CACI INTERNATIONAL INC /DE/, 10-Q filed on 10/28/2021
Quarterly Report
v3.21.2
Document And Entity Information - shares
 3 Months Ended
Sep. 30, 2021
Oct. 11, 2021
Cover [Abstract]    
Entity Registrant Name CACI International Inc  
Entity Central Index Key 0000016058  
Current Fiscal Year End Date --06-30  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   23,327,067
Document Type 10-Q  
Document Period End Date Sep. 30, 2021  
Amendment Flag false  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q1  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Title of 12(b) Security Common Stock  
Trading Symbol CACI  
Security Exchange Name NYSE  
Entity File Number 001-31400  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 54-1345888  
Entity Address, Address Line One 12021 Sunset Hills Road  
Entity Address, City or Town Reston  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 20190  
City Area Code 703  
Local Phone Number 841-7800  
Document Quarterly Report true  
Document Transition Report false  
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Income Statement [Abstract]    
Revenues $ 1,490,898 $ 1,459,506
Costs of revenues:    
Direct costs 974,171 939,934
Indirect costs and selling expenses 357,106 355,004
Depreciation and amortization 32,592 30,144
Total costs of revenues 1,363,869 1,325,082
Income from operations 127,029 134,424
Interest expense and other, net 10,398 9,980
Income before income taxes 116,631 124,444
Income taxes 28,522 30,800
Net income $ 88,109 $ 93,644
Basic earnings per share $ 3.74 $ 3.73
Diluted earnings per share $ 3.70 $ 3.67
Weighted-average basic shares outstanding 23,560 25,099
Weighted-average diluted shares outstanding 23,844 25,486
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]    
Net income $ 88,109 $ 93,644
Other comprehensive income (loss):    
Foreign currency translation adjustment (6,762) 7,793
Change in fair value of interest rate swap agreements, net of tax 2,214 2,252
Other comprehensive (loss) income, net of tax (4,548) 10,045
Comprehensive income $ 83,561 $ 103,689
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Current assets:    
Cash and cash equivalents $ 104,430 $ 88,031
Accounts receivable, net 774,934 879,851
Prepaid expenses and other current assets 362,809 363,294
Total current assets 1,242,173 1,331,176
Goodwill 3,707,719 3,632,578
Intangible assets, net 501,574 [1] 476,106
Property, plant and equipment, net 183,864 190,444
Operating lease right-of-use assets 359,603 356,887
Supplemental retirement savings plan assets 103,048 102,984
Accounts receivable, long-term 11,540 12,159
Other long-term assets 69,789 70,038
Total assets 6,179,310 6,172,372
Current liabilities:    
Current portion of long-term debt 46,920 46,920
Accounts payable 119,176 148,636
Accrued compensation and benefits 370,905 409,275
Other accrued expenses and current liabilities 299,273 279,970
Total current liabilities 836,274 884,801
Long-term debt, net of current portion 1,647,765 1,688,919
Supplemental retirement savings plan obligations, net of current portion 106,574 104,490
Deferred income taxes 330,658 327,230
Operating lease liabilities, noncurrent 366,492 363,302
Other long-term liabilities 136,425 138,352
Total liabilities 3,424,188 3,507,094
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:    
Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued or outstanding
Common stock $0.10 par value, 80,000 shares authorized; 42,710 shares issued and 23,306 outstanding at September 30, 2021 and 42,676 shares issued and 23,554 outstanding at June 30, 2021 4,271 4,268
Additional paid-in capital 561,688 484,260
Retained earnings 3,277,196 3,189,087
Accumulated other comprehensive loss (40,839) (36,291)
Treasury stock, at cost (19,404 and 19,122 shares, respectively) (1,047,329) (976,181)
Total CACI shareholders’ equity 2,754,987 2,665,143
Noncontrolling interest 135 135
Total shareholders’ equity 2,755,122 2,665,278
Total liabilities and shareholders’ equity $ 6,179,310 $ 6,172,372
[1]

During the three months ended September 30, 2021, the Company removed $26.8 million in fully amortized intangible assets.
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parentheticals) - $ / shares
Sep. 30, 2021
Jun. 30, 2021
Statement Of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0.10 $ 0.10
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.10 $ 0.10
Common stock, shares authorized 80,000,000 80,000,000
Common stock, shares issued 42,710,000 42,676,000
Common stock, shares outstanding 23,306,000 23,554,000
Treasury stock, shares at cost 19,404,000 19,122,000
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income $ 88,109 $ 93,644
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 32,592 30,144
Amortization of deferred financing costs 576 583
Non-cash lease expense 16,960 19,056
Stock-based compensation expense 6,669 7,847
Deferred income taxes (4,461) 2,339
Changes in operating assets and liabilities, net of effect of business acquisitions:    
Accounts receivable, net 108,236 20,987
Prepaid expenses and other assets (24,085) (21,420)
Accounts payable and other accrued expenses (16,235) 21,109
Accrued compensation and benefits (40,521) (23,882)
Income taxes payable and receivable 31,444 8,384
Operating lease liabilities (16,076) (19,364)
Long-term liabilities 2,745 37,473
Net cash provided by operating activities 185,953 176,900
CASH FLOWS FROM INVESTING ACTIVITIES    
Capital expenditures (10,203) (16,282)
Acquisition of businesses, net of cash acquired (116,273) (354,095)
Net cash used in investing activities (126,476) (370,377)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from borrowings under bank credit facilities 548,000 839,500
Principal payments made under bank credit facilities (589,730) (630,230)
Proceeds from employee stock purchase plans 2,911 2,431
Repurchases of common stock (2,472) (2,074)
Payment of taxes for equity transactions (426) (688)
Net cash (used in) provided by financing activities (41,717) 208,939
Effect of exchange rate changes on cash and cash equivalents (1,361) 2,164
Net change in cash and cash equivalents 16,399 17,626
Cash and cash equivalents at beginning of period 88,031 107,236
Cash and cash equivalents at end of period 104,430 124,862
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    
Cash paid during the period for income taxes, net of refunds 518 19,725
Cash paid during the period for interest 9,383 8,768
Non-cash financing and investing activities:    
Landlord sponsored tenant incentives 724 1,389
Accrued capital expenditures $ 227 $ 938
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Treasury Stock
Total CACI Shareholders' Equity
Noncontrolling Interest
Beginning balance at Jun. 30, 2020 $ 2,661,310 $ 4,253 $ 573,744 $ 2,731,644 $ (72,285) $ (576,181) $ 2,661,175 $ 135
Beginning balance, shares at Jun. 30, 2020   42,525       17,432    
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 93,644     93,644     93,644  
Stock-based compensation expense 7,847   7,847       7,847  
Tax withholdings on restricted share vestings (1,176) $ 1 (1,177)       (1,176)  
Tax withholdings on restricted share vestings (in shares)   12            
Other comprehensive income (loss), net of tax 10,045       10,045   10,045  
Repurchases of common stock (2,074)   80     $ (2,154) (2,074)  
Repurchases of common stock (in shares)           10    
Treasury stock issued under stock purchase plans 2,173   19     $ 2,154 2,173  
Treasury stock issued under stock purchase plans (in shares)           (10)    
Ending balance at Sep. 30, 2020 2,771,769 $ 4,254 580,513 2,825,288 (62,240) $ (576,181) 2,771,634 135
Ending balance, shares at Sep. 30, 2020   42,537       17,432    
Beginning balance at Jun. 30, 2021 2,665,278 $ 4,268 484,260 3,189,087 (36,291) $ (976,181) 2,665,143 135
Beginning balance, shares at Jun. 30, 2021   42,676       19,122    
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 88,109     88,109     88,109  
Stock-based compensation expense 6,669   6,669       6,669  
Tax withholdings on restricted share vestings (273) $ 3 (276)       (273)  
Tax withholdings on restricted share vestings (in shares)   34            
Other comprehensive income (loss), net of tax (4,548)       (4,548)   (4,548)  
Repurchases of common stock (2,472)   70,974     $ (73,446) (2,472)  
Repurchases of common stock (in shares)           292    
Treasury stock issued under stock purchase plans 2,359   61     $ 2,298 2,359  
Treasury stock issued under stock purchase plans (in shares)           (10)    
Ending balance at Sep. 30, 2021 $ 2,755,122 $ 4,271 $ 561,688 $ 3,277,196 $ (40,839) $ (1,047,329) $ 2,754,987 $ 135
Ending balance, shares at Sep. 30, 2021   42,710       19,404    
v3.21.2
Basis of Presentation
 3 Months Ended
Sep. 30, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Basis of Presentation

