|By Business Wire||
|February 26, 2014 04:06 PM EST||
ICF International, Inc. (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported results for the full year and fourth quarter ended December 31, 2013.
Full Year 2013 Results
“Full year 2013 was representative of our differentiated business model. For the third consecutive year, commercial revenue growth significantly outpaced total revenue growth, driven by an 18 percent increase in revenues from energy efficiency clients and solid performance across our other commercial activities. International government revenues increased 44 percent year-on-year, demonstrating our ability to successfully leverage existing expertise and qualifications and integrate acquisitions to expand our pipeline and improve win rates.”
“ICF’s increased spending on business development over the last two years has yielded excellent returns on our investments. Contract awards reached a record $1.2 billion in 2013, up 21 percent year-over-year, reflecting the importance of our domain expertise in the broad areas of health and energy and the increasing number of implementation projects that we have captured as natural follow-ons to our advisory work,” said Sudhakar Kesavan, Chairman and Chief Executive Officer.
For full year 2013, revenue was $949.3 million, up 1.3 percent over the $937.1 million reported for full year 2012. Service revenue, total revenue less subcontractor and other direct costs, increased 0.6 percent to $709.8 million. EBITDA was $85.4 million; and EBITDA margin was 9.0 percent. Operating income was $64.7 million compared to the $66.2 million reported in 2012. Net income increased 3.3 percent to $39.3 million, and earnings per diluted share were $1.95, up from $1.91. Adjusted earnings per diluted share, which exclude acquisition costs, were $1.98 in 2013, up from $1.93.
ICF experienced growth across two of its three key markets in 2013. Health, Social Programs, and Consumer/Financial increased 4.0 percent, and Energy, Environment, and Infrastructure was up 1.7 percent, together accounting for 88 percent of total revenues.
“ICF’s fourth quarter results were affected by the 16-day government shutdown in October, but were in line with the guidance we provided in November,” said Mr. Kesavan. “As anticipated, our growing commercial and international government businesses, and a pick up in state and local projects, enabled us to partially offset the revenue decline related to the government closure.”
For the fourth quarter, revenue was $229.8 million, a 1.0 percent decrease from the $232.0 million reported in the 2012 fourth quarter. Service revenue decreased 0.8 percent to $171.3 million. Fourth quarter profitability was significantly impacted by the government shutdown. EBITDA was $17.7 million, and EBITDA margin was 7.7 percent. Operating income was $12.6 million, compared to the $14.5 million reported in the 2012 fourth quarter. Net income was $7.8 million, or $0.38 per diluted share compared to $9.2 million, or $0.47 per diluted share earned in the comparable 2012 period.
Backlog and New Business Awards
Backlog was $1.7 billion at the end of 2013, up 10 percent from $1.5 billion at 2012 year-end. Funded backlog was $697 million, or 42 percent of total backlog. The total value of contracts awarded in the fourth quarter of 2013 was $224 million, up 36 percent from the same period last year. The total value of contracts awarded in 2013 was $1.2 billion, up 21 percent over 2012 levels.
Commercial Business 2013 Highlights
Revenues from commercial clients increased 7 percent in 2013 to $267.9 million and represented 28 percent of total revenue, up from 27 percent in 2012. Excluding a large infrastructure project that was in a slower phase of construction in 2013, commercial revenues increased 9.7 percent. Revenues from energy efficiency clients increased 18 percent and accounted for 39 percent of commercial revenues.
Key Commercial Sales Highlights for the Fourth Quarter
Commercial sales awards were $83 million for the 2013 fourth quarter, representing 37 percent of total sales for the period, and a book-to-bill ratio of 1.2.
ICF was awarded more than 400 commercial projects globally in the fourth quarter. Individual commercial sales in excess of $1 million included:
- Eight energy efficiency contracts for U.S. Northeast, Midwest, and West Coast utilities encompassing new residential market contracts, scope expansion and extensions of existing contracts
- Environmental infrastructure support projects on the U.S. West Coast
- New interactive data applications for a utility and for a major financial institution
Primary areas of additional awards included residential as well as commercial and industrial energy efficiency projects, aviation industry consulting, management consulting for health insurers, health survey research, interactive data applications for health care insurers and large financial institutions, environmental program and compliance management, and market studies for utilities and industry associations.
