CACI International Inc

Thank you for standing by. Welcome to the CACI International Full Year 21 Results and Full Year 22 Guidance 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 followed by zero and someone will help you. At this time, I would like to turn the conference call over to Dan Luckberg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Well, thank you, Andrea, and good morning, everyone. I'm Dan Luckberg, Head of Investor Relations for CACI, and we 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 in 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 Miguchi, President and Chief Executive Officer of CACI International. John.

Thanks, Dan, and good morning, everyone. Thank you for joining us to discuss our fourth quarter and fiscal year 2021 results, as well as our fiscal year 2022 guidance. With me this morning is Tom Mutrin, our Chief Financial Officer. Slide four, please. Last night, we released our fourth quarter and full year results for fiscal 2021, as well as our guidance for fiscal 22, and I'm very pleased with our performance. Our fourth quarter results were in line with our expectations and kept another strong year for CACI. For fiscal year 21, we delivered revenue growth of 6%, adjusted EBITDA margin of 11.1%, and robust cash flow. Our organic revenue growth of 5% was ahead of our underlying adjustable market, and we delivered healthy margin expansion. We also won a total of $9.2 billion of contract awards with over 40% of that new business to CACI. That represents a 1.5 times book to bill for the year with a healthy mix of re-compete wins to preserve our base and new awards to drive future growth. And we delivered those results while navigating the persistent challenges of COVID-19. I could not be prouder of all of our employees who continue to support our customers while ensuring the health and safety of themselves and those around them. Slide five, please. Turning to the external environment, we are almost seven months into the new administration, and budget indications remain very constructive. The administration proposed an increase in overall defense spending of about 2%. and as the NDAA makes its way through Congress, there are indications defense spending could have further upside. Importantly, we continue to see bipartisan support to fund national security and IT modernization priorities, including offensive and defensive cyber, border security, C4ISR, electronic warfare, and space. As we think about cyber outside of DoD and the intelligence community, DHS's Cybersecurity and Infrastructure Security Agency, or CISA, will be a focal point for federal civilian cyber investment. CACI is well positioned at CISA and DHS more broadly with existing programs, customer relationships, and contract vehicles to address additional cyber requirements. In addition, the administration is focused on enabling technologies and methodologies like artificial intelligence and agile software development. areas where CACI is extremely well-positioned. It's all about an R&D-led agenda to develop capabilities and technology geared toward near-peer threats, great power competition, and ongoing counterterrorism. All this aligns very well with our strategy and capabilities. Slide six, please. Looking forward, it remains clear that the future is software-based. Many of our customers' most pressing challenges have common underlying needs, new capabilities at the speed of technology, increased agility, flexibility, security, and efficiency, all of which can be solved with software. CACI continues to address these needs and demonstrate industry leadership in software development with multiple pillars of success, agile software development at scale, DevSecOps using tool-based automation, and a focus on open software architectures. Different programs may emphasize one or more of these elements, but they are all present and key to our future growth. Our Agilent scale capabilities enable the industrialization of software development, which customers are increasingly asking for. Faster, more responsive to changing needs, more efficient, with materially higher quality. CACI is a leader. of Agile at scale, delivering on the largest Agile programs in the federal government. This includes our Beagle program with over 100 applications. Beagle and other CACI Agile programs provide important past performance and credentials to address the government's growing demand for Agile. In fact, we recently won new business at a classified agency to apply Agile software development to large-scale data analytics. This win also leveraged the capabilities and customer relationships of our next century acquisition. In addition, you've heard us discuss our 100-plus projects focused on AI. AI is ubiquitous across our business, providing customer speed, efficiency, and predictive analytics. AI was at the center of our recent $376 million NGA win, where CACI is building out the computer vision infrastructure, tool suites, and analytic environments for NGA analysts, providing an open, best-of-breed environment to users. Lastly, a key element of our strategy is to look further downfield and invest in differentiated software-defined technology ahead of customer need. Photonics, or laser-based communications and remote sensing, is a great example, which came to us via our acquisition of LGS. It is a technology we continue to invest in today. Notably, Aerospace and Defense Primes recently purchased our photonics technologies to include on their platforms. We have a nice pipeline of additional sales opportunities across the A&D primes. This is confirmation of well-placed investments in differentiated technology. Slide seven, please. Turning to our FY22 guidance, we expect another year of revenue growth above our addressable market, which we expect to grow at about 3% over the next five years. And we remain committed to ongoing margin expansion consistent with our stated performance goals. At the midpoint of our FY22 guidance, we expect revenue growth of 4 percent and adjusted EBITDA margin of 10.9 percent, which represents continued expansion off our normalized FY21 base of 10.7. In addition, we expect to continue to generate robust cash flow, and Tom will provide additional details shortly. We're seeing positive growth in technology and expect it to continue to outpace expertise growth. collectively offsetting the impact of the Afghanistan drawdown. I want to emphasize that all areas of our business are important and can contribute to growth and margin expansion. And there is a great synergy between expertise and technology. Expertise informs the technological requirements of the daily mission. And our technology capabilities are fantastic enablers and differentiators of our expertise, allowing us to deliver efficient and effective results to our customers. Slide eight, please. CACI's success driving growth and margin expansion continues to generate robust cash flow. Our cash flow and overall financial strength enable us to deploy capital to drive additional shareholder value through investments in growth, share repurchases, M&A, and other capital deployment options. We will continue to invest ahead of customer need to drive future growth and differentiation. Our commitment is to utilize CACI's strong cash flow to deliver the greatest long-term shareholder value. With that, I'll turn the call over to Tom.