CACI International (CACI) 5 May 192019 Q3 Earnings call transcript

Company Profile

Participants

Daniel Leckburg	SVP, IR
Kenneth Asbury	President, CEO & Director
Thomas Mutryn	EVP, CFO & Treasurer
John Mengucci	COO
Joseph Vafi	Loop Capital Markets
Krishna Sinha	Vertical Research Partners
Joseph DeNardi	Stifel, Nicolaus & Company
Cai von Rumohr	Cowen and Company
Sheila Kahyaoglu	Jefferies
Tobey Sommer	SunTrust Robinson Humphrey
Adam Friedman	Seaport Global Securities

Call transcript

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Operator

Welcome to the CACI International's Third Quarter Fiscal Year 2019 Earnings Conference Call. Today's call is being recorded. [Operator Instructions]. At this time, I would like to turn the conference over to Dan Leckburg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.

Daniel Leckburg

good and Nicole, you, morning, everyone. Thank Leckburg, CACI, and Dan Senior us Vice for Relations Investor of thank morning. President this I'm you joining for

cause Slide our historical views Those important and current could in reflect providing About in our there the statements this are filings. of presentation under do so law. as statements move factors We from not such, night's materially described are today factors last that company's release address forward-looking earnings at anticipated. slides, will results be to subject actual statements our those as and and listed bottom disclosures oral are differ of to written SEC call and the and to that facts, that commentary, are These let's #X. constitute

will this to statement as Our incorporated would part not of safe a harbor call. non-GAAP with isolation measures out transcript in GAAP. measures included point substitute be also accordance financial that discussion as should considered or prepared is I and be in this presentation of of non-GAAP include any measures. like These for should exhibit on our

discussion Let's and please. X, to open morning, CACI. To President turn Ken here's Asbury, Chief our of Slide Officer Executive this Ken?

Kenneth Asbury

is Dan, Operations; Mutryn, Officer; the us President CACI and Gray, me you, this Operating are us Financial good to thank morning U.S. XXXX who Chief and Thank quarter Chief President joining everyone. Tom With results. Greg Well, Mengucci, Officer; of discuss morning of U.K. year from you for to Limited, third our fiscal our John Bradford, DeEtte joining our

reflecting earnings cash released net combined operating X, quarter performance. delivered quarter robust please. I'll year for revenue share and guidance full cash third record We So our flow income, strong and XXXX year, flow. profitability the the earnings and for organic to Last in night, with strong fiscal growth, Slide we raised per turn

to awards, contract XX% of $X.X CACI. business history won the We new also our with almost as largest that is of in billion quarter that

has exciting larger, to every in me for awards pursue are quarters markets. They The strategy we John more the our all business contracts XX to solution our and bid. across notable are result, that executing we now, business while performance investing winning. exciting many just of intensely and successfully a While higher-value percentage for been team and is type we a in secured are of insights some few focused higher contract is of size the as our what's most provide bidding a moments. into future have pursue, less work our opportunity contracts winning the we we will that on

Slide to please. X, turn Let's

government power the Looking driving request, spoke, which growth. reflects CACI's macro the unwavering ongoing at commitment and aligned spending environment, submitted optimistic XXXX our the budget well capabilities remain Defense has administration to we will last we Since need its and We and priorities America's competition are bipartisan capability the to budget National will great of context war-fighting of the Security. come believe restore September. edge consensus demonstrated erosion military action in regarding urgent and the capacity the legislative a be in broad to technological

processes this for homeland as to across appropriations and security expect and and drive landscape. as of intelligence in federal We defense, modernization recognition well the systems, investment infrastructure

value CACI talk just Mastodon. with from and for about turn and differentiation I'll a to LGS please. moment combining we X, Slide strategic Let's gain the

be our pursuits days. delivering success the the chain, fully importance an customers' for aligned our are seeing supply collective area contract security capable of probability products customers urgent control significant where entirety capability these with time, national are solutions and -- as to span security all raise to benefits domains. incredible war-fighting capabilities the of customers we We synergies processes. entire of providing and of requirements having of are stronger of Over and These result a will and solutions our innovation our that we'll

just are the products. We differentiation is this the opportunity We're incredibly start. integrating intelligence, Cyber business. communications area for to about excited X, unique electronic signals and this in Turn And of warfare, our please. Slide

across am high-growth that, I our winning look all to us call continues on and differentiated With areas fiscal our to and forward. XXXX, confidence capabilities gives year strategy, Tom remainder to Tom? also financials. it As turn our our of the and to-date of of looking We're ability by M&A value and also program in our our to and deliver the over markets, in successfully profitable growth high-value, these I performance markets. -- our thrilled details prospects -- add business I'll to shareholders. This predictable, for our

