Q1 2022 CACI International Inc Earnings Call

October 28, 2021

We purchased it offsetting the tough comparisons against last year's temporary benefit from materially lower cost under Covid on a fixed price program.

Slide nine please.

First quarter free cash flow was $164 million, excluding our accounts receivable purchase facility, reflecting healthy profitability and strong cash collections.

Our continued focus on collections resulted in DSO at 52 days, great performance for our business.

And as a reminder, first quarter of last year included a $32 million benefit from the deferral of employee payroll taxes under the cares Act.

Excluding this benefit free cash flow would have been up 13%.

We closed the first quarter with net debt to trailing 12 month adjusted EBITDA at two four times. After the two acquisitions John mentioned down from the start of the year with first quarter free cash flow greater than the purchase consideration.

Our strong cash flow allows.

So with.

<unk>.

Obviously, you can delever.

Never create flexibility and optionality.

Ever Ality.

<unk> as all capital.

<unk> capital.

<unk>.

The different options.

To provide more long term shareholder.

Options are all of the value.

Next slide please.

Please.

Pleased with our track record of growing Brett.

Revenue.

Margin.

Ending margin.

Margin as well as our focus on operational excellence.

Margin will excellent.

<unk> generates.

Rates plus cash.

Cash flow.

A key metric to track.

To track.

Track internally.

Italy.

Italy externally.

<unk> cash flow per share.

<unk> per share growth.

Over the past few years.

A few years.

<unk> Ti.

<unk> T is.

Hi.

Five year free cash flow per share CAGR.

<unk> recently been in the double D.

<unk> double digit.

Digit driven by AR.

<unk> bye.

Just a allocation.

Our dislocation.

Asia, including a combination.

<unk> in the nation.

<unk>.

<unk> invested.

Invest M&A.

M&A.

<unk> share repurchase.

<unk> a repurchase.

Purchase.

Yes.

Slide 11.

11 please.

As John noted we acquired two companies during.

During the first quarter.

First both government and mission technology area of our business.

Water if our business.

Business growth.

Business high growth.

Growth.

Growth high market.

We invested a total of approximately $120 million.

For these businesses.

For these.

Can we expect.

Acquisitions should add.

Spectrum at.

Around.

Around $1 billion.

Sure.

Our service.

Revenue is modest.

Modest.

2020.

'twenty two.

Two items of clothes and associated.

Two associated.

One time cost.

Given the size of these acquisitions.

<unk> acquisitions.

<unk> consider them to be within.

<unk> fin.

Our existing guidance range.

Our 2012.

K 12.

Please we are.

Please.

Fiscal year 2022 guidance.

Turning to guidance.

We continued.

<unk> continued.

Two.

Organic.

With the 4%.

<unk>, 4%.

<unk> expect our full year.

<unk> EBITDA margin.

Nine.

<unk>, 9%.

Our other assumptions remain materially unchanged.

<unk> unchanged.

As a reminder, our free cash flow guidance.

<unk> guidance.

<unk>.

<unk> two.

100 dollar tax refund.

<unk> hundred three.

We filed our associated tax returns in October.

October.

With respect to refund in the second half.

<unk> second half.

Half.

Half of the fiscal.

After the spin upon government.

Year government actions.

In addition, we will pay.

We pay.

Your bonds.

About $1 to the payroll.

<unk>.

Taxable amount.

Yeah.

In December.

December 13th.

13 please.

<unk> invited the U S decision to withdraw.

Draw from.

From Afghanistan.

<unk>, which we said represent.

<unk> represents.

There will be 2% revenue headwind.

A headwind.

When.

22.

Wind in 'twenty two.

Two we reviewed.

To be reviewed.

And our backlog with related.

If you'd related work.

As a result.

<unk> backlog by $1 1 billion.

<unk>.

I do too.

To value that we do not.

Two we do not.

Not expert to revenue.

Not extra revenue.

<unk>.

<unk> withdrawal.

Even with this reduction.

Reduction.

<unk> quarter backlog of nearly 20.

<unk> nearly 20.

20.

<unk> 20 billion.

People are spending year over year.

Year over.

A year driven by our strong contract award.

Year towards.

<unk>.

Words.

That 4 billion.

It's a 1 billion.

Turning to other forward indicators.

Indicators.

<unk> remained strong.

Strong for fiscal year 'twenty two.

<unk> 22.

289% of our revenue.

<unk> of our revenue.

Revenue between program.

<unk> program.

Graham 7% from <unk>.

Graham and Recompete.

Compete on 4% from new.

Compete for new business.

These metrics are consistent with historical ranges.

At.

At this one.

At this fiscal year.

All year, we have $6 billion of submitted bids under evaluation.

