UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act.
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Title of each class |
Trading Symbols(s) |
Name of each exchange on which registered |
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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):
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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 3, 2021, ICF International, Inc. (the “Company”) announced its financial results for the second quarter ended June 30, 2021. 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 3, 2021, the Company's Board of Directors declared a quarterly dividend in an amount equal to $0.14 per share. This quarterly cash dividend will be paid on October 13, 2021 to stockholders of record as of the close of business on September 10, 2021.
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
(d) Exhibits
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
Exhibit Index
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Exhibit Number |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
2
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 thereunto duly authorized.
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ICF International, Inc. |
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Date: August 3, 2021 |
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By: |
/s/ Bettina G. Welsh |
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Bettina G. Welsh |
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Senior Vice President & Chief Financial Officer |
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Exhibit 99.1
NEWS RELEASE
ICF Reports Second Quarter 2021 Results
Second Quarter Highlights:
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Total Revenue Was $393 Million; Service Revenue¹ Was $281 Million, up 7.7% |
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Diluted EPS Increased 49% to $1.07 |
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Non-GAAP EPS¹ Was $1.19, up 34% |
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Adjusted EBITDA Margin on Service Revenue¹ Was 14.2%, up 180 Basis Points |
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Contract Awards of $398 Million up 41%; TTM Contract Awards Were $2.3 Billion for a Book-to-Bill Ratio of 1.48 |
—Reaffirms Full Year 2021 Service Revenue, EBITDA¹, and EPS at Upper End of Guidance Ranges—
—Record Business Development Pipeline Underscores ICF’s Significant Long-Term Growth Prospects—
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 3, 2021-- ICF (NASDAQ:ICFI), a global consulting and digital services provider, reported results for the second quarter ended June 30, 2021.
Commenting on the results, John Wasson, chairman and chief executive officer, said, “This was another quarter of strong performance for ICF, in which we executed well across our diversified client set and expanded our business development pipeline by over $1 billion, reinforcing the substantial growth opportunities in our key markets.
“Year-on-year revenue increases for the quarter were broad-based across all client categories, led by double-digit growth with our government clients and commercial energy clients that together accounted for over 87% of total second quarter revenues. Our work in IT modernization, public health and social programs, utility consulting and climate change and resilience were key contributors to second quarter revenue growth. These results were paired with steady performance in commercial marketing activity and a material pick up in aviation consulting activity.
1 Non-GAAP EPS, Service Revenue, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBITDA Margin on Service Revenue are non-GAAP measurements. A reconciliation of all non-GAAP measurements to the most applicable GAAP number is set forth below. Special charges are items that were included within our consolidated statements of comprehensive income but are not indicative of ongoing performance and have been presented net of applicable U.S. GAAP taxes. The presentation of non-GAAP measurements may not be comparable to other similarly titled measures used by other companies.
1
“Substantial growth in service revenue, favorable business mix and continued high utilization drove strong year-on-year increases in earnings and EBITDA in the quarter. The growth in these profit metrics significantly outpaced revenue growth, while we continued to invest in people and technologies to build our capabilities in anticipation of increased activity in our high-growth markets. In making these investments in people and technologies, we have continued to carefully manage our overall cost structure.
“Year-to-date contract awards increased 56% and reflected broad-based wins across our key markets, the majority of which represented new business. This performance has resulted in a trailing twelve-month book-to-bill ratio of almost 1.5 and is a clear indication of how well ICF’s qualifications and domain expertise align with areas of high demand across ICF’s government and commercial client sets,” Mr. Wasson said.
Second Quarter 2021 Results
Second quarter 2021 total revenue was $392.5 million, an increase of 10.9% from the $354.0 million reported in the second quarter of 2020. Service revenue growth was 7.7% year-over-year to $281.4 million, from $261.2 million. Net income amounted to $20.3 million in the 2021 second quarter, and diluted EPS was $1.07 per diluted share, increases of 48.7% and 48.6%, respectively, over the net income of $13.7 million, or $0.72 per diluted share, reported last year.
Non-GAAP EPS was $1.19 per share, an increase of 33.7% over the $0.89 per share reported in the year-ago quarter. EBITDA was $39.7 million, 26.7% ahead of the $31.3 million reported in the second quarter of 2020. Adjusted EBITDA¹ was $40.0 million, compared to $32.5 million reported in the comparable quarter of 2020. Second quarter 2021 adjusted EBITDA margin on service revenue was 14.2%, representing a 180-basis point increase from the 12.4% reported in the 2020 second quarter.