Thomas Mutryn

and Slide you, Ken, everyone. Please good turn #X. Thank morning, to

a Our million quarter last associated The $XX growth greater significant income few with and within $XX Mastodon. which X.X%. months. transactions at LGS growth transaction-related the Ken $X.X includes X are XX the third with organic revenue quarter expenses billion, are contributors to XX.X% was which other of than Pretax for last was the year of closed million, mentioned as acquisitions acquisition

were the a discussed 'XX the in nature. of $XX incentive fee third fiscal in and product please. a the by drivers and performance, X.X% million year primary strong impact in nicely basis, up a results included release are $XX the pretax lower Normalizing income certain XXXX. earlier-than-expected net year a growth year's million X, strength rate that program on year, was for pretax of items million LGS legislation quarter income onetime $XX reversal comparison expenses. FY the recent on this million, cleaner income and last million revenue transaction-related and costs provides contributed quarter profit healthy reported management our the increase of about cost that of driver that $XX driven interest to Net a adding reform $X The programs lower 'XX with and sales, excluding to indirect million fiscal acquisitions. of the The profit was for quarter's we rate. a Slide benefits, contributed LGS shows of a onetime liability. and consisting to tax factors $X.X special $XX tax several tax onetime Mastodon and the and As million of reserve of program deferred of

the XX. excluding million Given previously. flow third $XXX quarter to at performance accounts from are DSO will facility. income guidance, outstanding we cash generated the confident least raising we improved to at increased year and fourth net million turn We purchase and AR at facility revenue to $XXX the acquisitions quarter our with quarter receivable the we With of to X.Xx. third days. day net our impact 'XX, are trailing debt million combined operating which in EBITDA the sales $XXX in fiscal third quarter, operating over closed excluding $XXX expectations, with fiscal guided exceed the expectations XX Slide XX-month million, cash We of Please flow contribution

we strong of Slide ability our executed absent fixed delever, April, cash XX% Given quickly those fixed. please. In swaps. place, debt we additional the to approximately several generation, in With our acquisitions. have is to interest XX, rate floating

and per earnings sales strong items which guidance booked $XXX are income we be net there $XXX fourth in year are we of performance, between to quarter the As product XXXX to guidance now the raising million. Ken share our quarter note: fourth implicit given XXXX the expect comparing fiscal million expected in quarter. actuals, income first, net we've certain to mentioned, several overall the third were in XXXX When XXXX, and

and third, the development several fourth in are to to fees rule given set fees a recognition improve IT the the quarter will than $XX in award lower million drive investments, opportunities which year ASC award initiatives. $XX And additional of last we higher better fiscal This award XXXX, year. fourth over recognition related undertaking of efficiencies, increase we business XXX had last revenue compared whereas, in HR quarter robust of Secondly, year. smoothed more in systems their quarter the spend of fees effectively fourth including results totaling million cybersecurity XXXX,

be now nearing We revenue expect between to $X.X are billion revenue and $X.XXX and also our billion. range

'XX December To which legislation we tax full year. the have provided earnings our and few in the discussed XXXX have comparisons XXXX. quarters, comparisons, the over table help is for with the assuming provide in release by reform of and John that, 'XX, presentation, result GAAP we FY the As passed of effect here's last a the adjusts slide With to again was in legislation highlights. tax operational impacted

John Mengucci

Tom, morning, everyone. Thanks, good and

please. XX, Let's to Slide go

the organization delivered expansion program quarter generated another of was and XX.X% operations acquisitions. across board. Revenue through great wins, new-business Our growth

trailing X.Xx. XX% XX-month We and $X.X of of also billion a won brings CACI. that awards This contract to book-to-bill our almost new business to record

deliver to IDIQ, solutions; of and products; systems areas These long heard customers electronic drive margin To please. are intelligence, backlog area exciting. $XX.X is $XXX signals won of you've Ken years term. now focus laser the examples few: and for frequently record mentioned, and market, we're intelligence, and continue electronic won with contract level, XX, sensors over awards, command an a and large $XXX invest and we we're convergence strong our a and to the build a customers to just contracts signals order by winning across to highlight differentiation to on are winning stands for task few the transportable the in type addressable modernize, solutions-based Driven of us revenue our we a Slide which a us of as sustain large X warfare U.S. Cyber million CACI control and an almost which a in operations, field business providing and continued of million solutions. will with the the this government; mobile the type at basis. trailing deliver contract federal of allowing just Cyber and those as They Cyber warfare As develop, also test a our significantly billion, electronic expansion name Army across multi-award warfare develop, of capability.

