UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2018
ICF International, Inc.
(Exact name of Registrant as Specified in Its Charter)
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Delaware |
001-33045 |
22-3661438 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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9300 Lee Highway, Fairfax, Virginia |
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22031 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (703) 934-3000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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☐ |
Emerging growth company |
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☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.02 Results of Operations and Financial Condition
On August 2, 2018, ICF International, Inc. (the “Company”) announced its financial results for the second quarter ended June 30, 2018. The press release containing this announcement is attached hereto as Exhibit 99.1.
The information contained in this report, including Exhibit 99.1, is considered to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. The information in this report shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The release contains forward-looking statements regarding the Company and includes a cautionary statement identifying important factors that could cause actual result to differ materially from those anticipated.
Item 8.01 Other Events
On August 2, 2018, the Company's Board of Directors declared quarterly dividend in an amount equal to $0.14 per share. This quarterly cash dividend will be paid on October 16, 2018 to stockholders of record as of the close of business on September 7, 2018.
The cash dividend policy and the payment of future cash dividends under that policy will be made at the discretion of the Company's Board of Directors and will depend on earnings, operating and financial conditions, capital requirements, and other factors deemed relevant by the Board, including the applicable requirements of the Delaware General Corporation Law and the best interests of the Company’s stockholders.
Item 9.01 Financial Statements and Exhibits
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Exhibit Number |
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Description |
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99.1 |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ICF International, Inc. |
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Date: August 2, 2018 |
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By: |
/s/ James C. Morgan |
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James C. Morgan |
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Executive Vice President & Chief Financial Officer |
Exhibit 99.1
NEWS RELEASE
ICF Reports Second Quarter 2018 Results
Second Quarter Highlights:
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• |
Total Revenue Was $324 Million, Up 6 Percent |
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• |
Diluted EPS of $0.71, Up 13 Percent; Non-GAAP EPS¹ Was $0.80 |
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• |
Adjusted EBITDA Margin¹ on Service Revenue¹ Was 11.9 Percent |
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• |
Contract Awards Increased 74 Percent to $590 Million; TTM Contract Awards Were $1.6 Billion for a Book-to-Bill of 1.28x |
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• |
Increased Business Development Spending Drives Record Pipeline of $5.7 Billion at Quarter-End |
Company Raises 2018 Revenue and EPS Guidance by $50 million and $0.10; respectively
FOR IMMEDIATE RELEASE
Investor Contacts:
Lynn Morgen, ADVISIRY PARTNERS, lynn.morgen@advisiry.com +1.212.750.5800
David Gold, ADVISIRY PARTNERS, david.gold@advisiry.com +1.212.750.5800
Company Information Contact:
Lauren Dyke, ICF, lauren.dyke@ICF.com +1.571.373.5577
FAIRFAX, Va.— August 2, 2018-- ICF (NASDAQ:ICFI), global consultancy and digital services providers to government and commercial clients around the world, reported results for the second quarter ended June 30, 2018.
“Second quarter results showed good year-on-year growth across our government and commercial client sets and strong business development metrics that position ICF for future growth,” said Sudhakar Kesavan, ICF’s Chairman and Chief Executive Officer.
“In the second quarter, revenue growth from government clients was led by strong gains in our international government work. Both energy markets and marketing services were key drivers of second quarter commercial revenue growth, posting double-digit and high single-digit year-on-year increases, respectively. Similar to this year’s first quarter, we significantly increased our business development spending to fund capture and proposal activity around disaster recovery opportunities and are pleased with our success to date. Revenues associated with recent disaster recovery contract wins are expected to significantly ramp up in the second half of the year. This growth will be enhanced by our acquisition of DMS Disaster Consultants, a 50-person disaster planning and recovery advisory firm, which we announced today and detailed in a separate release.
Non-GAAP EPS, Service Revenue, EBITDA, and Adjusted EBITDA are non-GAAP measurements. EBITDA Margin and Adjusted EBITDA Margin are the non-GAAP measures divided by the appropriate revenue. A reconciliation of all non-GAAP measurements to the most applicable GAAP number is set forth below. The presentation of non-GAAP measurements may not be comparable to other similarly titled measures used by other companies.
