CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Third 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 need any assistance during this call, please press star, 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.

Well, thanks, Eileen, and good morning, everyone. I'm Dan Leckberg, Senior Vice President of Investor Relations for CACI, and 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 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 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 financial measures prepared in accordance with GAAP. Let's turn to slide three, please. To open our discussion this morning, here's 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 third quarter fiscal 2021 results and guidance. With me this morning are Tom Mutren, our chief financial officer, and Greg Bradford, president of CACI Limited, who is joining us from the UK. Let's turn to slide four, please. Turning to our third quarter fiscal 21 results, we again performed well, delivering strong growth, profitability, and cash flow. We grew revenue by 6%. net income by 49%, and earnings per share by 51% compared to a year ago. We also continue to deliver double-digit growth in technology revenue, a key driver of our margin expansion. In addition to the increasing technology mix and our continued strong operational performance, our profitability again benefited from fixed price program cost efficiencies in the COVID environment. This drove only about a third of our year-over-year adjusted EBIT margin increase. The rest was core operations. We generated strong cash flow from operations and strong free cash flow. Lastly, we won $1.6 billion of contract awards representing a book-to-bill of 1.0 times for the quarter and 1.5 times on a trailing 12-month basis. Slide five, please. As we've discussed before, we are investing ahead of need to ensure we solve our customers' and our nation's most critical priorities. This strategy enables CACI to provide our customers with high-value technology to execute their missions, enhance our competitive differentiation, generate improved profitability, and drive future growth in shareholder value. Broadly speaking, the need for IT modernization in the heightened global threat environment are two key market trends driving our investments, and both play to our core technology strengths. Let me highlight a few investments and recent successes that demonstrate the value of our lead with software or software-defined everything strategy. First, CCI is a leader in agile software development, which enables us to rapidly address customers' needs as they arise. We did so this quarter when our Beagle team developed and deployed mobile applications in only a few weeks to enable Customs and Border Protection to better handle the immigration challenges at our southern border. That is simply not possible without deep Agilent scale capabilities. It's why this customer selected CACI to increase efficiency and speed the delivery of mission critical technology to users. An area of investment I discussed a few quarters ago was artificial intelligence, or AI. Recall that CACI has over 100 projects incorporating AI capabilities across our business. These capabilities span all type of AI, but one particular capability I'd like to discuss is referred to as computer vision. Simply put, computer vision leverages AI to identify and track objects in imagery and full motion video. During our third quarter, a military services research lab conducted a formal competitive evaluation to assess the AI capabilities of CACI and a number of other companies. Government provided all competitors with the same raw data, including imagery, video, and publicly available information. CACI was the most successful company in the competition, delivering highly accurate and reliable outputs further positioning us for future opportunities across a broad AI customer set. It's capabilities just like these that differentiate CACI and allow us to win contracts like the five-year, $376 million National Geospatial Intelligence Agency award to implement and integrate cutting-edge AI computer vision mission technology. At CACI, our investments result in tangible, value-creating intellectual property and capabilities. These are proven, deployed technologies advancing our customers' modernization and national security missions and further differentiating CACI in the marketplace. Slide six, please. During the quarter, we executed a $500 million accelerated share repurchase program. This is the next step in a more opportunistic and flexible capital deployment strategy. We continue to view strategic M&A as an important use of our capital and believe our approach to M&A and proven ability to integrate our strategic differentiators. That being said, M&A is just one element of our capital deployment strategy going forward. Our healthy cash flow, strong balance sheet, and overall financial strength provide us with the flexibility and optionality to be opportunistic on multiple fronts. It's an and, not an or, strategy. This flexible approach reflects our commitment to shareholders to deploy capital in a number of ways based on the long-term growth plans of the company. I want to emphasize that on an ongoing basis, we are committed to evaluating all capital deployment opportunities to deliver the greatest long-term shareholder value. Slide seven, please. Turning to the market environment, we remain very optimistic. There's bipartisan support for defense and national security spending and the new administration stated priorities align very well with our capabilities. While a detailed government fiscal year 2022 budget proposal has not yet been released, the administration has released a top-line proposal for aggregate defense spending of $753 billion, up almost 2% from the current government fiscal year. Our offerings align to priorities that will continue to be funded. And this gives us the confidence that we will be able to continue to grow faster than our addressable market, expand margins, and generate strong cash flow. Slide 8, please. Looking at the remainder of our fiscal year, we are navigating COVID challenges, delivering growth, and expanding margins. That said, we continue to see higher-than-expected impacts from OCONUS deployment delays, tasking delays, and other COVID-related factors. Putting this all together, we now expect organic revenue growth of approximately 5% at the midpoint of guidance, slightly lower than our prior guidance, but still well ahead of our addressable market growth. Moreover, the increase to our net income and EPS guidance reinforces our relentless focus on growing both top line and bottom line, which highlights our dedication to creating shareholder value. Our organization continues to deliver strong operating performance while addressing our customers' most pressing needs, and we are more confident than ever about the strength of our strategy. With that, let me turn the call over to Tom to provide details on our financial performance and outlook. Tom? Thank you, John, and good morning, everyone.