CACI International, Inc. (NYSE:CACI) Q4 2019 Earnings Conference Call August 15, 2019 8:30 AM ET
Dan Leckburg – Senior Vice President-Investor Relations
John Mengucci – President and Chief Executive Officer
Tom Mutryn – Chief Financial Officer
Greg Bradford – President-CACI Limited UK
- Dan Leckburg - 投资者关系高级副总裁
- John Mengucci - 总裁兼首席执行官
- Tom Mutryn - 首席财务官
- 格雷格布拉德福德 - 英国CACI有限公司总裁
Gavin Parsons – Goldman Sachs
Cai von Rumohr – Cowen
Matt Sharpe – Morgan Stanley
Joseph DeNardi – Stifel
Robert Spingarn – Credit Suisse
Jon Raviv – Citi
Justin Donati – Wells Fargo
Greg Konrad – Jefferies
- Gavin Parsons - Goldman Sachs
- Cai von Rumohr - 考恩
- 马特夏普 - 摩根士丹利
- Joseph DeNardi - Stifel
- Robert Spingarn - 瑞士信贷
- 乔恩拉维夫 - 花旗
- 贾斯汀多纳蒂 - 富国银行
- 格雷格康拉德 - 杰弗里斯
Welcome to CACI International Q4 and Year-End FY 2019 Earnings Conference Call. Today’s call is being recorded. [Operator instructions]
At this time, I would like to turn the conference over to Dan Leckburg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir.
欢迎参加CACI国际Q4和2019财年年度盈利电话会议。 今天的电话正在录音。 [操作说明]
在这个时候，我想把会议转交给CACI国际投资者关系高级副总裁Dan Leckburg。 请继续，先生。
Well, thank you, Nicole, and good morning, everyone. I’m Dan Leckburg, Senior Vice President of Investor Relations for CACI, and I thank you for joining us this morning. We are providing presentation slides. So, let’s move to Slide number 2.
There will be statements in this call that do not address historical facts, and as such, constitute forward-looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated. Those factors are listed at the bottom of last night’s press release and/or described in the company’s SEC filings. Our Safe Harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call.
I would also like to point out that our presentation will include discussion of non-GAAP financial measures. These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.
Let’s turn to Slide 3, please. To open our discussion this morning, here is John Mengucci, President and Chief Executive of CACI International. John?
Thanks, Dan and good morning everyone. Thank you for joining us to discuss our fiscal year 2019 fourth quarter and full-year results. With me this morning are Tom Mutryn, our Chief Financial Officer and Greg Bradford, President of CACI Limited, who is joining us from the UK.
Let’s turn to Slide 4 please. Last night, we released our fourth quarter and full-year results for fiscal 2019, and I am pleased with our performance. We delivered several significant accomplishments during the year including record revenue, record operating income, record cash from operations, record awards and record staffing levels. We booked $10.3 billion of awards, $6.9 billion of that for new business. We went up against the best incumbents in the best competitors in our market space and won.
In fact, we were successful on seven of every 10 new business competitions in 2019 and establish new beachheads in the areas of secure communications, electronic warfare, SIGINT and cyber. We won nearly 90% of our recompetes for $3.4 billion of awards. We finished the year delivering 11.6% revenue growth and EBITDA margin expansion in excess of our commitment, which Tom will cover in more detail.
We also opened our shared services center in July 2018, which is performing exceptionally well and further enables us to invest in long-term growth and employee initiatives, maintain competitive rates and deliver on our commitment to expand margins. We are utilizing our M&A program to further differentiate by adding new capabilities and customers across our addressable market.
Slide 5 please. We continued to successfully execute our strategy to win larger, more enduring contracts with a focus on technology, which will sustain both organic revenue growth and margin expansion. A few examples of these awards are a seven-year $880 million task order to develop software for the Army’s Force Management Systems utilizing our Agile software development factory. In the five recompetes of this work, this is the first time, an incumbent has re-won this business, which is a testament to CACI’s people, our credentials in Agile software development and the performance, value and innovation we deliver.
CACI also won an $810 million contract with the United States Air Force to develop, modernize, deliver, and sustain mobile and transportable command and control systems. This work is vital to our national security. It was awarded on a sole source basis given our differentiated offering. And CACI also won two large signals intelligence and electronic warfare programs in the quarter. The first is a five-year $415 million contract, the second, a five-year $318 million contract. Both awards are to design and deploy new technologies to enhance capabilities and signals intelligence, electronic warfare and cybersecurity. These awards illustrate the investments our customers were making in these critical areas and the differentiated distinctive technology CACI delivers to solve our customer’s most pressing requirements.
谢谢，丹，大家早上好。感谢您加入我们，讨论2019财年第四季度和全年业绩。今天早上和我一起的是我们的首席财务官Tom Mutryn和来自英国的CACI有限公司总裁Greg Bradford。
Slide 6 please. We continue to invest in long-term growth in a broad sense. First, in terms of our capability set to stay ahead of customer demand and technology trends. to internal R&D, we are developing technology at the convergence of signals intelligence, electronic warfare, cyber and communications. These solutions provide software-defined agility and multi-domain operations within the electromagnetic spectrum, where we are fielding capabilities in near real-time to counter highly dynamic threats.
In the space domain, we’re delivering situational awareness tools to address a critical and now contested environment. And we are investing in other innovative ideas to include space-based photonic laser communications. We’re also investing in the growth of talent base, ensuring we attract and retain the best and the brightest. This includes enhanced benefits and work life experiences and extensive training and certification programs. Our efforts are paying off as CACI was recently recognized as a top workplace in seven cities across the U.S. in addition to being named the Washington Post as a Top Workplace in Washington, D.C. for the fifth consecutive year. These rankings are based on our employees’ feedback from the third-party surveys, evaluating CACI’s leadership, culture and benefits. This kind of recognition greatly supports our hiring efforts.
And lastly, we remain focused on the growth of our leadership team to take this company to new levels. During fiscal year 2019, we added several strategic hires and important areas of growth for CACI. These are senior leaders with the right vision and experience to drive continued success across many areas of our business.
Slide 7 please. M&A remains our priority for capital development. We continue to pursue quality companies to fill capability gaps and drive further differentiation and our customers’ most critical investment areas. During fiscal 2019, we acquire the Navy Systems Engineering business, which is a premier platform engineering and life cycle support provider to nearly all navy ship building, and it’s performing very well. It gives CACI the leading role in the revitalization and long-term operations of the nation’s naval fleet and insight into future technology demands.
In June, we acquired a small company in our UK operations, which provide proprietary data analytic software to the Ministry of Defense and National Security Community, growing our presence in priority areas to address UK national security. And in our third quarter, we acquired LGS and Mastodon, two exquisite companies would highly differentiated capabilities in the areas of signals intelligence, electronic warfare, communications and cyber. As you saw in our record contract awards, these are areas of increasing priority in demand.
During the first four months at CACI, LGS and Mastodon are performing very nicely right in line with our expectations. We continue to expect the combined businesses to deliver a 17% EBITDA margins as we look at fiscal year 2020. Given the nature of the Mastodon business and its schedule of part deliveries, profitability will naturally increase during the year with a higher level of deliveries, and Tom will provide additional color on that in just a few minutes.
Slide 8 please. Turning to the federal government budget. We are very encouraged by the recently-signed two-year budget agreement providing healthy spending levels for defense and non-defense customers, particularly in areas aligned to CACI capabilities. This agreement dispenses with sequester cuts and suspends the debt-ceiling through 2021 creating much needed fiscal stability. While 12 appropriation bills still need to be passed, the progress is very encouraging, allowing our customers to plan, program and invest with greater visibility and consistency, but what’s more encouraging is our customers’ spending priorities are in areas like system and infrastructure modernization, electronic warfare, cyber and space, all of which are aligned with long-term CACI capabilities.
In closing, we achieved the number of successes in fiscal year 2019 that will continue to serve us well in 2020 and beyond. We delivered record financial performance with expanded gross and EBITDA margins reflecting a higher-quality mix of business. We won a record amount of contract awards with high technology content. These awards now provide record backlog, upon which we will continue to grow over the next several years. We closed on four strategic acquisitions during the year, adding differentiated capabilities in highly relevant areas of our market and we continue to invest in technology offerings to differentiate and disrupt. these star distinctions continue to drive CACI’s success within the market. as they look to fiscal 2020, we have nothing but success in mind. We have an industry leading financial plan, 12.3% top-line growth with approximately double the organic growth levels we achieved in 2019. We expect to grow adjusted EBITDA margins by 100 basis points from 9.3 to 10.3 and net income by 14.8%.
