8-K
0001362004false00013620042022-11-032022-11-03

 

 

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): November 03, 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.)

 

 

 

 

 

1902 Reston Metro Plaza

 

Reston, Virginia

 

20190

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 703 934-3000

 

 

(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
Symbol(s)

 


Name of each exchange on which registered

Common Stock

 

ICFI

 

The NASDAQ Global Market

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 November 3, 2022, ICF International, Inc. (the “Company”) announced its financial results for the third quarter ended September 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 November 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 January 12, 2023 to stockholders of record as of the close of business on December 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 November 3, 2022

104

 

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

 

 


 

Exhibit Index

 

Exhibit

Number

 

Description

99.1

 

Press Release dated November 3, 2022

104

 

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

 

 


 

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: November 3, 2022

 

By:

/s/ Barry Broadus

 

 

 

Barry Broadus

 

 

 

Chief Financial Officer

 

 


EX-99.1

Exhibit 99.1

https://cdn.kscope.io/f8af9fdfbabe457a557745cf88e56907-img241278440_0.jpg  

NEWS RELEASE

ICF Reports Third Quarter 2022 Results

 

Third Quarter Highlights:

Total Revenue Was $468 Million; Service Revenue1 Was $335 Million, Up 22%
Diluted EPS Was $1.01 Inclusive of $0.28 in Tax-Effected Severance, M&A and Facility-Related Charges
Non-GAAP EPS1 Was $1.61, Up 22%
GAAP EPS and Non-GAAP EPS Include a One-Time Tax Benefit of $0.20
Adjusted EBITDA1 Was $49.8 Million; Adjusted EBITDA Margin on Service Revenue1Was 14.8%
Contract Awards Were $865 Million; TTM Contract Awards Were $2.2 Billion Representing a Book-to-Bill Ratio of 1.31

 

Business Development Pipeline Was $9.0 Billion at Quarter-End After Record Q3 Awards

 

 

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

 

RESTON, Va.— November 3, 2022 -- ICF (NASDAQ:ICFI), a global consulting and digital services provider, reported results for the third quarter ended September 30, 2022.

 

Commenting on the results, John Wasson, chair and chief executive officer, said, “Our third quarter performance reflected ICF’s excellent positioning in high-growth areas, which drove strong year-on-year revenue comparisons and resulted in record contract awards. Growth was led by our federal government, state and local government, and commercial energy client categories, where revenues increased 39%, 11.6% and 15.5%, respectively, and which together accounted for over 87% of total third quarter revenues.


 

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


 

“In the third quarter, we took strategic actions to both strengthen and streamline our capabilities as we position ICF for continued growth. We completed the acquisition of SemanticBits, which broadened our digital modernization capabilities and expanded our addressable market with their strong presence in the large and well-funded Centers for Medicare & Medicaid Services. Additionally, we announced and completed the acquisition of Blanton & Associates, Inc., an environmental consulting, planning and project management firm, which expands our environmental capabilities to support large infrastructure projects and strengthens ICF's presence in Texas, a state that is set to receive significant federal investment dollars under the recently enacted Infrastructure and Jobs Act. We also made a strategic business shift in our commercial marketing area, closing its traditional advertising and platform development offerings to maintain focus on its core loyalty programs, business transformation and integrated communications services.

 

“Third quarter adjusted EBITDA margin on service revenue was 14.8%, which is aligned with our full year margin expectations and reflected continued high utilization and our increased scale. Additionally, we continue to invest in people and technology to ensure that ICF is positioned to take full advantage of the growth opportunities we see on the horizon.

 

“This was a record third quarter for contract awards, which at $865 million represented a quarterly book-to-bill ratio of 1.85 and brought our trailing twelve-month book-to-bill ratio to 1.31. Our business development pipeline remained at near-record levels following this strong quarter of awards and is comprised of a diversified set of increasingly larger opportunities.”

