icfi-8k_20220803.htm
false 0001362004 0001362004 2022-08-03 2022-08-03

 

 

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 3, 2022

 

ICF International, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-33045

22-3661438

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

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))

 

Securities registered pursuant to Section 12(b) of the Act.

Title of each class

Trading Symbols(s)

Name of each exchange on which registered

Common Stock

ICFI

NASDAQ

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).

Emerging growth company

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, 2022, ICF International, Inc. (the “Company”) announced its financial results for the second quarter ended June 30, 2022.  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, 2022, 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, 2022 to stockholders of record as of the close of business on September 9, 2022.

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

 

99.1

 

Press Release dated August 3, 2022

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

1


 

 

Exhibit Index

 

Exhibit

Number

 

Description

99.1

 

Press Release dated August 3, 2022

104

 

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.

 

 

 

ICF International, Inc.

 

 

 

 

Date:  August 3, 2022

 

By:

/s/ Barry Broadus

 

 

 

Barry Broadus

 

 

 

Chief Financial Officer

 

3

icfi-ex991_6.htm

Exhibit 99.1

 

NEWS RELEASE

ICF Reports Second Quarter 2022 Results

 

Second Quarter Highlights:

 

Total Revenue Was $423 Million; Service Revenue1 Was $306 Million, Up 9%

 

Diluted EPS Was $0.97 Inclusive of $0.16 in Tax-Effected M&A and Facility-Related Charges

 

Non-GAAP EPS1 Was $1.33, Up 12%

 

Adjusted EBITDA1 Was $44.1 Million, Up 10%; Adjusted EBITDA Margin on Service Revenue1 Was 14.4%

 

Contract Awards Were $346 Million; TTM Contract Awards Were $1.96 Billion Representing a Book-to-Bill Ratio of 1.21

 

Record Business Development Pipeline of $8.7 Billion at Quarter-End

 

Raises Full Year 2022 Revenue, Adjusted EBITDA, Non-GAAP EPS and Cash Flow Guidance to Include the SemanticBits Acquisition

 

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, 2022 -- ICF (NASDAQ:ICFI), a global consulting and digital services provider, reported results for the second quarter ended June 30, 2022.  

 

Commenting on the results, John Wasson, chair and chief executive officer, said, “This was another quarter of strong growth for ICF, in which we continued to experience substantial revenue increases in our high-growth markets, while building a record business development pipeline that reflects our expanded addressable market. Similar to the first quarter, year-on-year growth was led by our government client category, in which revenue from federal and state and local government clients increased 24% and 10%, respectively. This strong performance was underpinned by the continued growth of our work in IT modernization/digital transformation, public health and disaster management.

 

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


 

 

“Profitability continues to benefit from favorable mix, high utilization levels and our increased scale, as well as past actions to consolidate our real estate footprint and increase efficiencies. Our second quarter adjusted EBITDA margin on service revenue expanded 20 basis points year-on-year to 14.4%, while we increased our investments in people and technology to execute efficiently on existing contracts and position ICF for future growth.

 

“Year-to-date contract wins were $707 million, of which approximately 80% represented new business, a strong indication of ICF’s ability to capture the significant growth opportunities in our markets. Our trailing twelve-month book-to-bill ratio was 1.21, which provides substantial visibility, and our business development pipeline at the end of July, including SemanticBits, was over $9 billion, leading us to expect considerable growth in contract awards in the second half of this year.”

 

 

Second Quarter 2022 Results

 

Second quarter 2022 total revenue increased 7.8% to $423.1 million from $392.5 million in the second quarter of 2021. Service revenue was $306.3 million, up 8.9% year-over-year from $281.4 million. Net income totaled $18.4 million and diluted EPS was $0.97 per share, inclusive of $0.17 in tax-effected special charges of which $0.16 were M&A and facility-related, compared to net income of $20.3 million and $1.07 per diluted share last year.

 

Non-GAAP EPS was $1.33, representing an increase of 11.8% compared to $1.19 per share in the second quarter of 2021. EBITDA1 was $39.8 million, in comparison to $39.7 million in the year prior. Adjusted EBITDA was $44.1 million, 10.3% ahead of the $40.0 million reported in the comparable quarter last year. Adjusted EBITDA margin on service revenue was 14.4%, an increase of 20 basis points relative to the 14.2% reported last year.

