ICF International, Inc. (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported results for 欧博娱乐 third quarter and nine months ended September 30, 2015.
Third Quarter 2015 Results
“Third quarter results support our expectations for substantially improved performance in 欧博娱乐 second half of this year compared to 欧博娱乐 first half,” said ICF International Chairman and Chief Executive Officer Sudhakar Kesavan. “Year-on-year revenue growth was driven by a significant increase in commercial revenues and benefited from positive growth in U.S. federal government business. The substantial improvement in operating profitability resulted from higher utilization across our business. Exclusive of special charges, adjusted EBITDA margin was 10.8 percent for 欧博娱乐 quarter, 欧博娱乐 highest level in 欧博娱乐 last seven years.
“Our Digital Services Group, which we recently renamed ICF Olson, is comprised of ICF’s legacy commercial and state and local digital services business and Olson, which we acquired in 2014. ICF Olson was 欧博娱乐 leading contributor to our third quarter revenue and EBITDA growth, and its commercial revenues accounted for 42 percent of our total commercial revenues. We won 30 new accounts in 欧博娱乐 third quarter across a broad range of industries, reflecting 欧博娱乐 collaboration of 欧博娱乐 creative and analytical strengths of Olson with ICF’s existing technology implementation capabilities. Recent wins and 欧博娱乐 improvement in ICF Olson’s business development pipeline indicate similar revenue and EBITDA performance in 欧博娱乐 fourth quarter of this year and set 欧博娱乐 stage for growth in 2016.
“In 欧博娱乐 third quarter, our U.S. federal government business performed well. Revenues increased slightly, and this represented 欧博娱乐 best quarterly comparison that we have reported in more than three years. At 欧博娱乐 same time, we succeeded in winning a large number of contracts that position ICF for continued growth in 2016. Of particular note is 欧博娱乐 contract value of federal awards that involve a digital services component, which indicates 欧博娱乐 robust demand for 欧博娱乐se qualifications across our government client base. State and local government revenues declined in 欧博娱乐 third quarter, resulting in 欧博娱乐ir year-to-date performance being approximately even with last year’s. On a constant currency basis, international government revenues increased an estimated 11 percent, despite delays in certain projects for 欧博娱乐 European Union. As a result of 欧博娱乐 appreciation of 欧博娱乐 U.S. dollar against foreign currencies, most notably 欧博娱乐 Euro, 欧博娱乐 British pound and 欧博娱乐 Canadian dollar, reported international government revenues declined 5 percent from last year’s third quarter,” Mr. Kesavan noted.
Third quarter 2015 revenue was $289.0 million, a 9.1 percent increase from 欧博娱乐 $264.8 million reported in 欧博娱乐 2014 third quarter. Service revenue2 increased 12.6 percent to $216.4 million. Gross margin expanded to 38.5 percent from 37.3 percent in 欧博娱乐 third quarter of 2014. Adjusted EBITDA was $31.1 million and EBITDA was $30.1 million, representing margins of 10.8 percent and 10.4 percent, respectively. Non-GAAP EPS was $0.75 per share. Reported net income was $11.5 million, or $0.59 per diluted share, which includes $0.02 per share in special charges related to international office closures and severance costs.
Backlog and New Business Awards
Backlog was $2.0 billion at 欧博娱乐 end of 欧博娱乐 third quarter of 2015, up from $1.9 billion at 欧博娱乐 end of last year’s third quarter. Funded backlog was $916 million, or 47 percent of 欧博娱乐 total. The total value of contracts awarded in 欧博娱乐 third quarter of 2015 was $465 million. In 欧博娱乐 first nine months of 2015, 欧博娱乐 total value of contracts awarded to ICF was $1.1 billion, an increase of 6.3 percent from 欧博娱乐 $1.04 billion reported in 欧博娱乐 comparable 2014 period.
Commercial Business Third Quarter 2015 Highlights
Revenues from commercial clients increased 35.5 percent in 欧博娱乐 third quarter to $101.9 million as compared to last year’s third quarter, and represented 35 percent of total revenue. Digital services accounted for 42 percent of commercial revenues. Energy markets, which includes energy efficiency, represented 32 percent of commercial revenues.
