What changed in CACI INTERNATIONAL INC /DE/'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of CACI INTERNATIONAL INC /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+122 added−122 removedSource: 10-K (2024-08-08) vs 10-K (2023-08-10)
Top changes in CACI INTERNATIONAL INC /DE/'s 2024 10-K
122 paragraphs added · 122 removed · 104 edited across 7 sections
- Item 1A. Risk Factors+28 / −33 · 25 edited
- Item 7. Management's Discussion & Analysis+32 / −33 · 29 edited
- Item 1. Business+29 / −31 · 25 edited
- Item 3. Legal Proceedings+22 / −14 · 14 edited
- Item 5. Market for Registrant's Common Equity+5 / −5 · 5 edited
Item 1. Business
Business — how the company describes what it does
25 edited+4 added−6 removed42 unchanged
Item 1. Business
Business — how the company describes what it does
25 edited+4 added−6 removed42 unchanged
2023 filing
2024 filing
Biggest changeRecent Acquisitions During the past three fiscal years, we completed a total of six acquisitions, including: • During fiscal 2023, CACI Limited completed one acquisition of a business in the U.K. that provides software engineering, data analysis and cyber services to the national security sector. • During fiscal 2022, CACI completed four acquisitions that provide mission and enterprise technology to sensitive government customers.
Biggest changeFor fiscal 2024, the top ten revenue-producing contracts, many of which consist of many task orders, accounted for 41.9% of our revenues, or $3.2 billion. 5 Recent Acquisitions During the past three fiscal years, we completed a total of eight acquisitions, including: • During fiscal 2024, the Company completed three acquisitions that enhance our capabilities and/or customer relationships. • During fiscal 2023, CACI Limited completed one acquisition of a business in the U.K. that provides software engineering, data analysis and cyber services to the national security sector. • During fiscal 2022, CACI completed four acquisitions that provide technology to sensitive government customers.
We employ marketing professionals who identify and qualify major contract opportunities, primarily in the federal government market. 5 Much of our business is won through submission of formal competitive bids. Government and commercial customers typically base their decisions regarding contract awards on their assessment of the quality of past performance, responsiveness to proposal requirements, price, and other factors.
We employ marketing professionals who identify and qualify major contract opportunities, primarily in the federal government market. Much of our business is won through submission of formal competitive bids. Government and commercial customers typically base their decisions regarding contract awards on their assessment of the quality of past performance, responsiveness to proposal requirements, price, and other factors.
We enhance platforms to improve situational awareness, mobility, interoperability, lethality, and survivability. We conduct software vulnerability analysis and harden technology to protect against malicious actors. Our platform-agnostic, mission-first approach ensures optimal performance, so our nation’s forces can overmatch our adversaries. • Enterprise IT – CACI amplifies efficiency with unmatched expertise and next-generation technology.
We enhance platforms to improve situational awareness, mobility, interoperability, lethality, and survivability. We conduct software vulnerability analysis and harden technology to protect against malicious actors. Our platform-agnostic, mission-first approach ensures optimal performance, so our nation’s forces can overmatch our adversaries. 4 • Enterprise IT – CACI amplifies efficiency with unmatched expertise and next-generation technology.
The CRADLE brings together customers, industry partners, academia, and CACI personnel to explore and discover new ways to solve complex problems and challenges. 6 Diversity, Equity, and Inclusion We embrace diversity, equity, and inclusion as core values and seek to ensure that all our employees experience a highly inclusive working environment.
The CRADLE brings together customers, industry partners, academia, and CACI personnel to explore and discover new ways to solve complex problems and challenges. Diversity, Equity, and Inclusion We embrace diversity, equity, and inclusion as core values and seek to ensure that all our employees experience a highly inclusive working environment.
We have a relatively small share of the addressable market for our solutions and services and intend to achieve growth and increase market share both organically and through strategic acquisitions. Strengths and Strategy We primarily offer our entire range of Expertise and Technology to defense, intelligence and civilian agencies of the U.S. government.
We have a relatively small share of the addressable market for our Expertise and Technology and intend to achieve growth and increase market share both organically and through strategic acquisitions. Strengths and Strategy We primarily offer our entire range of Expertise and Technology to defense, intelligence and civilian agencies of the U.S. government.
In order to effectively perform on our existing customer contracts and secure new customer contracts within the U.S. government, we must maintain expert knowledge of agency policies, operations and challenges. We combine this comprehensive knowledge with Expertise and Technology for our Enterprise and Mission customers.
In order to effectively perform on our existing customer contracts and secure new customer contracts within the U.S. government, we must maintain expert knowledge of agency policies, operations and challenges. We combine this comprehensive knowledge with Expertise and Technology for our customers.
Documents filed by us with the SEC can also be viewed at www.sec.gov.
Documents filed by us with the SEC can also be viewed at www.sec.gov. 7
Headquartered in London, our international operations provide a diverse mix of IT services and proprietary data and software products, serving commercial and government customers throughout the United Kingdom (U.K.), continental Europe and around the world. International Operations represented 2.8%, 3.1%, and 2.9% of our total revenues for fiscal 2023, 2022, and 2021, respectively.
Headquartered in London, our international operations provide a diverse mix of IT services and proprietary data and software products, serving commercial and government customers throughout the United Kingdom (U.K.), continental Europe and around the world. International Operations represented 3.0%, 2.8%, and 3.1% of our total revenues for fiscal 2024, 2023, and 2022, respectively.
As of June 30, 2023, we employed approximately 23,000 ta lented full and part-time employees that help make CACI a respected and recognized industry leader. Our Culture Our culture defines who we are, how we act, and what we believe is the right way to conduct business and is the driving force behind our success.
As of June 30, 2024, we employed approximately 24,000 ta lented full and part-time employees that help make CACI a respected and recognized industry leader. Our Culture Our culture defines who we are, how we act, and what we believe is the right way to conduct business and is the driving force behind our success.
Our software-defined, full-spectrum cyber, electronic warfare, and counter-unmanned aircraft system (C-UAS) solutions provide electromagnetic spectrum advantage and deliver precision effects against national security threats.
Our software-defined signals intelligence, electronic warfare, and counter-unmanned aircraft system (C-UAS) solutions provide electromagnetic spectrum advantage and deliver precision effects against national security threats.
We use data analytics and visualization to provide insights and outcomes that optimize our customer’s operations. • C4ISR, Cyber & Space – CACI teams ensure information superiority by delivering multi-domain command, control, communications, and computer (C4) technology and networks.
We use data analytics and visualization to provide insights and outcomes that optimize our customer’s operations. • C4ISR – CACI teams ensure information superiority by delivering multi-domain command, control, communications, and computer (C4) intelligence, surveillance, and reconnaissance (ISR) technology and networks.
We are at the forefront of developing technologies that meet the challenges of 5G wireless communications both on and off the battlefield, mmWave, and the use of lasers for free space optical communications and long-range sensing. 4 • Engineering Services – CACI provides platform integration and modernization and sustainment, system engineering, naval architecture, training and simulation services, and logistics engineering to help our customer achieve a decisive tactical edge.
We are at the forefront of developing technologies that use lasers for free space optical communications and long-range sensing. • Engineering Services – CACI provides platform integration and modernization and sustainment, system engineering, naval architecture, training and simulation services, and logistics engineering to help our customer achieve a decisive tactical edge.
Domestic Operations represented 97.2%, 96.9%, and 97.1% of our total revenues for the fiscal year ended June 30, 2023 (“fiscal 2023”), June 30, 2022 (“fiscal 2022”) and June 30, 2021 (“fiscal 2021”), respectively.
Domestic Operations represented 97.0%, 97.2%, and 96.9% of our total revenues for the fiscal year ended June 30, 2024 (“fiscal 2024”), June 30, 2023 (“fiscal 2023”) and June 30, 2022 (“fiscal 2022”), respectively.
The U.S. government’s fiscal year ends on September 30 of each year. It is not uncommon for government agencies to award extra tasks or complete other contract actions in the weeks before the end of a fiscal year in order to avoid the loss of unexpended funds.
It is not uncommon for government agencies to award extra tasks or complete other contract actions in the weeks before the end of a fiscal year in order to avoid the loss of unexpended funds.
CACI was founded in 1962 as a simulation technology company and has grown into a leading provider of Expertise and Technology to Enterprise and Mission customers, supporting national security missions and government modernization/transformation in the intelligence, defense, and federal civilian sectors, both domestically and internationally.
