ICF International Reports First Quarter 2011 Results

Total Revenue Increased 12 Percent
Operating Income Up 33 Percent
Diluted Earnings Per Share Up 39 Percent



Fairfax, Virginia, May 5, 2011 -

ICF International, Inc. (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported results for the first quarter ended March 31, 2011.

First Quarter 2011 Results and Highlights

For the first quarter, total revenue reached $194.7 million, an 11.6 percent increase over the $174.4 million reported for the 2010 first quarter. Organic revenue  growth was 10.9 percent. Net income was $7.7 million, or $0.39 per diluted share, representing a 42.5 percent increase over net income of $5.4 million, or $0.28 per diluted share, earned in the comparable 2010 period. Operating income increased 32.9 percent to $13.4 million from the $10.1 million reported in last year’s first quarter.

“ICF’s strong first quarter 2011 performance was driven by solid revenue gains across each of our markets and client categories and demonstrates our excellent competitive positioning in the high-growth areas of commercial energy and the federal health and education markets,” said Chairman and Chief Executive Officer Sudhakar Kesavan. “Profitability benefited from a 40.8 percent revenue increase in our domestic commercial business, which was driven by energy efficiency work and related performance incentives, environmental management of infrastructure projects, and a pickup in energy transaction activity.” 

“The pace of new contract wins was good, our backlog was seasonably stable and well diversified, and our pipeline exceeded $2.6 billion at the end of the first quarter,” Mr. Kesavan noted.

Backlog and New Business Awards

Backlog was $1.4 billion at the end of the 2011 first quarter. Funded backlog was $639 million, or 47 percent of the total.

The total value of contracts awarded in the first quarter of 2011 was $217 million.

Key contracts won in the first quarter included:

  • Energy Efficiency: A $36.5 million re-compete contract with the U.S. Environmental Protection Agency (EPA) to continue nearly two decades of support for the ENERGY STAR® PROGRAM. This particular contract supports the Labeling and Residential Branch of the program with a wide variety of research, marketing, information, evaluation, and management support functions.

  • Energy Efficiency: A new grant valued at up to $10 million to support global energy efficiency efforts of the U.S. Agency for International Development (USAID) through the agency’s Energy Efficiency for Clean Development Program. ICF will help USAID address energy performance and greenhouse gas mitigation at missions worldwide.

  • Energy Efficiency: A new $4.3 million contract to support another major U.S. utility. ICF’s responsibilities under the contract encompass the areas of residential energy efficiency; whole house retrofit programs; and contractor recruitment, training, and program support.

  • Health: A new multiple-award Indefinite Delivery/Indefinite Quantity (ID/IQ) contract by the U.S. Public Health Service, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services, with a capacity of $100 million. ICF is one of three winners to provide global epidemiology and strategic information services, with an emphasis on activities under the U.S. President's Emergency Plan for AIDS Relief (PEPFAR).

  • Information Technology: A new, multiple-award blanket purchase agreement valued at up to $108 million by the EPA to support the agency’s Information Technology Solutions - Business Information Strategic Support II (ITS-BISS II) program. Under the contract ICF will provide EPA’s information technology and information management policy, planning, and support services.

  • Transportation: A new ID/IQ contract by the U.S. Department of Transportation’s Volpe Transportation Systems Center valued at up to $40 million. ICF will support the National Environmental Policy Act (NEPA) of 1969 compliance area.

  • Commercial Sector: In addition to the energy efficiency projects already noted, more than 250 additional domestic and international commercial project wins in the areas of energy efficiency, power and gas market assessment, asset valuation, environmental management, and aviation.

Summary and Outlook

“First quarter results marked a strong start to 2011 for ICF and illustrated the advantages of our balanced portfolio strategy in both the government and commercial sectors,” Mr. Kesavan said. “We expect results in the seasonally stronger second quarter to continue to reflect similar business trends, with revenues in the range of $212 million to $220 million and earnings per share in the range of $0.43 to $0.47, based on approximately 19.9 million weighted average number of shares outstanding and an effective tax rate of 40.0 percent.”

“Based on funded backlog levels and our strong business development pipeline, we reaffirm our full year 2011 guidance of revenues in the range of $830 million to $865 million, which represent 10.8 percent growth at the midpoint and earnings per diluted share of $1.63 to $1.73, which represent 21.7 percent growth at the midpoint. This is based on approximately 20.1 million weighted average number of shares outstanding and an effective tax rate of 40.0 percent.”

1Organic revenue excludes revenue from acquisitions closed during the previous four quarters.

To view the full release, including financial tables, download the PDF.

ICF International, Inc. and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
(in thousands, except per share amounts)
        Three months ended
March 31,
        2011   2010
Gross Revenue $ 194,742       $ 174,438      
Direct Costs   118,221         107,559      
Operating costs and expenses:
  Indirect and selling expenses   57,926         51,030      
  Depreciation and amortization   2,761         2,668      
  Amortization of intangible assets   2,415         3,081      
    Total operating costs and expenses   63,102         56,779      
  Operating Income   13,419         10,100      
  Interest expense   (629)         (963)      
  Other income   87         19      
  Income before income taxes   12,877         9,156      
  Provision for income taxes   5,151         3,736      
  Net income $ 7,726       $ 5,420      
  Earnings per Share:
    Basic $ 0.39       $ 0.28      
    Diluted $ 0.39       $ 0.28      
  Weighted-average Shares:
    Basic   19,580         19,282      
    Diluted   19,780         19,504      
  Reconciliation of EBITDA
  Operating Income   13,419         10,100      
  Depreciation and amortization   5,176         5,749      
  EBITDA   18,595         15,849      