1
“This was a record second quarter of contract wins for ICF. Contract awards were broad-based across our client sets and increased 74 percent, primarily representing new business. At the end of the second quarter, our business development pipeline was a record $5.7 billion, up from $4.4 billion at the end of the prior quarter, setting the stage for continued growth,” Mr. Kesavan noted.
Second Quarter 2018 Results
Second quarter 2018 revenue was $324.3 million, a 5.8 percent increase from $306.4 million in the second quarter of 2017. Service revenue grew 2.7 percent year-over-year to $231.0 million. Net income was $13.6 million in the second quarter, up 14.1 percent from $11.9 million in the second quarter of 2017. Diluted earnings per share (EPS) amounted to $0.71, a 12.7 percent increase from $0.63 per diluted share in the prior year period.
Non-GAAP EPS increased 9.6 percent year-on-year to $0.80 per share in the second quarter of 2018, from $0.73 in the year-ago quarter. EBITDA1 was $27.3 million, compared to $29.3 million in the second quarter of 2017. Adjusted EBITDA was $27.4 million compared to $29.9 million in last year’s second quarter. Second quarter 2018 adjusted EBITDA margin was 11.9 percent of service revenue compared to 13.3 percent in the 2017 second quarter. Both EBITDA and adjusted EBITDA in the second quarter of 2018 were impacted primarily by significant marketing investments associated with pursuing disaster recovery opportunities.
Backlog and New Business Awards
Total backlog was $2.2 billion at the end of the second quarter of 2018. Funded backlog was $1.1 billion, representing approximately half of the total backlog. The total value of contracts awarded in the 2018 second quarter was $590 million, up 74 percent year-on-year, representing a book-to-bill ratio of 1.82.
Government Business Second Quarter 2018 Highlights
Revenue from government clients was $208.7 million, up 5.5% year-on-year.
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• |
U.S. federal government revenue was $138.9 million and accounted for 43 percent of total revenue, compared to 46 percent of total revenue in the second quarter of 2017. |
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• |
U.S. state and local government revenue was $35.3 million and accounted for 11 percent of total revenue, compared to 12 percent of total revenue in the second quarter of 2017. |
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• |
International government revenue was $34.5 million and accounted for 10 percent of total revenue, up from 7 percent in last year’s second quarter. |
Key Government Contracts Awarded in the Second Quarter
ICF was awarded more than 80 U.S. federal contracts and task orders and more than 250 additional contracts from U.S. state and local and international governments. The largest awards have an aggregate value of more than $370 million and are listed below:
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Disaster recovery: As previously disclosed in our 8-K filing, a professional services agreement with an authority of the government of Puerto Rico to provide disaster recovery grant claims review and disaster recovery project formulation services assistance related to Hurricanes Irma and Maria. |
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• |
Cybersecurity services: A contract with the U.S. Air Force to provide comprehensive cybersecurity support across the U.S. Air Force enterprise. |
2
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Program support: Two task orders with the U.S. Department of Defense to provide strategic planning and program support to the Defense Security Service. |
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Technical assistance: A contract modification with the New Jersey Department of Community Affairs to provide ongoing regulatory compliance and construction management support related to Superstorm Sandy. |
Select other government contract and task order wins with a value greater than $2 million included: additional funding to provide program support services for the Pennsylvania Department of Insurance; a recompete with the Connecticut Department of Public Health to provide support services related to the U.S. Centers for Disease Control’s Behavioral Risk Factor Surveillance Survey; and environmental planning services for a California county water resources agency and a western U.S. transit authority.
Commercial Business Second Quarter 2018 Highlights
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• |
Commercial revenue was $115.7 million, 6.5 percent above the $108.6 million in last year’s second quarter. |
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• |
Energy markets, which includes energy efficiency programs for utilities, represented 48 percent of commercial revenue. Marketing services accounted for 43 percent of commercial revenues. |
Key Commercial Contracts Awarded in the Second Quarter
Commercial sales were $144.0 million in the second quarter of 2018, and ICF was awarded more than 700 commercial projects globally during the period.