CACI was founded in 1962 as a simulation technology company and has grown into a leading provider of distinctive Expertise and differentiated Technology to customers in support of national security in the intelligence, defense, and federal civilian sectors, both domestically and internationally.
CQ is an essential skill that consists of being aware of our own cultural identity, understanding the cultural identities of others, and bridging the gap to embrace and appreciate the differences. This enables us to work collaboratively across teams and the organization in ways that ensure everyone is valued.
CQ is an essential skill that consists of being aware of our own cultural identity, understanding the cultural identities of others, and bridging the gap to embrace and appreciate the differences.
Unless the context indicates otherwise, the terms “we”, “our”, “the Company” and “CACI” refer to CACI International Inc and its subsidiaries and ventures that are majority-owned or otherwise controlled by it.
Unless the context indicates otherwise, the terms “we”, “our”, “the Company” and “CACI” refer to CACI International Inc and its subsidiaries and ventures that are majority-owned or otherwise controlled by it. The term “the Registrant” refers to CACI International Inc only. • Expertise – CACI delivers talent with the specific technical and functional knowledge to support internal agency operations.
Although we are not materially dependent on the protection of our intellectual property, we take such matters seriously and pursue claims against such individuals to the extent necessary to adequately protect our rights. 7 As a systems integrator, it is important that we maintain access to software, data and technology supplied by third parties and we continue to enter into agreements that give us the right to distribute and receive income from third party software, data and technology that serve our customers.
As a systems integrator, it is important that we maintain access to software, data and technology supplied by third parties and we continue to enter into agreements that give us the right to distribute and receive income from third party software, data and technology that serve our customers.
Talent Acquisition, Development and Retention Our industry is ever-evolving, and those who are most successful evolve with it, continually learning and growing throughout their careers.
This enables us to work collaboratively across teams and the organization in ways that ensure everyone is valued. 6 Talent Acquisition, Development and Retention Our industry is ever-evolving, and those who are most successful evolve with it, continually learning and growing throughout their careers.
From time to time, we are required to assert our rights against former employees or other third parties who attempt to misappropriate our proprietary and confidential information.
From time to time, we are required to assert our rights against former employees or other third parties who attempt to misappropriate our proprietary and confidential information. Although we are not materially dependent on the protection of our intellectual property, we take such matters seriously and pursue claims against such individuals to the extent necessary to adequately protect our rights.
We seek competitive business opportunities and have built our operations to support major programs through a market-focused business development organization. Our customers are primarily agencies and departments of the U.S. government as well as foreign governments and commercial enterprises.
Our customers are primarily agencies and departments of the U.S. government as well as foreign governments and commercial enterprises.
CACI invests ahead of customer need with research and development to generate unique intellectual property and differentiated technology addressing critical national security and government modernization needs. Our proven Expertise and Technology and strong record of program delivery have enabled us to compete for and secure new customers and contracts, win repeat business, and build and maintain long-term customer relationships.
Our proven Expertise and Technology and strong record of program delivery have enabled us to compete for and secure new customers and contracts, win repeat business, and build and maintain long-term customer relationships. We seek competitive business opportunities and have built our operations to support major programs through a market-focused business development organization.
Seasonal Nature of Business Our business in general is not seasonal, although the summer and holiday seasons affect our revenues because of the impact of holidays and vacations on our labor. Variations in our business also may occur at the expiration of major contracts until such contracts are renewed or new business is obtained.
Variations in our business also may occur at the expiration of major contracts until such contracts are renewed or new business is obtained. The U.S. government’s fiscal year ends on September 30 of each year.
Their capabilities include open source intelligence solutions, specialized cyber, satellite communications, multi-domain photonics technologies for free-space optical (FSO) communications, and commercial solutions for classified (CSfC) security technologies. • During fiscal 2021, CACI completed the acquisition of Ascent Vision Technologies (AVT). AVT specializes in Electro-Optical Infrared payloads, On-Board Computer Vision Processing and C-UAS solutions.
Their capabilities include open source intelligence solutions, specialized cyber, satellite communications, multi-domain photonics technologies for free-space optical (FSO) communications, and commercial solutions for classified (CSfC) security technologies. Seasonal Nature of Business Our business in general is not seasonal, although the summer and holiday seasons affect our revenues because of the impact of holidays and vacations on our labor.
Examples include engineering expertise such as naval architecture, marine engineering, and life cycle support; and mission support expertise such as intelligence and special operations support. • Technology – CACI delivers Technology to both Enterprise and Mission customers.
Examples include functional software development expertise, data and business analysis, IT operations support, naval architecture, engineering, and life cycle support intelligence and special operations support, and network and exploitation analysis. • Technology – CACI provides technology that addresses our customer's most challenging needs.
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The term “the Registrant” refers to CACI International Inc only. • Enterprise – CACI provides capabilities that enable the internal operations of a government agency. • Mission – CACI provides capabilities that enable the execution of a government agency’s primary function, or “mission”. • Expertise – CACI provides Expertise to both Enterprise and Mission customers.
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This includes agile software development using open modern architectures and DevSecOps; advanced data platforms and applications augmented by Artificial Intelligence (AI), Enterprise Resource Planning (ERP) systems, Electromagnetic Spectrum (EMS) capabilities, photonics and network modernization. CACI invests ahead of customer need with research and development to generate unique intellectual property and differentiated technology addressing critical national security needs.
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For Enterprise customers, we deliver talent with the specific technical and functional knowledge to support internal agency operations. Examples include functional software development expertise, data and business analysis, and IT operations support. For Mission customers, we deliver talent with technical and domain knowledge to support the execution of an agency’s mission.
Added
We are at the forefront of developing technologies that meet the challenges of 5G and mmWave wireless communications both on and off the battlefield. • Cyber – CACI’s full-spectrum cyber capabilities help customers prepare, defend, and sustain their enterprise and mission against cyber threats.
Removed
For both Enterprise and Mission, CACI provides: Software development at scale using open modern architectures, DevSecOps, and agile methodologies; and advanced data platforms, data operations and analyst-centric analytics including application of Artificial Intelligence and multi-source analysis.
Added
Through our research and development (R&D) efforts, we develop and deploy new technologies for cybersecurity and cyberspace operations, including addressing technical challenges in an era of converging cyber, electronic warfare (EW), and signals intelligence (SIGINT) operations.
Removed
Additional examples of Enterprise technology include: Network and IT modernization; the customization, implementation, and maintenance of commercial-off-the-shelf (COTS) and enterprise resource planning (ERP) systems including financial, human capital, and supply chain management systems; and cyber security active defense and zero trust architectures.
Added
Our industry-leading cybersecurity lifecycle approach ensures the confidentiality, integrity, and availability of networks, systems, and data. • Space – CACI’s space domain awareness and decision support capabilities enable multi-domain operations. We are an industry leader in intelligence fusion, data analytics, and decision support as well as integrated logistics that keep vital space capabilities running.
Removed
Additional examples of Mission technology include: Developing and deploying multi-domain offerings for signals intelligence (SIGINT) and electronic warfare (EW) including Counter-UAS, cyber operations, and Radio Frequency (RF) spectrum awareness, agility and usage; photonics technology including free space optical communications; and resilient communications.
Removed
For fiscal 2023, the top ten revenue-producing contracts, many of which consist of many task orders, accounted for 38.3% of our revenues, or $2.6 billion.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
25 edited+3 added−8 removed119 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
25 edited+3 added−8 removed119 unchanged
2023 filing
2024 filing
Biggest changeOn rare occasions, these losses have been significant. In the event that we encounter such problems in the future, our actual results could differ materially and adversely from those anticipated. Our earnings and margins may vary based on the mix of our contracts and programs. At June 30, 2023, our backlog included cost reimbursable, time-and-materials and fixed-price contracts.
Biggest changeFrom time to time, unexpected costs and unanticipated delays have caused us to incur losses on fixed-price contracts, primarily in connection with state government customers. On rare occasions, these losses have been significant. In the event that we encounter such problems in the future, our actual results could differ materially and adversely from those anticipated.
These restrictions may significantly limit or prohibit us from engaging in certain transactions, and include the following: • incurring or guaranteeing certain amounts of additional debt; • paying dividends or other distributions to our stockholders or redeeming, repurchasing or retiring our capital stock in excess of specific limits; • making certain investments, loans and advances; • exceeding specific levels of liens on our assets; • issuing or selling equity in our subsidiaries; • transforming or selling certain assets currently held by us, including certain sale and lease-back transactions; • amending or modifying certain agreements, including those related to indebtedness; and • engaging in certain mergers, consolidations or acquisitions.