Government Business 2013 Highlights
- U.S. Federal Government revenues declined 2.5 percent to $549.6 million in 2013 and accounted for 58 percent of total revenue, compared to 60 percent in 2012. Growth areas included education, public health, and international health survey research.
- U.S. state and local government revenues declined 4.7 percent and accounted for 9 percent of total revenue, compared to 10 percent in 2012.
- International government revenues increased 43.6 percent and accounted for 5 percent of total revenue, up from 3 percent in 2012, primarily reflecting recent contract wins with the European Commission and the U.K. government.
Key Government Contracts Won in the Fourth Quarter
ICF was awarded more than 100 U.S. Federal Government contracts and task orders and hundreds of additional contracts from other U.S. state and local and international governments. The largest awards included:
- Human Health Risk Assessment: A contract valued at approximately $33 million to continue to support the Environmental Protection Agency’s National Center for Environmental Assessment to conduct human health risk assessments on chemicals and other environmental stressors.
- Cybersecurity: A contract valued at nearly $20 million to continue cybersecurity and identification management support for the Social Security Administration.
- Health Informatics: A contract valued at more than $10 million with the National Science Foundation (NSF) to provide data collection, information technology, and analysis support of 11 NSF education and training grant programs.
- Clean Energy: A $6 million contract with the Environmental Protection Agency to support clean energy and climate change strategies and programs.
- European Immigration Policy: A $5 million contract with the European Commission to provide program support to the European Migration Network.
Additional individual government awards of greater than $1 million included educational simulation support for medical training for the U.S. Navy, strategic communications and software support to two offices of the National Institutes of Health, web support for two offices of the Department of Health and Human Services, information portal support for the Department of Education, program support for two offices of the Department of Transportation, and analytical support to the National Science Foundation.
Acquisitions of CITYTECH, Inc., and Mostra SA
ICF is announcing today that it has signed a definitive agreement to purchase CITYTECH, Inc., a Chicago-based digital interactive consultancy specializing in enterprise applications development, web experience management, mobile application development, cloud enablement, and managed services. For 2013, CITYTECH had annual revenues of approximately $16 million and 100 employees.
“A leading partner with Adobe, CITYTECH will add expertise to ICF’s content management capabilities. It is a complementary fit with ICF Interactive, which combines user experience, creative services, systems integration, marketing, and e-commerce services into an integrated suite of capabilities designed to meet commercial and government clients’ digital and interactive business needs,” Mr. Kesavan said.
This transaction follows ICF’s recent acquisition of Brussels-based Mostra SA, a fully-integrated communications firm with annual revenues of approximately $40 million and 140 employees. Mostra offers end-to-end, multi-channel communications solutions to assist government and commercial clients in reaching out to their stakeholders and customers. The firm is a key provider of strategic communications to European Union institutions, in particular the European Commission, and significantly increases ICF’s ability to deliver implementation services in Europe.
Summary and Outlook
“In 2013, we continued to execute effectively on our strategy to drive growth by building our commercial and international government qualifications and business wins. Since the end of the year, we have announced two acquisitions that are strategically important and expected to be accretive in 2014. Both position us to further expand our implementation activities, and Mostra will also enable us to replicate the success of our program lifecycle strategy in our international operations.”
“In 2014, we expect our commercial and international government activities to further increase as a percentage of revenues. While we will continue to invest in growth initiatives, we expect to see meaningful margin improvement coming from scale benefits, a more favorable business mix, and increased productivity.”
“In 2014, we expect to exceed the $1 billion milestone in revenues and generate EBITDA around $100 million. Based on our current portfolio of business, including the acquisitions of Mostra and CITYTECH, we expect full year 2014 revenues of $1.025 billion to $1.065 billion and earnings per diluted share of $2.27 to $2.37, based on approximately 20.2 million diluted weighted average number of shares outstanding and an effective tax rate of 38.5 percent. Our operating cash flow for 2014 is expected to be $70 million to $80 million,” Mr. Kesavan noted.
