CACI International Inc (NYSE: CACI), a leading information solutions and services provider to the federal government, announced results today for its second fiscal quarter ended December 31, 2016.
CEO Commentary and Outlook
Ken Asbury, CACI’s President and CEO, said, “We had excellent operational, financial and business development execution in the second quarter. Our NSS acquisition continues to perform well and is fully integrated into CACI. Our performance in the first half of this year gives us confidence to raise our top and bottom line guidance for FY17.”
Second Quarter Results
| (in millions except per-share data) | Q2, FY17 | Q2, FY16 | % Change | ||||||
| Revenue | $1,057.5 | $830.4 | 27.3% | ||||||
| Operating income | $80.3 | $55.5 | 44.6% | ||||||
| Net income | $42.4 | $30.5 | 39.3% | ||||||
| Diluted earnings per share | $1.69 | $1.23 | 37.7% | ||||||
Revenue for the second quarter of Fiscal Year 2017 (FY17) increased compared to the second quarter of Fiscal Year 2016 (FY16), driven primarily by revenue of $260 million from the NSS acquisition. The higher operating income was due to the NSS contribution, program performance, and the absence of one-time acquisition-related expenses which occurred in the second quarter of FY16. The increase in net income was due to the factors noted above. Cash provided by operations in the quarter was $77.6 million.
Additional Financial Metrics
| Q2, FY17 | Q2, FY16 | % Change | |||||||
| Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure (in millions) | $98.8 | $70.4 | 40.3% | ||||||
| Diluted adjusted earnings per share, a non-GAAP measure | $2.30 | $1.72 | 33.7% | ||||||
| Days sales outstanding | 60 | 60 | |||||||
Second Quarter Awards, Contract Funding Orders, and Other Highlights
Our contract awards in the quarter were $1.6 billion, which excludes ceiling values of multi-award indefinite delivery, indefinite quantity (IDIQ) contracts. Approximately 85 percent of our awards were for new business (which includes modifications and extensions).
Key awards during the quarter included:
- A task order with a ceiling value of $1.77 billion to provide deployable analytical operations, integrated intelligence, and training services to the Joint Improvised-Threat Defeat Organization (JIDO). The five-year award, won under the OASIS contract vehicle, represents new work for CACI in its Intelligence Services market area. The anticipated spend is estimated at $875.6 million which the company recorded as an increase to its total backlog.
- A $140 million prime contract to provide global logistics support services for the U.S. Fleet Forces Command’s Naval Forces Logistics Support/Training Services program. The five-year contract represents continuing business in CACI’s Logistics and Material Readiness market area.
- A $79 million task order to support the U.S. Army Intelligence and Information Warfare Directorate’s Innovative Intelligence Solutions and Systems Engineering Support program. The three-year award, won under the TIES contract vehicle, represents continuing work in CACI’s Intelligence Systems and Support market area.
- A $31 million task order to support modeling and simulation technology for the U.S. Army’s Night Vision and Electronic Sensors Directorate. The three-year award, won under the R2-3G contract vehicle, represents new business in CACI’s Surveillance and Reconnaissance market area.
- A $26 million task order with the Space and Naval Warfare Systems Center Atlantic to provide DoD travel call center support services. The three-year, seven-month contract, won under the ITES-2S contract vehicle, represents continuing work in CACI’s Business Systems market area.
- A prime position on a multiple-award IDIQ contract with a $6 billion ceiling value to provide IT, technical, and management expertise for the Defense Logistics Agency’s Information Operations Office (J6), program offices, and other DoD agencies. The eight-year J6 Enterprise Technology Services contract positions CACI for new work in its Business Systems, Enterprise IT, and Cyber Security market areas.
- A prime position on a multiple-award IDIQ contract with a ceiling value of $192 million to provide training and curriculum development to the Naval Education and Training Command. The six-year contract represents new work for CACI in its Logistics and Material Readiness market area.
