CACI International (CACI) 10-Q 2000 Q3 Quarterly report

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 2000

Commission File Number 0-8401

CACI International Inc
(Exact name of registrant as
specified in its charter)

                 Delaware                
(State or other jurisdiction of
incorporation or organization)

                    54-1345888                    
(I.R.S. Employer Identification No.)

1100 North Glebe Road, Arlington, VA 22201
(Address of principal executive offices)

                (703) 841-7800                
(Registrant's telephone number,
including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	None

Securities registered pursuant to Section 12(g) of the Act:

CACI International Inc Common Stock, $0.10 par value
(Title of each class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X     No        .

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of March 31, 2000: CACI International Inc Common Stock, $0.10 par value, 11,447,307 shares.

CACI INTERNATIONAL INC AND SUBSIDIARIES

PART I:   FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2000 and 1999
	Unaudited Condensed Consolidated Statements of Operations for the Nine Months Ended March 31, 2000 and 1999
	Condensed Consolidated Balance Sheets as of March 31, 2000 (Unaudited) and June 30, 1999
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2000 and 1999
	Unaudited Consolidated Financial Statements of Comprehensive Income for the Three and Nine Months Ended March 31, 2000 and 1999
	Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
PART II:  OTHER INFORMATION
Item 1.	Legal Proceedings
Item 5.	Forward Looking Statements
Item 6.	Exhibits and Reports on Form 8-K
SIGNATURES
INDEX TO EXHIBITS

PART 1

FINANCIAL INFORMATION

Item 1.  Financial Statements

CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)

		Three Months Ended March 31,
		2000		1999
Revenues		$	122,112	$	117,766
Costs and expenses
	Direct costs		70,751		70,096
	Indirect costs and selling expenses		40,572		37,526
	Depreciation and amortization		2,066		1,894
	Goodwill amortization		938		915
	Total operating expenses		114,327		110,431
Operating income			7,785		7.335
Interest expense			539		1,160
Income before income taxes			7,246		6,175
Income taxes			2,827		2,465
Income from continuing operations			4,419		3,710
Discontinued operations
	Loss from operations of discontinued COMNET products business (less applicable income tax benefit of $0 and $87, respectively)		-		(137	)
Net income		$	4,419	$	3,573
Basic earnings per share
Income from continuing operations		$	0.39	$	0.34
Loss from discontinued operations of COMNET products business			-		(0.01	)
Net Income			0.39		0.33
Average shares outstanding			11,428		10,892
Diluted earnings per share
Income from continuing operations		$	0.38	$	0.33
Loss from discontinued operations of COMNET products business			-		(0.01	)
Net Income		$	0.38	$	0.32
Average shares and equivalent shares outstanding			11,693		11,211

See notes to condensed consolidated financial statements (unaudited).

CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)

		Nine Months Ended March 31,
		2000			1999
Revenues		$	361,871		$	309,470
Costs and expenses
	Direct costs		212,008			179,809
	Indirect costs and selling expenses		117,651			102,353
	Depreciation and amortization		5,806			5,403
	Goodwill amortization		2,767			2,309
	Total operating expenses		338,232			289,874
Operating income			23,639			19,596
Interest expense			2,695			2,628
Income before income taxes			20,944			16,968
Income taxes			8,170			6,510
Income from continuing operations			12,774			10,458
Discontinued operations
	Loss from operations of discontinued COMNET products business (less applicable income tax benefit of $280 and $246, respectively)		(320	)		(384	)
	Gain on disposal of COMNET products business including provision of $118 for operating losses during phase-out period (less applicable income taxes of $13,512)		21,134			-
Net income		$	33,588		$	10,074
Basic earnings per share
Income from continuing operations		$	1.14		$	0.96
Loss from discontinued operations of COMNET products business			(0.03	)		(0.04	)
Gain on disposal of COMNET product business			1.88			-
Net income		$	2.99		$	0.93
Average shares outstanding			11,242			10,875
Diluted earnings per share
Income from continuing operations		$	1.11		$	0.93
Loss from discontinued operations of COMNET products business			(0.03	)		(0.03	)
Gain on disposal of COMNET products business			1.83			-
Net income		$	2.91		$	0.90
Average shares and equivalent shares outstanding			11,530			11,203

See notes to condensed consolidated financial statements (unaudited).