<unk> valuation.

Asian, where 80% of that for new.

<unk> for new.

<unk>.

<unk> and Dci.

And we expect to submit another $14 $7 billion over the next two quarters.

My two partners.

Partners, nearly 80% of that for new visit.

Partners for new business.

In summary.

Okay.

I think another year of strong financial performance.

Actual performance.

<unk> solid organic.

Format, although organic.

Again opinion Marcia.

Growth and margin expansion.

<unk> robust cash.

<unk> plus cash.

Cash flow that I will turn the call back over.

Cash flow over.

Jonathan.

John Let's go to slide four.

Slide 14.

In 14, we delivered strong first quarter result.

<unk> results.

Solid organic growth.

<unk> clinic growth.

Both clean margin.

Both margins.

<unk> contract awards.

<unk> Awards.

Words plus cash.

<unk> cash flow.

Flow, we're successfully executing our strategy to invest ahead of customer.

Tumor need.

<unk>.

Need.

<unk>, both organically and through M&A.

Need through M&A.

M&A and we are positioned to continue doing so.

Doing.

So.

So the years to come.

As a result.

Come as a result.

So confident in our ability to create long term value.

Earned value.

<unk> customers.

<unk>.

<unk> shareholders.

Our employees tally.

His talent.

<unk>.

Our nation.

<unk> commitment.

<unk> and customers Miss.

<unk> commissions.

<unk> each other.

So each.

Other to CACI.

Other ACI.

Part of our success.

<unk> success.

I am proud of how our people continued to perform.

<unk> perform.

Warm highly uncertain time.

Warm and times.

<unk> very <unk>.

I am very honored.

<unk>.

<unk> day.

<unk> signed each.

But each.

Have you I also want to thank our shareholders for their continued.

Each of you continues.

Supreme confidence in.

So prince and.

Hi.

With that I.

Really call for questions.

<unk> questions.

We will now begin the question and answer session.

Okay.

The question you may.

You may.

Preston.

Press Star.

Question on your.

On your.

Hello.

Okay.

Your telephone.

The speaker phone.

Please go ahead.

So let's say your quest.

Two questions.

<unk>.

Sure.

Any questions.

Thank.

We also.

You also.

Ask limit yourself to one question.

To ask a question.

I'll follow up.

Our first question today will come from.

Come from.

From.

From Keybanc.

No.

Okay.

Thanks very much.

Morning, everyone. Good morning.

Good morning.

Yes.

We saw the revenue growth breakdown between.

And technology.

Yes.

No.

Thats definitely consistent with what you guys outlined and.

Yes.

The decline in.

All right.

And this is very much driven by.

Bye.

The withdrawal from Afghanistan.

Got it.

That's the end of the year, though and we think about the acceleration.

Desperation.

And that we're likely to see in inorganic growth.

<unk> kind of growth.

Growth.

Does it.

So withdrawal of his expertise to kind of stay at this level.

At this level.

<unk> seen the acceleration in in technology going into the double digits in terms of growth to.

Evel Mr.

<unk> of the overall rate or.

Brian or.

Or hard to see.

Or.

Excellent move back toward.

X back toward.

Sure.

Flattening out.

Yes.

Perfect.

Except this is Tom.

This has provided initial guidance you mentioned.

<unk>.

That year.

Weeks.

Technology.

X technology.

You.

G to.

You too.

No.

Tom.

Hi.

Yes.

And.

Oh, Gee, we'd be growing faster than.

And that expertise.

Excellent give as to why.

<unk> two <unk>.

1%.

<unk> 10 organic.

Canada range.

Candy range so.

We expect growth in both.

So both years.

<unk>.

There is modest.

<unk> robust technology.

<unk> and technology.

Okay.

Hey.

Great that sounds good and then maybe.

And then maybe.

If you could just update.

<unk>.

It seems like some of.

Some of the.

The services companies have been talking about some of the.

<unk>.

The related challenges associated with the pandemic from.

Hi, Matt.

From getting from the middle of 2000.

Good.

Morning, maybe those are abating, a little bit we're seeing some more.

More.

Of it maybe in.

Of it.

Kind of.

Manufacturing companies.

And he is.

Now can you.

Update us on kind of where you guys stand with with regard to all.

Now all.

All of that yes.

Of that.

Yes, Seth this is John.

<unk>.

We've been saying for a number of quarters demand for <unk>.

For talent.

<unk>.

And.

Sure.

Absolutely.

<unk> remained remains high.

Hi.

And hiring.

Environment remains competitive and extremely challenged.

<unk> LNG.

<unk>.

Jean.

But really no different than it has been for the past several years as we look.

Do we look.

At the Covid period.

At period.

<unk>.

