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Press Release

ICF Reports First Quarter 2018 Results

FAIRFAX, Va

May 2, 2018

First Quarter Highlights

  • Total Revenue Was $303 Million, Up 2 Percent
  • Operating Income Was Up 6 Percent
  • Diluted EPS Increased 25 Percent to $0.65; Non-GAAP EPS[1] Was Up 12 Percent to $0.77
  • Contract Awards Were $301 Million, Up 20 Percent; TTM Contract Awards Were $1.36 Billion for a Book-to-Bill of 1.1
  • Business Development Pipeline Was $4.4 Billion at Quarter-End and Continues to Increase
Lynn Morgen
AdvisIRy Partners
David Gold
AdvisIRy Partners
Sr. Director, Communications

ICF (NASDAQ:ICFI), a global consulting and digital services provider, reported results for the first quarter ended March 31, 2018.

“First quarter revenue performance was consistent with our expectations, demonstrating the benefits of our balanced mix of clients and markets served. Operating margin improved, and our business development pipeline increased sequentially, following a strong quarter of contract awards,” said Sudhakar Kesavan, ICF’s Chairman and Chief Executive Officer.

“Revenue growth reflected higher year-on-year demand from both our government and commercial client sets, led by strong results from the commercial energy and international government markets and positive year-on-year growth in commercial marketing services. Operating income increased despite significant investments in capture and proposal activities around disaster recovery opportunities.

“At the end of the 2018 first quarter, our business development pipeline was $4.4 billion. We are pleased that we are seeing opportunities where we can use our expertise on contracts funded by both the Federal Emergency Management Authority (FEMA) and the Department of Housing and Urban Development (HUD). These opportunities, as well as further clarity with respect to forthcoming RFPs from jurisdictions affected by Hurricanes Harvey, Irma and Maria, are expected to result in a considerable increase in our pipeline during this year’s second quarter,” Mr. Kesavan noted.

First Quarter 2018 Results

First quarter 2018 revenue was $302.8 million, a 2.2 percent increase from $296.3 million in the first quarter of 2017. Service revenue[1] grew 1.9 percent year-over-year to $223.9 million. Net income was $12.4 million in the first quarter, up 22.0 percent from $10.2 million in the first quarter of 2017. Diluted earnings per share amounted to $0.65, a 25.0 percent increase from $0.52 per diluted share in the prior year period.

Non-GAAP EPS increased 11.6 percent year-on-year to $0.77 per share in the first quarter of 2018, from $0.69 in the year-ago quarter. EBITDA1 was $24.3 million, compared to $23.9 million in the first quarter of 2017. Adjusted EBITDA[1] was $25.0 million compared to $25.6 million in last year’s first quarter. First quarter 2018 adjusted EBITDA margin was 11.1 percent of service revenue compared to 11.6 percent in the 2017 first quarter.

Backlog and New Business Awards

Total backlog was $1.96 billion at the end of the first quarter of 2018. Funded backlog was $1.05 billion, representing approximately half of the total backlog. The total value of contracts awarded in the 2018 first quarter was $301 million, up 20 percent year-on-year. 

Government Business Second Quarter 2017 Highlights

Revenue from government clients was $194.3 million, up 1.8 percent year-on-year.

  • U.S. federal government revenue was $133.5 million and accounted for 44 percent of total revenue, compared to 46 percent of total revenue in the first quarter of 2017.
  • U.S. state and local government revenue was $32.0 million and accounted for 10 percent of total revenue, similar to the year-ago period.
  • International government revenue was $28.8 million and accounted for 10 percent of total revenue, up from 7 percent in last year’s first quarter.

Key Government Contracts Awarded in the First Quarter

ICF was awarded more than 70 U.S. federal contracts and task orders and more than 250 additional contracts from U.S. state and local and international governments. The largest awards have an aggregate value of more than $95 million and are listed below: 

  • CybersecurityA recompete contract with the Social Security Administration to provide support for a smart card program.
  • Cybersecurity services: A task order with the U.S. Army Research Laboratory to perform full spectrum defensive cyber operations and research and development.
  • Technical assistance: Several cooperative agreements with the U.S. Department of Housing and Urban Development (HUD) to provide technical assistance services.
  • Program Support: Two contracts with the U.S. General Services Administration (GSA) to support the Administration’s IT Modernization Plan, including development and implementation of IT Centers of Excellence for customer experience and analytics.
  • Substance abuse program support: Two contracts with the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA) to provide web content management and support services
  • Environment and planning services: A recompete contract with a state transportation department in the western U.S. to support development of environmental policies.
  • Program Support: A recompete contract with the U.S. Department of Defense to provide training and outreach, system requirements development, user acceptance testing, analytics, monitoring and evaluation for a program website.
  • Program SupportTwo contract amendments with a western U.S. water authority to provide planning and execution assistance related to a water quality control program.

