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): May 14, 2007
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 communication pursuant to Rule 245 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 Exchanged 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 May 14, 2007, ICF International, Inc. (the “Company”) announced its financial results for the first quarter of fiscal year 2007. The press release containing this announcement is filed as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| 99.1 | Press Release dated May 14, 2007 |
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: May 14, 2007 | By: | /s/ Alan Stewart | ||
| Alan Stewart | ||||
| Senior Vice President, Chief Financial Officer and Assistant Secretary | ||||
Exhibit Index
| Exhibit No. |
Document | |
| 99.1 |
Press Release dated May 14, 2007 |
Exhibit 99.1
NEWS RELEASE
| FOR IMMEDIATE RELEASE | Contact: Douglas Beck ICF International, Inc. 703.934.3820 or Lynn Morgen/Betsy Brod MBS Value Partners 212.750.5800 |
ICF International Reports First Quarter 2007 Results
FAIRFAX, VA, May 14, 2007 – ICF International, Inc. (NASDAQ: ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported revenue and earnings growth for the first quarter ended March 31, 2007.
First Quarter Results
First quarter 2007 revenue was $151.7 million, an increase of 33.2 percent from the $113.9 million reported for the 2006 fourth quarter. Earnings from operations were $14.7 million, slightly below the $15.0 million reported for the prior quarter. Net income was $8.7 million, or $0.60 per diluted share, compared to net income of $9.2 million, or $0.65 per diluted share in the 2006 fourth quarter. In last year’s first quarter, the Company had revenue of $53.4 million, earnings from operations of $3.2 million, and net income of $1.1 million, or $0.11 per diluted share. Revenue from The Road Home contract was $96.8 million in the first quarter of 2007. ICF was awarded this contract in June 2006 by the State of Louisiana’s Office of Community Development.
“ICF continued its strong performance in the first quarter of 2007,” said Sudhakar Kesavan, ICF Chairman and Chief Executive Officer. “We provided a broad portfolio of advisory and implementation services to a diverse group of government and corporate clients, and we accelerated implementation of The Road Home program to significantly increase the number of closings.”
“Additionally, we succeeded in winning strategically important contracts in key markets, including homeland security, energy, and transportation, and in attracting top senior professionals with excellent credentials in the fields of strategic planning, information technology-based solutions, early education research, emergency management, and energy markets,” added Mr. Kesavan.
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Backlog and New Business Award Highlights
At the end of the first quarter, the Company had total backlog of $902 million, of which 75 percent was funded, compared to total backlog at the end of the 2006 fourth quarter of $969 million, of which 79 percent was funded. Backlog, excluding The Road Home contract, was $359 million at the end of the 2007 first quarter, up nine percent sequentially from comparable fourth quarter 2006 levels.
Contracts awarded in the first quarter of 2007 totaled $83 million. These awards are unrelated to The Road Home program.
Key competitive contracts won during the quarter included:
| • | National Infrastructure Protection Plan. ICF was awarded a five-year, recompete contract valued at $22.1 million from the U.S. Department of Homeland Security, Office of Infrastructure to provide management, analytical, and technical consulting for mitigating risk by lowering vulnerabilities, deterring threats, and minimizing the consequences of terrorist attacks across the nation’s 17 critical infrastructure and key resources sectors. |
| • | European Commission Climate Change. ICF was awarded a new contract with a €10 million (US$13 million) ceiling over four years to advise the European Commission’s Environment Directorate-General on a range of atmospheric policy issues, including climate change and air quality, and their concomitant impacts on health and the environment. |
| • | Additions to Highway Capacity. ICF was awarded a new contract valued at $2.6 million to assist the U.S. Department of Transportation Research Board Strategic Highway Research Program in advancing highway performance and safety. |
| • | Energy Efficient Homes. ICF was awarded a two-year, recompete contract valued at $1.9 million to provide program design and implementation support to Southern California Edison’s New Homes Program. The program’s goal is to create high-performance homes that will lower homeowner energy bills while simultaneously reducing the strain on California energy supplies and improving local air quality. |
Outlook
“ICF continues to benefit from favorable business conditions, resulting from our extensive domain expertise in key markets and our ability to provide clients with complete project solutions. We anticipate 2007 to be a year of solid growth for the Company, characterized by accelerated execution of The Road Home program and increased business development activity focused on both traditional contracts and larger, longer-term awards,” Mr. Kesavan said.