Backlog and New Business Awards
Total backlog was $3.0 billion at the end of the second quarter of 2021. Funded backlog was $1.5 billion, or approximately 50% of the total backlog. The total value of contracts awarded in the 2021 second quarter was $398 million, up 41% year-on-year for a quarterly book-to-bill ratio of 1.01. Trailing-twelve-month contract awards totaled $2.32 billion for a book-to-bill ratio of 1.48.
Government Revenue Second Quarter 2021 Highlights
Revenue from government clients was $278.0 million, up 13.0% year-over-year.
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U.S. federal government revenue was $182.2 million, representing a 6.7% year-over-year increase. Federal government revenue accounted for 46% of total revenue, compared to 48% of total revenue in the second quarter of 2020. |
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U.S. state and local government revenue was $58.1 million, up from $57.4 million in the year-ago quarter. State and local government clients represented 15% of total revenue, compared to 16% of total revenue for the second quarter of 2020. |
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International government revenue was $37.8 million, representing an 111.7% year-over-year increase, primarily related to a short-term project with significant pass-through revenue. International government revenue accounted for 10% of total revenue, compared to 5% in the second quarter of 2020. |
Key Government Contracts Awarded in the Second Quarter 2021
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ICF was awarded more than 100 U.S. federal contracts and task orders and more than 200 additional contracts from U.S. state and local and international governments with an aggregate value of over $278 million. Notable awards won in the second quarter 2021 included:
Disaster Management
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A contract amendment with a value of $13.1 million with the Government of Puerto Rico’s Department of Housing to expand the implementation of the agency’s Rehabilitation, Reconstruction and Relocation (R3) program for single-family homes damaged by hurricanes Irma and Maria. |
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A new contract with a value of $9.0 million with the Government of the U.S. Virgin Islands Department of Labor to implement a new workforce development program that will train local workers to support the territory’s recovery from hurricanes Irma and Maria. |
Climate Change
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A recompete contract valued up to $34 million with the U.S. National Aeronautical Space Administration to provide technical and administrative support to the U.S. Global Change Research Program’s National Coordination Office. |
IT Modernization
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A recompete contract with a value of $12.4 million with the U.S. Department of Health and Human Services Social Security Administration to develop, maintain and support software applications to automate its physical security business processes. |
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A new call order with a value of $10.4 million with the U.S. Federal Transit Administration to modernize its Oversight Tracking System. |
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Additional contract funding with a value of $11.3 million with the U.S. General Services Administration to continue modernization efforts for the federal acquisition application. |
Public Health and Communications
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A recompete blanket purchase agreement with a ceiling of $49.1 million with the U.S. National Cancer Institute to provide digital communications strategy, design and implementation support for its behavioral health initiatives. |
Program, Technical and Analytical Support
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A contract amendment with a value of $7.2 million with the transportation department of a Northeastern U.S. state to continue to provide information, tools and services to support and encourage the use of sustainable transportation. |
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A new contract with a value of $7.6 million with a California State agency to provide program support and technical assistance services to support the administration of emergency coronavirus relief funds throughout the state. |
3
Commercial Revenue Second Quarter 2021 Highlights
Commercial revenue was $114.5 million, an increase of 6% compared to the $108.0 million reported in last year’s second quarter.
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Commercial revenue accounted for 29% of total revenue compared to 31% of total revenue in the 2020 second quarter. |
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Energy markets, which include energy efficiency programs, represented 57% of commercial revenue. |
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Marketing services accounted for 33% of commercial revenue. |
Key Commercial Contracts Awarded in the Second Quarter 2021
Commercial contract awards were over $119 million in the second quarter 2021. ICF was awarded more than 700 commercial projects globally during the quarter including:
Energy Markets
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Two add-ons to our existing contract with a Northeastern U.S. utility to continue to deliver energy efficiency program services for its expanded residential portfolio. |
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A recompete subcontract to provide major project construction and post-construction environmental compliance services to a Western U.S. utility. |
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Two new contracts with a Western U.S. utility to implement energy efficiency programs designed to promote and install energy efficiency equipment to agricultural and multifamily customer segments. |
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Two contract modifications with a Midwestern U.S. energy efficiency program to provide program implementation services for its energy efficiency residential portfolio. |
Marketing Services
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A new contract with a U.S. utility operating in the Southern and Northeastern U.S. to serve as digital agency of record for its energy efficiency portfolio. |
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Multiple task orders with a multinational food products manufacturer to provide marketing services. |
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Multiple task orders with a multinational drink and brewing company to provide marketing services across a number of product lines. |
Dividend Declaration
On August 3, 2021, ICF declared a quarterly cash dividend of $0.14 per share, payable on October 13, 2021, to shareholders of record on September 10, 2021.
