CACI International Inc

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the CACI International Quarter 2 Fiscal Year 20 Earnings Conference Call. Today's call is being recorded. At this time, all lines are in listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. If you should need assistance during this call, please press star, then zero, and someone will help you. At this time, I would like to turn the conference over to Dan Leckberg. Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Thank you, Chuck. 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 is John Mangucci, 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 second quarter results. With me this morning are Tom Utrecht, our Chief Financial Officer, and Greg Bradford, President of CACI Limited, who's joining us from the UK. Let's move to slide four, please. Last night, we released our second quarter results for fiscal 2020, and I'm very pleased with our performance. CACI, again, delivered strong financial results across the board, significant revenue and profitability growth, accelerating organic growth, and robust cash flow. We also won $2.7 billion of contract awards with approximately 60% of that value representing new business for CACI. These results round out a great first half to our fiscal 2020. At the beginning of the fiscal year, we guided to accelerating organic revenue growth and margin expansion. Today, we are raising revenue and net income guidance to reflect further organic acceleration with ongoing margin expansion. Slide five, please. We continue to see healthy demand trends across our adjustable market, supporting both revenue growth and margin expansion. Let me illustrate this demand with awards from this quarter. First, CECI won a five-year, $1.1 billion enterprise and mission technology contract to modernize a customer's business and mission applications portfolio, including extensive cloud migration. This is one of the government's largest agile software development programs, which we won by leveraging our unique past performance and the award-winning innovative capabilities of our Agile Solutions Factory. CACI now delivers on two of the federal government's largest Agile development programs. On the mission technology side, CACI won a $475 million sole source contract with an intelligence community customer to enable their critical national security missions. We won this opportunity by offering new, unique intelligence and communications technologies, leveraging the R&D field innovation of LGS. This contract represents new and reconfigured work for CACI. Slide six, please. These awards are just a few examples of the high value contracts we are consistently adding to our backlog. These are larger, longer duration and enduring drivers of organic growth and margin expansion. In fact, today the contracts we're winning have a weighted average contract duration that is 1.5 years longer than those we won over the past three years. This results in a dependable revenue base and allows us to focus items such as BNP investment on additional growth rather than simply maintaining our book of business via re-competes. Many of these contracts are also more complex technology development efforts that initially ramp slowly but provide the high-quality, long-term growth we are focused on delivering. What we are now seeing is something we have discussed the past several quarters. As we successfully deliver on these contracts and enter higher volume phases, we are driving accelerating organic growth. In fact, we now expect fiscal 2020 organic growth of at least 7%, up materially from just six months ago when we guided to about 5.5%. Slide seven, please. Turning to the market environment, we continue to be very encouraged by what we see. The two-year budget agreement signed back in August was followed by the passage of government fiscal 20 appropriations bills in late December, funding the government at levels about 4% higher than government fiscal 19. More important to us than the absolute budget levels are the multi-year investment plans of our customers. When we map CCI's capabilities against these priorities, we see tremendous opportunity across our $220 billion decibel market. Within our enterprise business, customers are modernizing IT infrastructure and business applications. In our mission business, customers are investing heavily in signals intelligence, electronic warfare, cyber, communications, and space. Our alignment to these critical areas enable our ability to take market share and gives us confidence in our future growth. Slide eight, please. To ensure CACI remains ready to address our customers' emerging needs, we continue to invest for future growth. We're developing differentiated technologies ahead of customer demand through our research and development program. When we win on differentiation, we deliver more value to our customers and our shareholders. Our business development and operations organizations are developing solutions in pursuit of the right growth opportunities, testing technologies with our customers, We're winning opportunities that will provide long-term sustainable growth. And we're consistently investing in our leadership and our people. We're adding strategic leaders, like retired General Mike Nagata, who will establish a strategic advisory group of industry and customer experts to ensure CACI remains ahead of market trends. And on the broader people side, we continue to offer highly competitive benefits, including training, certifications, and work-life balance, to name just a few. This continues to attract and retain the industry's best talent. In closing, I'm very pleased with our second quarter performance. We remain committed to our successful strategy that has served us so well. Win new business, deliver operational excellence, and deploy capital to support future growth. Relentless focus across the organization on this strategy drives growth and margin expansion, which generates increasing levels of cash flow. We then deploy that cash to add strategic capabilities in customers' critical investment areas. This combination of organic and acquired growth has successfully compounded cash generation and shareholder value over the long term. We remain very confident looking forward. With that, I'll turn the call over to Tom.