CACI International Inc

Good morning and welcome to the CACI International Second Quarter Fiscal Year 2021 Conference Talk. All participants will be in listen-only mode. If you need assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. We do ask that in the interest of time that you limit yourself to one question and a single follow-up. Please also note today's event is being recorded. I would now like to turn the conference over to Dan Lechberg, Senior Vice President of Investor Relations. Please go ahead, sir.

Well, thanks, Rocco, and good morning, everyone. I'm Dan Lechberg, Senior Vice President of Investor Relations for CACI, and I thank you for joining us this morning. We are providing presentation slides, so let's move to slide number two. There will be statements in the 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 Miguchi, President and Chief Executive Officer of CECI International. John.

Thanks, Dan, and good morning, everyone. Thank you for joining us to discuss our second quarter fiscal 2021 results and guidance. With me this morning are Tom Uttren, our Chief Financial Officer, and Greg Bradford, President of CACI Limited, who's joining us from the UK. Let's turn to slide four, please. Before I start, I want to acknowledge the passing of our Executive Chairman, Dr. Jack London. Jack joined CACI in 1972 as the company's 35th employee. Under his visionary leadership for nearly half a century, CACI grew from a small professional services firm into a national security and technology leader, with $6 billion in revenue, 23,000 employees, and recognition as the Fortune 1000 and world's most admired company. Jack will be remembered for many of his attributes and successes, but chief among them will be his architecting CACI's culture of good character and ethics, which to this day guides our company and its people. Like all of us, I will miss Jack greatly. I deeply admired his wisdom, intellect, experience, and good character. He was a leader, mentor, teacher, author, and friend. and left an invaluable example and legacy of success for all of us. There is no doubt that Jack would want us to continue the outstanding work that we do on behalf of our customers and our country to be ever vigilant in helping to support our country's greatest needs and to always act with ethics and integrity in all we do. With that, let's get to it. Slide five, please. Turning to our second quarter fiscal 21 results, we again delivered significant growth, profitability, and cash flow. We grew revenue by over 5% and net income and earnings per share by more than 34% compared to a year ago. In addition, we continue to see strong double-digit growth on the technology side of our business, driving margin expansion. Our profitability benefited from this improved mix, as well as continued program cost efficiencies in the COVID environment, the latter we view as temporary or one time in nature. Lastly, we generated strong cash, strong operating cash flow of $190 million and free cash flow of $174 million. Slide six, please. We won $2.1 billion of contract awards, a healthy level of awards, in what is typically a seasonally light quarter. This represents a book-to-bill of 1.4 times for the quarter and 1.5 times on a trailing 12-month basis. These awards include a number of important re-compete wins with growth above previous run rates. A few examples are a $447 million mission technology re-compete with the NSA, supporting signals intelligence and cybersecurity missions. not only includes our existing work, but it adds work previously performed by six previous competitors. We also expanded scope on a web-based supply chain program to include cloud migration, SAP HANA work, and numerous business modernization initiatives. And our AFSCNET-NASC II IT support contract, which provides enterprise technology to deploy elements of the Air Force community. With great performance and customer relationships, we were able to expand scope to deliver additional network and cyber innovations, which also supports higher margins on the contract. We also won work supporting the Navy's foreign military sales, representing new business to CACI that leverages the expertise from our Navy systems engineering acquisition. This expands our long history of providing engineering and mission expertise to the Navy and is yet another example of our strategic M&A program driving future growth. Slide seven, please. As we've discussed before, at CECI we are investing ahead of customer need to ensure we can address our customers and our nation's most critical priorities. Our customers receive high value technology to execute their missions. The CACI is able to generate intellectual property, enhance our competitive differentiation, and drive future growth and shareholder value. In the space domain, CACI is on the forefront of developing and deploying next-generation laser communication technology. Laser communications can transmit data over long distances in the hundreds of millions of miles. It rates up to 100 times faster than traditional radio frequency systems. Laser communications also lowers the probability of detection or defeat by an adversary, which is critical in the increasingly contested space domain. CACI is currently developing laser communication systems for half a dozen space programs. CACI's laser communication technology has dramatically lowered size, weight, and power characteristics, which aligns well with customer demand and positions our technology for a wide range of large space opportunities. Our laser communications technology can also be used for terrestrial applications, positioning us well for secure communications initiatives. These are demonstrated near-term successes on critical space missions, and we continue to believe space-based technologies will be long-term growth areas in this important domain. Slide 8, please. As we look at our large and growing addressable market, over $230 billion, we remain very optimistic. There continues to be bipartisan support for defense and national security spending, especially in the context of a heightened global threat environment, and the new administration has echoed that sentiment. Government Fiscal Year 2021 is now fully funded, providing broad visibility for our customers to invest in their key priorities. Looking further into the budget, we see a number of specific areas of our business that will benefit, including counter UAS, cyber, defense health, and our Navy engineering work. Let me give you a few details. First, the budget includes a DOD-wide procurement funding increase that includes Conry UAS capabilities for Special Operations Forces. We also see an increase in Army RDT&E funding for Conry UAS to defeat swarms. These increases create opportunities for our Conry UAS mission technology, including our Corian and our ABT X-MATIS systems. The Army RDT&E funding increase I just mentioned also increases funding for cyber work on ground systems, creating opportunities for our mission technology business. It also increases funding for the Army Cyber Command, an important customer for CACI. The government fiscal year 21 budget includes increased funding for the Defense Health Program, which will benefit our work fielding HALO, or our health assessment light operations in theater medical record systems. HALO was deployed during the early days of the COVID-19 pandemic to field hospitals set up in some of the worst hit areas of our country. This is a critical capability our government will continue to invest in to increase preparedness for the next potential crisis. Finally, the budget includes a multi-billion dollar plus up in naval shipbuilding funding, which will benefit our navy systems engineering programs. We also believe that broader IT modernization initiatives including defensive cyber, continue to be high priorities as a result of dispersed operating models due to COVID-19, as well as other recent cyber events. Now, we've been through many budget cycles over our company's long history and have purposefully positioned this business to be more resilient, aligning to priorities that must be funded in nearly any budget environment. This, in addition to flexibility, speed to market, and highly differentiated technology, gives us continued confidence in our ability to grow and expand margins over the next several years. With that, I'll turn the call over to Tom to provide details on our financial performance.