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ICF International Reports First Quarter 2016 Results

First Quarter Highlights

  • Total Revenue Increased 4 Percent to $284 Million, Led by 7 Percent Growth in Federal Government Revenue
  • Non-GAAP EPS1 Was $0.60, up 11 Percent Year-on-Year; Diluted EPS Was $0.50, up 25 Percent Year-on-Year
  • Contract Awards Were $318 Million, 19 Percent Ahead of Last Year; TTM Contract Awards Were $1.4 Billion for a Book-to-Bill of 1.21

Fairfax VA | May 5, 2016

ICF International, Inc. (NASDAQ:ICFI), a leading provider of professional services and technology-based solutions to government and commercial clients, reported results for the first quarter ended March 31, 2016.

First Quarter 2016 Results

“Our first quarter performance puts us on track to meet our expectations for solid revenue growth and significantly higher earnings in 2016,” said ICF International Chairman and Chief Executive Officer Sudhakar Kesavan. “Earnings increased at a double-digit rate and outpaced revenue growth, benefitting from lower overhead expenses and reduced amortization costs.

“First quarter revenue growth was driven by a strong pick up in federal government business, where we have seen positive year-on-year comparisons for the last three consecutive quarters. Revenues from energy and digital interactive services performed for commercial and state and local clients, were over $80 million and in line with last year’s levels. Year-on-year comparisons for total commercial revenues primarily reflected the anticipated reduction in certain energy and infrastructure contracts and currency impacts.

“This was an excellent quarter for contract wins. In addition to an almost 20 percent year-on-year increase in total dollar value, all of our client categories posted double-digit increases in new business wins. We were awarded 16 energy efficiency contracts, and ICF Olson gained several important new projects, setting the stage for year-on-year growth in commercial revenues in line with our expectations. Our federal and international government wins were strong, reflecting our recognized domain expertise in the broad areas of energy, health and digital communications.”

First quarter 2016 revenue was $283.6 million, a 3.7 percent increase from the $273.5 million reported in the 2015 first quarter. Service revenue2 increased 1.0 percent to $212.4 million. EBITDA2  was $24.8 million, representing a 3.0 percent increase from the $24.1 million reported in the 2015 first quarter. EBITDA margins were 8.8 percent in both quarters. As previously disclosed, EBITDA performance was affected by the start-up and implementation phases of certain contracts and the weather-related federal government office closures in January, which reduced first quarter 2016 EBITDA margin by approximately 90 basis points. Non-GAAP EPS increased 11.1 percent to $0.60 per share in the 2016 first quarter compared to $0.54 in the prior year. Reported net income was $9.7 million in the 2016 first quarter, or $0.50 per diluted share, up 25.0 percent from $0.40 per diluted share in the prior year.

Backlog and New Business Awards

Total backlog was $1.9 billion at the end of the first quarter of 2016. Funded backlog was $857 million, or approximately 44 percent of the total. The total value of contracts awarded in the 2016 first quarter was $318 million compared to $266 million for the same period for the prior fiscal year. Trailing twelve months contract awards were $1.4 billion for a book-to-bill ratio of 1.21.

Government Business First Quarter 2016 Highlights

  • U.S. federal government revenues increased 6.6 percent to $137.3 million in the first quarter and accounted for 49 percent of total revenue, compared to 47 percent in last year’s first quarter.
  • U.S. state and local government revenues increased 20.5 percent, inclusive of $4.8 million of energy and digital interactive commercial-rate projects, and accounted for 11 percent of total revenue, compared to 10 percent in the year-ago period.
  • International government revenues increased approximately 1 percent on a reported basis, which was an estimated increase of 7 percent on a constant currency basis, and accounted for 6 percent of total revenue, compared to 6 percent in last year’s first quarter.

Key Government Contracts Awarded in the First Quarter

ICF was awarded more than 100 U.S. federal contracts and task orders and more than 200 additional contracts from state and local governments and international governments. The largest awards were:

  • Strategic Communications: A 32 million euro contract to support events, seminars and training sessions for the European Commission’s Executive Agency for Small and Medium Sized Enterprises.
  • Data Management: A $34.7 million contract with the U.S. Centers for Disease Control and Prevention to provide data management support to the Division of HIV/AIDS Prevention.
  • Climate Change: A $19.8 million contract with the U.S. Environmental Protection Agency to provide technical, economic and public policy analysis to support ozone and greenhouse gas initiatives.
  • Environmental Planning: Two contracts with a combined total of $16.1 million with the California Department of Transportation to provide environmental services in support of the maintenance, development and construction of proposed facilities.
  • Information Management: Two task order contracts with a combined value of $14.4 million with the U.S. Centers for Disease Control and Prevention to provide health informatics and information technology support for the Laboratory Response Network.
  • Energy Efficiency: A $12.4 million subcontract to support clean-energy and energy efficiency programs for a major public utility board in the Eastern U.S.
  • International Development: A 6 million GBP contract with the U.K. government to support efforts addressing poverty in Nigeria. 
  • Information Management: A $5.9 million contract with the U.S. Department of State to provide enterprise strategy and management support for the Bureau of Consular Affairs.
  • Program Implementation Support: A $3.6 million contract with the U.S. Department of Defense to support the global rollout of its web-based child care portal for the military. 
  • Program Support: A 2.6 million euro contract with the European Commission to support the Directorate-General for Climate Action.
  • Resilience Solutions: A $2.2 million contract with the U.S. Department of Transportation to provide resilience planning for the Federal Highway Administration’s Office of Planning.
  • Strategic Communications: A $2.1 million contract with the U.S. National Institutes of Health to provide strategic communications planning and development of state-of-the-art media products.
  • Strategic Communications: A 2 million euro contract with the European Commission’s Service for Foreign Policy Instruments to support the evolving policy agenda on issues arising from Europe 2020.