The Energy Markets contracts below have an aggregate value of over $10 million:
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• |
Contracts with a northeastern U.S. utility to support its residential energy efficiency programs and provide related services. |
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A contract extension with a midwestern U.S. utility to continue support for its residential energy efficiency programs. |
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Multiple task orders with a western U.S. utility to provide environment and planning services. |
The Marketing Services contracts below have an aggregate value of over $70 million:
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Multiple contracts and task orders with a U.S. health insurer to continue providing marketing support for its programs. |
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Two task orders with a U.S. hospitality company to provide support for its loyalty program. |
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Multiple task orders with a health, beauty, and home care products company to provide digital solutions services. |
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A contract with a U.S. healthcare association to provide digital strategy services. |
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Renewal of the retainer with the Belize Tourism Board to continue to provide marketing services. |
Selected other commercial contract wins with a value of more than $1 million included: customer relationship marketing services for a large U.S. consumer packaged foods company; training development for a U.S. city airport system; marketing services for a North American fitness club chain; loyalty strategy for a U.K. telecommunications and internet service provider; environment and planning services for a western U.S. utility; energy efficiency program support for a southwestern U.S. utility; digital solutions services for a U.S. manufacturer of fluid-handling systems and products; advisory services for an aviation company; and customer strategy for a global e-commerce platform.
Dividend Payment
On August 2, 2018, ICF declared a quarterly cash dividend of $0.14 per share, payable on October 16, 2018 to shareholders of record on September 7, 2018.
3
“Our first half results, together with our funded backlog, and record pipeline levels have enhanced our visibility heading into the second half of 2018. Consequently, we are increasing our guidance for revenue and EPS for full year 2018.
“We now expect to report total revenue of $1.295 billion to $1.335 billion for full year 2018. The midpoint of our updated guidance is equivalent to 7.0 percent year-on-year growth. GAAP diluted EPS is expected to be in the range of $3.35 to $3.55, exclusive of any special charges. Non-GAAP EPS is expected to range from $3.70 to $3.90. Per-share guidance is based on a weighted average number of shares outstanding of 19.2 million. Operating cash flow is expected to be in the range of $100 million to $110 million,” concluded Mr. Kesavan.
###
About ICF
ICF (NASDAQ:ICFI) is a global consulting services company with over 5,500 specialized experts, but we are not your typical consultants. At ICF, business analysts and policy specialists work together with digital strategists, data scientists and creatives. We combine unmatched industry expertise with cutting-edge engagement capabilities to help organizations solve their most complex challenges. Since 1969, public and private sector clients have worked with ICF to navigate change and shape the future. Learn more at icf.com.
Caution Concerning Forward-looking Statements
Statements that are not historical facts and involve known and unknown risks and uncertainties are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements may concern our current expectations about our future results, plans, operations and prospects and involve certain risks, including those related to the government contracting industry generally; our particular business, including our dependence on contracts with U.S. federal government agencies; and our ability to acquire and successfully integrate businesses. These and other factors that could cause our actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of our securities filings with the Securities and Exchange Commission. The forward-looking statements included herein are only made as of the date hereof, and we specifically disclaim any obligation to update these statements in the future.