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Based on currently available information, the Company expects second quarter 2007 revenue to range from $135 million to $145 million, and full year 2007 revenue to range from $530 million to $550 million. For both the quarter and the year, the Company seeks to earn net income equal to approximately five percent of revenues.
About ICF International
ICF International (NASDAQ: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security 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 analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 2,000 employees serve these clients worldwide. ICF’s Web site is www.icfi.com.
Caution Concerning Forward-Looking Statements
This document may contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995—that is, statements related to future—not past—events, plans, and prospects. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “guidance,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “seek,” “should,” “will,” “would,” or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information, and are subject to factors that could cause actual results to differ materially from those anticipated. For ICF, particular uncertainties that could adversely or positively affect the Company’s future results include but are not limited to: risks related to the government contracting industry, including the timely approval of government budgets, changes in client spending priorities, and the results of government audits and investigations; risks related to our business, including our dependence on contracts with U.S. Federal Government agencies and departments and the State of Louisiana; continued good relations with these and other customers; success in competitive bidding on recompete and new contracts; performance by ICF and its subcontractors under our contract with the State of Louisiana, Office of Community Development, including but not limited to the risks of failure to achieve certain levels of program activities, termination, or material modification of the contract, and political uncertainties relating to The Road Home program; uncertainties as to whether revenues corresponding to the Company’s contract backlog will actually be received; the future of the energy sector of the global economy; our ability to attract and retain management and staff; strategic actions, including attempts to expand our service offerings and client base, the ability to make acquisitions, and the performance and future integration of acquired businesses; risks associated with operations outside the United States, including but not limited to international, regional, and national economic conditions, including the effects of terrorist activities, war, and currency fluctuations; and other risks and uncertainties disclosed in the Company’s filings with the Securities and Exchange Commission. These uncertainties may cause ICF’s actual future results to be materially different than those expressed in the Company’s forward-looking statements. ICF does not undertake to update its forward-looking statements.
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ICF International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
| March 31, 2007 | December 31, 2006 | |||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 1,274 | $ | 2,997 | ||||
| Contract receivables, net |
155,354 | 110,548 | ||||||
| Prepaid expenses and other |
3,062 | 2,659 | ||||||
| Deferred income taxes |
3,270 | 2,494 | ||||||
| Total Current Assets |
162,960 | 118,698 | ||||||
| Total property and equipment, net |
5,204 | 5,388 | ||||||
| Other assets: |
||||||||
| Goodwill |
91,661 | 83,833 | ||||||
| Other intangible assets |
5,350 | 2,720 | ||||||
| Restricted cash |
5,135 | 3,703 | ||||||
| Other assets |
1,608 | 1,485 | ||||||
| Total Assets |
$ | 271,918 | $ | 215,827 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable |
$ | 30,175 | $ | 19,455 | ||||
| Accrued expenses |
53,480 | 37,202 | ||||||
| Accrued salaries and benefits |
17,607 | 17,727 | ||||||
| Deferred revenue |
15,556 | 18,281 | ||||||
| Income taxes payable |
6,115 | 3,682 | ||||||
| Total current liabilities |
122,933 | 96,347 | ||||||
| Long-term liabilities: |
||||||||
| Long-term debt |
18,927 | — | ||||||
| Deferred rent |
1,605 | 1,599 | ||||||
| Deferred income taxes |
1,240 | 1,324 | ||||||
| Other |
2,599 | 2,610 | ||||||
| Total Liabilities |
$ | 147,304 | $ | 101,880 | ||||
