Government contractor CACI International posted lower sales and profits for its fiscal year ending June 30, a result of the military pullback in Afghanistan, the government shutdown and a slowdown in professional services work, the Arlington-based company said Thursday.
CACI’s acquisition of intelligence contractor Six3 last year raised the company’s operating income for the fourth quarter. But Six3’s sales during the quarter also were below expectations, CACI said.
For fiscal 2014, the company’s sales were down 3.2 percent to $3.6 billion. Profit was down nearly 11 percent to $135.3 million, or $5.38 per share. In the last quarter, CACI’s sales were down nearly 1 percent and profit was down 3.7 percent.
Although business has been slow, Kenneth Asbury, the company’s president and chief executive, noted that turmoil in Iraq, Russia and other countries likely would drive more government demand for the company’s intelligence services.
The government’s increased involvement in Iraq was already having a small effect on business, Asbury told investors.
“Contracts that . . . we’re drawing down as a result of overall plans, have now begun to add people back to them, as a result of some of the things that are going there,” Asbury said. “Right now, we wouldn’t judge those to be material,” meaning they are unlikely to significantly boost financial results, he said.
In an interview, Asbury said CACI was positioning itself to deal with the threat of government spending cuts known as sequestration, which are expected to occur again next year.
“We plan for things to take longer; we put more uncertainty into the schedules,” he said.
That is a different approach for the company, which did not expect sequestration to hit businesses the last time around.
“We’re taking the lessons learned from the last 18 months,” Asbury said.
He characterized the company’s earnings last quarter as “a great adjustment to a market that’s changed radically from sequestration.”
CACI was already seeing more contract activity, and Asbury said he expected a seasonal uptick in the number of contracts awarded toward the end of the year. The company announced Thursday that the Navy has selected it as a prime contractor for a $37 million, five-year mission to provide logistical support to the Navy’s ocean transportation command.
Asbury, who took CACI’s helm last February, reiterated his acquisition-focused approach for expanding the business.
Health care and cybersecurity are big areas of growth, he said. That’s why CACI is on the lookout for a “high-end health-care I.T. business,” Asbury said.
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