4
ICF International, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
(in thousands, except per share amounts)
|
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Three months ended |
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Six months ended |
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||||||||||
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June 30, |
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June 30, |
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||||||||||
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2018 |
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2017 |
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2018 |
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2017 |
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||||
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Revenue |
|
$ |
324,315 |
|
|
$ |
306,392 |
|
|
$ |
627,095 |
|
|
$ |
602,687 |
|
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Direct costs |
|
|
206,565 |
|
|
|
190,896 |
|
|
|
395,391 |
|
|
|
374,503 |
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect and selling expenses |
|
|
90,410 |
|
|
|
86,240 |
|
|
|
180,069 |
|
|
|
175,042 |
|
|
Depreciation and amortization |
|
|
4,045 |
|
|
|
4,299 |
|
|
|
8,514 |
|
|
|
8,818 |
|
|
Amortization of intangible assets |
|
|
2,270 |
|
|
|
2,749 |
|
|
|
4,514 |
|
|
|
5,483 |
|
|
Total operating costs and expenses |
|
|
96,725 |
|
|
|
93,288 |
|
|
|
193,097 |
|
|
|
189,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
21,025 |
|
|
|
22,208 |
|
|
|
38,607 |
|
|
|
38,841 |
|
|
Interest expense |
|
|
(2,167 |
) |
|
|
(2,537 |
) |
|
|
(3,833 |
) |
|
|
(4,488 |
) |
|
Other (expense) income |
|
|
(318 |
) |
|
|
226 |
|
|
|
(214 |
) |
|
|
335 |
|
|
Income before income taxes |
|
|
18,540 |
|
|
|
19,897 |
|
|
|
34,560 |
|
|
|
34,688 |
|
|
Provision for income taxes |
|
|
4,923 |
|
|
|
7,960 |
|
|
|
8,526 |
|
|
|
12,574 |
|
|
Net income |
|
$ |
13,617 |
|
|
$ |
11,937 |
|
|
$ |
26,034 |
|
|
$ |
22,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share: |
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|
|
|
|
|
|
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|
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|
|
|
|
|
|
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Basic |
|
$ |
0.72 |
|
|
$ |
0.64 |
|
|
$ |
1.39 |
|
|
$ |
1.17 |
|
|
Diluted |
|
$ |
0.71 |
|
|
$ |
0.63 |
|
|
$ |
1.36 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
18,806 |
|
|
|
18,775 |
|
|
|
18,738 |
|
|
|
18,840 |
|
|
Diluted |
|
|
19,209 |
|
|
|
19,086 |
|
|
|
19,208 |
|
|
|
19,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.14 |
|
|
$ |
— |
|
|
$ |
0.28 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income, net of tax |
|
|
(3,317 |
) |
|
|
2,100 |
|
|
|
(1,708 |
) |
|
|
2,472 |
|
|
Comprehensive income, net of tax |
|
$ |
10,300 |
|
|
$ |
14,037 |
|
|
$ |
24,326 |
|
|
$ |
24,586 |
|
5
ICF International, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures (2) (Unaudited)
(in thousands, except per share amounts)
|
|
|
Three months ended |
|
|
Six months ended |
|
||||||||||
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|
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June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
Reconciliation of Service Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
324,315 |
|
|
$ |
306,392 |
|
|
$ |
627,095 |
|
|
$ |
602,687 |
|
|
Subcontractor and other direct costs(3) |
|
|
(93,330 |
) |
|
|
(81,446 |
) |
|
|
(172,212 |
) |
|
|