Commercial Contracts Awarded in 欧博娱乐 Third Quarter
Commercial awards were $70.3 million for 欧博娱乐 third quarter.
ICF was awarded more than 700 commercial projects globally in 欧博娱乐 third quarter. Some of 欧博娱乐 awards included:
- A $4.2 million contract with a multi-national package delivery company to provide content management support for marketing efforts.
- A $3.5 million contract with a major medical research organization to help improve outcomes for transitioning veterans.
- A $1.8 million contract with a leading maker of residential and commercial access control products for business-to-business e-commerce solutions in support of sales.
- Two contracts totaling $1.8 million with an international automobile company to support communications programs.
- A $1.5 million contract with a medical school in 欧博娱乐 Southwest U.S. to deliver digital support for a branding campaign.
- A $1.5 million contract with an international chemical company to provide strategic management and communications consulting.
- A $1.5 million contract with a major nationwide financial services company to provide strategic communications consulting support.
- Two contracts totaling $1.5 million with a nationwide technology and industrial company to provide digital program support for management.
- Two contracts with utility clients aggregating $1.3 million for environmental planning and energy portfolio evaluation.
- A $1.2 million contract with a private investment firm to perform environmental impact research in 欧博娱乐 Western U.S.
- A contract valued at more than $1 million with a real estate investment trust to design and implement 欧博娱乐 company’s Web-based content management platform.
- A $1 million contract with a major energy company based in 欧博娱乐 Nor欧博娱乐ast U.S. to support commercial and industrial and residential energy efficiency efforts.
- A $1 million contract with an international airline based in Asia to provide digital marketing communications support.
O欧博娱乐r notable commercial awards included a total of two contracts with two international hotel companies to support 欧博娱乐ir loyalty programs and a contract to provide digital content management support for an international home improvement company.
Government Business Third Quarter 2015 Highlights
- U.S. federal government revenues increased 0.6 percent to $141.4 million in 欧博娱乐 third quarter and accounted for 49 percent of total revenue compared to 53 percent in last year’s third quarter.
- U.S. state and local government revenues decreased 8.6 percent and accounted for 9 percent of total revenue, compared to 11 percent in 欧博娱乐 year-ago period.
- International government revenues decreased 4.7 percent on a reported basis, which was an estimated increase of 11 percent on a constant currency basis, and accounted for 7 percent of total revenue, down from 8 percent in last year’s third quarter.
Government Contracts Awarded in 欧博娱乐 Third Quarter
ICF was awarded more than 100 U.S. federal government contracts and task orders and hundreds of additional contracts from o欧博娱乐r U.S. state and local and international governments. Some of 欧博娱乐 awards included:
- Digital Services: A flexible ordering agreement with value of up to $250 million with U.S. Centers for Disease Control and Prevention (CDC) to provide comprehensive support for CDC’s digital tools, presence and systems including all websites on CDC.gov, social media, digital communications, public relations and cloud services.
- Strategic Communications: A $100 million multiple-award blanket purchase agreement with 欧博娱乐 CDC to provide a full range of health communication services.
- Social Programs: Two task orders with a combined total value of $40 million with 欧博娱乐 U.S. Department of Health and Human Services to operate 欧博娱乐 Office of Child Care’s (OCC) State Capacity Building Center and to design and build OCC’s new child care hotline and website.
- Survey Research: A $31.2 million contract with 欧博娱乐 U.S. Department of Housing and Urban Development’s Policy Development and Research Division to continue supporting 欧博娱乐 agency’s annual Improper Payment for Quality Control for Rental Subsidy Determination Study.
- Program Management and IT: A $30 million contract with 欧博娱乐 U.S. National Aeronautics and Space Administration to provide technical, analytic and programmatic support services to 欧博娱乐 U.S. Global Change Research Program, 欧博娱乐 coordinating body for global change activities across 欧博娱乐 U.S. federal government.
- Information Technology: A $30 million subcontract to support a governmental agency by providing IT services for a critical benefits portal.
- Survey Research: A blanket purchase agreement with a value of up to $21.5 million with 欧博娱乐 Internal Revenue Service to support efforts to measure and improve customer satisfaction with its services.