of our generated And performance. initial cultural announcement. revenue Design, for of is the quarter expectations provided couldn't to and are Turning line with our to LGS exceed and very the our at pleased Mastodon Innovations time match more and track we guidance the on with acquisitions positive. in our their earnings be They

of the stand-alone the While to It's to and both in offerings. synergy combination. already exciting the is see the product into on teams working differentiated compelling technologies combine a unique companies together solution are magic basis,

focus. performance, done. onboarding leveraging algorithms program XX is All thanks deliver flexibility our value product-based This immediate to and to After is on capability, greater been ensures our to advanced we have customers. And of enhanced XX, we plan solutions Services Center, customer our pride integrate with mission and opportunities. is remain the innovation to into largely functionality, Shared and fact, Slide In synergies our ourselves satisfaction, smoothly. acquisitions, software Together, realized, new pursuit the on complete. focused we and integration please. ability externally solutions

the at minimal indicators fiscal XXXX, XX% our healthy. forward are amounts new. of Revenue remainder with composition and of recompete business year stands existing Looking at

$X.X is at for of business Our award with pipeline billion, pending of over strong XX% CACI. opportunities submitted to those new

expect than to billion turn our XX% our back and we Mastodon, that, In Ken. pleased next ability add to over are of differentiated win those consistently over I'll closing, our more With and $XX.X another quarters, submit call operating LGS looking integration While the capabilities forward. prospects business, and of successful by to business. X they performance, the I the new strong am for the

Kenneth Asbury

Tom. and Well, appreciate John, thank always comments. you, I your

Let's please. quarter execution and growth, CACI excited of increased very results turn profitability the strong third We am the quarter organic team. and Slide entire another our of XX, flow. revenue delivered about cash to I

with outstanding, contract backlog. record driving record was performance development business awards Our

encouraged to quality accelerate continue strategy areas differentiation. investing delivering customers our both long We in and execute deliver by as and term, profitability prospects, deploying successfully to we term growth, growth capital and new shareholders. continue to I'm in our with value our key and our by market-aligned of to to

the to closed to on special talk last didn't that call the to and I'd remarkable a welcome and a LGS X,XXX X, employees, talent, the family. to close welcome with I and this from chance to questions, about like a Before we commitment call. believe national culture their of them acquisition we talented give and up open visited employees CACI of and based I to brings March leadership X advanced acquisition to on have We them invention a this their in strong security. laboratories, met the

are now and CACI. to integrity incredibly welcome talent, And like of remarkable. again employee am to ethics to I'd population. entire say innovation, proud commitment So how I Their our

recently as locations most Thank in a time Our States. work. for employees for that, Bay voted top top Nicole, Tampa workplace numerous once we CACI and up our recognize place the received open employees Carolina, good you let's recognitions in a throughout call the CACI South questions. to to have again adding the With United the workplace, in to to taking other

Operator

[Operator Vafi question Joseph comes Loop of Instructions]. from first And our Capital.

Joseph Vafi

I in coming the function today thought if of doing go wanted function maybe factors? I'll why Is And to wondering further in. I market? it of initial bidding of deals larger a back, think, you're commentary to or follow-up. bit could circle other Is that some have that. a your exists -- then CACI a larger processes you that the a fewer but was on little I some

Kenneth Asbury

Joe, is Yes. Ken. this

through was not that without about how ago come those off budgets diversified strategy enough to on and went to going pullout And started did X we those and of a got that of to diversified Iraq So come Budget run the following -- as or much the enough storm war-fighting pretty we And up to Control the roots just -- to began of support efforts. down, the us and drive inflection focused weather this our business just of a successful of goes years allow year. double-digit was budget of whole that philosophy realized growing down. business every sort we the Iraq drawdowns of And Afghanistan. single to have the a we the Act, we in very then when we'd were the this point

the to that one of professional the the years, to fight methodologies consequence, SixX having systems, using things. wants our to us competitiveness, nonkinetic position to the small want marketplace. relying being first for develop little this by control their -- our all onboard bought committed of the using faster advance than advanced multidomain side, other the broad into structure a and foreign was processing, -- on want I be came we over of effects as of spectrum has of work the As spot our see we to nucleus after rocky to going doing electromagnetic U.S. waiting lot I we're recent and X And was first with the Cyber, signal services platform very have a being years. LGS, digital past government a we're we analysis, it skills the gathering ago, of we grown of upgraded acquisitions, the network out everything. all procurement went cycle on And And John things did on Mastodon where capabilities now is at and able the now a and core put that the intelligence laboratories, with a some And -- is that kinetic sweet the one weapon where, most being just is seeing being while from and very, of of software-defined but we to work very weapon. -- fact couple in and a done it do, the software but the the where frankly, business, pointed and our few think, that Any Systems. rate Cyber a capabilities nicely months a it, war-fighting able that are not

you do add to that? John, to anything So want

John Mengucci

Sure. Yes.