 

 

Third Quarter 2022 Results

 

Third quarter 2022 total revenue increased 18.7% to $467.8 million from $394.1 million in the third quarter of 2021. Service revenue was up 21.7% year-over-year to $335.4 million from the $275.6 million reported in the prior year quarter. Net income totaled $19.1 million and diluted EPS was $1.01 per share, inclusive of $0.28 in tax-effected severance, facility-related and M&A special charges. Third quarter 2022 net income and diluted EPS included a one-time tax benefit from tax optimization strategies which equated to $0.20 per share. Net income in last year’s third quarter was $20.4 million and $1.07 per diluted share.

 

Non-GAAP EPS increased 22% to $1.61 from $1.32 per share in the comparable prior year quarter, inclusive of the one-time tax benefit from tax optimization strategies of $0.20 per share. EBITDA1was $42.2 million, 5.6% above the $39.9 million reported in the third quarter of 2021. Adjusted EBITDA was $49.8 million, a 13.6% increase from the $43.8 million reported in the comparable quarter last year. Adjusted EBITDA margin on service revenue was 14.8%, compared to 15.9% reported last year.

 

 

Backlog and New Business Awards

 

Total backlog was $3.7billion at the end of the third quarter of 2022, an increase of 17.5% sequentially, representing new awards and the addition of SemanticBits and Blanton. Funded backlog was $1.8 billion, or approximately 49% of the total backlog. The total value of contracts awarded in the 2022 third quarter was $865 million, and trailing-twelve-month contract awards totaled $2.2 billion for a book-to-bill ratio of 1.31.

 

 

2


Government Revenue Third Quarter 2022 Highlights

 

Revenue from government clients was $359.9 million, up 25.6% year-over-year.

 

U.S. federal government revenue was $271.3 million, 39% above the $195.2 million reported in the year-ago quarter. Federal government revenue accounted for 58% of total revenue, compared to 49.5% of total revenue in the third quarter of 2021.
U.S. state and local government revenue was $65.6 million, up 11.6% from the $58.8 million in last year’s third quarter. State and local government clients represented 14% of total revenue, compared to 14.9% in the third quarter of 2021.
International government revenue was $23.1 million, compared to $32.7 million in the year-ago quarter, reflecting the wind-down of a short-term project with significant pass-through revenue. International government revenue represented 4.9% of total revenue, compared to 8.3% in the third quarter of 2021.

 

Key Government Contracts Awarded in the Third Quarter 2022

 

Notable awards won in the third quarter 2022 included:

 

Digital Modernization

Two agreements with a combined value of more than $45 million with the U.S. Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) to support the agency’s data migration and website optimization efforts.
A recompete contract with a value of $32.9 million with CMS to provide ServiceNow application development and workflow design services.

Public Health

A recompete contract with a ceiling of $49.0 million with the U.S. National Institutes of Health (NIH) to provide business and professional support services.
One contract and three subcontracts with a combined value of $34.4 million to provide HHS’s Substance Abuse and Mental Health Services Administration with web management and support, evaluation services related to suicide prevention, case management and behavioral support services, and outreach for substance use disorder prevention.
A recompete task order* with a value of $17.2 million with NIH to provide digital content management, outreach and engagement support to the National Center for Complementary and Integrated Health (NCCIH).
A contract modification with a value of $15.0 million with the U.S. Agency for International Development to provide infectious disease detection and surveillance support to affected lower- and middle-income countries worldwide.
A new task order with a value of $11.6 million with the U.S. Centers for Disease Control and Prevention Center for Surveillance, Epidemiology, and Laboratory Services to support and modernize public health laboratory informatics and data exchange services for its Laboratory Response Network.

 

 

 

3


Program Implementation and Technical Support

Two recompete contracts with a combined value of $64.0 million with the HHS Administration for Children and Families Office of Child Care to continue to support the State Capacity Building Center and the National Center on Early Childhood Quality Assurance.
Two new contracts with a combined value of $33.6 million with the U.S. Department of Labor’s Bureau of International Labor Affairs to conduct supply chain research studies and provide other advisory and support services.
A contract extension with a value of $16.6 million with the Maryland Department of Human Services to continue to support its customer service center.
A new framework contract with a ceiling of $21.0 million with a directorate general of the European Commission to provide expertise and support for European cooperation in several issue areas.
A recompete contract with a value of $10.5 million with the U.S. Department of Justice Office for Victims of Crime to support the National Elder Fraud Hotline.

