CACI - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen thank you for standing by. Welcome to the CACI International Full-year 2021 and Full Year 2022 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. time, Dan like of Leckburg, for International. this conference turn Investor At CACI to over Senior Instructions] I to would the Relations [Operator Vice President Please ahead sir. go

Dan Leckburg

Dan CACI. And thank and morning, Andrea, you, this joining we of thank for everyone. you Well, I’m Relations Investor Leckburg, us good morning. for Head

statements presentation the that as not let’s cause materially are will forward-looking of move providing are of are today in subject this Company’s current and address Those in statements such, be press facts, under call anticipated. actual to Slide as listed Number differ are statements SEC views We important do to filings. These to slides, night’s factors the bottom so and last could that results historical and There at factors our reflect X law. please. release, constitute from our described

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

open to Chief John this Mengucci, John? turn Executive International. up President Officer X, Let’s please. morning, Slide To and discussion our here is of CACI

John Mengucci

guidance as results, this well for Mutryn, you me discuss Thanks, year Tom as performance. as quarter full night fiscal pleased guidance. Officer. Thank And fiscal start good Slide quarter really joining well for us results our to Dan. XXXX everyone. and I'm is XXXX. morning fiscal And Financial our please. our fourth year morning and very for Last With XXXX, our XXXX with fiscal we Chief four as our fourth

line in expectations year CACI. strong for results capped our fourth quarter and another were with Our

delivered of EBITDA revenue year X%, cash flow. margin For and XX.X% growth robust we adjusted fiscal XXXX, of

and market, underlying margin was we of expansion. ahead growth addressable revenue of X% organic delivered Our our healthy

won business a a of of And those to billion challenges persistent growth. of preserve total navigating wins awards and we our I the X.X five of support prouder drive that with while of while healthy $X.X CACI. new contract represents please. to for also not a ensuring base awards results new themselves who be the safety all of to future and delivered and with continue of recompete book-to-bill the We health That our those could COVID-XX. employees year customers, mix of them. over XX% around our times Slide to

seven an have Turning environment, to new in way are Congress, constructive. and external as The very and we indications increase administration almost could fund to further indications their the administration spending makes of spending proposed upside. about through X% defense months budget the NDAA overall into its the remain

to and modernization we including to cyber, space. Importantly, priorities, and continue electronic CXISR, bipartisan see offensive IT support fund warfare border national defensive security security, and

for community, to and and at federal we investment. think Infrastructure broadly additional is and and outside point a cyber or customer address with contract DHS's programs, DHS cyber vehicles Security CISA intelligence Cyber be civilian of well-positioned the As about DoD relationships requirements. Agency more existing CISA focal will Security cyber CACI

All on all to this capabilities six enabling methodologies were CACI about very technology extremely agenda administration let ongoing develop an counterterrorism. intelligence development, our and strategy agile with the addition, peer and great near It's power areas artificial software please. competition focused geared capabilities. In aligns well and toward is technologies is and and R&D Slide threats, like well-positioned.

challenges our have most needs. future pressing the software-based. of customers it is forward, Looking that underlying remains common clear Many

architectures. these solved with success. needs increased all and development of to New industry address open are in at of which on present development to demonstrate technology, they and using our a future and Different security key CACI flexibility, and -- more of they DevSecOps at be agility, leadership software growth. automation focus tool-based Agile pillars scale, emphasize progress capabilities these the can but with efficiency, continues or software speed multiple more of software elements, software. one

program applications. agile. provide performance materially customers BEAGLE agile-at-scale a growing Our of the past delivering CACI on largest CACI government's BEAGLE government. other changing software the development, industrialization address more for includes the enables agile capabilities in XXX important faster, efficient is increasingly to at needs, agile and scale This agile the demand of programs federal and more leader with which programs asking our for over are to responsive credentials quality. with higher

software In win we agile recently classified agency and apply leveraged This customer data of large-scale Century development our to a analytics. won Next acquisition. fact, new also relationships the to at capabilities business

AI AI. In on to focused analytic us and tool where addition, analytics. you've providing our our NGA heard is best-of-breed plus infrastructure, analysts, was business million recent our center the the open discuss for building efficiency at NGA AI users. projects of predictive and providing $XXX suites CACI environments win out is across vision customers environment speed XXX computer ubiquitous an

key we platforms. Photonics remote continue a technologies invest in today. great their defense is a our via photonics and aerospace acquisition downfield on element technology a Notably, of invest strategy include laser-based example, purchased is us customer Lastly, to is further of It recently our to differentiated and or in software-defined look ahead primes our LGS. which need. to came technology to of sensing and communications

well-placed differentiated We of sales seven confirmation Slide in primes. have A&D please. pipeline the nice a opportunities additional technology. of across is This investments

XXXX the to of XX.X%, we consistent FY guidance, addressable EBITDA expect growth and margin base five to to normalized at above over X% expansion XXXX growth which with about of revenue our revenue year performance continued market, years. we the expect we FY of our midpoint our remain we next of which adjusted guidance, grow FY margin At our goals. expect expansion committed to another Turning stated X% And our XX.X%. ongoing XXXX of represents

our continue technology continue capabilities growth, expect a In expect and expansion. growth and that we to cash shortly. provide collectively want please. generate robust success flow, And differentiators are synergy to addition, technology. emphasize contribute allowing between to there of important CACI requirements informs and fantastic our growth of and of expertise technological offsetting can is to to all areas continues and And seeing and generate results great the deliver flow. and cash enablers it our will I are robust Slide mission. efficient Tom impact expansion of and the the us eight daily the outpace to driving expertise to in effective business expertise, drawdown. Expertise customers. positive Afghanistan our additional to technology details We're to margin margin growth