- A prime position on a $92 million multiple-award IDIQ contract to provide a range of operations support solutions for the Space and Naval Warfare Systems Center Pacific. The two-year contract represents new work for CACI in its Surveillance and Reconnaissance market area.
Contract funding orders in the second quarter were $752 million. Our total backlog at December 31, 2016 was $11.6 billion compared with $11.0 billion at the end of the fourth quarter of FY16. Funded backlog at December 31, 2016 was $2.0 billion compared with $2.3 billion at June 30, 2016.
Other highlights in the quarter included:
- CACI earned enterprise-wide certification for the International Organization for Standardization (ISO) 27001 credential for information security policies and practices, providing independent verification that CACI’s internal corporate IT infrastructure and information security policies and practices adhere to industry best practices. This is the second enterprise-wide ISO credential the company has received, having been certified for the ISO 9001:2015 quality management credential in May 2016.
- CACI received the SmartCEO GovStar Industry Star award in the large company category, recognizing the significant contributions CACI has made to the government contracting industry through mentoring, business partnerships, philanthropy, advocacy, and dedication providing solutions and services that help safeguard the nation and support its customers’ critical missions.
- CACI was selected for the Amazon Web Services (AWS) Public Sector Partner Program, recognizing CACI’s strong overall AWS practice experience and readiness to support government, education, and/or non-profit customer missions. The selection builds upon CACI’s work providing customers with comprehensive, rapid, and agile cloud services and solutions and enhances the company’s presence across all its market areas.
- CACI was named a Top Workplace in Austin by The Austin American-Statesman and in Memphis by The Memphis Commercial Appeal. These rankings are based on employee feedback surveys.
Six Months Results
| (in millions except per-share data) |
Six Months, |
Six Months, | % Change | ||||||
| Revenue | $2,130.8 | $1,652.9 | 28.9% | ||||||
| Operating income | $149.9 | $120.0 | 24.9% | ||||||
| Net income | $79.1 | $65.1 | 21.5% | ||||||
| Diluted earnings per share | $3.16 | $2.63 | 20.3% | ||||||
Revenue in the first half of FY17 increased compared to the year earlier period due to the NSS acquisition. Operating and net income increased due to the NSS acquisition, program performance, and the absence of one-time acquisition-related expenses which occurred in the second quarter of FY16. Net cash provided by operations in the first half of FY17 was $135 million.
Additional Financial Metrics
Six Months, |
Six Months, | % Change | |||||||
| Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure (in millions) | $187.0 | $149.7 | 24.9% | ||||||
| Diluted adjusted earnings per share, a non-GAAP measure | $4.37 | $3.59 | 21.8% | ||||||
CACI Raises Its FY17 Guidance
We are raising our FY17 guidance we issued on October 26, 2016. The table below summarizes our FY17 guidance and represents our views as of February 1, 2017:
(In millions except for tax rate and earnings per share) | Current Fiscal Year | Previous Fiscal Year | ||||
| Revenue | $4,150 - $4,300 | $4,050 - $4,250 | ||||
| Net income | $155 - $162 | $150 - $160 | ||||
| Effective corporate tax rate | 37.5% | 37.5% | ||||
| Diluted earnings per share | $6.18 - $6.45 | $5.98 - $6.37 | ||||
| Diluted weighted average shares | 25.1 | 25.1 | ||||
Conference Call Information
We have scheduled a conference call for 8:30 AM Eastern Time Thursday, February 2, 2017 during which members of our senior management team will be making a brief presentation focusing on second quarter results and operating trends followed by a question-and-answer session. You can listen to the conference call and view the accompanying exhibits over the Internet by logging on to our homepage, www.caci.com, at the scheduled time, or you may dial 1-888-317-6016, confirmation code CACI International. A replay of the call will also be available over the Internet and can be accessed through our homepage (www.caci.com) by clicking on the CACI Investor Info button.
