CACI International Inc. said increased demand for its homeland security and intelligence services helped boost fourth-quarter profit by 56 percent over the same period a year earlier.
The Arlington government contractor came under fire this year after one of its employees was implicated in the Abu Ghraib prison scandal. An internal Army report said a CACI interrogator encouraged soldiers at the prison outside Baghdad to set conditions for interrogations and said he "clearly knew his instructions equated to physical abuse."
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Despite international scrutiny of its operations, CACI's business continued to expand. The company earned $20.7 million (69 cents a share) in the three months ended June 30, up from $13.3 million (45 cents). Revenue rose to $358.3 million from $228.6 million.
Stephen L. Waechter, chief financial officer, said in an interview that CACI's intention had been to become a billion-dollar company by 2005, a goal it reached ahead of schedule by recording $1.1 billion in revenue in fiscal 2004. In fiscal 2003, its revenue was $843.1 million.
The contractor's strategy for growth included winning existing contracts that came up for new competition, responding to new requirements put out by the government and acquiring companies. CACI completed four acquisitions in the 12 months ended June 30, including the $415 million purchase of American Management System's Defense and Intelligence Group completed in May.
"That was just a really, really great deal for the company. . . . Part of the reason we had such a great quarter was that they were up and running and integrated," Waechter said. The Abu Ghraib scandal's impact on the business was minimal, he said. "Clearly there's a lot of noise out there, but from a business standpoint it's very small. [Interrogation services] is less than 1 percent of our revenue for the year."
The company also said yesterday that it has been awarded a $126 million contract to provide information technology support to the U.S. Navy for the next five years.
For the year, CACI earned $63.7 million ($2.13 a share), up from $44.7 million ($1.52) in fiscal 2003. Waechter said that the company's next goal is to reach the $2 billion revenue mark and that it is looking at six to eight potential acquisitions.
Some analysts think the company's results, which were released after the market's close yesterday, may help restore investor confidence in CACI. Shares of the contractor closed at $40.92, up 92 cents yesterday, but still down significantly from its 52-week high of $53 a share.
"It should really help investors in the market refocus on the company's growth and outlook rather than on the allegations that they had been involved in the Abu Ghraib prison" scandal, said William W. Hamilton, an analyst with Pershing LLC. "Those story lines have been weighing on the stock."