CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Fiscal 2022 First Quarter Results. Today's call is being recorded. At this time, all lines are in a listen-only mode. Later, we will announce the opportunities for questions and instructions will be given at that time. If you need 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 Lackberg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Well, thanks, Eileen. 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, 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 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, I'll turn the call over to John Miguchi, President and Chief Executive Officer of CSCI International.

John. Thanks, Dan, and good morning, everyone. Thank you for joining us to discuss our first quarter 2022 results. With me this morning is Tom Mutrin, our Chief Financial Officer. Let's move to slide four, please. Our first quarter results were in line with our expectations and represent a strong start to our fiscal year. We grew revenue by 2% organically, driven by technology revenue growth of 10%. Profitability was strong, with adjusted EBITDA margin of 10.8 percent. We generated robust cash flow, and we won $2.4 billion of contract awards, representing a book-to-bill of 1.6 times for both the quarter and on a trailing 12-month basis. Slide five, please. Turning to the external environment, we remain very optimistic. We continue to see our capabilities and strategy align very well with the administration's priorities. The administration is pursuing an R&D-led agenda to develop capabilities geared toward near-peer adversaries and continued counterterrorism, while also supporting broad modernization investments. It is an agenda that increasingly focuses on technology, speed, and flexibility. From a budget standpoint, we are under a CR through early December, which, as most of you know, is very common and historically has not impacted our business. While the government fiscal year 22 appropriations process continues to play out, discussions on all sides are still very consistent with the large and growing addressable market for CACI. Defense spending has been increasing as the budget process continues. As I've noted in the past, whether spending is flat or modestly higher, there continues to be strong bipartisan support for national security-related spending. CACI remains very well positioned in well-funded growth areas like cybersecurity, AI, and IT modernization across the entirety of DoD, civilian agencies, and the intelligence community. Slide six, please. At CACI, the bulk of our enterprise and mission technology offerings are based on software. Software enables us to address our customers' most pressing challenges within the evolving technology landscape and threat environment. Challenges that require the delivery of new capabilities at the speed of technology and with increased agility, security, and usability. As an example, we were recently awarded a $200 million enterprise technology contract to modernize the Air Force's legacy financial systems using our agile software development capabilities and to migrate these systems to a scalable cloud environment. This award is a re-compete win with additional new work. The program is regarded by our customer as a major step forward in delivering improved security, scalability, and efficiency. It's a great enterprise example of the desire to modernize, move to the cloud, and by doing so, significantly enhance application capabilities and overall cyber posture. This follows our other agile and IT modernization successes with the Army, DHS, and many other customers. In addition, in our mission technology area, software-defined everything and open architectures are at the heart of our industry-leading counter UAS capabilities. We recently announced enhancements to our Corian counter UAS system, extending the range of effectiveness, enhancing the ability to track and defeat swarms, increasing deployment flexibility, and enabling integration with other systems like ABT's electrical optical infrared technology. In addition, we introduced Corian Tactical, a streamlined configuration that can be deployed in less than an hour and which is based entirely on CACI-funded intellectual property. These enhancements address new demands and increase our probability of win as we pursue new counter UAS opportunities. This quarter, CACI also continued to demonstrate its leadership position in cyber, both offensive and defensive. In our first quarter, over $530 million of our awards came from unannounced classified contracts with a significant amount of cyber-related content. This includes a multi-hundred million dollar re-compete to provide offensive cyber capabilities to a customer in the intelligence community. This opportunity originally came to CACI with our NSS acquisition, and our combined capabilities, performance, and synergies, including those from LGS, have ensured CACI remains the go-to provider through multiple competitions. Slide seven, please. With our focus on growth and margin expansion, CACI continues to generate strong cash flow. Our cash flow and overall financial strength provide the flexibility and optionality to deploy capital in a number of ways. First, we continue to invest organically ahead of customer need in the many areas we have discussed. Conner UAS, artificial intelligence, cyber, electronic warfare, and photonics, among others. These investments are differentiating CCI in the market and enabling us to win new, high-value work. Second, during Q1, we acquired two companies that provide mission technology to sensitive government customers. Their capabilities include open-source intelligence solutions, specialized cyber, and satellite communications. These are areas of significant growth potential over the next several years. One of the companies, Bluestone Analytics, is focused on open source intel in the dark web, a domain of increasing importance not only for law enforcement, but also for every aspect of national security and intelligence gathering. Lastly, on the capital deployment front, we completed our $500 million accelerated share repurchase program at the end of our first quarter. We remain committed to evaluating all capital deployment opportunities based on the dynamics at the time with a focus on driving long-term growth of free cash flow per share. As Tom will discuss in more detail shortly, CACI has ample capital to execute a flexible and opportunistic capital deployment strategy delivering continued shareholder value.