Note 1.

Basis of Presentation

The accompanying unaudited consolidated financial statements of CACI International Inc and subsidiaries (CACI or the Company) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and include the assets, liabilities, results of operations, comprehensive income and cash flows for the Company, including its subsidiaries and ventures that are majority-owned or otherwise controlled by the Company.  Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated in consolidation.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts.  The fair value of the Company’s debt outstanding as of September 30, 2021 under its bank credit facility approximates its carrying value.  The fair value of the Company’s debt under its bank credit facility was estimated using Level 2 inputs based on market data of companies with a corporate rating similar to CACI’s that have recently priced credit facilities.  See Notes 10 and 15.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for the fair presentation of the periods presented.  It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report to the SEC on Form 10-K for the year ended June 30, 2021.  The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the results to be expected for any subsequent interim period or for the full fiscal year.
v3.21.2
Recent Accounting Pronouncements
 3 Months Ended
Sep. 30, 2021
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]  
Recent Accounting Pronouncements

Note 2.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The guidance in this ASU is optional and expedients may be elected over time through December 31, 2022, as reference rate reform activities occur. During the three months ended June 30, 2020, CACI elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives consistent with past presentation. Application of these expedients assisted in preserving the Company's presentation of derivatives as qualifying cash flow hedges. The Company continues to evaluate this guidance and may apply other elections, as applicable, as additional changes in the market occur.
v3.21.2
Acquisitions
 3 Months Ended
Sep. 30, 2021
Business Combinations [Abstract]  
Acquisitions

Note 3.

Acquisitions

During the three months ended September 30, 2021 CACI completed two acquisitions that provide mission technology to sensitive government customers. Their capabilities include open source intelligence solutions, specialized cyber, and satellite communications. The aggregate purchase consideration was approximately $120.3 million. The Company preliminarily recognized fair values of the assets acquired and liabilities assumed and allocated $79.7 million to goodwill and $43.5 million to intangible assets.  The fair value attributed to the intangible assets acquired was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques. Of the value attributed to goodwill and intangible assets, approximately $44.0 million is deductible for income tax purposes.

 
v3.21.2
Intangible Assets
 3 Months Ended
Sep. 30, 2021
Finite Lived Intangible Assets Net [Abstract]  
Intangible Assets

Note 4.

Intangible Assets

Intangible assets, net consisted of the following (in thousands):

 

 

 

September 30,

 

 

June 30,

 

 

 

2021 (1)

 

 

2021

 

Intangible assets:

 

 

 

 

 

 

 

 

Customer contracts and related customer relationships

 

$

598,074

 

 

$

601,516

 

Acquired technologies

 

 

217,711

 

 

 

198,273

 

Intangible assets

 

 

815,785

 

 

 

799,789

 

Less accumulated amortization:

 

 

 

 

 

 

 

 

Customer contracts and related customer relationships

 

 

(259,607

)

 

 

(276,498

)

Acquired technologies

 

 

(54,604

)

 

 

(47,185

)

Less accumulated amortization

 

 

(314,211

)

 

 

(323,683

)

Total intangible assets, net

 

$

501,574

 

 

$

476,106

 

 

 

(1)

During the three months ended September 30, 2021, the Company removed $26.8 million in fully amortized intangible assets.

Intangible assets are primarily amortized on an accelerated basis over periods ranging from one to twenty years.  The weighted-average period of amortization for all customer contracts and related customer relationships as of September 30, 2021 is 17.9 years, and the weighted-average remaining period of amortization is 14.4 years.  The weighted-average period of amortization for acquired technologies as of September 30, 2021 is 10.1 years, and the weighted-average remaining period of amortization is 8.4 years.

Amortization expense for the three months ended September 30, 2021 and 2020 was $17.6 million and $16.1 million, respectively. The estimated annual amortization expense as of September 30, 2021 was as follows (in thousands):

 

Fiscal year ending June 30,

 

Amount

 

2022 (remainder of year)

 

$

53,442

 

2023

 

 

69,062

 

2024

 

 

62,060

 

2025

 

 

54,886

 

2026

 

 

47,083

 

2027 and thereafter

 

 

215,041

 

 

 

$

501,574

 

 
v3.21.2
Goodwill
 3 Months Ended
Sep. 30, 2021
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill

Note 5.

Goodwill

The changes in the carrying amount of goodwill for the three months ended September 30, 2021 are as follows (in thousands):

 

 

 

Domestic

 

 

International

 

 

Total

 

Balance at June 30, 2021

 

$

3,491,747

 

 

$

140,831

 

 

$

3,632,578

 

Goodwill acquired (1)

 

 

79,690

 

 

 

—

 

 

 

79,690

 

Foreign currency translation

 

 

(739

)

 

 

(3,810

)

 

 

(4,549

)

Balance at September 30, 2021

 

$

3,570,698

 

 

$

137,021

 

 

$

3,707,719

 

 

 

(1)

Includes goodwill initially allocated to new business combinations as well as measurement period adjustments, when applicable.

 
v3.21.2
Revenues from Contracts with Customers
 3 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Revenues from Contracts with Customers

Note 6.

Revenues from Contracts with Customers

Disaggregation of Revenues

The Company disaggregates revenues by contract type, customer type, prime vs. subcontractor, and whether the solution provided is primarily expertise or technology.  These categories represent how the nature, amount, timing, and uncertainty of revenues and cash flows are affected.

