CACI International Inc (CACI) 2004 Q4 法說會逐字稿

Good day, everyone, and welcome to the CACI International fourth quarter and year end fiscal 2004 earnings conference call. Today's conference is being recorded. For opening remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Dave Dragics. Please go ahead, sir.

Thanks and good morning ladies and gentlemen. I'm Dave Dragics, Vice President of Investor Relations of CACI International. We're very pleased that you are able to participate with us today. For those of you who are with us for the first time either by telephone or via the Internet, we welcome you to this call. For those of you who are joining us again, welcome back and we appreciate your ongoing interest in CACI. Now, it has been our custom on these calls, we're including exhibits with our presentation. We believe they will be helpful in reviewing our financial results and trends and with the discussion of our operations.

As we progress this morning, like we do every time, we will make every effort to keep all of you on the same page as we are. So let's go to the first Exhibit. As you know, yesterday after the market closed, we released our fourth quarter and full year fiscal 2004 results. We hope that most of you have had the opportunity to review our announcement and the results, and the fourth quarter and year-end results are summarized on this exhibit. Moving to the next exhibit, before we begin our discussion this morning, I would like to make our customary but important statement regarding CACI's written and oral disclosures and commentary.

There will be statements in this call that do not address historical fact, and as such constitute forward-looking statements under current law. These statements are subject to important factors that could cause actual results to differ materially from the statements made today. The primary factors that cause actual results to differ materially from those anticipated are listed at the bottom of yesterday's earnings release and appear in the Company's Securities and Exchange Commission filings, and our full Safe Harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call. Let's turn to the next exhibit, and to open up our discussion this morning, here is Jack London, Chairman, President and CEO of CACI International. Jack.

Thank you Dave. Good morning ladies and gentlemen, including those of my fellow shareholders. First let me welcome you to our conference call this morning. I would like to extend a personal and special welcome to those of you who are new to CACI and to our call this morning. We appreciate your interest, invite you to join us on our future conference calls as well. Last evening, after the market closed, we reported record results for the fourth quarter and full fiscal year 2004. For the first time in CACI's history, our twelve-month's revenue exceeded $1 billion in sales. I much say that I'm very proud to report that we achieved this significant milestone over one year earlier than we had originally forecast back in our fiscal year planning for the year 2000, when we first announced our $1 billion annual revenue objective for 2005.

Our target date then had been to be doing one billion in sales by fiscal year '05, closing next year June 30, 2005, so we're a year early. More importantly, these results reflect the success of our strategic plan that CACI embarked on in the late '90s when we made the decision to reposition the Company and place our strategic emphasis on building our expertise in communications and in the intelligence community marketplaces. Since 1997, we have gained new capabilities and broadened our customer base in system integration, engineering services, network services and knowledge management, and we have emphasized technologies and capabilities to support national priorities in intelligence and homeland security.

This has been accomplished because our strategic focus in the areas of high national priorities has prevailed in national security and in helping our government customers to become more efficient in their operations. That focus has been and is the key to our success. We have been enabled to support the increasing requirements and needs of our customers through a combination of drivers. Most importantly, maintaining our base of business by winning virtually all of our recompeted contracts. Further, we have been able to build that base by winning new work for new and existing customers and rapidly expanding profitable areas of expertise. We have augmented the overall growth of our company through the integration of some 17 accretive and profitable transactions since that time. Most important, we have accomplished this growth and increased shareholder value at the same time. I must say, M&A implementation and integration is truly a core strength at CACI. This ongoing success is reflected in some of our accomplishments during fiscal year '04 just ending, CACI contract awards totaling almost $1.7 billion, a new record for us, including the winning of 100 percent, again I say, 100 percent, of our recompete contracts.

Also, closing on four important acquisitions, including the largest in our 42-year history, that collectively added over $370 million in revenue, and brought us over 2,300 highly skilled employees, many with government security clearances. Record profitability, operating cash flow, and contract backlog that provided us a solid foundation for fiscal year '05 to come and to build upon even as we go-forward. Our continuing success is due to the contributions of the outstanding people of our CACI team, our management and our employees who continue to execute against our growth strategy. It is due to the excellent leadership displayed at all levels of our organization and the dedication of our employees throughout CACI to the successful achievement of our customers' missions and we have been a stand-up guy in this area.

I have said this many times before and cannot emphasize it enough. All of this would not have been achieved without the commitment to service throughout CACI, while providing the highest quality of service to our clients. That commitment has produced the many valuable long-term relationships that truly are the foundation for CACI where we are today, and indeed where we will be in the future. So with me today to discuss our operating results in more detail and to join me in answering your questions are Ken Johnson, President of CACI U.S. Operations, and Steve Waechter our Chief Financial Officer. Greg Bradford, President of the CACI United Kingdom, is on the line also ready to answer questions as we go along. Now, as is our custom on these calls, we will discuss three pencil-able items. First Steve is going to discuss our financial results; second, Ken will discuss our domestic operations and international outlook; finally, we will have some closing comments to pass along and after that we will open up for your questions. So the first item on our agenda as we have indicated is our financial results, which we are quite proud of needless to say, so here is Steve Waechter, our CFO. Steve, over to you.

Thank you, Jack, and good morning everyone. Let's go to Exhibit 6. As Jack indicated last evening, we reported record fourth quarter and full fiscal year '04 revenue and earnings. Revenue for the fourth quarter increased 57 percent to $358.3 million versus $228.6 million a year-ago. Just about one-third of that growth, or a little over $40 million, came from the acquisition of the Defense and Intelligence Group of American Management Systems. Net income was $20.7 million or 69 cents per diluted share, up 56 percent over last year's 13.3 million or 45 cents per diluted share. During the fourth quarter we successfully acquired the assets of the Defense and Intelligence Group of American Management Systems and successfully integrated the business operations with CACI Systems.

Our acquisition due diligence and transition teams with employees from both CACI and the Defense Intelligence Group worked around the clock to successfully bring approximately 1,650 new employees on to the CACI business systems. The biggest driver for us in exceeding our previous guidance was the acquisition of the defense business from AMS. Revenue was pretty much in line with our expectations, but the favorability to the bottom-line resulted primarily from higher gross margins related to lower ODCs and higher direct labor content, lower amortization cost related to the acquired intangibles and lower interest expenses.