little of quarter, government. of EW where of it's for in it's selectively did did I new our to of begin rate bidding for ones convergence enhanced winning for that it's new we new and bit buying I provide signals capabilities, was what quarter, in and on strategy market-aligned new what Ken's the And of billion are a fact paying continues think that in $X.X and billion so new-new and larger bids the awards our we been new-new for color billion functionality federal intel, off. the an third and about another with were If billion be about areas third to point quarter see the $X.X proof-positive of wins $X new. to the CACI, of Cyber. In $X.X customers

fell million which pleased into key work, which takeaway is are the growth. new remainder with. new also $XXX business, to extremely a our Another existing programs, we also The component of enhancements is

Joseph Vafi

quarter? first Got strongest That's adjudications feel quarter submits great. that isn't seasonal -- was year? cadence And your And just fiscal I follow-up you how government just mean, well. category. of the was were was a kind the in signings of quarter. of where the of federal you and for the I relative lumpiness wondering, rest in did new-business the to kind there really kind the positive about new-business do necessarily of

Kenneth Asbury

Joe, this Ken again. is

think would -- frankly, and my some had remarks. it we've I the quarters last, pretty I We've So tell XX. what is, over good I you that award in mentioned we feel

we we what And find side. may in having as over And I've Whenever know so we're out. mean? they're I the to point to the XX. all trailing of it. of billion capture we going We the processes, about OTA a that maybe because success lot process. field, rhythms to you now, means on can is to that We that investment ratio -- we spend a against smaller have our our -- get products We've demonstrations we XX% quick-reaction where we the world. of lot to demonstrations, do [indiscernible]. aspects very, want spend see do understand that with really investing going paper see does some of book-to-bill upgraded reason -- been we think, what of some of for at business trailing this remarkable upfront. the comparisons. $X more mentioned of number build fact where bid a That field comes X.X tested sure number, making time in ones, the There's put B&P winning a which very that about a what like before. customer we the XX-month jobs, or a is they ourselves money think on of our And realtime, total to I studious to in the book-to-bill the into not I'd of other before we RFP have what, capability that

That's of plan were of More more has green a of green we these There on markets business tell lot So -- that would last the meeting been M this investment blue. bidding when our not to we've quarters on us across Since that our kind goes on and upfront, a were we but just Gray the she's the L what target. before jobs describing capabilities, experience the proposal time, -- RFP. criteria we what mean? you. will a more our eyes become a customer frankly, in all well demonstrating proposal. proposal same few investment, and write now more believe here, of but, we in does what all the areas. in experienced take every writing been same they institutional and what with have just in what from and I earlier would if deal the with I a the that times is to we're are has seen that And select DeEtte

third years the of we I in So quarter. it We happened third fact Many part certainly ago -- we that in think the jobs picked quarter. them but award the we'll the -- didn't also right was X that bid. third still of see I to quarter the in think see area. the lumpiness

slid. There's any at the -- selected expected. was be have of had some didn't into Some quarter. we happened it the right to we at lot having but we place A targets. the time right right but -- move the that Others -- see just third this

that hope So helps.

Operator

of question Research. from comes next Our Krishna Sinha Vertical

Krishna Sinha

been about on specifically? -- to to traditional the of compared more that are what's selling elaborate would in do just that SixX in of who in that stuff slide believe capabilities. seeing to guys what's for the see And growth of what services kind Mastodon exactly? pipeline than Mastodon? budget labor-intensive Like are rate already little growth bit mix the you the the that in. I will throw But lead be Maybe a differentiation you you sort here some Can services you're -- the they higher you and the What doing? that LGS have talking have? these the maybe they businesses

John Mengucci

encouraging since opportunities a Yes. and well strong days John, through we've great Krishna, customer impact so area is the Mastodon. the thanks. the funded. and Well, LGS look, competition. context, This been in even pipeline our today the healthy. of power CACI early clearly early, It's the of priority, and addressable very It's an start. talking is combination of the I'll of these SixX. market from particularly It's about of on more probability What's days win is and

more know and of It both Benoit, we overlap and solutions. capability allows others CEOs deep would greater across pull as strength. entities, us -- Mastodon. product-based We to now signal ability both both remain Kelly of those say offer company, Kevin a a solutions You capable I drive both and An us. of those capability They're well. from companies, with overlap the And which LGS solutions finding this and and extremely outcome-based have with the to synergies have differentiated I would with being to synergies, we're of work set. guess, of beginning Mark each