ICF International, Inc. and Subsidiaries
Consolidated Balance Sheets

(in thousands)
      March 31, 2011     December 31, 2010
Current Assets:          
  Cash $ 6,288   $ 3,301
  Contract receivables, net   180,816     176,963
  Prepaid expenses and other   7,423     6,995
  Income tax receivable   —      1,628
  Deferred income taxes   3,713     4,973
Total current assets   198,240     193,860
Total property and equipment, net   17,786     18,887
Other assets:          
  Goodwill   325,999     323,467
  Other intangible assets, net   24,729     26,148
  Restricted cash   1,876     3,179
  Other assets   7,676     7,278
Total assets $ 576,306   $ 572,819
Current Liabilities:          
  Accounts payable $ 24,216   $ 29,866
  Accrued salaries and benefits   44,880     40,750
  Accrued expenses   22,569     25,552
  Deferred revenue   20,931     20,034
  Income tax payable   2,615    
Total current liabilities   115,211     116,172
Long-term liabilities:          
  Long-term debt   80,000     85,000
  Deferred rent   5,944     5,142
  Deferred income taxes   8,848     10,068
  Other   4,218     3,704
Total Liabilities   214,221     220,086
Commitments and Contingencies          
Stockholders' Equity:          
  Preferred stock, par value $.001 per share; 5,000,000 shares authorized; none issued —     
  Common stock, $.001 par value; 70,000,000 shares authorized; 20     20
19,738,880 and 19,618,659 shares issued; and 19,651,969 and 19,567,571 shares outstanding as of March 31, 2011, and December 31, 2010, respectively
  Additional paid-in capital   223,140     220,891
  Retained earnings   141,363     133,637
  Treasury stock   (2,070)     (1,291)
  Accumulated other comprehensive loss   (368)     (524)
Total stockholders' equity   362,085     352,773
Total liabilities and stockholders' equity $ 576,306   $ 572,819

ICF International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)

(in thousands)
    Three months ended
    March 31,
    2011     2010
Cash flows from operating activities
Net income $ 7,726   $ 5,420
Adjustments to reconcile net income to net cash provided by operating activities:          
  Deferred income taxes   (16)     (1,222)
  (Gain) loss on disposal of fixed assets   (66)     29
  Non-cash equity compensation   1,195     1,715
  Depreciation and amortization   5,176     5,749
  Deferred rent   842     (76)
  Changes in operating assets and liabilities, net of the effect of acquisitions:          
      Contract receivables, net   (2,138)     7,265
      Prepaid expenses and other assets   (972)     496
      Accounts payable   (5,629)     (4,347)
      Accrued salaries and benefits   3,819     2,818
      Accrued expenses   (3,059)     (1,499)
      Deferred revenue   896     (2,949)
      Income tax receivable and payable   4,236     4,112
      Restricted cash   1,303     (1,013)
      Other liabilities   513     (635)
Net cash provided by operating activities   13,826     15,863
Cash flows from investing activities          
  Capital expenditures   (1,696)     (1,447)
  Capitalized software development costs   (28)     (93)
  Payments for business acquisitions, net of cash received   (4,547)    
Net cash used in investing activities   (6,271)     (1,540)
Cash flows from financing activities          
  Advances from working capital facilities   32,294     3,729
  Payments on working capital facilities   (37,294)     (13,729)
  Proceeds from exercise of options   85     408
  Tax benefits of stock option exercises and award vesting   949     192
  Net payments for stockholder issuances and buybacks   (758)     (428)
Net cash used in financing activities   (4,724)     (9,828)
  Effect of exchange rate on cash   156     (82)
Increase in cash   2,987     4,413
Cash, beginning of period   3,301     2,353
Cash, end of period $ 6,288   $ 6,766
Supplemental disclosure of cash flow information
  Cash paid during the period for:          
      Interest $ 610   $ 1,459
      Income taxes $ 328   $ 518

ICF International, Inc. and Subsidiaries
Supplemental Schedule (Unaudited)
Revenue by market Three Months Ended
March 31,
  2011     2010  
Energy, environment, and transportation 41%     40%  
Health, education, and social programs   45%     46%  
Homeland security and defense 14%     14%  
Total 100%     100%  
Revenue by client Three Months Ended
March 31,
2011     2010  
U.S. federal government 68%     72%  
U.S. state and local government 10%     10%  
Domestic commercial   17%     14%  
International 5%     4%  
Total   100%     100%  
Revenue by contract type Three Months Ended
March 31,
  2011     2010  
Time-and-materials 51%     49%  
Cost-based   22%     24%  
Fixed-price 27%     27%  
Total   100%     100%  


About ICF International

ICF International (NASDAQ:ICFI) partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment, and transportation; health, education, and social programs; and homeland security and defense markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program lifecycle, from research and analysis through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 3,700 employees serve these clients worldwide. ICF's website is

Caution Concerning Forward-looking Statements

Statements that are not historical facts and involve known and unknown risks and uncertainties are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements may concern our current expectations about our future results, plans, operations and prospects and involve certain risks, including those related to the government contracting industry generally; our particular business, including our dependence on contracts with U.S. federal government agencies; and our ability to acquire and successfully integrate businesses. These and other factors that could cause our actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of our securities filings with the Securities and Exchange Commission. The forward-looking statements included herein are only made as of the date hereof, and we specifically disclaim any obligation to update these statements in the future.

For Immediate Release

Lynn Morgen
MBS Value Partners

Betsy Brod
MBS Value Partners


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9300 Lee Highway, Fairfax, VA.