(157,980 |
) |
|
Service revenue |
|
$ |
230,985 |
|
|
$ |
224,946 |
|
|
$ |
454,883 |
|
|
$ |
444,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
13,617 |
|
|
$ |
11,937 |
|
|
$ |
26,034 |
|
|
$ |
22,114 |
|
|
Other expense (income) |
|
|
318 |
|
|
|
(226 |
) |
|
|
214 |
|
|
|
(335 |
) |
|
Interest expense |
|
|
2,167 |
|
|
|
2,537 |
|
|
|
3,833 |
|
|
|
4,488 |
|
|
Provision for income taxes |
|
|
4,923 |
|
|
|
7,960 |
|
|
|
8,526 |
|
|
|
12,574 |
|
|
Depreciation and amortization |
|
|
6,315 |
|
|
|
7,048 |
|
|
|
13,028 |
|
|
|
14,301 |
|
|
EBITDA |
|
|
27,340 |
|
|
|
29,256 |
|
|
|
51,635 |
|
|
|
53,142 |
|
|
Acquisition-related expenses(4) |
|
|
44 |
|
|
|
— |
|
|
|
46 |
|
|
|
— |
|
|
Special charges related to severance for staff realignment(5) |
|
|
— |
|
|
|
577 |
|
|
|
655 |
|
|
|
577 |
|
|
Special charges related to facilities consolidations and office closures(6) |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
1,719 |
|
|
Total special charges and adjustments |
|
|
44 |
|
|
|
598 |
|
|
|
701 |
|
|
|
2,296 |
|
|
Adjusted EBITDA |
|
$ |
27,384 |
|
|
$ |
29,854 |
|
|
$ |
52,336 |
|
|
$ |
55,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin Percent on Revenue(7) |
|
|
8.4 |
% |
|
|
9.5 |
% |
|
|
8.2 |
% |
|
|
8.8 |
% |
|
EBITDA Margin Percent on Service Revenue(7) |
|
|
11.8 |
% |
|
|
13.0 |
% |
|
|
11.4 |
% |
|
|
11.9 |
% |
|
Adjusted EBITDA Margin Percent on Revenue(7) |
|
|
8.4 |
% |
|
|
9.7 |
% |
|
|
8.3 |
% |
|
|
9.2 |
% |
|
Adjusted EBITDA Margin Percent on Service Revenue(7) |
|
|
11.9 |
% |
|
|
13.3 |
% |
|
|
11.5 |
% |
|
|
12.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
0.71 |
|
|
$ |
0.63 |
|
|
$ |
1.36 |
|
|
$ |
1.15 |
|
|
Special charges related to severance for staff realignment |
|
|
— |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
Special charges related to facilities consolidations and office closures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.10 |
|
|
Amortization of intangibles |
|
|
0.12 |
|
|
|
0.14 |
|
|
|
0.24 |
|
|
|
0.28 |
|
|
Income tax effects on amortization, special charges, and adjustments(8) |
|
|
(0.03 |
) |
|
|
(0.07 |
) |
|
|
(0.07 |
) |
|
|
(0.15 |
) |
|
Non-GAAP EPS |
|
$ |
0.80 |
|
|
$ |
0.73 |
|
|
$ |
1.56 |
|
|
$ |
1.41 |
|
6
|
(3) |
Subcontractor and Other Direct Costs is equal to Direct Costs minus Direct Labor and Fringe Costs. |
|
(4) |
Acquisition-related expenses: These costs are mainly related to closed and anticipated to closed acquisitions, consisting primarily of consultant and other outside third-party costs. |
|
(5) |
Special charges related to severance for staff realignment: These costs are mainly due to either involuntary employee termination benefits for Company officers who have been terminated as part of a consolidation or reduction in operations. |
|
(6) |
Special charges related to facilities consolidations and office closures: These costs are exit costs associated with terminated leases or full office closures. These exit costs include charges incurred under a contractual obligation that existed as of the date of the accrual and for which we will continue to pay until the contractual obligation is satisfied but with no economic benefit to us. |
|
(7) |
EBITDA Margin Percent and Adjusted EBITDA Margin Percent were calculated by dividing the non-GAAP measure by the corresponding revenue. |
|
(8) |
Income tax effects were calculated using an effective GAAP tax rate of 26.6% and 40.0%, and 24.7% and 36.3% for the three and six months ended June 30, 2018 and 2017, respectively. |
7
