Press Release

ICF Reports Second Quarter 2016 Results

Fairfax, VA


Aug 2, 2016

Second Quarter Highlights

  • Revenue Increased 6 Percent Year-on-Year, Driven by Strong Growth in Federal Government and Commercial Energy Markets
  • Diluted EPS Was $0.55, 17 Percent Ahead of Last Year; Non-GAAP EPS was $0.69
  • Operating Cash Flow of $15.7 Million Year-to-Date, a $10.7 Million Increase over Last Year
  • Contract Awards Were $303 Million, Trailing Twelve Month Contract Awards Were over $1.3 Billion for a Book-to-Bill of 1.13

First Half Performance Supports Full Year 2016 Revenue and EPS Guidance

Lynn Morgen
AdvisIRy Partners
Betsy Brod
MBS Value Partners

ICF (NASDAQ:ICFI), a leading provider of professional services and technology-based solutions to government and commercial clients, reported results for the second quarter and first half ended June 30, 2016.

Second Quarter and First Half 2016 Results

“This was another strong quarter for ICF. Revenues increased by 5.7 percent, driven by strong growth in our federal government business and supported by solid year-on-year growth in revenues from commercial clients,” said ICF Chairman and Chief Executive Officer Sudhakar Kesavan. “First half results have caused us to now expect full year 2016 revenues to be at the high end of our guidance range. We are maintaining our GAAP earnings per share range, inclusive of year-to-date special charges.

“Our federal government revenues grew by 8.4 percent year-on-year, and each of our related markets, broadly defined as Energy, Health, and Safety & Security, showed gains over the prior year. Our commercial business performed as expected in the second quarter, with energy markets experiencing robust 8.9 percent year-on-year growth and 6.5 percent sequential growth, and digital marketing services posting another quarter of sequential growth.

“Earnings per share growth continued to outpace revenue growth, benefitting primarily from higher utilization rates, reduced amortization expenses and a lower tax rate. Pass-through revenues were 15 percent higher than anticipated, which reduced our expected EBITDA  margin by approximately 25 basis points.

“We continue to effectively leverage our domain expertise and scale in IT and digital, marketing and communications services to win new contracts, which accounted for the large majority of our second quarter awards. Our pipeline reached a record $4 billion at the end of the second quarter,” Mr. Kesavan said.

Second quarter 2016 revenue was $305.4 million, a 5.7 percent increase from the $288.9 million reported in the 2015 second quarter. Service revenue2 increased 3.2 percent to $222.4 million. Net income was $10.6 million in the 2016 second quarter, or $0.55 per diluted share, up 17.0 percent from $0.47 per diluted share in the prior year. Non-GAAP EPS increased 9.5 percent to $0.69 per share in the 2016 second quarter compared to $0.63 in the prior year. EBITDA was $26.6 million, in-line with the $26.9 million reported in the 2015 second quarter. EBITDA margin was 8.7 percent in the quarter. Adjusted EBITDA2, which excludes special charges related to international severance and office closures of $1.1 million, was $27.7 million or 9.1 percent of revenues, up from last year’s $26.9 million.  

Backlog and New Business Awards

Total backlog was $1.9 billion at the end of the second quarter of 2016. Funded backlog was $811 million, or approximately 42 percent of the total. The total value of contracts awarded in the 2016 second quarter was $303 million. Trailing twelve month contract awards were $1.3 billion for a book-to-bill ratio of 1.13.

Government Business Second Quarter 2016 Highlights

  • U.S. federal government revenues increased 8.4 percent year-on-year to $148.3 million in the second quarter of 2016 and accounted for 49 percent of total revenue, compared to 47 percent in last year’s second quarter.
  • U.S. state and local government revenues increased 16.7 percent year-on-year and accounted for 11 percent of total revenue, compared to 10 percent in the year-ago period.
  • International government revenues decreased by 14.4 percent year-on-year on a reported basis, and accounted for 6 percent of total revenue, compared to 8 percent in last year’s second quarter.

Key Government Contracts Awarded in the Second Quarter

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

The largest awards were:

  • Business Operations: A $65.7 million contract with a U.S. federal financial services agency to provide management support and business analysis services.
  • Analytic Solutions: A contract with a value up to $60 million with the U.S. National Institutes of Health to provide scientific information management and literature-based evaluations.
  • Strategic Communications: A framework contract with a value up to 26 million euros with the European Commission to develop and implement communications strategies and activities.
  • Environmental Services: Two contracts with a combined value of up to $14 million with the State of California Department of Transportation to provide environmental and biological support services.
  • Technical Assistance: An $11.2 million contract with the U.S. Department of Housing and Urban Development to support an integrated technical assistance and capacity building initiative.
  • Compliance and Security: A $9.6 million contract with the U.S. Social Security Administration to maintain and improve its security processes and oversight of offices nationwide.
  • Project Management: An $8.4 million contract with the U.S. Department of State to provide information planning and management services for the Bureau of International Narcotics and Law Enforcement.
  • Program Management: A contract with a value of up to 7 million euros with the European Commission to support establishment, organization, management and coordination of a European center of expertise.
  • Environmental Planning: A $5.6 million contract with a regional transportation authority to provide environmental impact assessment of a road widening project.
  • Strategic Communications: A $5 million task order with the U.S. Centers for Disease Control and Prevention to oversee a large-scale communications campaign.