Additionally, during the quarter, we experienced higher margins from one contract with fixed unit pricing and higher award fees that were partially offset by costs related to the situation in Iraq. Let me give you some more details on these results. If you move to Exhibit No. 7, you can see that our federal business grew 59 percent during the fourth quarter and represented 94 percent of our total revenue. The internal growth rate of our federal business in the quarter was 23 percent. For all of CACI, internal growth was also 23 percent for the quarter. For fiscal year '04 internal growth was 15 percent, which was the upper limit of our annual objective of 12 to 15 percent.

Performance of our United Kingdom operations also grew considerably in the quarter. Our operations there reported $13.3 million in revenue, 38 percent more than the $9.6 million reported a year-ago. The pretax profit margin grew to 12 percent compared to 9.5 percent a year-ago. Sales of our higher margin UK software and data products were strong in the quarter and we saw a definite improvement in our commercial IT services marketplace. We were also successful in growing our UK government business which accounted for approximately 23 percent of its quarterly revenue compared with about 16 percent a year-ago. Moving to Exhibit 8, let's look at some of the key metrics most of which were included in the financial exhibits and our press release. Operating margins expanded during the quarter to 10 percent, compared to 9.2 percent in the fourth quarter of last year.

The growth in our operating margin continues to be driven primarily by our acquisitions, a favorable business mix, operational efficiencies, and during the quarter timing of award fees. In addition to having higher margins, our acquisitions also contributed favorably to the improvement by allowing us to leverage off our infrastructure. Our operating cash flow improved significantly during the quarter. We generated $62.9 million of operating cash flow for the quarter. The timing of our operating cash flow was consistent with the timing we have evidenced in the past. During the past two quarters, we have generated operating cash flow of approximately $88 million. Full year cash flow from operating activities was approximately $76 million. For fiscal year '04, 62 percent of our revenue came from time and materials work, 21 from cost plus work and 17 from fixed-price contracts. Approximately 86 percent of our revenue this past quarter and for the year-to-date was earned as a prime contractor. Moving to Exhibit No. 9, Days Sales Outstanding at the end of the quarter was 88 days, up four days from the prior quarter.

The acquisition of the Defense and Intelligence Group on May 1st added approximately 12 days to this outstanding days calculation. Excluding the impact of the AMS acquisition, days would have been 76 days compared with 78 days last year. This exhibit also shows our cash and marketable securities and debt, at June 30th. The next Exhibit No. 10, contains our guidance and revenue, net income and diluted earnings -- diluted shares, for the first quarter and for the full year 2005. Our guidance assumes that we complete no new additional acquisitions. Additionally, while we believe that there will be no material changes to the balance sheet we acquired from AMS, we have not finalized the acquired balance sheet at this time.

Our reported beginning balance sheet includes loss estimates related to the completion of two fixed-price contracts we acquired. On final review and agreement under the terms of the asset purchase agreement, we could owe CGI up to $10 million in additional purchase price consideration if the net assets acquired exceed $60 million. We have not included anything in our estimates for this potentiality. We have assumed a tax rate of 38 percent, an annualized interest expense rate between 4 percent and 4.5 percent. That also includes the amortization of fees related to the credit facility, annual intangible amortization expense of approximately $19 million, and depreciation of fixed assets and amortization of leasehold expenditures between $17 million and $18 million.

From a balance sheet perspective, we anticipate that the term loan of about $350 million will decline slightly by $3 million to $4 million by the end of the year and the current borrowings of approximately $60 million on our revolver should be paid down completely by the end of the year. Operating cash flow should range between $100 million to $115 million. Our CapEx should range between $10 million to $12 million, and we have increased our guidance for the first quarter as you can see on this exhibit. We anticipate that our revenue for the first quarter will range between $360 million and $370 million, an increase of 53 to 57 percent over the first quarter of fiscal year '04. Also for this quarter, we expect our operating margins to range between 9.3 and 9.5 percent. We anticipate that our net income will range between $18.4 million and $19.4 million, a 42 to 49 percent increase. We expect diluted earnings per share to be between 61 cents and 64 cents per share, up 40 to 47 percent over the year-earlier period. We believe that our internal growth in the first quarter will range between 15 percent to 17 percent, and finally we estimate that the diluted weighted average shares for the first quarter will be 30.1 million.

For the full year we now estimate that our revenue will range between $1,500,000,000 and $1,550,000,000, a 31 percent to 35 percent increase over fiscal year '04. We now anticipate that net income for the year will range between $76.6 million and $79.6 million, a 20 percent to 25 percent increase over the $62.9 million reported for fiscal year '04. Diluted earnings per share will range between $2.52 to $2.62 per share, an increase of 18 percent to 23 percent over the $2.13 per share reported this fiscal year.

Even though Dave mentioned the Safe Harbor statement at the beginning of this call, I'm going to again state that these projections are forward-looking and represent our current estimate of our future operations. Listeners on the call and the readers of the transcript should be advised that our actual results may differ materially from the statements that we are making today. At this time that completes my financial review. And now here is Ken Johnson who will cover our domestic operations. Ken.

Thanks Steve. Good morning to everyone as well. Let's go to Exhibit No. 11 please. The pace of our domestic operations continued as it has all during FY '04, very strong. Combine that with the addition of the Defense and Intelligence Group and their contribution, and you can understand how pleased we are with our results for the quarter. Our growth this quarter, including that of the Defense and Intelligence Group, was driven primarily by the continued high level op tempo environment in which we and our customers work. We experienced increasing demand for our services from our intelligence community customers both for mission support and business management in operations. We also saw demand for our engineering and network services increase from our DoD Army and Navy customers. Overall, we experienced strong growth across the board.

As we forecast last quarter and as Steve indicated, our organic growth in the quarter was extremely strong. Internal growth for all of our federal government business was 23 percent. The driver for this increase was our DoD revenue where internal growth soared to almost 30 percent. With that exceptionally strong Q4, we finished the year with organic growth at a robust 15 percent. More importantly, our performance causes us to be cautiously optimistic regarding our FY '04 forecast of 15 percent to 20 percent organic growth. This was also an exceptional year for us with regard to contract awards. As Jack mentioned, we received almost $1.7 billion in awards during the year, well over one billion of that amount was for new work. The new awards had an average period of performance in excess of six years. In addition, as Jack indicated, we won all of our major recompetes for the year. Those awards, plus the addition of the Defense and Intelligence Group, help explain the significant increase in our year-end backlog to $3.4 billion. Let's go to Exhibit No. 12 please. Let's now turn to operating trends. Our DoD revenue grew approximately 76 percent for the quarter. This growth came primarily from work we are doing in the military intelligence community. Key distributors to that growth were from contracts we announced earlier in the fiscal year such as GENESIS and NightVision, as they continue to ramp up and the revenue from the Defense and Intelligence Group, as well. Revenue from Federal Civilian Agencies added almost 23 percent for the quarter. Much of that growth came from our recent acquisitions as well as from work on the Mega 2 contract with the Justice Department and other civilian agencies.