We also plan to spend about $90 million of B&P and IRAD levels that are materially higher than in past years indicative of the technology business we are pursuing. And we come into the year with a $220 billion addressable market made larger by our investments, partnerships and acquisitions, and a federal budget and spending plan that’s more than sufficient to support our growth.
With that, I’ll turn the call over to Tom.
Thank you, John and good morning everyone. Please turn to Slide number 9. Our fourth quarter revenue is $1.4 billion, 17.4% greater than last year with 2.8% organic growth in strong performance from our acquisition.
Net income for the quarter was $50 million, tapping off of the year of exceptionally strong performance and in line with our expectations and guidance. As we noted in our may earnings call, there are two items to note when comparing this year’s fourth quarter to last.
First, we adopted ASC 606 in fiscal year 2019, which had the effect of spreading award fees throughout the year. This reduced the award fees in the fourth quarter of 2019 by $7 million when compared to 2018. Second, we made $13 million of one-time investments in the fourth quarter of 2019 for IT systems to drive enhanced security and efficiency for increased business development and IR&D given a robust pipeline of opportunities and for some HR initiatives.
Mastodon and LGS’s contribution to the quarter were consistent with our expectations. during the five and four months as part of CACI, they added $150 million of revenue with a combined EBTIDA margin of around 12%. Given our forecast and pipeline, we continue to expect 17% EBTIDA margins for the first 12 months. for mastodon, the timing of product orders and deliveries will create fluctuations in profit and margins from quarter-to-quarter. Their products are highly specialized, which results in very high margins, but with orders coming into street batches. We are confident that mastodon will drive significant value.
Please turn to Slide 10. full year revenue was $5 billion; up 11.6% also with 2.8% organic growth. Net income was $266 million assuming a full year of tax reform in fiscal year 2018, which is detailed on our earnings release. Net income for fiscal year 2019 was 14.4% greater than last year, driven by strong program performance.
We continue to expand EBITDA margins in line with our long-term commitments. for a more meaningful year-over-year comparison, it is helpful to normalize for two items. First, fiscal year 2019 adjusted EBITDA includes $14 million of non-recurring transaction expenses associated with the acquisition of LGS and Mastodon. Second, in conversely fiscal year 2018, adjusted EBITDA includes about $12 million of net one-time benefits, which we spoke of last year. Adjusting for these items reflects in even healthier profits growth in fiscal year 2019.
please turn to Slide 11. We generated $363 million of operating cash flow for the full year excluding our A/R purchase facility, it increased the 13% over the last year. Days sales outstanding excluding the facility, about 64 days at year-end, showing contingent improvement from 66 days in the third quarter. We ended the year with net debt to trailing 12-month adjusted EBITDA at 3.2 times having ample debt capacity to fund potential acquisition opportunities.
before discussing 2020 guidance, let me turn to another matter. In August, we were informed that the IRS filed several tax liens against CACI related to various employment related payable taxes. Bottom line, we have paid all the appropriate taxes on time and these liens are results of administrative errors and without merit. As a background in 2017, we undertook an internal reorganization, just streamlined our structure transferring several thousand employees from various subsidiaries of CACI – from various subsidiaries to CACI, Inc.-Federal. All payroll taxes were paid by the appropriate legal entity.
请转到幻灯片11.除了我们的A / R采购设施外，我们在全年产生了3.63亿美元的运营现金流，比去年增加了13％。除设施外的待售天数，年末约64天，从第三季度的66天开始显示出应有的改善。我们今年结束时的净债务为12个月调整后的EBITDA为3.2倍，拥有充足的债务能力，为潜在的收购机会提供资金。
在讨论2020年指导之前，让我转向另一件事。 8月份，我们被告知美国国税局针对CACI提出了几项与各种与就业相关的应付税款的税收优惠。最重要的是，我们按时支付了所有适当的税款，这些留置权是行政错误的结果，没有任何价值。作为2017年的背景，我们进行了内部重组，简化了我们的结构，从CACI的各个子公司转移了数千名员工 - 从各个子公司到CACI，Inc.-Federal。所有工资税均由适当的法律实体支付。
The fact that the subsidiary ceased to employee personnel with not immediately recognized by the IRS, it makes subsequently filed $156 million in liens against these entities. We are in communication with the IRS to resolve this matter and provided them with all appropriate evidence and documentation. We are highly confident that this issue will be resolved favorably and without any financial consequences.
Slide 12 please. We are reiterating our fiscal year 2020 guidance, which we provided on June 19. We continue to expect strong revenue and earnings growth with accelerating organic revenue growth in margin expansion.
To help feature modeling, let me give you some color on the first quarter of fiscal 2020. In first quarter of last year, we disclosed $12 million of pretax profit associated with sales activities occurring earlier in the years than expected. In addition, the effective tax rate in the first quarter last year was low 13%. As a result of the tax benefits of stock vesting at prices higher than at the grant date. this year, we are expecting our first quarter effective tax rate to be around 19%.
Normalizing for the revenue timing in applying a higher tax rate with reduced first quarter 2019 net income by around $14 million. this year, we expect modest first quarter net income growth over the normalized 2019 level and we expect sequential improvement in net income as the year progresses. LGS and Mastodon are expected to contribute around $18 million of EBITDA in the quarter. This will be offset by additional intangible amortization and interest expense, such that the acquisitions will be about neutral from an EPS accretion perspective for the quarter.
slide 13 please. Our forward indicators remain healthy. At the midpoint of our guidance, we now expect 85% of our revenue will come from the existing contracts, 11% from recompetes and 4% from new business. Our pipeline metrics are strong with committed bid pending awards now about $9.3 billion around 65% of the debt for new business at CACI. And we expect submitting other $16.8 billion worth of bids during the remainder of the calendar year with around 80% of that for new business at CACI.
And with that, let me turn the call back over to John.
Thank you, Tom. Let’s go to Slide 15. in closing, I am very pleased with our performance in fiscal year 2019 and confident in our prospects going forward. We delivered record financial results for the year, including sustained organic revenue growth and margin expansion. We won a record amount of contract awards in areas of our market that will continue generating profitable growth and we expect accelerating organic revenue growth and continued margin expansion throughout 2020.
this team’s successful execution of every element of our strategy, gives me great confidence in our ability to deliver on our commitments in fiscal year 2020 and beyond. None of this happens without the talent, innovation and commitment to our customers’ missions by our employees. I’d like to say how incredibly proud I am, and I thank you all for what you do each and every day.
With that, Nicole, let’s open up the call for questions.
汤姆，谢谢你。 让我们进入幻灯片15.结束时，我对2019财年的表现非常满意，对我们未来的前景充满信心。 我们创造了全年创纪录的财务业绩，包括持续的有机收入增长和利润率扩张。 我们在市场领域赢得了创纪录的合同授予量，这将继续带来盈利增长，我们预计整个2020年有机收入增长和利润率持续扩张。
该团队成功执行了我们战略的每一个要素，使我对我们在2020财年及以后履行承诺的能力充满信心。 如果没有员工的才能，创新和对客户使命的承诺，这一切都不会发生。 我想说我有多么自豪，我感谢你们每天所做的一切。
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Gavin Parsons of Goldman Sachs. Please go ahead.
谢谢。 我们现在开始问答环节。 [操作员说明]我们的第一个问题来自高盛的Gavin Parsons。 请继续。
Hey, good morning everyone.
Good morning, Gavin.
You guys have a look at the revenue growth for the year, obviously really strong bookings in the quarter and in the year, and I think on the guidance call, you had mentioned if you got a two-year budget deal, you think you’d be towards kind of the right end of that growth goalpost. So maybe, just an update on kind of what the upside risks are to kind of the range of revenue organic growth.
你们看看今年的收入增长情况，显然这个季度和一年中的预订非常强劲，我想在指导电话会议上，你曾提到如果你有两年的预算协议，你认为你们 d是朝着那个增长目标的正确方向发展。 所以，也许，只是对收入有机增长范围的上行风险的更新。
Yes, Gavin, thanks. So, one of the things that we haven't had in the past was a very solid next two-year budget. We are starting FY 2020 strong with the – with our business awards. And as we look at risk to hitting our guidance, we don't see any risk going forward. If we look at the high end, if we get the awards awarded on a timely basis, which is what we haven't planned within our FY 2020 plan, if some of those were pulled to the left, that would allow us to start some of these larger technology-based development program sooner. As it pertains to our Mastodon folks, the only risk there is if we see any move to the right of some of the product orders that we have planned for the year. We don't see that in our near-term view now due to budgets and due that the contractual vehicles that we need are already in place. So we're very confident on the midpoint of our guidance. Should we be able to get some awards coming in sooner, that would help us keep our momentum forward and finish somewhere closer to the right side.