CACI INTERNATIONAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)

			March 31, 2000 (Unaudited)			June 30, 1999
ASSETS
Current assets
	Cash and equivalents		$	14,402		$	2,403
	Accounts receivable:
		Billed		110,285			99,681
		Unbilled		8,762			12,264
	Total accounts receivable			119,047			111,945
	Income taxes receivable			-			948
	Deferred income taxes			-			198
	Deferred contracts costs			1,556			1,543
	Prepaid expenses and other			4,121			5,437
Total current assets				139,126			122,474
Property and equipment, net				16,226			13,762
Accounts receivable, long term				7,381			7,036
Goodwill				67,461			67,767
Other assets				10,270			6,266
Deferred contract costs, long-term				344			989
Deferred income taxes				3,899			3,418
Total assets			$	244,707		$	221,712
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued expenses		$	28,085		$	32,851
	Accrued compensation and benefits			20,116			21,034
	Income taxes payable			3,526			-
	Deferred income taxes			5,612			1,593
Total current liabilities				57,339			55,748
Note payable, long-term				44,467			62,069
Deferred rent expenses				771			720
Deferred income taxes				131			138
Other long-term obligations				3,832			4,100
Shareholders' equity
	Common stock - $.10 par value, 40,000,000 shares authorized, 14,995,000 and 14,499,000 shares issued			1,500			1,450
	Capital in excess of par			19,518			13,932
	Retained earnings			132,173			98,585
	Cumulative currency translation adjustments			(1,362	)		(1,368	)
	Treasury stock, at cost (3,526,000 shares)			(13,662	)		(13,662	)
Total shareholders' equity				138,167			98,937
Total liabilities & shareholders' equity			$	244,707		$	221,712

See notes to condensed consolidated financial statements (unaudited)

CACI INTERNATIONAL INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)

		Nine Months Ended March 31,
		2000			1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	33,588		$	10,074
Reconciliation of net income to net cash provided by (used in) operating activities
	Depreciation and amortization		8,573			7,928
	Provision for deferred income taxes		3,537			(72	)
	Loss (gain) on sale of property and equipment		-			30
	Gain from sale of COMNET product division		(21,252	)		-
Changes in operating assets and liabilities
	Accounts receivable		(7,199	)		(7,250	)
	Prepaid expenses and other assets		586			(774	)
	Deferred contract costs		632			401
	Accounts payable and accrued expenses		(5,151	)		667
	Accrued compensation and benefits		(3,614	)		1,452
	Other long-term obligations		(268	)		(439	)
	Deferred rent expense		230			(386	)
	Income taxes payable		(9,194	)		(2,686	)
	Net cash provided by operating activities		468			8,945
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment			(7,647	)		(5,265	)
Purchase of businesses			(3,996	)		(44,291	)
Proceeds from the sale of business			37,000			-
Proceeds from the sale of property and equipment			-			9
Capitalized software cost and other			(1,755	)		(491	)
Net cash provided by (used in) investing activities			23,602			(50,038	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds under line-of-credit			138,103			158,379
Payments under line-of-credit			(155,705	)		(119,179	)
Proceeds from stock options			6,454			774
Payment for exercise of reload options			(819	)		-
Net cash (used in) provided by financing activities			(11,967	)		39,974
Effect of changes in currency rates on cash and equivalents			(104	)		(26	)
Net increase (decrease) in cash and equivalents			11,999			(1,145	)
Cash and equivalents, beginning of period			2,403			2,081
Cash and equivalents, end of period		$	14,402		$	936
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for income taxes, net		$	12,532		$	8,783
Interest paid during the period		$	2,878		$	2,172

See notes to condensed consolidated financial statements (unaudited).