Our strength us repurchases, capital M&A deploy and cash options. share enable other drive financial overall flow to shareholder additional to growth, in capital deployment value investments and through

to continue of to invest will and growth We ahead drive differentiation. future need customer

is I'll to commitment the Our greatest to to, turn call utilize the shareholder CACI's Tom. With flow cash that, deliver over long-term value. strong

Tom Mutryn

John, you, slide morning to Thank good and everyone. turn number Please nine.

and was revenue expansion. EBITDA growth results the successful net representing margin in were income year a and X.X% of in fourth Our Adjusted finish overall to margin $X.X quarter, X.X% million. of billion was growth generated X% solid We another growth. $XXX organic quarter

in also GAAP associated expense a the quarter income for are net intangible with income we amortization Adjusted adjusted adjusted was We reporting as net $XXX net acquisitions. which the defined income, million.

XX you Slide remind increased discussed quarter by quarter fourth million. consecutive and please. income $XX by method that $X last tax it me adjusted we the Let net reduced change EBITDA revenue million,

organic For growth the full $X year of X% we COVID-XX generated and despite impacts. representing revenue, growth just over X% billion total

expand tax share our for Recall, the to from fourth and for fiscal revenue change operating accounts of even our with in flow year from was the the operating of We COVID debt $XXX growth, in The and related the for DSO the fiscal items the FY head on associated a with A XX XX.X%, flow facility. method benefited calls the million lower tailwind, to which payroll XX% growth, three-day additional $XX program performance more tax excluding quarter continue reduction a as purchase XXXX, X.X we Adjusted base operating million also benefiting March $XXX EBITDA of method excluding apples-to-apples purchase well Fourth method and year. million outflow strong performance, healthy with overall normalized growth expansion adjusted a We margin. for $XXX cash offset ended expansion both reflects please. trailing AR price net margins million margin month fixed strong profitability flow represents and XX.X% adjusted leverage from allowing by margin quarter expectation. with $XXX the in fiscal margin XXXX EBITDA income in time, the us year. margin represents XX underlying initial of of provides taxes was up to receivable we cash cash program, XX value million for line facility, change an expense. driven during commitment. This XX.X%, $XX with million prior in with year on cash the repurchase. collection. in this $XXX the noted cash fixed-price the last payment year year DSO. at with These GAAP our XXXX net income of our net XX% that interest generated million Slide fiscal full in than operating we associated comparison change as flow tax accelerated or growth guidance. reflecting XX% from exceed days year to continued

low drive and XX to the flows Our shareholder interest informed please. Slide value. repurchase cash our low strong our to shares rate in valuation leverage, decision environment additional equity

XXXX turn guidance. fiscal our let's to Now year

is confidence bottoms This provides based years our its in visibility a at planning program-by-program As activity. significant profit and guidance prior our outlook. on of

by implying quarter. We headwind between midpoint. is of last at into the driven which billion growth expect despite Afghanistan, X% from organic a the and $X.X This we revenue revenue $X.X the to going withdrawal discussed year be X% billion

income expense. $XXX after-tax to with $XX $XXX We million amortization million between and be million expected adjusted net intangible

basis margin midpoint, a XX up XX.X% year basis. normalized expected We adjusted EBITDA last the on from points at

Our new execution efficiencies. on margin organic well in wins in overall program business contract growth business excellent by market of are as and growth, as driven expectations areas expansion our addressable high

expected least than operating $XXX to Capital million flow investment approximately be are We at cash XXXX. expect projects. expected year be in $XX this, free million discrete several to higher growth FY least last million. driven With flow is expenditures $XXX by cash in the at

of pay will December. to portion million $XX We the in tax of employee the payroll related deferrals

tax with the You approximately of change. expect refund million method tax second-half $XXX associated

of expecting XXXX. and the related are tax FY to $XX incremental method We in change payments FY XXXX both

XX the with call, expected tax period change in quarter's cash of should net Depreciation please. savings around GAAP the million here benefited last assist some are in To modeling recognizing planning are method P&L interest the expected to additional be XXXX. be $XXX $XX $XX discussed with million. expense Slide over assumptions. expense amortization is and As FY million, approximately provide to tax four-year

year's tax change effective is to to lower net higher federal are are larger effect due second I We in a fiscal to state XX.X% effective of of tax expecting rate we prior stock rate last of rate the tax FY full a year the tax were rate and in rate adjusted GAAP impact in prior in credit tangible And investing the full calculate granted R&D tax combined to using than a income. amortization XX.X% will award, year a our with tax due and bit tax which years. to XXXX note, quarter XXXX. method

typical a costs, in of expect skew delivery quarterly factors timing can certain trends We and in other note margin of but high revenue profitability, technology. quarterly sequential such direct increase as the that

FY timing the to Slide sequential X% in COVID-XX. a greater than are expect to of buys, timing to also the fourth of related assuming quarter revenue We normal technology material And XXXX FY drawdowns material from impacts sales. be first quarter no Afghanistan decline and X% will in XXXX we XX. to some of due there

remain our forward indicators, to prospects Turning strong.