And then as I think about the target to outgrow the market organically, it hasn't been the case the past few years, the 7.5% at the midpoint, maybe, it wouldn't be as fast versus the public peer group as you've been looking for. But the bookings are a little lot stronger. So maybe, what innings kind of do you think you're – what inning do you think you're in as far as kind of the strategy to kind of pivot towards the products and solutions. Obviously, it's paying off in booking, but do we see that outgrowth kind of accelerate going forward over the next couple of years versus the market?
然后，当我想到有机地超越市场的目标时，过去几年的情况并非如此，中间点为7.5％，也许，与公众同行相比，它不会像你那样快。 一直在寻找。 但预订有点强大。 所以，也许，你认为你是什么局 - 你认为你所处的内容是什么样的策略，以转向产品和解决方案。 显然，它在预订中获得了回报，但是我们是否看到未来几年与市场相比会出现明显的加速增长？
Yes, Gavin, thanks. So, I’ll focus on two areas. One is our focus on long-term, sustainable growth for this company as we've done the last 57 years, also focus on the fact that we are looking to drive both top and bottom-line growth. So we too read of other top line growth. We're actually focused on the strategy we have, which is looking at the markets that we serve today, making actually certain that our IR&D investments are being made ahead of customer need so that when budgets arrive, CACI is ready to deliver. We're very, very proud of the awards of the book of business that we did during 2019, I mean who wouldn't at $10.3 billion. But a lot of that is also representative of us moving to longer-term contractual relationships with some of our technology-driven customers. If I were to look back over the last five to six years, where the majority of our business was on with expertise, those contract turns were three to three to four years. And during LPTA time, it was closer to, every year, to 18 months. So we're looking this coming year to nearly double the level of organic growth. At the same time, we don't have a three-year plan to grow margins. We have a year-over-year plan to grow for margins. And last two years, being able to exceed 10 basis points to 30 basis points is what we believe shareholders are going to be looking for not only now, but in the future.
Our next question comes from Cai von Rumohr of Cowen. Please go ahead.
我们的下一个问题来自Cowen的Cai von Rumohr。 请继续。
Cai von Rumohr
Yes. Thanks so much and good quarter. So, the $13 million investment in the fourth quarter, give us a little more color about what percent was to each of the items you mentioned. Where is it in the P&L? And are you considering kind of doing more special investments in FY 2020?
是。 非常感谢和好季度。 因此，第四季度的1300万美元投资，让我们更多地了解您提到的每个项目的百分比。 P＆L在哪里？ 您是否正在考虑在2020财年进行更多特殊投资？
Yes. So, in terms of the – I can't give you specific details. In terms of kind of order in magnitude, the B&T in IR&D was the kind of largest item either followed by the internal IT investments, followed by HR initiatives. And let me point out that there's a variety of other HR initiatives, which are ongoing and sustainable, but these are more unique activities to jump-start certain activities associated with those. And we had – it will all flow through the indirect expense line on our P&L.
是。 所以，就 - 我不能给你具体的细节。 就规模的数量而言，IR＆D中的B＆T是最大的项目，其次是内部IT投资，其次是人力资源计划。 我要指出的是，还有各种其他人力资源计划，这些计划是持续的和可持续的，但这些是更加独特的活动，可以启动与之相关的某些活动。 而且我们 - 它将全部流经我们的损益表中的间接费用线。
Cai, you also asked around some special investments, is there any plan in FY 2020. When we did – when we announced early in the third quarter those special investments in the fourth, we're looking at what our FY 2020 plan looks like. We were within all of our guidance ranges for the full year FY 2019, and we found it prudent for the long-term growth of this company for us to make some of those investments in the fourth quarter of 2019. As we look at FY 2020, will we do the same exact thing? It will most likely be in two areas if we happen to do that. Some of the technology investments that we have may or may not require additional investment for us to hit customer need ahead of – to hit customer plans ahead of need, and we will always be investing in not only retaining the best and brightest folks, but attracting them, and that is an ongoing focus that CACI has, and we will continue to make the prudent investments. I will say all the while making certain we're living within our very competitive rate structure. So we're not looking at making investments to then push our rates greater. We're actually balancing cost and spend.
Cai，您还询问了一些特殊投资，2020财年是否有任何计划。当我们这样做时 - 当我们在第三季度初宣布第四季度的特殊投资时，我们正在考虑我们的2020财年计划。我们处于2019财年全年的所有指导范围内，我们发现该公司的长期增长对于我们在2019年第四季度进行部分投资是谨慎的。我们看看2020财年，我们会做同样的事情吗？如果碰巧这样做，很可能会在两个方面。我们所拥有的一些技术投资可能会或可能不会需要额外的投资来满足客户的需求 - 在需要之前达成客户计划，我们将始终投资不仅保留最优秀和最聪明的人，而且吸引人他们，这是CACI持续关注的焦点，我们将继续进行谨慎的投资。我会一直说，确保我们生活在我们极具竞争力的价格结构中。因此，我们不会考虑进行投资，以便提高利率。我们实际上在平衡成本和支出。
Cai von Rumohr
Terrific. And last one that 12% EBITDA margin for LGS, Mastodon in the four months and 17% next year with the sequential build, which would imply, I don't know, the exit rate's going to be 19% to 20%. Is that sustainable or is that just a function of when the Mastodon products deliver? Thank you.
了不起。 最后一个是LGS的12％EBITDA利润率，Mastodon在4个月和明年17％的顺序构建，这意味着，我不知道，退出率将是19％到20％。 这是可持续的还是仅仅是Mastodon产品何时交付的功能？ 谢谢。
Yes. thank you, Cai. Right now, it’s a little bit premature for us to talk about kind of margins to the performance of – in 2021. I would hope sustainable, and certainly that's our goal and our aspirations. But at this point in time, I think your latter comment that this could be some fluctuation, some quarters are going to be higher than others given those product kind of orders and deliveries will create some, again, nobody is associated with that steady state. So we get aspirationally kind of one inside, kind of higher margins, and I will point out that the margin characteristics of Mastodon are materially higher than the LGS. I think that's what we've disclosed when we purchased the acquisition. And so to the extent that, that organization can grow disproportionately, that would be very productive to markets going forward.
是。 谢谢蔡。 现在，我们谈论2021年表现的利润还为时过早。我希望可持续发展，当然这也是我们的目标和愿望。 但是在这个时候，我认为你的后者评论说这可能是一些波动，某些季度会比其他季度更高，因为那些产品类型的订单和交付将创造一些，再一次，没有人与这种稳定状态相关联。 因此，我们可以获得一种内在的，更高的利润率，并且我将指出Mastodon的边际特征实质上高于LGS。 我认为这是我们购买此次收购时所披露的内容。 因此，在某种程度上，该组织可以不成比例地增长，这对于未来的市场来说将是非常有成效的。
Yes. Can I also add a little more color? When we talk about Mastodon, we talk about MD&A product-based company. But they earn a large scale production company, right. So as we look at the quarter-to-quarter orders for what they create, it's not that kind of production model, where once we get through the first 20 or 40 units, we'll see even greater margins. It is really more than respectable margins on unique technology products that they deliver. So that mix of products will change from time to time. But as Tom mentioned, they came into us with a promise of materially greater margins and the rest of CACI, and we are very, very pleased to – we're very pleased with where we'll finish in FY 2020.
是。 我还可以添加更多颜色吗？ 当我们谈论Mastodon时，我们谈论MD＆A产品为基础的公司。 但他们赚了一家大型制作公司吧。 因此，当我们查看他们创造的季度订单时，不是那种生产模式，一旦我们通过前20或40个单位，我们将看到更大的利润。 它们提供的独特技术产品的利润确实超过了可观的利润。 因此，产品组合将不时发生变化。 但正如汤姆所说，他们带着实质上更大的利润和CACI的其余部分来到我们这里，我们非常非常高兴 - 我们对2020财年的目标非常满意。
Our next question comes from Matt Sharpe of Morgan Stanley. Please go ahead.
Good morning, gentlemen.
Good morning, Matt. Welcome.
Thank you. So, I just wanted to touch, I know we've discussed this a bit thus far, but does the higher investment in R&D and infrastructure, how should we think about that as it carries forward? Will there be a continued sort of higher level into early fiscal 2020 and then sort of tail off as the year goes on? Or will the indirect be relatively consistent as a percentage of revenue throughout the year?
