Investor Press Release
ICF International Reports Second Quarter 2010 Results
Core Business Revenue Up 24 Percent
Organic Growth Rate of 20 Percent
FAIRFAX, Va., Aug 05, 2010 (BUSINESS WIRE) --
ICF International, Inc. (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported results for the second quarter ended June 30, 2010.
Second Quarter Results and Highlights
Total revenue for the 2010 second quarter reached $199.6 million, an increase of 14 percent over total revenue of $175.4 million reported in the 2009 second quarter and 24 percent above core business revenue1 of $160.6 million reported for last year's second quarter. The second quarter of 2009 included $14.8 million of total revenue from The Road Home contract. Organic revenue2 growth was 20 percent for the 2010 second quarter.
Net income was $7.2 million, a 39 percent increase over the $5.2 million reported for last year's second quarter. Earnings per diluted share were $0.37 compared to $0.33 per diluted share in the second quarter of 2009. For the 2010 second quarter, the fully diluted weighted average number of shares outstanding was 19.6 million compared to 15.7 million shares in the 2009 second quarter. The increase resulted primarily from the 3.6 million shares issued in connection with the Company's secondary public offering, which was completed in December 2009.
"Our second quarter performance was at the high end of our guidance range," noted Sudhakar Kesavan, chairman and chief executive officer. "Each of our markets achieved significant revenue growth, driven primarily by the continued strength of our federal government business, and we posted an exceptional organic growth rate of 20 percent. Operating income increased 25 percent, benefiting from higher revenue without a commensurate increase in indirect and selling expenses."
"This was a solid sales quarter for ICF in which we captured several important contracts in the federal, state, and commercial markets. Quarter-end backlog was $1.3 billion, similar to levels at the end of the 2010 first quarter, and our pipeline is $2.9 billion," Mr. Kesavan said.
Backlog and New Business Awards
Backlog was $1.3 billion at the end of the 2010 second quarter. Funded backlog was $549 million, or 43 percent of the total.
The total value of contracts awarded in the second quarter of 2010 was $162 million compared to $143 million in the second quarter of 2009.
Key contracts won in the second quarter included:
Summary and Outlook
"We expect 2010 to be a year of continued strong growth for ICF," Mr. Kesavan said. "Based upon our year-to-date results and our current visibility, we are narrowing our total revenue guidance range for full year 2010 to $755 million to $775 million from the previous range of $740 million to $775 million and our organic revenue growth rate range to 13 percent to 16 percent from the previous range of 11 percent to 16 percent. We reaffirm our expectations for EBITDA3 margin in the range of 9 percent to 10 percent and for diluted EPS of $1.33 to $1.43, based on approximately 19.7 million fully diluted shares outstanding and an effective tax rate of 40.0 percent."
For the third quarter of 2010, the Company expects total revenue of $195 million to $202 million and diluted EPS of $0.35 to $0.40, based on approximately 19.7 million fully diluted shares outstanding and an effective tax rate of 40.2 percent.
1 Core business revenue excludes revenue from The Road Home contract.
2 Organic revenue excludes revenue from The Road Home contract and revenue from acquisitions closed during the previous four quarters.
3 EBITDA is a non-GAAP measurement, which adds depreciation and amortization to operating income to derive EBITDA. We have provided EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to help investors evaluate companies on a consistent basis, as well as to enhance an understanding of our operating results. EBITDA does not purport to be an alternative to operating income as a measure of operating performance or the cash flows from operating activities as a measure of liquidity. Please refer to the table at the bottom of the statement of earnings in this release that reconciles GAAP operating income to EBITDA and adjusted EBITDA.