About ICF International
ICF International (NASDAQ:ICFI) provides professional services and technology solutions that deliver beneficial impact in areas critical to the world’s future. ICF is fluent in the language of change, whether driven by markets, technology, or policy. Since 1969, we have combined a passion for our work with deep industry expertise to tackle our clients’ most important challenges. We partner with clients around the globe—advising, executing, innovating—to help them define and achieve success. Our more than 4,500 employees serve government and commercial clients from more than 60 offices worldwide. ICF's website is www.icfi.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 ICF’s current expectations about its future results, plans, operations and prospects and involve certain risks, including those related to the government contracting industry generally; ICF’s particular business, including its dependence on contracts with U.S. federal government agencies; and its ability to acquire and successfully integrate businesses. These statements include those that refer to ICF’s current expectations about the acquisitions of Mostra and CITYTECH. These and other factors that could cause ICF’s actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of ICF’s securities filings with the Securities and Exchange Commission. Although ICF’s expectations are based on what management believes to be reasonable assumptions, it cannot assure the expectations reflected in this document will be achieved as they are subject to risks and uncertainties that are difficult to predict and may be outside of ICF’s control. Such risks and uncertainties include the possibility that the benefits anticipated from the Mostra and CITYTECH transactions will not be fully realized, the possibility the CITYTECH transaction may not close, and other risks in connection with both the proposed CITYTECH transaction and the integration of Mostra. The forward-looking statements included herein are only made as of the date hereof, and ICF specifically disclaims any obligation to update these statements in the future.
|ICF International, Inc. and Subsidiaries|
|Consolidated Statements of Comprehensive Income|
|(in thousands, except per share amounts)|
|Three months ended||Twelve months ended|
|December 31,||December 31,|
|Operating costs and expenses:|
|Indirect and selling expenses||68,874||64,265||272,387||263,878|
|Depreciation and amortization||2,886||2,731||11,238||9,789|
|Amortization of intangible assets||2,266||3,559||9,477||14,089|
|Total operating costs and expenses||74,026||70,555||293,102||287,756|
|Other (expense) income||(221||)||54||(12||)||(325||)|
|Income before income taxes||11,789||13,818||62,226||61,911|
|Provision for income taxes||4,033||4,599||22,896||23,836|
|Earnings per Share:|
|Other comprehensive income:|
|Foreign currency translation adjustments||248||99||251||(436||)|
|Reconciliation of non-GAAP financial measures:|
Reconciliation of Service Revenue
|Subcontractor and Other Direct Costs*||58,423||59,249||239,529||231,838|
Reconciliation of EBITDA
|Depreciation and amortization||5,152||6,290||20,715||23,878|
Reconciliation of Diluted EPS
|EPS impact of acquisition costs, net of tax||0.02||—||0.03||0.02|
* Subcontractor and Other Direct Costs exclude Direct Labor and Fringe.