Disaster Management and Mitigation

A new contract with a value of $15.7 million with a Southern U.S. state to provide Federal Emergency Management Agency Public Assistance program grant management services.
A contract modification with a value of $10.4 million with the Puerto Rico Department of Housing to continue implementation of the agency’s Community Development Block Grant Disaster Recovery Home Repair, Reconstruction and or Relocation program.

Transportation, Energy and Environment

A new contract with a value of $15.5 million with the U.S. Department of the Interior's Bureau of Reclamation to provide environmental consulting services to support the long-term operation of its Central Valley and State Water projects.
A new contract with a value of $13.8 million with the department of transportation of a Southeastern U.S. state to provide transportation planning services.

 

 

Commercial Revenue Third Quarter 2022 Highlights

 

Commercial revenue was $107.8 million, compared to $107.4 million in the year-ago quarter.

Commercial revenue accounted for 23.1% of total revenue compared to 27.3% of total revenue in the 2021 third quarter.
Energy markets revenue increased 15.5% and represented 66.7% of commercial revenue.
Marketing services and aviation consulting accounted for 26.5% of commercial revenue.

 

Key Commercial Contracts Awarded in the Third Quarter 2022

 

Notable commercial awards won in the third quarter 2022 included:

 

Energy Markets

A contract modification with six Northeastern U.S. utilities to implement residential and commercial heating programs.

4


A contract modification with a Northeastern U.S. utility to provide workforce development support services related to its energy efficiency programs.
A new contract with a Midwestern U.S. utility to support a flexible load management pilot program focused on managing both behind the meter storage and water heaters to provide grid and customer benefits.

 

Marketing Services and Other

A recompete blanket purchase agreement with a not-for-profit telecommunications administration organization to modernize mission critical business functions on the Appian platform.
A new contract with a U.K.-based banking and financial services organization to support its employee engagement initiatives.
A new contract with a Middle East aerospace engineering corporation to provide advisory services to decrease aircraft ground time for maintenance.
A new contract with a new U.S. hospitality company client to provide loyalty platform services.

 

Dividend Declaration

 

On November 3, 2022, ICF declared a quarterly cash dividend of $0.14 per share, payable on January 12, 2023, to shareholders of record on December 9, 2022.

 

 

Summary and Outlook

 

“ICF’s positioning in key markets, including IT modernization/digital transformation, public health, disaster management, utility consulting and climate, environmental and infrastructure services has enhanced our growth trajectory. We are heading into 2023 with these areas accounting for over 70% of our service revenue, prior to any material benefit from recently enacted legislation, which has further expanded our addressable market. The alignment of ICF’s domain expertise and cross-cutting capabilities in these markets, together with our strong business development pipeline, underscores our confidence in 2023 being another year of significant growth for the company.

 

“Looking ahead to the fourth quarter of 2022, we expect total revenue and service revenue to be similar to third quarter levels, as the recovery in our international government and commercial marketing businesses has not yet materialized. This brings our guidance for full year 2022 service revenue to $1.275 to $1.300 billion, implying total revenue of $1.760 to $1.790 billion. We re-affirm our guidance for Adjusted EBITDA margin on service revenue to approximate 14.8%, of which approximately 40 basis points is related to the previously disclosed postponement of planned infrastructure investments to 2023. Our GAAP EPS is expected to range from $3.90 to $4.10, reflecting year-to-date special charges amounting to $0.61 per share on a tax-effected basis, which primarily were M&A- and severance-related. The GAAP EPS guidance range incorporates the impact of non-cash rent abatement charges associated with our new headquarters totaling $7.5 million, or $0.30 per share. Non-GAAP EPS is expected to be in the range of $5.70 to $5.90. We revised our operating cash flow guidance from a point estimate of $140 million to a range of $120 million to $140 million for full year 2022, reflecting timing factors affecting year-to-date collections.