These restrictions may significantly limit or prohibit us from engaging in certain transactions, and include the following: • incurring or guaranteeing certain amounts of additional debt; 13 • paying dividends or other distributions to our stockholders or redeeming, repurchasing or retiring our capital stock in excess of specific limits; • making certain investments, loans and advances; • exceeding specific levels of liens on our assets; • issuing or selling equity in our subsidiaries; • transforming or selling certain assets currently held by us, including certain sale and lease-back transactions; • amending or modifying certain agreements, including those related to indebtedness; and • engaging in certain mergers, consolidations or acquisitions.
Federal government contracts contain provisions and are subject to laws and regulations that give the government rights and remedies, some of which are not typically found in commercial contracts, including allowing the government to: • cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • claim rights in systems and software developed by us; • suspend or debar us from doing business with the federal government or with a governmental agency; • impose fines and penalties and subject us to criminal prosecution; and • control or prohibit the export of our data and technology.
Federal government contracts contain provisions and are subject to laws and regulations that give the government rights and remedies, some of which are not typically found in commercial contracts, including allowing the government to: • cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • claim rights in systems and software developed by us; 8 • suspend or debar us from doing business with the federal government or with a governmental agency; • impose fines and penalties and subject us to criminal prosecution; and • control or prohibit the export of our data and technology.
As a result of employee misconduct, we could face fines and penalties, loss of security clearance and suspension or debarment from contracting with the federal government, which could cause our actual results to differ materially and adversely from those anticipated. Our failure to attract and retain qualified employees, including our senior management team, could adversely affect our business.
As a result of employee misconduct, we could face fines and penalties, loss of security clearance and suspension or debarment from contracting with the federal government, which could cause our actual results to differ materially and adversely from those anticipated. 11 Our failure to attract and retain qualified employees, including our senior management team, could adversely affect our business.
For further discussion, refer to “Management’s Discussion and Analysis of Financial Condition & Results of Operations” in Part II of this Annual Report on Form 10-K. 8 At times, we may continue to work without funding, and use our own internal funds in order to meet our customer’s desired delivery dates for Expertise or Technology.
For further discussion, refer to “Management’s Discussion and Analysis of Financial Condition & Results of Operations” in Part II of this Annual Report on Form 10-K. At times, we may continue to work without funding, and use our own internal funds in order to meet our customer’s desired delivery dates for Expertise or Technology.
Any reduction in the government’s use of private contractors to provide federal services could cause our actual results to differ materially and adversely from those anticipated. Our contracts and administrative processes and systems are subject to audits and cost adjustments by the federal government, which could reduce our revenues, disrupt our business, or otherwise adversely affect our operating results.
Any reduction in the government’s use of private contractors to provide federal services could cause our actual results to differ materially and adversely from those anticipated. 10 Our contracts and administrative processes and systems are subject to audits and cost adjustments by the federal government, which could reduce our revenues, disrupt our business, or otherwise adversely affect our operating results.
If our backlog estimate is inaccurate and we fail to realize those amounts as revenues, our future operating results could be materially and adversely affected. 11 Employee misconduct, including security breaches, could result in the loss of customers and our suspension or debarment from contracting with the federal government.
If our backlog estimate is inaccurate and we fail to realize those amounts as revenues, our future operating results could be materially and adversely affected. Employee misconduct, including security breaches, could result in the loss of customers and our suspension or debarment from contracting with the federal government.
If we are unable to win particular contracts, we may be prevented from providing to customers services that are purchased under those contracts for a number of years.
If we are unable to win particular multi-year contracts, we may be prevented from providing to customers services that are purchased under those contracts for a number of years.
We have substantial investments in recorded goodwill as a result of prior acquisitions, and changes in future business conditions could cause these investments to become impaired, requiring substantial write-downs that would reduce our operating income. As of June 30, 2023, goodwill accounts for $4.1 billion of our recorded total assets.
We have substantial investments in recorded goodwill as a result of prior acquisitions, and changes in future business conditions could cause these investments to become impaired, requiring substantial write-downs that would reduce our operating income. As of June 30, 2024, goodwill accounts for $4.2 billion of our recorded total assets.
We conduct the majority of our international operations in the U.K. and the Netherlands. As a percentage of our total revenues, our international operations generated 2.8% and 3.1% in fiscal 2023 and 2022, respectively. Our international operations are subject to risks associated with operating in a foreign country.
We conduct the majority of our international operations in the U.K. and the Netherlands. As a percentage of our total revenues, our international operations generated 3.0% and 2.8% in fiscal 2024 and 2023, respectively. Our international operations are subject to risks associated with operating in a foreign country.
As of June 30, 2023, $525.0 million was outstanding under the Revolving Facility and $1,179.1 million was outstanding under the Term Loan. In addition, the terms of the Credit Facility allow us to incur additional indebtedness from other sources so long as we satisfy the covenants in the agreement governing the Credit Facility.
As of June 30, 2024, $415.0 million was outstanding under the Revolving Facility and $1,133.1 million was outstanding under the Term Loan. In addition, the terms of the Credit Facility allow us to incur additional indebtedness from other sources so long as we satisfy the covenants in the agreement governing the Credit Facility.
The federal government is our primary customer, with revenues from federal government contracts, either as a prime contractor or a subcontractor, accounting for 94.8% and 94.8% of our total revenues in fiscal 2023 and 2022, respectively. Specifically, we generated 71.9% and 69.8% of our total revenues in fiscal 2023 and 2022, respectively, from contracts with agencies of the DoD.
The federal government is our primary customer, with revenues from federal government contracts, either as a prime contractor or a subcontractor, accounting for 95.1% and 94.8% of our total revenues in fiscal 2024 and 2023, respectively. Specifically, we generated 74.4% and 71.9% of our total revenues in fiscal 2024 and 2023, respectively, from contracts with agencies of the DoD.
Moreover, even if we are highly qualified to work on a particular new contract, we might not be awarded business because of the federal government’s policy and practice of maintaining a diverse contracting base. 9 This competitive bidding process presents a number of risks, including the following: • we bid on programs before the completion of their design, which may result in unforeseen technological difficulties and cost overruns; • we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; • we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win; and • we may encounter expense and delay if our competitors protest or challenge awards of contracts to us in competitive bidding, and any such protest or challenge could result in the resubmission of bids on modified specifications, or in the termination, reduction or modification of the awarded contract.
This competitive bidding process presents a number of risks, including the following: • we bid on programs before the completion of their design, which may result in unforeseen technological difficulties and cost overruns; • we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; • we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win; and • we may encounter expense and delay if our competitors protest or challenge awards of contracts to us in competitive bidding, and any such protest or challenge could result in the resubmission of bids on modified specifications, or in the termination, reduction or modification of the awarded contract.
Depending on the level of clearance, security clearances can be difficult and time-consuming to obtain. If we or our employees lose or are unable to obtain necessary security clearances, we may not be able to win new business and our existing customers could terminate their contracts with us or decide not to renew them.
If we or our employees lose or are unable to obtain necessary security clearances, we may not be able to win new business and our existing customers could terminate their contracts with us or decide not to renew them.
We derive a significant amount of revenues from service contracts with the federal government. The government may face restrictions from new legislation, regulations or government union pressures, on the nature and amount of services the government may obtain from private contractors (i.e., insourcing versus outsourcing).
The government may face restrictions from new legislation, regulations or government union pressures, on the nature and amount of services the government may obtain from private contractors (i.e., insourcing versus outsourcing).
There can be no assurance that we will win any particular bid, or that we will be able to replace business lost upon expiration or completion of a contract, and the termination or non-renewal of any of our significant contracts could cause our actual results to differ materially and adversely from those anticipated.
There can be no assurance that we will win any particular bid, or that we will be able to replace business lost upon expiration or completion of a contract, and the termination or non-renewal of any of our significant contracts could cause our actual results to differ materially and adversely from those anticipated. 9 Our business may suffer if we or our employees are unable to obtain the security clearances or other qualifications we and they need to perform services for our customers.
While these types of contracts are generally subject to less uncertainty than fixed-price contracts, to the extent that our actual labor costs are higher than the contract rates, our actual results could differ materially and adversely from those anticipated.
While these types of contracts are generally subject to less uncertainty than fixed-price contracts, to the extent that our actual labor costs are higher than the contract rates, our actual results could differ materially and adversely from those anticipated. 12 When making proposals for engagements on a fixed-price basis, we rely on our estimates of costs and timing for completing the projects.