Disaggregated revenues by contract type were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Cost-plus-fee

 

$

893,713

 

 

$

—

 

 

$

893,713

 

 

$

823,609

 

 

$

—

 

 

$

823,609

 

Fixed-price

 

 

374,474

 

 

 

33,231

 

 

 

407,705

 

 

 

409,584

 

 

 

24,230

 

 

 

433,814

 

Time-and-materials

 

 

175,535

 

 

 

13,945

 

 

 

189,480

 

 

 

184,994

 

 

 

17,089

 

 

 

202,083

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Disaggregated revenues by customer type were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Department of Defense

 

$

1,000,127

 

 

$

—

 

 

$

1,000,127

 

 

$

1,004,195

 

 

$

—

 

 

$

1,004,195

 

Federal Civilian agencies

 

 

413,664

 

 

 

—

 

 

 

413,664

 

 

 

390,179

 

 

 

—

 

 

 

390,179

 

Commercial and other

 

 

29,931

 

 

 

47,176

 

 

 

77,107

 

 

 

23,813

 

 

 

41,319

 

 

 

65,132

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Disaggregated revenues by prime vs. subcontractor were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Prime contractor

 

$

1,298,653

 

 

$

42,906

 

 

$

1,341,559

 

 

$

1,288,705

 

 

$

38,133

 

 

$

1,326,838

 

Subcontractor

 

 

145,069

 

 

 

4,270

 

 

 

149,339

 

 

 

129,482

 

 

 

3,186

 

 

 

132,668

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

 

Disaggregated revenues by expertise or technology were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Expertise

 

$

683,624

 

 

$

19,422

 

 

$

703,046

 

 

$

723,197

 

 

$

17,486

 

 

$

740,683

 

Technology

 

 

760,098

 

 

 

27,754

 

 

 

787,852

 

 

 

694,990

 

 

 

23,833

 

 

 

718,823

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

 

Changes in Estimates

The Company recognizes revenues on many of its fixed price, award fee, and incentive fee arrangements over time primarily using a cost-to-cost input method based on the ratio of costs incurred to date to total estimated costs at completion. The process requires the Company to use professional judgment when assessing risks, estimating contract revenues and costs, estimating variable consideration, and making assumptions for schedule and technical issues.  The Company periodically reassesses its assumptions and updates its estimates as needed.  When estimates of total costs to be incurred on a contract exceed total revenues, a provision for the entire loss on the contract is recorded in the period in which the loss is determined.


 

Aggregate net changes in estimates for the three months ended September 30, 2021 reflected an increase to income before income taxes of $2.8 million ($0.09 per diluted share), compared with $7.8 million ($0.22 per diluted share) for the three months ended September 30, 2020.  The Company uses its statutory tax rate when calculating the impact to diluted earnings per share.

Revenues recognized from previously satisfied performance obligations were immaterial for the three months ended September 30, 2021 and 2020.  The change in revenues generally relates to final true-up adjustments for estimated award or incentive fees in the period in which the customer’s final performance score was received or when it can be determined that more objective, contractually-defined criteria have been fully satisfied.  

 

Remaining Performance Obligations

Remaining performance obligations (RPO) represent the expected revenues to be recognized for the satisfaction of remaining performance obligations on existing contracts.  This balance excludes unexercised contract option years and task orders that may be issued underneath an Indefinite Delivery/Indefinite Quantity (IDIQ) vehicle until such task orders are awarded.  The RPO balance generally increases with the execution of new contracts and converts into revenues as contractual performance obligations are satisfied. The Company continues to monitor this balance as it is subject to change from execution of new contracts, contract modifications or extensions, government deobligations, or early terminations.

As of September 30, 2021, the Company had $7.5 billion of RPO and expects to recognize approximately 80 percent over the next twelve months with the remainder to be recognized thereafter.
v3.21.2
Contract Balances
 3 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Contract Balances

Note 7.

Contract Balances

Contract balances consisted of the following (in thousands):

 

 

 

 

 

September 30,

 

 

June 30,

 

Description of Contract Related Balance

 

Financial Statement Classification

 

2021

 

 

2021

 

Billed and billable receivables

 

Accounts receivable, net

 

$

676,912

 

 

$

763,921

 

Contract assets – current unbilled receivables

 

Accounts receivable, net

 

 

98,022

 

 

 

115,930

 

Contract assets – current costs to obtain

 

Prepaid expenses and other current assets

 

 

4,411

 

 

 

4,144

 

Contract assets – noncurrent unbilled receivables

 

Accounts receivable, long-term

 

 

11,540

 

 

 

12,159

 

Contract assets – noncurrent costs to obtain

 

Other long-term assets

 

 

10,927

 

 

 

9,584

 

Contract liabilities – current deferred

   revenue and other contract liabilities

 

Other accrued expenses and current liabilities

 

 

(80,551

)

 

 

(70,907

)

Contract liabilities – noncurrent deferred

   revenue and other contract liabilities

 

Other long-term liabilities

 

 

(7,015

)

 

 

(6,837

)

 

During the three months ended September 30, 2021, the Company recognized $54.7 million of revenues, compared with $33.5 million of revenues for the three months ended September 30, 2020, that was included in a previously recorded contract liability as of the beginning of the period.
v3.21.2
Inventories
 3 Months Ended
Sep. 30, 2021
Inventory Disclosure [Abstract]  
Inventories

Note 8.

Inventories

Inventories consisted of the following (in thousands):

 

 

 

 

September 30,

 

 

June 30,

 

 

 

 

2021

 

 

2021

 

Materials, purchased parts and supplies

 

 

$

57,047

 

 

$

52,615

 

Work in process

 

 

 

15,439

 

 

 

11,353

 

Finished goods

 

 

 

14,102

 

 

 

15,728

 

Total

 

 

$

86,588

 

 

$

79,696

 

 

Inventories are stated at the lower of cost (average cost or first-in, first-out) or net realizable value and are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.  The Company periodically assesses its current inventory balances and records a provision for damaged, deteriorated, or obsolete inventory based on historical patterns and forecasted sales.
v3.21.2
Sales of Receivables
 3 Months Ended
Sep. 30, 2021
Transfers And Servicing Of Financial Assets [Abstract]  
Sales of Receivables

Note 9.

Sales of Receivables

On December 24, 2020, the Company amended its Master Accounts Receivable Purchase Agreement (MARPA) with MUFG Bank, Ltd. (the Purchaser), for the sale of certain designated eligible U.S. government receivables.  The amendment extended the term of the MARPA to December 23, 2021.  Under the MARPA, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million.  The Company’s receivables are sold under the MARPA without recourse for any U.S. government credit risk.

The Company accounts for receivable transfers under the MARPA as sales under ASC 860, Transfers and Servicing, and derecognizes the sold receivables from its balance sheets.  The fair value of the sold receivables approximated their book value due to their short-term nature.  

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services.  The Company estimated that its servicing fee was at fair value and therefore no servicing asset or liability related to these receivables was recognized as of September 30, 2021.  Proceeds from the sold receivables are reflected in operating cash flows on the statement of cash flows.

MARPA activity consisted of the following (in thousands):

 

 

 

As of and for the Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Beginning balance:

 

$

182,027

 

 

$

200,000

 

Sales of receivables

 

 

690,132

 

 

 

626,603

 

Cash collections

 

 

(678,643

)

 

 

(642,398

)

Outstanding balance sold to Purchaser: (1)

 

 

193,516

 

 

 

184,205

 

Cash collected, not remitted to Purchaser (2)

 

 

(51,034

)

 

 

(79,804

)

Remaining sold receivables

 

$

142,482

 

 

$

104,401

 

 

 

(1)

For the three months ended September 30, 2021 and 2020, the Company recorded a net cash inflow of $11.5 million and a net cash outflow of $15.8 million in its cash flows from operating activities, respectively, from sold receivables.  MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year.