 

 

Backlog and New Business Awards

 

Total backlog was $3.2 billion at the end of the second quarter of 2022. Funded backlog was $1.5 billion, or approximately 48% of the total backlog. The total value of contracts awarded in the 2022 second quarter was $346.1 million, and trailing-twelve-month contract awards totaled $1.96 billion for a book-to-bill ratio of 1.21.

 

 

Government Revenue Second Quarter 2022 Highlights

 

Revenue from government clients was $316.4 million, up 13.9% year-over-year.

 

 

U.S. federal government revenue was $225.2 million, 23.6% above the $182.2 million reported in the year-ago quarter. Federal government revenue accounted for 53% of total revenue, compared to 46% of total revenue in the second quarter of 2021.

 

U.S. state and local government revenue was $64.1 million, up 9.5% from the $58.5 million in last year’s second quarter. State and local government clients represented 15% of total revenue, similar to the second quarter of 2021.   

 

International government revenue was $27.1 million, compared to $37.1 million in the year-ago quarter, reflecting the wind-down of a short-term project with significant pass-through revenue. International government revenue represented 7% of total revenue, compared to 10% in the second quarter of 2021.   

2


 

 

 

Key Government Contracts Awarded in the Second Quarter 2022

 

ICF was awarded government contracts with an aggregate value of over $280 million. Notable awards won in the second quarter 2022 included:

 

Public Health

 

A recompete contract with a value of $30 million with the U.S. Department of Defense, Defense Health Agency to provide research and operational support to help execute the agency's critical military mental health research agenda.

 

A recompete contract with a value up to $7.2 million with the U.S. Centers for Disease Control and Prevention to implement the national Youth Risk Behavior Survey.

 

Digital Modernization

 

A new task order with a value of $10.3 million with a U.S. federal department to provide application development and sustainment services.

 

A contract modification with a value of $8.9 million with the U.S. Federal Communications Commission to provide legacy IT application support.2

 

A new contract with a value of $7.1 million with an Office of the Inspector General for a large U.S. federal department to provide support services related to fraud abuse and control.

 

Disaster Management and Mitigation

 

Three work order amendments with a combined value of $12.9 million with a U.S. state agency extending the period of performance and adding funding to support housing and infrastructure programs that are part of state and local government disaster recovery activities.

 

Program Implementation and Technical Support

 

Several new cooperative agreements with a combined multimillion-dollar value with the U.S. Department of Housing and Urban Development to support its Community Compass and National Homeless Data Analysis Project programs.

 

A new contract with a value of $14.2 million with the U.S. Department of Labor’s Office of Apprenticeship to provide technical assistance and coaching support to its apprenticeship programs.

 

A recompete competitive framework contract with a multimillion-dollar ceiling with a directorate general of the European Commission to support the implementation of technical support projects.

 

Energy and Environment

 

A recompete task order with a value of $7.6 million with the U.S. Environmental Protection Agency to provide account management, outreach and technical support for ENERGY STAR® residential programs.

 

Two new task orders with a combined value of $8.5 million with the U.S. Department of Energy (DOE) to provide program management support for DOE’s Grid Deployment Office charged with implementing major portions of the Infrastructure Investment and Jobs Act.

 

2 

Disclaimer: This disclaimer is required by Contract No. 273FCC18F0042. The Federal Communications Commission (FCC) has not reviewed or approved any statement in this document for accuracy or validity. The FCC and its employees do not endorse goods or services provided by this firm or any other firm, except as allowed by 5 C.F.R. 2635.702(c)(1)-(2), which do not apply here.

3


 

 

Strategic Communications

 

A recompete framework contract with a ceiling of up to $41.7 million with a European government agency to provide promotional and marketing campaigns.

 

Commercial Revenue Second Quarter 2022 Highlights

 

Commercial revenue was $106.7 million, compared to $114.7 million in the year-ago quarter.

 

Commercial revenue accounted for 25% of total revenue compared to 29% of total revenue in the 2021 second quarter.  

 

The variance was primarily driven by commercial marketing services, which remained below pre-pandemic levels.

 

Energy markets increased 1%, after increasing 11.4% in the second quarter of 2021.

 

Energy markets represented 62% of commercial revenue. Marketing services accounted for 27% of commercial revenue.

 

Key Commercial Contracts Awarded in the Second Quarter 2022

 

Notable commercial awards won in the second quarter 2022 included:

 

Energy Markets

 

A multimillion-dollar subcontract modification to continue to provide energy efficiency program implementation services for a Midwestern U.S. utility.