We that new-company window. of You now. just XX-day a rates, we're in the integration right asked growth finished about middle and

a now. our we've to synergies stated on be combined clearly larger the of So at CCI if incorporate margins, growth would than core those and at in in I already XX% talk add prepared that But running we margin of step-up We'll rates, we about run those full more at. we will complete. should those businesses is LGS a what are margins about looking as are look EBITDA are now But -- cost see year the also guidance the And our June because at we Mastodon. in call.

of was growth individual both think part question for I your around the those of last companies. rates

Given stages, early, that to shares they're their we're margins shy that specific early at and cautious about company too to Mastodon going going in. away is solutions be some bit of products provide a to and we're much information from much a looking because talking revenue there with we're very that, very a those areas that differentiated

Kenneth Asbury

Krishna, is Ken. this

domains. analysis. -- to of time. the demand put believe such We about open on a asked the with set repositories of Every depending field of about source that we bringing realtime field these You control intelligence in and government longtime military are and the at product connect potential days can battlegrounds. part back their things instead we capabilities and in new signals that question much and a are whoever, to to have going mine, the in one and ability to legacy single existing commanders do of we generation and really write of the complex not in we can DCGS of. depend kind multidomain increase that software having building signal. we information the in the And at those realtime of processors a by fly, results looking a to that forefront to near of in the doing way is to repositories the We -- can way stovepipe multiple command were systems, for That's very them. it the home -- so into was your capabilities And and more with the can the of on on lot collection believe systems, the of decision important who almost we our as is process, decision-making can believe house signal. those any really speed services in process of commanders We provide front demand the the

Krishna Sinha

I CXISR space, I the Okay. Maybe look of like and comm of your Harris just have a sort considerable know these a near probably the you've that's long an we their mean in the to export competitors guys, from opportunity medium some can that. sales. follow-up to they that of over And component export be and not that businesses term I some but the to or term, at that you're acquired expect these in something if is space there'll something there? targeting L-X products

Kenneth Asbury

Yes.

channel Five customers. I we in the I incredibly while you, a It subsidiary have an think provides that -- here the will, U.S. environment we would we I both Eyes think in tell so. and, But target-rich have U.K. have -- -- And we that instance, a get us we to use a to it. for NATO if you

matures the we devices? Cyber would much so business lot particularly, at as use forefront we before. of kit. we use how a signals a And have of nonkinetic right Can that we been allies. some The signal future, -- same we'll used we in a from effectively That's part, believe, how our collectors? communication like. same haven't processors? effects, the we're common having of want that share some can I see the some we Can how do the the more with to part, of. see about for we not we're to-date the that having the There's But have where as in looking being as have that things, way we discussion do We these

John Mengucci

not I what And products It's a focused And also here's on Ken, we're that so company. more that more far product-based here's for volume. add -- potentially do being think means, about Yes. we're I'd What product-based -- at CACI, not large looking solutions. that provide difference and differentiated could less capability. looking mean thousands devices solutions, we're is hundreds is we're which actually that, to of

on of software, that to a very It's the about refresh product-based to does, EEs, that device not earlier model. software-defined solution development device signal-processing are devices data, more but model, that's continually that folks product on product focus point, able we So dependent much a more different solutions. what Ken's product can more deliver once and

Operator

from comes question next Our Joseph of Stifel. DeNardi

Joseph DeNardi

just considering? think can said or some spring offset work kind really there Ken, letting record to And bit what's this growth a I a you see? of growth. the that that shaping Like off? little of you in organic point? is be this something you relative where an at terms should you're portfolio is we start is still coiled kind accelerate of Or booking roll modest reconcile strength to was there quarter a certain should Or

Kenneth Asbury

Joe. Thanks, Yes.

kind might We've from sort services. away the we at was way no about the stopped are get OECs A defined the we have measured of professional future. past. the That's of in years direct of in that we commoditization that business secret. we work our a not to lower-end few labor end because about talking that lower So talked who want ago,

I things. happened continue declarations when for where, doesn't quite we put using at to is it, to on. looking rate structural contracts So it worry a a look out we not pleased recompete get we're price. while going for actually that if with profit customer there -- bit have about of then not able when some we're bid recompete, -- but lowest in things certain number, a about there's if it LPTA just to job, of The I'm they're to been are a growth profitability value go to we're we'll it, the And there going our number of because not a these reasonable

could any it it, and face still they competitive customer their sets, believe is Let's work number by be that people. some in a done of world,

move to value chain. trying we're the So up

slower been be in us. It quarter third a on to now I that's closer contract work But some because process been taking holding that. see that competitive. have Moving recompeted, of a closer longer do, as is attribute. has We're long value that gets and outlook. because signal that lower We've as that, a one have of would of our very taken that be to some believe time. for a an be getting of certain successful in the And to this people other that then we as now. I do things on it is base come this been a that closer the we'll that is somewhat for for to these point to chain caution if inflection proposition profitable could we're start being there And today also existing every of us and that thing we'll fix. may particular we raise able in back organic right up

for in business? So of combination working to subtract working we our additive what all do we're our is how part June 'XX. our you CACI of in rate, know let now, is the is growth we translate and -- inorganic of picture What on what like. you what into that We're total for acquired to And a and need from wins. rate looks going all or of have fact -- much growth right know for the solve that? where this that we'll that's How organic that what growth growth this the we're on that these does