In the competitive environment in which we operate as a government contractor, the lack of pricing leverage and ability to renegotiate long-term, multi-year contracts, could reduce our profits, disrupt our business, or otherwise materially adversely affect our results of operations. 12 We may lose money or generate less than anticipated profits if we do not accurately estimate the cost of an engagement which is conducted on a fixed-price basis.
In the competitive environment in which we operate as a government contractor, the lack of pricing leverage and ability to renegotiate long-term, multi-year contracts, could reduce our profits, disrupt our business, or otherwise materially adversely affect our results of operations.
Any increased or unexpected costs or unanticipated delays in connection with the performance of fixed-price contracts, including delays caused by factors outside of our control, could make these contracts less profitable or unprofitable. From time to time, unexpected costs and unanticipated delays have caused us to incur losses on fixed-price contracts, primarily in connection with state government customers.
These estimates reflect our best judgment regarding our capability to complete the task efficiently. Any increased or unexpected costs or unanticipated delays in connection with the performance of fixed-price contracts, including delays caused by factors outside of our control, could make these contracts less profitable or unprofitable.
Any new contracting methods could be costly or administratively difficult for us to satisfy and, as a result, could cause actual results to differ materially and adversely from those anticipated. 10 Restrictions on or other changes to the federal government’s use of service contracts may harm our operating results.
These changes could impair our ability to obtain new contracts or win re-competed contracts or adversely affect our future profit margin. Any new contracting methods could be costly or administratively difficult for us to satisfy and, as a result, could cause actual results to differ materially and adversely from those anticipated.
If there is an impairment, we would be required to write down the recorded amount of goodwill, which would be reflected as a charge against operating income. 13 Risks Related to our Indebtedness Our senior secured credit facility (the Credit Facility) imposes certain restrictions on our ability to take certain actions which may have an impact on our business, operating results and financial condition.
Risks Related to our Indebtedness Our senior secured credit facility (the Credit Facility) imposes certain restrictions on our ability to take certain actions which may have an impact on our business, operating results and financial condition. The Credit Facility imposes certain operating and financial restrictions on us and requires us to meet certain financial covenants.
These risks include fluctuations in the value of the British pound and the Euro, longer payment cycles, changes in foreign tax laws and regulations and unexpected legislative, regulatory, economic or political changes. 15 The effects of health epidemics, pandemics and similar outbreaks may have material adverse effects on our business, financial position, results of operations and/or cash flows.
These risks include fluctuations in the value of the British pound and the Euro, longer payment cycles, changes in foreign tax laws and regulations and unexpected legislative, regulatory, economic or political changes. Item 1B. Unresolved Staff Comments None. 15
Our business may suffer if we or our employees are unable to obtain the security clearances or other qualifications we and they need to perform services for our customers. Many of our federal government contracts require us to have security clearances and employ personnel with specified levels of education, work experience and security clearances.
Many of our federal government contracts require us to have security clearances and employ personnel with specified levels of education, work experience and security clearances. Depending on the level of clearance, security clearances can be difficult and time-consuming to obtain.
Cost reimbursable and time-and-materials contracts generally have lower profit margins than fixed-price contracts.
Our earnings and margins may vary based on the mix of our contracts and programs. At June 30, 2024, our backlog included cost reimbursable, time-and-materials and fixed-price contracts. Cost reimbursable and time-and-materials contracts generally have lower profit margins than fixed-price contracts.
We generated 30.2% and 29.4% of our total revenues in fiscal 2023 and 2022, respectively, from fixed-price contracts. Fixed-price contracts require us to price our contracts by predicting our expenditures in advance.
We may lose money or generate less than anticipated profits if we do not accurately estimate the cost of an engagement which is conducted on a fixed-price basis. We generated 27.3% and 30.2% of our total revenues in fiscal 2024 and 2023, respectively, from fixed-price contracts. Fixed-price contracts require us to price our contracts by predicting our expenditures in advance.
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The net effect of such programs may reduce the number of bidding opportunities available to us.
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The net effect of such programs may reduce the number of bidding opportunities available to us. Moreover, even if we are highly qualified to work on a particular new contract, we might not be awarded business because of the federal government’s policy and practice of maintaining a diverse contracting base.
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These changes could impair our ability to obtain new contracts or win re-competed contracts or adversely affect our future profit margin.
Added
Restrictions on or other changes to the federal government’s use of service contracts may harm our operating results. We derive a significant amount of revenues from service contracts with the federal government.
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When making proposals for engagements on a fixed-price basis, we rely on our estimates of costs and timing for completing the projects. These estimates reflect our best judgment regarding our capability to complete the task efficiently.
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If there is an impairment, we would be required to write down the recorded amount of goodwill, which would be reflected as a charge against operating income.
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The Credit Facility imposes certain operating and financial restrictions on us and requires us to meet certain financial covenants.
Removed
We face various risks related to health epidemics, pandemics and similar outbreaks, including the global outbreak of COVID-19. The COVID-19 pandemic and the mitigation efforts to control its spread have adversely impacted the U.S. and global economies, leading to disruptions and volatility in global capital markets.
Removed
While we have taken steps to mitigate the impact of the COVID-19 pandemic on our employees and our business, the continued spread of COVID-19 may have a material adverse effect on our business, financial position, results of operations and/or cash flows as the result of significant portions of our workforce being unable to work due to illness, quarantines, government actions, facility closures, vaccination status, or other restrictions; the inability for us to fully perform on our contracts as a result of government actions or reduction in personnel due to the federal vaccine mandate which requires all federal contractors to be vaccinated; delays or limits to the ability of the U.S.
Removed
Government or other customers to make timely payments; incurrence of increased costs which may not be recoverable; adverse impacts on our access to capital; or other unpredictable events.
Removed
We continue to monitor the effect of COVID-19 on our business, but we cannot predict the full impact of COVID-19 as the extent of the impact will depend on the duration and spread of the pandemic and the actions taken by federal, state, local and foreign governments to prevent the spread of COVID-19. Item 1B. Unresolved Staff Comments None.
Item 2. Properties
Properties — owned and leased real estate
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Item 2. Properties
Properties — owned and leased real estate
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2023 filing
2024 filing
Biggest changeItem 2. Properties As of June 30, 2023, we leased building space (including offices, manufacturing plants, warehouses, laboratories and other facilities) at 134 U.S. locations containing an aggregate of approximately 3.5 million square feet located in 28 states and the District of Columbia.
Biggest changeItem 2. Properties As of June 30, 2024, we leased building space (including offices, manufacturing plants, warehouses, laboratories and other facilities) at 127 U.S. locations containing an aggregate of approximately 3.5 million square feet located in 26 states and the District of Columbia.
We may improve, replace, or reduce facilities as considered appropriate to meet the needs of our operations. See “Note 10 – Leases” in Part II of this Annual Report on Form 10-K for additional information.
We may improve, replace, or reduce facilities as considered appropriate to meet the needs of our operations. See “Note 10 – Leases” in Part II of this Annual Report on Form 10-K for additional information. 16
In five countries outside the U.S., we leased office space at 12 locations containing an aggregate of approximately 0.1 million square feet. Our corporate headquarters is located at 12021 Sunset Hills Road, Reston, Virginia. We believe our facilities are in good condition and adequate for their current use.
In four countries outside the U.S., we leased office space at 11 locations containing an aggregate of approximately 0.1 million square feet. Our corporate headquarters is located at 12021 Sunset Hills Road, Reston, Virginia. We believe our facilities are in good condition and adequate for their current use.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
14 edited+8 added−0 removed46 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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2023 filing
2024 filing
Biggest changeOn July 18, 2022, CACI filed a memorandum of supplemental authority in support of its motion to dismiss filed on July 23, 2021, asserting that a recent decision from the U.S. Court of Appeals for the Fourth Circuit regarding the test for extraterritoriality supported dismissal for lack of subject matter jurisdiction.
Biggest changeOn October 1, 2021, the plaintiffs filed an estimate of compensatory damages between $6.0 million and $9.0 million ($2.0 million to $3.0 million per plaintiff) and an estimate of punitive damages between $23.5 million and $64.0 million. 18 On July 18, 2022, CACI filed a memorandum of supplemental authority in support of its motion to dismiss filed on July 23, 2021, asserting that a recent decision from the U.S.