Summary and Outlook
“The first half of 2021 has been a period of significant growth and progress for ICF across all key metrics and has firmly positioned us to report full year 2021 service revenue, EBITDA and EPS that are at the upper end of the guidance ranges we provided at the time of our fourth quarter 2020 earnings release, namely service revenue of $1.095 billion to $1.13 billion, EBITDA of $145 million to $155 million, GAAP EPS of $3.90 to $4.20, and Non-GAAP EPS of $4.35 to $4.65. We continue to anticipate total revenue in 2021 of $1.525 billion to $1.575 billion, reflecting lower anticipated pass-through revenues, particularly those associated with the wind-down of a large contract in the fourth quarter of 2020.
"In the first half of 2021, over 60% of ICF’s service revenue represented work in key growth areas in which we expect growth rates, in the aggregate, to be at least 10% over the next several years. These areas include IT
4
modernization, public health, disaster management and utility consulting as well as climate, environment and infrastructure, which align well with the current administration’s priorities. At the end of the second quarter, our business development pipeline was a record $7.2 billion, representing a diversified set of opportunities in these and other areas in which ICF has built substantial expertise and experience, and providing us with substantial long-term growth prospects.
“At ICF, we work on many of the most important issues facing today’s society, from decarbonization and managing coastal flooding, to disease prevention and early childhood education, to helping hard-hit industries like retailing, hospitality and aviation re-engage with their customers. The problem-solving nature of our work has enabled ICF to attract an exceptional group of people who are dedicated to making a positive difference and who share our commitment to carbon neutrality, diversity, social justice and equality. We appreciate their contributions to our success and encourage you to visit our website to learn more about ICF and how we address our environmental, social and governance responsibilities,” Mr. Wasson concluded.
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About ICF
ICF (NASDAQ:ICFI) is a global consulting services company with approximately 7,500 full- and part-time employees, 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; our ability to acquire and successfully integrate businesses; and the effects of the novel coronavirus disease (COVID-19) and related federal, state and local government actions and reactions on the health of our staff and that of our clients, the continuity of our and our clients' operations, our results of operations and our outlook. These and other factors that could cause our actual results to differ from those indicated in forward-looking statements that 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.
5
ICF International, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(in thousands, except per share amounts) |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
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$ |
392,525 |
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$ |
353,987 |
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$ |
771,003 |
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$ |
712,225 |
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Direct costs |
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246,646 |
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223,407 |
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478,728 |
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454,023 |
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Operating costs and expenses: |
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Indirect and selling expenses |
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106,178 |
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99,255 |
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216,160 |
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202,526 |
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Depreciation and amortization |
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4,728 |
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5,064 |
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9,998 |
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10,243 |
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Amortization of intangible assets |
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3,019 |
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3,479 |
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6,034 |
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6,332 |
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Total operating costs and expenses |
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113,925 |
