CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Fiscal 2023 Second Quarter 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 zero and someone will help you. At this time, I would like to turn the conference call over to Dan Lechberg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Well, thank you, and good morning, everyone. I'm Dan Lechberg, Senior Vice President of Investor Relations for CACI International. 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 those. 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'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 second quarter fiscal year 23 results. With me this morning is Jeff McLaughlin, our Chief Financial Officer. Slide four, please. Last night, we released our second quarter results, and I'm very pleased with our performance. We grew revenue 11% with growth in both expertise and technology. Profitability was healthy with an adjusted EBITDA margin of 10.2%. And we had another strong quarter of contract awards, winning about $3.5 billion, which represents a book to bill of 2.1 times for the quarter, and 1.5 times on a trailing 12-month basis. About 70% of our contract awards were for new business to CACI, and we had strong performance on our re-competes as well. Overall, our execution in the second quarter and first half sets us up well to achieve our fiscal year guidance. Jeff will provide additional financial details shortly. Slide five, please. Turning to the external environment, market and demand trends remain very constructive for CACI's business. On December 29th, the President signed the Omnibus Appropriations Bill, funding the government through September 2023. Budgets in general saw healthy increases, including defense spending, which increased about 10 percent from last year. Below the top line numbers, we see healthy spending trends across both expertise and technology in key areas of focus for CACI. including C4ISR, cyber, digital solutions, enterprise IT, and mission support. CACI's commitment to invest ahead of need drives differentiation and positions us extremely well to deliver innovation to our customers and value to our shareholders. Slide six, please. Let me update you on a key recent award. Last quarter, we announced the award of the Air Force Enterprise IT as a Service Contract or ITAS, demonstrating our leading position in IT modernization. This enterprise technology award was protested, and the Air Force subsequently undertook corrective action. Late December, we were notified by the Air Force that, after corrective action, the award to CACI was reaffirmed. We're very pleased by our customer's decision. Not surprisingly, that decision was protested again, and now sits with GAO for resolution. Our team is ready to go, and we look forward to beginning this important work for the Air Force, which we expect will be a positive driver of growth in fiscal 24. This award is a great example of our strategy to bid less and win more, focus on larger contracts, and leverage our leading position in enterprise IT modernization. Turning to second quarter awards, CACI won a sizable mission expertise contract to provide network and exploitation analysis in support of foreign intelligence and cybersecurity missions. As you know, our work and mission expertise engages highly skilled employees who apply their technical and domain knowledge to support critical and complex agency missions. The work on this program will incorporate CCI's deep, longstanding capabilities in both intelligence analysis and cyber. We won this competitive award and displaced the incumbent by leveraging our superior ability to understand, and execute the mission, thanks to our industry-leading talent. This award was also protested, and the customer is currently taking corrective action. In the space domain, we continue to see strong demand trends, and our photonics business continues to grow and scale. As we have discussed before, we supply both government customers and defense primes with our photonics technology. In the second quarter, we received additional follow-on orders from a defense prime. Our industry-leading photonics technology addresses the requirements of spacecraft operating at all ranges of space, low Earth, medium Earth, in geospatial area orbits, and beyond. CCI's optical communications technology is the only U.S.-based offering operating in space today that meets DoD and intelligence customers' stringent security and performance requirements. When we continue to invest in this technology to maintain our leading position as we see increasing demand for secure, high-bandwidth communications across all domains. I also want to highlight our strong re-compete performance. In particular, our re-compete wins of our best-grown investigation work for DCSA and important cyber-related work for the intelligence community. Our re-compete successes are driven by strong execution and the value we bring to customers. All of these awards, new business and re-competes, are for high-value, enduring work that addresses critical priorities for our customers and supports our ability to deliver long-term growth, margin expansion, strong cash flow, and shareholder value. Slide seven, please. As we have discussed before, we are committed to a flexible and opportunistic capital deployment strategy that includes internal investments, M&A, share repurchases, and other capital deployment options based on business and market dynamics. This morning, we announced that our Board of Directors has authorized a $750 million share repurchase program, of which $250 million is expected to be executed imminently as an accelerated share repurchase. With moderate leverage, ample borrowing capacity, and confidence in generating strong future cash flow, we're in a good position to deploy capital to drive additional shareholder value. We're pleased with our performance, and we remain confident in our long-term prospects. We are successfully executing our strategy, making the right investments, hiring and retaining top talent, winning new work, managing the business efficiently, and leveraging our strong cash flow to deliver shareholder value. With that, I'll turn the call over to John.