We had a very strong quarter," he says. "And we're looking at a record year coming into the fourth quarter."
Revenues at CACI rose 23.4 percent to $182.82 million from $148.19 million during the third quarter, which was a busy time for the company in terms of winning new contracts.
Last week CACI won a $500 million subcontract with Science Applications International Corp., in San Diego, to support the communications network of the Defense Information Systems Agency.
Earlier in April the company was awarded two other contracts: One is a five-year $31.5 million deal through the General Services Administration to assist the U.S. Customs Service in its implementation of enterprisewide information assurance. The other is for $25 million to continue providing support to the Navy Personnel Command's Electronic Military Personnel Records System.
Between January and March CACI got a handful of other contracts, including a $50 million, 10-year, subcontract with Northrop Grumman to provide software for the U.S. Army Communications-Electronics Command Software Engineering Center.
"They are performing very well," says Michael Coady, analyst with Sidoti & Co. "They are benefiting from increasing defense spending."
In the weeks following September 11 Congress passed a $20 billion defense emergency bill, which was tagged to the fiscal 2002 budget that started Oct. 1. Since then more supplemental money has gone toward defense, and President Bush is pushing for $379 billion for fiscal 2003, plus about $20 billion in supplemental emergency spending for homeland defense.
This bodes well for CACI, which conducts 60 percent of its business with the U.S. defense community. Another 8 percent is with international and commercial firms, and the rest is with U.S. civilian federal agencies.
CACI's target is to become a $1 billion company by fiscal 2005 a goal Mr. London sees the company fulfilling. The growth strategy is simple: Half of it is internal growth and half is through mergers and acquisitions.
"It's clear that the Bush administration and government are very serious about upgrading the structure for the federal sector," says Christopher Penny, analyst with Friedman, Billings & Ramsey.


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