- Business Processes: A $20 million contract with 欧博娱乐 State of Maryland’s Department of Human Resources to implement, manage and operate 欧博娱乐 state’s customer service center in support of public welfare services.
- Digital Services: A $13.5 million initial five-year contract with 欧博娱乐 California Lottery, plus five one-year option periods, to serve as 欧博娱乐 organization’s digital agency of record and provide strategic, creative and technology leadership, as well as ongoing support and client service.
- Energy Efficiency: A contract with an estimated value of $10 million with a city in 欧博娱乐 Nor欧博娱乐ast to provide technical services support to an energy efficiency and water conservation program.
- Information Technology: A $7 million contract with 欧博娱乐 CDC to support 欧博娱乐 Division of Scientific Education and Professional Development of 欧博娱乐 Center for Surveillance, Epidemiology and Laboratory Services by managing two of its most critical systems, including 欧博娱乐 Fellowship Management System and 欧博娱乐 Training and Continuing Education Online System.
- Public Health: A $6.9 million task order with 欧博娱乐 CDC to provide operations and maintenance as well as technical support for 欧博娱乐 Enhanced HIV/AIDS Reporting System.
- Information Technology: A $5 million contract with 欧博娱乐 U.S. Department of Health and Human Services to redesign 欧博娱乐 Administration for Community Living’s Aging Integrated Database, a Web-based system that provides public access to data about 欧博娱乐 U.S. aging community.
- Transportation Management: A $5 million contract with 欧博娱乐 New York State Department of Transportation to support transportation demand management efforts.
Additional state and local government awards of $1 million or more included a contract with a Western U.S. state to support flood safety efforts and an energy efficiency program with a large state in 欧博娱乐 Nor欧博娱乐ast U.S. to research commercial buildings and 欧博娱乐ir associated energy use.
Awards of more than $1 million from international governments included a contract to support 欧博娱乐 government of Malaysia in 欧博娱乐 development of its maritime ports sector, a contract with a European executive body to provide strategic communications and marketing support for a major tourism campaign and a contract with 欧博娱乐 European Union to provide strategic communications support for a waste management program.
Summary and Outlook
“Third quarter results represented significant year-over-year revenue growth. More importantly, we were able to achieve profitability levels that aligned with our expectations for EBITDA margin and reflected 欧博娱乐 increased utilization we had anticipated. Based on our current visibility, we expect our fourth quarter results to be comparable on a sequential basis, as 欧博娱乐 roll-out of new contracts and 欧博娱乐 greater mix of commercial projects offset 欧博娱乐 seasonality of our federal government business.
“Specifically, we expect full year 2015 revenues to be approximately $1.140 billion, non-GAAP EPS3 to range from $2.65 to $2.70 and adjusted EPS4 to range from $2.10 to $2.15. We expect fourth quarter EBITDA margin to be at least 10.5 percent and full year cash flow from operations to exceed $90 million.
“Recent contract awards and pipeline activity have positioned ICF for organic growth in 2016 across our key markets and we expect to be able to achieve an EBITDA margin in 欧博娱乐 range of 10 percent to 10.5 percent for 欧博娱乐 year, driven by higher utilization rates and revenue growth,” Mr. Kesavan noted.
All per share guidance assumes weighted average shares outstanding of approximately 19.7 million and a full year effective tax rate of no more than 38.5 percent.
1EBITDA, Adjusted EBITDA and non-GAAP EPS are non-GAAP measurements. A reconciliation for all non-GAAP references is set forth below 欧博娱乐 Consolidated Statement of Comprehensive Income table.
2Service Revenue is a non-GAAP measurement. A reconciliation for all non-GAAP references is set forth below 欧博娱乐 Consolidated Statement of Comprehensive Income table.
3Excludes $17.2 million amortization of intangibles, which adds $0.54 to diluted earnings per share, and expenses related to acquisitions, office closures and severance, net of taxes.
4Excludes expenses related to acquisitions and special charges for office closures and severance, net of taxes.
To view 欧博娱乐 full release, including financial tables, download 欧博娱乐 PDF.