<unk> rates were down.

We're down.

<unk> do you expect.

<unk> expect.

<unk> change jobs.

<unk> changed jobs.

So the generational pandemic.

<unk> and <unk>.

So.

So question.

Is the fare and how do we look.

As we look.

Look come out of Covid.

Look the Covid.

And as we move forward.

<unk> move forward.

We put.

Forward, we put.

Or.

A couple of.

Great place a number of years back.

Great years back.

Back, what's hash tag, making making moves in the second folk.

Back in focus.

<unk> to improve our referral program.

<unk> four program.

Graham.

Third leg.

Graham her leg.

Lag that we've continued to expand our internship program even through Alco.

While COVID-19.

Covid.

This past year.

Over the last year.

<unk> 300.

<unk> 200.

<unk> earns from a number of schools will be strengths.

<unk> strengthened.

<unk>.

Much of our relationships with.

With the.

Not only local.

The goal.

But why colleges and universities out.

But these out.

There.

Some are some specifics.

Specifics.

<unk> one.

Three four.

Four.

Sure.

For openings.

<unk> is now filled internally so that's people moving around the.

<unk> soundly.

<unk>.

Driving their careers forward also working.

Working.

With customers.

And on the referral trends.

<unk> trends.

Trends, we new hires as a referral so if we take those two metro.

Trends two metrics.

<unk> 300 in terms to many of.

<unk> any of which.

Which for their senior year.

Which senior year.

Here, it's already in hand from.

Year from.

We believe that we've been very focused and very.

It's a very.

Murray.

Captive.

Yes.

<unk> audience.

Cyber to make certain.

Certain.

Certain CEO of a public company I didn't find myself on an earnings call talking about.

Certain about.

It's really hard to find to find.

To find.

Talent, both on our expertise and our technology side.

Talent G side.

<unk> continued to hire.

<unk> new hire.

Here, let's say the right talent.

<unk> talent.

<unk> right the right time.

<unk> a time.

A last note.

No.

Acknowledging portion.

No portion.

That's very different staffing levels, we're able to.

Well too.

To lay staffing levels on all of our technology deliveries.

<unk> deliveries.

<unk>.

<unk> that we.

We bought unquote.

That workforce.

Workforce.

Force captive.

That.

<unk> seen that.

And a number of different.

That are different.

Technology program.

Different programs.

<unk> I'm not providing.

<unk>.

Individuals.

Adding visual.

Will the customers so.

<unk> or so.

Technology that we continue to win and we have.

We have.

Two.

Two liver on.

<unk> our entire workforce.

Ron higher workforce.

Fortunately.

And that's what keeps.

So that's what keeps.

Keeps brisk in hiring.

Keeps the hiring down.

Our next question comes from Tobey Sommer.

Hi, Matt.

With clarity.

With security.

<unk>.

Thank you I was hoping to get your perspective.

Expected.

<unk>.

Dave.

As for labor issue, but.

But.

A different one perhaps.

One perhaps.

<unk>.

Each inflation kind of what youre seeing.

Being.

And look forward basis.

An excellent basis.

How much that may be contributing to your organic growth.

<unk> growth.

Growth.

Not just this year's guide.

Growth guide, but.

But sort of broadly.

Sort of broadly.

<unk>.

Lee.

<unk> margin.

The impact.

Maybe.

Your contract.

Nick.

Yes.

Thank you Toby.

Tobey.

Look as.

Tobey.

Earlier.

Talent.

<unk> is going to become.

<unk> become.

<unk> is continuing to be challenged.

Jim.

Jean.

I've said, many many times.

The times.

<unk>.

For top.

Top talent.

Talent base technology skills and certifications.

Talent.

And as in everything else that were.

And we're.

Our new employees.

We're poised for.

<unk> well as the fact that we are.

And a lot of cases hiring.

Four is hiring.

During the I'll be cleared of employee.

Hearing employees.

<unk> I'm very happy to pay.

<unk> pay for.

Four of them, 60% of our revenue was cost plus so higher wages get.

For them does get.

Past.

Pass along.

Past.

<unk> customer.

On a glib comment, saying that I'm happy about.

Happy about.

Additional costs.

Costs, that's what the marketplace.

Cost to place.

So thats, what the marketplace bears and that's what we're going.

But we're going.

Turning to <unk>.

In addition, though are increasing technology.

Well as you.

We're able to be much more efficient.

We're a proficient.

<unk>, who we hire.

<unk> will be higher.

Higher leverage our talent.

<unk> talent.

Talent.

If we look.

We look.

At how we deliver.

At deliver.

Over is really more important in the <unk>.

And the important.

Cost like wages, so agile software development.

Development.

<unk> got so many tools.