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107,798 |
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232,192 |
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219,101 |
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Operating income |
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31,954 |
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22,782 |
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60,083 |
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39,101 |
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Interest expense |
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(2,612 |
) |
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(3,908 |
) |
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(5,295 |
) |
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(7,433 |
) |
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Other (expense) income |
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(46 |
) |
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349 |
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(463 |
) |
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539 |
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Income before income taxes |
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29,296 |
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19,223 |
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54,325 |
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32,207 |
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Provision for income taxes |
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8,984 |
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5,567 |
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15,662 |
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7,939 |
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Net income |
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$ |
20,312 |
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$ |
13,656 |
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$ |
38,663 |
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$ |
24,268 |
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Earnings per Share: |
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Basic |
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$ |
1.08 |
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$ |
0.73 |
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$ |
2.05 |
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$ |
1.29 |
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Diluted |
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$ |
1.07 |
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$ |
0.72 |
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$ |
2.03 |
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$ |
1.27 |
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Weighted-average Shares: |
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Basic |
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18,843 |
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18,829 |
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18,864 |
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18,835 |
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Diluted |
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19,022 |
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19,020 |
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19,078 |
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19,120 |
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Cash dividends declared per common share |
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$ |
0.14 |
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$ |
0.14 |
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$ |
0.28 |
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$ |
0.28 |
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Other comprehensive income (loss), net of tax |
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432 |
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(164 |
) |
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3,212 |
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(11,287 |
) |
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Comprehensive income, net of tax |
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$ |
20,744 |
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$ |
13,492 |
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$ |
41,875 |
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$ |
12,981 |
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6
ICF International, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures(2)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(in thousands, except per share amounts) |
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2021 |
