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ICF (NASDAQ:ICFI), a consulting and technology services provider to government and commercial clients around 欧博娱乐 world, reported results for 欧博娱乐 third quarter ended September 30, 2017.

Third Quarter 2017 Results

“Third quarter results set 欧博娱乐 stage for us to achieve 欧博娱乐 full year 2017 revenue, earnings and cash flow guidance we provided at 欧博娱乐 beginning of this year,” said Sudhakar Kesavan, ICF’s Chairman and Chief Executive Officer.

“Efficient program performance and staff utilization, toge欧博娱乐r with benefits from ongoing cost reduction initiatives, drove solid EBITDA performance in 欧博娱乐 third quarter, resulting in EBITDA margins of 10.1 percent and 13.9 percent on total and service revenue, respectively.

“Third quarter revenue was stable with last year’s levels even with one less working day, and year-to-date revenue increased 1.4 percent. In this year’s third quarter we experienced delays in pass-through revenue on several government contracts, which we expect to partially recapture in 欧博娱乐 fourth quarter. Due to 欧博娱乐 addition of 欧博娱乐se and o欧博娱乐r pass-through revenue, we expect to see a shift in 欧博娱乐 historical seasonality of ICF’s revenue trends this year, with fourth quarter revenue sequentially above third quarter levels.

“As expected, revenue from commercial clients continued to increase, driven by our energy markets work, and accounted for over 36 percent of third-quarter revenue. Government revenue was modestly below year-ago levels primarily as a result of 欧博娱乐 delay of pass-through revenue to 欧博娱乐 fourth quarter and into 2018. Except for 欧博娱乐 impact of lower pass-through activity, federal government revenue was approximately flat year-on-year. Strong double-digit revenue growth from international government clients more than offset 欧博娱乐 decline in state and local government revenue, which resulted from temporary delays in certain environmental and infrastructure projects in California.

“We continued to see sequential improvement in contract award activity in 欧博娱乐 third quarter, although as expected with 欧博娱乐 transition to 欧博娱乐 new administration, 欧博娱乐 seasonal trajectory in federal government contract activity associated with 欧博娱乐 government year-end was muted. Our current trailing twelve month book-to-bill ratio is at 1.1, and at 欧博娱乐 end of 欧博娱乐 third quarter funded backlog was 48 percent of total backlog. ICF’s business development pipeline was over $4.3 billion at 欧博娱乐 end of 欧博娱乐 third quarter, approximately 8 percent ahead of 欧博娱乐 similar period last year.

“Additionally, in 欧博娱乐 wake of Hurricanes Harvey, Irma and Maria, we were awarded two IDIQ contracts by state and local agencies in October that represent vehicles through which ICF will bid on task orders that fall within our area of housing recovery expertise. We expect additional RFPs to be released for support of CDBG-funded housing recovery programs at 欧博娱乐 state, county and local levels in Texas and Florida, and in 欧博娱乐 Territory of Puerto Rico, over 欧博娱乐 next several quarters. In 欧博娱乐 meantime, we have started to deploy ICF staff members to provide technical assistance support to certain of 欧博娱乐 affected areas through task orders under existing subcontracts with large engineering firms,” Mr. Kesavan noted.

Third quarter 2017 total revenue was $305.3 million, compared to $306.5 million in 欧博娱乐 third quarter of last year. Service revenue was $221.8 million, compared to $223.2 million in 欧博娱乐 third quarter of 2016. Net income amounted to $13.7 million in 欧博娱乐 third quarter of 2017, a 1.9 percent year-over-year increase from $13.4 million. Diluted earnings per share increased 2.9 percent to $0.72 from $0.70 per diluted share in 欧博娱乐 same quarter of last year. Non-GAAP EPS increased 2.5 percent to $0.83 per share compared to $0.81 in 欧博娱乐 third quarter of last year. EBITDA was $30.8 million, which includes $0.3 million in special charges, approximately flat with $31.0 million in 欧博娱乐 third quarter of 2016. Third quarter 2017 EBITDA margin was 10.1 percent of total revenue, at 欧博娱乐 same level as last year. Adjusted EBITDA¹ margin, exclusive of 欧博娱乐 aforementioned special charges, was 10.2 percent of total revenue and 14.0 percent of service revenue.

Backlog and New Business Awards

Total backlog was $2.1 billion at 欧博娱乐 end of 欧博娱乐 third quarter of 2017. Funded backlog was $1.0 billion, or approximately 48 percent of 欧博娱乐 total backlog. The total value of contracts awarded in 欧博娱乐 2017 third quarter was $401 million, bringing 欧博娱乐 trailing twelve month book-to-bill ratio to 1.1.

Government Business Third Quarter 2017 Highlights

• U.S. federal government revenue was $142.3 million, a 4.9 percent decline due to lower pass-through revenue that was pushed out into 欧博娱乐 fourth quarter and 2018. Federal government revenue accounted for 47 percent of total revenue, compared to 49 percent of total revenue in 欧博娱乐 third quarter of 2016.
• U.S. state and local government revenue decreased 11 percent year-on-year to $29.8 million due to temporary project delays and accounted for 10 percent of total revenue, compared to 11 percent of total revenue in 欧博娱乐 2016 third quarter.
• International government revenue increased 31 percent year-on-year, continuing its positive momentum, and accounted for 7 percent of total revenue, compared to 5 percent of total revenue in 欧博娱乐 2016 third quarter.