 

(2)

Includes the cash collected on behalf of but not yet remitted to the Purchaser as of September 30, 2021 and 2020.  This balance is included in other accrued expenses and current liabilities as of the balance sheet date.
v3.21.2
Long-term Debt
 3 Months Ended
Sep. 30, 2021
Long Term Debt [Abstract]  
Long-term Debt

Note 10.

Long-term Debt 

Long-term debt consisted of the following (in thousands):

 

 

 

September 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

Bank credit facility – term loans

 

$

785,905

 

 

$

797,635

 

Bank credit facility – revolver loans

 

 

915,000

 

 

 

945,000

 

Principal amount of long-term debt

 

 

1,700,905

 

 

 

1,742,635

 

Less unamortized discounts and debt issuance costs

 

 

(6,220

)

 

 

(6,796

)

Total long-term debt

 

 

1,694,685

 

 

 

1,735,839

 

Less current portion

 

 

(46,920

)

 

 

(46,920

)

Long-term debt, net of current portion

 

$

1,647,765

 

 

$

1,688,919

 

 

Bank Credit Facility

The Company has a $2,438.4 million credit facility (the Credit Facility), which consists of an $1,500.0 million revolving credit facility (the Revolving Facility) and a $938.4 million term loan (the Term Loan). The Revolving Facility has subfacilities of $100.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit.

The Revolving Facility is a secured facility that permits continuously renewable borrowings of up to $1,500.0 million. As of September 30, 2021, the Company had $915.0 million outstanding under the Revolving Facility and no borrowings on the swing line.  The Company pays a quarterly facility fee for the unused portion of the Revolving Facility.  

The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $11.7 million until the balance is due in full on June 30, 2024. As of September 30, 2021, the Company had $785.9 million outstanding under the Term Loan.

The interest rates applicable to loans under the Credit Facility are floating interest rates that, at the Company’s option, equal a base rate or a Eurodollar rate plus, in each case, an applicable rate based upon the Company’s consolidated total leverage ratio.  As of September 30, 2021, the effective interest rate, including the impact of the Company’s floating-to-fixed interest rate swap agreements and excluding the effect of amortization of debt financing costs, for the outstanding borrowings under the Credit Facility was 2.16 percent.

The Credit Facility requires the Company to comply with certain financial covenants, including a maximum total leverage ratio and a minimum interest coverage ratio.  The Credit Facility also includes customary negative covenants restricting or limiting the Company’s ability to guarantee or incur additional indebtedness, grant liens or other security interests to third parties, make loans or investments, transfer assets, declare dividends or redeem or repurchase capital stock or make other distributions, prepay subordinated indebtedness and engage in mergers, acquisitions or other business combinations, in each case except as expressly permitted under the Credit Facility.  As of September 30, 2021, the Company was in compliance with all of the financial covenants.  A majority of the Company’s assets serve as collateral under the Credit Facility.

All debt issuance costs are being amortized from the date incurred to the expiration date of the Credit Facility.

The aggregate maturities of long-term debt at September 30, 2021 were as follows (in thousands):

 

Twelve months ending September 30,

 

 

 

 

2022

 

$

46,920

 

2023

 

 

46,920

 

2024

 

 

1,607,065

 

Principal amount of long-term debt

 

 

1,700,905

 

Less unamortized discounts and debt issuance costs

 

 

(6,220

)

Total long-term debt

 

$

1,694,685

 

 

Cash Flow Hedges

The Company periodically uses derivative financial instruments as part of a strategy to manage exposure to market risks associated with interest rate fluctuations.  The Company has entered into several floating-to-fixed interest rate swap agreements for an aggregate notional amount of $650.0 million which hedge a portion of the Company’s floating rate indebtedness.  The swaps mature at various dates through 2026.  The Company has designated the swaps as cash flow hedges. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Realized gains and losses in connection with each required interest payment are reclassified from accumulated other comprehensive income or loss to interest expense.  The Company does not hold or issue derivative financial instruments for trading purposes.

The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three months ended September 30, 2021 and 2020 is as follows (in thousands):

 

 

 

Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Loss recognized in other comprehensive income

 

$

(1,008

)

 

$

(1,280

)

Amounts reclassified to earnings from accumulated other comprehensive loss

 

 

3,222

 

 

 

3,532

 

Net current period other comprehensive income

 

$

2,214

 

 

$

2,252

 

 
v3.21.2
Legal Proceedings and Other Commitments and Contingencies
 3 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Legal Proceedings and Other Commitments and Contingencies

Note 11.

Legal Proceedings and Other Commitments and Contingencies

Legal Proceedings

The Company is involved in various claims, lawsuits, and administrative proceedings arising in the normal course of business, none of which, based on current information, are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Government Contracting

Payments to the Company on cost-plus-fee and T&M contracts are subject to adjustment upon audit by the Defense Contract Audit Agency (DCAA) and other government agencies that do not utilize DCAA’s services.  The DCAA has completed audits of the Company’s annual incurred cost proposals through fiscal year 2019.  The Company is still negotiating the results of prior years’ audits with the respective cognizant contracting officers and believe its reserves for such are adequate. Adjustments that may result from these audits and the audits not yet started are not expected to have a material effect on the Company’s financial position, results of operations, or cash flows and the Company has accrued its best estimate of potential disallowances. Additionally, the DCAA continually reviews the cost accounting and other practices of government contractors, including the Company. In the course of those reviews, cost accounting and other issues may be identified, discussed and settled.
v3.21.2
Earnings Per Share
 3 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Earnings Per Share

Note 12.

Earnings Per Share

Earnings per share and the weighted-average number of diluted shares are computed as follows (in thousands, except per share data):

 

 

 

Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Net income

 

$

88,109

 

 

$

93,644

 

Weighted-average number of basic shares outstanding during the period

 

 

23,560

 

 

 

25,099

 

Dilutive effect of RSUs after application of treasury stock method

 

 

284

 

 

 

387

 

Weighted-average number of diluted shares outstanding during the period

 

 

23,844

 

 

 

25,486

 

Basic earnings per share

 

$

3.74

 

 

$

3.73

 

Diluted earnings per share

 

$

3.70

 

 

$

3.67

 

 
v3.21.2
Income Taxes
 3 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

Note 13.

Income Taxes

The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment.  The Company is currently under examination by the Internal Revenue Service for fiscal years 2017 through 2019 and does not expect the resolution of these examinations to have a material impact on its results of operations, financial condition or cash flows. 

The Company’s total liability for unrecognized tax benefits as of September 30, 2021 and June 30, 2021 was $32.9 million and $31.5 million, respectively. The $32.9 million unrecognized tax benefit at September 30, 2021, if recognized, would positively impact the Company’s effective tax rate.

The Company’s effective income tax rate was 24.5 percent for the three months ended September 30, 2021, and 24.8 percent for the three months ended September 30, 2020. The Company’s effective income tax rate was lower in the current period primarily due to an increase in research and development credits and an increase in excess tax benefits related to employee stock-based compensation.
v3.21.2
Business Segment Information
 3 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Business Segment Information

Note 14.

Business Segment Information

The Company reports operating results and financial data in two segments: domestic operations and international operations. Domestic operations provide Expertise and Technology primarily to U.S. federal government agencies. International operations provide Expertise and Technology primarily to international government and commercial customers.