 

5


“We are pleased to report that in 2022 ICF was ranked by Forbes as One of the Best Management Consulting Firms, One of the Best Employers for Diversity and One of the Best Employers for Women. This recognition is emblematic of the corporate culture we have developed at ICF, enabling us to attract and retain the best talent and making us a preferred partner and acquiror,” Mr. Wasson concluded.

 

*This project has been funded in whole or in part with federal funds from NCCIH, NCI under Task Order No. 75N91021D00022/75N91022F00001.

 

 

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.

 

 

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

467,777

 

 

$

394,060

 

 

$

1,304,355

 

 

$

1,165,063

 

Direct costs

 

 

307,295

 

 

 

254,175

 

 

 

834,358

 

 

 

732,903

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Indirect and selling expenses

 

 

118,290

 

 

 

99,940

 

 

 

350,145

 

 

 

316,100

 

Depreciation and amortization

 

 

5,297

 

 

 

4,665

 

 

 

15,198

 

 

 

14,663

 

Amortization of intangible assets

 

 

8,661

 

 

 

3,015

 

 

 

18,941

 

 

 

9,049

 

Total operating costs and expenses

 

 

132,248

 

 

 

107,620

 

 

 

384,284

 

 

 

339,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

28,234

 

 

 

32,265

 

 

 

85,713

 

 

 

92,348

 

Interest expense

 

 

(7,474

)

 

 

(2,550

)

 

 

(14,274

)

 

 

(7,845

)

Other income (expense)

 

 

887

 

 

 

81

 

 

 

616

 

 

 

(382

)

Income before income taxes

 

 

21,647

 

 

 

29,796

 

 

 

72,055

 

 

 

84,121

 

Provision for income taxes

 

 

2,542

 

 

 

9,406

 

 

 

16,691

 

 

 

25,068

 

Net income

 

$

19,105

 

 

$

20,390

 

 

$

55,364

 

 

$

59,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.01

 

 

$

1.08

 

 

$

2.94

 

 

$

3.13

 

Diluted

 

$

1.01

 

 

$

1.07

 

 

$

2.91

 

 

$

3.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,826

 

 

 

18,865

 

 

 

18,806

 

 

 

18,864

 

Diluted

 

 

19,009

 

 

 

19,061

 

 

 

19,001

 

 

 

19,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.42

 

 

$

0.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income, net of tax

 

 

(1,555

)

 

 

(1,971

)

 

 

(3,107

)

 

 

1,241

 

Comprehensive income, net of tax

 

$

17,550

 

 

$

18,419

 

 

$

52,257

 

 

$

60,294

 

 

7


ICF International, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures(2)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Reconciliation of Service Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

467,777

 

 

$

394,060

 

 

$

1,304,355

 

 

$

1,165,063

 

Subcontractor and other direct costs (3)

 

 

(132,348

)

 

 

(118,471

)

 

 

(358,037

)

 

 

(328,522

)

Service revenue

 

$

335,429

 

 

$

275,589

 

 

$

946,318

 

 

$

836,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

19,105

 

 

$

20,390

 

 

$

55,364

 

 

$

59,053

 

Other (income) expense

 

 

(887

)

 

 

(81

)

 

 

(616

)

 

 

382

 

Interest expense

 

 

7,474

 

 

 

2,550

 

 

 

14,274

 

 

 

7,845

 

Provision for income taxes

 

 

2,542

 

 

 

9,406

 

 

 

16,691

 

 

 

25,068

 

Depreciation and amortization

 

 

13,958

 

 

 

7,680

 

 

 

34,139

 

 

 

23,712

 

EBITDA

 

 

42,192

 

 

 

39,945

 

 

 

119,852

 

 

 

116,060

 

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

 

 

 

 

 

35

 

 

 

 

 

 

338

 

Special charges related to acquisitions(5)

 

 

1,940

 

 

 

3,261

 

 

 

5,521

 

 

 

3,410

 

Special charges related to staff realignment(6)

 

 

3,757

 

 

 

335

 

 

 

5,168

 

 

 

1,144

 

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

 

