FORM 8-K

 

 

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 1, 2011

 

 

ICF International, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-33045   22-3661438

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

 

9300 Lee Highway, Fairfax, Virginia   22031
(Address of principal executive offices)   (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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition

On August 1, 2011, ICF International, Inc. (the “Company”) announced its financial results for the second quarter ended June 30, 2011. The press release containing this announcement is filed as Exhibit 99.1.

The information contained in this report 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.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

99.1 Press Release dated August 1, 2011


SIGNATURES

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 hereunto duly authorized.

 

    ICF International, Inc.
Date: August 1, 2011     By:   /s/    SANDRA B. MURRAY        
      Sandra B. Murray
      Interim Chief Financial Officer


Exhibit Index

 

Exhibit No.

  

Document

99.1    Press Release dated August 1, 2011
PRESS RELEASE

Exhibit 99.1

 

LOGO

   NEWS RELEASE

ICF International Reports Second Quarter 2011 Results

 

   

Total Revenue Increased 7 Percent

 

   

Operating Income Up 23 Percent

 

   

Net Income Increased 25 Percent; Diluted EPS of $0.45

 

   

Contract Awards Increased 29 Percent to $209 Million

FAIRFAX, Va. (August 1, 2011) - 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, 2011.

Second Quarter and First Half 2011 Results and Highlights

For the second quarter, total revenue reached $213.4 million, a 6.9 percent increase over the $199.6 million reported in the 2010 second quarter. Net income was $9.0 million, or $0.45 per diluted share, representing a 24.5 percent increase over net income of $7.2 million, or $0.37 per diluted share, earned in the comparable 2010 period. Operating income increased 22.5 percent to $15.5 million from the $12.7 million reported in last year’s second quarter.

“ICF’s strong second quarter 2011 performance demonstrates the advantages of our diversified business mix. Domestic commercial business revenues increased 52.3 percent year-over-year, led by significant growth in energy efficiency work and infrastructure project management, as well as a pickup in energy-related transaction activity,” said Sudhakar Kesavan, chairman and chief executive officer. “We continue to achieve significant growth in profitability driven by the strength of our commercial business and success in managing costs.”

“First half 2011 revenue growth was 9.1 percent, operating income increased 27.1 percent, and net income was up 32.2 percent, indicative of ICF’s significant operating leverage,” Mr. Kesavan noted.

“We are particularly pleased with the growth and strategic importance of second quarter contract awards, which included our first task order win under the $4 billion Centers for Disease Control and Prevention ID/IQ that ICF was awarded in 2010. Gaining larger implementation contracts is an integral part of our growth strategy.”

Backlog and New Business Awards

Backlog was $1.3 billion at the end of the 2011 second quarter. Funded backlog was $579 million, or 43 percent of the total.

The total value of contracts awarded in the second quarter of 2011 was $209 million compared to $162 million in 2010, an increase of 29 percent.

Key contracts won in the second quarter included:

 

   

Energy: A new contract valued at more than $40 million with the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability. ICF will provide technical, IT, and management support to assist the office’s mission to modernize the electric grid and enhance the security and reliability of the U.S. energy infrastructure.


   

Health Information Technology: A new $25.9 million task order under the contract supporting the Centers for Disease Control and Prevention (CDC) Information Management Services (CIMS), which was announced in October 2010. Under this task order, ICF International will support the Division of HIV/AIDS Prevention in its efforts to reduce HIV transmission, identify those living with HIV, and link them with appropriate care.

 

   

Information Technology Management: A new $27.5 million contract with the Office of the Chief Information Officer (CIO) at the National Institutes of Health (NIH). Under the contract, ICF will support the strategic direction and management responsibilities of the NIH CIO with IT market research, executive program and communications services, and other technical support services.

 

   

Public Health: A $16.3 million re-compete contract from the U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Health, Office of the Surgeon General, Office of the Civilian Volunteer Medical Reserve Corps. ICF will provide the office with communications, outreach, deployment operations, regional coordination, and IT services to help engage public health volunteers.

 

   

Energy Efficiency: Two new contracts totaling $13.6 million to support a major U.S. utility. ICF’s responsibilities under the two contracts include commercial and residential energy efficiency, demand side management, whole house retrofit programs, and contractor recruitment, training, and program support.