Justice Department in the quarter was $29 million. As has been the case, each quarter this fiscal year growth in DoJ revenue, although growing to a record size, is being outpaced by the combined revenue from our other Federal Civilian Agencies customers. Today, approximately one-third of our federal civilian revenue now comes from the Justice Department. Moving to the next exhibit please. Here is a recap of the revenue we generated from our federal, commercial and state and local customers through our various services offerings. These percentages, as always, are approximate. Systems integration, which includes our UK operations, and beginning this quarter the Defense and Intelligence Group, represents almost 60 percent of that revenue.

Engineering Services is in the 19 percent to 20 percent range, while network services represents between 12 percent and 14 percent. Knowledge Management currently represents about 7 percent to 9 percent of the revenue. The new service offering that you will be hearing more about as a result of the acquisition of the Defense and Intelligence Group is that of our consulting services. The acquisition has provided us with a significantly larger footprint in this business area. We are working hard to build this newly acquired capability and integrate it with our other areas of expertise. This consulting practice not only provides us a broader skill set to address the full lifecycle of information or communication system, it also provides a potentially more profitable line of business near the top end of the food (technical difficulty) chain.

Starting next quarter you will hear us talk about that consulting business as separate from our systems integration work. Now let's move to the next Exhibit, No. 14 please. Let's take a look at our pipeline of qualified opportunities. When we spoke to you in April we were looking at about $6.6 billion of business in our pipeline. That estimate is now approximately 7.4 billion. Part of that growth was brought about by unawarded programs slipping from our Q4 to our Q1. Additionally, a fair amount of that growth comes as a direct result of the increase in our addressable market accruing to the Defense and Intelligence Group acquisition. Because this is an election year, let me touch on a couple of topics that we have been asked about over the last few months when we have met with the investment community. The status of the FY '05 budget process and the potential impact that a change of administration might have on our business.

As of today, as you know, only the Defense Appropriations Bill has been passed and signed into law. Congress will not return until after Labor Day. Additionally, we do not expect many, if any, other appropriation bill to be passed or signed into law by the end of September. As has been the case, about 90 percent of the time over the last three decades, the government will start its next fiscal year operating under a continuing resolution. As we have indicated in past years, we do not expect this to significantly affect our operations during our second or third fiscal quarters. The other topic is, what does the presidential election this fall mean to us? Given that national security is a key topic of the campaign and given that no one in this town sees a global was on terrorism ending anytime soon, we do not believe that either a second term for the President or that a change in the Whitehouse from a Republican to a Democrat will have a material impact on our business.

Our focus on national defense, intelligence, homeland security, and the transformation of government will enable us to make a seamless transition irrespective of the change. Looking ahead to FY '05, we believe that this will be another strong year for our domestic operations. We are experiencing solid growth throughout the operations as we continue to support customers and their mission critical work. The integration of the Defense and Intelligence Business Group is going extremely well for us, as you can see from our fourth quarter results and our increased guidance. As you have no doubt surmised we're ecstatic about our FY '04 performance and given our outlook for Q1 FY '05, we are equally enthusiastic about the coming year. Jack, that concludes my remarks and I will turn it back over to you.

Thank you, Ken, and thank you Steve for your updates. Most informative and a pleasure to review. First, I want to welcome all of the new CACI people that have come aboard through our M&I program and acquisitions this year, just want to put that on the record and welcome them into our institution. CACI has clearly concluded the most successful year in the Company's history, record profits and record revenue. I am proud of the people here at CACI who continue to provide support to our customers, both here and overseas. CACI is an outstanding company with an excellent record of service to our customers. We are very proud of our forty-two years of high-quality support to every one of our customers throughout the federal government and to our commercial customers, both here and in the United Kingdom as well, and to our state and local clients, as well.

We will continue to be vigilant and focused in supporting every one of them. We have placed the greatest value on conducting our business with each of our customers with integrity and a commitment to do the best job possible. Our motto for over 20 years has been quality client service at best value. As we look ahead, we believe that the continuing implementation of our growth strategy and our strategic focus on national security, global war against terrorism, and the transformation of government, especially the IT market side, positions CACI correctly for the future. The world we live in is becoming more dangerous on a daily basis. We all see the new stories about the proliferation, potential proliferation of nuclear weapons, concern about the black market for weapons of mass destruction, dirty bombs, the presence of Al Quaida here in our own country, homeland security, and needs of all sorts like immigration and border control, the need to reform our intelligence community and the need for greater collaboration of information and information sharing and even more high-level (technical difficulty) like the recommendations coming from the 9/11 Commission's Report.

Our national leaders understand that in order for the federal government to protect American citizens from this myriad of threats, organizations throughout the government must become more efficient and more effective and especially in the IT capabilities. We believe that the positioning of CACI over the past decade places us at what we considered to be an ideal niche. We believe we have strengthened our overall ability to support such high-priority, critical areas as national security, and intelligence community activities. We're committed to meeting our customers' programmatic requirements as they respond to the challenges of what is, quite simply, a very dangerous world. Looking ahead, you can see from our guidance we reported out here today, that we believe we will be able to sustain our growth and progress throughout fiscal year 2005.

We believe we will be able to grow both our top and bottom lines at a rate of 20 percent or more during the fiscal year. We're very excited about the future here at CACI. As we have move forward we remain committed in providing the highest quality service, innovative solutions, to our many clients throughout the world while continuing to enhance value for our shareholders. So at this point, we're ready to open up our discussions. We are ready to go, so I will turn the microphone back to our receptionist, Gwen (ph), and we will see where our questions go from there.

Thank you. (OPERATOR INSTRUCTIONS). Laura Lederman with William Blair.

Good morning. Thank you for a great quarter. Just a few quick questions, if I may. Can you talk about the percentage of revenue that is coming from intelligence in the last quarter just reported and also what your sense is of that going forward? And separately, in the guidance for '05 how much of that is from the AMS business? Thanks.