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2020 |
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2021 |
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2020 |
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Reconciliation of Service Revenue |
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Revenue |
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$ |
392,525 |
|
|
$ |
353,987 |
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|
$ |
771,003 |
|
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$ |
712,225 |
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Subcontractor and other direct costs (3) |
|
|
(111,140 |
) |
|
|
(92,789 |
) |
|
|
(210,051 |
) |
|
|
(195,625 |
) |
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Service revenue |
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$ |
281,385 |
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|
$ |
261,198 |
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|
$ |
560,952 |
|
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$ |
516,600 |
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Reconciliation of EBITDA and Adjusted EBITDA |
|
|
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|
|
|
|
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Net income |
|
$ |
20,312 |
|
|
$ |
13,656 |
|
|
$ |
38,663 |
|
|
$ |
24,268 |
|
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Other expense (income) |
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|
46 |
|
|
|
(349 |
) |
|
|
463 |
|
|
|
(539 |
) |
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Interest expense |
|
|
2,612 |
|
|
|
3,908 |
|
|
|
5,295 |
|
|
|
7,433 |
|
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Provision for income taxes |
|
|
8,984 |
|
|
|
5,567 |
|
|
|
15,662 |
|
|
|
7,939 |
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Depreciation and amortization |
|
|
7,747 |
|
|
|
8,543 |
|
|
|
16,032 |
|
|
|
16,575 |
|
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EBITDA |
|
|
39,701 |
|
|
|
31,325 |
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|
|
76,115 |
|
|
|
55,676 |
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Adjustment related to impairment of long-lived assets (4) |
|
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— |
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|
|
— |
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|
|
303 |
|
|
|
— |
|
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Special charges related to acquisitions (5) |
|
|
54 |
|
|
|
98 |
|
|
|
149 |
|
|
|
1,942 |
|
|
Special charges related to severance for staff realignment (6) |
|
|
318 |
|
|
|
1,078 |
|
|
|
809 |
|
|
|
2,848 |
|
|
Special charges related to facilities consolidations and office closures (7) |
|
|
(61 |
) |
|
|
— |
|
|
|
139 |
|
|
|
— |
|
|
Special charges related to retirement of the former Executive Chair (8) |
|
|
— |
|
|
|
— |
|
|
|
224 |
|
|
|
— |
|
|
Total special charges |
|
|
311 |
|
|
|
1,176 |
|
|
|
1,624 |
|
|
|
4,790 |
|
|
Adjusted EBITDA |
|
$ |
40,012 |
|
|
$ |
32,501 |
|
|
$ |
77,739 |
|
|
$ |
60,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin Percent on Revenue (9) |
|
|
10.1 |
% |
|
|
8.8 |
% |
|
|
9.9 |
% |
|
|
7.8 |
% |
|
EBITDA Margin Percent on Service Revenue (9) |
|
|
14.1 |
% |
|
|
12.0 |
% |
|
|
13.6 |
% |
|
|
10.8 |
% |
|
Adjusted EBITDA Margin Percent on Revenue (9) |
|
|
10.2 |
% |
|
|
9.2 |
% |
|
|
10.1 |
% |
|
|
8.5 |
% |
|
Adjusted EBITDA Margin Percent on Service Revenue (9) |
|
|
14.2 |
% |
|
|
12.4 |
% |
|
|
13.9 |
% |
|
|
11.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
1.07 |
|
|
$ |
0.72 |
|
|
$ |
2.03 |
|
|
$ |
1.27 |
|
|
Adjustment related to impairment of long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Special charges related to acquisitions |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.10 |
|
|
Special charges related to severance for staff realignment |
|
|
0.02 |
|
|
|
0.06 |
|
|
|
0.04 |
|
|
|
0.15 |
|
|
Special charges related to facilities consolidations and office closures |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
Special charges related to retirement of the former Executive Chair |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
Amortization of intangibles |
|
|
0.16 |
|
|
|
0.18 |
|
|
|
0.32 |
|
|
|
0.33 |
|
|
Income tax effects (10) |
|
|
(0.06 |
) |
|
|
(0.07 |
) |
|
|
(0.12 |
) |
|
|
(0.14 |
) |
|
Non-GAAP EPS |
|
$ |
1.19 |
|
|
$ |
0.89 |
|
|
$ |
2.32 |
|
|
$ |
1.71 |
|
7
|
(2) These tables provide reconciliations of non-GAAP financial measures to the most applicable GAAP numbers. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Other companies may define similarly titled non-GAAP measures differently and, accordingly, care should be exercised in understanding how we define these measures. |
||||
|
|
|
|
|
|
|