with in from come return metrics expect are recompete, For with margin X% business. also of to business an And These historical come XXXX, in amount our of and we year from deliveries from increasing know, reflect sales content. new quick contributions. new these our programs, as XX% line fiscal ranges existing and you high technology XX% revenue about

call cash In flows. margin submit another evaluation We business. back that new we year CACI. are through new billion under turn XX% calendar business over another of for have XX% robust submitted bids performance And we organic financial of that of to With summary, billion with I'll expecting to strong of for with the over to $X and that, growth, expect expansion healthy with continued $XX.X John. year-end

John Mengucci

Tom. you, Thank

Let's continuing exceptionally we deployment growth a ahead and in our cash challenging Despite exquisite share to of accelerated We than generated are and our also fiscal say record opportunistically call commitment questions. priorities. challenges of grew innovation and We in do. the true. margins. to am Andrea, security technology our customer expanded employees go flow modernization for With of strong million this to ABT capacity with because shareholders. their team, tremendous of environment continue investment I national acquisition did ISR generate need. capital. each included and it well one employees proud capacity missions, $XXX country meet you these team margin we adjustable beyond often budget please. and to of to I will help internal our XXXX. faster for do. cash the our talent, expansion. we each support challenges. capital XX XXXX and to to company. year and every CACI positioned that our continued CACI and market We there achieved Critical and That want would that continued shareholders and its fiscal repurchase, creating And the for additional of backlog CACI be value With We company what investments for performed and what of also CACI our for let's open deployments and thank our a you remain said it's success aligned slide the have for ample we well other. we awards, customer our for robust ongoing value deployed because I

Operator

first Please begin now Suisse. Spingarn question Our come answer question the go from [Operator and will ahead. of Instructions] Robert We will session. Credit

Robert Spingarn

morning. good Well,

John Mengucci

Good morning, Rob.

Robert Spingarn

August, COVID the revenue know But there's the we Thanks expect revenue lower come color you no quarter what to we when impact end? think And we and at this for all seen into first impact, so far guide. July, to and maybe given EBITDA guidance fiscal end the were Tom, margins have the the COVID explicit in before. variant? and range higher XXXX, of the delta about in if should

Tom Mutryn

Yes.

of If how customers on depends hypothetical impact So question, Rob, what it's buying behaviors, I'll start activity, A COVID such It's hard of impact, out it affect our to award speculate. happens? with a that. lot COVID employees would the level ability to perform.

so So that. going to to speculative, given that I'm it's defer trying answer

John Mengucci

John. is this Rob, Yes.

Let virus. year that and guess of we we at a where CACI deal me Three I set more add we something months to else. much our back, is, our XX were both than XX first if were with customers COVID today it's belief ago prepared all to versus this are items. look

So, it's a solution. battle known risk hardened with a

And dispersed did get work that focused ago years a support being the infrastructure to across And in remote to build providing talked core of then employees We it job in took Second, through the the building force. on able lastly, technology COVID the actually did a on locations. action nation. we about period. to cleared work supporting versus as great past to I've choices employees a actually us our

which be, So, the far We three that impact. we're to going that COVID issuing guidance extent into we additional prepared we're really is factors, believe Rob, any better can without it's year. the those why

Robert Spingarn

switch trust I've agencies that security Okay. there's over hearing Fair architecture. security. federal lot we're enough. got there about that John, mandates these out to while a you, cyber And zero should

you And trust? partners have that's an I for in commercial any So the if wanted company? do Zero opportunity ask to

John Mengucci

Thanks. Rob. Yes,

how partners. commercial better of a trust, in specialize if have as We have large lot do a lot varying zero partners our mean, I at information to we look that you customer use many on number as What we comes attacks. networks we we cyber well tool in that of defend. own a as monitor of network is

of We going moving line, zero have and to those for trust out to all the get much are much, assume in. our closer are to on people networks you

put And of all do protect in information. you your defense do how mechanisms how So place. you different

mentioned are as well networks. of and -- well number as federal own are civilian DHS our of here, a as others, as independent networks number We hardening I we across agencies such as networks a defense as

much we it. read on very in are So

We the they have are focus the following better a that all administration much this are from very and of And doing the on administration. executive this we're new orders that also coming with out job. work that happy

buildings we bill government Now come. with that has we believe home. working it's buildings, more expanded and also employees with have right be that we've in had right so there's others infrastructure the both from because of attack many that had the in answer to funding and That and COVID the and and -- surface amount funding to we greatly, our have

So thanks very much for that question, Rob.

Robert Spingarn

the way frame any or there to potential? Is the size

John Mengucci

is directly it. enterprise It's what an Rob, sizing with the in we'll in track overlay to modernization. of potential IT line sort more the

So information that able currently in when task it Rob. selling clean IT, most work we'll be come provide. enterprise every we the to we it, to all an orders likely be -- on provide of or But separate additional we're time see sub out we'll clean to more will see start there

Robert Spingarn

Okay. Got Thank you. it.