 

A new multimillion-dollar contract with a Western U.S. electric utility to provide agricultural energy efficiency program implementation services.

 

A multimillion-dollar contract extension with a major North American regulator of electricity and natural gas to continue the management and administration of its low-income energy support program.

 

A new contract with a mid-Atlantic U.S. utility to support demand-side management programs.

 

Marketing Services and Other

 

A new contract with a Midwestern U.S. economic development corporation to provide consulting services related to Community Development Block Grant Disaster Recovery funding.

 

Renewal of a retainer to continue providing public relations services to a global premium beverages company.

 

A contract modification with a U.S. financial services corporation to provide inventory valuation services for an airline holding company.

 

 

Dividend Declaration

 

On August 3, 2022, ICF declared a quarterly cash dividend of $0.14 per share, payable on October 13, 2022, to shareholders of record on September 9, 2022.

 

 


4


 

Summary and Outlook

 

Our first half results have put us on track for substantial growth in fiscal 2022. Additionally, we completed the acquisition of SemanticBits in mid-July, which broadens ICF’s digital modernization capabilities and significantly expands our addressable market. As one of the industry's leading digital service and platform providers using open-source, SemanticBits adds to our rapidly growing capabilities in this arena, enabling us to support larger projects across federal civilian agencies and providing ICF entrée at scale to the Centers for Medicare & Medicaid Services (CMS).

 

“We have raised our full year 2022 guidance to reflect the SemanticBits acquisition and now expect service revenue to range from $1.275 billion to $1.325 billion, implying total revenue of $1.760 billion to $1.820 billion, and representing year-on-year service revenue growth of 17% at the midpoint of guidance. Adjusted EBITDA is anticipated at $186 million to $198 million, equivalent to an adjusted EBITDA margin on service revenue of 14.8% at the midpoint. Approximately one-half of the 90-basis point increase from our prior adjusted EBITA margin guidance represents the acquisition of SemanticBits, with the remainder related to a pushout of planned corporate investments. Our GAAP EPS range remains the same at $4.15 to $4.45 exclusive of year-to-date special charges amounting to $0.19 per share on a tax-effected basis, which primarily were M&A-related. The GAAP EPS guidance range incorporates the impact of non-cash rent abatement charges associated with our new headquarters totaling $7.6 million, or $0.30 per share. Non-GAAP EPS is expected to range from $5.50 to $5.80, which at the midpoint represents a year-on-year increase of 17.2%. Operating cash flow is expected to increase to $140 million in 2022.

“Over 70% of ICF’s year-to-date service revenue was derived from our key growth areas of IT modernization/digital transformation, public health, disaster management and utility consulting, as well as climate, environment and infrastructure, where we continue to anticipate strong, long-term demand. These areas also contribute to ICF’s positive impact on society and have enabled us to retain and attract like-minded people who are passionate about their work, as well as enhance our profile as a preferred acquiror of firms with similar cultures,” Mr. Wasson concluded.

 

 

 

About ICF

ICF (NASDAQ:ICFI) is a global consulting services company with approximately 8,000 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.

 

 

 


5


 

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.

 

6


 

ICF International, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

423,110

 

 

$

392,525

 

 

$

836,578

 

 

$

771,003

 

Direct costs

 

 

268,905

 

 

 

246,646

 

 

 

527,063

 

 

 

478,728

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indirect and selling expenses

 

 

114,403

 

 

 

106,178

 

 

 

231,855

 

 

 

216,160

 

Depreciation and amortization

 

 

5,063

 

 

 

4,728

 

 

 

9,901

 

 

 

9,998

 

Amortization of intangible assets

 

 

4,963

 

 

 

3,019

 

 

 

10,280

 

 

 

6,034

 

Total operating costs and expenses

 

 

124,429

 

 

 

113,925

 

 

 

252,036

 

 

 

232,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

29,776

 

 

 

31,954

 

 

 

57,479

 

 

 

60,083

 

Interest expense

 

 

(4,103

)

 

 

(2,612

)

 

 

(6,800

)

 

 

(5,295

)

Other income (expense)

 

 

98

 

 

 

(46

)

 

 

(271

)

 

 

(463

)

Income before income taxes

 

 

25,771

 

 

 

29,296

 

 

 