(3) Subcontractor and other direct costs is direct costs excluding direct labor and fringe costs. |
||||
|
|
|
|
|
|
|
(4) Adjustment related to impairment of long-lived assets: We recognized impairment expense of $0.3 million in the first quarter of 2021 related to impairment of a right-of-use lease asset. |
||||
|
|
|
|
|
|
|
(5) Special charges related to acquisitions: These costs consist primarily of consultants and other outside third-party costs and integration costs associated with an acquisition. |
||||
|
|
|
|
|
|
|
(6) Special charges related to severance for staff realignment: These costs are mainly due to involuntary employee termination benefits for our officers, groups of employees who have been notified that they will be terminated as part of a consolidation or reorganization or, to the extent that the costs are not included in the previous two categories, involuntary employee termination benefits for employees who have been terminated as a result of COVID-19. |
||||
|
|
|
|
|
|
|
(7) Special charges related to facilities consolidations and office closures: These costs are exit costs or gains associated with office lease contraction, terminated office leases, or full office closures. The 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. |
||||
|
|
|
|
|
|
|
(8) Special charges related to retirement of the former Executive Chair: As a result of the employment agreement, the departing officer was able to maintain certain equity awards beyond his date of employment. The 2019 equity award held by the former Executive Chair was updated for a change in the performance factor. |
||||
|
|
|
|
|
|
|
(9) EBITDA Margin Percent and Adjusted EBITDA Margin Percent were calculated by dividing the non-GAAP measure by the corresponding revenue. |
||||
|
|
|
|
|
|
|
(10) Income tax effects were calculated using an effective U.S. GAAP tax rate of 30.7% and 29.0% for the three months ended June 30, 2021 and 2020, respectively, and 28.8% and 24.6% for the six months ended June 30, 2021 and 2020, respectively. |
||||
8
ICF International, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
|
(in thousands, except share and per share amounts) |
|
June 30, 2021 |
|
|
December 31, 2020 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,603 |
|
|
$ |
13,841 |
|
|
Restricted cash |
|
|
26,307 |
|
|
|
68,146 |
|
|
Contract receivables, net |
|
|
242,562 |
|
|
|
222,850 |
|
|
Contract assets |
|
|
150,390 |
|
|
|
143,369 |
|
|
Prepaid expenses and other assets |
|
|
25,784 |
|
|
|
25,492 |
|
|
Income tax receivable |
|
|
8,717 |
|
|
|
1,977 |
|
|
Total Current Assets |
|
|
463,363 |
|
|
|
475,675 |
|
|
Property and Equipment, net |
|
|
53,083 |
|
|
|
62,434 |
|
|
Other Assets: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
910,640 |
|
|
|
909,913 |
|
|
Other intangible assets, net |
|
|
53,899 |
|
|
|
59,887 |
|
|
Operating lease - right-of-use assets |
|
|
111,755 |
|
|
|
127,132 |
|
|
Other assets |
|
|
40,049 |
|
|
|
32,249 |
|
|
Total Assets |
|
$ |
1,632,789 |
|
|
$ |
1,667,290 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
10,000 |
|
|
$ |
10,000 |
|
|
Accounts payable |
|
|
94,939 |
|
|
|
91,365 |
|
|
Contract liabilities |
|
|
35,700 |
|
|
|
42,050 |
|
|
Operating lease liabilities - current |
|
|
35,128 |
|
|
|
23,350 |
|
|
Accrued salaries and benefits |
|
|
82,297 |
|
|
|
80,512 |
|
|
Accrued subcontractors and other direct costs |
|
|
41,610 |
|
|
|
78,842 |
|
|
Accrued expenses and other current liabilities |
|
|
67,252 |
|
|
|
100,908 |
|
|
Total Current Liabilities |
|
|
366,926 |
|
|
|
427,027 |
|
|
Long-term Liabilities: |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
321,681 |
|
|
|
303,214 |
|
|
Operating lease liabilities - non-current |
|
|
96,746 |
|
|
|
115,614 |
|
|
Deferred income taxes |
|
|
37,790 |
|
|
|
34,330 |
|
|
Other long-term liabilities |
|
|
38,135 |
|
|
|
40,144 |
|
|
Total Liabilities |
|
|
861,278 |
|
|
|
920,329 |
|
|
|
|
|
|
|
|
|
|
|
|
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; 23,483,971 and 23,305,255 shares issued at June 30, 2021 and December 31, 2020, respectively; 18,859,735 and 18,909,983 shares outstanding at June 30, 2021 and December 31, 2020, respectively |
|
|
23 |
|
|
|
23 |
|
|
Additional paid-in capital |
|
|
376,622 |
|
|
|
369,058 |
|
|
Retained earnings |
|
|
622,113 |
|
|
|
588,731 |
|
|
Treasury stock, 4,624,236 and 4,395,272 shares at June 30, 2021 and December 31, 2020, respectively |
|
|
(216,353 |
) |
|
|
(196,745 |
) |
|
Accumulated other comprehensive loss |
|
|
(10,894 |
) |
|
|
(14,106 |
) |
|
Total Stockholders’ Equity |
|
|
771,511 |
|
|
|
746,961 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
1,632,789 |
|
|
$ |
1,667,290 |
|
9
ICF International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
||||||
|
(in thousands) |
|
2021 |
|
|
2020 |
|
||
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
38,663 |
|
|
$ |