Plaintiffs are Iraqi nationals who assert that their allegations are essentially the same as those of the plaintiffs in Al Shimari. Plaintiffs claim that they suffered significant physical injury and emotional distress while in U.S. custody in Iraq. The lawsuit names CACI International Inc and CACI Premier Technology, Inc. as Defendants.
CACI Premier Technology, Inc., et al. Plaintiffs are Iraqi nationals who assert that their allegations are essentially the same as those of the plaintiffs in Al Shimari. Plaintiffs claim that they suffered significant physical injury and emotional distress while in U.S. custody in Iraq. The lawsuit names CACI International Inc and CACI Premier Technology, Inc. as Defendants.
CACI Premier Technology, Inc. and CACI International Inc, Case No. 1:13CV1186-LMB/JFA (EDVA) On September 20, 2013, fifty-five Plaintiffs filed a nine-count complaint in the United States District Court for the Eastern District of Virginia styled Abbass, et al. v. CACI Premier Technology, Inc., et al.
The District Court subsequently scheduled the new trial to start on October 30, 2024. Abbass, et al v. CACI Premier Technology, Inc. and CACI International Inc, Case No. 1:13CV1186-LMB/JFA (EDVA) On September 20, 2013, fifty-five Plaintiffs filed a nine-count complaint in the United States District Court for the Eastern District of Virginia styled Abbass, et al. v.
On July 23, 2015, Plaintiffs filed a Notice of Appeal of the district court’s June 2015 decision. On October 21, 2016, the Court of Appeals vacated and remanded the District Court’s judgment with instructions for the District Court to make further determinations regarding the political question doctrine. The District Court conducted an initial status conference on December 16, 2016.
On October 21, 2016, the Court of Appeals vacated and remanded the District Court’s judgment with instructions for the District Court to make further determinations regarding the political question doctrine. The District Court conducted an initial status conference on December 16, 2016.
On February 27, 2019, the District Court denied CACI’s motion for summary judgment and motions to dismiss for lack of subject matter jurisdiction and on the state secrets privilege.
On February 27, 2019, the District Court denied CACI’s motion for summary judgment and motions to dismiss for lack of subject matter jurisdiction and on the state secrets privilege. On February 28, 2019, CACI filed a motion seeking dismissal on grounds of derivative sovereign immunity.
The District Court also granted the United States’ motion for summary judgment with respect to CACI’s third-party complaint. On March 26, 2019, CACI filed a Notice of Appeal of the District Court’s March 22, 2019 decision. On April 2, 2019, the U.S. Court of Appeals for the Fourth Circuit issued an Accelerated Briefing Order for the appeal.
On March 26, 2019, CACI filed a Notice of Appeal of the District Court’s March 22, 2019 decision. On April 2, 2019, the U.S. Court of Appeals for the Fourth Circuit issued an Accelerated Briefing Order for the appeal.
On March 28, 2013, Plaintiffs filed a Third Amended Complaint, and on April 15, 2013, Defendant CACI Premier Technology, Inc. moved to dismiss the conspiracy claims in the Third Amended Complaint. 16 On March 19, 2013, the Court granted a motion for reconsideration filed by Defendants with respect to the statute of limitations applicable to the common law tort claims of three of the four Plaintiffs, and dismissed those claims.
On March 19, 2013, the Court granted a motion for reconsideration filed by Defendants with respect to the statute of limitations applicable to the common law tort claims of three of the four Plaintiffs, and dismissed those claims.
We are vigorously defending the above-described legal proceedings, and based on our present knowledge of the facts, believe the lawsuits are completely without merit. 18 On September 13, 2021, the Court issued an Order directing plaintiffs’ counsel to file a report advising the Court of the status of each plaintiff, and indicating that any plaintiff whom counsel is unable to contact may be dismissed from the action.
On September 13, 2021, the Court issued an Order directing plaintiffs’ counsel to file a report advising the Court of the status of each plaintiff, and indicating that any plaintiff whom counsel is unable to contact may be dismissed from the action.
On remand, Defendant CACI Premier Technology, Inc. moved to dismiss Plaintiffs’ claims based upon the political question doctrine. On June 18, 2015, the Court issued an Order granting Defendant CACI Premier Technology, Inc.’s motion to dismiss, and on June 26, 2015 entered a final judgment in favor of Defendant CACI Premier Technology, Inc.
On June 18, 2015, the Court issued an Order granting Defendant CACI Premier Technology, Inc.’s motion to dismiss, and on June 26, 2015 entered a final judgment in favor of Defendant CACI Premier Technology, Inc. 17 On July 23, 2015, Plaintiffs filed a Notice of Appeal of the district court’s June 2015 decision.
Before deciding the motion to dismiss, the district court stayed the action pending a decision from the Court of Appeals in Al Shimari v. L-3 Services, Inc.
Before deciding the motion to dismiss, the district court stayed the action pending a decision from the Court of Appeals in Al Shimari v. L-3 Services, Inc. We are vigorously defending the above-described legal proceedings, and based on our present knowledge of the facts, believe the lawsuits are completely without merit.
On February 28, 2019, CACI filed a motion seeking dismissal on grounds of derivative sovereign immunity. 17 On March 22, 2019, the District Court denied the United States’ motion to dismiss on grounds of sovereign immunity and CACI’s motion to dismiss on grounds of derivative sovereign immunity.
On March 22, 2019, the District Court denied the United States’ motion to dismiss on grounds of sovereign immunity and CACI’s motion to dismiss on grounds of derivative sovereign immunity. The District Court also granted the United States’ motion for summary judgment with respect to CACI’s third-party complaint.
In response, plaintiffs advised the Court that, if the case is tried, they do not intend to request a specific amount of damages. On October 1, 2021, the plaintiffs filed an estimate of compensatory damages between $6.0 million and $9.0 million ($2.0 million to $3.0 million per plaintiff) and an estimate of punitive damages between $23.5 million and $64.0 million.
In response, plaintiffs advised the Court that, if the case is tried, they do not intend to request a specific amount of damages.
On October 25, 2021, plaintiffs’ counsel filed a memorandum stating that he was in communication with 46 plaintiffs or their representatives. Item 4. Mine Safety Disclosures Not Applicable. 19 PART II
On October 25, 2021, plaintiffs’ counsel filed a memorandum stating that he was in communication with 46 plaintiffs or their representatives. On June 21, 2024, CACI filed a motion to lift the stay. Plaintiffs filed an opposition to that motion on June 26, 2024. On June 28, 2024, the District Court denied CACI's motion without prejudice.
On July 31, 2023, in a decision currently under seal the District Court denied CACI’s July 2021 and July 2022 motions to dismiss. Abbass, et al v.
On July 31, 2023, the District Court denied the July 23, 2021 motion to dismiss and the July 18, 2022 motion to dismiss. On September 7, 2023, CACI filed a petition for a writ of mandamus with the U.S.
Added
On March 28, 2013, Plaintiffs filed a Third Amended Complaint, and on April 15, 2013, Defendant CACI Premier Technology, Inc. moved to dismiss the conspiracy claims in the Third Amended Complaint.
Added
On remand, Defendant CACI Premier Technology, Inc. moved to dismiss Plaintiffs’ claims based upon the political question doctrine.
Added
Court of Appeals for the Fourth Circuit regarding the test for extraterritoriality supported dismissal for lack of subject matter jurisdiction.
Added
Court of Appeals for the Fourth Circuit, asserting that the District Court had disregarded binding precedent and asking the Court of Appeals to dismiss the action for lack of subject matter jurisdiction. On September 13, 2023, the Court of Appeals issued an Order requiring the plaintiffs to respond to the petition.
Added
On September 25, 2023, the plaintiffs filed their response to CACI’s petition, opposing the relief sought. On October 2, 2023, the District Court entered an Order setting the case for a jury trial on April 15, 2024. On November 2, 2023, the Court of Appeals denied without opinion the petition for a writ of mandamus.
Added
Trial commenced on April 15, 2024. During trial, the plaintiffs abandoned their claim of war crimes. On May 9, 2024, the jury notified the District Court that it was deadlocked and could not reach a unanimous verdict on any claim. The District Court then dismissed the jury and declared a mistrial.
Added
On May 16, 2024, plaintiffs filed a motion for a new trial, and CACI filed a motion for judgment as a matter of law. On June 14, 2024, the District Court granted plaintiffs’ motion, denied CACI’s motion, and proposed dates in October 2024 for a new trial.