CACI provides information solutions and services in support of national security missions and government transformation for Intelligence, Defense, and Federal Civilian customers. A Fortune magazine World’s Most Admired Company in the IT Services industry, CACI is a member of the Fortune 1000 Largest Companies, the Russell 2000 Index, and the S&P SmallCap600 Index. CACI’s sustained commitment to ethics and integrity defines its corporate culture and drives its success. With approximately 20,000 employees worldwide, CACI provides dynamic career opportunities for military veterans and industry professionals to support the nation’s most critical missions. Join us! www.caci.com.
There are statements made herein which do not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: legal, regulatory, and political change as a result of transitioning to a new presidential administration that could result in economic uncertainty; changes in U.S. federal agencies, current agreements with other nations, foreign events, or any other events which may affect the global economy; regional and national economic conditions in the United States and globally; terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; failure to achieve contract awards in connection with re-competes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. government or other public sector projects, based on a change in spending patterns, implementation of spending cuts (sequestration) under the Budget Control Act of 2011, or any legislation that amends or changes discretionary spending levels under that act; changes in budgetary priorities or in the event of a priority need for funds, such as homeland security; government contract procurement (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the results of government audits and reviews conducted by the Defense Contract Audit Agency, the Defense Contract Management Agency, or other governmental entities with cognizant oversight; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); market speculation regarding our continued independence; material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, and (iii) competition for task orders under Government Wide Acquisition Contracts (GWACs) and/or schedule contracts with the General Services Administration; the ability to successfully integrate the operations of our recent and any future acquisitions; our own ability to achieve the objectives of near term or long range business plans; and other risks described in our Securities and Exchange Commission filings.
CACI-Earnings Release
| Selected Financial Data | ||||||||||||||||||||||
| CACI International Inc | ||||||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||||
| (Amounts in thousands, except per share amounts) | ||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | |||||||||||||||||
| Revenue | $ | 1,057,530 | $ | 830,437 | 27.3 | % | $ | 2,130,810 | $ | 1,652,879 | 28.9 | % | ||||||||||
| Costs of revenue | ||||||||||||||||||||||
| Direct costs | 705,321 | 547,140 | 28.9 | % | 1,433,542 | 1,084,564 | 32.2 | % | ||||||||||||||
| Indirect costs and selling expenses | 253,822 | 213,144 | 19.1 | % | 511,160 | 418,844 | 22.0 | % | ||||||||||||||
| Depreciation and amortization | 18,132 | 14,670 | 23.6 | % | 36,195 | 29,481 | 22.8 | % | ||||||||||||||
| Total costs of revenue | 977,275 | 774,954 | 26.1 | % | 1,980,897 | 1,532,889 | 29.2 | % | ||||||||||||||
| Operating income | 80,255 | 55,483 | 44.6 | % | 149,913 | 119,990 | 24.9 | % | ||||||||||||||