 

   

Commercial Sector: In addition to the energy efficiency projects already noted, ICF was awarded more than 300 additional domestic and international commercial projects in the areas of energy efficiency, environmental management, fuels, renewable and grid strategy, asset valuation, and aviation.

Summary and Outlook

“ICF continues to gain share in its key markets, and we believe that our recent awards will ensure continued future growth in our federal business. We also expect our commercial business to continue to show double-digit revenue growth and drive significant growth in profitability,” Mr. Kesavan said.

“Based on first-half performance, funded backlog levels, and our existing portfolio of business, we are narrowing our full year 2011 revenue guidance and increasing our guidance for earnings per diluted share (EPS). Revenues for the year are expected to be within the range of $835 million to $850 million, which represents 10.2 percent year-over-year growth at the midpoint, and fully diluted earnings per share are expected to range from $1.69 to $1.77, equivalent to 25.4 percent growth at the midpoint. EPS estimates are based upon approximately 19.9 million weighted average shares outstanding and an effective tax rate of 40.0 percent,” noted Mr. Kesavan.

“For the third quarter of 2011, the Company expects revenues to range from $214 million to $220 million and earnings per diluted share to range from $0.43 to $0.47, based on approximately 20.0 million weighted average shares outstanding and an effective tax rate of 40.0 percent,” Mr. Kesavan concluded.

About ICF International

ICF International (NASDAQ:ICFI) partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment and transportation; health, education, 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 lifecycle, 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 3,700 employees serve these clients worldwide. ICF’s website is 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.

SOURCE: ICF International

Contacts:

Douglas Beck, ICF International, 1.703.934.3820

Lynn Morgen / Betsy Brod, MBS Value Partners, 1.212.750.5800


ICF International, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share amounts)

 

     June 30, 2011     December 31, 2010  
     (unaudited)        

Current Assets:

    

Cash

   $ 2,677      $ 3,301   

Contract receivables, net

     184,409        176,963   

Prepaid expenses and other

     9,395        6,995   

Income tax receivable

     2,761        1,628   

Deferred income taxes

     4,564        4,973   
  

 

 

   

 

 

 

Total current assets

     203,806        193,860   
  

 

 

   

 

 

 

Total property and equipment, net

     17,247        18,887   

Other assets:

    

Goodwill

     325,835        323,467   

Other intangible assets, net

     22,685        26,148   

Restricted cash

     1,735        3,179   

Other assets

     7,520        7,278   
  

 

 

   

 

 

 

Total Assets

   $ 578,828      $ 572,819   
  

 

 

   

 

 

 

Current Liabilities:

    

Accounts payable

   $ 33,255      $ 29,866   

Accrued salaries and benefits

     42,911        40,750   

Accrued expenses

     24,772        25,522   

Deferred revenue

     20,596        20,034   
  

 

 

   

 

 

 

Total current liabilities

     121,534        116,172   
  

 

 

   

 

 

 

Long-term liabilities:

    

Long-term debt

     63,414        85,000   

Deferred rent

     6,312        5,142   

Deferred income taxes

     9,560        10,068   

Other

     5,250        3,704   
  

 

 

   

 

 

 

Total Liabilities

     206,070        220,086   

Commitments and Contingencies

    

Stockholders’ Equity:

    

Preferred stock, par value $.001 per share; 5,000,000 shares authorized; none issued

     —          —     

Common stock, $.001 par value; 70,000,000 shares authorized; 19,854,975 and 19,618,659 shares issued; and 19,758,966 and 19,567,571 shares outstanding as of June 30, 2011, and December 31, 2010, respectively

     20        20   

Additional paid-in capital

     225,058        220,891   

Retained earnings

     150,326        133,637   

Treasury stock

     (2,322     (1,291

Accumulated other comprehensive loss

     (324     (524
  

 

 

   

 

 

 

Total Stockholders’ Equity

     372,758        352,733   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 578,828      $ 572,819   
  

 

 

   

 

 

 


ICF International, Inc. and Subsidiaries

Consolidated Statements of Earnings (Unaudited)