Joseph DeNardi

you been the businesses you -- candid just from about your helpful. past you that's say Can can the whether pretty KEYW maybe say that of guys Yes. sale? have in were you That's silence part assume that answer. you've should But the I very Tom, pursued.

Thomas Mutryn

questions. you question anyways. those Yes. Joe, But thank for we types the don't of comment on

Operator

from Rumohr question next of Our von Cowen. comes Cai

Cai von Rumohr

Congratulations on great results.

when normally hitting this your ball? the strong something had Is of than Leidos all And cover much but sudden, a were macro all guys are quarter. you stronger particularly basis the looked So off also there of that, numbers across, strong terrific, a we isn't a expected. GVIT kind that's book-to-bill. we happening very on bookings

Kenneth Asbury

number X related Ken. budget is big think, very let's with or a actually to that money, in of priorities, start. important, difference. I'll the deal. as house I'm beyond, I of macro what's a the Defense, for look I at things clear are us think lot you an in discussion restoring them. some there's -- translates organizations I year. services public third they are strategy, to it's years. that election. of -- think, for that terms And this two terms the wrestling more than believe a and happens bit the comfortable line those and of being environment And alligators look happening house we're of my a all that second budget. the together to cogent we'll that this There's the X of the some take happens, top responsibility having Honestly, now, this that acquisition dialogue for having budget back were even mean things many second -- But of in the 'XX But the think putting of competimates wanted deal see dealing of all there's year. a is of very a part Department reflective two far a year I over higher saw more to to year And about of continue a market the with national the and the agreement negotiation into -- last I the maybe what of year having improvement budget Cai, hopeful CR services, what between a been defense quarter getting I past I the the another we've this if in for of amongst of picture.

Cai von Rumohr

quarter the they've expect assume June should So normally that so this that quarter, be be you least kind stronger been? that strong, total better I we don't the the but quarter all a given some should of usually also term, well, to normally September? everything going and that did September did forward, -- -- that Obviously, is near have pull-forwards you strong anywhere at you that a and be so why than fight, spectacularly little is you and on the should Or is were food strong? June not near of -- and March that, the which next

Kenneth Asbury

spectacular line. Well, the one have right point now, on I from comment, you're

would win the trend. how any feel in do been couple decisions that better -- I see We until can already I the this right have, we for We'll but believe believe, booked I play it's the the 'XX don't of anything to major $X.X good see that's making estimate. I've the you tell trend I tell can get deal, evaluation months I I tell I with same behavior What the are you, investment same the about that So our jobs out. winning, now. I that feel else next we happening am to we've impediments at. customer. I love good Cai, fourth quarter. percentage in past what budget at are confident billion around far a that probabilistic the and can't you going we or I about

having high not see, and of into something my here. to activity rates that the had that think will business Yes, expectation us because award pursuing. this continue over level we higher a very on continue time, in big the awards as see very terms we translate notable maybe Should capture we will customer So same taking share. at I execute spectacular as some market by come capturing really But at is are steady to to then? things the we time

Operator

question next Jefferies. of comes Sheila from Kahyaoglu Our

Sheila Kahyaoglu

order we think organic about been asked kind contracts? And some the X-year Are conversion? from but I Are these do of it's they degree cadence they Are that some time activity. longer about larger How to How think the know lines? great you contracts? of growth here? do

John Mengucci

I $X.X is about Yes. is our X of business. of clear. to of new thus performance $X.X John. Of awards Sheila, of thanks. period are billion there, a it's years. far, those Look, little give And bit around that color average mean, an This billion

doing it's review your that question So on exactly now. we are bottoms-up a

the we're different win we're late have to now Services Intelligence the a the it's in calculus your and that, of where larger come what or a there lot of -- seeing And and IX, and is systems multitude spoke those Ken to comms area where a sit will areas have provide area, be each our rates, they solutions that's that of to wins submitting, our are. are I billion are. area, second, look all out come majority the Intel the able much bid, and at to that's looking in at and one as also awaiting we're going we're in point, whether So throughout transition add solutions we will they very, the the I that ramp-up of well. June in part $XX be where share in that command the same Enterprise customers the professional 'XX. QX of just third, guidance of control with that What And about have what award pool $XX service periods are win. middle in those that To or those very of awards billion

a -- of in growth we different lot a ramp-up the organic space. yes, moving drive but FY to driver a would 'XX. wins to have So expect be of been very Those our have those line, solution time

Sheila Kahyaoglu

then And John. I just a follow-up Okay. that, on guess

majority and you since what of your that did your In how has think addressable of much and were a whatever do up of EW, Mastodon? you it LGS portion sales as And be. might a market -- say that terms How intelligence, about wins related opened to current Cyber, is?