Select other government contract and task order wins with a value greater than $1 million included: expanded survey support services for the New York State Department of Health; program support services for the Federal Highway Administration; additional environmental and planning services for a transit authority in the western U.S.; biological monitoring for a western U.S. regional water authority; technical support services for a state energy administration; additional support to FEMA for response efforts related to Hurricanes Harvey and Irma; DevOps and analytics services for the U.S. Citizenship and Immigration Services; environmental and planning services for a California port authority; and survey services in support of two state health departments for the U.S. Centers for Disease Control.

Commercial Business First Quarter 2018 Highlights

  • Commercial revenue was $108.4 million, 2.9 percent above the $105.4 million reported in last year’s first quarter.  
  • Energy markets, which includes energy efficiency programs for utilities, represented 48 percent of commercial revenue. Marketing services accounted for 43 percent of commercial revenues

Key Commercial Contracts Awarded in the Second Quarter

Commercial sales were $126 million in the first quarter of 2018, and ICF was awarded more than 700 commercial projects globally during the period.

The Energy Markets contracts below have an aggregate value of over $30 million:

  • A contract with a North American energy agency to support expansion of its energy efficiency program implementation.
  • Multiple purchase orders with a midwestern U.S. utility to support its demand side management program.
  • Contracts with an eastern U.S. utility to support its residential and small business energy efficiency programs.
  • contract with a southwestern U.S. utility to support its residential air conditioning program.
  • contract with a southeastern U.S. utility to support the implementation of a beneficial electrification program.
  • contract with a southeastern U.S. utility to support its residential and commercial/industrial energy efficiency programs.
  • contract with a statewide energy efficiency and renewable resource program to support its ENERGY STAR retail product platform programs.

The Marketing Services contracts below have an aggregate value of over $30 million:

  • A retainer with a major U.S. rail transport system to provide ongoing loyalty program support.
  • Multiple task orders with a national beverage company to provide public relations services.
  • Retainer and multiple task orders with a manufacturer of flooring care products to provide marketing services.
  • Retainers with a confectionery manufacturer to provide marketing services.
  • Retainer and contract with a financial services company to provide loyalty, creative and strategic services for its credit card program.
  • Multiple task orders with a food company to provide public relations services for a number of its products.
  • recompete contract and paid media add-ons with a nationwide health insurer to support its Medicaid and other marketing programs.
  • A contract with a chemical conglomerate to provide digital services.

Other commercial contract wins with a value of at least $1 million included: environment and planning services for a western U.S. utility; digital services for two U.S. health insurance providers; communications services for a financial services company; public relations services for a consumer products company; strategy and creative for an organization promoting the boating lifestyle; digital services for a nationwide mortgage company; public relations retainer for a U.S. confectionery company; support for the implementation of an energy efficiency program for new homes for a southwestern U.S. utility; and loyalty creative services for a hotel group.

Dividend Payment

ICF has declared a quarterly cash dividend of $0.14 per share, payable on July 16, 2018 to shareholders of record on June 8, 2018.

Summary and Outlook

First quarter results and our business outlook underpin our confidence in ICF’s growth prospects.

For 2018, we reaffirm our current guidance of GAAP earnings per diluted share in the range of $3.25 to $3.45, exclusive of any special charges, on total revenue of $1.245 billion to $1.285 billion. The midpoint of our total revenue guidance is equivalent to 2.9 percent growth, which equates to approximately 4 percent growth in service revenue. The midpoint of our diluted EPS guidance reflects an estimated year-on-year increase of 16.7 percent, after normalizing 2017 EPS for the impact of the Tax Cuts and Jobs Act of 2017. Non-GAAP diluted EPS is expected to range from $3.60 to $3.80. Per-share guidance is based on a weighted average number of shares outstanding of 19.1 million.  Operating cash flow is expected to be in the range of $100 million to $110 million.

Full year 2018 guidance continues to contemplate no significant benefit from the increase in appropriations for federal civilian agencies included in the two-year federal government budget, given the time it takes for funds to become available to the agencies and departments.  Similarly, this year’s guidance does not include any significant new disaster recovery-related contract wins that might occur,” concluded Mr. Kesavan.


1Non-GAAP EPS, Service Revenue, EBITDA, and Adjusted EBITDA are non-GAAP measurements. A reconciliation of all non-GAAP measurements to the most applicable GAAP number is set forth below.  The presentation of non-GAAP measurements may not be comparable to other similarly titled measures used by other companies.

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

About ICF

ICF (NASDAQ:ICFI) is a global consulting services company with over 5,500 specialized experts, 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 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.