CACI INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(dollars in thousands)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2000			1999			2000		1999
Net income	$	4,419		$	3,573		$	33,588	$	10,074
Currency translation adjustment		(318	)		(660	)		6		(775	)
Comprehensive income	$	4,101		$	2,913		$	33,594	$	9,299

CACI INTERNATIONAL INC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A.     Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements, prepared in accordance with generally accepted accounting principles, 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.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all necessary adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for fair presentation for the periods presented. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in the Company's latest annual report to the Securities and Exchange Commission on Form 10-K for the year ended June 30, 1999.

Certain reclassifications have been made to the prior period's financial statements to conform to the current presentation (See also Note C).

B.     Accounts Receivable

Total accounts receivable are net of allowance for doubtful accounts of $2,153,000 and $3,050,000 at March 31, 2000 and June 30, 1999, respectively. Accounts receivable are classified as follows:

(dollars in thousands)		March 31, 2000		June 30, 1999
Billed receivables
	Billed receivables	$	96,823	$	88,918
	Billable receivables at end of period		13,462		10,763
	Total billed receivables		110,285		99,681
Unbilled receivables
	Unbilled pending receipt of contractual documents authorizing billing		8,713		12,172
	Unbilled retainages and fee withholds expected to be billed within the next 12 months		49		92
			8,762		12,264
	Unbilled retainages and fee withholds expected to be billed beyond the next 12 months		7,381		7,036
	Total unbilled receivables		16,143		19,300
Total accounts receivable		$	126,428	$	118,981

C.     Discontinued Operations

On November 2, 1999, the Company executed a letter of intent to sell its COMNET products business to Compuware Corporation. On December 15, 1999, the Company completed the sale of the net assets of the COMNET products business for $37 million in cash and $3 million in escrow to be received one year from the settlement date. This resulted in a net after tax gain for the Company of $21.1 million. Included in the gain was a net after tax loss from discontinued operations of $118 thousand for the period from November 3, 1999 to December 15, 1999. The consolidated statements of operations for prior periods have been restated for consistent presentation of discontinued operations.

D.     Acquisitions

On February 1, 2000, the Company completed its acquisition of all the common stock of XEN Corporation ("XEN") for $7.89 per share in cash. The total purchase price was $4,258,500. XEN specializes in providing quality systems engineering, engineering design, distance learning, training development, multimedia support, electronic commerce, and data security services to national intelligence organizations, the Department of Defense, and the U.S. Navy. The transaction was funded through borrowings under the Company's existing line of credit with a group of banks. XEN, which has approximately 70 employees, is operated as a wholly-owned subsidiary of CACI Technologies, Inc., a wholly-owned subsidiary of the Registrant. The operations of the new subsidiary will be fully integrated into the Company to achieve the full benefit of the merger for customers and shareholders. XEN's revenues for its fiscal year ended September 30, 1999 were $8.5 million. The transaction has been recorded using the purchase method of accounting. Approximately $2.5 million of the purchase consideration has been allocated to goodwill based upon the excess of the purchase price over the estimated fair value of net assets acquired, and will be amortized over 15 years. The primary purchase price allocation may change during the year ending June 30, 2000, as additional information concerning the net asset valuation is obtained. XEN contributed $1.4 million of revenue for the period from February 1, 2000 to March 31, 2000.

On September 24, 1999, the Company purchased the assets of MapData Online International Ltd and Digital MapData Online Ltd. (collectively, "MapData") for $0.6 million in cash and, therefore, the transaction has been recorded using purchase accounting standards. MapData provided demographic software which, when bundled with existing products offered by the Company's Marketing System Group ("MSG"), will enhance MSG's capabilities in the U.S. market. The purchase price has been allocated based upon the fair value of the assets acquired. No goodwill has been recognized in connection with transaction.