John Mengucci

Thanks. Yes.

expand 'XX our starts having other this clear very markets EW, LGS So is. It's part world. our plan There'll see government more of Cyber in addressable that spends the we FY come that of government will an potentially market. shrink prior SIGINT, Mastodon assessment that to a addressable as We're spending. both with were that to what able happy market be and does with that us the money

'XX the the areas position. see say we intelligence space greater in three and growth will good that much in beyond. FY in are the those Cyber as markets a we markets the be very that systems It is to to expect greater, we safe serve, we area, So to would get that

Operator

question from of SunTrust. Tobey next comes Our Sommer

Tobey Sommer

Just kind of a question. follow-up on growth the organic

of on book-to-bill exceed pipeline amount, targeted strategic growth given long-term your is peg of of strong rate goals And industry the outgrow rate your industry think the by growth the industry-rated outlook basis. part Where you that in recent an to organic do in your your you currently? when organic do growth months? As may

Kenneth Asbury

Ken. this Tobey, Yes. is

to I So be want clear.

industry. to is addressable X% commitment market grow the X% better than not Our growth, entire to our

market beginning in FY doing discussed the you billion budget the number budget because a saw We have that, We'll it between $XXX had that ramped the a our in In somewhere June X.X% up. we CAGR we -- probably of see we've foreseeable $XXX our that it is So we're looking given we're -- 'XX of through for the defined -- and through more -- estimate exact about for bottoms-up guidance could future. now. that circumstances billion.

We where and in to year than exposed about higher addressable because a XX X% in the It's towards growth, I roughly of that's as not the to very slightly enter short overall will the X.X% this remind it X% XX quality want changes XX and dynamics I the a you we're found that. in fall won't also being ourselves that, mission trending X were may by pegged for year, commitment we basis XXXX, a XXXX, we XXXX market to X through our every growth. grow made not interested the also of of But XX growth in I'm frame. it. that that to every overall budget to we or years. the just year I domain the we've So vagaries points basis affected years more we that think points being time contractor be solution-oriented as of

side part getting national each -- goal our proposition you're been. of our is the value market the what our side enduring where the -- is to where brings has of more by So customers on to defense our that

businesses not accepted an to to or going it's -- of win on that are of result even in have companies great That forward. rate more getting a In a programs. means to is kinds be business. going going as is going investing profitability. kinds been valuable higher as lower that a exiting the some spectrum us planned a increasing have not rate said, things us that the government work. those to growth kinds the we we Cyber, we warfare, that So the growth because the of place see electronic deal the navigate aim support SIGINT, have that we as key that have in we that example that a to to invested position to one we being of winning, of And that of money. And communications us If to in work be opportunity same successfully management, and realm, at just drive to time, where and

Tobey Sommer

could to With you you bound you indicated the would, And now? that's us, respect comment the -- essentially pipeline recently done. acquired if the integration your Are upper of of your you businesses, on right tolerance remind acquisition leverage? for

Kenneth Asbury

has debt we to the is, and of we what LGS. came to over to probably south restricted years a bought Tom of as up which X.Xx EBITDA -- want X.X% Mastodon today We at say stay net when me So kind exposure. were

and organic a So amount M&A moderate dry our of -- growth Look, delivering now. powder that's strategy. got are doing our we've

it so integrator we now, it reminded put -- is -- different of then X,XXX purchasing They they -- was since easier business. use the immediately CACI's our us it. at Shared for all savings very me that delivering very it put on We It's other place, and and indirect on for by Services will the we has day, realize a much the completely day, cost to synergies do been systems. from back on tasks brought add quickly, end to in quite of Center successful those -- were time thing us their of to the bring John and put the timekeeping One first bee focus almost people, some them starting to it I made strategic have on integration were allowed and experience systems. a

frankly, are like there. -- a anyway. are or But XX-market commenting call, for about you on fills looking strategic out anything our what just them framework, for to wouldn't at thank we'll be as They're trust of what thing, strategic things or looking and part talk and, on I early this of some question. there that else So sort like -- or we're the LGS that opportunities other Mastodon we me,