ICF International, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
|
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
||
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
6,322 |
|
|
$ |
11,809 |
|
|
Contract receivables, net |
|
|
174,652 |
|
|
|
168,318 |
|
|
Contract assets |
|
|
130,241 |
|
|
|
123,197 |
|
|
Prepaid expenses and other assets |
|
|
16,393 |
|
|
|
11,327 |
|
|
Income tax receivable |
|
|
12,134 |
|
|
|
5,596 |
|
|
Restricted cash - current |
|
|
— |
|
|
|
11,191 |
|
|
Total Current Assets |
|
|
339,742 |
|
|
|
331,438 |
|
|
Property and Equipment, net |
|
|
44,937 |
|
|
|
38,052 |
|
|
Other Assets: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
693,027 |
|
|
|
686,108 |
|
|
Other intangible assets, net |
|
|
33,437 |
|
|
|
35,304 |
|
|
Restricted cash - non-current |
|
|
1,279 |
|
|
|
1,266 |
|
|
Other assets |
|
|
22,129 |
|
|
|
18,087 |
|
|
Total Assets |
|
$ |
1,134,551 |
|
|
$ |
1,110,255 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
63,705 |
|
|
$ |
75,074 |
|
|
Contract liabilities |
|
|
25,886 |
|
|
|
38,571 |
|
|
Accrued salaries and benefits |
|
|
44,125 |
|
|
|
45,645 |
|
|
Accrued subcontractors and other direct costs |
|
|
30,228 |
|
|
|
47,508 |
|
|
Accrued expenses and other current liabilities |
|
|
24,891 |
|
|
|
17,572 |
|
|
Total Current Liabilities |
|
|
188,835 |
|
|
|
224,370 |
|
|
Long-term Liabilities: |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
243,645 |
|
|
|
206,250 |
|
|
Deferred rent |
|
|
14,214 |
|
|
|
15,119 |
|
|
Deferred income taxes |
|
|
34,831 |
|
|
|
33,351 |
|
|
Other |
|
|
17,655 |
|
|
|
15,135 |
|
|
Total Liabilities |
|
|
499,180 |
|
|
|
494,225 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
Preferred stock, par value $.001; 5,000,000 shares authorized; none issued |
|
|
— |
|
|
|
— |
|
|
Common stock, par value $.001; 70,000,000 shares authorized; 22,328,695 and 22,019,315 shares issued as of June 30, 2018 and December 31, 2017, respectively; 18,825,993 and 18,661,801 shares outstanding as of June 30, 2018 and December 31, 2017, respectively |
|
|
22 |
|
|
|
22 |
|
|
Additional paid-in capital |
|
|
317,013 |
|
|
|
307,821 |
|
|
Retained earnings |
|
|
456,358 |
|
|
|
434,766 |
|
|
Treasury stock |
|
|
(130,446 |
) |
|
|
(121,540 |
) |
|
Accumulated other comprehensive loss |
|
|
(7,576 |
) |
|
|
(5,039 |
) |
|
Total Stockholders’ Equity |
|
|
635,371 |
|
|
|
616,030 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
1,134,551 |
|
|
$ |
1,110,255 |
|
8
ICF International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|
|
Six Months Ended |
|
|||||
|
|
|
June 30, |
|
|||||
|
|
|
2018 |
|
|
2017 |
|
||
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
26,034 |
|
|
$ |
22,114 |
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
|
Non-cash equity compensation |
|
|
5,347 |
|
|
|
5,361 |
|
|
Depreciation and amortization |
|
|
13,027 |
|
|
|
14,301 |
|
|
Facilities consolidation reserve |
|
|
(127 |
) |
|
|
1,625 |
|
|
Deferred taxes and other adjustments, net |
|
|
1,339 |
|
|
|
4,421 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Contract assets and liabilities |
|
|
(19,658 |
) |
|
|
(13,813 |
) |
|
Contract receivables, net |
|
|
(5,971 |
) |
|
|
6,952 |
|
|
Prepaid expenses and other assets |
|
|
(7,115 |
) |
|
|
(2,978 |
) |
|
Accounts payable |
|
|
(11,283 |
) |
|
|
(9,953 |
) |
|
Accrued salaries and benefits |
|
|
(1,378 |
) |
|
|
(3,375 |
) |
|
Accrued subcontractors and other direct costs |
|
|
(17,280 |
) |
|
|
(6,550 |
) |
|
Accrued expenses and other current liabilities |
|
|
3,757 |
|
|