John Mengucci

Rob. Yes. Thanks

Operator

Parsons comes next The question of Goldman ahead. from Please Gavin Sachs. go

Gavin Parsons

morning. good Hey,

John Mengucci

Gavin. morning, Good

Gavin Parsons

Two-parter and organic X% on the the growth five-year maybe target.

headwind at first X% the midpoint mean from including Does So, Afghanistan. growing targeting you're X% that the part, you're X%.

of the much your catch you. second Thank thinking that to you book-to-bill outgrow that Or up? years X% the And how underlying? what's for also do part kind does So over about next COVID then can some and ahead framework you the that? of have X% what is, need few

John Mengucci

our X% ahead right. FY All growth of market of revenue which is addressable ready. three. Gavin, Okay, XXXX

is frankly are which check there company And quality saying look, can the looking box to company focused we we our revenue. than can that's we on addressable market. high that grow better out that with So

at same going but expanding time to nicely, be we've So, the grow we're margins. got to

at at major are look six we're level a today in slightly reason is set Gavin, saying share we XXXX this this, even award factors mentioned or Afghanistan reduction, higher. behind one. a I when Tom few approach, a guidance a there it churn very us are of factors average the that FY play As X%. which I'll versus four why gives But bottoms-up which in confidence duration. are and few why out. It's

about X% of coming shared XXXX headwind we We FY very XXXX. As you the mentioned over a accurately, of two into that FY have because Afghanistan. quarters last

conclusion So, revenue the last policy though year. administration up it losses no year years, it's at we the natural plus in XX% every that we surprise six. be would re-compete or the four, we because minus. at show we couple when And a from churn of Each loss. churn, be change that is of aren't would larger that or step revenue chart. work down following is stack not year. But comes our going churn it's or take look that plus, we that a year admin to happens to this the four, really than up define Churn show soundly suffer about recompete that Typical when usually did

the with eye fair bottom growth. bids driving an price just in successful. portion reminded And a at of of deliver careful bid ensure. -- can we the We As of every We're towards those this. not an the to in work. insurance very line one We we're we with successfully and our portfolio said seems we do it like were expertise year past, that

some all say over term a The work. about longer backlog, levels you So about revenue is us is, that. us the a for year us has feel duration our on our much to downside year. it, growth. drive it be last reward much visibility considering enterprise four and FY of on backlog, What by gives I going for per duration revenue a Net-net does lesser couple we where revenue we'll better of desirable average if expertise But X%. factors last those to longer a goodbye XXXX of of those of our period look three part would the grown it's to at growth good years. to forward that without And all will things a Gavin, really move positive, really X% gives time

COVID remember predominantly you from catch-up? area. to folks No. we we You over the seasonal also The mentioned Afghanistan is additionally trying had impact deploy locations if COVID there was were to the any in

Now slate cleared has with the clean. change that administration that

were have we So, that to make up work it we never didn't. COVID continued were and obviously but work for looking going to going forward,

of anything or Gavin, So, that I else can the there we words of awful majority answer. questions lot catch that your

Gavin Parsons

just That's expertise appreciate mix. detail. that all technology on perfect. Maybe I following the up and

maybe higher a versus I little think expertise? for of do and XX% Where that backlog tech out coming see what over technology time you the in year the going XQ. portion is

John Mengucci

stated all are We've Gavin. our Yes, that important framework four quadrants us. to of

There's to We kind have value quadrants. resources. other drive of quadrant in kind opportunities of informs one

synergistic there So is that. to aspect a

technology grew year XX%, expertise For was flat. essentially this past about

[ph] we after submitted As expertise. year, some to is with supported parts that. the to be pending, associated the if will grow faster kind and into hemispheres of both than next you in our bids of bids with going see we're we backlog by to move work that growing both expertise that And technology expect

growth in both hemispheres. So again

Tom Mutryn

also I'd Gavin, Yes. add.

credential going an It's that on really that up bids bids past to have spent of are other of submitted We agile. and top time technology play either at what repeatedly. need, And we a to lot we area. are front to a for of really prepared to in performance has about continue little at hard hard are that mission to invest are have exactly team in remarks in On on. know to awful area It's future really the great scale. there hard enterprise Agile It's talking a the tech time buzz the we looking customers do. bit the going is out same do do customer our that my coming enterprise word. or tech spent

continue to tech look to So, I for would than expertise. drive higher us

Now XX% they grew be I having said if that, would at year, each all even happier.

much so Gavin. thanks So

Gavin Parsons

detail. Thank both for all you the

Operator

question comes Mariana of of ahead. go Perez next from Mora America. The Bank Please

Mariana Perez Mora

morning, everyone. Good

John Mengucci

morning. Good

Mariana Perez Mora

So. give and your are the is color do the subscribe remains capital outlook you future? on about pipeline? flattish. us M&A for implies Could what's you more appetite share share How And how repurchases some accounts thinking please deployment? in

John Mengucci

Okay. Thanks Mariana.

So evaluation add on different -- in capital deployment. Tom to and Look, going announced purposeful potentially options. to we a than you to was continuous had that this all well. level you're a about always all We've may when we little commitment us of about I'm March. those have some both differently a in past. capital Look, the deployment execution a seeing to comments deployments. is talk call have heard of as back announced deployment talked ASR when we What our were

when and intended So repurchase internal have options. leverage repurchases, forward. the to only I remains is want investments, that and table order our reductions ideas in strategy else they're larger like no we use prioritize and And us. capital debt M&A, to an whatever other robust going I internal of like additional and not And it's to we the I forward opportunistic and that to past. cash do But all And and reduction, investments word. one. profitability, greater a use on way M&A key be debt capital in I the M&A flexible. clear and, and you've that for considered we can word, me greater going whatever important flow. heard as potential deployment as a cash just say multiple and say company uses. our with very be flow, And things.

strategy going color. the we're my at. where some and you Tom, vision that's more where add the can head's from So, of

Tom Mutryn

Yes.