I can give you an indicator. Our intelligence, the scope of our intelligence business is somewhere around 25 percent. As we are going forward, we believe that rate will continue. We certainly are seeing continuing interest as you undoubtedly recognize with even our recent contract awards in that area. The guidance in terms of the AMS, are you talking about from AMS' performance last quarter or what was your question again?

Going forward, in other words in the '05 numbers?

For the full year? We have been looking at that. It's somewhere around 265, 275 level which is somewhat I think indicated previously, but we should anticipate a good strong performance from that unit. They've been integrated very smoothly and I think we're really pleased with the way things have been going.

Final question. Competitive environment, can you talk about who you are seeing more of and who you are seeing less of?

Ken, maybe you can take a shot at that one.

Sure. Laura, obviously it differs as we have indicated to you on a couple of calls, depending on the line of business. But in terms of the companies that we see, probably on almost every major acquisition, is Computer Sciences Corporation, SAIC, one or more of the aerospace firms. Certainly the two most cost popular there are Lockheed Martin, one of the divisions of Lockheed Martin, or one of the divisions of Northrop Grumman. So kind of all-day everyday, irrespective of the line of business, those are probably what we would recognize as the primary competition on what we call our corporate deals or the bigger deals. Those that have greater yields and that we spend more money on.

Okay. So there is no change? There are no competitors, you're seeing less of or any changes in that?

No.

Thank you so much, great quarter.

Ed Caso with Wachovia Securities.

Congratulations. My first question is, if Steve could go back and review for us the -- it sounded like there were several positive things on the margin side in the quarter, if Steve could talk a little bit about that again. And clarify for us the run rates, the quarterly run rate for depreciation, amortization and interest?

I would be happy to do that for you. Some of the positive things that we had relative to kind of the guidance we had given out previously, timing of award fees. As you know, we do not book award fees until they are awarded. So we had three contracts actually in the quarter, were a little bit of a very nice to surprise to us. They came in and generated some margins for us and revenue. Additionally, at the end of every fiscal year, we booked for provisional rates throughout the year and then true it up to an actual at the end of the year, so that gave us a bit of positive impact. We also had one contract where we had some higher than anticipated fixed unit pricing. Then, obviously, the AMS early integration of that business was a real positive to us, offset a little bit by some of the costs associated with Iraq. But overall those are some of the key factors.

Can you give us some run rates on the amortization, depreciation and interest?

With respect to the -- on the intangible assets side, we're looking at about somewhere in the high 4.7 million to 5 million, I guess, on the amortization. It should be about $19 million on an annual basis for amortization of intangibles. With regard to depreciation and amortization of leasehold losses, I would assume about a $3.5 million per quarter kind of rate and then on the interest side of the house, somewhere 3.8 million to 4 million quarterly, is about what to expect. And that is a -- that includes also, an interest expense is included in that offset by a little bit of interest income. And then we also have financing fees associated with our credit facility that we amortized over the period of time. That is all included in that number.

Final question. DSO's, they are obviously distorted by the way the math works and the calculation. What is your expectation for Q1? Do you have a range for Q1 and for next year?

Our targets internally on a normalized basis, to be in the mid '70s, is where we would like to be. If you went back, we tried to normalize it by backing out the acquired AR and the revenues, if you will, in the quarter and that got us to about 76 days as I indicated in my opening remarks there. But mid '70s is kind of where we think we will be.

Thank you. Congratulations.

(OPERATOR INSTRUCTIONS). Julie Santoriello with Morgan Stanley.

Good morning. One of the things that we have been seeing a positive trend for CACI and the industry has been an increase in the deal size and particularly deals in the $100 million category or higher. I know you just won one of those yesterday. I was wondering if you could give us some parameters around that? Are there a lot more of those in your pipeline?

Let me start off by saying that we're always delighted to move up the scale and size and volume of the business contractual opportunities. I think I will Ken share a little bit of the operational perspective of our procedural file and how we're going about it. I am happy to say we are delighted and we undoubtedly will be moving up that ladder as we go along.

Julie, I don't know that I can give you a succinct parameters that describe it. Basically, historically what we have done is we have provided I think a little more focus on our new business development, the bigger opportunities. We have kind of indicated to the analyst community that we are looking at deals that largely are $40 million and above. As we get bigger, as our addressable market grows, now that we're looking at a run rate of a company that is somewhere between $1.3 billion and $1.4 billion, we have stepped that up considerably and we are looking much more actively and aggressively at $100 million, $150 million size programs.

The number of those programs, I don't want to say that they are infinite, but they are far too many for us to bid. So it is not a question of the fertility of the marketplace. The thing that has made us successful I think is the focus on that handful or hopefully in our case, two or three handfuls of those opportunities that we believe that are really winnable as a prime contractor. So we're going to look at, I don't know, it won't be a specific number. So this is not something that you would want to ask us quarter after quarter how we are doing, but 10, 15, 20 of these kinds of things -- we're actually looking at a lot more, but we will actually submit bids in that kind of range. It is something, a couple dozen or less, over the course of the year and that will at least for FY '05 and the early part of '06 will sustain this kind of organic growth that we have believe that we can sustain. And then as we get bigger, as we enter the subsequent fiscal year, the programs are going to have to get bigger and larger in number. So it is kind of a continuous process, Julie.

Thanks for that. It's good to hear that there are plenty of them out there still. Just one quick follow-up. Homeland security in general, kind of as a spending category seems to really becoming into its own at least for '05. Can you help us understand in your minds how large this opportunity is for CACI? Perhaps talk in particular about some of the key opportunities that you see in homeland security for this next fiscal year?

Let me say that as a part of a strategic profile of the Company, certainly the homeland security as part of the overall national priorities of security and defense, is well within our target zone. We watch it carefully in terms of its viability in the markets that we can address, but Ken has been watching that with his team and I will ask him to share a few thoughts with you there?

As you know because you've been around us here for the last couple of years, we continue to be cautiously optimistic about the potential at some point in time. The department has dealt with their own budget this year which has caused a little, but they lack of inertia there. They are actually writing their requirements now and issuing them and evaluating proposals and they've got the big visit program out and awarded. There are a number of other programs of consequence in the Q. There has been some talk and concern about abandoning the spirit program. That will have absolutely, in our world, that will have absolutely no impact. The requirements still exists as they get better and better staffed at what they do. We believe that in the places where we have a sizable footprint, whether it's inside the Coast Guard part of the organization or the customs and border patrol part of the organization, or the overall information assurance security part of the organization, or in the threat analysis or the counter-terrorism analysis part of the organization, we're going to see opportunities of size and consequence. So we continue to be cautiously optimistic that there is going to be attractive growth. And the one that I did not point out that I should have clearly is, with the acquisition of Defense and Intelligence Group, some of the business systems that they are going to be required to put into place, their financial management infrastructure, we are now a real player in that part of the business. So we believe that there is going to be substantive potential growth inside of that department in that line of business.

