Arlington-based intelligence contractor CACI International may have reported lower sales and profits for its fiscal year ending June 30, but Kenneth Asbury, the company’s chief executive, said the business has plenty of room for growth in a tough market.
In a phone interview, Asbury shared what he’s doing to make sure CACI stays vigilant for any surprises that lie ahead.
What’s your takeaway from the quarterly and annual results?
I look at what we did here as a great adjustment to a market that’s changed radically from sequestration. The 16,000 people who work at CACI did a good job of planning the last three months. That bodes well for how we’re thinking.
How is CACI adapting to deal with the threat of another round of sequestration?
We’re taking the lessons learned from the last 18 months.
We plan for things to take longer, we put more uncertainty into the schedules, and put less amounts in some programs. At the same time, I’ve beefed up my business development organization. There is still a very large addressable marketplace and we’re going to continue to serve it.
I want to be optimistic that people are going to realize that sequestration is not [a plausible] way forward. But I said that the first time around. (laughs)
Do you feel better prepared this time?
I think there will be no more surprises. We’ve been through sequestration, the government shutdown, the fact that we had to [make cuts] at the company.
I get the fact that it’s a smaller market. You’ve seen some companies that adapt well, and some that are still [trying to adapt]. I would like to think we’re in the former category.
So what are some areas of growth for CACI?
Health care and cybersecurity. We find that there is tremendous interest from the federal government in both of those areas now. There are also some nice channels of growth in our traditional lines of business, like C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance).
What about expanding into global or commercial markets, like others in the industry have done?
We have a small component of both today, but it’s not a material part of our business. I could see a couple of areas, such as health care, cybersecurity and big data, that may have commercial applications, but we’re not chasing them.
You’ve been open about wanting to make acquisitions. What kind of businesses are a good fit for CACI?
Right now we’re looking for high-end health care IT businesses or anything than can extend our reach with Six3. [CACI acquired intelligence contractor Six3 in a deal worth $820 million last year].
We’re also looking on the solutions and products side particularly as it relates to cybersecurity and intelligence.
You said global events, for example in Iraq, are starting to have a small effect on boosting business. Do you anticipate more activity?
We’re getting into crystal ball territory here. It’s not just Iraq, it’s a number of global hot spots. From a Department of Defense perspective, we’re in sort of a containment policy right now. Personally, I hope it doesn’t [escalate], because it means we are broadly engaged in something difficult. Frankly, I don’t want to see people going to war.
How is an election year going to affect CACI’s business?
We’ve been in the business for 53 years, and it really almost doesn’t matter. The nation has a responsibility to serve citizens and help allies. The policies may change a bit here and there [depending on who’s in power], but in general, the government continues to need the services and solutions that industry provides. So it doesn’t affect the business all that much.
Also, we’re so broadly positioned in the market, that we’re not subject to a big prime [contractor] program issue.
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