Jacobs Solutions Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Jacobs Fiscal First Quarter 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Jonathan Doros, Investor Relations. Thank you. Please go ahead.

Thank you. During this presentation, we will be referring to certain non-GAAP financial measures. Please refer to slide two of the presentation for more information on these figures. In addition, during the presentation, we will discuss comparisons of current results to prior periods on a pro forma basis. See slide two for more information on the calculation of these pro forma measures. For pro-forma comparisons, current and prior periods include the results of the Wood Nuclear business, which closed in March 2020, and Buffalo Group, which closed in November of 2020. We have provided historical pro-forma results in the appendix of the investor presentation. Turn to the agenda on slide three. Speaking on today's call will be Jacobs Chair and CEO, Steve Dimitria, President and Chief Operating Officer, Bob Pergata, and President and Chief Financial Officer, Kevin Barron. Steve will begin by updating the progress we're making against our strategy and reviewing our commitments to ESG and sustainability solutions. Bob will then review our performance by line of business, and Kevin will provide some more in-depth discussion of our financial metrics, followed by an update on our Focus 2023 integration efforts, as well as a review of our balance sheet and cash flow. Finally, Steve will provide a detail on our updated outlook, along with some closing remarks. And then we'll open the call for your questions. With that, I'll now pass it over to Steve Demetrio, Chair and CEO.

Thanks, John. And thanks, everyone, for joining us today to discuss our first quarter fiscal year 2021 business performance and strategy update. It's been about a year since the pandemic started, and we hope everyone is safe and healthy as COVID-19 continues to impact all facets of our daily lives. At Jacobs, in addition to keeping our people safe, we're continuing to support national governments and industry in their production and distribution of critical vaccines. Turning to slide four to discuss our first quarter results, it's important to review our strategy, which is foundational to an investment in Jacobs. We believe the transformation that Jacobs has undergone over the last several years has created a compelling multi-decade investment opportunity for our current and potential shareholders based on three key tenets. First, we have transformed our culture, aligned around a common purpose of creating a connected, sustainable world, underpinned by strong values of we do things right, we challenge the accepted, we aim higher, and we live inclusion. This culture permeates through our more than 50,000 people, the solutions we deliver for our clients, and the engagement in our communities where we live and work. Our purpose-driven culture has also enabled us to quickly adapt to changes in market conditions, while also staying focused on our long-term vision of being a technology-enabled solutions provider. Second, we have a portfolio of solutions aligned to a diverse set of global opportunities, such as space exploration, cyber readiness, climate change, and modernizing and digitizing our infrastructure. Our thematic growth areas are global, allowing us to address them efficiently, effectively, and competitively at scale through our integrated global platform of technology, our talented resources, domain expertise, and enhanced brand awareness. Finally, our Jacobs management team has demonstrated the ability to strategically allocate capital, including successfully executing acquisitions. Our continued focus on strategy and execution has resulted in a strong start to fiscal 2021, even while continuing to manage the headwinds from the global pandemic. First quarter net revenue increased 3% year-over-year and adjusted EBITDA grew 8%. Our backlog ended the first quarter up 11% year-over-year and up 7% on a pro forma basis. Given the strong momentum, we're increasing the midpoint of our full fiscal year of 2021 adjusted EBITDA and EPS outlook. Our cash flow generation was strong during the first quarter, and our balance sheet remains healthy. In the near term, we do expect to deploy excess cash toward paying down debt. Last quarter, we announced a strategic majority investment in PA Consulting. and we are happy to share that the transaction was overwhelmingly approved on February 4th, with 99.8% of PA shareholders voting in favor of their transaction. Particularly exciting was the fact that the voluntary election for management rollover was fully subscribed, and new partner hiring has also been very successful post-announcement, indicating the enthusiasm and commitment of PA partners and employees about the future growth opportunity of this partnership. Confirmation of the scheme of arrangement is awaiting regulatory approval by the Financial Conduct Authority in the UK, and we expect to close the investment by the end of this current quarter. PA's performance for calendar 2020 exceeded our expectations, and their pipeline of strategic and technical consulting work continues to grow. This includes a new engagement with the UK's Department of International Trade advising on Project Defend and UK supply chain resilience to underpin economic and national security, along with reaching a key milestone with the National Institute for Health Research, where they completed a UK public sector first delivery of Google Cloud Search to upgrade research platforms. Once we complete the transaction, we expect significant benefit for the clients of our firms, driven by the complementary solutions offering of PA and Jacobs. Now, looking further into fiscal 2021 and beyond, we believe Jacobs has a compelling organic growth opportunity. And as appropriate, we will further accelerate that growth through thoughtful strategic acquisitions that offer a higher return versus our alternative of repurchasing shares of Jacobs. Turning to slide five, I'd like to review some recent ESG actions. As a company, we're committed to delivering results to all our stakeholders, our employees, our clients, our investors, and our communities. Delivering on this includes our commitment to our sustainability strategy called Plan Beyond and our Climate Action Plan launched last year. I'm pleased to report that we achieved a net zero carbon, including 100% renewable energy for our operations of 2020. and our carbon reduction targets have been formally approved by the Science-Based Target Initiative. The climate agenda will continue to be front and center in 2021, with the United States rejoining the Paris Agreement and the 26th UN Climate Change Conference of the Parties, or COP26, being held in November. In support, Jacobson announced our Pledge to Action, a campaign inviting our clients and suppliers around the globe to take measurable actions to tackle climate change before the opening of COP26. And we are also leveraging the power of our Jacobs people in making a positive impact. We launched our Climate Countdown Challenge, where employees can join a new mission each month to tackle the climate crisis. Through both of these initiatives, we hope to raise awareness, inspire and motivate individuals and companies and demonstrate the collective power of organizations taking actions now to make an impact for generations to come. Moving to slide six. At Jacobs, we intend to lead from the front in the transformation to a net zero economy. In combination with the COVID-19 pandemic, climate change remains the major global driver for ecological, social, and economic disruption, impacting every person, community, business, and governments around the world. It's also a major disruptor, advancing technology-enabled innovation and sustainable business models for addressing decarbonization, the global energy transition, and resource scarcity. Jacobs is uniquely positioned to support our clients and communities in developing and deploying solutions and technologies across the full spectrum of decarbonization efforts, including renewable energy and clean power, carbon capture and storage, energy efficiency and energy storage, green buildings, sustainable transport, circular economy, carbon management mitigation and compliance consulting, as well as adaptation and resilience for all facets of infrastructure. This includes developing technology solutions, like our recently announced launch of Jacob's Travel Service Optimization Solution, which transforms the home-to-school travel experience for special educational needs and disabilities children and young people. This solution combines our deep domain knowledge with the latest advances in data analytics to determine the most efficient ride-sharing experience while supporting decarbonization and our long-term transition to a net zero economy. With that, I'll turn the call over to Bob Fregata to provide more detail by line of business.