So, It again, a ASR, current beginning couple share was of the at still is March. repurchase the of ongoing. factors. executed The accelerated

-- compensation some for in which share completing associated the Hence share have being XXX,XXX the offset which going reduces we're XXX,XXX still completed, our the XXXX. shares, we flattest XXXX. to That is that to of FY count another delivery there the would repurchase account said, that. counterparty So is with into Once was that. expect share of equity-based FY market

we excessive capital ASR will good leverage flexibility. $X.X deploy of to The and we low said. is leverage be at Right billion of done, of so whatever have we we strength markets, is that the for once So news access capital reasonable have evaluate now, to in the had as the financial situation estimate keeping a lot well kind John levels, most cash. on of historically access at with LIBOR would interest call kind of kind X.XX% basis LIBOR rates this incremental revolver spending broad all of recognize we're Right Plus now, people points levels. being on the incremental as today low very XX borrowing spending And kind is are capital and interest to XXX points and basis our expense.

go of our this terms continue interest flow of both in free our intent debt that we zero for expense. strategy is and very plus best So strong kind of And maintain cash cash forward to question to year. to as reduce is, will to reduce reasons look The kind debt. obvious try determine the we repay will capacity what until at we borrowing very, we balances

Mariana Perez Mora

Perfect. Thank you.

John Mengucci

Thanks Mariana.

Operator

from question JP Seth next Seifman comes go ahead. of The Please Morgan.

Seth Seifman

sales year good much at growing is morning that everyone. company I And XX,XXX a bit noting number maybe that think last release. Hey. count forward? between growing. of head and does higher change per going a kind -- Does link think we in count employee little and growth the and end. was from backlog, the a end. should And Thanks mean was the of the year down the company very Obviously, it It's that business the bit head profile revenue technology. increased with I was and the about is a

John Mengucci

exit business in to to people. small due Afghanistan a the a frankly answer been count on thanks. couple better That at than giving. as answer total head actually time terms I well from Seth, Tactically it's our of XX,XXX. here. count we've me in change move rounding. looked things John. as Look, in But to was let head long was This that of share some the XX some [ph] frankly That's is planning

of tactically road absolutely head certain what years we growth correlated on to as a was not But our With growth technology that So hand conscious expertise Seth. our that growing to been our head to was you're happened. decisions been in maybe count. its as making not back. our seven it have and conscious right, five count faster, that's based That is type does predominantly show make work. It's

six, for that like. us of And us to deliver were to to large technology can work we we're work, margins differentiate work seven that of have reasons, out enough point coming a just be a talk five, some years type Susie, we're profitability, how wanted for the that Julia at last lower over and go not the and value, going to number able we the right-size and our shareholder heard win on hire how of You all of which performance about we past we enough Johnny. or capable are on where we whether

So yes.

no XX,XXX, to it's leading into XX this cater. So

Tom Mutryn

people perform we with the fewer better people. add organization can work the help also that. expertise to area jobs, get I'll the efficiencies. in can And their develop we're the driving Throughout Yes. Even tools we extent to that done

take You've had prior is it another where great would development to software. number of develop people that example software agile to extra

we're Now we as with can wage concerned head less kind result of lower count. of do And a it at materially that inflation.

drive customer and in efficiencies deliver to people cost we can very the to done right work the the getting do effectively. government attractive the hire job, Let's

Seth Seifman

quick Thanks follow-up. much. And very Great. as a just

the CapEx a As think for that number technology part the continue here. Is saw guidance to grow? becomes bigger to state mix, a of should we trajectory [indiscernible]. kind steady about how of the of We

John Mengucci

Yes. Thank you.

and program will eight spending ultimately government supports year recovered And This pay has the for expensive. a the the way life our program in to that it. ten priced capital to year expenditure be sizable to one year, makes $XX approximately last million. regarding which is manufacturing we're $XX was secured, of some on a was which So capital -- There in and facility will this million. is year to a spending This type that which pricing. is do planning which work, the facility

going would one function predict that that, going next kind more So to level happen that step in that of say a spending. XX, particular what's range. driven year. of XX that around has I revenue towards But move in capital X.X% Hard up to with to somewhere we're

Seth Seifman

Thanks very much.

Operator

of question go Wells comes Fargo. Matt from next ahead. Please Akers The

Matt Akers

Good Hi. guys. Thanks morning.

John Mengucci

morning, Matt. Good

Matt Akers

of of fixed kind else guess unusual I normal? was sort reverted margins through to price the in that we anything of contract think we this of of should -- that keep that Is quarterly year. like guess, as remodeling mind? year. last the there that And has higher driving I kind margins sort Is

John Mengucci

Yes.

is benefits for the program and that the similar second, about quarter From some guidance year the this expect quarter into spoke we see, FY we what fourth on had benefit going first, XXXX. So kind number. the we built and that into of material third of first of

revenue from that to first greater Consistent prepared help my program the we And is with -- contributing margin quarter down throughout the the of margin. revenue than first year be margins the the have quarter So despite remarks, expect price do fact fourth will quarter should fixed to sequentially increasing trends. performance. that historic in first kind quarter margin

five. stop quarters. We're would the for year four three, margin going two, the So, year. higher be and guide I quarters one, increasing purposes the margin committed full And there both in Full fluctuations to due like. We are deliveries EBITDA fluctuations there to numbers. are the revenue margin full technology in modeling recognize and to among that have an

Matt Akers

it. Got

you I just And from talk that maybe more. helpful. guess and on DOD on any then vaccinations That's one mandating kind by Do of have you. some heard for and Thank Okay. I've thoughts they not able government do work potential, do or employees -- be any to that access maybe I employees may facilities risk guess, contractors. if haven't or see vaccinated? you And been