John Mahoney with Raymond James.

Great quarter. Could you give us a little -- I know you talked about the, you gave us some detail Steve about the award fees, provisional rates, and the things that helped the quarter that maybe wouldn't -- you can't count on every quarter in and out, offset by expense associated with the investigation in Iraq and all those issues. Could you give us some numbers around that? A little more detail -- what would the quarter have been?

Let me start it off, John, by saying that we indeed have been spending a bit of cash, if you will, on some of the Iraq issues. I must say though, it has not risen to the level that certainly I thought it might have, and many of the things that we're dealing with has been reduced (indiscernible) profile. We put up some 19, 18 or 19 news releases trying to keep our investors and the public and our shareholders and our boys aware of what was happening. A lot of these things are beginning to subside, at least in terms of the kinds of things we have to spend a lot of money on. So that is greatly improving, unless there is something that may occur otherwise. But it has been good in that vein, but I will ask Steve to talk to some of this for us.

I'm going to group these a little bit, but the kind of one time goodness things, if you will, in the quarter, the awards fees timing and so forth, was probably about all those together, probably about 6 cents a share is what we picked up on that. And if you net the cost with the Iraq and the AMS integration, probably picked up 3 or 4 cents off of that.

Net, okay.

Net positive. Kind of gets you from -- if you take our upper guidance range of 60 cents, I think that kind of gets you up to about 69.

6 cents from (multiple speakers) expected fixed in provisional rates and award fees plus fixed, and then the early integration was so positive that it more than offset the Iraq to the tune that it was a positive 3 cents or more?

That's rough, on order of magnitude that's about right.

That is about as granular as we can get down to it. On the organic growth, what businesses have moved into the regular organic calculation now? What is still outside of that calculation?

PTG has now moved into the internal growth, because that was completed May a year ago. We now have four businesses that you'll see running forward and that will be C-CUBED, MTL, CMS and AMS is what we will be counting as acquired growth for next year.

Will Hamilton with Pershing.

Good morning. First, Ken you mentioned (technical difficulty) consulting service business. I was wondering if you could give us any color in terms of what you think that approximate percentage of revenue will be next year, year overall federal business?

Well, we don't have real actual numbers yet. The reason why I kind of delayed to give it to you next quarter, we're going to have to make some value judgments as to what is not integration. There is clearly no bright line. It will be somewhere $100 million, $200 million book of business, depending on what we put in there. The key though is to just focus not only our intention internally on the quality of that capability, but to distinguish it to you folks from that which we currently, this quarter actually, lump into that systems integration which we have indicated to you all along has sort of been a catchall. There is a lot of business inside the integration where from a purist standpoint we may not be integrating this box with that piece of software.

So the actual size of it, I think my sense is to you, is less important. What we would like to do is draw your attention to it. It clearly will be more profitable for us, so given its size and given our ability to not only grow it itself, but to have it support the growth of our solutions business, I think that is going to be the, I don't want to say where the miracle happens, but that is going to be the good thing for us. We are very fortunate in the acquisition. We've got a bunch of really bright folks that came to join us from the Defense and Intelligence Group that do this kind of consulting, in this consulting practice for a living. And in our business if your enterprise architecture skills or horizontal integration kind of skills inside this federal government marketplace, there is any number of places to sell that capability.

Alright. Good. Thanks. Secondly, there has been some reports about significant backlog, people waiting for government security clearances. I was wondering if you could just discuss at all how that may be affecting CACI if at all?

It affects us all day, everyday. It's a problem. It is one that has gotten to the highest levels of government. It has gotten a great deal of exposure at the most senior levels of this administration and Congress. It is getting a lot of attention. They are spending more money on companies doing background investigations, as a matter-of-fact, of which we are one. It is going to get better, but it is a management challenge for us and for everybody else to get these people cleared. Now as good as our growth is, and as well as we have performed, I have got to tell you it could be better if we could get the people cleared in a more timely fashion and we are working with industry associations. We are actually working with competitor companies to shine as bright a light on this issue as we possibly can because it is something that our customers can help us, to a certain extent, can help us with. So it is getting an awful lot of attention and it is something that our managers face all day, every day.

The continuing issue is to make sure that the background clearances are indeed thoroughly checked, however. So it's not a matter of just skipping past things. You've got both the issue of workload but the need to be very careful and thorough in the reviews.

Tim Quillin with Stephens Inc.

Good morning. Great quarter. First, I just wanted to point out I guess what looks like an error in the slides. It looks like the EPS guidance in there was 255 to 265, so I guess that was before you built in a little more conservatism into your number?

Point well taken Tim. We will fix that.

My question regarding AMS is, and you may have touched on this in your prepared remarks, but how much AMS contributed in terms of revenue in the fourth quarter? Then you talked about 14 cents to 17 cents accretion in FY '05 initially, if anything has changed there and if you can just discuss just in general any positive or negative surprises around the DIG acquisition? Thanks.

Let me just lead off by saying it's been I think a very successful transaction for CACI. We had a team that really focused on it and got it going right from the start. We have been very pleased with the people who have across, their enthusiasm and their leadership and how they have integrated. The attitudes have been terrific. The revenue for the fourth quarter was somewhere around 40 million for the time period, on board in May. They came on the first of May, so it's May and June.

In terms of our projection, we have had I think some good news out of it. We are reluctant I think to get into a committing of any specifics. We're going forward because the thing, quite frankly, has not shaken out all the way yet although it is off to a great start. I did mention earlier the revenue opportunity we see ahead is somewhere between 265 million and 275 million. I think we've got a reasonably good fix on that, but again we are a little bit early in the flight and we want to be able to take some more looks as we go along. Maybe we will have some better news in terms of clarity by the end of the first quarter and I think Ken wants to add a thought or two.