The Company evaluates the performance of its operating segments based on net income. Summarized financial information for the Company’s reportable segments is as follows (in thousands):

 

 

 

Domestic

Operations

 

 

International

Operations

 

 

Total

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

Net income

 

 

81,697

 

 

 

6,412

 

 

 

88,109

 

Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Net income

 

 

88,137

 

 

 

5,507

 

 

 

93,644

 

 
v3.21.2
Fair Value of Financial Instruments
 3 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

Note 15.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  

The Company’s financial assets and liabilities recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows:

 

•

Level 1 Inputs – unadjusted quoted prices in active markets for identical assets or liabilities.

 

•

Level 2 Inputs – unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

•

Level 3 Inputs – amounts derived from valuation models in which unobservable inputs reflect the reporting entity’s own assumptions about the assumptions of market participants that would be used in pricing the asset or liability.

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and June 30, 2021, and the level they fall within the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

September 30,

 

 

June 30,

 

 

 

Financial Statement

 

Fair Value

 

2021

 

 

2021

 

Description of Financial Instrument

 

Classification

 

Hierarchy

 

Fair Value

 

Interest rate swap agreements

 

Other accrued expenses and

   current liabilities

 

Level 2

 

$

530

 

 

$

1,028

 

Interest rate swap agreements

 

Other long-term liabilities

 

Level 2

 

$

22,332

 

 

$

24,838

 

 

Changes in the fair value of the interest rate swap agreements are recorded as a component of accumulated other comprehensive income or loss.
v3.21.2
Accelerated Share Repurchase
 3 Months Ended
Sep. 30, 2021
Disclosure Of Repurchase Agreements [Abstract]  
Accelerated Share Repurchase

Note 16.

Accelerated Share Repurchase

On March 12, 2021, the Company entered into an accelerated share repurchase agreement (ASR Agreement) with JPMorgan Chase Bank, National Association (JPMorgan).  Under the ASR Agreement, the Company paid $500.0 million to JPMorgan and received an initial delivery of 1.7 million shares of common stock which became treasury shares.  During the three months ended September 30, 2021, the ASR Agreement was completed and an additional 0.3 million shares of common stock were received which became treasury shares.  In total, 2.0 million shares were repurchased at an average price per share of $253.47.
v3.21.2
Intangible Assets (Tables)
 3 Months Ended
Sep. 30, 2021
Finite Lived Intangible Assets Net [Abstract]  
Schedule of Intangible Assets

Intangible assets, net consisted of the following (in thousands):

 

 

 

September 30,

 

 

June 30,

 

 

 

2021 (1)

 

 

2021

 

Intangible assets:

 

 

 

 

 

 

 

 

Customer contracts and related customer relationships

 

$

598,074

 

 

$

601,516

 

Acquired technologies

 

 

217,711

 

 

 

198,273

 

Intangible assets

 

 

815,785

 

 

 

799,789

 

Less accumulated amortization:

 

 

 

 

 

 

 

 

Customer contracts and related customer relationships

 

 

(259,607

)

 

 

(276,498

)

Acquired technologies

 

 

(54,604

)

 

 

(47,185

)

Less accumulated amortization

 

 

(314,211

)

 

 

(323,683

)

Total intangible assets, net

 

$

501,574

 

 

$

476,106

 

 

 

(1)

During the three months ended September 30, 2021, the Company removed $26.8 million in fully amortized intangible assets.
Schedule of Estimated Annual Amortization Expense

Amortization expense for the three months ended September 30, 2021 and 2020 was $17.6 million and $16.1 million, respectively. The estimated annual amortization expense as of September 30, 2021 was as follows (in thousands):

 

Fiscal year ending June 30,

 

Amount

 

2022 (remainder of year)

 

$

53,442

 

2023

 

 

69,062

 

2024

 

 

62,060

 

2025

 

 

54,886

 

2026

 

 

47,083

 

2027 and thereafter

 

 

215,041

 

 

 

$

501,574

 

 
v3.21.2
Goodwill (Tables)
 3 Months Ended
Sep. 30, 2021
Goodwill And Intangible Assets Disclosure [Abstract]  
Roll Forward of Goodwill

The changes in the carrying amount of goodwill for the three months ended September 30, 2021 are as follows (in thousands):

 

 

 

Domestic

 

 

International

 

 

Total

 

Balance at June 30, 2021

 

$

3,491,747

 

 

$

140,831

 

 

$

3,632,578

 

Goodwill acquired (1)

 

 

79,690

 

 

 

—

 

 

 

79,690

 

Foreign currency translation

 

 

(739

)

 

 

(3,810

)

 

 

(4,549

)

Balance at September 30, 2021

 

$

3,570,698

 

 

$

137,021

 

 

$

3,707,719

 

 

 

(1)

Includes goodwill initially allocated to new business combinations as well as measurement period adjustments, when applicable.
v3.21.2
Revenues from Contracts with Customers (Tables)
 3 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Schedule of Disaggregated Revenues

Disaggregated revenues by contract type were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Cost-plus-fee

 

$

893,713

 

 

$

—

 

 

$

893,713

 

 

$

823,609

 

 

$

—

 

 

$

823,609

 

Fixed-price

 

 

374,474

 

 

 

33,231

 

 

 

407,705

 

 

 

409,584

 

 

 

24,230

 

 

 

433,814

 

Time-and-materials

 

 

175,535

 

 

 

13,945

 

 

 

189,480

 

 

 

184,994

 

 

 

17,089

 

 

 

202,083

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Disaggregated revenues by customer type were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Department of Defense

 

$

1,000,127

 

 

$

—

 

 

$

1,000,127

 

 

$

1,004,195

 

 

$

—

 

 

$

1,004,195

 

Federal Civilian agencies

 

 

413,664

 

 

 

—

 

 

 

413,664

 

 

 

390,179

 

 

 

—

 

 

 

390,179

 

Commercial and other

 

 

29,931

 

 

 

47,176

 

 

 

77,107

 

 

 

23,813

 

 

 

41,319

 

 

 

65,132

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Disaggregated revenues by prime vs. subcontractor were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Prime contractor

 

$

1,298,653

 

 

$

42,906

 

 

$

1,341,559

 

 

$

1,288,705

 

 

$

38,133

 

 

$

1,326,838

 

Subcontractor

 

 

145,069

 

 

 

4,270

 

 

 

149,339

 

 

 

129,482

 

 

 

3,186

 

 

 

132,668

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

 

Disaggregated revenues by expertise or technology were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Expertise

 

$

683,624

 

 

$

19,422

 

 

$

703,046

 

 

$

723,197

 

 

$

17,486

 

 

$

740,683

 

Technology

 

 

760,098

 

 

 

27,754

 

 

 

787,852

 

 

 

694,990

 

 

 

23,833

 

 

 

718,823

 

Total

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

 
v3.21.2
Contract Balances (Tables)
 3 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Contract Assets and Liabilities

Contract balances consisted of the following (in thousands):

 

 

 

 

 

September 30,

 

 

June 30,

 

Description of Contract Related Balance

 

Financial Statement Classification

 

2021

 

 

2021

 

Billed and billable receivables

 

Accounts receivable, net

 

$

676,912

 

 

$

763,921

 

Contract assets – current unbilled receivables

 

Accounts receivable, net

 

 

98,022

 

 

 

115,930

 

Contract assets – current costs to obtain

 

Prepaid expenses and other current assets

 

 

4,411

 

 