 

 

 

 

 

 

 

 

 

 

139

 

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

 

 

1,883

 

 

 

 

 

 

5,647

 

 

 

 

Special charges related to retirement of Executive Chair(9)

 

 

 

 

 

254

 

 

 

 

 

 

478

 

Total special charges and adjustments

 

 

7,580

 

 

 

3,885

 

 

 

16,336

 

 

 

5,509

 

Adjusted EBITDA

 

$

49,772

 

 

$

43,830

 

 

$

136,188

 

 

$

121,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin Percent on Revenue(10)

 

 

9.0

%

 

 

10.1

%

 

 

9.2

%

 

 

10.0

%

EBITDA Margin Percent on Service Revenue(10)

 

 

12.6

%

 

 

14.5

%

 

 

12.7

%

 

 

13.9

%

Adjusted EBITDA Margin Percent on Revenue(10)

 

 

10.6

%

 

 

11.1

%

 

 

10.4

%

 

 

10.4

%

Adjusted EBITDA Margin Percent on Service Revenue(10)

 

 

14.8

%

 

 

15.9

%

 

 

14.4

%

 

 

14.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

U.S. GAAP Diluted EPS

 

$

1.01

 

 

$

1.07

 

 

$

2.91

 

 

$

3.10

 

Adjustment related to impairment of long-lived assets

 

 

 

 

 

 

 

 

 

 

 

0.02

 

Special charges related to acquisitions

 

 

0.10

 

 

 

0.17

 

 

 

0.29

 

 

 

0.18

 

Special charges related to staff realignment

 

 

0.20

 

 

 

0.02

 

 

 

0.27

 

 

 

0.06

 

Special charges related to facilities consolidations and office closures

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Special charges related to the transfer to our new corporate headquarters

 

 

0.10

 

 

 

 

 

 

0.30

 

 

 

 

Special charges related to retirement of Executive Chair

 

 

 

 

 

0.01

 

 

 

 

 

 

0.03

 

Amortization of intangibles

 

 

0.46

 

 

 

0.16

 

 

 

1.00

 

 

 

0.47

 

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

 

 

(0.26

)

 

 

(0.11

)

 

 

(0.54

)

 

 

(0.23

)

Non-GAAP Diluted EPS

 

$

1.61

 

 

$

1.32

 

 

$

4.23

 

 

$

3.64

 

 

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 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 the effective tax rate, adjusted for discrete items, if any, of 29.4% and 31.6% for the three months ended September 30, 2022 and 2021, respectively, and 28.5% and 29.8% for the nine months ended September 30, 2022 and 2021, respectively.

 

9


ICF International, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except share and per share amounts)

 

September 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

8,483

 

 

$

8,254

 

Restricted cash

 

 

1,993

 

 

 

12,179

 

Contract receivables, net

 

 

282,271

 

 

 

237,684

 

Contract assets

 

 

196,811

 

 

 

137,867

 

Prepaid expenses and other assets

 

 

30,612

 

 

 

42,354

 

Income tax receivable

 

 

11,979

 

 

 

10,825

 

Total Current Assets

 

 

532,149

 

 

 

449,163

 

Property and Equipment, net

 

 

85,295

 

 

 

52,053

 

Other Assets:

 

 

 

 

 

 

Goodwill

 

 

1,190,450

 

 

 

1,046,760

 

Other intangible assets, net

 

 

135,932

 

 

 

79,645

 

Operating lease - right-of-use assets

 

 

163,438

 

 

 

177,417

 

Other assets

 

 

50,496

 

 

 

44,496

 

Total Assets

 

$

2,157,760

 

 

$

1,849,534

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

20,500

 

 

$

10,000

 

Accounts payable

 

 

128,528

 

 

 

105,652

 

Contract liabilities

 

 

24,599

 

 

 

39,665

 

Operating lease liabilities - current

 

 

22,959

 

 

 

34,901

 

Finance lease liabilities - current

 

 

1,779

 

 

 

 

Accrued salaries and benefits

 

 

74,766

 

 

 

85,517

 