One actually positive surprise that we have seen is from a pipeline standpoint, once we got them on board and were able to look at the opportunities a little better and look at the opportunities from the advantage point of the CAIC enterprise, we are looking at a number of larger more attractive opportunities, where they can actually provide a leadership role or provide a really star supporting role to other parts of CACI.

We're looking at proposal opportunities, a little more in number and a little bigger in size than we had originally indicated because as you know, when we talked about this acquisition we indicated to all of you that would be one of the challenges. As the enterprise grew that much, that quickly, our digestive tract obviously gets larger. So, instantaneously we have to write more bigger proposals. The organization has really stepped-up, the Defense and Intelligence Group, and we are pleasantly surprised at that one issue.

Right. Thanks gentlemen.

Joseph Vafi with Jefferies & Co.

Great results. Just going back to it AMS here real quick. Ken, can you maybe give us an update on some of those larger fixed-price software development projects you have going on there now that you have had that inside of the company for a while. Secondly, clearly a strong operating margin. I think we have talked about some of the, maybe the one time tickers to the margin here, but if you could talk to the margin contribution and the potential for a 10 percent operating margin moving forward as this higher margin AMS business potentially continues to grow? Thanks.

As far as the status of the programs, absolutely no surprises at all, Joe. We did -- our team did a real nice job. We looked very thoroughly at those programs. We indicated to you -- we've been indicating to you now for several months that that clearly is where the miracle happens, because of the fixed-price nature, and because of the fact that we're developing software for these customers. There have been few, if any, in fact, no negative surprises at all. They have integrated very, very nicely into our software development organization. They have enjoyed the benefit now of taking the functional guys that they have, and the technical team all together, because basically we operate a little differently than the old AMS model, and we operate on a program management model. So the face that we present to the customer is a single face and the individual, the men and women who in fact front that customer all day every day, can not only speak to the developers but they can speak to the functional expertise and the individual loans to schedule.

We have given, I think, I hope I am not giving us too much credit but we have given our customer a great deal more confidence in our ability to get things done. We have actually looked a little bit at accelerating some of the schedules for delivery. We have taken one of the fixed-price efforts and a huge chunk of it has migrated to a T&M kind of contract relationship because of the confidence that the customer has in where we are. So all up, it's so far at least, it will never get to at a point where it is so far down the list that we won't want to talk about it. It will get continue scrutiny and management oversight, but it's been just a steady stream of good news for us.

I would just like to add one thought. Most large fixed-priced jobs, we have the culture here of approaching them with what I will call guarded optimism. In other words, I think we are enthusiastic but we will certainly keep an eye on them because of the importance of them in terms of the financial profile.

You asked also a question about the opportunity to move margins up. I will tell you the guidance that we gave out, we're anticipating slightly higher gross margins and maybe a half of a percentage point better. We think our indirect costs as a ratio to revenues will also be down about a half of point. So we'll pick up a point there, however, it is offset somewhat by the amortization related to the intangibles which is about up 7/10 of a point or so relative to revenues. So, net net, you will get a slight increase in the operating profits this next year as we amortize and we are on an accelerated schedule for the amortization of that intangible. You should see improvements going forward year-over-year as we drive that down.

So you have an accelerated schedule for fiscal '05 year and would it be the same run rate in '06 or would it be --?

I don't have the exact numbers in front of me. It is about 20 percent, is what we're amortizing I believe this year, and that will go down about three or four percentage points each year. It's over, I want to say, eight years. It varies by element. There is a lot of different pieces to the amortization, but roughly it's over about a seven, eight year time period. It is higher in the earlier years than in the out years, as it gets worked off you should see some improvement just from that.

Maybe one other quick one. Steve, do have the number for how many organic net hires you have had in the quarter?

No I don't. I don't have it handy, Joe. I can follow up with you on that. I will circle back.

We are gaining a staff, though, as we go along.

Mark Jordan with A.G. Edwards.

Good morning gentleman. Could you talk a little bit about your, reiterate your debt paydown plans. Also, given the debt that you do have on board, what role do you see acquisitions playing and specifically in '05, again given your goals for debt reducing debt and how might that change as you move into fiscal '06.

I want Steve to talk a little bit, but I'm going to lay out a little bit of perspective and philosophy. I think we have a long legacy and history of being very conservative on our cash management and debt management. I think we will bear that out in the strategic application of our business operations and concepts this coming year. We do have cash management targets. We will however, nonetheless, be considering acquisition opportunities. We will continue, at least it's in our plan to continue to look at what I will call more a significant niche plays in terms of markets that fit, companies that fit nicely into the strategic plan we have going forward, and we do have a plan for these acquisitions. We're looking at some companies even as we speak. There may be some other larger opportunities we would be looking at for consideration. I want to turn it over to Steve and let him amplify some of the issues regarding our debt management and cash program for the year.

Good morning Mark. Good question. Just to refresh everybody's memory, we have a credit facility of $550 million, of which 350 is a term loan, and so we have a $200 million revolver. Currently we have about $60 million on that. We anticipate paying that off here over the next several quarters, so that we will have that revolver, the 200 million available for additional acquisitions. We have actually have even paid it off down from where we were at the end the quarter, we have paid some more down. Anticipate that balance again to continue to be paid down throughout the year, and again obviously it's somewhat contingent upon us doing another acquisition. If we do, that will obviously take it up a little bit.

Final question on the consulting group you mentioned. It's a group of business and sort of right now, roughly 100 million to 200 million. Do you have an idea, in rough percentage-wise, how much of that revenue stream will come from AMS, how much was from the core company? And secondly, what is the strengths or attributes that you have within those, with those people that will comprise that revenue stream that would differentiate you from say some of the more traditional names that we think of when we think of consulting names?

Great question. Given the bigness of my answer, the 100 million to 200 million, given that swing, I am going to duck the thing about how much from the mothership and how much from Defense and Intelligence Group. We are going to work on that over the quarter, and rather than give you some numbers and have them be wrong, it would be just so much of a swag for me to give that. I don't think it would be, I don't think it would serve much of a utility. In terms of a differentiation for that practice, the thing that I like the most about it is that we now have a consulting practice inside what I consider a functionally driven or mission oriented organization.

The large number of the previous 7,500 people inside of CACI, the preponderance of those people have some real strong affiliation with some customers mission or some particular function and support that we provide to the customer. So, if you take that skillset and you couple that with a group of people, a large group of people, that are very conversant with state-of-the-practice kind of enterprise architecture thinking, or state-of-the-practice business management modernization program, which is a very deragare (ph) issue inside the Department of Defense, or horizontal integration kinds of requirements. We're hopeful that that creates a very, very powerful combination. I would be hard pressed to say that somebody like an Accenture or a Bearing Point or certainly a Booz Allen, I'm not saying they don't have it. Whether they do or they don't, it is immaterial to me. It is just that inside our organization I think it is just a real nice combination of skill sets.