<unk> tools.

<unk> this.

As the analogies, we can deliver large scale software developer.

<unk> development.

<unk> significantly fewer people programs.

Programs like Beagle.

Like.

Of course.

Yes.

<unk>.

But agile.

No I meant award that I talked about.

<unk> talked about.

And comments.

<unk> comments.

<unk> got so many levers.

<unk>.

We're certain that we can.

As we can.

Can I.

Can find.

<unk>.

Mind forward.

<unk>.

Talent.

<unk>.

And on the indirect side.

The Frac side.

And frankly, we've put our shared service center.

Site Service Center.

Center in place on the Oklahoma City.

Center home of Citi.

City great.

Great great processes there.

Great is there.

There on Imation everywhere, we can.

There we can.

So that gives us another leg.

Can lever.

Are you seeing in cost management, so as I said, the last one I'm not obsessing over wage.

Over inflation.

<unk> out there, it's real as part of running a.

<unk>.

Hum.

What company.

Company.

We have positioned ourselves extremely extremely well.

<unk> extremely well there.

Well there thank you.

<unk>.

Building on that response.

Our response.

Sponsor about.

Sponsors about.

The mix of employees sort of in.

The.

The D C Metro area.

The area.

Yes.

Versus other.

So places perhaps with different.

There are different.

Different did it cost.

Bid costs.

<unk>.

<unk> today.

That may look like over.

Okay.

Three or five year period.

Period.

<unk> grow your head count sort of disproportionately in other.

<unk> other.

Geographies.

Yeah Tobey thanks.

Thanks.

Seven or eight years back.

Back when.

Ken was the CEO and I was in a different different role, we literally took a step back in.

I can said.

So we have to plan for the future.

<unk> future.

<unk> pertains to the northern Virginia.

<unk> junior.

Our market.

Market.

Market, both quickly got to the point.

Market point with.

With of.

With.

We can hire cleared employees across this.

This.

Nation. So we.

<unk>.

Quite an aggressive plan in place.

You place.

There is back.

Shares back.

<unk> seen a resilient network across the entire company.

Backed by our company.

You could look for digital signal processor engineers software engineers.

<unk> engineers.

There is across the country so weather.

So whether.

Either it's through New York.

Either it's from New York.

<unk> soda, Florida, Denver, Colorado Springs.

<unk> Springs.

<unk> number of different areas.

<unk> areas.

He is too.

Network out that allows us.

Us.

Sort of back to your wage inflation store.

Story.

But where can we find additional sources.

<unk> sources.

We then.

See then.

Then down to said where are the.

Then or the.

The.

Relevant schools within those areas that we.

We.

From.

From to build our workforce.

Force.

<unk> crossed the U.

<unk> U.

<unk> also worked with us as well.

The us as well.

Well it wasn't many years back where a lot of the request for proposals.

Well proposals.

The development work had to happen within X number of miles.

<unk> sales.

Of the <unk>.

Of the facility.

<unk> and our customers recognize that that fight for.

<unk> talent.

Why.

Just where are.

Our customers are.

Our star so.

So we're in a multitude of different areas Toby.

So his tobey.

<unk> still.

I'll still.

Northern Virginia versus versus others.

But there's others.

Others, probably 50 50, if I looked at all of our other areas compared to northern Virginia.

Others, Virginia.

Kenya prevailing wage indexes and the law.

Kenya and the like.

<unk>.

If we've.

<unk>.

This race for talent very.

Very.

Well, yes, I would add.

Well.

Yeah.

What COVID-19.

It has.

Has across the nation is.

Has the genius.

Two and a trend.

And it could trend.

<unk> working remotely.

<unk> remotely.

Totally so.

So.

So besides.

<unk> direct employees.

Indirect employees can work anywhere.

<unk>.

We have.

Sure.

Putting foray.

For Ray.

Hey, how can you or HR or contracts.

A contract.

Track.

Across the nation.

The nation to fill those.

<unk> positioned.

Though slipped position.

<unk> <unk>.

<unk> say.

Roger.

<unk> employees.

So the ability to take advantage.

<unk> advantage.

The prevailing.

Of.

Mailing and <unk>.

Wage rates.

Wage rate.

Okay.

Our next question comes from Kevin Parks.

Parsons.

<unk>.

<unk> with Goldman.

<unk>.

Sam.

Good.

Good morning.

Good morning, good morning, Greg.

Kevin.

You guys have either appears originally given multi year margin targets that are kind of flat to down.

Down.

<unk> ask if that's a dynamic youre seeing at CACI or do you think you can kind of continue to expand margins for the foreseeable <unk>.

<unk> future.

Yeah Gavin thanks.

I can't really comment on what my competitors are out there talking on but what I will tell you about.