John Mengucci

make But same to to measurement but Not can they in we also going and we that in comply facilities to and it subject protective facilities put Yes, to attest don't severe ours, times now, vaccination What folks attest thing two in red so travel right? The we've have can can Matt. government of they're has facility requirement. is working of or to testing want will same a be requiring they restrictions. if one the in announced using need their company. the well orange the vaccine government measures far, to CDC's any What side, right a place. and of look whatever the the get what inside with and status. actually COVID a as learned week information. certain that I we so facilities track the at administration recently doing in potentially have federal that as so our of individuals, it know and People everyone to are. share we mask. as county goes our to terms When wear high those We're We're

employees -- is, between to out to they'll through are be going what how government. And So going it quarantine that. vaccinated to we watch, who we're There as overseas work work on have have us behalf countries days. Matt ten perform we'll are of not have figure impacts to going the anywhere we in five to to are

vaccine get having make thing right vaccinated, is a individual us. beliefs do So folks not And the willing smart the and the of respectful what every please respect being make thing. make you're that there that let's to sure in and people asking we're all if doing other sure be out But -- the just we're is of business. to And also decisions. we're different has we but positive the different that fact just will for

Matt Akers

Understood.

Thank Okay. you.

John Mengucci

Thanks Matt. Yes.

Operator

of question next comes Please go Securities. Truist Tobey Sommer The from ahead.

Tobey Sommer

everyone. morning Good Hey.

John Mengucci

Tobey. morning Good

Tobey Sommer

problem. no Yes,

cited some with of competitors community. your in some just the delays First, the Intel issues passing

how impact on around did that experience Just your your hoping there you thinking guidance? comment and could

John Mengucci

$X.X that call billion guess awards, a book-to-bill I'd X.X. quarter and billion during in Yes. fourth ways. of answer I couple year, trading COVID couple of a XX-month $X.X

answer So is the no. simple

demand, a heavy continue customer to good and really see We behavior. with pipeline opportunities consistent flow award of normal

last day, -- actually proposals In mind, there level slipping RFP have, we decisions or some times we've and we With later tasking, attributed again some that which But that long we like. was time. put out XX-day typically about are measure this and at awards. the make the set discussing our behaviors a And make a something are into What remember to window we've that are customer really plan right. planned. if due is we would every in a the used agencies slow. see year day, And -- that's been some slower to we've customers customer COVID in seen delays there awards talked over -- of and days we've to keep very award that old the for higher job in than people some being we day. up you for historically what Now, awarded

simple answer end no. my is with which So I'll

Tobey Sommer

the And to sense. then, the of any from makes on seeing That you least at related technology deliveries business? chip mission your in impact Thanks. some timing shortage are product

John Mengucci

fiscal issues. with have have we business. Century throughout I that the lot working technology. COVID value, Next think discussed that where great we most had EVT our they folks. our where that They you in been also had bring But is with supply with differentiated high pleased We're XXXX and year saw all during it's of a chain we acquisition. And

build to items. long week a do much week day, We're a going the to with were items, of have less through One customers customer have testing items or have time. But as ranges of mentioned with COVID other sure And article our long have is XX delivery COVID working ends. delays on make weren't bulk XX-week our on throughout delivery gone the to that delays. that delivery usually buys we lead at we long, some actually them. lead of we've had teams We We right? both you also to from items customer But there material some third on that every are previous delivery. had our XX-week final because of had to in our a to receive end they delays those every do

So we issue are continuing -- there's will It's a today. we a few issue. that to factors there. global But work

predictive the actions a modest our have amount way we're through well quite happen during We year. navigating But all-in-all it. doing of will that

Tobey Sommer

Okay. Appreciate guys. Thanks the color.

John Mengucci

Thank you.

Operator

comes question of Please from David Strauss The Barclays. next ahead. go

David Strauss

morning. Good Thanks.

John Mengucci

David. morning, Good

David Strauss

for anything capital Tom, just assumed on to guide flow Are clarify I pay in stay free you cash in the using to debt? your deployment. generation assuming, deployment? want Have it down you'll capital you excess

John Mengucci

Yes. there, have assumption that other CapEx acquisitions is share what is the internal new regards R&D no but is are assumed. we repurchases. Obviously, with and/or and normal There what kind of assumed. That we investments

David Strauss

XXXX. tailwind working XXXX? slight looks you in are movement Okay. And then expecting in working capital What like was it the from capital

John Mengucci

Yes.

$XX that operating we DSO you started out as million days, around reduction at in at days XX year cash increased with point So, ended DSO XX the was in three-day flow.

to are in close of kind asymptotic terms kind level of an DSO We improvement. getting of

in another that need we're good For the to think capital. essentially growing it. out relatively We at capital around day working around way a year, modest expecting probably flattish working offset $XX somewhere is companies a But Typically get levels. we improvement more look those particular DSO and million. maybe can of

David Strauss

Okay. amortization you this exposure issue? to any R&D do And have

John Mengucci

do we so that work of is to material type us. the not It's No. to that not going be

David Strauss

much. Thanks very All right.

John Mengucci

David. Thanks

Operator

The of ahead. go Please Forbes next comes Scott from question Jefferies.

Scott Forbes

XXXX you expertise? technology in generally XX in expansion and just maybe pieces COVID were guess bps there XXXX. cost are anything I margin around XX.X, the normalized have The with Hi. what of returning, then moving major

John Mengucci

Yes.