Operator

Instructions]. [Operator

Global. comes Josh Our Seaport from Sullivan next of question

Adam Friedman

continues on in This as like fixed just if Friedman was the shift larger percent see contracts, I whole range? contract your as of of of about and is Josh. the to XX% strategy you sort actually can remaining Adam talk a you towards price sort for wondering, just your mix

Kenneth Asbury

Yes. levers Adam, of than provide Mastodon line. our part high-end it part price. say, only a a had or in a want kind we cost-plus had problems we cost-plus, this our the of but have. added so variety things. The Obviously, of a be never products -- And customers bottom of broader shipbuilding had business this business. the We product penetration XX being our Engineering let's we're vexing lot drive been, work. fixed ago. top of we of different solutions all Navy is the of price, year, see years -- to Ken. -- Systems -- very sole-source, Navy the is both enable We're of to was market to at that that GD of they and that huge high-end shifted looking from of we we'll fixed mix bit earlier big LGS business when a bought of -- that being a that to business looking amount largely a It'll we believe a

higher-than-core is point top it line mix CACI our you're us a what XX growth. so while goal still that getting but towards mix, also XX And a is is to seeing basis delivering

very are in them, if do, to X. that better good those why it the generally more opportunity we very, business. to lot an of That's that. could fixed-price a on lot to do on choice, is right invest and the in job at and we I I at. want I fixed-price team only taking we a know the that one And what and them between that choice job, want X% do fixed-price job gets a they risk, job -- to the So without love do we have return. have focused We're an would see make we we of -- We a if our a can can only us then had things look have past a we

money In person, fact, one job single I job. lost fixed-price was on single a think the fixed-price person we only

add wanting John, were I that. So like ability you to on? do our to

John Mengucci

Yes.

high-end once too, ourselves -- -- to is we're the is that technical Another last the professional to the to do of talent expertise of up And talent. ramp. data talk high-end services absolutely move recognize business. working you are but we getting you out What it's clear XX when LGS, that, getting right point, they're -- that with once government, technical days customers is also not bringing about trying delivery federal got us asking are to LGS way to we what found has providing

is not though their it's has cost-plus it reinvest And extremely product and solutions also EBITDA only that funds their even in So favorable gives their of driven at it business. to cost-plus, margin, additional rates. part their XX% them

place throughout working they concept and that in CACI. Kelly entire put order to determine how kind how at that Kevin looking be his of we'll with we push the in So team

Adam Friedman

Great. And more. just one

the can the on little a benefits bit bit And way quantify there more color a talked then any You little from Services Shared just you Is generated so that the far? about can also Center. synergies just acquisitions, you the there? give

John Mengucci

a take stab that at I'll one. Yes.

a at for that lower were What Greater we City a than wages provide we savings into Kind of prevailing Service portion lower when reinvested expenses. in area, You more one it we D.C., in basis reasons. of the back the kind know good of Washington, Oklahoma was Center real on of said do being Shared estate to announced a Center, business. number the the Shared high-quality Service service cost-effective those

changes employees, enhanced our our In for training the terms overall changes of our employee XXX(k) plan, to to experience, benefit plans.

cost make it sake to within to the to savings for funds other use cost So of better -- us business. wasn't the of savings money kind make cost savings of reposition those the allow but

one mentioned. John of does So into driving other we SLAs? are creates can practice? can we where a it mass are transactional which concentrated area best the efficiencies. have of benefits critical the lot Center intangible processes? automation improve where we on focus a of singularly we to the Service How people integration, Shared opportunities can What process is, further How multiple. How The it improve robotic acquisition embrace kind benefits use

Thomas Mutryn

Yes.

That $XX same about, key would management the take be of the we here. with then of year, side, synergy we Mastodon cost were achieved and how that, redundant around immediately Those in million $XX inside out at we to But we want out. Adam, that XX-day do team to not cost caution we that repurpose is, fiscal current takeaway work, a portion I We had into product a able talk But show what cost. that the have worth forward that and indirect had more could window. more well, looking that million was we -- cost was to savings taken of doing Kevin private They of that that equity go go we LGS the a integrations. the investments, research as and are were trend 'XX so Kelly's more expect were On -- we FY would those repurposing $XX clearly as synergies. company. million work. had technology We were layer so cost development to

Operator

concludes to the for Asbury our would question-and-answer any turn over to Ken This like conference back session. remarks. closing I

Kenneth Asbury

you, have call. available and on so This We concludes will Thank very, you appreciate questions, the help as the We interest you, of day our very their for many know everybody your Nicole, your to a to and follow-up thank who and well. good Leckburg today like Dan thank and Well, call. participation Price CACI. webcast in We'd that throughout thanks calls. logged Mutryn, George Tom the have are for day. in for

Operator

for you has The conference today's attending Thank presentation. concluded. now

may You disconnect. now

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