About ICF International
ICF International (NASDAQ:ICFI) partners with government and commercial clients to deliver professional services and technology solutions in the energy and climate change; environment and infrastructure; health, human services, and social programs; and homeland security and defense markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from research and analysis through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 3,500 employees serve these clients worldwide. ICF's Web site is http://www.icfi.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.
|ICF International, Inc. and Subsidiaries|
|Consolidated Statements of Earnings (Unaudited)|
|(in thousands, except per share amounts)|
|Three months ended||Six months ended|
|June 30,||June 30,|
|Operating costs and expenses:|
|Indirect and selling expenses||56,130||55,698||107,160||100,987|
|Depreciation and amortization||2,643||2,499||5,311||4,058|
|Amortization of intangible assets||3,082||3,160||6,163||4,907|
|Total operating costs and expenses||61,855||61,357||118,634||109,952|
|Income before taxes||11,823||8,831||20,979||18,291|
|Provision for income taxes||4,622||3,662||8,358||7,240|
|Earnings per Share:|
Reconciliation of EBITDA
|Depreciation and amortization||5,725||5,659||11,474||8,965|
|Transaction related costs||-||-||-||987|
|ICF International, Inc. and Subsidiaries|
|Consolidated Balance Sheets|
|June 30, 2010||December 31, 2009|
|Cash and cash equivalents||$||5,338||$||2,353|
|Contract receivables, net||164,541||174,120|
|Prepaid expenses and other||8,791||6,666|
|Income tax receivable||--||4,175|
|Deferred income taxes||3,885||1,337|
|Total current assets||182,555||188,651|
|Total property and equipment, net||20,006||22,600|
|Other intangible assets, net||32,311||38,474|
|Accrued salaries and benefits||34,271||32,072|
|Total current liabilities||92,729||100,287|
|Deferred income taxes||11,984||11,656|
|Commitments and Contingencies|
|Preferred stock, par value $.001 per share; 5,000,000 shares authorized; none issued||--||--|
|Common stock, $.001 par value; 70,000,000 shares authorized; 19,425,612 and 19,278,591 issued; and 19,400,326 and 19,278,591 outstanding as of June 30, 2010, and December 31, 2009, respectively||19||19|
|Additional paid-in capital||216,407||211,412|
|Treasury stock, at cost||(584||)||--|
|Accumulated other comprehensive loss||(743||)||(337||)|
|Total stockholders' equity||334,186||317,560|
|Total liabilities and stockholders' equity||$||568,363||$||582,227|
|ICF International, Inc. and Subsidiaries|
|Consolidated Statements of Cash Flows (Unaudited)|
|Six months ended|
|Cash flows from operating activities|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization||11,474||8,965|
|Loss on disposal of fixed assets||19||17|
|Deferred income taxes||(2,220||)||(2,734||)|
|Changes in operating assets and liabilities, net of the effect of acquisitions:|
|Contract receivables, net||9,579||17,833|
|Prepaid expenses and other||(2,114||)||(5,005||)|
|Accrued salaries and benefits||2,213||(6,785||)|
|Income tax receivable||5,235||2,353|
|Net cash provided by operating activities||31,167||19,346|
|Cash flows from investing activities|
|Capitalized software development costs||(201||)||(235||)|
|Payments for business acquisitions, net of cash acquired||--||(156,902||)|
|Net cash used in investing activities||(3,278||)||(159,716||)|
|Cash flows from financing activities|
|Advances from working capital facilities||13,051||235,008|
|Payments on working capital facilities||(38,051||)||(93,335||)|
|Debt issue costs||(21||)||(630||)|
|Proceeds from exercise of options||489||1,761|
|Excess tax benefits of stock option exercises||606||1,007|
|Net payments for stockholder issuances and buybacks||(572||)||(473||)|
|Net cash (used in) provided by financing activities||(24,498||)||143,338|
|Effect of exchange rate on cash||(406||)||(131||)|
|Net increase in cash and cash equivalents||2,985||2,837|
|Cash and cash equivalents, beginning of period||2,353||1,536|
|Cash and cash equivalents, end of period||$||5,338||$||4,373|
|Supplemental disclosure of cash flow information|
|Cash paid during the period for:|
SOURCE: ICF International
Douglas Beck, 1-703-934-3820
MBS Value Partners
Lynn Morgen / Betsy Brod, 1-212-750-5800