 

4,144

 

Contract assets – noncurrent unbilled receivables

 

Accounts receivable, long-term

 

 

11,540

 

 

 

12,159

 

Contract assets – noncurrent costs to obtain

 

Other long-term assets

 

 

10,927

 

 

 

9,584

 

Contract liabilities – current deferred

   revenue and other contract liabilities

 

Other accrued expenses and current liabilities

 

 

(80,551

)

 

 

(70,907

)

Contract liabilities – noncurrent deferred

   revenue and other contract liabilities

 

Other long-term liabilities

 

 

(7,015

)

 

 

(6,837

)

 
v3.21.2
Inventories (Tables)
 3 Months Ended
Sep. 30, 2021
Inventory Disclosure [Abstract]  
Components of Inventories

Inventories consisted of the following (in thousands):

 

 

 

 

September 30,

 

 

June 30,

 

 

 

 

2021

 

 

2021

 

Materials, purchased parts and supplies

 

 

$

57,047

 

 

$

52,615

 

Work in process

 

 

 

15,439

 

 

 

11,353

 

Finished goods

 

 

 

14,102

 

 

 

15,728

 

Total

 

 

$

86,588

 

 

$

79,696

 

 
v3.21.2
Sales of Receivables (Tables)
 3 Months Ended
Sep. 30, 2021
Transfers And Servicing Of Financial Assets [Abstract]  
Summary of MARPA Activity

MARPA activity consisted of the following (in thousands):

 

 

 

As of and for the Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Beginning balance:

 

$

182,027

 

 

$

200,000

 

Sales of receivables

 

 

690,132

 

 

 

626,603

 

Cash collections

 

 

(678,643

)

 

 

(642,398

)

Outstanding balance sold to Purchaser: (1)

 

 

193,516

 

 

 

184,205

 

Cash collected, not remitted to Purchaser (2)

 

 

(51,034

)

 

 

(79,804

)

Remaining sold receivables

 

$

142,482

 

 

$

104,401

 

 

 

(1)

For the three months ended September 30, 2021 and 2020, the Company recorded a net cash inflow of $11.5 million and a net cash outflow of $15.8 million in its cash flows from operating activities, respectively, from sold receivables.  MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year.

 

(2)

Includes the cash collected on behalf of but not yet remitted to the Purchaser as of September 30, 2021 and 2020.  This balance is included in other accrued expenses and current liabilities as of the balance sheet date.
v3.21.2
Long-term Debt (Tables)
 3 Months Ended
Sep. 30, 2021
Long Term Debt [Abstract]  
Schedule of Long-term Debt

Long-term debt consisted of the following (in thousands):

 

 

 

September 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

Bank credit facility – term loans

 

$

785,905

 

 

$

797,635

 

Bank credit facility – revolver loans

 

 

915,000

 

 

 

945,000

 

Principal amount of long-term debt

 

 

1,700,905

 

 

 

1,742,635

 

Less unamortized discounts and debt issuance costs

 

 

(6,220

)

 

 

(6,796

)

Total long-term debt

 

 

1,694,685

 

 

 

1,735,839

 

Less current portion

 

 

(46,920

)

 

 

(46,920

)

Long-term debt, net of current portion

 

$

1,647,765

 

 

$

1,688,919

 

 
Aggregate Maturities of Long-term Debt

The aggregate maturities of long-term debt at September 30, 2021 were as follows (in thousands):

 

Twelve months ending September 30,

 

 

 

 

2022

 

$

46,920

 

2023

 

 

46,920

 

2024

 

 

1,607,065

 

Principal amount of long-term debt

 

 

1,700,905

 

Less unamortized discounts and debt issuance costs

 

 

(6,220

)

Total long-term debt

 

$

1,694,685

 

 
Cash Flow Hedges

The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three months ended September 30, 2021 and 2020 is as follows (in thousands):

 

 

 

Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Loss recognized in other comprehensive income

 

$

(1,008

)

 

$

(1,280

)

Amounts reclassified to earnings from accumulated other comprehensive loss

 

 

3,222

 

 

 

3,532

 

Net current period other comprehensive income

 

$

2,214

 

 

$

2,252

 

 
v3.21.2
Earnings Per Share (Tables)
 3 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Calculation of basic and diluted earnings per share

Earnings per share and the weighted-average number of diluted shares are computed as follows (in thousands, except per share data):

 

 

 

Three Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Net income

 

$

88,109

 

 

$

93,644

 

Weighted-average number of basic shares outstanding during the period

 

 

23,560

 

 

 

25,099

 

Dilutive effect of RSUs after application of treasury stock method

 

 

284

 

 

 

387

 

Weighted-average number of diluted shares outstanding during the period

 

 

23,844

 

 

 

25,486

 

Basic earnings per share

 

$

3.74

 

 

$

3.73

 

Diluted earnings per share

 

$

3.70

 

 

$

3.67

 

 
v3.21.2
Business Segment Information (Tables)
 3 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Summarized Financial Information of Reportable Segments Summarized financial information for the Company’s reportable segments is as follows (in thousands):

 

 

 

Domestic

Operations

 

 

International

Operations

 

 

Total

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,443,722

 

 

$

47,176

 

 

$

1,490,898

 

Net income

 

 

81,697

 

 

 

6,412

 

 

 

88,109

 

Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,418,187

 

 

$

41,319

 

 

$

1,459,506

 

Net income

 

 

88,137

 

 

 

5,507

 

 

 

93,644

 

 
v3.21.2
Fair Value of Financial Instruments (Tables)
 3 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and June 30, 2021, and the level they fall within the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

September 30,

 

 

June 30,

 

 

 

Financial Statement

 

Fair Value

 

2021

 

 

2021

 

Description of Financial Instrument

 

Classification

 

Hierarchy

 

Fair Value

 

Interest rate swap agreements

 

Other accrued expenses and

   current liabilities

 

Level 2

 

$

530

 

 

$

1,028

 

Interest rate swap agreements

 

Other long-term liabilities

 

Level 2

 

$

22,332

 

 

$

24,838

 

 
v3.21.2
Acquisitions (Detail Textual)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
USD ($)
Acquisition
Jun. 30, 2021
USD ($)
Business Acquisition [Line Items]    
Goodwill $ 3,707,719 $ 3,632,578
Other Acquisitions    
Business Acquisition [Line Items]    
Purchase consideration $ 120,300  
Number of acquisitions | Acquisition 2  
Goodwill $ 79,700  
Identifiable intangible assets 43,500  
Amount of tax deductible goodwill and intangibles $ 44,000  
v3.21.2
Intangible Assets - Schedule of Intangible Assets Net (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
 [1]
Jun. 30, 2021
Finite Lived Intangible Assets [Line Items]    
Intangible assets $ 815,785 $ 799,789
Less accumulated amortization (314,211) (323,683)
Total intangible assets, net 501,574 476,106
Customer contracts and related customer relationships    
Finite Lived Intangible Assets [Line Items]    
Intangible assets 598,074 601,516
Less accumulated amortization (259,607) (276,498)
Acquired technologies    
Finite Lived Intangible Assets [Line Items]    
Intangible assets 217,711 198,273
Less accumulated amortization $ (54,604) $ (47,185)
[1]

