CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Q1 FY20 earnings conference call. Today's call is being recorded. At this time, all lines are in a listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. If you should need any assistance during this call, please press star zero and someone will help you. At this time, I'd like to turn the conference call over to Dan Lechberg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Well, thank you, Allison, and good morning, everyone. I'm Dan Lechberg, Senior Vice President of Investor Relations for CACI International, and I thank you for joining us this morning. We are providing presentation slides, so let's move to slide number two, please. There will be statements in this call that do not address historical fact and as such constitute forward-looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated. Those factors are listed at the bottom of last night's press release and are described in the company's SEC filings. Our safe harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call. I would also like to point out that our presentation will include discussion of non-GAAP financial measures. These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Let's turn to slide three, please. To open our discussion this morning, here's John Migucci, President and Chief Executive Officer of CACI International. John.

Thanks, Dan, and good morning, everyone. Thank you for joining us to discuss our fiscal year 2020 first quarter results. With me this morning are Tom Mutrin, our Chief Financial Officer, and Greg Bradford, President of CACI Limited, who's joining us from the UK. Slide four, please. Last night, we released our first quarter results for fiscal 2020, and I am very pleased with our performance. We delivered strong financial performance across all measures, strong revenue growth and profitability, and robust cash flow. We also won $4 billion of contract awards with approximately 60% of that representing new business for CACI. These results are an excellent start to our fiscal 2020. In addition, we continue to invest for future growth, leveraging our distinctive M&A program. We recently closed on three acquisitions that enhance our capabilities for our mission customers. I'll provide more background on these acquisitions shortly. As a result of these acquisitions, we are raising our guidance for fiscal year 2020 which Tom will discuss in more detail. Slide five, please. I'd like to take a moment to remind you of the way we talk about our business, which we introduced at our recent Investor Day. When we talk about what CACI does, you will hear four words, enterprise, mission, expertise, and technology. We serve two types of customers, enterprise and mission. For enterprise customers, we provide expertise and technology that enable the internal operations of an agency. Examples of that are IT infrastructure, financial, HR, and supply chain systems, and support to agencies in the clearance process. This provides for $130 billion of our addressable market and is consistently growing. For mission customers, we provide expertise and technology that directly enable the execution of an agency's primary function or mission. Examples of those are solutions in domain areas, such as space, C4ISR, cyber, and electronic warfare, driving a $90 billion adjustable market and growing at a more rapid pace. I encourage you to review our Investor Day presentations on our website in the Investor Relations section to better appreciate the more fulsome discussion that we shared in mid-September. Slide six, please. We are seeing healthy demand trends across both the enterprise and mission areas of our adjustable market that will drive both organic revenue growth and margin expansion. A few examples of recent awards are a nearly five-year, $385 million enterprise technology contract to support the U.S. Navy's My Navy Human Resources transformation. Based on our strong past performance on the SLMR program for the United States Army, Ips Army, CACI will consolidate hundreds of legacy applications and deliver an interoperable solution to improve HR services and transform how the Navy recruits, trains, and manages personnel. We also won a five-year, $443 million mission expertise contract to assist the U.S. Army in countering emerging commercial-based threats, including unmanned aircraft systems and IEDs. This re-compete win also included expanded scope that doubles the size of the opportunity, highlighting our differentiated expertise and record of performance with this customer and their mission. In addition, we won a five-year, $438 million mission technology contract to support the United States Air Force Research Laboratory with the multi-domain integration of geospatial and signals intelligence and operations across air, space, and cyberspace. This is largely new work to CACI, which has since led to additional awards with this same customer. Slide seven, please. You've heard us previously discuss the three pillars of our strategy, win new business, drive operational excellence, and deploy capital for growth. Our record contract awards demonstrate our success in winning new business, and our strong financial performance is indicative of driving operational excellence. We also continue to deploy capital to drive future growth through our distinctive M&A program, which remains our top priority for capital development. capital deployment. We continue to pursue high-quality, innovative companies that fill capability gaps and drive further differentiation in our customers' most critical investment areas. As I mentioned earlier, we closed on three acquisitions over the last week, Next Century, Lindustry Shielding, and Deep3. Next Century is a mission technology company that delivers advanced geospatial mapping and predictive analytics, data fusion, and machine learning to the intelligence community and the Department of Defense. This acquisition provides additional growth to our strong business base of high-value technology offerings. Lindustry Sealing is a mission technology company that delivers hardened systems to protect equipment from electromagnetic interference, a key growth aspect of a large single award IDIQ that we were awarded late last fiscal year. Indeed3 is a mission expertise company that provides applications development, data analytics, digital transformation, and cybersecurity. This acquisition is part of our UK operations and supports UK national security and defense customers, a growth area for both our domestic and our UK operations. While on the topic of acquisitions, I'm extremely pleased with the performance of both LGS and Mastodon, as they both not only are driving the top and bottom line growth we expected, but are investing ahead of customer needs to ensure we have the next generation technology offerings our customers desire. In addition to our M&A program, we continue to invest organically in our capabilities and technology assets, including key priority areas like signals intelligence, electronic warfare, cyber, and communications, as well as business development. As I mentioned last quarter, throughout fiscal year 2020, we plan to invest at levels higher than previous years in internal R&D and business development. In addition, our strong contract wins are driving slightly higher capital spending to support that growth. Our first quarter results include increased investments in those areas, consistent with our strategy to invest ahead of customer demand. Slide eight, please. Turning to the market environment, we remain encouraged by demand trends. From a budget standpoint, the two-year agreement signed back in August provides healthy spending levels for our customers in both government fiscal 20 and 21, particularly in areas aligned to CACI capabilities. Government fiscal year 2020 started under continuing resolution which is in effect through November 21st and could extend longer. As you know, we start virtually every year under a CR, and as in the past, we did not expect this to have an impact on our business. And given our record backlog and strong contract awards, we remain confident in our ability to deliver on our financial commitments. In closing, our first quarter results were a great start to the year, with increased organic growth, strong profitability, robust cash flow, and record contract awards. In addition, we are deploying our capital for accretive acquisitions that continue to position CACI for future growth. We continue to execute our strategy and remain confident in our ability to deliver growth, margin expansion, and shareholder value. With that, I'll turn the call over to Tom.