谢谢。 所以，我只是想触摸，我知道到目前为止我们已经讨论了这一点，但研发和基础设施的投资是否更高，我们应该如何继续思考呢？ 到2020年初财政会有更高的水平，然后随着时间的推移会有所不同吗？ 或者间接在全年的收入百分比中是否相对一致？
Yes, Matt. So, when we look at IRAD investments, we were looking at it in two different areas, where those areas we have to invest to sustain. When we go after these large-scale recompetes as we did on the Army cash program, we really looked at about two years before the recompete, what are those star distinctions or those type of differentiated technologies we have to put in place. So that was an investment to make certain that we are able to retain some of the business that we have, albeit delivering more of a technology bend. We're going to continue to increase our investments in signals intelligence, electronic warfare, communications and the like, and that's a very dynamic market. Those are very dangerous place, so that's continued to change. And the model that both LGS and Mastodon have brought into our business is one of continuous investments.
So, to provide some kind of modeling guidance, I would say we're really looking at full-year bidding proposal in IRAD investments. I think you'll continue to see that level grow year-over-year, knock on wood, as we get out of FY 2020, continue to drive more technology solutions means greater investments. But again, never to a point where we are busting rates, which then make us less competitive. We really are looking to grow our innovative dollars within our means.
Yes. And looking at fourth quarter level indirect spend as a percentage of revenue, excluding those $13 million items, that's somewhat indicative of where we'll be kind of going forward in 2020. And as John mentioned, I'll just embellish, the higher kind of value-add solution technology requires a higher level of indirect support, laboratories, IR&D, smart people trying to solve problems in advance of customer to solve problems in advance of customer requirements. The good news is that customers are willing to pay for that, and the wrap rates that we're able to command in some of those areas are materially higher than average wrap rates. And so spend the money, the customers pay for them, and we can still deliver increasing margin and increasing profitability.
是。 并且将第四季度间接支出视为收入的百分比，不包括那些1300万美元的项目，这在一定程度上表明了我们将在2020年向前发展的方向。正如约翰所提到的，我只是修饰，更高的类型 增值解决方案技术需要更高水平的间接支持，实验室，IR＆D，聪明的人试图在客户提前解决问题之前解决客户要求的问题。 好消息是客户愿意为此付出代价，而我们在某些领域能够获得的包装率实际上高于平均包装率。 因此花钱，客户为他们付钱，我们仍然可以提供更高的利润并提高盈利能力。
Got it. And then sort of on a related note on the CapEx side. How should we think about the profile that – from here? Obviously, 4Q was relatively high, and it's usually a light quarter for CACI. So, are you seeing upward pressure just given some of the acquisitions that are a little bit more product or solutions-based? And again, how do we think about that going forward? Does it revert back down towards the sub-1% level that you're traditionally at or just gravitate towards the current 1.3%?
得到它了。 然后在资本支出方面进行相关说明。 我们应该如何思考这个概况 - 从这里开始？ 显然，第四季度相对较高，而且通常是CACI的轻度季度。 那么，您是否看到了一些收购的上行压力，这些收购是基于产品或解决方案的更多？ 而且，我们如何看待未来呢？ 它是否会恢复到传统上处于或低于当前1.3％的低于1％的水平？
Yes. So, we guided to full year CapEx of $55 million for 2020, approximately 1% of revenue for revenues, approximately 5% and $0.6 kind of billion. The absolute level is higher than we have seen in the past, two large buckets, some just – some internal IT, other kind of infrastructure to support a kind of large organization. The other bucket is facility expense. And as we win programs, oftentimes these programs need to be performed at CACI facilities. And to the extent that we need facilities in new locations, we need to make those investments for those facilities. Some of those facilities require skits or secured spaces, which are even more expensive. And so that is driving some of the higher absolute dollars of CapEx. I would think that going forward, that 1% seems to be about reasonable set of numbers for CACI, kind of borrowing any unusual type of program, which would require material CapEx.
是。 因此，我们指导2020年的全年资本支出为5500万美元，约占收入收入的1％，约为5％和0.6亿美元。 绝对水平高于我们过去看到的两个大桶，一些只是 - 一些内部IT，其他类型的基础设施来支持一种大型组织。 另一个桶是设施费用。 当我们赢得节目时，这些节目通常需要在CACI设施上进行。 如果我们需要新地点的设施，我们需要为这些设施进行投资。 其中一些设施需要短剧或安全空间，甚至更昂贵。 因此，这推动了一些较高的资本支出绝对美元。 我认为未来，1％似乎是关于CACI的合理数字集，有点借用任何不寻常的程序类型，这需要物质资本支出。
But I’ll also add that those that will require a higher level of CapEx are most likely going to be technology-driven programs that have a – their own unique investment plan. I'm almost certain that we won't be able to predict CapEx by quarter, but I can tell you by the type of business that were out there, we need to always be within the right level of spend given the type of programs that we continue to win.
但我还要补充说，那些需要更高水平的资本支出的人最有可能是技术驱动的计划，他们有自己独特的投资计划。 我几乎可以肯定，我们无法按季度预测资本支出，但我可以根据那里的业务类型告诉您，我们需要始终处于适当的支出水平，因为该类型的计划是 我们继续赢。
Our next question comes from Joseph DeNardi of Stifel. Please go ahead.
我们的下一个问题来自Stifel的Joseph DeNardi。 请继续。
Yes. Thanks very much. John, when you look at kind of the pipeline of opportunities, the budget backdrop, your expectations for kind of the timing of some of the bigger awards that may be out there, can you maintain the type of book-to-bill that you had the last 12 months? Or should the expectation be that, that moderates some in FY 2020?
是。 非常感谢。 约翰，当你看到各种机会，预算背景，你对那些可能在那里的一些更大奖项的时间的期望，你能保持你有的账单到账单的类型 过去12个月？ 或者期望是这样，在2020财年温和一些？
Yes, Joe, thanks. I always answer every award question where it's lumpy. I've been in this business far too long that when we celebrate the absolute highs, customer changes a couple of awards. And they award July 2nd versus June 28, and book-to-bill looks crazy. And can we maintain the book-to-bill? I'll tell you what we can maintain. We can maintain the level of success that we have had. It wasn't five or six years back when we were in a slightly different place. We really took the time to add the right business development talent. We actually drove market strategies, so that we were, in two words, disciplined and focused. I don't see anything different in our business development team as we come into FY 2020 other than discipline and focus. So, I would expect us to continue to win more than we don't. I would expect us to continue to bring back 90%, if not better, of our recompete wins, frankly, internally. We have an absolute goal of – we went 100% of our recompetes. And when we don't, we're not happy. So if I look at budget support, if I look at the investments, if I look at the areas of the federal government budget that CACI now plays in, I feel very confident that we are on the right path and we will continue to win new business of those recompetes at the FY 2019 pace.
是的，乔，谢谢。我总是回答每个奖励问题。我从事这项业务的时间太长了，当我们庆祝绝对高点时，客户会改变几个奖项。他们在7月2日和6月28日之间获奖，而且订单到账单看起来很疯狂。我们可以保持按订单收费吗？我会告诉你我们能保持什么。我们可以保持我们的成功水平。当我们在一个稍微不同的地方时，不是五六年前。我们真的花时间来增加合适的业务开发人才。我们实际上推动了市场战略，因此我们用两个词来纪律和专注。我们的业务开发团队没有看到任何不同，因为我们进入2020财年除了纪律和专注。所以，我希望我们继续赢得比我们更多的胜利。我希望我们能够继续带回90％（如果不是更好的话）我们的重新获胜，坦率地说，在内部。我们有一个绝对的目标 - 我们完成了100％的重新计算。当我们不这样做时，我们就不开心了。因此，如果我看看预算支持，如果我看一下投资，如果我看一下CACI现在所处的联邦政府预算领域，我会对我们走在正确的道路上充满信心，我们将继续赢得新的2019财年的重组业务。
Okay. I mean, does the nature of the pipeline in terms of duration and size support? I mean because I think that's been a tailwind for you guys recently. Does it support maintaining that type of book-to-bill? Or even if you're successful, that number will come down just because the duration may be changed? Just trying to set expectations a little bit given how strong it's been for you guys.