| Interest expense and other, net | 12,325 | 8,180 | 50.7 | % | 24,814 | 17,362 | 42.9 | % | ||||||||||||||
| Income before income taxes | 67,930 | 47,303 | 43.6 | % | 125,099 | 102,628 | 21.9 | % | ||||||||||||||
| Income taxes | 25,510 | 16,851 | 51.4 | % | 46,016 | 37,544 | 22.6 | % | ||||||||||||||
| Net income | $ | 42,420 | $ | 30,452 | 39.3 | % | $ | 79,083 | $ | 65,084 | 21.5 | % | ||||||||||
| Basic earnings per share | $ | 1.74 | $ | 1.26 | 38.5 | % | $ | 3.25 | $ | 2.69 | 20.8 | % | ||||||||||
| Diluted earnings per share | $ | 1.69 | $ | 1.23 | 37.7 | % | $ | 3.16 | $ | 2.63 | 20.3 | % | ||||||||||
| Weighted average shares used in per share computations: | ||||||||||||||||||||||
| Basic | 24,387 | 24,246 | 24,363 | 24,227 | ||||||||||||||||||
| Diluted | 25,069 | 24,786 | 24,998 | 24,754 | ||||||||||||||||||
| Statement of Operations Data (Unaudited) | ||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | |||||||||||||||||
| Operating income margin | 7.6 | % | 6.7 | % | 7.0 | % | 7.3 | % | ||||||||||||||
| Tax rate | 37.6 | % | 35.6 | % | 36.8 | % | 36.6 | % | ||||||||||||||
| Net income margin | 4.0 | % | 3.7 | % | 3.7 | % | 3.9 | % | ||||||||||||||
| Adjusted EBITDA* | $ | 98,793 | $ | 70,439 | 40.3 | % | $ | 187,032 | $ | 149,708 | 24.9 | % | ||||||||||
| Adjusted EBITDA Margin | 9.3 | % | 8.5 | % | 8.8 | % | 9.1 | % | ||||||||||||||
| Adjusted net income* | $ | 57,777 | $ | 42,714 | 35.3 | % | $ | 109,299 | $ | 88,884 | 23.0 | % | ||||||||||
| Diluted adjusted earnings per share | $ | 2.30 | $ | 1.72 | 33.7 | % | $ | 4.37 | $ | 3.59 | 21.8 | % | ||||||||||
| * | See Reconciliation of Net Income to Earnings before Interest, Taxes, Depreciation and Amortization and to Adjusted Net Income on page 11. | |||
| Selected Financial Data (Continued) | ||||||
| CACI International Inc | ||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||
| (Amounts in thousands) | ||||||
| 12/31/2016 | 6/30/2016 | |||||
| ASSETS: | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 72,650 | $ | 49,082 | ||
| Accounts receivable, net | 717,721 | 803,817 | ||||
| Prepaid expenses and other current assets | 69,679 | 68,939 | ||||
| Total current assets | 860,050 | 921,838 | ||||
| Goodwill and intangible assets, net | 2,825,778 | 2,860,715 | ||||
| Property and equipment, net | 86,406 | 81,362 | ||||
| Other long-term assets | 124,931 | 123,426 | ||||
| Total assets | $ | 3,897,165 | $ | 3,987,341 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||
| Current liabilities | ||||||
| Current portion of long-term debt | $ | 67,456 | $ | 53,965 | ||
| Accounts payable | 39,293 | 95,270 | ||||
| Accrued compensation and benefits | 212,480 | 228,362 | ||||
| Other accrued expenses and current liabilities | 179,705 | 187,579 | ||||
| Total current liabilities | 498,934 | 565,176 | ||||
| Long-term debt, net of current portion | 1,292,348 | 1,402,079 | ||||
| Other long-term liabilities | 409,924 | 412,773 | ||||
| Total liabilities | 2,201,206 | 2,380,028 | ||||
| Shareholders' equity | 1,695,959 | 1,607,313 | ||||
| Total liabilities and shareholders' equity | $ | 3,897,165 | $ | 3,987,341 | ||
| Selected Financial Data (Continued) | ||||||||
| CACI International Inc | ||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (Amounts in thousands) | ||||||||
| Six Months Ended | ||||||||
| 12/31/2016 | 12/31/2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 79,083 | $ | 65,084 | ||||
Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 36,195 | 29,481 | ||||||
| Amortization of deferred financing costs | 2,252 | 1,152 | ||||||