(in thousands, except per share amounts)

 

     Three months ended
June 30,
    Six months ended
June 30,
 
     2011     2010     2011     2010  

Gross Revenue

   $ 213,395      $ 199,647      $ 408,137      $ 374,085   

Direct Costs

     133,522        125,131        251,743        232,690   

Operating costs and expenses:

        

Indirect and selling expenses

     59,270        56,130        117,196        107,160   

Depreciation and amortization

     2,778        2,643        5,539        5,311   

Amortization of intangible assets

     2,321        3,082        4,736        6,163   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     64,369        61,855        127,471        118,634   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     15,504        12,661        28,923        22,761   

Interest expense

     (564     (917     (1,193     (1,880

Other income

     2        79        89        98   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     14,942        11,823        27,819        20,979   

Provision for income taxes

     5,979        4,622        11,130        8,358   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 8,963      $ 7,201      $ 16,689      $ 12,621   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per Share:

        

Basic

   $ 0.46      $ 0.37      $ 0.85      $ 0.65   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.45      $ 0.37      $ 0.84      $ 0.65   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average Shares:

        

Basic

     19,688        19,351        19,634        19,317   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     19,847        19,568        19,849        19,537   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EBITDA

        

Operating Income

     15,504        12,661        28,923        22,761   

Depreciation and amortization

     5,099        5,725        10,275        11,474   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     20,603        18,386        39,198        34,235   


ICF International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

     Six months ended
June 30,
 
     2011     2010  

Cash flows from operating activities

    

Net income

   $ 16,689      $ 12,621   

Deferred income taxes

     (157     (2,220

(Gain) loss on disposal of fixed assets

     (58     19   

Non-cash equity compensation

     2,972        3,888   

Depreciation and amortization

     10,275        11,474   

Deferred rent

     1,251        381   

Changes in operating assets and liabilities, net of the effect of acquisitions:

    

Contract receivables, net

     (5,778     9,579   

Prepaid expenses and other assets

     (2,987     (2,114

Accounts payable

     2,878        (3,822

Accrued salaries and benefits

     1,850        2,213   

Accrued expenses

     37        887   

Deferred revenue

     561        (5,301

Income tax receivable and payable

     (1,140     5,235   

Restricted cash

     1,444        (1,027

Other liabilities

     1,545        (646
  

 

 

   

 

 

 

Net cash provided by operating activities

     29,382        31,167   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Capital expenditures

     (4,234     (3,077

Capitalized software development costs

     (28     (201

Payments for business acquisitions, net of cash received

     (4,523     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (8,785     (3,278
  

 

 

   

 

 

 

Cash flows from financing activities

    

Advances from working capital facilities

     81,841        13,051   

Payments on working capital facilities

     (103,427     (38,051

Debt issue costs

     —          (21

Proceeds from exercise of options

     219        489   

Tax benefits of stock option exercises and award vesting

     911        606   

Net payments for stockholder issuances and buybacks

     (965     (572
  

 

 

   

 

 

 

Net cash used in financing activities

     (21,421     (24,498

Effect of exchange rate on cash

     200        (406
  

 

 

   

 

 

 

Increase (decrease) in cash

     (624     2,985   

Cash, beginning of period

     3,301        2,353   
  

 

 

   

 

 

 

Cash, end of period

   $ 2,677      $ 5,338   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid during the period for:

    

Interest

   $ 1,185      $ 2,379   
  

 

 

   

 

 

 

Income taxes

   $ 11,760      $ 4,682   
  

 

 

   

 

 

 


ICF International, Inc. and Subsidiaries

Supplemental Schedule

Revenue by market

 

      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

Energy, environment, and transportation

     43     39     42     39

Health, education, and social programs

     43     46     44     46

Homeland security and defense

     14     15     14     15
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenue by client

 

      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

U.S. federal government

     66     70     67     71

U.S. state and local government

     10     11     10     11

Domestic commercial

     20     14     19     14

International

     4     5     4     4
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenue by contract

 

      Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

Time-and-materials

     49     49     50     49

Fixed-price

     27     29     27     28

Cost-based

     24     22     23     23
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100     100     100     100