So the P&L. the gross is major margin of our down of kind the flows being -- revenue of business. improve, driver cost, kind of expansion margins direct the the expecting less flows down We're gross that mix to margins

of driven efficiencies should which in At earlier time margins, driving that And is some so costs. and higher of call. technologies that richer at And indirect the is helpful. efficiencies some be will expertise, I faster a in on same mix. of programs in growing we be kind terms the by Technology mentioned technology than

fringe indirect expense medical and X.X%. of excluding growing is increased Our around also labor additional costs direct of kind on fringe

service maintaining employing job of which city in of a drive to focus helping good on the past The doing about center shared spoke we're is technology in So within the initiatives. RPA Oklahoma kind been We've internally improvements efficiencies other such we efficiencies. to infrastructure. in

Scott Forbes

Thank you.

John Mengucci

Welcome.

Operator

next comes Please Sullivan Benchmark go from The Company. question Josh of ahead.

Josh Sullivan

good Hey, morning.

John Mengucci

Good morning.

Josh Sullivan

posturing make or agile world cycles? dynamics agile record changes of competitive, traditional harder? But increasingly changes. on the just software-defined by curious just the here. focus the that historical Just how and from or focus contracting IDIQ environment nature the customers cycle? How backlog continuously Does more does You've agile easier conversion the backlogs that change recompetes got

John Mengucci

thanks. Yes. Josh

up single simple We're all number contracting that y of to are when apps sure to it's more be through of would you means that's and and built people it -- it's we're have of a number to By also pushed cost we because we be tough of vehicle. award, going think -- done as to the that coming And fluid, IDIQ, world. put the or on want to for plus, make a it of plus to example. front. to is single we before What we as parts one-time nature have the government it's have dollars and from cost contracting that contract It's would the firm number award. the that price a and taskings which modded access still was agile n would BEAGLE of award in come and book have So, agile. BEAGLE out where about it we'll need it's fixed a of and use agile would field. system right, the challenges there's a to working it going change. word, get agile, and

a XX,XXX on are the defect It under do to to your not you used a about during So, agile for What do things only give on provider real mention last perspective. the like defect to provide program but but an do costs. things managing costs rates of numbers about of better customer side. -- cooperative ebb and I'm One, with it development Tom us What earlier is flow of XXX -- XX a incredibly better software that much job does our also illustrative, people. It people delivering program. much going couple with employ that helps does question means? people to people our allows over XX,XXX the agile us on greater side, We're XXX rate. to managing us far that of allows people with us. for job agile low --

at a of does some price lower margins customer risk. it a what programs if is that lower on agile taking cost. and we're us, will that, be higher So our and for because the to us to And do we applications allows deliver

see what place. test to Because I going They And to want single got all-in-all, don't want build the bit, in multiple field. time to So, have a as buy we're the you've agile program items, or try. award staying award them spirals. they either building IDIQs. in to as at be see little bit, right I a deploying methodologies little you any could but to

have have along that So there of you spirals, out those you a every solution can enhance the to complete one put you then way.

So, very all I mission make absolutely is and as work. to try can better it enterprise we'll think in big be and prevalent we development and to software try, us our very government very continue It's very driving agile growth. And are can. margin -- both it's as get we as tech our to we how both material

Josh Sullivan

exposure. your question And Thank you the for all that detail. on just Iraq

thinking we You be about detailed environment? that should some out here, Biden just giving exposure the to Afghanistan the of exposure your administration how commentary but

John Mengucci

which Yes, are OCONUS which areas as willing no Africa missions is we on other not have in watched Josh. of least to the I completely are standing of There's say we safety. make Those and areas. to can Afghanistan broaden we've executing and X/XX still of and I'm today administration throughout Josh. any reductions not share all a were At firm, everybody's the have outside the lot by Korea. presence folks that, they're exit Middle decision. Afghanistan if But for decision to that East, are

withdrawal fully folks other those And of globe. the Some plan. not XXXX baked Iraq exiting FY Afghanistan or missions does the into of other Afghanistan impact other parts in were is were that our locations. brought specifically And that in

other broader about in services focus much that is with those in threats areas. are provide The focus locations of a lot analytical there's broader much the we of a talking near peer on like. some We're the and So missions counterterrorism. provided than those actually

So, leverage relationships. we're going customer to continue to

doing work hard incredibly very absolutely where around are embedded foot with win customers we broaden we our much the and work footprint can new We some globe well.

Josh Sullivan

Got for it. Thank you time. the

John Mengucci

Yes. Thanks Josh.

Operator

of go Please question Louie comes next The DiPalma Blair. William from ahead.

Louie DiPalma

and Tom good John, Dan, morning.

John Mengucci

Louie. morning, Good

Louie DiPalma

the drone more provide portfolio? products wins energy/counter you effects? to innovations you with both for CACI -- photonics LGS can highlighted laser detail does and John, the directed And contract laser on that exposure CACI have communications

John Mengucci

Yes, Louie, thanks.