About.

US is.

We're really pleased.

Really pleased.

Please how the business is.

Please.

Positions.

<unk> consistent financial performance.

<unk> performance.

<unk>, particularly over the last 18 months given given.

<unk> had been COVID-19.

Covid.

And I would hate to tell you that we believe we have been giving longer term guidance for many many years and we started off.

It off.

With.

And we continue today to be committed to growing revenue faster than our addressable market, meaning we're going to continue to take market.

Market share.

Sure at ever expanding margins and when I when I talk to time each quarter.

<unk> quarter.

<unk>.

<unk> Shere.

Are delivering.

During that long term.

That commitment.

<unk> for several several years now.

Here's now.

Now do mean doing that we've been winning more of our fair share of.

Now.

<unk> business, we've got a north of 90% Recompete.

Compete.

At the end of the day.

Right.

It's because on driving free cash flow per share, which is what we've been.

We've been focused.

Focus on.

Stan.

And Tobey.

High level the reason why.

Bye.

<unk>.

Gavin.

Why.

And why.

And making the ever increasing market.

Hi, Martin.

Mark is our focus on technology.

Mark and technology.

Allergy.

Has differentiated technology.

We acknowledge.

<unk> differentiated technology.

Allergy.

She is higher.

She is higher margin.

Mark.

It's.

<unk>.

The way.

It's in market to operate.

They operate.

<unk> technology.

<unk> balance.

<unk> display.

<unk> just fortunately.

Blake will drive how tomorrow.

<unk> how to Margaret.

Is.

Is creating a war.

His words.

<unk>.

Words can have some.

Proration will niche.

Some niche.

<unk>.

Or.

Or in case, we're not sure what the needs enough.

Or did not.

<unk>.

This being a contract.

Are on track.

Track value of.

<unk>.

X so to make it.

You will make it X plus.

Plus.

Same.

For.

And in particular when the Gulf.

If you are in the government.

<unk> is so unpredictable.

From an addictive.

Bolt as operation.

<unk> operations.

<unk> you saw.

That.

That and so the.

We begin to write down.

The breakdown.

Great.

Greater than.

Then tears run.

Then run.

Right.

Right up but.

Those particular.

That particular.

Contract, Yeah, and that backlog is was to cover a number of years looking forward.

Contracting forward.

Forward because so.

Forward so.

So revenue impact.

So this.

This is going to be 2%.

Percent.

And at.

Two zero as we go forward and we just thought it was prudent and the right thing to.

If I can.

Do look at our backlog number each and every.

Do each and every.

To make certain that once we knew we were completely.

Quickly.

<unk> at area.

<unk> area.

Right time for us to re look at what we had in our backlog.

And.

And make that.

Thats unfunded backlog chain.

That's a change.

<unk>.

<unk> Thanks, Kevin.

[noise].

Our last question.

Ah sometimes.

<unk>.

Okay.

Hi.

Let's find out.

Hi, this is.

<unk> from.

Okay. This from.

Thanks for the question.

On that reflection.

Hi.

Sure.

What.

Thank you orders.

Orders.

Submit.

Certainly.

Get a bigger than we typically get in too.

Two.

You want them.

Two one.

What's the impact.

The impact.

Pacman Donkey.

Packbell too.

Any individual.

<unk> two areas.

<unk>.

He was set designers.

That is yeah Eric.

Eric Thanks.

Oh.

I'm gonna stick by my decade old comment.

<unk>.

Sports are lumpy.

Lumpy.

There isn't anything.

Anything.

<unk>.

Think we should.

Read into.

Should to.

Two it another outstanding.

Do it standing.

Ending awards awards quarter 1.6.

<unk> six.

Which is right on top of our trailing 12.

612.

A number.

<unk>, there's not one.

One.

One one award I think I share the last couple of quarters.

One orders.

Customers has.

As.

[laughter].

As.

Ward personality.

Personality.

<unk> when they award and when they don't and some awards.

<unk> rewards.

Word right on time and some award later.

Word later.

<unk> haven't we haven't seen.

<unk> in that.

That we still do see some residual.

That visual.

We'll ask orders on.

<unk> is on.

As we've already won in those come out a little slower than what they used to and I'm assuming.

Assuming.

That's our federal government colleagues are working through Covid.

That through Covid.

<unk>.

<unk> and it's.

Syrians.

Its variants.

<unk>, it's going to put some level.

<unk> some level.

Will delay in but no nothing that we can point can point to.

You'll need to.

It is just round.

Awards are lumping.

It's just lumping.

And the first date of second quarter to us looks just like the last day of the first.

And first.

And but what.

And what happens.

Would happen.

[noise].

Okay. Thanks.