50,408

 

 

 

54,325

 

Provision for income taxes

 

 

7,374

 

 

 

8,984

 

 

 

14,149

 

 

 

15,662

 

Net income

 

$

18,397

 

 

$

20,312

 

 

$

36,259

 

 

$

38,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

 

$

1.08

 

 

$

1.93

 

 

$

2.05

 

Diluted

 

$

0.97

 

 

$

1.07

 

 

$

1.91

 

 

$

2.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,796

 

 

 

18,843

 

 

 

18,795

 

 

 

18,864

 

Diluted

 

 

18,954

 

 

 

19,022

 

 

 

18,991

 

 

 

19,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.28

 

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income, net of tax

 

 

(4,211

)

 

 

432

 

 

 

(1,552

)

 

 

3,212

 

Comprehensive income, net of tax

 

$

14,186

 

 

$

20,744

 

 

$

34,707

 

 

$

41,875

 

 

7


 

ICF International, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures(2)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reconciliation of Service Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

423,110

 

 

$

392,525

 

 

$

836,578

 

 

$

771,003

 

Subcontractor and other direct costs (3)

 

 

(116,791

)

 

 

(111,140

)

 

 

(225,689

)

 

 

(210,051

)

Service revenue

 

$

306,319

 

 

$

281,385

 

 

$

610,889

 

 

$

560,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

18,397

 

 

$

20,312

 

 

$

36,259

 

 

$

38,663

 

Other (income) expense

 

 

(98

)

 

 

46

 

 

 

271

 

 

 

463

 

Interest expense

 

 

4,103

 

 

 

2,612

 

 

 

6,800

 

 

 

5,295

 

Provision for income taxes

 

 

7,374

 

 

 

8,984

 

 

 

14,149

 

 

 

15,662

 

Depreciation and amortization

 

 

10,026

 

 

 

7,747

 

 

 

20,181

 

 

 

16,032

 

EBITDA

 

 

39,802

 

 

 

39,701

 

 

 

77,660

 

 

 

76,115

 

Adjustment related to impairment of long-lived assets(4)

 

 

 

 

 

 

 

 

 

 

 

303

 

Special charges related to acquisitions(5)

 

 

2,262

 

 

 

54

 

 

 

3,581

 

 

 

149

 

Special charges related to severance for staff realignment(6)

 

 

185

 

 

 

318

 

 

 

1,411

 

 

 

809

 

Special charges related to facilities consolidations and office closures(7)

 

 

 

 

 

(61

)

 

 

 

 

 

139

 

Special charges related to the transfer to our new corporate headquarters(8)

 

 

1,882

 

 

 

 

 

 

3,764

 

 

 

 

Special charges related to retirement of Executive Chair(9)

 

 

 

 

 

 

 

 

 

 

 

224

 

Total special charges

 

 

4,329

 

 

 

311

 

 

 

8,756

 

 

 

1,624

 

Adjusted EBITDA

 

$

44,131

 

 

$

40,012

 

 

$

86,416

 

 

$

77,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin Percent on Revenue(10)

 

 

9.4

%

 

 

10.1

%

 

 

9.3

%

 

 

9.9

%

EBITDA Margin Percent on Service Revenue(10)

 

 

13.0

%

 

 

14.1

%

 

 

12.7

%

 

 

13.6

%

Adjusted EBITDA Margin Percent on Revenue(10)

 

 

10.4

%

 

 

10.2

%

 

 

10.3

%

 

 

10.1

%

Adjusted EBITDA Margin Percent on Service Revenue(10)

 

 

14.4

%

 

 

14.2

%

 

 

14.1

%

 

 

13.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.97

 

 

$

1.07

 

 

$

1.91

 

 

$

2.03

 

Adjustment related to impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

0.02

 

Special charges related to acquisitions

 

 

0.12

 

 

 

 

 

 

0.19

 

 

 

0.01

 

Special charges related to severance for staff realignment

 

 

0.01

 

 

 

0.02

 

 

 

0.07

 

 

 

0.04

 

Special charges related to facilities consolidations and office closures

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Special charges related to the transfer to our new corporate headquarters

 

 

0.10

 

 

 

 

 

 

0.20

 

 

 

 

Special charges related to retirement of Executive Chair

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Amortization of intangibles

 

 

0.26

 

 

 

0.16

 

 

 

0.54

 

 

 

0.32

 

Income tax effects on amortization, special charges, and adjustments(11)

 

 

(0.13

)

 

 

(0.06

)

 

 

(0.28

)

 

 

(0.12

)

Non-GAAP EPS

 

$

1.33

 

 

$

1.19

 

 

$

2.63

 

 

$

2.32

 

 

8


 

 

(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 our acquisitions and/or potential acquisitions.