E.     Business Segment Information

The Company reports financial data in two segments: Information Systems Group ("ISG") and Marketing Systems Group ("MSG"). Operating results for the segments are as follows:

(dollars in thousands)		ISG		MSG		Other			Total
Quarter Ended March 31, 2000
	Revenue from external customers	$	110,865	$	11,247	$	-		$	122,112
	Pre-tax income (loss) from continuing operations		6,964		1,166		(884	)		7,246
Quarter Ended March 31, 1999
	Revenue from external customers	$	106,909	$	10,857	$	-		$	117,766
	Pre-tax income (loss) from continuing operations		5,872		998		(695	)		6,175
Nine Months Ended March 31, 2000
	Revenue from external customers	$	327,872	$	33,999	$	-		$	361,871
	Pre-tax income (loss) from continuing operations		19,811		3,629		(2,496	)		20,944
Nine Months Ended March 31, 1999
	Revenue from external customers	$	276,913	$	32,557	$	-		$	309,470
	Pre-tax income (loss) from continuing operations		16,189		2,816		(2,037	)		16,968
The "Other" column represents the elimination of intersegment revenue and corporate related items.

F.     Commitments and Contingencies

The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business. Management is of the opinion that any liability or loss associated with such matters will not have a material adverse effect on the Company's operations and liquidity.

G.     Subsequent Event

On April 1, 2000 the Company purchased substantially all of the assets of Century Technologies, Incorporated (CENTECH). The total purchase price was $7,668,000.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations For the Three and Nine Months Ended March 31, 2000 and 1999.

Revenues.    The table below sets forth the customer mix in revenues with related percentages of total revenues for the three and nine months ended on March 31, 2000 (FY00) and March 31, 1999 (FY99), respectively:

(dollars in thousands)	Third Quarter						First Nine Months
	FY00			FY99			FY00			FY99
Department of Defense	$	61,105	50.0%	$	61,745	52.4%	$	183,694	50.8%	$	152,167	49.2%
Federal Civilian Agencies		37,725	30.9%		34,357	29.2%		101,571	28.1%		95,583	30.9%
Commercial		16,244	13.3%		16,174	13.7%		49,097	13.6%		47,387	15.3%
State & Local Governments		7,038	5.8%		5,491	4.7%		27,509	7.5%		14,333	4.6%
Total	$	122,112	100.0%	$	117,767	100.0%	$	361,871	100.0%	$	309,470	100.0%

For the three months and nine months ended March 31, 2000, the Company's total revenue increased by 3.7%, or $4.4 million, and by 16.9%, or $52.4 million, respectively, over the same periods last year. Approximately $2.9 million, or 67.7% of the three month increase, and $19.7 million, or 37.5% of the nine month increase, was achieved through internal growth for the quarter and nine month ended March 31, 2000, respectively, over the same periods a year ago. The remaining increases of $1.5 million for three month and $32.7 million for the nine month of FY00, respectively, as compared to FY99 were primarily the result of the Company acquiring all of the issued and outstanding common stock of XEN Corporation ("XEN") on February 1, 2000 and QuesTech, Inc. ("QuesTech") on November 13, 1998.

Department of Defense revenue remained flat for the quarter and increased 20.7%, or $31.5 million, for the first nine month. The QuesTech acquisition accounted for the majority of the growth for the nine month period.

Revenue from Federal Civilian agencies increased 9.8%, or $3.4 million, and 6.3%, or $6 million, for the quarter and first nine months of FY00 as compared to the same periods a year ago. Approximately 54.6% of Federal Civilian agency revenue is derived from the Department of Justice ("DoJ") in providing litigation support services and in developing an automated debt collection system. Revenue for DoJ was $18.6 million and $55.4 million for the quarter and nine months ended March 31, 2000, as compared to $19.2 million and $52.1 million for the same periods in FY99.

Commercial revenue increased slightly for the quarter and by 3.6%, or $1.7 million, for the first nine months, as compared to the same period a year ago. This was primarily due to unusually slow growth in systems integration task orders as consumers focused on year 2000 issues.