| 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; 14,134,611 and 13,933,074 issued; and 14,076,233 and 13,874,696 outstanding as of March 31, 2007, and December 31, 2006, respectively |
14 | 14 | ||||||
| Additional paid-in capital |
101,816 | 98,995 | ||||||
| Treasury stock, at cost |
(428 | ) | (428 | ) | ||||
| Accumulated other comprehensive income |
239 | 227 | ||||||
| Stockholder notes receivable |
(540 | ) | (562 | ) | ||||
| Retained earnings |
23,513 | 15,701 | ||||||
| Total Stockholders’ Equity |
124,614 | 113,947 | ||||||
| Total Liabilities and Stockholders’ Equity |
$ | 271,918 | $ | 215,827 | ||||
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ICF International, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(in thousands, except per share amounts)
| Three months ended March 31, |
||||||||
| 2007 | 2006 | |||||||
| Gross Revenue |
$ | 151,713 | $ | 53,448 | ||||
| Direct Costs |
108,152 | 31,626 | ||||||
| Operating expenses: |
||||||||
| Indirect and selling expenses |
27,734 | 17,883 | ||||||
| Depreciation and amortization |
1,167 | 772 | ||||||
| Total operating expenses |
28,901 | 18,655 | ||||||
| Earnings from Operations |
14,660 | 3,167 | ||||||
| Interest expense |
(324 | ) | (1,052 | ) | ||||
| Other income |
278 | 26 | ||||||
| Income before taxes |
14,614 | 2,141 | ||||||
| Provision for income taxes |
5,932 | 1,047 | ||||||
| Net income |
$ | 8,682 | $ | 1,094 | ||||
| Earnings per Share: |
||||||||
| Basic |
$ | 0.63 | $ | 0.12 | ||||
| Diluted |
$ | 0.60 | $ | 0.11 | ||||
| Weighted-average Shares: |
||||||||
| Basic |
13,753 | 9,225 | ||||||
| Diluted |
14,415 | 9,772 | ||||||
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ICF International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Three months ended March 31, |
||||||||
| 2007 | 2006 | |||||||
| Cash Flows from Operating Activities |
||||||||
| Net income |
$ | 8,682 | $ | 1,094 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
1,167 | 772 | ||||||
| Non-cash compensation |
619 | 76 | ||||||
| Accrued interest on stockholder notes |
(11 | ) | (21 | ) | ||||
| Deferred income taxes |
(860 | ) | — | |||||
| Changes in operating assets and liabilities, net of the effect of acquisitions: |
||||||||
| Contract receivables, net |
(41,648 | ) | (4,336 | ) | ||||
| Prepaid expenses and other |
(286 | ) | (11 | ) | ||||
| Accounts payable |
10,810 | (2,621 | ) | |||||
| Accrued expenses |
16,502 | 875 | ||||||
| Accrued salaries and benefits |
(809 | ) | 1,256 | |||||
| Deferred revenue |
(2,725 | ) | (708 | ) | ||||
| Income tax payable |
1,563 | (389 | ) | |||||
| Deferred rent |
18 | (47 | ) | |||||
| Other liabilities |
(11 | ) | (158 | ) | ||||
| Net Cash Used in Operating Activities |
(6,989 | ) | (4,218 | ) | ||||
| Cash Flows from Investing Activities |
||||||||
| Capital expenditures |
(921 | ) | (115 | ) | ||||
| Payments for trademarks applications |
(15 | ) | — | |||||
| Capitalized software development costs |
(178 | ) | (24 | ) | ||||
| Additional payments for acquisition of Caliber Associates, Inc. |
(500 | ) | — | |||||
| Payments for business acquisitions, net of cash acquired |
(12,855 | ) | — | |||||
| Net Cash Used in Investing Activities |
(14,469 | ) | (139 | ) | ||||
| Cash Flows from Financing Activities |
||||||||
| Payments on notes payable |
— | (1,467 | ) | |||||
| Advances from working capital facilities |
52,406 | 27,484 | ||||||
| Payments on working capital facilities |
(33,479 | ) | (20,645 | ) | ||||
| Restricted cash |
(1,432 | ) | (117 | ) | ||||
| Debt issue costs |
(7 | ) | (117 | ) | ||||
| Exercise of options |
1,283 | — | ||||||
| Tax benefits of stock option exercises |
880 | — | ||||||
| Net proceeds from initial public offering |
12 | (91 | ) | |||||
| Net payments for stockholder issuances and buybacks |
27 | 100 | ||||||
| Payments received on stockholder notes |
33 | 14 | ||||||
| Net Cash Provided by (Used In) Financing Activities |
19,723 | 5,161 | ||||||
| Effect of Exchange Rate on Cash |
12 | (7 | ) | |||||
| Net (decrease) increase in cash and cash equivalents |
(1,723 | ) | 797 | |||||
| Cash and cash equivalents, beginning of period |
2,997 | 499 | ||||||
| Cash and cash equivalents, end of period |
$ | 1,274 | $ | 1,296 | ||||
| Supplemental disclosure of cash flow information |
||||||||
| Cash paid during the period for: |
||||||||
| Interest |
$ | 213 | $ | 1,467 | ||||
| Income taxes |
$ | 4,364 | $ | 1,486 | ||||
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