 

 

 

 

 

(6) Special charges related to severance for staff realignment: These costs are mainly due to involuntary employee termination benefits for our officers, and/or groups of employees who have been notified that they will be terminated as part of a consolidation or reorganization.

 

 

 

 

 

(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 the transfer to our new corporate headquarters:  These costs are additional rent as a result of us taking possession of our new corporate headquarters in Reston, Virginia, during the fourth quarter of 2021 while maintaining our current headquarters in Fairfax, Virginia.  We intend to complete the transition to our new corporate headquarters by the end of 2022 when our Fairfax lease ends.

 

 

 

 

 

(9) Special charges related to retirement of the former Executive Chair: Our former Executive Chair retired effective December 31, 2020. These costs relate to unvested equity awards that, as a result of his employment agreement, the departing officer was able to maintain certain equity awards beyond the date of employment.

 

 

 

 

 

(10)  EBITDA Margin Percent and Adjusted EBITDA Margin Percent were calculated by dividing the non-GAAP measure by the corresponding revenue.

 

 

 

 

 

(11) Income tax effects were calculated using an effective U.S. GAAP tax rate of 28.6% and 30.7% for the three months ended June 30, 2022 and 2021, respectively, and 28.1% and 28.8% for the six months ended June 30, 2022 and 2021, respectively.

9


 

ICF International, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except share and per share amounts)

 

June 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,063

 

 

$

8,254

 

Restricted cash

 

 

2,401

 

 

 

12,179

 

Contract receivables, net

 

 

218,807

 

 

 

237,684

 

Contract assets

 

 

190,506

 

 

 

137,867

 

Prepaid expenses and other assets

 

 

23,196

 

 

 

42,354

 

Income tax receivable

 

 

11,979

 

 

 

10,825

 

Total Current Assets

 

 

452,952

 

 

 

449,163

 

Property and Equipment, net

 

 

70,689

 

 

 

52,053

 

Other Assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

1,043,908

 

 

 

1,046,760

 

Other intangible assets, net

 

 

69,178

 

 

 

79,645

 

Operating lease - right-of-use assets

 

 

164,602

 

 

 

177,417

 

Other assets

 

 

49,473

 

 

 

44,496

 

Total Assets

 

$

1,850,802

 

 

$

1,849,534

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

15,000

 

 

$

10,000

 

Accounts payable

 

 

99,365

 

 

 

105,652

 

Contract liabilities

 

 

24,612

 

 

 

39,665

 

Operating lease liabilities - current

 

 

26,267

 

 

 

34,901

 

Accrued salaries and benefits

 

 

86,583

 

 

 

85,517

 

Accrued subcontractors and other direct costs

 

 

44,946

 

 

 

39,400

 

Accrued expenses and other current liabilities

 

 

45,102

 

 

 

61,496

 

Total Current Liabilities

 

 

341,875

 

 

 

376,631

 

Long-term Liabilities:

 

 

 

 

 

 

 

 

Long-term debt

 

 

435,075

 

 

 

411,605

 

Operating lease liabilities - non-current

 

 

185,970

 

 

 

191,805

 

Deferred income taxes

 

 

47,643

 

 

 

41,913

 

Other long-term liabilities

 

 

20,822

 

 

 

24,110

 

Total Liabilities

 

 

1,031,385

 

 

 

1,046,064

 

 

 

 

 

 

 

 

 

 

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; 23,705,062 and 23,535,671 shares issued at June 30, 2022 and December 31, 2021, respectively; 18,818,604 and 18,876,490 shares outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

23

 

 

 

23

 

Additional paid-in capital

 

 

393,224

 

 

 

384,984

 

Retained earnings

 

 

680,323

 

 

 

649,298

 

Treasury stock, 4,886,458 and 4,659,181 shares at June 30, 2022 and December 31, 2021, respectively

 

 

(241,566

)

 

 

(219,800

)

Accumulated other comprehensive loss

 

 

(12,587

)

 

 

(11,035

)

Total Stockholders’ Equity

 