Revenue from state and local governments increased by 28.2%, or $1.5 million, and 91.9%, or $13.2 million, for the quarter and nine months ended March 31, 2000, respectively, over the same periods a year ago. The growth from this area is primarily attributable to higher levels of systems integration work.

The following table sets forth the relative percentage that certain items of expense and earnings bear to revenues for the quarter and nine months ended March 31, 2000 and March 31, 1999, respectively.

		Dollar Amount (in thousands)											Percentage of Revenue
		Third Quarter					Nine Months						Third Quarter			Nine Months
		FY00		FY99			FY00			FY99			FY00	FY99		FY00		FY99
Revenues		$	122,112	$	117,766		$	361,871		$	309,470		100.0%	100.0%		100.0%		100.0%
Costs and expenses:
	Direct costs		70,751		70,096			212,008			179,809		57.9%	59.5%		58.6%		58.1%
	Indirect costs & selling expenses		40,572		37,526			117,651			102,353		33.2%	31.9%		32.5%		33.1%
	Depreciation & amortization		2,066		1,894			5,806			5,403		1.7%	1.6%		1.6%		1.8%
	Goodwill amortization		938		915			2,767			2,309		0.8%	0.8%		0.8%		0.7%
Total operating expenses			114,327		110,431			338,232			289,874		93.6%	93.8%		93.5%		93.7%
Income from operations			7,785		7,335			23,639			19,596		6.4%	6.2%		6.5%		6.3%
Interest expense			539		1,160			2,695			2,628		0.5%	1.0%		0.7%		0.8%
Earnings before income taxes			7,246		6,175			20,944			16,968		5.9%	5.2%		5.8%		5.5%
Income taxes			2,827		2,465			8,170			6,510		2.3%	2.1%		2.3%		2.1%
Income from continuing operations			4,419		3,710			12,774			10,458		3.6%	3.1%		3.5%		3.4%
Discontinued operations
	Loss from operations of discontinued COMNET products business		-		(137	)		(320	)		(384	)	-	(0.1%	)	(0.1%	)	(0.1%	)
	Gain on disposal of COMNET products business		-		-			21,134			-		-	-		5.8%		-
	Net Income	$	4,419	$	3,573		$	33,588		$	10,074		3.6%	3.0%		9.2%		3.3%

Operating Income. Operating income increased 6.1% and 20.6% for the quarter and nine months ended March 31, 2000, as compared to the same periods a year ago. This is due to the 3.7% and 16.9% growth in revenue for the three and nine months of FY00, respectively, along with the Company's continued ability to control its indirect cost and selling expenses.

As percentage of revenue, direct costs remained flat as compared to the same period a year ago. Direct costs include direct labor and other direct costs such as equipment purchases, subcontractor costs and travel expenses. The largest component of direct costs, direct labor, was $37.4 million and $34.2 million for the third quarter of FY00 and FY99, respectively. For the nine months ended March 31, 2000 and 1999, direct labor was respectively, $106.3 million and $91 million. Other direct costs were slightly down in the quarter as compared to the prior year and up 19.1%, or $16.9 million, through the first nine months of FY00 as compared to FY99.

Indirect costs and selling expenses include fringe benefits, marketing, and bid and proposal costs, indirect labor, and other discretionary costs, most of which are highly variable. As a percentage of revenue, indirect costs have remained relatively flat for the quarter and nine months ended for FY00 as compared to FY99.

Depreciation and amortization expense increased by $172 thousand and $403 thousand as compared to last year over the same periods. This growth was primarily due to investments in facility costs.

Goodwill amortization expense has increased slightly in the third quarter and by $458 thousand in the first nine months of FY00 as compared to the same periods a year ago, due primarily to the acquisition of QuesTech in the prior fiscal year.

Interest Expense. Interest expense decreased $621 thousand for the third quarter and increased slightly for the first nine months of FY00 as compared to the same periods in FY99. The decrease for the quarter was due primarily to the pay down of the Company's line of credit from the proceeds on the sale of the COMNET products business. For the first nine months of FY00, average borrowings were $52.2 million versus $55.3 million for the first nine months of FY99. In the third quarter of FY00, average borrowings were $28.5 million as compared to $75.1 million for FY99. This lower borrowings were due primarily from the sale proceeds as mentioned above, along with increased efforts on cash collections.