24,268 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
|
7,782 |
|
|
|
1,153 |
|
|
Deferred income taxes |
|
|
2,489 |
|
|
|
6,070 |
|
|
Non-cash equity compensation |
|
|
6,163 |
|
|
|
6,344 |
|
|
Depreciation and amortization |
|
|
16,032 |
|
|
|
16,575 |
|
|
Non-cash lease expense |
|
|
(3,361 |
) |
|
|
(783 |
) |
|
Facilities consolidation reserve |
|
|
(148 |
) |
|
|
(141 |
) |
|
Amortization of debt issuance costs |
|
|
309 |
|
|
|
403 |
|
|
Impairment of long-lived assets |
|
|
303 |
|
|
|
— |
|
|
Other adjustments, net |
|
|
1,365 |
|
|
|
(863 |
) |
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
|
|
|
|
|
Net contract assets and liabilities |
|
|
(13,698 |
) |
|
|
(15,050 |
) |
|
Contract receivables |
|
|
(29,070 |
) |
|
|
54,729 |
|
|
Prepaid expenses and other assets |
|
|
(3,108 |
) |
|
|
(1,866 |
) |
|
Accounts payable |
|
|
3,667 |
|
|
|
(65,293 |
) |
|
Accrued salaries and benefits |
|
|
2,738 |
|
|
|
4,658 |
|
|
Accrued subcontractors and other direct costs |
|
|
(37,035 |
) |
|
|
(9,227 |
) |
|
Accrued expenses and other current liabilities |
|
|
20,619 |
|
|
|
(8,685 |
) |
|
Income tax receivable and payable |
|
|
(7,193 |
) |
|
|
(8,158 |
) |
|
Other liabilities |
|
|
(176 |
) |
|
|
6,667 |
|
|
Net Cash Provided by Operating Activities |
|
|
6,341 |
|
|
|
10,801 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment and capitalized software |
|
|
(7,475 |
) |
|
|
(9,015 |
) |
|
Payments for business acquisitions, net of cash acquired |
|
|
— |
|
|
|
(253,090 |
) |
|
Net Cash Used in Investing Activities |
|
|
(7,475 |
) |
|
|
(262,105 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
Advances from working capital facilities |
|
|
382,552 |
|
|
|
914,507 |
|
|
Payments on working capital facilities |
|
|
(364,395 |
) |
|
|
(626,159 |
) |
|
Payments on capital expenditure obligations |
|
|
— |
|
|
|
(1,712 |
) |
|
Receipt of restricted contract funds |
|
|
75,158 |
|
|
|
— |
|
|
Payment of restricted contract funds |
|
|
(117,399 |
) |
|
|
— |
|
|
Debt issue costs |
|
|
— |
|
|
|
(2,084 |
) |
|
Proceeds from exercise of options |
|
|
2,773 |
|
|
|
37 |
|
|
Dividends paid |
|
|
(5,284 |
) |
|
|
(5,275 |
) |
|
Net payments for stock issuances and buybacks |
|
|
(18,365 |
) |
|
|
(23,024 |
) |
|
Payments on business acquisition liabilities |
|
|
(682 |
) |
|
|
(1,924 |
) |
|
Net Cash (Used in) Provided by Financing Activities |
|
|
(45,642 |
) |
|
|
254,366 |
|
|
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash |
|
|
699 |
|
|
|
(480 |
) |
|
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash |
|
|
(46,077 |
) |
|
|
2,582 |
|
|
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period |
|
|
81,987 |
|
|
|
6,482 |
|
|
Cash, Cash Equivalents, and Restricted Cash, End of Period |
|
$ |
35,910 |
|
|
$ |
9,064 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
Interest |
|
$ |
5,319 |
|
|
$ |
7,875 |
|
|
Income taxes |
|
$ |
20,714 |
|
|
$ |
10,123 |
|
|
|
|
|
|
|
|
|
|
|
10
ICF International, Inc. and Subsidiaries
Supplemental Schedule(11) (12)
|
Revenue by client markets |
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
|
Energy, environment, and infrastructure |
|
|
43 |
% |
|
|
42 |
% |
|
|
43 |
% |
|
|
42 |
% |
|
Health, education, and social programs |
|
|
43 |
% |
|
|
43 |
% |
|
|
42 |
% |
|
|
43 |
% |
|
Safety and security |
|
|
7 |
% |
|
|
9 |
% |
|
|
8 |
% |
|
|
8 |
% |
|
Consumer and financial services |
|
|
7 |
% |
|
|
6 |
% |
|
|
7 |
% |
|
|
7 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by client type |
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
|
U.S. federal government |
|
|
46 |
% |
|
|
48 |
% |
|
|
46 |
% |
|
|
46 |
% |
|
U.S. state and local government |
|
|
15 |
% |
|
|
16 |
% |
|
|
15 |
% |
|
|
16 |
% |
|
International government |
|
|
10 |
% |
|
|
5 |
% |
|
|
10 |
% |
|
|
6 |
% |
|
Government |
|
|
71 |
% |
|
|
69 |
% |
|
|
71 |
% |
|
|
68 |
% |
|
Commercial |
|
|
29 |
% |
|
|
31 |
% |
|
|
29 |
% |
|
|
32 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by contract mix |
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
|
Time-and-materials |
|
|
41 |
% |
|
|
48 |
% |
|
|
42 |
% |
|
|
47 |
% |
|
Fixed-price |
|
|
41 |
% |
|
|
35 |
% |
|
|
40 |
% |
|
|
36 |
% |
|
Cost-based |
|
|
18 |
% |
|
|
17 |
% |
|
|
18 |
% |
|
|
17 |
% |
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
(11) As is shown in the supplemental schedule, we track revenue by key metrics that provide useful information about the nature of our operations. Client markets provide insight into the breadth of our expertise. Client type is an indicator of the diversity of our client base. Revenue by contract mix provides insight in terms of the degree of performance risk that we have assumed. |
||||
|
|
|
|
|
|
|
(12) Certain immaterial revenue percentages in the prior year have been reclassified due to minor adjustments and reclassifications. |
||||
11