CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International First Quarter FY21 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 then zero and an operator will assist you. At this time, I would like to turn the conference over to Dan Lechberg, Senior Vice President of Investor Relations for CACI. CI International. Please go ahead, sir.

Well, thank you, Chad, and good morning, everyone. I'm Dan Lechberg, Senior Vice President of Investor Relations for CSCI International. 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 facts, 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 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 first quarter fiscal 2021 results and guidance. With me this morning are Tom Mutren, and our Chief Financial Officer, and Greg Bradford, President of CACI Limited, who's joining us from the UK. As we all continue to address the COVID-19 pandemic, I'd like to take a moment to thank our employees for their dedication. You all have risen above expectations to continue supporting the important missions of our customers and this company, and you've done so in a safe manner. You have also supported community programs, delivering food to hospitals, first responders, and food banks. Your commitment to fulfilling customer missions while supporting our communities and neighbors during this time is beyond admirable. I couldn't be more humbled by the positive impacts we have collectively delivered, and I thank each of you for your efforts. Slide four, please. Now turning to our first quarter fiscal 21 results, we delivered significant growth profitability, and cash flow. We grew revenue by 7% and net income and earnings per share by almost 40% compared to a year ago. Profitability was higher than expected, primarily as a result of favorable contract performance, as well as enhanced cost controls in the COVID environment. We continue to mitigate the impact of COVID-19, working closely with our customers to safely return employees to work. This includes creative alternatives, such as temporary skips, redesigning work plans so more work is done outside of classified facilities, and utilizing teleworking to the extent possible. We are fortunate that our business has been less impacted by COVID compared to other parts of the economy, both by the nature of our work and the specific actions we have been taking. We have had less than 1% of our 23,000 employee population contract COVID. This is a testament to the hard work being done throughout our company to ensure work continues in a safe manner for everyone involved. These efforts have been quite successful, mitigating the overall COVID headwind below our initial estimates. As a result of this progress and strong operational performance, we are raising our fiscal 21 guidance to reflect higher revenue and net income growth, increased margin expansion, and even more robust cash flow. Tom will discuss all of this in more detail shortly. Slide five, please. About a year ago, we held an investor day during which we introduced our four quadrant framework to describe our business. The framework depicts what and to whom we deliver. We deliver expertise and technology to enterprise and mission customers. What's most important in that split is what we deliver, expertise and technology. When we provide expertise, we provide talent with specific technical, functional, and domain knowledge. When we provide technology, we provide software and hardware capabilities enabled by innovative R&D. Expertise delivers respectable margins with low capital requirements and the opportunity to build past performance and deep customer relationships. Technology is more differentiated with a higher growth addressable market and higher average margins. In order to enhance transparency into our business, we are now disclosing revenue by expertise and technology. You'll notice that in the first quarter of fiscal 2021, we reported growth in both revenue streams and drove faster growth in the higher margin technology stream. This is consistent with our strategy and supports our financial objectives to outgrow our addressable market and expand margins. Slide six, please. We had solid contract awards in the first quarter, representing a book-to-bill of 1.3 times, with wins across all four quadrants and more than half of the awards representing technology work. We also continued to execute against our large and growing backlog of $22 billion, which is up 13% from a year ago. Within expertise, we won new work with the Department of Veterans Affairs, to provide talent that will assist the VA in its financial management system modernization efforts. We also won work with the Department of Homeland Security to apply our data analytics experts to help them detect criminal activities. Within technology, we significantly expanded our work with DHS to provide enterprise IT utilizing an innovative service model to enhance productivity and efficiency for both CACI and our customer. and we won new cybersecurity work within the United States Army, DARPA, and the intelligence community. In addition, we are continuing to ramp recent large technology awards like Beagle and TCS, leveraging our differentiated capabilities and strong past performance to expand these programs. For example, agile software development is increasingly being recognized for its benefits and being utilized on larger programs sometimes consolidations of multiple contracts. Our industry-leading Agile Solutions Factory and past performance are competitive differentiators that allow us to bring new work onto large marquee programs such as these, which will continue to drive growth beyond fiscal 2021. Slide seven, please. To ensure CACI remains ready to address our customers' most critical priorities, we continue to invest ahead of customer demand. In addition to the higher value our customers receive, this investment allows us to generate intellectual property, enhance competitive differentiation, and drive future growth, all of which drive shareholder value. In cyber, we are investing in both offensive and defensive technologies, as well as modeling the simulation environments to enhance training and effectiveness. Around 5G, we are investing the capabilities and technologies to collect, and process new 5G signals and frequencies, adding 5G capabilities to our expanding number of sensors, and developing tools to ensure the resiliency of 5G networks. More broadly, we are addressing the convergence of signals intelligence, electronic warfare, cyber, and communications to enable the US to dominate the electromagnetic spectrum. And around artificial intelligence, we have over 100 projects developing AI capabilities across many areas of our business. All of these investments are targeted at well-funded areas of the federal budget, supporting solutions necessary to combat both counterterrorism and near-peer threats. While on the topic of investment, I'm very pleased with the performance of our recent acquisition of Ascent Vision Technologies, or AVT. The bottom line is they're delivering in line with expectations, enhancing their EOIR product offerings, and providing value-creating synergy solutions. We have had several joint meetings with representatives from the DoD Joint Counter UAS Office, or JCO, discussing their desired enhancements to both the ABT mobile and CACI fixed-site offerings. Internally, we are already working on ways to leverage ABT's technology into CACI's large fixed site, counter UAS installed base, and vice versa. Slide eight, please. DACI has been in business for nearly six decades, and during that time, we have prospered through many election cycles. One thing we've seen is that investment in defense is bipartisan, especially in times of an elevated threat environment like we see now. Our addressable market remains healthy. With all indications, we will continue to see sustained technology investment to support national security and IT modernization priorities. When we look at CACI's capabilities against these priorities, we see tremendous opportunity within our 230 billion and growing addressable market. Our awards and backlog are a testament to CACI's ability to enable our customers to modernize IT infrastructure and business applications secure networks and communications, and enhance offensive and defensive capabilities to enable the warfighter to dominate across all demands. Our alignment to these critical areas makes our business resilient, allows us to take market share, and gives us confidence in ongoing growth prospects. Now over to Tom to provide even more insights into our financial performance and increase guidance. Tom?