Income Taxes. The effective income tax rate for both the quarter and nine months ended March 31, 2000 was 39.0% as compared to 39.9% and 38.4% for the quarter and nine months ended March 31, 2000.

Liquidity and Capital Resources

Historically, the Company's positive cash flow from operations and available credit facilities provided adequate liquidity and working capital to fully fund the Company's operational needs and support the acquisition activities. Working capital was $81.7 million and $66.7 million as of March 31, 2000 and June 30, 1999, respectively. The increase in working capital in the first nine months is attributable to the Company drawing down the line of credit at March 31, 2000, which will be used for acquisition purposes (see subsequent events). There were also higher accounts receivables which were generated from increased revenues. Operating activities provided cash in the amount of $468 thousand for the nine months of FY00 as compared to FY99, when operating activities provided cash of $8.9 million. The decrease in cash provided by operating activities is due to $12.5 million of income tax payments in the nine month period of FY00 as compared to $8.8 million of income tax payments in FY99. In addition, the decrease is due to cash payments related to higher other direct costs resulting from the 16.9% growth in revenues for the first nine months of FY00 as compared to FY99.

The Company used the proceeds from the sale of the COMNET product business to pay down its line of credit. In FY99, the Company financed its investing activities from operating cash flows and from a net increase in borrowings of $39.2 million under its line of credit.

The Company generated $23.6 million in cash from investing activities for the nine months ended March 31, 2000 versus using $50 million for the same period a year ago. The cash used in FY99 was primarily due to the acquisitions of QuesTech for $41.6 million and of Information Decision Systems for $2.6 million. The cash generated in FY00 is due to the sale of the COMNET products business for $40 million, of which $3 million is held in escrow, net of the purchase of the XEN Corporation of $4.3 million and purchases of property and equipment of $7.6 million.

The Company maintains a five-year unsecured revolving line of credit which expires on June 19, 2003. The agreement permits borrowings of up to $125 million with annual sublimits on amounts borrowed for acquisitions. The Company also maintains a 500,000 pound sterling unsecured line of credit in London, England, which expires in November 2000. At March 31, 2000, the Company had approximately $81.3 million available for borrowings under its lines of credit.

The Company believes that the combination of internally generated funds, available bank borrowings and cash on hand will provide the required liquidity and capital resources for the foreseeable future.

Year 2000

In its quarterly report to the Securities and Exchange Commission for the quarter ended December 31, 1999, the Company reported that it had achieved material compliance with its multi-dimensional compliance program. To date, the Company has not experienced any significant disruptions in any aspect of its operations. The Company continues to monitor its infrastructure, its products offered, and its critical business partners to ensure continued success. The Company has not incurred any material expenditures in addition to those already reported in its prior filing and does not anticipate any significant future costs related to maintaining its Year 2000 compliance.

PART II

OTHER INFORMATION

Item 1.   Legal Proceedings

CACI, INC.-FEDERAL v. Arizona Department of Transportation

Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's Report on Form 10-Q for the quarter ended December 31, 1999 for the most recently filed information concerning the lawsuit filed on June 25, 1996, by CACI, INC. - FEDERAL ("CACI"), the Registrant's wholly-owned subsidiary, in Superior Court for Maricopa County, Arizona, against the Arizona Department of Transportation ("ADOT"). This suit seeks the following: (i) a declaratory judgment that the disputes procedures mandated by the Arizona Procurement Code is unconstitutional; (ii) a declaratory judgment that ADOT cannot assert claims against CACI under the mandated disputes procedure; (iii) a declaratory judgment that ADOT is not entitled to recover consequential damages in connection with the dispute; (iv) $2,938,990 plus interest in breach of contract damages; (v) the return of CACI's property seized by ADOT in connection with the termination of the contract; and (vi) lawyers' fees. ADOT has counterclaimed, seeking in excess of $100 million in damages allegedly caused by CACI's breach of contract.