 

819,417

 

 

 

803,470

 

Total Liabilities and Stockholders’ Equity

 

$

1,850,802

 

 

$

1,849,534

 

 

10


 

ICF International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

 

Six Months Ended

 

 

 

June 30,

 

(in thousands)

 

2022

 

 

2021

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

Net income

 

$

36,259

 

 

$

38,663

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

(Recovery of) provision for credit losses

 

 

(172

)

 

 

7,782

 

Deferred income taxes

 

 

4,741

 

 

 

2,489

 

Non-cash equity compensation

 

 

6,507

 

 

 

6,163

 

Depreciation and amortization

 

 

20,181

 

 

 

16,032

 

Facilities consolidation reserve

 

 

(156

)

 

 

(148

)

Amortization of debt issuance costs

 

 

617

 

 

 

309

 

Impairment of long-lived assets

 

 

 

 

 

303

 

Other adjustments, net

 

 

868

 

 

 

1,365

 

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

 

 

 

 

 

 

 

 

Net contract assets and liabilities

 

 

(71,612

)

 

 

(13,698

)

Contract receivables

 

 

17,520

 

 

 

(29,070

)

Prepaid expenses and other assets

 

 

(5,758

)

 

 

(3,108

)

Operating lease assets and liabilities, net

 

 

(997

)

 

 

(3,361

)

Accounts payable

 

 

(5,801

)

 

 

3,667

 

Accrued salaries and benefits

 

 

1,512

 

 

 

2,738

 

Accrued subcontractors and other direct costs

 

 

6,754

 

 

 

(37,035

)

Accrued expenses and other current liabilities

 

 

(3,253

)

 

 

20,619

 

Income tax receivable and payable

 

 

(1,572

)

 

 

(7,193

)

Other liabilities

 

 

771

 

 

 

(176

)

Net Cash Provided by Operating Activities

 

 

6,409

 

 

 

6,341

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Capital expenditures for property and equipment and capitalized software

 

 

(11,026

)

 

 

(7,475

)

Proceeds from working capital adjustments related to prior business acquisition

 

 

2,911

 

 

 

 

Net Cash Used in Investing Activities

 

 

(8,115

)

 

 

(7,475

)

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

Advances from working capital facilities

 

 

869,529

 

 

 

382,552

 

Payments on working capital facilities

 

 

(838,259

)

 

 

(364,395

)

Receipt of restricted contract funds

 

 

10,967

 

 

 

75,158

 

Payment of restricted contract funds

 

 

(20,550

)

 

 

(117,399

)

Debt issue costs

 

 

(4,776

)

 

 

 

Proceeds from exercise of options

 

 

194

 

 

 

2,773

 

Dividends paid

 

 

(5,280

)

 

 

(5,284

)

Net payments for stock issuances and buybacks

 

 

(20,778

)

 

 

(18,365

)

Payments on business acquisition liabilities

 

 

(121

)

 

 

(682

)

Net Cash Used in Financing Activities

 

 

(9,074

)

 

 

(45,642

)

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

 

 

(1,189

)

 

 

699

 

 

 

 

 

 

 

 

 

 

Decrease in Cash, Cash Equivalents, and Restricted Cash

 

 

(11,969

)

 

 

(46,077

)

Cash, Cash Equivalents, and Restricted Cash, Beginning of Period

 

 

20,433

 

 

 

81,987

 

Cash, Cash Equivalents, and Restricted Cash, End of Period

 

$

8,464

 

 

$

35,910

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$

6,473

 

 

$

5,319

 

Income taxes

 

$

12,373

 

 

$

20,714

 

Non-cash investing and financing transactions:

 

 

 

 

 

 

 

 

Tenant improvements funded by lessor

 

$

20,243

 

 

$

 

 

11


 

ICF International, Inc. and Subsidiaries

Supplemental Schedule(12)

 

Revenue by client markets

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Energy, environment, and infrastructure

 

 

38

%

 

 

43

%

 

 

38

%

 

 

43

%

Health, education, and social programs

 

 

49

%

 

 

43

%

 

 

50

%

 

 

42

%

Safety and security

 

 

8

%

 

 

7

%

 

 

7

%

 

 

8

%

Consumer and financial

 

 

5

%

 

 

7

%

 

 

5

%

 

 

7

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by client type

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

U.S. federal government

 

 

53

%

 

 

46