Commercial Business First Quarter 2016 Highlights

Total commercial revenues were $97.6 million compared to $101.6 million in last year’s first quarter. Additionally, revenue from energy and digital interactive commercial-rate work performed for state and local government clients was $4.8 million in this year’s first quarter, or more than 40 percent above the prior year’s levels. Revenues from energy and digital interactive services performed for commercial and state and local clients were $80.8 million, in line with last year’s levels.

Digital services accounted for 45 percent of commercial revenues. Energy markets, which includes energy efficiency, represented 32 percent of commercial revenues.

Key Commercial Contracts Awarded in the First Quarter

Commercial sales were $141 million in the first quarter and ICF was awarded more than 800 commercial projects globally in the period. The largest awards were:

Digital Services: 

  • A $4.5 million contract to support customer loyalty efforts for an international hotel company. 
  • Four contracts with a combined value of $4.1 million to provide public relations support for an international food processing company.
  • A $3.1 million contract to support customer loyalty efforts for an international retailer.
  • A $1.9 million contract to provide strategic communications consulting support with a major nationwide financial services company. 

Energy Markets: 

  • A $15.7 million contract with American Electric Power Public Service Company of Oklahoma to support residential, commercial and industrial energy efficiency programs.
  • A $9.2 million contract with Wisconsin Focus on Energy to implement a residential retailer lighting and appliance program.
  • An $8.6 million contract with a consortium of utilities in the Northeastern U.S. to support energy efficiency programs.
  • Three contracts with a combined value of $6 million with a utility in the Midwestern U.S. to support energy efficiency programs.
  • A $4 million contract with a major utility in the Western U.S. to provide environmental licensing, permitting and compliance services. 
  • A $3.2 million contract with a major utility in the Western U.S. to provide energy efficiency program support.
  • A $2.1 million contract with a major utility in the Southern U.S. to provide appliance recycling program management.

Other commercial wins with a value of at least $1 million each included: marketing program management for a medical firm; energy efficiency program management for a major utility in the Southern U.S.; brand management for an international restaurant chain; evaluation, technical assistance and training services for a multinational food manufacturing company; public relations support for an international spirits company; business consulting and technology support for a major insurance payer; brand building for an international beauty industry corporation; and digital programs support for an international sporting events organization.

Summary and Outlook 

“ICF’s diversified business portfolio positions us to take advantage of growth opportunities across our government and commercial client base. The 6.6 percent first quarter increase in federal government revenues provides a strong start to the year. Contract and project wins over the last several months have set the stage for high single digit growth in commercial revenues, demonstrating progressive improvement throughout the year, which will accelerate in the second half.
“First quarter performance supports our full year 2016 expectations for substantial earnings growth, driven by organic revenue growth, a greater mix of commercial-rate revenues, notably in energy markets and digital interactive, and higher utilization rates. We reaffirm our expectations as follows:

  • “Full year 2016 revenues to range from $1.15 billion to $1.19 billion, 3.3 percent ahead of 2015 levels at the midpoint. 
  • “Non-GAAP EPS to be $2.79 to $2.94, which represents year-on-year growth of 8.7 percent at the midpoint.
  • “Diluted EPS at $2.40 to $2.55, or $2.48 at the midpoint, up 24 percent from $2.00 in 2015. 
  • “Average EBITDA margin for full year 2016 of between 10 percent and 10.3 percent, up from 9.6 percent in 2015. 
  • “Full year cash flow from operations to be in the range of $85 million to $95 million for 2016,” Mr. Kesavan concluded.

Revenue guidance is based on exchange rates between the U.S. dollar and the euro, GBP and Canadian dollar similar to those on March 1, 2016. Per share guidance assumes weighted average shares outstanding of approximately 19.4 million and a full year effective tax rate of no more than 38.5 percent. 


1Non-GAAP EPS is a non-GAAP measurement. A reconciliation for all non-GAAP references is set forth below the Consolidated Statements of Comprehensive Income table.
2Service revenue and EBITDA are non-GAAP measurements. A reconciliation for all non-GAAP references is set forth below the Consolidated Statements of Comprehensive Income table.


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


About ICF

ICF (NASDAQ:ICFI) is a global consulting and technology services provider with more than 5,000 professionals focused on making big things possible for our clients. We are business analysts, policy specialists, technologists, researchers, digital strategists, social scientists and creatives. Since 1969, government and commercial clients have worked with ICF to overcome their toughest challenges on issues that matter profoundly to their success. Come engage with us 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; 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.

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