Added
CACI subsequently filed a Notice of Appeal to the U.S. Court of Appeals for the Fourth Circuit, as well as a Petition for a Writ of Mandamus in the Court of Appeals, asking the Court of Appeals to issue an order requiring the District Court to lift the stay. Item 4. Mine Safety Disclosures Not Applicable. 19 PART II
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+0 added−0 removed3 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+0 added−0 removed3 unchanged
2023 filing
2024 filing
Biggest changeThe following table provides certain information with respect to our purchases of shares of CACI International Inc’s common stock during the three months ended June 30, 2023: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) April 2023 9,193 $ 303.14 9,193 1,746,170 May 2023 — — — — June 2023 — — — — Total 9,193 $ 303.14 9,193 ______________________ (1) Number of shares determined based on the closing price of $340.84 as of June 30, 2023.
Biggest changeThe following table provides certain information with respect to our purchases of shares of CACI International Inc’s common stock during the three months ended June 30, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) April 2024 8,101 $ 377.86 8,101 920,539 May 2024 — — — 920,539 June 2024 — — — 920,539 Total 8,101 $ 377.86 8,101 ______________________ (1) Number of shares determined based on the closing price of $430.13 as of June 30, 2024.
As of July 27, 2023, the number of stockholders of record of our common stock was approximately 161. The number of stockholders of record is not representative of the number of beneficial stockholders due to the fact that many shares are held by depositories, brokers, or nominees.
As of July 26, 2024, the number of stockholders of record of our common stock was approximately 155. The number of stockholders of record is not representative of the number of beneficial stockholders due to the fact that many shares are held by depositories, brokers, or nominees.
The graph assumes that the value of the investment in our common stock and in each of the indexes (including reinvestment of dividends) was $100 on June 30, 2018 and tracks it through June 30, 2023. $100 invested on 6/30/18 in stock or index—including reinvestment of dividends.
The graph assumes that the value of the investment in our common stock and in each of the indexes (including reinvestment of dividends) was $100 on June 30, 2019 and tracks it through June 30, 2024. $100 invested on 6/30/19 in stock or index—including reinvestment of dividends.
Computer Services Index $ 100.00 $ 108.39 $ 105.01 $ 139.86 $ 126.48 $ 130.46 The stock price performance included in this graph is not necessarily indicative of future stock price performance. Item 6. [Reserved]
Computer Services Index $ 100.00 $ 96.88 $ 129.04 $ 116.69 $ 120.36 $ 144.92 The stock price performance included in this graph is not necessarily indicative of future stock price performance. Item 6. [Reserved]
Fiscal year ending June 30. 20 June 30, 2018 2019 2020 2021 2022 2023 CACI International Inc $ 100.00 $ 121.38 $ 128.67 $ 151.36 $ 167.18 $ 202.22 Russell 1000 $ 100.00 $ 110.02 $ 118.25 $ 169.18 $ 147.13 $ 175.62 Dow Jones U.S.
Fiscal year ending June 30. 20 June 30, 2019 2020 2021 2022 2023 2024 CACI International Inc $ 100.00 $ 106.01 $ 124.70 $ 137.73 $ 166.60 $ 210.24 Russell 1000 $ 100.00 $ 107.48 $ 153.78 $ 133.73 $ 159.63 $ 197.74 Dow Jones U.S.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
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Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
29 edited+3 added−4 removed57 unchanged
2023 filing
2024 filing
Biggest changeSee “Note 6 – Sales of Receivables” and “Note 12 – Debt” in Part II of this Annual Report on Form 10-K for additional information. 24 A summary of cash flow information is presented below: Year Ended June 30, 2023 2022 (dollar in thousands) Net cash provided by operating activities $ 388,056 $ 745,554 Net cash used in investing activities (75,717) (689,149) Net cash used in financing activities (316,108) (21,209) Effect of exchange rate changes on cash and cash equivalents 4,741 (8,423) Net change in cash and cash equivalents 972 26,773 Net cash provided by operating activities decreased $357.5 million primarily as a result of a $341.3 million increase in cash paid for income taxes, higher interest payments and net unfavorable changes in operating assets and liabilities driven by the timing of vendor payments, partially offset by higher cash received from the Company ’ s MARPA.
Biggest changeSee “Note 6 – Sales of Receivables” and “Note 12 – Debt” in Part II of this Annual Report on Form 10-K for additional information. 24 A summary of cash flow information is presented below: Year Ended June 30, 2024 2023 (dollars in thousands) Net cash provided by operating activities $ 497,331 $ 388,056 Net cash used in investing activities (151,952) (75,717) Net cash used in financing activities (326,895) (316,108) Effect of exchange rate changes on cash and cash equivalents (299) 4,741 Net change in cash and cash equivalents 18,185 972 Net cash provided by operating activities increased $109.3 million primarily as a result of a $ 46.6 million reduction in CARES Act payroll tax payments, a $36.5 million reduction in income taxes payments, a $7.8 million increase in cash received from the Company's MARPA, and $18.4 million of other net favorable changes, primarily increases in net income adjusted for non-cash items driven by revenue growth, partially offset by unfavorable changes in other operating assets and liabilities.
The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $7.7 million through December 31, 2023 and $15.3 million thereafter until the balance is due in full on December 13, 2026. The Credit Facility contains customary financial and restrictive covenants which we have been in compliance with since inception.
The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $7.7 million through December 31, 2023 and $15.3 million thereafter until the balance is due in full on December 13, 2026. The Credit Facility contains customary financial and restrictive covenants with which we have been in compliance since inception.
We believe that the following trends will influence the USG’s spending in our addressable market: • A stable-to-higher USG budget environment, particularly in defense and intelligence-related areas; • Increased focus on cyber, space, and the electromagnetic spectrum as key domains for National Security; • Increased spend on network and application modernization and enhancements to cyber security posture; • Increased investments in advanced technologies (e.g., Artificial Intelligence, 5G), particularly software-based technologies; • Increasing focus on near-peer competitors and other nation state threats; • Continued focus on counterterrorism, counterintelligence, and counter proliferation as key U.S. security concerns; and • Increased demand for innovation and speed of delivery.
We believe that the following trends will influence the USG’s spending in our addressable market: • A stable-to-higher USG budget environment, particularly in defense and intelligence-related areas; • Increased focus on cyber, space, and the electromagnetic spectrum as key domains for National Security; • Increased spend on network and application modernization and enhancements to cyber security posture; • Increased investments in advanced technologies (e.g., Artificial Intelligence), particularly software-based technologies; • Increasing focus on near-peer competitors and other nation state threats; • Continued focus on counterterrorism, counterintelligence, and counter proliferation as key U.S. security concerns; and • Increased demand for innovation and speed of delivery.
This discussion contains forward-looking statements that involve risks and uncertainties. Unless otherwise specifically noted, all years refer to our fiscal year which ends on June 30. In this section, we discuss our financial condition, changes in financial condition and results of our operations for fiscal 2023 compared to fiscal 2022.
This discussion contains forward-looking statements that involve risks and uncertainties. Unless otherwise specifically noted, all years refer to our fiscal year which ends on June 30. In this section, we discuss our financial condition, changes in financial condition and results of our operations for fiscal 2024 compared to fiscal 2023.
Specifically, GFY24 defense spending is capped at $886 billion, an increase of 3% and in-line with the President’s budget request, and GFY24 nondefense spending is capped at levels similar to GFY22 (though after various adjustments may be essentially flat with GFY23 levels). For GFY25, discretionary spending growth (both defense and nondefense) is capped at 1%.
Specifically, GFY24 defense spending is capped at $886 billion, an increase of 3% and in-line with the President’s GFY24 budget request, and GFY24 nondefense spending is capped at levels similar to GFY22 (though after various adjustments would essentially be flat with GFY23 levels). For GFY25, discretionary spending growth (both defense and nondefense) is capped at 1%.
We believe that our customers ’ use of lowest price/technically acceptable (LPTA) procurements, which contributed to pricing pressures in past years, has moderated, though price still remains an important factor in procurements. We also continue to see protests of major contract awards and delays in USG procurement activities.
We believe that our customers’ use of lowest price/technically acceptable (LPTA) procurements, which contributed to pricing pressures in past years, has moderated, though price still remains an important factor in procurements. We also continue to see protests of major contract awards and delays in USG procurement activities.
During the fourth quarter of fiscal 2023, we completed our annual goodwill assessment and determined that each reporting unit’s fair value significantly exceeded its carrying value.
During the fourth quarter of fiscal 2024, we completed our annual goodwill assessment and determined that each reporting unit’s fair value significantly exceeded its carrying value.