好的。 我的意思是，管道在持续时间和尺寸方面的性质是否支持？ 我的意思是因为我认为最近这对你们来说是一个顺风。 它是否支持维持这种类型的订单到付款？ 或者即使你成功了，这个数字也会因为持续时间可能会改变而降下来？ 考虑到对你们来说有多强大，试着设定一点期望。
Sure. Given the nature of our pipeline, the type of business which is in there, we're pretty confident that we are continually finding larger programs for us to go out there and win. Okay. So, I honestly believe that we've got the right formula there. Now that pipeline is also going to trick – change a little bit, and maybe, it has the last couple of years, because you're bringing a company like Mastodon, which is really product deliveries that is probably a 30- to 90-day delivery cycle. So that's more choppy shorter term kind of business. But I have to tell you, we've got some multi-dollar bid submitted that we feel as confident as we ever had. So time will tell, but I can tell you is that what our plans for new business awards are very much support our FY 2020 guidance.
当然。 鉴于我们的管道的性质，那里的业务类型，我们非常有信心，我们不断寻找更大的项目，让我们去那里赢得胜利。 好的。 所以，我真的相信我们在那里有正确的配方。 现在这条管道也会变得棘手 - 稍微改变一下，也许，它已经过去了几年，因为你带来了像Mastodon这样的公司，这实际上是产品交付时间可能是30到90天 交货周期。 因此，这种短期业务更加波动。 但我必须告诉你，我们已经提交了一些多美元的出价，我们感觉像以前一样自信。 所以时间会证明，但我可以告诉你，我们的新业务奖励计划非常支持我们的2020财年指导。
Our next question comes from Robert Spingarn of Credit Suisse. Please go ahead.
我们的下一个问题来自瑞士信贷的Robert Spingarn。 请继续。
Hi, good morning.
Good morning, Rob.
Just following up on that, and I appreciate your answer before that your performance is going to be consistent, your relative performance to the others. But when I do look at the budgets, I'm wondering if this big surge in your backlog in your fiscal 2019 reflects the big surge in the budget, which peaked in fiscal 2018 – in government fiscal 2018. And so is this money that's coming into your this coffers this year, these orders? Is this fiscal 2018 money and it's kind of a onetime deal? Because clearly, the budget slows through 2021.
只是跟进，我感谢你的答案，你的表现将是一致的，你的相对表现与其他人。 但是，当我查看预算时，我想知道2019财年你的积压的大幅增长是否反映了2018财政年度预算的大幅增长 - 在2018财政年度的最高点。这笔资金即将到来 这些订单今年进入你的库房？ 这是2018财年的资金吗？这是一次性的交易吗？ 因为很明显，预算到2021年会放缓。
Yes, Rob, thanks. So let me answer that in a – from a couple different angles. Budget clearly helps, right, clearly, absolutely helps. But I think as much as the FY 2018 budget looked and as we go forward in FY 2019 budget. What I try to look at is when we get up to FY 2021, if the budget isn't going and it's flat, what does that present for CACI and sort of measure that against the business that we have in our backlog today? What is different, I think, with CACI than potentially other folks out there is that as we move more towards technology-based awards, those are longer term and they are fully funded. So we look at these five to seven-year $800 million, $900 million awards. Those are fully funded awards. So just like a long-term production program, it's really hard to change course when you had a five to seven-year technology development program that is very software intensive. I would also tell you that the fact that we are on that technology track, it also allows us to look at a very different addressable market. So, although budgets may be fluctuating, what CACI can go out there and capture with more than making a fist in kind of capabilities that grow. So $220 billion addressable market, which is fully funded, even a flat budget environment, we're a $5.6 billion company. So I look at our team all the time saying, if our addressable market is $220 billion, there are ample things we can go out there and invest in and go forward in and win. So it will be for the same percentage, perhaps not, but we're very confident on what our investment strategy has been over the long term and really believe large budget or not, the areas of budget are growing are in areas that we three or four years ago began to invest in.
Okay. And then just want to take a couple of things on the acquisitions on LGS and Mastodon. In terms of where you've been surprised on the upside and downside, sounds like the margins are coming nicely. But upside and downside there, I wanted to ask Tom if he could just clarify for us how much of this expansion in the backlog in the funded orders and so forth was acquired or was added at the time of acquisition. Possible you told us that last time, but I just wanted to get an idea of that. And then what is the M&A outlook with companies or for companies like these that are product-based? Is there more out there that you can expand this part of the business with? Thank you.
好的。 然后只想对LGS和Mastodon的收购采取一些措施。 就你在上行和下行方面感到惊讶的方面而言，听起来很有利可图。 但在那里的上行和下行，我想问汤姆他是否可以向我们澄清在获得资助的订单等积压中的这种扩张有多少，或者在收购时增加了。 可能你上次告诉过我们，但我只是想知道这一点。 那么对于公司或类似公司的产品型并购前景是什么？ 还有更多可以扩展这部分业务的吗？ 谢谢。
You bet, Rob. Thanks. So, let me take the first and third question. I'll have Tom handle the second. Look. So how do we feel about where LGS and Mastodon are and what has gone well, and then what hasn't gone so well. On the – let me start with the not so well, because I'm struggling with what it is hasn't gone well. Look, it's the first time we, as a company, reached out and stretched ourselves to close two acquisitions at the same exact time. So if you're a functional leader inside of CACI, my CHRO or my IT folks, we really stretched that. And frankly, in some areas, we most likely stressed the incoming employees from Mastodon and LGS because we weren't as sharp as we normally are when we do a single acquisition. The good news is, we're about five months in and most of those employees have forgotten that.
On a more positive side, I'm really happy, Rob, with – over the last five months, the level of collaboration we've seen across core CACI folks, LGS and Mastodon folks. I'll give you a couple of examples, because for me to give you qualitative statements don't really mean much. LGS has already contributed with a triple million dollar award, $200 million to $300 million of an updated sole source, where it competes. And that's part of the business case for that part of our acquisition. It's also proved that the business does continue to operate just as they did prior to the integration.
On our E3I award that I spoke about earlier, what's most exciting is that, that was a job won by CACI, and in the delivery cycle, we're watching LGS, Mastodon and CACI Technology being put into those capabilities, enhancing those. And also, on single award IDIQs that we have, we're combining all of the technology know-how for us to be able to spend more than what that customer's initial spend plan was. Tom, you want to talk about the second portion? I'll wrap up with comment on where we see the M&A with comment on where we see the M&A.
你打赌，罗布。谢谢。那么，让我提出第一个和第三个问题。我会让汤姆处理第二个问题。看。那么我们如何看待LGS和Mastodon的位置以及哪些方面进展顺利，然后又没有那么顺利。在 - 让我从不太好开始，因为我正在努力解决它不顺利的问题。看，这是我们作为一家公司第一次伸出援手，在同一时间完成两次收购。因此，如果你是CACI，我的CHRO或我的IT人员中的职能领导者，我们真的很紧张。坦率地说，在某些领域，我们很可能会强调来自Mastodon和LGS的新员工，因为当我们进行单次收购时，我们并不像通常那样敏锐。好消息是，我们已经进入了大约五个月，大多数员工都忘记了这一点。
Yes. Thank you. I don't have the specific number that LGS or Mastodon has added to the backlog or the awards. We added those numbers at the end of the third quarter, and that was reflected in our market results. And I think it's reasonable to assume that their backlog is kind of relative to their size. Of course, CACI versus LGS is kind of a 10:1 ratio. So, while it is contributing, it’s not a huge driver in the overall kind of backlog number. And as John mentioned, going forward, it’s going be hard to subscribe backlog numbers to LGS or CACI given the fact that the credentials of both organizations, or parts of CACI, I should say, are driving kind of wins
是。 谢谢。 我没有LGS或Mastodon在积压或奖励中添加的具体数字。 我们在第三季度末添加了这些数字，这反映在我们的市场结果中。 而且我认为假设他们的积压与他们的规模有关是合理的。 当然，CACI与LGS的比例是10：1。 因此，虽然它有所贡献，但它并不是整体积压数量的巨大推动因素。 正如约翰所提到的那样，向前看，由于两个组织的证书或CACI的一部分，我应该说正在推动胜利，所以很难将积压数量订阅给LGS或CACI。
So – and on the M&A piece, Rob, for everyone on the call, we are very much sticking with M&A strategy that we’ve had in the past. We know what our focus areas are. We know the markets that we serve. We review our market-based strategies twice each year to look for gaps, and then we turn our Corporate Development team on going to look for our new properties. In the areas, they’re going to be very technology-centric, everything from supporting Enterprise IT and business systems customer as they continually look for new creative enterprise-wide solutions. But closer to where Six3, Mastodon and LGS are, really in that SIGINT, EW, Cyber and communications area. I mean look, it’s no secret that our ad, vis-à-vis other great powers, has eroded and that needs to be rebuilt. We saw that about 36 months back. We started to build upon what CACI already was creating. We then went to Six3 and then did that with LGS and Mastodon.