** Acquisition-related expenses include expenses related to closed and anticipated-to-close acquisitions.
|ICF International, Inc. and Subsidiaries|
|Consolidated Balance Sheets|
|(in thousands, except share amounts)|
|December 31, 2013||December 31, 2012|
|Contract receivables, net||205,062||204,938|
|Prepaid expenses and other||7,847||7,608|
|Income tax receivable||4,482||11,231|
|Total current assets||226,344||238,502|
|Total property and equipment, net||30,214||28,860|
|Other intangible assets, net||12,239||21,016|
|Accrued salaries and benefits||45,994||42,264|
|Deferred income taxes||6,144||5,790|
|Total current liabilities||150,220||146,831|
|Deferred income taxes||10,780||9,081|
|Commitments and Contingencies|
|Preferred stock, par value $.001 per share; 5,000,000 shares authorized; none issued||—||—|
|Common stock, $.001 par value; 70,000,000 shares authorized; 20,617,270 and 20,171,613 shares issued; and 19,764,634 and 19,559,409 shares outstanding as of December 31, 2013, and December 31, 2012, respectively||21||20|
|Additional paid-in capital||250,698||237,262|
|Accumulated other comprehensive loss||(990||)||(1,241||)|
|Total Stockholders’ Equity||474,091||428,750|
|Total Liabilities and Stockholders’ Equity||$||700,914||$||709,721|
|ICF International, Inc. and Subsidiaries|
|Consolidated Statements of Cash Flows|
|Twelve months ended|
|Cash flows from operating activities|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Bad debt expense||112||336|
|Deferred income taxes||2,434||13,637|
|(Gain) loss on disposal of fixed assets||(15||)||122|
|Non-cash equity compensation||8,891||8,770|
|Depreciation and amortization||20,715||23,878|
|Amortization of debt issue costs||476||562|
|Changes in operating assets and liabilities, net of the effect of acquisitions:|
|Prepaid expenses and other assets||(3,619||)||(162||)|
|Accrued salaries and benefits||3,699||(4,154||)|
|Income tax receivable and payable||6,749||(10,451||)|
|Net cash provided by operating activities||81,032||87,241|
|Cash flows from investing activities|
|Capital expenditures for property and equipment and capitalized software||(14,161||)||(13,561||)|
|Payments for business acquisitions, net of cash received||(4,763||)||(9,974||)|
|Net cash used in investing activities||(18,924||)||(23,535||)|
|Cash flows from financing activities|
|Advances from working capital facilities||139,215||172,270|
|Payments on working capital facilities||(204,215||)||(212,270||)|
|Debt issue costs||—||(1,955||)|
|Proceeds from exercise of options||3,103||78|
|Tax benefits of stock option exercises and award vesting||1,213||804|
|Net payments for stockholder issuances and buybacks||(7,447||)||(11,569||)|
|Net cash used in financing activities||(68,131||)||(52,642||)|
|Effect of exchange rate changes on cash||251||(436||)|
|(Decrease) increase in cash||(5,772||)||10,628|
|Cash, beginning of period||14,725||4,097|
|Cash, end of period||$||8,953||$||14,725|
|Supplemental disclosure of cash flow information|
|Cash paid during the period for:|
|Non-cash investing and financing transactions:|
|Fair value of contingent consideration payable in connection with acquisition||$||2,842||$||—|
|ICF International, Inc. and Subsidiaries|
|Revenue by market||Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|Energy, environment, and infrastructure||41||%||40||%||39||%||39||%|
|Health, social programs, and consumer/financial||48||%||47||%||49||%||47||%|
|Public safety and defense||11||%||13||%||12||%||14||%|
|Revenue by client||Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|U.S. federal government||55||%||58||%||58||%||60||%|
|U.S. state and local government||10||%||9||%||9||%||10||%|
|Revenue by contract||Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
Oct. 21, 2016 05:15 PM EDT Reads: 2,804
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
Oct. 21, 2016 05:15 PM EDT Reads: 584
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
Oct. 21, 2016 04:30 PM EDT Reads: 3,786
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Oct. 21, 2016 04:15 PM EDT Reads: 1,476
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
Oct. 21, 2016 04:15 PM EDT Reads: 911
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
Oct. 21, 2016 04:00 PM EDT Reads: 2,680
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captu...
Oct. 21, 2016 04:00 PM EDT Reads: 1,461
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and...
Oct. 21, 2016 03:54 PM EDT Reads: 211
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining senso...
Oct. 21, 2016 03:31 PM EDT Reads: 169
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Oct. 21, 2016 03:15 PM EDT Reads: 279
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Oct. 21, 2016 03:00 PM EDT Reads: 4,357
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Oct. 21, 2016 03:00 PM EDT Reads: 11,148
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
Oct. 21, 2016 02:30 PM EDT Reads: 1,401
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...
Oct. 21, 2016 02:15 PM EDT Reads: 1,429
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, will discuss the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docke...
Oct. 21, 2016 02:15 PM EDT Reads: 2,198