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CACI Grows Intelligence Business With Acquisitions As C4ISR Contributes To Firm’s Record Earnings

A renewed emphasis on targeting the intelligence community is reaping handsome rewards for CACI International, with two recent acquisitions that should further improve cash flow and news that serving the sector contributed to record profits.

Company officials said the acquisition of TechniGraphics Inc. and Applied Systems Research expand CACI’s presence in providing geospatial and technical services for intelligence agencies but declined to disclose financial terms of the transactions.

Based in Arlington, Va., the IT services company ranks 16th on the list of the trade journal Washington Technology’s list of top 100 government contractors. That’s up from 20th place last year.

“These acquisitions are particularly important to CACI’s concentrated focus on building our intelligence business,” said Paul Cofoni, CACI president and chief executive officer. “They reinforce our commitment to intelligence as one of CACI’s core competencies and provide solutions that cross multiple mission areas and market sectors.”

TechniGraphics Inc. was founded in 1982 and is based in Wooster, Ohio. The firm employs 450 with additional operations in Fort Collins, Colo., St. Louis, Mo., and Madrid, Spain. Besides U.S. intelligence agencies, key customers include the Pentagon, Homeland Security and allied governments.

Billing itself as an expert in the visual display of information, TechniGraphics delivers such geospatial products as data conversion and 3-D content, blast analysis and data verification. The company also focuses on animating complex data to make it easier to understand.

Inc. magazine has included the company in the publication’s list of the 5,000 fastest growing private firms in the U.S. every year since 2006, when TechniGraphics debuted in the top 500.

Applied Systems Research is a much smaller firm employing only about 50 workers and is based in Fairfax, Va. Founded in 1999, the company is designated a veteran-owned small business.

In addition to geospatial information services, the company delivers measurement and signal intelligence and radio frequency technology solutions. It has a wide range of clients that include the Central Intelligence Agency, Defense Intelligence Agency, DARPA and the National Geospatial-Intelligence Agency.

In its most recent earnings report, CACI clearly illustrated the impact of its intelligence business in an era of tight Pentagon budgets as the pace of spending on IT services slows down under the Obama administration.

For its first quarter in fiscal year 2011, CACI reported what it hailed as “historic” contract wins and a 20 percent increase in profits. It also registered revenue of $834 million, a 12.8 percent increase from the comparable period in the previous fiscal year.

“Our nearly $1.5 billion in awards, a quarterly record, was over twice as much as we won in the first quarter of fiscal 2010,” Cofoni said. “With these awards, we retained existing business and secured new business that will help sustain our growth in fiscal 2011, fiscal 2012 and beyond. These awards expand our footprint into important growth areas.”

Cofoni listed C4ISR services, logistics and material readiness, and cyber solutions as contributing to the results. The CEO noted that CACI is providing the transformation of electronic health records for active duty and retired service personnel.

CACI also supports healthcare IT for the Department of Veterans Affairs and Department of Defense as well as biometrics technology support for intelligence and security missions.

Reflecting its improving financial picture, the company also raised the guidance it gives Wall Street analysts for profits in the current fiscal year. Cofoni said the firm now expects to earn in the range of $121 to $128 million, up from previous forecasts in the range of $116 to $122 million.

Indeed, CACI stock has come under buying pressure in the last few weeks. The stock currently trades substantially above both its 50-day and 200-day moving averages, a sign that bullish investors expect continued earnings growth with recent volume up by about one-third.

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Michael A. Robinson has written articles for some of the nation's more prestigious publications. As...