| Loss on disposal of fixed assets | 975 | - | ||||||
| Stock-based compensation expense | 10,557 | 8,473 | ||||||
| Provision for deferred income taxes | 5,081 | 12,045 | ||||||
| Equity in earnings from unconsolidated ventures | (103 | ) | (98 | ) | ||||
Changes in operating assets and liabilities net of effect of business acquisitions | ||||||||
| Accounts receivable, net | 71,080 | 35,216 | ||||||
| Prepaid expenses and other assets | 1,649 | (7,170 | ) | |||||
| Accounts payable and accrued expenses | (58,873 | ) | 11,870 | |||||
| Accrued compensation and benefits | (15,339 | ) | (16,998 | ) | ||||
| Income taxes receivable and payable | (391 | ) | (2,768 | ) | ||||
| Other liabilities | 3,184 | (647 | ) | |||||
| Net cash provided by operating activities | 135,350 | 135,640 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (21,826 | ) | (7,642 | ) | ||||
| Purchases of businesses, net of cash acquired | (5,605 | ) | (15,578 | ) | ||||
| Proceeds from net working capital refund of acquired business | 13,619 | - | ||||||
| Proceeds from equity method investments | 4,681 | - | ||||||
| Other | 1,051 | (684 | ) | |||||
| Net cash used in investing activities | (8,080 | ) | (23,904 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net payments under credit facilities | (98,491 | ) | (74,494 | ) | ||||
| Proceeds from employee stock purchase plans | 2,262 | 1,577 | ||||||
| Repurchases of common stock | (2,243 | ) | (1,689 | ) | ||||
| Payment of taxes for equity transactions | (3,632 | ) | (2,560 | ) | ||||
| Other | - | 451 | ||||||
| Net cash used in financing activities | (102,104 | ) | (76,715 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (1,598 | ) | (1,388 | ) | ||||
| Net increase in cash and cash equivalents | 23,568 | 33,633 | ||||||
| Cash and cash equivalents, beginning of period | 49,082 | 35,364 | ||||||
| Cash and cash equivalents, end of period | $ | 72,650 | $ | 68,997 | ||||
| Selected Financial Data (Continued) | |||||||||||||||||||
| Revenue by Customer Type (Unaudited) | |||||||||||||||||||
| Quarter Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Department of Defense | $ | 684,673 | 64.8 | % | $ | 543,716 | 65.5 | % | $ | 140,957 | 25.9 | % | |||||||
| Federal Civilian Agencies | 308,053 | 29.1 | % | 232,773 | 28.0 | % | 75,280 | 32.3 | % | ||||||||||
| Commercial and other | 64,804 | 6.1 | % | 53,948 | 6.5 | % | 10,856 | 20.1 | % | ||||||||||
| Total | $ | 1,057,530 | 100.0 | % | $ | 830,437 | 100.0 | % | $ | 227,093 | 27.3 | % | |||||||
| Six Months Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Department of Defense | $ | 1,376,876 | 64.6 | % | $ | 1,087,235 | 65.8 | % | $ | 289,641 | 26.6 | % | |||||||
| Federal Civilian Agencies | 621,846 | 29.2 | % | 458,196 | 27.7 | % | 163,650 | 35.7 | % | ||||||||||
| Commercial and other | 132,088 | 6.2 | % | 107,448 | 6.5 | % | 24,640 | 22.9 | % | ||||||||||
| Total | $ | 2,130,810 | 100.0 | % | $ | 1,652,879 | 100.0 | % | $ | 477,931 | 28.9 | % | |||||||
| Revenue by Contract Type (Unaudited) | |||||||||||||||||||
| Quarter Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Cost reimbursable | $ | 495,080 | 46.8 | % | $ | 394,425 | 47.5 | % | $ | 100,655 | 25.5 | % | |||||||
| Fixed price | 361,141 | 34.2 | % | 288,883 | 34.8 | % | 72,258 | 25.0 | % | ||||||||||
| Time and materials | 201,309 | 19.0 | % | 147,129 | 17.7 | % | 54,180 | 36.8 | % | ||||||||||
| Total | $ | 1,057,530 | 100.0 | % | $ | 830,437 | 100.0 | % | $ | 227,093 | 27.3 | % | |||||||