So much thanks.

So much.

[noise].

Our next question.

Symptoms.

<unk>.

<unk> <unk>.

Morgan Stanley.

<unk> <unk>.

Tom Good morning, gentlemen.

Good morning, gentlemen.

Good morning.

That.

John you mentioned in.

Your opening remarks, I think 500.

500.

<unk> so million.

<unk>.

Of classified contracts I think this is the first time.

Of.

It's been quite a while that you've you've mentioned that are called that out I was hoping you might be able to talk to what percentage.

And age.

Have.

<unk> of your businesses.

Of your by today and then.

This is because then.

That component.

Component.

This trend is relative to the broader business over the last year or.

The beer or so.

So yes, ma'am thanks, we've.

We've.

The portion of our business, which is classified and.

Right and.

That's how we're setup.

That's where setup.

Setup unprotected.

Setup protecting.

Being those customers do which which every once in a while and we have a large.

Being large.

<unk> a number of awards that we can't.

<unk>.

Can't discuss openly.

Weekly we've.

We frankly group those together.

We was together.

Other you may not have done that in the last year, but I can tell you. There's been many many quarters that we look at things when we sort of group though.

The other group those.

Those two together.

Those together.

As my prepared remarks mentioned.

Engined.

And what is important.

Important.

Jordan. These types of awards is that they are very much cyber centric.

Jordan or central.

Sentra, which which really speaks to the fact.

Sentra the fact.

Fact beyond the counter terrorism.

Fact terrorism.

Is a focus.

Some focus.

<unk>.

National security issues that we all have.

I'll have.

Have to do with.

Have to deal with.

This is moving towards near P.

Or appear.

And that message really was to share.

Pierre share.

There, we are winning more than our fair share.

Sure sure.

There additional funds are being spent around offensive and defensive cyber.

There have cyber.

Cyber and it actually plays right into.

Cyber into.

Two couple of the acquisitions that we talked about.

Too about.

<unk> peered remarks as as we.

As well.

Well the one we can't talk a lot about.

Well a lot about.

But.

But we.

Should think about.

Acquisition being in the space.

Space.

Race.

Race domain.

<unk> is seen more and more plus ups.

Main Ah subs.

Oh forward.

Forward and how do.

Forward how do.

<unk> face.

Space.

<unk> communications and assets, that's about all I can say about.

<unk> about.

That.

Then.

Action so.

Oh nothing out of the ordinary.

So.

That can't break.

Break out.

Hi versus.

<unk>.

Person on.

We do break it out into D O D fed civil and.

And.

And on that gives.

And it gives.

[noise] you relevant in.

[noise] you that insight.

Site and we also.

Talk about.

Site Kubacki.

Employees.

Should have different lots of clearance.

You know there's a variety.

Chances variety.

<unk> of all the.

Idea of holding on.

Right now approximately 70%.

8%.

That over and above.

Senator from them level of Clarence.

Look.

Got it okay. That's that's helpful cells.

And then maybe just quickly on the subject.

Subjective.

<unk> <unk>.

<unk> believes the far Council has directed most federal agencies at this point, if not all a federal agency.

<unk> licensees.

C as corporate either a clause into Rfps, our language in a contract Ma that.

C as in.

Acts nation for all employees.

Ploys.

<unk> a R a.

My question to you is are you seeing that language showing up on your end yet and then.

<unk>.

Any risks.

Risks.

Come December.

September.

<unk>.

Thing levels or how do you handle that.

The type.

The time comes.

Matt thinks highly highly relevant.

Hello.

Oliphant.

The president.

Elephant President.

Order steak.

Or states.

<unk> that all federal contractors are required.

It's quite.

To be funny.

Beef vaccinated or.

Needed an approved exemptions and and accommodation.

Or mutation.

Action by December December.

<unk> December.

We are continuing to communicate with our employees.

<unk> our employees.

<unk> together vaccination status and frankly to encourage and support.

<unk> support.

Them get.

Them vaccinated.

<unk>.

On a positive side, we're trending towards the 90% vaccination rate within this comes.

It is company.

Company, but it's a very fluid situation.

Company and.

Monitor.

<unk>.

<unk> every bit of guidance and Matt I wouldn't be exaggerating, if I didn't tell you.

<unk> can tell you.

That hourly changes.

The dangers.

<unk> Cross every agency, which is out there.

Is there.

As to how that government agency is going to handle.

Handle.

<unk> could have ordered that then came out to a task force. It then.

But then.

Then spread out like a fish bone.

Then fishbone.

One.

How each agency is going to hand.

And handle.

Andel at this point.

Customers are reacting differently to this man and they were working with them to address.

And to address.

Dressed.

Drive <unk>.