how we've about correctly tech place. create that, Look, investments they got we and didn't photonics. go we nice and in about you portfolio, And bit as little about intellectual but where supersized we doing a a LGS go putting that property. certainly So mentioned, differentiated

understand laser a that, distances we've that extreme little We so that in the mission And outstanding tech want have of point to Look, technology space-based what discriminates about doing sophisticated what size, modem And Todd our in control our and digital and top solution, can lot frankly at it's He's developed, communications. we software is an of the tiny has he of that on invest combination that's enable, all to weight Probert ours. work. laser of photonics, who then assured team we job. But and his Next. power. combination

in are and defense that large As trust and that offerings to We're my remarks, our But primes. illustrates we've expand and that. differentiate to looking demonstrates aerospace platform tells their said had to that these I us sales is deliver. what providers in also initial me,

drawings of you This lasers of can some not actually the products that we So this is have is touch. gimbals. smallest and

relevant growing. the our as to folks. about It's have We're both differentiated. air and work. not looking highly things And cue profitable. four And our and I'm It's got our confident around, all and large grow satellite actually far it's up different providers of tracker are We're modified SATCOM and sky that it's way your in is that But force nation is for. been kinetic? tip very question we're and next. those it commercial I yet. size billion laser-based $X to got it or and systems where But pipeline, think Louie. Frankly It's where go kinetic As comps we it all this was last a set further. and laser even our on it's intelligence go, our solutions. to photonics laser on very non-kinetic our UAS our counter focused It's CORIAN

take that down our not do CORIAN we're and drones we provide a able other RF also that let's with we're of if So means, kinetic other to say swarm integrating solution effects. partners and using in have

that you. hopefully for right of So provides color some kind

Louie DiPalma

perfect. Thanks That was John. Excellent.

John Mengucci

You bet. Thanks.

Operator

from comes Please Cai Rumohr question next The go von of Cowen. ahead.

Cai von Rumohr

Yes. good Thanks so much and results.

XX your So, X.X is best John, book-to-bill of done you've years. the in

other where issues. So delays normally a first you in it's as Was of in a your was know Because saw people a big as the quarter. changeover of any and that administration number Intel quarter booking pull-forward? huge noted, sort quarter is

a could So one-nine first a not great something should [ph] [ph]? or line -- see the Or XX-year one-eight like we quarter? I be quarter good, your record first with your but in think

John Mengucci

Yes. Cai, thanks.

It's saying by are we've awards lumpy. on Okay. positioned Couple factor things. one job. or things a is off so in an I us come more actually much awards team the questions of It last years. yes, always How -- these the of of two better. did outstanding start done awards

bids as dollar team under his don't and I generate of a great certain revenue finishing second, second. great I've not processes I finished checked, job that involved making when BD Mike Our we're Gaffney do will getting in a because

nice continues about of to worth change. quarter was that was work. million a re-compete full So, head in probably, re-compete disclosure selection. additional FSDE had the it. We're of work, Cai, XX%, the top million shot of one it's DTRA fourth Two, my work on our mission to XX% because $XXX But there $XXX

because pull-forward. delays have gets we back late. that seen being no of COVID no Massive material out. So not awards. fundamental was question It there There in to sort one-time these was of people of push or

got of award -- RFP for to we've disclosed off. I deliver term. years years that mentioned, day? have been. a so. We that. you And love XX And we've point closer What practice. just they've that expected those says or But we personalities have customers far they they're I some customers as information something how that same that lack can't Absolutely to personalities different the to And got kept we've better have been who But on There's customers up. not seen have of buy.

Cai von Rumohr

for X% quarter first sequentially there quarter. baddies mentioned that the of likely can this down Thank go I quarter to you. -- year-over-year? that? more relative average would mean, that one how growth mentioned each secondly, mean, the the be kind quarter a And of you for in this little better And X%. or put the I this a we you is could you down the we then think than growth then quarter Tom, chance two bit quarter be the of context is as probably like year? year, about and Is has through X% four should And

Tom Mutryn

Yes.

quarter first the We've quarter. expecting So completed it's of growth the unlikely be down modest year-over-year. that in July. month organic We're our first will

have of kind of where We mid-August. two months it's kind left

order number growth in have we quarters. need in we'll hit to one kind some organic mathematically the if of quarter in X% So subsequent higher of kind the growth modest

John Mengucci

I ahead Yes, -- would up. go Cai, Cai. finish also

Cai von Rumohr

you lumpy, mentioned Afghanistan. say, to because I that was going is

So so second in Afghanistan million from hit is quarter. or and all the $XXX the first

kind So second stick we half? of the get hockey in a

John Mengucci

Yes.

Your first year. Afghanistan kind the Asia good of quarter disproportionate southwest the work is of observation. the in

Tom Mutryn

we move great to off referral not to very, watching been XXX continually we and those to place, We that with interns want these talent from. certain got grow, programs enhanced over talent need Demand last different We've in than again, always hiring. technology when folks we that of we make the even difficulty kind kind this low after try past and right put would I have we class have go people talent different competitive been We've on to challenging. employer it too. COVID years. be color and high We that of in start strive also just of I over Cai, pattern to no around some it's we're you source years in has we've fact, the the to We've the clear. could remains for very that more to program. due the When additional remains the our our certain get to But on. talent worked to the coupled had a throughout in is decide And want make bring of where environment company. choice. class. And work that's provide continued allow that. we That

hard want hiring these a we tie had don't have I not folks. we That's end, because things. to all issues right to We've the So that just back all find done it.

And hiring so, X% wasn't there is to in that can I the around certain growth wanted we calculus issues. and make get going be just anybody's to

Cai von Rumohr

Thanks Terrific. job. great and

John Mengucci

Cai. much, so Thanks

Operator

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

John Mengucci

best your many after families. today's thanks We'd call. Andrea, you follow-on and call. to have and are of very and for your healthy Thank good thank all concludes that a Well or George on everyone today's call. have available in like our and the day. thank Dan you Tom listened for and who We questions, stay to you help webcast to Mutryn, dialed our their Leckburg participation. will Please Price This you know

Operator

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

CACI International (CACI) 12 Aug 212021 Q4 Earnings call transcript