| Six Months Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Cost reimbursable | $ | 1,029,662 | 48.3 | % | $ | 782,423 | 47.3 | % | $ | 247,239 | 31.6 | % | |||||||
| Fixed price | 704,454 | 33.1 | % | 578,184 | 35.0 | % | 126,270 | 21.8 | % | ||||||||||
| Time and materials | 396,694 | 18.6 | % | 292,272 | 17.7 | % | 104,422 | 35.7 | % | ||||||||||
| Total | $ | 2,130,810 | 100.0 | % | $ | 1,652,879 | 100.0 | % | $ | 477,931 | 28.9 | % | |||||||
| Revenue Received as a Prime versus Subcontractor (Unaudited) | |||||||||||||||||||
| Quarter Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Prime | $ | 984,642 | 93.1 | % | $ | 758,336 | 91.3 | % | $ | 226,306 | 29.8 | % | |||||||
| Subcontractor | 72,888 | 6.9 | % | 72,101 | 8.7 | % | 787 | 1.1 | % | ||||||||||
| Total | $ | 1,057,530 | 100.0 | % | $ | 830,437 | 100.0 | % | $ | 227,093 | 27.3 | % | |||||||
| Six Months Ended | |||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | |||||||||||||||
| Prime | $ | 1,981,099 | 93.0 | % | $ | 1,500,914 | 90.8 | % | $ | 480,185 | 32.0 | % | |||||||
| Subcontractor | 149,711 | 7.0 | % | 151,965 | 9.2 | % | (2,254 | ) | -1.5 | % | |||||||||
| Total | $ | 2,130,810 | 100.0 | % | $ | 1,652,879 | 100.0 | % | $ | 477,931 | 28.9 | % | |||||||
| Selected Financial Data (Continued) | ||||||||||||
| Contract Funding Orders Received (Unaudited) | ||||||||||||
| Quarter Ended | ||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | ||||||||
| Contract Funding Orders | $ | 751,703 | $ | 541,358 | $ | 210,345 | 38.9 | % | ||||
| Six Months Ended | ||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | ||||||||
| Contract Funding Orders | $ | 1,914,594 | $ | 1,669,834 | $ | 244,760 | 14.7 | % | ||||
| Direct Costs by Category (Unaudited) | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | ||||||||||||||
| Direct labor | $ | 324,485 | 46.0 | % | $ | 259,835 | 47.5 | % | $ | 64,650 | 24.9 | % | ||||||
| Other direct costs | 380,836 | 54.0 | % | 287,305 | 52.5 | % | 93,531 | 32.6 | % | |||||||||
| Total direct costs | $ | 705,321 | 100.0 | % | $ | 547,140 | 100.0 | % | $ | 158,181 | 28.9 | % | ||||||
| Six Months Ended | ||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | $ Change | % Change | ||||||||||||||
| Direct labor | $ | 659,413 | 46.0 | % | $ | 530,299 | 48.9 | % | $ | 129,114 | 24.3 | % | ||||||
| Other direct costs | 774,129 | 54.0 | % | 554,265 | 51.1 | % | 219,864 | 39.7 | % | |||||||||
| Total direct costs | $ | 1,433,542 | 100.0 | % | $ | 1,084,564 | 100.0 | % | $ | 348,978 | 32.2 | % | ||||||
Selected Financial Data (Continued) |
Reconciliation of Net Income to Adjusted Earnings Before Interest, Taxes, Depreciation |
and Amortization (EBITDA) and to Adjusted Net Income |
(Unaudited) |
| The Company views Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Diluted Adjusted Earnings Per Share, all of which are defined as non-GAAP measures, as important indicators of performance, consistent with the manner in which management measures and forecasts the Company’s performance. Adjusted EBITDA is a commonly used non-GAAP measure when comparing our results with those of other companies. We define Adjusted EBITDA as GAAP net income plus net interest expense, income taxes, depreciation and amortization, and earnout adjustments. We consider Adjusted EBITDA to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of non-cash items such as depreciation of tangible assets, amortization of intangible assets primarily recognized in business combinations, as well as the effect of earnout gains and losses, which