During the three months ended September 30, 2021, the Company removed $26.8 million in fully amortized intangible assets.
v3.21.2
Intangible Assets - Schedule of Intangible Assets Net (Parenthetical) (Detail)
$ in Millions
 3 Months Ended
Sep. 30, 2021
USD ($)
Finite Lived Intangible Assets Net [Abstract]  
Removal of fully amortized intangible assets $ 26.8
v3.21.2
Intangible Assets (Detail Textual) - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Finite Lived Intangible Assets [Line Items]    
Amortization expense $ 17.6 $ 16.1
Minimum    
Finite Lived Intangible Assets [Line Items]    
Intangible asset amortization period 1 year  
Maximum    
Finite Lived Intangible Assets [Line Items]    
Intangible asset amortization period 20 years  
Customer contracts and related customer relationships    
Finite Lived Intangible Assets [Line Items]    
Weighted-average amortization period 17 years 10 months 24 days  
Weighted-average remaining amortization period 10 years 1 month 6 days  
Acquired technologies    
Finite Lived Intangible Assets [Line Items]    
Weighted-average amortization period 14 years 4 months 24 days  
Weighted-average remaining amortization period 8 years 4 months 24 days  
v3.21.2
Intangible Assets - Schedule of Estimated Annual Amortization Expense (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Finite Lived Intangible Assets Net [Abstract]    
2022 (remainder of year) $ 53,442  
2023 69,062  
2024 62,060  
2025 54,886  
2026 47,083  
2027 and thereafter 215,041  
Total intangible assets, net $ 501,574 [1] $ 476,106
[1]