Tom Mayer (ph) with BB&T Capital Markets.

Good morning and once again, congratulations. I guess Steve I will segue over to you like I always do for the first question.

29, Tom. For those of you listening, that is the Department of Justice revenue.

It was in the script, Tom.

It's in the script this time?

Yes.

What is that comp again Steve, from last year?

It's 29 million in the quarter versus 27.

27, okay.

DoJ, that's all DoJ.

When we were going to see you and everyone else in June, at that time I think the consensus and maybe this is for you Ken, was in terms of recruiting that clients were willing to bear the brunt of some of the pay increases that these intel-cleared people were getting. I'm just wondering if that is still the case, or have you started to see any pushbacks from your clients in that area about them absorbing that cost as opposed to the contractors?

Yes, so far at least there is clearly no way that they can impose those increases on us. What they do though from a good management standpoint, is they attempt as best they can to lay down the law. As you know, Tom, inside the intel space, much like the DoD space, they will issue these multiple award contracts and they'll make sure in a very stern, comprehensible way, we understand that they don't want to us poaching the other clients, the other vendors' employees in that particular space, and they can clearly control that.

They can put you in the penalty box if they keep paying for the same guy over and over again and he keeps getting a 10 percent raise as he moves through these contractors. What they really have a harder time controlling is moving from agency to agency or from contract vehicle to contract vehicle. It's a problem and all of us are very, very sensitive to it. Frankly, the employees know not to push the envelope too far, Tom. I think it is sort of a self-governing kind of a thing, but it is an issue, there is no doubt about it. It is a simple supply and demand kind of issue.

Alex Hamilton with Advest.

Good morning. I am traveling so I apologize about the bad reception. However, most of my questions have been answered, but I guess kind of following up on the acquisition question. Lately there has been a lot of studies talking about IT growth rate figures coming down, obviously defense budget constraints going forward due to the budget deficits that we have going forward. So I guess kind of looking at your business, obviously you're seeing some trends there based on the outperformance you had this quarter and based on the fact that you have raised your guidance. But I guess looking out, let's say even '06 and beyond, what areas of your business I guess -- what new areas of business would you like to enter? And obviously, what areas, what particular niches you think you would like to add to in order to take advantage of the trends you see going forward?

Let me respond. The Company has been in a thorough examination of our business strategy and market perspectives, looking forward over certainly this coming year and even into the next two or three years in updating our annual plan. We are very enthusiastic about, and in fact, delighted, professionally speaking, with the market niche that we're focused on and devoted to, and have built such an exceedingly well known reputation. That is in a sense, the national security, national defense market. Certainly that includes the intelligence community. We have a wide, are widely known in this market. We feel like it has significant upside opportunities, a litany of overarching and ominous issues that I presented in my closing remarks. There is just a lot of things out there that auger well, if you will, from a business perspective for CACI continuing forward.

We don't see any, let me put it this way, radical movements, outside of the business strategy that we have outlined in a number of ways to our investor community. Certainly there are things we will be looking at. We won't ignore opportunities as they emerge. On the international scene, business development, not from international customers so much, but from the United States government moving abroad in different kinds of committed ways. We see contractor opportunities out there for us in the technologies and offerings and reputation markets that we have. There may be a few others that will come along, but let's just say for the moment we are pretty much concentrating on the areas that we have devoted a lot of energy and emphasis and resources and feel very comfortable about the upside opportunities.

Bill Loomis with Legg Mason.

Great quarter guys. Looking at the revenue and the internal growth is very strong now. (technical difficulty) seeing PTG (ph) for the partial incremental quarter. Did you include fully in internal growth in the June quarter, or was there a partial that you included as acquired growth?

There was a partial in there, about half of a quarter.

Did that business fall off at all due to the investigations during the quarter?

No, but there wasn't any wild growth either. We are pretty much steady as she goes.

On the margins, the outlook for the year, based on their first quarter guidance we basically are having the model flat to down to meet the full year EPS as far as margins, and traditionally you have gone up as we worked through the year with the fourth quarter being your highest. Is that just being a little conservative at the beginning of the year or are there real issues that could result in different than historical margin pattern?

I think, what you see Bill, it's a good question, when you look at the first quarter guidance we gave out relative to the fourth quarter we just completed, one thing you have to keep in mind we have -- there are two holidays in the first quarter, versus one and the fourth. In addition to that, because of the employees -- we are more driven very heavily by our direct labor. People take vacations in the July August time frame, so we have less direct labor. So that is a contributor to driving the overall margins down a little bit in the quarter. In addition to that, as I stated earlier, in the fourth quarter we had some favorability that were onetime contributors that are out of there.

Cynthia Houlton with RBC Capital Markets.

Great quarter guys. Most of the questions have been answered, just some filling in the numbers. Could you give what your count was at the end of the quarter, and what was UK versus your U.S. government operations?

We have it in the past. It's about 9,400 people roughly, a little less than 9,400.

Total?

Total.

Is UK about 260.

That's about right, 260, 270.

ODC split, direct labor versus ODCs as a percentage?

It's about 50-50.

Okay, so that is fairly consistent with the prior quarters?

Yes.

I know margins have been discussed a little bit, do you have a sense of what kind of more longer-term target could be on an operating margin level? I know that you are still kind of integrating or thinking about how DIG is going to impact the overall business? But in the past this margin expansion had not necessarily been a big target, but can we assume getting to that 10 percent to 11 percent at some point, or is that a new target, or just in color on that?

From my perspective, trying to get to 10 percent is clearly a target. We would like to get up to that level. We obviously achieved that here in the fourth quarter. Sustaining it will be a little bit harder to get there, but as I think we move into more profitable lines of business and move up that food chain, there is that opportunity to enhance margins and 10 percent as a long-term kind of a goal and target, I think is very reasonable.

Sandra Notardonato with Adams Harkness.

Good morning. A couple of questions. The sector has been talking about turnover increasing and I was wondering if you could talk a little bit about what turnover was at CACI and if you have the number of folks that left the DIG business, if you break that out?