we do not believe are indicative of our core operating performance. Adjusted EBITDA margin is adjusted EBITDA divided by revenue. We define Adjusted Net Income as GAAP net income plus stock-based compensation expense, depreciation and amortization, amortization of financing costs, and earnout adjustments, net of related tax effects. We believe Adjusted Net Income is an important measure of long-term value and is used by investors to measure our performance. This measure in particular assists readers in further understanding our results and trends from period-to-period by removing certain non-cash items that do not impact the cash flow performance of our business. Diluted Adjusted Earnings Per Share is Adjusted Net Income divided by diluted weighted-average shares, as reported. Adjusted EBITDA and Adjusted Net Income as defined by us may not be computed in the same manner as similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. |
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | ||||||||||||||||
| Net income | $ | 42,420 | $ | 30,452 | 39.3 | % | $ | 79,083 | $ | 65,084 | 21.5 | % | ||||||||||
| Plus: | ||||||||||||||||||||||
| Income taxes | 25,510 | 16,851 | 51.4 | % | 46,016 | 37,544 | 22.6 | % | ||||||||||||||
| Interest income and expense, net | 12,325 | 8,327 | 48.0 | % | 24,918 | 17,460 | 42.7 | % | ||||||||||||||
| Depreciation and amortization | 18,132 | 14,670 | 23.6 | % | 36,195 | 29,481 | 22.8 | % | ||||||||||||||
| Earnout adjustments | 406 | 139 | 192.1 | % | 820 | 139 | 489.9 | % | ||||||||||||||
| Adjusted EBITDA | $ | 98,793 | $ | 70,439 | 40.3 | % | $ | 187,032 | $ | 149,708 | 24.9 | % | ||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | ||||||||||||||||
| Revenue, as reported | $ | 1,057,530 | $ | 830,437 | 27.3 | % | $ | 2,130,810 | $ | 1,652,879 | 28.9 | % | ||||||||||
| Adjusted EBITDA | $ | 98,793 | $ | 70,439 | 40.3 | % | $ | 187,032 | $ | 149,708 | 24.9 | % | ||||||||||
| Adjusted EBITDA margin | 9.3 | % | 8.5 | % | 8.8 | % | 9.1 | % | ||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (dollars in thousands) | 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | ||||||||||||||||
| Net income | $ | 42,420 | $ | 30,452 | 39.3 | % | $ | 79,083 | $ | 65,084 | 21.5 | % | ||||||||||
| Plus: | ||||||||||||||||||||||
| Stock-based compensation | 5,660 | 4,835 | 17.1 | % | 10,557 | 8,473 | 24.6 | % | ||||||||||||||
| Depreciation and amortization | 18,132 | 14,670 | 23.6 | % | 36,195 | 29,481 | 22.8 | % | ||||||||||||||
| Amortization of financing costs | 1,124 | 575 | 95.5 | % | 2,252 | 1,152 | 95.5 | % | ||||||||||||||
| Earnout adjustments | 406 | 139 | 192.1 | % | 820 | 139 | 489.9 | % | ||||||||||||||
| Less: | ||||||||||||||||||||||
| Related tax effect | (9,965 | ) | (7,957 | ) | 25.2 | % | (19,608 | ) | (15,445 | ) | 27.0 | % | ||||||||||
| Adjusted net income | $ | 57,777 | $ | 42,714 | 35.3 | % | $ | 109,299 | $ | 88,884 | 23.0 | % | ||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (shares in thousands) | 12/31/2016 | 12/31/2015 | % Change | 12/31/2016 | 12/31/2015 | % Change | ||||||||||||||||
Diluted weighted average shares, as reported | 25,069 | 24,786 | 24,998 | 24,754 | ||||||||||||||||||
| Diluted earnings per share | $ | 1.69 | $ | 1.23 | 37.7 | % | $ | 3.16 | $ | 2.63 | 20.3 | % | ||||||||||
| Diluted adjusted earnings per share | $ | 2.30 | $ | 1.72 | 33.7 | % | $ | 4.37 | $ | 3.59 | 21.8 | % | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170201006149/en/
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