During the three months ended September 30, 2021, the Company removed $26.8 million in fully amortized intangible assets.
v3.21.2
Goodwill - Roll Forward of Goodwill (Detail)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
USD ($)
Goodwill [Roll Forward]  
Balance $ 3,632,578
Goodwill acquired 79,690 [1]
Foreign currency translation (4,549)
Balance 3,707,719
Domestic  
Goodwill [Roll Forward]  
Balance 3,491,747
Goodwill acquired 79,690 [1]
Foreign currency translation (739)
Balance 3,570,698
International  
Goodwill [Roll Forward]  
Balance 140,831
Foreign currency translation (3,810)
Balance $ 137,021
[1] Includes goodwill initially allocated to new business combinations as well as measurement period adjustments, when applicable.
v3.21.2
Revenues from Contracts with Customers - Disaggregation of Revenue (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Disaggregation Of Revenue [Line Items]    
Revenues $ 1,490,898 $ 1,459,506
Expertise    
Disaggregation Of Revenue [Line Items]    
Revenues 703,046 740,683
Technology    
Disaggregation Of Revenue [Line Items]    
Revenues 787,852 718,823
Prime contractor    
Disaggregation Of Revenue [Line Items]    
Revenues 1,341,559 1,326,838
Subcontractor    
Disaggregation Of Revenue [Line Items]    
Revenues 149,339 132,668
Department of Defense    
Disaggregation Of Revenue [Line Items]    
Revenues 1,000,127 1,004,195
Federal civilian agencies    
Disaggregation Of Revenue [Line Items]    
Revenues 413,664 390,179
Commercial and other    
Disaggregation Of Revenue [Line Items]    
Revenues 77,107 65,132
Cost-plus-fee    
Disaggregation Of Revenue [Line Items]    
Revenues 893,713 823,609
Fixed-price    
Disaggregation Of Revenue [Line Items]    
Revenues 407,705 433,814
Time and materials    
Disaggregation Of Revenue [Line Items]    
Revenues 189,480 202,083
Domestic    
Disaggregation Of Revenue [Line Items]    
Revenues 1,443,722 1,418,187
Domestic | Expertise    
Disaggregation Of Revenue [Line Items]    
Revenues 683,624 723,197
Domestic | Technology    
Disaggregation Of Revenue [Line Items]    
Revenues 760,098 694,990
Domestic | Prime contractor    
Disaggregation Of Revenue [Line Items]    
Revenues 1,298,653 1,288,705
Domestic | Subcontractor    
Disaggregation Of Revenue [Line Items]    
Revenues 145,069 129,482
Domestic | Department of Defense    
Disaggregation Of Revenue [Line Items]    
Revenues 1,000,127 1,004,195
Domestic | Federal civilian agencies    
Disaggregation Of Revenue [Line Items]    
Revenues 413,664 390,179
Domestic | Commercial and other    
Disaggregation Of Revenue [Line Items]    
Revenues 29,931 23,813
Domestic | Cost-plus-fee    
Disaggregation Of Revenue [Line Items]    
Revenues 893,713 823,609
Domestic | Fixed-price    
Disaggregation Of Revenue [Line Items]    
Revenues 374,474 409,584
Domestic | Time and materials    
Disaggregation Of Revenue [Line Items]    
Revenues 175,535 184,994
International    
Disaggregation Of Revenue [Line Items]    
Revenues 47,176 41,319
International | Expertise    
Disaggregation Of Revenue [Line Items]    
Revenues 19,422 17,486
International | Technology    
Disaggregation Of Revenue [Line Items]    
Revenues 27,754 23,833
International | Prime contractor    
Disaggregation Of Revenue [Line Items]    
Revenues 42,906 38,133
International | Subcontractor    
Disaggregation Of Revenue [Line Items]    
Revenues 4,270 3,186
International | Commercial and other    
Disaggregation Of Revenue [Line Items]    
Revenues 47,176 41,319
International | Fixed-price    
Disaggregation Of Revenue [Line Items]    
Revenues 33,231 24,230
International | Time and materials    
Disaggregation Of Revenue [Line Items]    
Revenues $ 13,945 $ 17,089
v3.21.2
Revenues from Contracts with Customers (Detail Textual) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Change In Accounting Estimate [Line Items]    
Income before income taxes $ 116,631 $ 124,444
Diluted earnings per share $ 3.70 $ 3.67
EAC Adjustments    
Change In Accounting Estimate [Line Items]    
Income before income taxes $ 2,800 $ 7,800
Diluted earnings per share $ 0.09 $ 0.22
v3.21.2
Revenues from Contracts with Customers - Remaining Performance Obligations (Detail)
$ in Billions
Sep. 30, 2021
USD ($)
Revenue From Contract With Customer [Abstract]  
Remaining performance obligations $ 7.5
v3.21.2
Revenues from Contracts with Customers - Remaining Performance Obligations (Detail 1)
Sep. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-10-01  
Remaining Performance Obligations [Line Items]  
Remaining performance obligations, expected satisfaction, percentage 80.00%
Remaining performance obligations, expected timing of satisfaction 12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01  
Remaining Performance Obligations [Line Items]  
Remaining performance obligations, expected satisfaction, percentage 20.00%
Remaining performance obligations, expected timing of satisfaction
v3.21.2
Contract Balances - Contract Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Contract with Customer, Asset and Liability [Abstract]    
Billed and billable receivables $ 676,912 $ 763,921
Contract assets – current unbilled receivables 98,022 115,930
Contract assets – current costs to obtain 4,411 4,144
Contract assets – noncurrent unbilled receivables 11,540 12,159
Contract assets – noncurrent costs to obtain 10,927 9,584
Contract liabilities – current deferred revenue and other contract liabilities (80,551) (70,907)
Contract liabilities – noncurrent deferred revenue and other contract liabilities $ (7,015) $ (6,837)
v3.21.2
Contract Balances (Detail Textual) - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Revenue From Contract With Customer [Abstract]    
Liability, revenue recognized $ 54.7 $ 33.5
v3.21.2
Inventories - Components of Inventories (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Inventory Disclosure [Abstract]    
Materials, purchased parts and supplies $ 57,047 $ 52,615
Work in process 15,439 11,353
Finished goods 14,102 15,728
Total $ 86,588 $ 79,696
v3.21.2
Sales of Receivables (Detail Textual)
$ in Millions
Dec. 24, 2020
USD ($)
MARPA  
MARPA maturity date Dec. 23, 2021
MARPA maximum commitment $ 200.0
v3.21.2
Sales of Receivables - Summary of MARPA Activity (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
Sep. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Transfers And Servicing Of Financial Assets [Abstract]        
Outstanding balance sold to Purchaser $ 193,516 [1] $ 184,205 [1] $ 182,027 $ 200,000
Sales of receivables 690,132 626,603    
Cash collections (678,643) (642,398)    
Cash collected, not remitted to Purchaser [2] (51,034) (79,804)    
Remaining sold receivables $ 142,482 $ 104,401    
[1] For the three months ended September 30, 2021 and 2020, the Company recorded a net cash inflow of $11.5 million and a net cash outflow of $15.8 million in its cash flows from operating activities, respectively, from sold receivables.  MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year.
[2] Includes the cash collected on behalf of but not yet remitted to the Purchaser as of September 30, 2021 and 2020.  This balance is included in other accrued expenses and current liabilities as of the balance sheet date.
v3.21.2
Sales of Receivables - Summary of MARPA Activity (Parentheticals) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Transfers And Servicing Of Financial Assets [Abstract]    
Cash provided (used) by MARPA $ 11.5 $ (15.8)
v3.21.2
Long-term Debt - Schedule of Long-term Debt (Detail) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Debt Instrument [Line Items]    
Principal amount of long-term debt $ 1,700,905 $ 1,742,635
Less unamortized discounts and debt issuance costs (6,220) (6,796)
Total long-term debt 1,694,685 1,735,839
Less current portion (46,920) (46,920)
Long-term debt, net of current portion 1,647,765 1,688,919
Bank credit facility - term loans    
Debt Instrument [Line Items]    
Principal amount of long-term debt 785,905 797,635
Bank credit facility - revolver loans    
Debt Instrument [Line Items]    
Principal amount of long-term debt $ 915,000 $ 945,000
v3.21.2
Long-term Debt (Detail Textual) - USD ($)
 3 Months Ended
Sep. 30, 2021
Jun. 30, 2021
Debt Instrument [Line Items]    
Outstanding amount under Credit Facility $ 1,700,905,000 $ 1,742,635,000
Interest Rate Swap | Cash Flow Hedging    
Debt Instrument [Line Items]    
Aggregate notional amount 650,000,000.0  
Bank Credit Facility    
Debt Instrument [Line Items]    
Credit facility maximum borrowing capacity $ 2,438,400,000  
Outstanding borrowings interest rate 2.16%  
Revolving Credit Facility    
Debt Instrument [Line Items]    
Credit facility maximum borrowing capacity $ 1,500,000,000.0  
Outstanding amount under Credit Facility 915,000,000 945,000,000
Term loans    
Debt Instrument [Line Items]    
Credit facility maximum borrowing capacity 938,400,000  
Outstanding amount under Credit Facility $ 785,905,000 $ 797,635,000
Term loan period 5 years  
Loan maturity date Jun. 30, 2024  
Term loan frequency of payment quarterly  
Term loan principal payment $ 11,700,000  
Same-Day Swing Line Loan Revolving Credit Sub-Facility    
Debt Instrument [Line Items]    
Credit facility maximum borrowing capacity 100,000,000.0  
Outstanding amount under Credit Facility 0  
Stand-By Letters Of Credit Revolving Credit Sub-Facility    
Debt Instrument [Line Items]    
Credit facility maximum borrowing capacity $ 25,000,000.0  
v3.21.2
Long-term Debt - Aggregate Maturities of Long-Term Debt (Detail 2) - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Long Term Debt [Abstract]    
2022 $ 46,920  
2023 46,920  
2024 1,607,065  
Principal amount of long-term debt 1,700,905 $ 1,742,635
Less unamortized discounts and debt issuance costs (6,220) (6,796)
Total long-term debt $ 1,694,685 $ 1,735,839
v3.21.2
Long-term Debt - Cash Flow Hedges (Detail 3) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Long Term Debt [Abstract]    
Loss recognized in other comprehensive income $ (1,008) $ (1,280)
Amounts reclassified to earnings from accumulated other comprehensive loss 3,222 3,532
Net current period other comprehensive income $ 2,214 $ 2,252
v3.21.2
Earnings Per Share - Calculation of Basic and Diluted Earnings per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Earnings Per Share [Abstract]    
Net income $ 88,109 $ 93,644
Weighted-average number of basic shares outstanding during the period 23,560 25,099
Dilutive effect of RSUs after application of treasury stock method 284 387
Weighted-average number of diluted shares outstanding during the period 23,844 25,486
Basic earnings per share $ 3.74 $ 3.73
Diluted earnings per share $ 3.70 $ 3.67
v3.21.2
Income Taxes (Detail Textual) - USD ($)
$ in Millions
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Jun. 30, 2021
Income Tax Disclosure [Abstract]      
Liability for unrecognized tax benefits $ 32.9   $ 31.5
Unrecognized tax benefit that would impact the company's effective tax rate $ 32.9    
Effective income tax rate 24.50% 24.80%  
v3.21.2
Business Segment Information (Detail Textual)
 3 Months Ended
Sep. 30, 2021
Segment
Segment Reporting [Abstract]  
Number of reportable segments 2
v3.21.2
Business Segment Information - Summarized Financial Information of Reportable Segments (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Segment Reporting Information [Line Items]    
Revenues from external customers $ 1,490,898 $ 1,459,506
Net income 88,109 93,644
Domestic Operations    
Segment Reporting Information [Line Items]    
Revenues from external customers 1,443,722 1,418,187
Net income 81,697 88,137
International Operations    
Segment Reporting Information [Line Items]    
Revenues from external customers 47,176 41,319
Net income $ 6,412 $ 5,507
v3.21.2
Fair Value of Financial Instruments - Recurring Fair Value Measurements (Detail) - Fair Value, Measurements, Recurring - Level 2 - Interest Rate Swap - USD ($)
$ in Thousands
Sep. 30, 2021
Jun. 30, 2021
Other accrued expenses and current liabilities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap agreements $ 530 $ 1,028
Other long-term liabilities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap agreements $ 22,332 $ 24,838
v3.21.2
Accelerated Share Repurchase (Detail Textual) - USD ($)
$ / shares in Units, $ in Thousands, shares in Millions
 3 Months Ended
Mar. 12, 2021
Sep. 30, 2021
Sep. 30, 2020
Accelerated Share Repurchases [Line Items]      
Payment for repurchase of common stock   $ 2,472 $ 2,074
Accelerated Share Repurchase      
Accelerated Share Repurchases [Line Items]      
Payment for repurchase of common stock $ 500,000    
Shares repurchased 1.7 0.3  
Total shares repurchased   2.0  
Shares repurchased, average price per share   $ 253.47