There are other properties out there that are – that could potentially fill other niche areas. For us, in this EW/SIGINT/Cyber world, but I have to tell you, I’m extremely pleased with everything we knew about LGS coming in and frankly, in the meetings I’ve been sitting in, learning even more of the areas that they covered. So we’re always involved in the M&As, we’re always looking for those long-term strategic targets, and I think you’ll continue to see more of the same for us in the near and the long-term future.
所以 - 在并购方面，Rob，对于每个人来说，我们都非常坚持我们过去所拥有的并购战略。我们知道我们的重点领域是什么。我们了解我们所服务的市场。我们每年两次审查基于市场的策略以寻找差距，然后我们转向我们的企业发展团队寻找我们的新物业。在这些领域，它们将以技术为中心，从支持企业IT和业务系统客户，到不断寻找新的创意企业级解决方案。但更接近Six3，Mastodon和LGS的地方，真正处于SIGINT，EW，Cyber和通信领域。我的意思是，我们的广告相对于其他大国而言已经被侵蚀并且需要重建，这已经不是什么秘密了。我们看到大约36个月前。我们开始在CACI已经创建的基础上进行构建。然后我们去了Six3，然后用LGS和Mastodon做到了。
还有其他一些属性 - 可能会填补其他利基领域。对于我们来说，在这个EW / SIGINT / Cyber世界中，但是我必须告诉你，我对我们所知道的关于LGS的所有事情非常满意，坦率地说，在我参加的会议中，学习更多他们所覆盖的领域。因此，我们始终参与并购，我们一直在寻找这些长期战略目标，而且我认为您将在近期和长期的未来继续看到更多相同的东西。
Our next question comes from Jon Raviv of Citi. Please go ahead.
我们的下一个问题来自花旗的Jon Raviv。 请继续。
Hey, good morning. Just first of all, clarification and a question here on the organic growth. The slides last month had 5.5% organic revenue growth in FY 2020. It’s now a 5% organic growth. Can you just bridge those two numbers for me, please? I don’t know, but any comment there. And just on the organic growth, can you just give us a sense of some of the programs and/or markets that were headwinds in FY 2019 that are rolling off in FY 2020 to prove out and to support the accelerated growth? How do you get to the 3% to 5%? Thank you.
嗨，早安。 首先，澄清和有关增长的问题。 上个月的幻灯片在2020财年的有机收入增长了5.5％。现在有机收入增长了5％。 你能把这两个号码连接起来吗？ 我不知道，但有任何评论。 就有机增长而言，您能否让我们了解2019财年的一些计划和/或市场，这些计划和/或市场将在2020财年推出以证明并支持加速增长？ 你如何达到3％到5％？ 谢谢。
Yes. So I’ll start. When we provided initial guidance, we guided from the midpoint of FY 2019 guidance to the midpoint of 2020 guidance, which kind of mathematically was a 5.5% kind of organic growth. We’ll be closing FY 2019 a bit higher than those midpoint numbers. And so if you keep 2020 intact, you’re getting 5% number. I will caution you all that using a point estimate is simply using a point estimate. We have a range of revenue, and I think it’s insufficient to say that inorganic revenue will be 5%, 5.5%, perhaps more given the upper end of the range, perhaps less with the lower part of the range. So I think that’s the – kind of, hopefully, that will clarify those set of numbers.
In terms of kind of where the areas of growth are in supporting the higher organic growth, a lot of the areas that John mentioned. We’re winning a large number of awards. Our information that we put out talks about kind of awards and communication, secured communication, kind of electronic warfare, a number of Enterprise IT work, and those are all kind of supporting that growth. I would say the broad areas continue to be Enterprise IT business systems, electronic warfare, digital signal processing, C4ISR kind of larger areas, intelligence solutions, Intelligence Services.
是。所以我会开始。当我们提供初步指导时，我们从2019财年中期指引到2020年中期指导，这在数学上是5.5％的有机增长。我们将在2019财年关闭比这些中点数字略高一些。因此，如果您保持2020完好无损，那么您将获得5％的数字。我会提醒大家，使用点估计只是使用点估计。我们有一系列的收入，我认为不足以说无机收入将是5％，5.5％，或许更多的是在该范围的上限，或许更低的范围的下半部分。所以我认为那种 - 希望能够澄清这些数字。
And john, I would also add that it will quickly become tough for us to differentiate organic versus nonorganic. What I’d focus on is growth. We’re very clear about that we do M&As to drive long-term growth. An example of that is in our secure communications award, the $800 million-some award, there’s about $400 million of that which is programmed against current visible deliveries. The other $400 million of that single word IDIQ is funded seemingly. So when I look at the capabilities of LGS and Mastodon and look at how they could come up with even in more enhanced solutions, we could spend more of that $800 million and deliver even better capability for our customer. Frankly, whether I count that as organic or nonorganic, it’s outstanding growth that we’d have had I that had not done LGS and Mastodon.
约翰，我还要补充一点，我们很快就会将有机产品与非有机产品区分开来。 我关注的是增长。 我们非常清楚我们进行并购以推动长期增长。 这方面的一个例子就是我们的安全通信奖，这个价值8亿美元的奖项，其中大约有4亿美元用于当前可见的交付。 其他4亿美元的单字IDIQ似乎也得到了资助。 因此，当我查看LGS和Mastodon的功能并了解他们如何能够提出更多增强型解决方案时，我们可以花费8亿美元，为客户提供更好的功能。 坦率地说，无论我认为它是有机的还是非有机的，它都是我所拥有的杰出成长，我没有完成LGS和Mastodon。
Great. Thanks for that perspective. This is a follow-up on, John, you mentioned the two kind of maybe buckets in M&A, EIT and biz systems and then also SIGINT, EW, Cyber. Would it be fair to characterize the first as being a bit bigger in terms of deal size and the second being a bit smaller in terms of deal size? And then also on the call, on your prepared remarks, you mentioned that at 2.2 times net leverage, you have ample capacity. What is ample capacity when you do approach the M&A market and what do you think in terms of size?
非常好。 谢谢你的观点。 这是John的后续行动，你提到了M＆A，EIT和biz系统中的两种可能桶，然后是SIGINT，EW，Cyber。 将第一个特征描述为在交易规模方面稍微大一点并且第二个在交易规模方面稍微小一点是否公平？ 然后在电话会议上，在你准备好的评论中，你提到净杠杆的2.2倍，你有足够的容量。 当您接近并购市场时，有多大的能力，您认为在规模方面有何看法？
Yes. Jon, thanks. So if I look at those two buckets, Enterprise IT and business systems, that, for us, if we look at the total addressable market, that’s a much larger market today. We have clearly long-term decade’s worth of experience there. So that’s a larger total addressable market, but a smaller growth rate. So you would expect deals in that area to be companies potentially of like size, if they fill capability and customer gaps, okay? If I find someone out there that’s just like us, where this becomes a volume buy, that’s not what we’ll be interested in. On the SIGINT/EW/Cyber comms, that second bucket, I think traditionally, what we’re looking for are companies that have the right kind of capabilities. I probably won’t share – in fact, I will not share any of those companies that we’re taking a look at. I wouldn’t say they’re all small, some could be larger as well. Some of the larger players, they’re most likely will fill even more gaps. So if we can find someone that fills four gaps versus small – four smaller companies that only fill one each, then it’s sort of a toss-up to have to meet our investment criteria, they have to have the right cultural fit as well. But hopefully, that provides some light. And, Tom, on our leverage?
是。乔恩，谢谢。因此，如果我看看这两个桶，企业IT和业务系统，对我们来说，如果我们看一下整个可寻址市场，那么今天这个市场就要大得多。我们显然有长期的十年经验。这是一个更大的总可寻址市场，但增长率较小。因此，如果他们填补能力和客户差距，你会期望该领域的交易成为可能具有相同规模的公司，好吗？如果我发现那里的人就像我们一样，这就是批量购买，那不是我们感兴趣的东西。在SIGINT / EW / Cyber通讯上，我认为传统的第二个桶，我们正在寻找什么适用于具有适当能力的公司。我可能不会分享 - 事实上，我不会分享我们正在考虑的那些公司。我不会说它们都很小，有些也可能更大。一些较大的参与者，他们最有可能填补更多的空白。因此，如果我们能够找到填补四个空白的人而不是小的四个小公司，每个只填充一个，那么必须满足我们的投资标准，他们必须具有正确的文化适应性。但希望，这提供了一些亮点。而且，汤姆，我们的杠杆？
Yes, capacity. So assuming a couple of reasonable kind of purchase price and margin of the acquired companies, we could undertake a kind of $1 billion purchase price acquisition while maintaining leverage south of four times. So if you want to take leverage up slightly higher than, there is even more capacity. So we feel pretty comfortable that we can kind of look for a wide variety of small independent-type companies with a all-cash deal.