Access to government facilities.

First facilities.

Cities, we sure can't.

Cities continent.

Operations.

I mean I.

Think certainly.

Eight and we.

Don't venture an executive order is to disrupt mission critical active.

Don't feel activities.

<unk> displays skilled and cleared workers in extremely tight labor market.

<unk> cyber market.

<unk>.

It is factored into our guidance.

Get guidance.

<unk>, if we felt that it was a material.

<unk> cereal.

Real change based on what we know today ma'am, we would've made some guidance changes.

Real changes.

<unk> more information.

<unk> information.

<unk> very transparent and as as we always have been.

<unk> because I have been.

Then it's fluid into.

Ben fluid enough.

Things that are breaking left are also breaking breaking right. So we're still remain confident with our guidance.

Fines range.

Range something for all of us to.

Range us to.

Watching and be very aware.

Be aware.

Thanks, Matt.

Our next question comes from Mariana.

Alright.

Yeah.

Good morning, gentlemen.

Gentlemen.

Nine.

Good morning around.

Huh.

Anna.

[noise].

Oh I was just thinking about this.

For the.

Alrighty commented about.

Paul sent in.

About.

About about Martha.

Okay.

So far this quarantine.

These companies have highlighted time and do for.

<unk> excuse me can supply.

<unk> that sounds <unk>.

Pakistan.

I can take a four by accident.

Packets of ketchup.

To me to get.

To get.

Then.

Yeah. Thank you look supply chain.

<unk> bye chain.

Jane is an issue facing many companies across many sectors.

Jane sectors.

<unk> for US the issue was around.

<unk> around <unk>.

<unk> <unk> and computing power so.

Cute hour so.

So.

So think about.

So.

F G.

Case.

Across the board with the biggest impacts.

[noise] impacts.

So we're gonna be in our counter Uaf's tactics.

<unk> ethical.

<unk> been three.

<unk> three.

<unk> product releases.

<unk> leases.

<unk> large volumes.

<unk> <unk>.

<unk> full enough.

<unk> stuff.

Whoa that plan ramp up and that was already factored in our F F y.

F y.

Why.

Y 20.

122 guidance.

<unk> new guidance.

<unk> forgetting which here it.

It is.

It is a school year, we did talk about a.

A v T.

And they had some supply chain issues in customer delivery delays.

Delays.

A's dress that by ordering ahead of needs.

Set of need.

Needs of our long lead item.

Need items.

Adams that we expected to get orders for this year.

Adams this year.

Here, a nice problem to have us if we serve beyond those planning levels.

Here and levels.

<unk>.

<unk> they say.

Impacts later in the fiscal.

A fiscal year.

A year, but right now it's too early to tell.

<unk> the Chow.

<unk>.

The way, we see supply chain.

Jane.

<unk> market, though.

<unk> get though.

Though like commercial items.

Though so items.

Supply chain issues.

And issues.

Hughes timing is.

<unk> I mean issue.

<unk> it doesn't go away the delivery still needs to happen.

<unk> to happen.

Happen we are continue.

Happen continue to re look at the full delivery timeline production is the first.

You too.

Peace training.

In installed test and then sell.

Inning fell.

Off and we've shortened timeline.

[noise] timelines.

So we do.

Lines.

More electronic training and how do we put training ahead of delivery.

Delivery.

Every we don't Miss that end date.

Every date.

Eight a delivery.

<unk> delivery.

Marine base so.

Marie.

I'm moving moving parts.

Moving parts.

Really.

It's really in the.

After Ah.

In a in a smaller portion of our <unk>.

Our business.

Is this the way we think.

He'd come back would be free.

Okay.

Three nine.

Alright.

Like the.

Mmm.

That keeps.

Okay.

I T.

T T R.

Sure.

<unk> Castle.

<unk> the short term.

<unk>.

<unk> no I mean, the the amount.

<unk> amount.

Of.

Production material that we're holding onto our balance sheet compared to the size of the company I'll use my times, where.

Where.

Sure It is cinemas.

Sure It is minimus.

Ms. So no no where we've been able to work around around around.

Ms around.

And that and make certain that the to the extent that we have prepurchase things.

That things.

<unk> on the lead item areas. So we have a.

We have a.

Of.

Lot of.

All the sources.

40 of the.

This is field.

The nurse that are in the mission technologies that we do.

We deliver.

[noise].

Deliver thanks Marianna.

Thanks Marianna.

Oh.

Our next question.

Question.

Kind of Slacked chiasma.

Kind of <unk>.

Hello.

Kathy.

I think.

Hi, Scott Barbizon for Sheila.

Congress Sheila.

Yeah, I mean, you guys group.

You guys group.

Q1.