We've been looking at it, trying to keep an eye. It's one of those things that does generally concern us. I think it would be fair to say we are about in the zone of industry, pretty much along with the industry standards, somewhere between 14 percent, 15 percent, 16 percent, somewhere in that range, nothing too particularly alarming. These are dynamic times in this industry as you well know. We (indiscernible) focus on the recruiting side of things. The stress factor we have by and large, there is some exceptions, by and large is in the highly classified and forward deploy requirements that we have.

Those are the tough ones. Otherwise, I think we are pretty much working within the zone that we would expect to be and don't have any alarms. We have been reviewing it fairly carefully the last month or two, especially in light of the AMS transaction. We did have a few folks that did not come over with the DIG transaction, but I believe that has pretty much stabilized at the point. Maybe Ken can talk to that in a little more detail. I think it is worth a little more perspective.

I just think that turnover is creeping up a little bit throughout the industry, so I would concur with any and all of your other sources. We have used over time, 20 percent is somewhat of a barometer of a concern barometer, if you will. We are a healthy number of integers below that, and so while it is moving north, we talked to you back one when ours was 11 or 12 and told you that was artificially low and that there was just no way, over the long haul, that that would be sustained. So up around the mid teens. If we can keep it in the mid teens, even in the face of the commercial IT space coming back. The more healthy that gets frankly, that's going to have some impact on our marketplace and the turnover inside the marketplace, the more opportunities that become available. But it is certainly management, there is a lot of management attention to it, but it does not represent an issue for us as we speak.

Do you have a sense of whether the people that are leaving currently, are they stay within industry or are you seeing more aggressive hiring from the commercial IT services firms that are seeing a pickup in their business and are also trying to get more into the intelligence market?

Actually, we pay a lot more attention as to why they leave as to where they are going. Now if in fact why they leave is because they are going to go to some commercial operation, we certainly stay sensitive to that. But we have not seen any real significant trends moving into the commercial IT space. It's just that we follow the trade rags as well and it appears as though there is some help inside the commercial IT space.

Tom Mayer with Lord Abbott.

My question was actually answered. Great quarter.

Bill Loomis with Legg Mason.

I got cut off by the operator. I was just asking about fiscal '05 guidance where the first-quarter operating margin, in order to get (technical difficulty) year for fiscal year '05, not counting the quarter that was reported, but from the first quarter '05 guidance through the full fiscal '05 guidance for the year. We basically have to keep the operating margin flat to down sequentially from first quarter '05 through fourth quarter '05, and usually you're historically the opposite where you go up through the fiscal year and I was just wondering if that was more conservative since we are early in the year, or if there are real issues that are going to lower operating margin in the second half of the year versus the first half in fiscal '05?

Bill, you know us well enough to know that we are somewhat conservative. There is nothing unusual happening in the second half of the year, but it's a little conservative. Hopefully we will have another great quarter next year and we plan conservatively, we manage that way, and hopefully we will get another upside. But right now the guidance we have is what we have out there.

Okay. Thank you.

(OPERATOR INSTRUCTIONS). Sandra Notardonato with Adams Harkness.

I got cut off by the operator. She is very aggressive. My question is, actually it's a statement. There is a New York Times article today indicating that there will be a report coming out, well actually shortly, with 24 people in the Iraq abuse scandal being named. Do you have any sense of whether any of the subcontractors you use will be mentioned in the report or whether your company will be mentioned in that report?

Sandra, that is an excellent question. Obviously I keep a close eye on all of the activities out there. I would say to you that we have been very fulsome in our reporting. On our website we have our truth (indiscernible) and the many FAQs and we have put out some 18 news releases. We are not actually aware of anything that would come through in that report you are talking about, I think the General Fay report. Our position, I felt very good about our position incidentally, as we have gone along. I think in many ways, we have gone through the gamut of review by the federal, various federal organizations, and being able to look deep into CACI has just shown and demonstrated to the world how strong and straightforward and the high integrity level of this corporation.

We have survived every possible deep examination, and I'm sure that we will survive very nicely whatever may come from the Fay report. I don't anticipate anything significant quite frankly. Our own internal investigations were not able to uncover anything of tangible, credible evidence, that substantiates or corroborates the allegations in the (indiscernible) report. Does that mean we know the answer to everything? Of course not. If there are issues that do arise, our position is well stated publicly to the world and to everyone around us that if there has indeed been some regrettable situation, unfortunate situation of one or more of our employees we will take the appropriate actions and support the United States government in its endeavors.

We have cooperated all the way along fully and responsibly to every inquiry and there have been plenty. So, I think that the net result on this is you're going to find CACI is one of the strongest companies in the industry. We will have been tested like many others perhaps would be able to be tested, or not, I don't know. But I know we have come through and come out on the other side of this and I feel very good about it quite frankly and very proud of the way we have been able to be examined and come through with high credentials.

I will also point out that the business that is addressed in the Fay report is a very small part of CACI International, a very tiny fraction of our business. We will respond to the United States Army, who has been a long customer. We have had a long faithful relationship. We are supporting that fine organization on behalf of the government and the American people and we will continue to do so. I'm very confident that notwithstanding anything that might come out of the report, we will be able to fair quite well beyond that and that is our position and we will sustain that position. I have no reason in any way to have any deep concerns about the future of this company, no matter what the Fay report comes out with.

Great. Thank you very much.

Mr. London, we have no further questions at this time.

Okay. Gwen, thank you very much. We certainly appreciate your help. I want to express the thanks and appreciation of CACI International for all of you who have attended this morning with your questions and your interest. We certainly appreciate your participation on the call. We hope we have provided you with what we believe is a clear picture of our current operations on its many dimensions, and what we have in the way of expectations for fiscal year '05. We have a very active business plan in motion as many of you well know. I think we are off to a great start in this fiscal year, looking at a very interesting business portfolio, and an incredibly interesting strategic focus for our company in the niches and opportunities that we devoted our business development energies toward, that being national defense, national security, intelligence community and those issues that relate to the security of our nation.

So we want to thank you very much, appreciate your calling in and look forward to talking to you in the future, not too distant future. In the meantime, those of you who may have some additional calls with questions that you might want to discuss with us, our management team will be available here in 15 minutes, 20 minutes to take your calls and you're most welcome to do so. So again, thank you ladies and gentlemen for your participation and interest in CACI. We look forward to talking to you in the future. Thank you once again.

Thank you. That does conclude today's conference. You may disconnect at this time.