Accrued subcontractors and other direct costs

 

 

46,610

 

 

 

39,400

 

Accrued expenses and other current liabilities

 

 

52,249

 

 

 

61,496

 

Total Current Liabilities

 

 

371,990

 

 

 

376,631

 

Long-term Liabilities:

 

 

 

 

 

 

Long-term debt

 

 

681,197

 

 

 

411,605

 

Operating lease liabilities - non-current

 

 

187,481

 

 

 

191,805

 

Finance lease liabilities - non-current

 

 

13,270

 

 

 

 

Deferred income taxes

 

 

46,449

 

 

 

41,913

 

Other long-term liabilities

 

 

19,634

 

 

 

24,110

 

Total Liabilities

 

 

1,320,021

 

 

 

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; 23,723,490 and 23,535,671 shares issued at September 30, 2022 and December 31, 2021, respectively; 18,833,688 and 18,876,490 shares outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

23

 

 

 

23

 

Additional paid-in capital

 

 

396,962

 

 

 

384,984

 

Retained earnings

 

 

696,792

 

 

 

649,298

 

Treasury stock, 4,889,802 and 4,659,181 shares at September 30, 2022 and December 31, 2021, respectively

 

 

(241,896

)

 

 

(219,800

)

Accumulated other comprehensive loss

 

 

(14,142

)

 

 

(11,035

)

Total Stockholders’ Equity

 

 

837,739

 

 

 

803,470

 

Total Liabilities and Stockholders’ Equity

 

$

2,157,760

 

 

$

1,849,534

 

 

10


ICF International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

 

Nine Months Ended

 

 

 

September 30,

 

(in thousands)

 

2022

 

 

2021

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net income

 

$

55,364

 

 

$

59,053

 

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

 

 

 

 

 

 

Provision for credit losses

 

 

91

 

 

 

11,324

 

Deferred income taxes

 

 

6,023

 

 

 

4,062

 

Non-cash equity compensation

 

 

10,023

 

 

 

9,756

 

Depreciation and amortization

 

 

34,139

 

 

 

23,712

 

Facilities consolidation reserve

 

 

(236

)

 

 

(225

)

Amortization of debt issuance costs

 

 

940

 

 

 

463

 

Impairment of long-lived assets

 

 

 

 

 

339

 

Other adjustments, net

 

 

474

 

 

 

1,818

 

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

 

 

 

 

 

 

Net contract assets and liabilities

 

 

(72,619

)

 

 

(16,381

)

Contract receivables

 

 

(31,770

)

 

 

(6,688

)

Prepaid expenses and other assets

 

 

(11,991

)

 

 

(9,224

)

Operating lease assets and liabilities, net

 

 

(1,305

)

 

 

(4,743

)

Accounts payable

 

 

23,394

 

 

 

5,653

 

Accrued salaries and benefits

 

 

(13,971

)

 

 

10,377

 

Accrued subcontractors and other direct costs

 

 

9,441

 

 

 

(36,436

)

Accrued expenses and other current liabilities

 

 

(476

)

 

 

17,002

 

Income tax receivable and payable

 

 

(1,667

)

 

 

(3,490

)

Other liabilities

 

 

742

 

 

 

(1,609

)

Net Cash Provided by Operating Activities

 

 

6,596

 

 

 

64,763

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

Capital expenditures for property and equipment and capitalized software

 

 

(17,323

)

 

 

(12,279

)

Payments for business acquisitions, net of cash acquired

 

 

(238,991

)

 

 

 

Proceeds from working capital adjustments related to prior business acquisition

 

 

2,911

 

 

 

 

Net Cash Used in Investing Activities

 

 

(253,403

)

 

 

(12,279

)

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

Advances from working capital facilities

 

 

1,358,335

 

 

 

559,830

 

Payments on working capital facilities

 

 

(1,074,888

)

 

 

(593,775

)

Receipt of restricted contract funds

 

 

13,525

 

 

 

194,504

 

Payment of restricted contract funds

 

 

(23,358

)

 

 

(227,700

)

Debt issue costs

 

 

(4,852

)