是的，容量。 因此，假设收购公司有一些合理的购买价格和保证金，我们可以进行一笔10亿美元的购买价格收购，同时保持四倍的杠杆率。 因此，如果你想略微提高杠杆率，那么就有更多的能力。 所以我们觉得很舒服，我们可以通过全现金交易来寻找各种各样的小型独立型公司。
Our next question comes from Edward Caso of Wells Fargo. Please go ahead.
我们的下一个问题来自富国银行的Edward Caso。 请继续。
It’s Justin Donati on for Ed. Thank you for taking my question.
The first one I had, just on the new award that you’ve won over the last 12 to 18 months, how much of that has been from on-contract growth versus takeaways?
Yes, Justin, This is John. That’s a– I don’t have that number off the top of mind, but what I will tell you is this, as it pertains to going further for – going forward in future growth. Earlier to someone’s question, I used the term single word IDIQ and realized there may be folks out there that don’t understand how we explain that. Single word IDIQs are where a customer awards only CACI a large contract. We have been very successful. It’s shaping large ceilings as well. So although we won a job, an $800 million ceiling, what’s very creative to us is there may be $400 million worth of current book of business that we can see, but that’s $400 million of guaranteed on-contract growth.
So we do have an absolute focus over the last few years. One of my focus areas coming into the CEO role is to put an even stronger focus on that. What we’re good at is when we sign a contract with our fiber broadband customers, we do deliver. We make things right, and what we’re going to really start doubling down on is how we continue to grow with on-contract growth. If you think about it, it takes very little investment, right? We’ve already won the actual vehicle for us to deliver on. We’re not competing against all the next five- to six-year task orders. So while I’m not answering your specific question, but I can tell you, it’s a healthy mix, and it’s one that supports growth going forward.
是的，贾斯汀，这是约翰。这是一个 - 我没有这个数字是最重要的，但我要告诉你的是，这涉及到进一步发展 - 未来的增长前进。在某人的问题早些时候，我使用单词IDIQ一词，并意识到可能有些人不明白我们如何解释这一点。单字IDIQ是客户仅授予CACI大合同的地方。我们非常成功。它也在塑造大型天花板。因此，尽管我们赢得了一份8亿美元的上限工作，但对我们来说非常有创意的是，我们可以看到价值4亿美元的当前商业书籍，但这是4亿美元的保证合同增长。
That’s helpful. And then, as you’ve talked here today about more technology and solutions, can you just provide any more color on how much of that has been inserted into bids today versus maybe one to two years ago.
Yes. Thanks, Justin. Over the last – I would say when we brought Six3 in, both Ken and I had this vision of people know CACI as an expert – a provider of expertise and some level of technology solutions. What our vision was, and it’ll be my vision to enhance that going forward, is let’s talk about what technology means and how do we get ahead of where the government’s spending, so that we’re not trying to punch above our weight, but we’re actually punching at our weight. So if you look at technology offerings today, I would say our offerings today are materially different than they were five years back. There’s not as materially different, maybe over the last couple of years, but going forward, the addition of LGS and Mastodon, we will continually drive technological discriminators, everything that we’re out there bidding. Even on those programs where it looks like it’s a delivery of expertise or professional services, we’re really driving to put technological differentiators in there as well. If a customer who wants to have 45 people in an operation center, why isn’t our bid showing technologies if the customer only needs to have 20? And that repurposes their dollars. It drives our margins. It really is a true win-win.
是。谢谢，贾斯汀。最后 - 我会说当我们带来Six3时，肯和我都有这样的愿景，人们都知道CACI是专家 - 专业知识提供者和某种程度的技术解决方案。我们的愿景是什么，并且我的愿景是提升未来的发展，让我们谈谈技术意味着什么，以及我们如何领先于政府的支出，以便我们不要试图超越我们的重量，但我们实际上正在努力。因此，如果你看看今天的技术产品，我会说今天我们的产品与五年前的产品有很大的不同。可能在过去几年里并没有那么大不同，但是在未来，LGS和Mastodon的加入，我们将不断推动技术鉴别者，我们在那里竞争的一切。即使在那些看起来像提供专业知识或专业服务的计划中，我们也真的在推动技术差异化。如果客户希望在运营中心拥有45名员工，那么，如果客户只需要20名员工，为什么我们的出价不显示技术呢？这会重新利用他们的美元。它推动了我们的利润。这真的是一个真正的双赢。
Yes. And I will add, probably five years ago, the bids in the universe had the technology criteria – evaluation criteria, well we were not able to bid on those because we didn’t have the investments in those underlying capabilities. And so our aperture has changed materially given those investments. And so it’s – we can go after a lot of things today that we were not qualified to go after five to 10 years ago.
是。 我想补充一下，可能是五年前，宇宙中的出价都有技术标准 - 评估标准，我们无法对这些标书进行投标，因为我们没有对这些潜在能力进行投资。 因此，考虑到这些投资，我们的光圈已大幅改变。 所以它 - 我们可以追踪今天很多事情，我们没有资格在五到十年前去。
Our next question comes from Greg Konrad of Jefferies. Please go ahead.
我们的下一个问题来自Jefferies的Greg Konrad。 请继续。
Good morning, Greg.
Just to follow-up on some of the last questions. I mean more broadly speaking, it seems like a lot of the services companies are maybe pursuing a more product-focused M&A strategy. I mean, have you seen any noticeable change to the overall market, either from an M&A pursuit aspect or just overall competition in the market?
只是为了跟进一些最后的问题。 我的意思是更广泛地说，似乎许多服务公司可能正在寻求更注重产品的并购战略。 我的意思是，您是否看到整体市场有任何明显变化，无论是并购追求还是整体市场竞争？
Yes. Greg. Thanks. When we look at our technology focused part of our business and talk about some of the competitive nature of what it is we’re going after, it sort of makes me think about where we delivered technology to solve a customer’s mission area. There’s a lot of different competitors there, very different from maybe the traditional government services providers who are really predominantly looked at and delivering expertise with that desire to go towards products. What I will tell you is that six years ago, we made a very defined move towards mission-type technology. And that’s what brought us Six3 and really has changed the conversation on these types of calls as it pertains to where this company’s going. The competitors in the technology place are very, very different. Some of those are going to be the larger aerospace and defense companies.
Some of those are going to be niche tech firms that are out there trying to move up the food chain and take some of that government budget. What – so I think we’ve done a great job on with supporting FY 2020 growth is making certain that as we’ve been building our technology plan out, we’ve been trying to get involved in a conversation of what our customers need. And you haven’t heard us talk about AI very often or machine learning because, frankly, as the CEO of this company, I believe that those terms have been greatly overused, maybe harkening back to 12 years back when we first heard about cyber. We’ve been doing artificial intelligence and machine learning to support space-based assets for 1.5 decades. We just didn’t call it that.
So our technology is going to be set up such that the larger companies who are looking at attacking this technological market with a product, we’re looking at our device being delivered as software definable. And that means that I can build software to put in a device. I can also take that same software, put it on a much larger scale system and be able to get back customer both mobile and fixed site coverage to what their problems are. So – and a lot of times, what we’ve learned with the LGS capabilities, the word uniqueness comes to mind. And then what they do, there’s most times few, if any, competitors that can do what that national asset does, and clearly, no one out there who can do it better than them.
其中一些将成为利基科技公司，试图提升食物链并采取一些政府预算。什么 - 所以我认为我们在支持2020财年增长方面做得很好，这使我们确信在我们制定技术计划的过程中，我们一直在努力参与客户需求的对话。而且你还没有听说过我们经常谈论人工智能或机器学习，因为坦率地说，作为这家公司的首席执行官，我相信这些条款已经被大大过度使用，或许可以追溯到12年前我们第一次听说网络时。我们一直在做人工智能和机器学习，以支持基于太空的资产1.5年。我们只是没有这样称呼它。
因此，我们的技术将建立在那些正在寻求用产品攻击这个技术市场的大公司，我们正在看我们的设备作为软件可定义交付。这意味着我可以构建软件以放入设备。我也可以使用相同的软件，将其放在更大规模的系统上，并能够将客户的移动和固定站点覆盖范围归结为他们的问题所在。所以 - 很多时候，我们通过LGS功能学到了什么，我想到了单一性这个词。然后，他们做了什么，很少有竞争对手可以做国家资产所做的事情，很明显，没有人能比他们做得更好。
Thank you. And then just kind of as a follow up, two-part. One, any color around what organic head count growth was in fiscal year 2019? And then as part of that, I would assume as solution grows, it’s probably a less headcount-based business. Has there been any change around HR initiatives or what you’re seeing in terms of competition for talent in the market?