We continuously review our operations in an attempt to identify programs potentially at risk from CRs so that we can consider appropriate contingency plans. Market Environment We provide Expertise and Technology to government enterprise and mission customers.
We continuously review our operations in an attempt to identify programs potentially at risk from CRs so that we can consider appropriate contingency plans. 21 Market Environment We provide Expertise and Technology to government customers.
Goodwill and intangible assets, net represent 69.6% and 70.0% of our total assets as of June 30, 2023 and June 30, 2022, respectively. We evaluate goodwill for both of our reporting units for impairment at least annually on the first day of the fiscal fourth quarter, or whenever events or circumstances indicate that the carrying value may not be recoverable.
Goodwill and intangible assets, net represent 68.1% and 69.6% of our total assets as of June 30, 2024 and June 30, 2023, respectively. We evaluate goodwill for both of our reporting units for impairment at least annually on the first day of the fiscal fourth quarter, or whenever events or circumstances indicate that the carrying value may not be recoverable.
Direct Costs . The increase in direct costs was primarily attributable to direct labor costs from organic growth on existing programs and higher materials and other direct costs. As a percentage of revenues, total direct costs were 65.7% and 65.3% for fiscal 2023 and 2022, respectively. Direct costs include direct labor, subcontractor costs, materials, and other direct costs.
Direct Costs . The increase in direct costs was primarily attributable to direct labor and subcontractor costs from organic growth on existing programs and higher materials costs. As a percentage of revenues, total direct costs were 67.2% and 65.7% for fiscal 2024 and 2023, respectively. Direct costs include direct labor, subcontractor costs, materials, and other direct costs.
Liquidity and Capital Resources Existing cash and cash equivalents and cash generated by operations are our primary sources of liquidity, as well as sales of receivables under our Master Accounts Receivable Purchase Agreement (MARPA) and available borrowings under our Credit Facility. As of June 30, 2023, we had $115.8 million in cash and cash equivalents.
Liquidity and Capital Resources Existing cash and cash equivalents and cash generated by operations are our primary sources of liquidity, as well as sales of receivables under our Master Accounts Receivable Purchase Agreement (MARPA) and available borrowings under our Credit Facility. As of June 30, 2024, we had $134.0 million in cash and cash equivalents.
On June 3, 2023, the President signed into law legislation that suspends the federal debt limit until January 2025 and caps discretionary spending in GFY24 and GFY25.
On June 3, 2023, the President signed into law legislation that suspended the federal debt limit until January 2025 and capped discretionary spending in GFY24 and GFY25.
For a discussion and analysis comparing our results for fiscal 2022 to fiscal 2021, see our Annual Report on Form 10-K for fiscal 2022, filed with the SEC on August 11, 2022, under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview We are a leading provider of Expertise and Technology to Enterprise and Mission customers, supporting national security missions and government modernization/transformation in the intelligence, defense, and federal civilian sectors, both domestically and internationally.
For a discussion and analysis comparing our results for fiscal 2023 to fiscal 2022, see our Annual Report on Form 10-K for fiscal 2023, filed with the SEC on August 10, 2023, under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview We are a leading provider of Expertise and Technology to customers in support of national security in the intelligence, defense, and federal civilian sectors, both domestically and internationally.
The future impact of this provision will depend on if and when this provision is deferred, modified, or repealed by Congress, including if retroactively, any guidance issued by the Treasury Department regarding the identification of appropriate costs for capitalization, and the amount of future research and development expenses paid or incurred (among other factors).
The future impact of this provision will depend on any guidance issued by the Treasury Department regarding the identification of appropriate costs for capitalization, and the amount of future research and development expenses paid or incurred (among other factors).
As of June 30, 2023, $1,179.1 million was outstanding under the Term Loan, $525.0 million was outstanding under the Revolving Facility and no borrowings on the swing line.
As of June 30, 2024, $1,133.1 million was outstanding under the Term Loan, $415.0 million was outstanding under the Revolving Facility and no borrowings on the swing line.
As of June 30, 2023, the Company had total backlog of $25.8 billion, compared with $23.3 billion a year ago, an increase of 10.7%. Funded backlog as of June 30, 2023 was $3.7 billion. The total backlog consists of remaining performance obligations plus unexercised options.
As of June 30, 2024, the Company had total backlog of $31.6 billion, compared with $25.8 billion a year ago, an increase of 22.5%. Funded backlog as of June 30, 2024 was $3.8 billion. The total backlog consists of remaining performance obligations plus unexercised options.
We generated the following revenues by contract type for the periods presented: Year Ended June 30, 2023 2022 Dollars Percent Dollars Percent (dollars in thousands) Cost-plus-fee $ 3,896,725 58.1 % $ 3,632,359 58.6 % Fixed-price 2,023,968 30.2 1,823,221 29.4 Time-and-materials 781,853 11.7 747,337 12.0 Total $ 6,702,546 100.0 % $ 6,202,917 100.0 % Effects of Inflation During fiscal 2023, 58.1% of our revenues were generated under cost-reimbursable contracts which automatically adjust revenues to cover costs that are affected by inflation. 11.7% of our revenues were generated under time-and-materials contracts where we adjust labor rates periodically, as permitted.
We generated the following revenues by contract type for the periods presented: Year Ended June 30, 2024 2023 Dollars Percent Dollars Percent (dollars in thousands) Cost-plus-fee $ 4,654,689 60.8 % $ 3,896,725 58.1 % Fixed-price 2,091,179 27.3 2,023,968 30.2 Time-and-materials 913,964 11.9 781,853 11.7 Total $ 7,659,832 100.0 % $ 6,702,546 100.0 % Effects of Inflation During fiscal 2024, 60.8% of our revenues were generated under cost-reimbursable contracts which automatically adjust revenues to cover costs that are affected by inflation. 11.9% of our revenues were generated under time-and-materials contracts where we adjust labor rates periodically, as permitted.
The increase in revenues was primarily attributable to organic growth of 6.1% and revenues from the acquisitions completed in fiscal 2022. 22 Revenues by customer type with related percentages of revenues were as follows: Year Ended June 30, 2023 2022 Dollars Percent Dollars Percent (dollars in thousands) Department of Defense $ 4,817,470 71.9 % $ 4,331,327 69.8 % Federal Civilian Agencies 1,533,295 22.9 1,549,791 25.0 Commercial and other 351,781 5.2 321,799 5.2 Total $ 6,702,546 100.0 % $ 6,202,917 100.0 % • DoD revenues include Expertise and Technology provided to various Department of Defense customers. • Federal civilian agencies’ revenues primarily include Expertise and Technology provided to non-DoD agencies and departments of the U.S. federal government, including intelligence agencies and Departments of Justice, Agriculture, Health and Human Services, and State. • Commercial and other revenues primarily include Expertise and Technology provided to U.S. state and local governments, commercial customers, and certain foreign governments and agencies through our International reportable segment.
The increase in revenues was primarily attributable to organic growth of 13.7%, including new contract awards and growth on existing programs. 22 Revenues by customer type with related percentages of revenues were as follows: Year Ended June 30, 2024 2023 Dollars Percent Dollars Percent (dollars in thousands) Department of Defense $ 5,695,408 74.4 % $ 4,817,470 71.9 % Federal Civilian Agencies 1,588,262 20.7 1,533,295 22.9 Commercial and other 376,162 4.9 351,781 5.2 Total $ 7,659,832 100.0 % $ 6,702,546 100.0 % • DoD revenues include Expertise and Technology provided to various Department of Defense customers. • Federal civilian agencies’ revenues primarily include Expertise and Technology provided to non-DoD agencies and departments of the U.S. federal government, including intelligence agencies and Departments of Justice, Agriculture, Health and Human Services, and State. • Commercial and other revenues primarily include Expertise and Technology provided to U.S. state and local governments, commercial customers, and certain foreign governments and agencies through our International reportable segment.
Indirect Costs and Selling Expenses . The increase in indirect costs was primarily attributable to the incremental costs of running the businesses acquired in fiscal year 2022 and an increase in fringe benefit expenses on a higher labor base. As a percentage of revenues, total indirect costs were 23.7% and 24.5% for fiscal 2023 and 2022, respectively.
Indirect Costs and Selling Expenses . As a percentage of revenues, indirect costs and selling expenses were 22.5% and 23.7% for fiscal 2024 and 2023, respectively, driven by cost efficiencies across the Company. The increase in indirect costs and selling expenses was primarily attributable to an increase in fringe benefit expenses on a higher labor base. Depreciation and Amortization .