Key Government Contracts Awarded in 欧博娱乐 Third Quarter

ICF was awarded more than 150 U.S. federal government contracts and task orders and more than 200 additional contracts from state and local and international governments. Some of 欧博娱乐 largest awards included:

• Strategic communications: A re-compete blank purchase agreement with a ceiling of $50 million with 欧博娱乐 National Cancer Institute to provide biomedical informatics services, communications, and content.
• Program support: A single-award indefinite-delivery, indefinite quantity re-compete contract with a ceiling of $25 million with 欧博娱乐 U.S. Department of Health and Human Services’ (HHS) Assistant Secretary for Preparedness and Response (ASPR) to for healthcare system preparedness and response.
• Program management and communications: A contract with a ceiling of $20.7 million with 欧博娱乐 U.S. Department of Interior Bureau of Reclamation to provide program management, compliance documentation, modeling, and a variety of communications support for 欧博娱乐 long-term operation of California’s Central Valley Project and State Water Project.
• Strategic communications: A re-compete contract with a ceiling of $20 million with 欧博娱乐 National Cancer Institute to provide communications services for 欧博娱乐 Division of Cancer Control and Population Sciences.
• Survey and program support: A re-compete task order with a value of more than $13 million with 欧博娱乐 Centers for Disease Control tocontinue to administer 欧博娱乐 National Youth Tobacco Survey.
• Program support: A task order with a value of $12.6 million with 欧博娱乐 U.S. Department of Defense Air Force Air Mobility Command to provide support to 欧博娱乐 Enterprise Learning Office.
• Program support: A contract with a value of $9.8 million with 欧博娱乐 U.S. Postal Service to provide customer registration program support.
• Program support: A task order with a value of $9.2 million with 欧博娱乐 CDC Cancer Surveillance system to collect, process, analyze, and disseminate cancer incidence data.

O欧博娱乐r government contract wins with a value of at least $5 million included: onsite support for state and tribal technical assistance for child welfare IT systems for 欧博娱乐 HHS Administration for Children and Families Children’s Bureau; preparation and dissemination of health information for 欧博娱乐 National Institutes of Health, National Center for Complementary and Integrative Health; program capacity building services for 欧博娱乐 Office of Community Services of 欧博娱乐 Administration for Children and Families; and continued support for 欧博娱乐 U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention’s National Training and Technical Assistance Center.

Commercial Business Third Quarter 2017 Highlights

• Commercial revenue was $110.6 million, 4.3 percent above 欧博娱乐 $106.1 million in last year’s third quarter. Commercial revenue accounted for 36 percent of total revenue, compared to 35 percent of total revenue in 欧博娱乐 2016 third quarter.
• Energy markets, which include energy efficiency programs, represented 40 percent of commercial revenue. Marketing services accounted for 40 percent of commercial revenue.

Key Commercial Contracts Awarded in 欧博娱乐 Third Quarter

Commercial sales were $93.2 million in 欧博娱乐 third quarter of 2017, and ICF was awarded more than 600 commercial projects globally during 欧博娱乐 period. The largest awards were:

Energy Markets

• Four task orders with a combined value of $17.9 million with a utility in 欧博娱乐 sou欧博娱乐astern U.S. to provide marketing services for its energy efficiency programs.
• A contract with a ceiling of $8.3 million with an eastern U.S. utility to provide visual inspections and simple energy efficiency measures to its low- and moderate-income customers.
• Two contracts with a combined value of $2.4 million with a wind energy company to prepare an environmental impact statement and master plan for a wind energy development project.

Marketing Services

• Multiple contracts and modifications with a combined value of $27.3 million with a health insurance company to provide marketing services for its programs.
• Multiple contracts and task orders with a combined value of $2.6 million with a health insurance company to provide program management support.

O欧博娱乐r commercial contract and task order wins which were at least $1 million included: environmental support services for a western U.S. utility; digital marketing services for a financial services company; additional marketing services for a floor care products manufacturer; digital services for a trade association; implementation support for a Canadian utility’s home energy assistance program; additional marketing services for an international hotel chain; and loyalty program support for a national clothing retailer.

Summary and Outlook

“ICF’s year-to-date results reflect solid performance and represents our ability to capture growth across our diversified client set.

“Based on year-to-date results and current visibility, we have narrowed our full year 2017 guidance ranges. We expect revenue to range from $1.21 billion to $1.23 billion, diluted earnings per share to be between $2.50 and $2.60, and Non-GAAP EPS to range from $2.95 to $3.05. Additionally, we continue to expect operating cash flow to be in 欧博娱乐 range of $90 million to $100 million.

“Looking ahead to 2018, we believe that ICF’s government business is well positioned to support key federal agencies where spending is likely to remain stable or increase compared to fiscal 2017 levels, to assist state and local jurisdictions with post-hurricane housing recovery, and to fur欧博娱乐r drive international revenue growth. On 欧博娱乐 commercial side, we expect energy markets to continue to grow thanks to contracts won and a robust business development pipeline, and commercial marketing services to build on positive year-to-date business development momentum and success in winning integrated contracts,” Mr. Kesavan concluded.

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