谢谢。 然后只是作为一个后续，两个部分。 其中一个是有关2019财年有机人数增长的颜色吗？ 然后作为其中的一部分，我认为随着解决方案的增长，它可能是一个基于人数的业务。 在人力资源市场竞争方面，人力资源计划或您所看到的是否有任何变化？
Yes. Great. Thanks. So I think it was maybe – it was probably four or six quarters back where as we, as a company, moved to a mix of both delivering expertise and technology, we sort of moved away from how many noses we have in our business, because it really – it’s actually a misleading guide as to where CACI is going in the future. Now to answer your direct question, we’re very successful during FY 2018 to bring additional folks into this business. And it more than supported our FY 2019 growth rates. As we look forward, you’re absolutely right. Some of our solutions-based work doesn’t take as many folks. Especially as we move to software defined or definable, where you’re looking to having high quality folks out there delivering solutions we can build once, hopefully, I shouldn’t say hopefully, with an investment model that allows us to own the intellectual property that we can sell many times over.
So on that solutions side, that’s what I would say there. Your other question was around sources of talent. Look, it’s a competitive labor market, we hear all the time. If I talk about the Washington, D.C. s area even more competitive. But what we have done is over the last four years, we’ve branched out to look at six to eight other major cities where there’s phenomenal universities out there that aren’t in the Washington, D.C. area where, oddly enough, you can actually still get people cleared and have those folks work collaboratively across these six to eight different cities. So it helps us bring great system and software engineers in. Earlier, we talked about addition FY 2019 investments. Some of those investments are, how do we do co-development across eight different sites, because we’re not going to penalize ourselves to only do development work in the greater Washington area.
So that takes a great IT infrastructure. There’s many new government laws and regs out there to protect their information. So how do we put infrastructure in place sooner so we can take full advantage of being able to source candidates in numerous different cities. So overall, talent is always going to be a challenge. We continually work on how we reward and put different benefits packages in place for current employees and with our upcharge referral program looking to bringing in more people in. So thank you for that question.
是。大。谢谢。所以我认为这可能是 - 可能还有四六个季度，因为我们作为一家公司，在提供专业知识和技术的同时，我们有点摆脱了我们业务中有多少鼻子，因为它真的 - 它实际上是一个误导性的指南，指出CACI未来的发展方向。现在回答您的直接问题，我们在2018财年非常成功，将更多人带入这项业务。它超过了我们2019财年的增长率。我们期待，你是完全正确的。我们的一些基于解决方案的工作并不需要那么多人。特别是当我们转向定义或定义的软件时，您希望在那里提供高质量的人员提供解决方案，我们可以建立一次，希望，我不应该希望，通过一种允许我们拥有知识产权的投资模式我们可以多次出售。
Our next question is a follow-up from Joseph DeNardi of Stifel. Please go ahead.
我们的下一个问题是Stifel的Joseph DeNardi的后续行动。 请继续。
Yes. Thanks for squeezing me in here. John, just want to go back to some of the commentary you and Tom had about making additional investments this year. I mean, obviously, you guys well exceeded the FY 2019 planned revenue and EPS and that kind of gave you the confidence to pull forward the investments. Is that how we should think about FY 2020? That you need to exceed the kind of guidance that you’ve provided us before you would consider making additional investments? Or if you’re on plan to kind of meet guidance, that would give you enough confidence to pull forward and make some additional investments? What’s the right way to think about that? Thank you.
是。 谢谢你在这里挤我。 约翰，只想回到你和汤姆今年进行额外投资的一些评论。 我的意思是，很明显，你们已经超过了2019财年的计划收入和每股盈利，这让你有信心推动投资。 我们应该如何看待2020财年？ 在考虑进行额外投资之前，您是否需要超出您提供给我们的指导？ 或者，如果您计划获得指导，那么您是否有足够的信心继续前进并进行额外投资？ 考虑这个问题的正确方法是什么？ 谢谢。
Yes, I guess I’ll start out. As you know, it’s always a balancing act. So we’re wanting to invest in our business. We believe in the long-term – because prospects and the investments are kind of long term in nature. That being said, do we care about annual earnings and do we care about quarterly earnings, the answer is absolutely yes. And so kind of making those particular balancing acts. In addition, we have commitments to increase margins. We take those commitments seriously. And we also watch and maintain our rates. At the beginning of the year, we submit to the government what our billing rates kind of will be for the year. And if we make additional spending versus the plan, that has an impact on billing rates, and we want to maintain those particular rates.
So I think the way I would characterize it is we will continue to make reasonable levels of investments, which will all be reflected in our plan, and anything beyond that, we would give a consideration. We’re not going to be bound by, well it’s not in the plan. We can undertake good decisions. We’re here to make good decisions, but we do take those commitments seriously.
是的，我想我会开始的。如你所知，它始终是一种平衡行为。所以我们想要投资我们的业务。我们相信长期 - 因为前景和投资本质上是长期的。话虽如此，我们是否关心年度收入，我们是否关心季度收益，答案绝对是肯定的。因此，做出那些特殊的平衡行为。此外，我们承诺增加利润。我们认真对待这些承诺。我们还会关注并维持利率。在今年年初，我们向政府提交了我们今年的计费率。如果我们对计划进行额外支出，则会对计费率产生影响，我们希望维持这些特定费率。
Joe, I would also say, and one real example is in the third quarter of FY 2019, we won a couple of extremely large technology-based jobs and if I harken back to my earlier answer, we all sat around the table saying, we need quite a number of specialized people. We can go in alone and fight for talent in the Washington area, but we have these seven somewhat network locations out there. It sounds like the time for us to make those even thicker is right now. So the focus really was on the awards that came in and how quickly do we want to ramp those jobs up, and the entire leadership team said, we’ve got to go make the seven sites even thicker because of the rate we’re winning this technology business, we got to have a broader footprint to be able to bring people in.
So yes, did it help? Was it one factor that we were on plan? Certainly. Is it the only factor though? No. So I really can’t give you the color at the end of 2020. We just have to wait toward 2021. Most times, we’re actually doing things in the current year for the current year. So time will – Tom will always be transparent, we always we talk about when our indirect spend comes up is what we’re spending on.
是的，它有帮助吗？这是我们计划的一个因素吗？当然。这是唯一的因素吗？不。所以我真的不能在2020年底给你这种颜色。我们只需要等到2021年。大多数时候，我们实际上是在今年做的事情。所以时间会 - 汤姆永远是透明的，我们总是谈论我们的间接支出是什么时候才是我们所花费的。
Got it. That’s helpful. Thank you.
得到它了。 这很有帮助。 谢谢。
Yes. Thanks, Joe.
[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to John Mengucci for any closing remarks.
[操作员说明]以下是我们的问答环节。 我想将会议转回John Mengucci的任何结束语。
Thanks, Nicole, and thank you, all, for your help on that – and thank you for your help on the call today. We’d like to thank everyone who dialed in and listen to the webcast for their participation. We know that many of you will have follow-up questions. So Tom Mutryn, Dan Leckburg and George Price are available after today’s call.
Before you disconnect, I would like to remind everyone of CACI’s next Investor Day, which we’re going to hold on Tuesday, September 17, in New York. We’ll be presenting some of our innovative capabilities that we talked about today and that are absolutely aligned with our customers’ most critical missions. This is a perfect opportunity to see what differentiates CACI. We will also be discussing our plans to drive additional growth and profitability over the long term and how we expect to continue to deliver shareholder value. We really look forward to spending time with you all in September.
With that, this concludes our call. Thank you. And have a great day.
谢谢，妮可，谢谢你们，感谢你们的帮助 - 感谢你们今天来电的帮助。我们要感谢所有拨打并收听网络直播的人。我们知道很多人都会有后续问题。因此，Tom Mutryn，Dan Leckburg和George Price将在今天的电话会议后发布。
Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
谢谢。 会议现已结束。 感谢您参加今天的演讲。 您现在可以断开连接。
- CACI国际 电话会议
- CACI国际 财务报告
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