Since the filing of Registrant's report indicated above, final settlement documentation has been distributed to the parties for signature. The settlement will have no adverse financial or legal consequences to CACI.

John Chrysogelos v. V. L. Salvatori, et al

In the fall of 1999, an action styled John Chrysogelos v. V. L. Salvatori, et al C.A. 17408NC, was filed in the Chancery Court for the State of Delaware setting forth both class and derivative claims alleging that the Registrant's Directors breached their fiduciary and other duties to the Registrant and its stockholders by (i) adopting by-law amendments specifying procedures for stockholder actions by consent and calling of special meetings; and, (ii) failing to evaluate and fairly respond to a premium cash offer to purchase the stock of the Registrant.

Since the filing of the Registrant's Report on Form 10-Q for the quarter ended December 31, 1999, there has been no change in the status of the litigation.

Parsow Partnership, Ltd., et al v. J. P. London, et al

In November, 1999, an action styled Parsow Partnership, Ltd., et. al. v J. P. London, et al, CA No. 99-770, was filed in the United States District Court for the District of Delaware alleging that the Board of Directors and senior management of the Registrant had solicited proxies in violation of Sections 14(a) and 20(2) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 14(a-9) promulgated thereunder.

On December 8, 1999, the Defendants filed their Answer and Counterclaim denying the substantive allegations of the Complaint, and claiming that the Plaintiffs violated Sections 14(a) and 20(a) of the Exchange Act and Rules 14a-2(b)(2) and 14a-9 promulgated thereunder by soliciting the proxies from more than ten (10) stockholders and by making false and misleading statements in solicitation of proxies.

Since the filing of the Registrant's Report on Form 10-Q for the quarter ended December 31, 1999, the parties have been engaged in discovery.

Item 5.   Other Information

Forward Looking Statements

There are statements made herein which do not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: regional and national economic conditions; changes in interest rates; failure to achieve contract awards in connection with recompetes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. Government or other public sector projects in the event of a priority need for funds; government contract procurement (such as bid protest) and termination risks; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees; our ability to complete acquisitions and/or divestitures appropriate to achievement of our strategic plans; Year 2000 issues, particularly as they concern the cost of litigation and potential legal liability associated with products, systems and services which are no longer under warranty or maintenance obligations; material changes in laws or regulations applicable to our businesses; our own ability to achieve the objectives of near term or long range business plans; and other risks described in the Company's Securities and Exchange Commission filings.

Item 6.   Exhibits and Reports on Form 8-K

3.1 By-laws of the Registrant, as amended March 16, 2000.

• The Registrant filed a Current Report on Form 8-K on February 14, 2000, in which the Registrant reported that it had completed its acquisition of XEN Corporation.
• The Registrant filed a Current Report on Form 8-K on March 28, 2000, in which the Registrant reported that it would acquire substantially all of the assets of Century Technologies, Incorporated (CENTECH).
• The Registrant filed a Current Report on Form 8-K on April 3, 2000, in which the Registrant reported that it had completed its acquisition of substantially all of the assets of Century Technologies, Incorporated (CENTECH).
• The Registrant filed an amended Current Report on Form 8-K/A on April 17, 2000, in which the Registrant provided restated compiled financial statements for XEN Corporation for the fiscal year ended September 30, 1999, and pro forma financial information relative to the acquisition of XEN Corporation.

CACI INTERNATIONAL INC AND SUBSIDIARIES

INDEX TO EXHIBITS

Exhibit Number	Title
3.1	By-laws of the Registrant, as amended March 16, 2000
11	Computation of Basic and Diluted Earnings Per Share

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			CACI International Inc
			Registrant
Date:	May 15, 2000	By:	/s/
			Dr. J. P. London Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
Date:	May 15, 2000	By:	/s/
			Stephen L. Waechter Chief Financial Officer and Treasurer, (Principal Financial Officer)