Contract Backlog The Company’s backlog represents value on existing contracts that has the potential to be recognized into revenues as work is performed. The Company includes unexercised option years in its backlog and excludes the value of task orders that may be awarded under multiple award IDIQ vehicles until such task orders are issued.
The Company includes unexercised option years in its backlog and excludes the value of task orders that may be awarded under multiple award IDIQ vehicles until such task orders are issued.
The Company ’ s effective income tax rate was 20.4% and 19.3% for fiscal 2023 and 2022, respectively. The effective tax rate for fiscal 2023 was favorably impacted by research and development tax credits and the remeasurement of state deferred taxes.
The effective tax rate for fiscal 2024 was favorably impacted by research and development tax credits, offset by state income taxes. The effective tax rate for fiscal 2023 was favorably impacted primarily by federal research tax credits and the remeasurement of state deferred taxes.
During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (CR), a temporary measure allowing the government to continue operations at prior year funding levels. 21 Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract award decisions, and other factors.
During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (CR), a temporary measure allowing the government to continue operations at prior year funding levels.
We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, customary capital expenditures, debt service obligations, and other working capital requirements over the next twelve months.
Net cash used in financing activities increased $10.8 million primarily as a result of a $117.3 million increase in net repayments under our Credit Facility, partially offset by a $111.7 million decrease in repurchases of our common stock We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, customary capital expenditures, debt service obligations, and other working capital requirements over the next twelve months.
Budgetary Environment We carefully follow federal budget, legislative and contracting trends and activities and evolve our strategies to take these into consideration. On December 29, 2022, the President signed into law the omnibus appropriations bill that provided full-year funding for the government fiscal year (GFY) ending September 30, 2023 (GFY23).
Budgetary Environment We carefully follow federal budget, legislative and contracting trends and activities and evolve our strategies to take these into consideration. For the government fiscal year (GFY) ending September 30, 2023 (GFY23), defense and nondefense funding levels represented increases of approximately 10% and 6%, respectively, over GFY22 enacted levels.
Net cash used in investing activities decreased $613.4 million primarily as a result of a $601.0 million decrease in cash used in acquisitions of businesses and a $10.8 million decrease in capital expenditures.
Net cash used in investing activities increased $76.2 million primarily as a result of a $75.8 million increase in cash used in acquisitions of businesses.
Results of Operations Our results of operations were as follows: Year Ended June 30, Year to Year Change 2023 2022 2022 to 2023 Dollars Dollars Percent (dollar in thousands) Revenues $ 6,702,546 $ 6,202,917 $ 499,629 8.1 % Costs of revenues: Direct costs 4,402,728 4,051,188 351,540 8.7 Indirect costs and selling expenses 1,590,754 1,520,719 70,035 4.6 Depreciation and amortization 141,564 134,681 6,883 5.1 Total costs of revenues 6,135,046 5,706,588 428,458 7.5 Income from operations 567,500 496,329 71,171 14.3 Interest expense and other, net 83,861 41,757 42,104 100.8 Income before income taxes 483,639 454,572 29,067 6.4 Income taxes 98,904 87,778 11,126 12.7 Net income $ 384,735 $ 366,794 $ 17,941 4.9 Revenues .
Results of Operations Our results of operations were as follows: Year Ended June 30, Year to Year Change 2024 2023 2023 to 2024 Dollars Dollars Percent (dollars in thousands) Revenues $ 7,659,832 $ 6,702,546 $ 957,286 14.3 % Costs of revenues: Direct costs 5,147,540 4,402,728 744,812 16.9 Indirect costs and selling expenses 1,720,439 1,590,754 129,685 8.2 Depreciation and amortization 142,145 141,564 581 0.4 Total costs of revenues 7,010,124 6,135,046 875,078 14.3 Income from operations 649,708 567,500 82,208 14.5 Interest expense and other, net 105,059 83,861 21,198 25.3 Income before income taxes 544,649 483,639 61,010 12.6 Income taxes 124,725 98,904 25,821 26.1 Net income $ 419,924 $ 384,735 $ 35,189 9.1 Revenues .
This provision decreased fiscal year 2023 cash flows from operations by $95.0 million and increased net deferred tax assets by a similar amount. Although it is possible that Congress amends this provision, potentially with retroactive effect, we have no assurance that Congress will take any action with respect to this provision.
This provision decreased fiscal year 2024 cash flows from operations by $73.9 million and increased net deferred tax assets by a similar amount.
Depreciation and Amortization . The increase in depreciation and amortization was primarily attributable to depreciation from the Company’s higher average property and equipment and intangible amortization from the acquisitions completed in fiscal 2022. Interest Expense and Other, Net . The increase in interest expense and other, net was primarily attributable to higher interest rates on outstanding debt. Income Taxes .
Depreciation and amortization for fiscal 2024 was consistent with the prior year period. Interest Expense and Other, Net . The increase in interest expense and other, net was primarily attributable to higher interest rates and higher outstanding debt balances. Income Taxes . The Company ’ s effective income tax rate was 22.9% and 20.4% for fiscal 2024 and 2023, respectively.
The effective tax rate for fiscal 2022 was favorably impacted primarily by federal research tax credits and the remeasurement of state deferred taxes. See “Note 16 – Income Taxes” in Part II of this Annual Report on Form 10-K for additional information.
See “Note 16 – Income Taxes” in Part II of this Annual Report on Form 10-K for additional information. Contract Backlog The Company’s backlog represents value on existing contracts that has the potential to be recognized into revenues as work is performed.
Removed
Of the total approximately $1.7 trillion in discretionary funding, approximately $858 billion was for national defense and approximately $773 billion was for nondefense, as well as an additional $47 billion of supplemental funding for Ukraine.
Added
On March 23, 2024, the President signed into law an appropriations bill that funds the federal government for GFY24, generally consistent with the terms set forth in the debt limit legislation signed in June 2023.
Removed
The defense and nondefense funding levels represent increases of approximately 10% and 6%, respectively, over GFY22 enacted levels, which themselves were increases of approximately 6% and 7%, respectively, over GFY21.
Added
Earlier in March, the President released his GFY25 budget request that was also generally consistent with the terms set forth in the debt limit legislation signed in June 2023.
Removed
On March 9, 2023, the President released his budget request for GFY24, which called for an increase in defense spending of approximately 3% and an increase in nondefense spending of approximately 8% over GFY23 levels.
Added
Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract award decisions, and other factors.
Removed
Net cash used in financing activities increased $294.9 million primarily as a result of a $263.5 million increase in repurchases of common stock, and a $38.7 million increase in net repayments under our Credit Facility.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
3 edited+0 added−0 removed3 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
3 edited+0 added−0 removed3 unchanged
2023 filing
2024 filing
Biggest changeWith every one percent fluctuation in the applicable interest rate, interest expense on our variable rate debt for the twelve months ended June 30, 2023 would have fluctuated by approximately $9.8 million. Approximately 2.8% and 3.1% of our total revenues in fiscal 2023 and 2022, respectively, were generated from our international operations headquartered in the U.K.
Biggest changeWith every one percent fluctuation in the applicable interest rate, interest expense on our variable rate debt for the twelve months ended June 30, 2024 would have fluctuated by approximately $7.4 million. Approximately 3.0% and 2.8% of our total revenues in fiscal 2024 and 2023, respectively, were generated from our international operations headquartered in the U.K.
We have entered into floating-to-fixed interest rate swap agreements for an aggregate notional amount of $1,200.0 million related to a portion of our floating rate indebtedness. All remaining balances under our Term Loan, and any additional amounts that may be borrowed under our Revolving Facility, are currently subject to interest rate fluctuations.
We have entered into floating-to-fixed interest rate swap agreements for an aggregate notional amount of $1,100.0 million related to a portion of our floating rate indebtedness. All remaining balances under our Term Loan, and any additional amounts that may be borrowed under our Revolving Facility, are currently subject to interest rate fluctuations.
As of June 30, 2023, we held a combination of euros and pounds sterling in the U.K. and in the Netherlands equivalent to approximately $65.7 million. Although these balances are generally available to fund ordinary business operations without legal or other restrictions, a significant portion is not immediately available to fund U.S. operations unless repatriated.
As of June 30, 2024, we held a combination of euros and pounds sterling in the U.K. and in the Netherlands equivalent to approximately $78.8 million. Although these balances are generally available to fund ordinary business operations without legal or other restrictions, a significant portion is not immediately available to fund U.S. operations unless repatriated.