CACI International Inc provides the IT and network solutions needed to prevail in today's new era of defense, intelligence, and e-government. From systems integration and managed network solutions to knowledge management, engineering, simulation, and information assurance, we deliver the IT applications and infrastructures our federal customers use to improve communications and collaboration, secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. Our solutions lead the transformation of defense and intelligence, assure homeland security, enhance decision-making, and help government to work smarter, faster, and more responsively. CACI has been named to the Fortune 1000 Largest Companies of 2006. A member of the Russell 1000 index, CACI provides dynamic careers for approximately 10,000 employees working in over 130 offices in the U.S. and Europe. CACI is the IT provider for a networked world

Revenue increased 13.7 percent to $476.9 million
Contract funding orders of $485 million, up 65 percent
Contract awards total $495 million, up 138 percent 

Arlington, VA, January 31, 2007 - CACI International Inc (NYSE:CAI), a leading information technology and network solutions provider to the federal government, announced results today for its second fiscal quarter and first six months ended December 31, 2006. CACI provides innovative solutions to meet America's national needs in defense, intelligence, homeland security, and the transformation of government, and is a leading strategic consolidator in its market space.

Second Quarter Results

For the second quarter of Fiscal Year 2007 (FY07) the Company reported record revenue of $476.9 million, up 13.7 percent over second quarter of Fiscal Year 2006 (FY06) revenue of $419.5 million, primarily due to acquisitions made in FY06. Operating income for the quarter was $37.0 million versus operating income of $39.2 million in the year earlier quarter, a decrease of 5.8 percent. The Company's operating margin in the quarter was 7.8 percent compared with 9.3 percent in the year earlier quarter. This decrease was driven primarily by three factors: reduced CACI labor content on work performed during the period; higher indirect costs due to unusually low healthcare-related expenses last year; and lower margin on an acquisition completed in FY06. The effective tax rate for the quarter was 35.2 percent versus 37.2 percent in the second quarter of FY06. The lower tax rate was driven by the positive impact of R&D tax credit legislation enacted in December 2006. Net income for the second quarter was $20.5 million, or $0.65 per diluted share, down 8.1 percent from $22.3 million, or $0.72 per diluted share, for the second quarter of FY06. Operating cash flow for the quarter was $27.9 million.

Second Quarter Highlights

Major highlights and accomplishments during the second quarter of FY07 include: 

Contract awards totaling approximately $495 million, of which approximately $170 million are from unannounced awards from the Intelligence Community. Contract awards for the first six months of FY07 total approximately $1.4 billion. 
Award of a prime position as a large contractor on the 20-year, multiple award, indefinite delivery/indefinite quantity $36 billion U.S. Army Field and Installation Readiness Support Team (FIRST) contract. 
Contract funding orders totaling $485 million, an increase of 65 percent over $294 million in the second quarter of FY06. Contract funding orders for the first six months of FY07 total approximately $1.1 billion, 41 percent higher than the approximately $772 million received in the first half of FY06. 

CEO Commentary

Commenting on the results for the second quarter, Dr. J.P. (Jack) London, CACI's Chairman, President and CEO said, "Our progress has been temporarily slowed by a combination of industry-wide and CACI-specific factors. Despite these issues, we remain confident in the value we provide to our customers and shareholders. We are encouraged by our sizeable recent contract awards and funding orders. They bode well for future results.

"We are convinced we are in the right market space, providing vital IT and network services to our Department of Defense, Homeland Security and intelligence agency customers. We are aggressively responding to short and longer-term changes in the marketplace. Recent large prime contract awards, both for new work and that previously performed by others, have provided clear indications from our government customers that they consider us a significant, tier 1 service provider. We continue with our aggressive acquisition strategy as a leading strategic consolidator. We have clearly defined goals for long-term profitable growth and we are confident that we will succeed."

Six Months FY07 Results

For the first six months of FY07, revenue increased 12.1 percent to $944.5 million versus revenue of $842.6 million for the same period of FY06. Operating income for the first six months was $73.5 million, 1.1 percent higher than the $72.7 million reported a year earlier. The Company's operating margin was 7.8 percent for the first six months of FY07 compared with 8.6 percent for the first six months of FY06. The effective tax rate for the first half of FY07 was 36.6 percent, equal to the tax rate for the first half of FY06. Net income for the first six months was $39.3 million, or $1.25 per diluted share, 5.1 percent lower than net income of $41.4 million, or $1.34 per diluted share, for the first half of FY06. Operating cash flow for the first six months of FY07 was $70.4 million compared with $47.1 million in the first six months of FY06.

CACI Guidance

The Company issued revised guidance for its FY07 on January 17, 2007. The contributing factors for the change in guidance are:

A larger-than-expected reduction in demand for our services on contracts supporting operations and maintenance activities in the Department of Defense (DoD) as a result of the continuing high priority of funding for the warfighter in Iraq and Afghanistan, and a continuing resolution for all federal civilian agencies, except for the Department of Homeland Security, that will last through September 2007. 
An increase in the number and duration of protests of major contract awards received by the Company, resulting in the delay of the initiation of work. 
The competitive hiring environment for individuals with high-level security clearances. 
The recent loss of two recompeted contracts. 
The Company is issuing its guidance for its third fiscal quarter and initial guidance for its fourth fiscal quarter of FY07. This guidance excludes the revenue or earnings from future acquisitions that may be completed prior to the end of FY07.