Other notable government wins with significant value included: disaster recovery support with a state in the Northeastern U.S.; international development efforts with the U.S. Agency for International Development; digital citizen solutions support for the U.S. Federal Trade Commission; technology solutions for the Office of the Secretary of the Navy; health informatics for the U.S. Department of Health and Human Services; and program evaluation for the European Commission. 

Commercial Business Second Quarter 2016 Highlights

Commercial revenues were $103.6 million, 3.5 percent above the $100.0 million in last year’s second quarter. 

Digital services accounted for 44 percent of commercial revenues. Energy markets, which includes energy efficiency, represented 32 percent of commercial revenues.

Key Commercial Contracts Awarded in the Second Quarter

Commercial sales were $100 million in the second quarter, and ICF was awarded more than 700 commercial projects globally during the period. The largest awards were:

Digital Services: 

  • An $8.1 million contract to support digital solutions and social marketing efforts with a major healthcare services company. 
  • A $5.3 million contract to support customer loyalty and retention for a Fortune 500 company.
  • A $2.1 million contract with an international retailer to provide customer loyalty solutions.
  • A $1.6 million contract with a mortgage corporation to support website operations.

Energy Markets:

  • Three contracts with a combined value of $11 million with Kansas City Power and Light to support residential energy efficiency programs.
  • Two contracts with a combined value of $4.8 million to support environmental planning efforts and a safety initiative with a major utility in the Western U.S.
  • A $4.1 million contract with a utility in the Western U.S. to provide social listening tools and other digital services.
  • A $3.2 million contract with a major Midwestern U.S. utility to support energy efficiency programs.
  • A $3.0 million contract with a utility in the Northeastern U.S. to help manage its energy efficiency portfolio.

Other commercial wins with a value of at least $1 million each included: digital solutions for a real estate investment trust in the Midwestern U.S.; public relations support for a multinational food, snack and beverage corporation; brand support for a major regional U.S. bank; residential portfolio support for a utility in the Midwestern U.S.; and loyalty program support for a multinational retailer.

Summary and Outlook 

“We are looking ahead to a strong second half in which mid-single digit revenue growth is expected to drive continued double-digit growth in diluted earnings per share.  Based on year-to-date results and visibility, we expect full year 2016 revenue to be at the high end of our guidance range, and we are maintaining our diluted EPS guidance range, inclusive of the special charges incurred in this year’s second quarter. We expect our federal government business to grow at a mid-single digit rate, ahead of the low-single digit rate we had originally expected.  Revenues from commercial clients are expected to grow at a mid-single digit rate for the full year, driven by double-digit growth in the second half. A summary of our expectations is as follows:

  • Full year 2016 revenues at the high end of the $1.15 billion to $1.19 billion range, approximately 5 percent ahead of 2015 levels;
  • Diluted EPS at $2.40 to $2.55, or $2.48 at the midpoint, up 24.0 percent from $2.00 in 2015, inclusive of year-to-date special charges;
  • Non-GAAP EPS to be $2.79 to $2.94, which represents year-on-year growth of 8.7 percent at the midpoint; 
  • EBITDA margin for full year 2016 of between 9.7 percent and 10.0 percent, up from 9.6 percent in 2015 and reflective of higher pass-through revenues; 
  • And, full year cash flow from operations of between $85 million to $95 million for 2016,” Mr. Kesavan concluded.

Per share guidance assumes weighted average shares outstanding of approximately 19.4 million and a full year effective tax rate of no more than 38.0 percent.

1Non-GAAP EPS is a non-GAAP measurement. A reconciliation of all non-GAAP references is set forth below.
2Service revenue, EBITDA and adjusted EBITDA are non-GAAP measurements. A reconciliation of all non-GAAP references is set forth below.

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





About ICF

ICF (NASDAQ:ICFI) is a global consulting services company with approximately 7,500 full- and part-time employees, but we are not your typical consultants. At ICF, business analysts and policy specialists work together with digital strategists, data scientists and creatives. We combine unmatched industry expertise with cutting-edge engagement capabilities to help organizations solve their most complex challenges. Since 1969, public and private sector clients have worked with ICF to navigate change and shape the future. Learn more at

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