One.

One, but with a few.

Yeah.

Other than that.

And the.

Talk about.

How about.

That kind of help.

Some other kind of help.

Growth.

Growth right through the year.

Yeah.

[noise].

Yes, Scott.

Kind of know singular issue you know you'd at any point in time.

It's in time.

I have a series of programs.

<unk> so.

How much will give useful life and so there's always a few can ramp talks of activity.

So much activities.

<unk> at the same time.

<unk>.

Rooms.

Programs.

Are expanding.

Slicing on contract growth.

Being at growth.

With that if any.

Because of ours.

Ours.

To make sure that we.

Who we are.

You can realize the full potential.

Casual.

You'll have teamwork.

Full of teamwork.

You too.

Winter.

Work with new.

Really the combination of.

New location of.

That are cool Yo.

That are Cleo.

So.

And will lay.

You ought to be.

<unk> bye.

Bike.

For the.

Are planning processes.

A year processes.

This is.

This is that we.

<unk>.

We have a.

A monthly forecast.

Forecast.

Cass we update regularly.

Casserly.

Eight six.

Out of your new in costs in Prague.

Out in profit.

<unk> bye.

Buffett by.

Month program.

Graham So we have a high degree of visibility.

Graham ability.

City.

<unk> and.

All depends.

I'll leave it.

And this this year so far is playing out during our.

Got that for an hour.

Tom.

Loose.

Some loose.

<unk>.

Directional.

<unk>.

Quarterly quarterly guidance, knowing that the Afghanistan, 2% hit.

Bennett.

It would take.

Take what's the impact in our first quarter.

Take first quarter.

<unk> look at.

Porter.

Last year's first quarter so.

<unk> headquarters so.

So plan this year.

So and this year.

Here growing.

<unk>.

Rover quarter were still on that.

At.

Lamp.

And then you've spoken a lot about cyber maybe from a high level, how do you think about that portfolio maybe.

So may be.

Well here and what are your broader expectations around.

Well it turns around that.

Around that.

Space.

I mean.

Cyber to us as part of everybody.

Beverly.

Right it used to be.

A separate.

If it's available.

It's horrible.

<unk> get offensive.

<unk> pensive versus.

Of <unk> of cyber you know everything we do on the defensive side at some point.

First is the point.

[noise] fractured.

Structured.

Sure we're focused on.

Picture just on.

An allergy and does not just.

Not just.

Trust and expertise to our customers every time, we can defend against something that gives us new insights into.

Just two.

To move that to an offensive.

Offensive.

So.

<unk> been very much engaged.

Engaged.

<unk>, let's talk about software defined every everything.

Re thing.

Thing you can think about devices admission technology being delivered.

<unk> delivered.

Averred only can find the threat, but it can find that.

<unk> at threat.

Threat understand.

Threat standard.

A ferret turn that around and deliver as potentially.

And it <unk>.

Really offensive.

Julie to payload.

Hello.

Hello to cyber.

As well.

<unk> file so.

So whether it's cyber or whether it's.

Whether it's machine learning.

So learning.

<unk> majority of our mission tack again is going to be focused on.

<unk> pushed on.

Software.

<unk> <unk>.

Where and software to find everything devices and the like so.

We're like so.

So.

We see that.

The intelligence community.

So community.

<unk>, we liked the hand that we're playing on the department.

<unk>.

[noise] fence.

Federal civilian world clearly.

Work clearly.

If you look at da DHS and the sister so there.

<unk> there.

Very few folks who are building that art architecture texture.

Extra.

And you really can't talk about zero trust without talking about cyber as well so.

Oh well.

So really liked the book of business we.

Well since we.

Have like the fact that the phone.

Have folks.

Looks and CACI and the folks that we are hiring are coming.

[noise] screen are coming.

I mean highly.

Coming credentialed.

<unk> and that just pour tons us to be able to drive further and further.

<unk> for the.

Growth.

Growth for them to cyber.

For.

Cyber domain.

This concludes that question and answer.

Okay. So awesome.

And the call back over to John <unk>.

I'm sorry can get.

So.

For being remarks.

Mark.

Thanks, Eileen and thank you for your help on today's.

Today's.

Call I'd like to thank everyone, who dialed in or listen to the webcast for their.

Call for their participation.

Just know that many of you will have follow up.

Patient low questions.

<unk>.

<unk> some neutral.

<unk>.

<unk> FERC.

Are available after today's.

Org today's.

Call stay healthy.

<unk> S to you and your families.

<unk> when your families.

Families, which are call. Thank you and have a great day.

Families break day.

I don't think there is now complete.

Okay.

Alright.

Tending.

Today's been taken.

Okay.

Meanwhile, desk alone.

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