|
(2,326 |
) |
|
Income tax receivable and payable |
|
|
(7,315 |
) |
|
|
(5,441 |
) |
|
Other liabilities |
|
|
(1,102 |
) |
|
|
6,307 |
|
|
Net Cash (Used in) Provided by Operating Activities |
|
|
(21,725 |
) |
|
|
16,645 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment and capitalized software |
|
|
(9,397 |
) |
|
|
(6,083 |
) |
|
Payments for business acquisitions, net of cash received |
|
|
(11,838 |
) |
|
|
(91 |
) |
|
Net Cash Used in Investing Activities |
|
|
(21,235 |
) |
|
|
(6,174 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
Advances from working capital facilities |
|
|
284,773 |
|
|
|
348,975 |
|
|
Payments on working capital facilities |
|
|
(247,378 |
) |
|
|
(330,363 |
) |
|
Payments on capital expenditure obligations |
|
|
(3,131 |
) |
|
|
(2,276 |
) |
|
Debt issue costs |
|
|
(21 |
) |
|
|
(1,489 |
) |
|
Proceeds from exercise of options |
|
|
3,533 |
|
|
|
2,431 |
|
|
Dividends paid |
|
|
(2,635 |
) |
|
|
— |
|
|
Net payments for stockholder issuances and buybacks |
|
|
(8,597 |
) |
|
|
(25,253 |
) |
|
Net Cash Provided by (Used in) Financing Activities |
|
|
26,544 |
|
|
|
(7,975 |
) |
|
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash |
|
|
(249 |
) |
|
|
366 |
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash |
|
|
(16,665 |
) |
|
|
2,862 |
|
|
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period |
|
|
24,266 |
|
|
|
7,885 |
|
|
Cash, Cash Equivalents, and Restricted Cash, End of Period |
|
$ |
7,601 |
|
|
$ |
10,747 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
Interest |
|
$ |
3,641 |
|
|
$ |
3,923 |
|
|
Income taxes |
|
$ |
11,490 |
|
|
$ |
12,982 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing transactions: |
|
|
|
|
|
|
|
|
|
Capital expenditure obligations |
|
$ |
6,121 |
|
|
$ |
— |
|
9
ICF International, Inc. and Subsidiaries
Supplemental Schedule (9)
|
Revenue by client markets |
|
Three months ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
Energy, environment, and infrastructure |
|
|
41 |
% |
|
|
39 |
% |
|
|
41 |
% |
|
|
40 |
% |
|
Health, education, and social programs |
|
|
41 |
% |
|
|
42 |
% |
|
|
41 |
% |
|
|
42 |
% |
|
Safety and security |
|
|
8 |
% |
|
|
9 |
% |
|
|
8 |
% |
|
|
8 |
% |
|
Consumer and financial |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by client mix |
|
Three months ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
U.S. federal government |
|
|
43 |
% |
|
|
46 |
% |
|
|
43 |
% |
|
|
46 |
% |
|
U.S. state and local government |
|
|
11 |
% |
|
|
12 |
% |
|
|
11 |
% |
|
|
12 |
% |
|
International government |
|
|
10 |
% |
|
|
7 |
% |
|
|
10 |
% |
|
|
7 |
% |
|
Government |
|
|
64 |
% |
|
|
65 |
% |
|
|
64 |
% |
|
|
65 |
% |
|
Commercial |
|
|
36 |
% |
|
|
35 |
% |
|
|
36 |
% |
|
|
35 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by contract mix |
|
Three months ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
Fixed-price |
|
|
42 |
% |
|
|
40 |
% |
|
|
41 |
% |
|
|
39 |
% |
|
Time-and-materials |
|
|
40 |
% |
|
|
42 |
% |
|
|
40 |
% |
|
|
43 |
% |
|
Cost-based |
|
|
18 |
% |
|
|
18 |
% |
|
|
19 |
% |
|
|
18 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
(9) |
As is shown in the supplemental schedule, we track revenue by key metrics that provide useful information about the nature of our operations. The client markets metric provides insight into the breadth of our expertise while the client mix metric is an indicator of the diversity of our client base. The contract mix metric provides insight in terms of the degree of performance risk we assume. |
10