ICF Reports Fourth Quarter and Full Year 2019 Results

FAIRFAX, Va., Feb. 27, 2020 /PRNewswire/ --

Fourth Quarter Highlights:

    --  Total Revenue Was $397 Million
    --  Diluted EPS Was $1.01, Inclusive of $0.09 in Special Charges(1)
    --  Non-GAAP EPS(1) Was $1.18
    --  Adjusted EBITDA Margin on Service Revenue(1) Was 14.9 Percent
    --  Contract Awards of $353 Million

Full Year Highlights:

    --  Total Revenue Was $1.48 Billion
    --  Diluted EPS Was $3.59, Inclusive of $0.24 in Special Charges
    --  Non-GAAP EPS Was $4.15
    --  Adjusted EBITDA Margin on Service Revenue Was 13.4 Percent
    --  Contract Awards of $1.5 Billion, Representing a Book-to-Bill Ratio of
        1.03
    --  Operating Cash Flow of $91 Million

Organic and Acquisition Growth Expected to Drive Double-Digit Increases in 2020 Revenue, EBITDA and Operating Cash Flow

Announces New Executive Leadership Roles

ICF (NASDAQ: ICFI), a global consulting and digital services provider, reported results for the fourth quarter and full year ended December 31, 2019.

"Growth catalysts across our client set resulted in a revenue increase of 11 percent for full year 2019, representing positive year-on-year comparisons in each of our client categories," said John Wasson, president and chief executive officer. Revenue from government clients increased at a double-digit rate, led by considerable growth in state and local government and a significant pickup in federal government work in the second half of the year. Revenue from commercial clients, which accounted for approximately 35 percent of 2019 revenue, advanced by 6 percent year-over-year, driven by growth in marketing services and energy markets, which together comprised 93 percent of commercial revenue.

"Our business mix, higher utilization and a lower tax rate led to earnings per share increasing at a faster rate than revenue for full year 2019, and we ended the year with operating cash flow of $91 million, 22 percent ahead of 2018 levels.

"Fourth quarter earnings included special charges, the majority of which represented M&A expenses related to our acquisition of ITG, which closed at the end of January. This transaction has strengthened ICF's position in the federal IT modernization arena, and we see significant revenue synergies on the horizon by combining ICF's domain expertise and contract vehicles with ITG's best-in-class qualifications and leading platform expertise.

"ICF was awarded over $1.5 billion in contract awards in 2019, of which over 70 percent represented new business, and our business development pipeline was a robust $6.5 billion at year end, supporting our expectations for significant growth in 2020," Mr. Wasson noted.


                        (1) Non-GAAP EPS, Service Revenue,
                         EBITDA, Adjusted EBITDA, and Adjusted
                         EBITDA Margin on Service Revenue are
                         non-GAAP measurements. A
                         reconciliation of all non-GAAP
                         measurements to the most applicable
                         GAAP number is set forth below.
                         Special charges are items that were
                         included within our statement of
                         operations but are not indicative of
                         ongoing performance and have been
                         presented net of applicable U.S. GAAP
                         taxes. The presentation of non-GAAP
                         measurements may not be comparable to
                         other similarly titled measures used
                         by other companies.

Fourth Quarter 2019 Results

Fourth quarter 2019 total revenue was $396.6 million, representing 5.0 percent growth over the $377.9 million reported in the fourth quarter of 2018. Service revenue(1) increased 5.1 percent year-over-year to $251.9 million, from $239.6 million. Net income amounted to $19.4 million in the 2019 fourth quarter, or $1.01 per diluted share, inclusive of $0.09 of tax-effected special charges primarily tied to M&A costs. In the 2018 fourth quarter, net income was $18.7 million, or $0.97 per diluted share, inclusive of $0.09 of tax-effected special charges.

Non-GAAP EPS was $1.18 per share, up from $1.17 per share in 2018. EBITDA(1) was $34.9 million compared to $36.9 million reported in the fourth quarter of 2018. Adjusted EBITDA(1) was $37.4 million compared to $39.4 million reported in the 2018 fourth quarter. Fourth quarter 2019 adjusted EBITDA margin on service revenue was 14.9 percent compared to 16.5 percent in the 2018 fourth quarter which was an exceptional quarter.

Full Year 2019 Results

For 2019, total revenue amounted to $1.48 billion, representing 10.5 percent growth over the $1.34 billion reported for full year 2018. Service revenue increased 8.3 percent year-over-year to $1.0 billion, from $925.8 million in 2018. Full year 2019 net income amounted to $68.9 million, or $3.59 per diluted share, inclusive of $0.24 of special charges. This compares to net income of $61.4 million, or $3.18 per diluted share for last year, inclusive of $0.17 of special charges.

Non-GAAP EPS increased 11.3 percent year-over-year to $4.15 per share from $3.73 per share. EBITDA was $129.6 million, up 8.5 percent from $119.5 million reported in 2018. Adjusted EBITDA was $134.8 million, an 8.9 percent increase over $123.7 million in 2018. The 2019 adjusted EBITDA margin on service revenue was 13.4 percent.

Backlog and New Business Awards

Total backlog was $2.4 billion at the end of the fourth quarter of 2019. Funded backlog was $1.3 billion, or approximately 53 percent of the total backlog. The total value of contracts awarded in the 2019 fourth quarter was $353.3 million. For full year 2019, contract awards were $1.52 billion, representing a book-to-bill ratio of 1.03.

Government Revenue Fourth Quarter 2019 Highlights

Revenue from government clients was $244.3 million, up 7.6 percent year-over-year.

    --  U.S. federal government revenue was $139.7 million, representing a 5.5
        percent year-over-year increase. Federal government revenue accounted
        for 35 percent of total revenue in both 2019 and 2018 fourth quarters.
    --  U.S. state and local government revenue increased by 10.9 percent
        year-on-year to $69.0 million. State and local accounted for 18 percent
        of total revenue, compared to 16 percent of total revenue in the 2018
        fourth quarter.
    --  International government revenue increased 10.0 percent year-on-year to
        $35.6 million and accounted for 9 percent of total revenue in both the
        2019 and 2018 fourth quarters.

Key Government Contracts Awarded in the Fourth Quarter

ICF was awarded more than 75 U.S. federal contracts and task orders and more than 200 additional contracts from U.S. state and local and international governments with an aggregate value of $155.2 million. Notable awards won in the fourth quarter included:

Disaster management:

    --  A contract to support the North Carolina Office of Recovery and
        Resiliency to provide implementation, program management and strategic
        communications services for the state's Community Development Block
        Grant (CDBG)-funded disaster recovery buyout program.
    --  A contract with a midwestern U.S. state to provide support for its
        disaster management CDBG mitigation planning. Subsequent to the end of
        the quarter, we were awarded a small contract with the city of Columbia,
        SC, to develop its CDBG Mitigation Action Plan.

IT modernization and digital engagement:

    --  A subcontract to support the U.S. Department of Education by providing
        software and system testing, requirements gathering and statistical
        analysis for the Free Application for Federal Student Aid (FAFSA)
        Application and Eligibility Determination System.
    --  A recompete contract with the U.S. Department of Health and Human
        Services (HHS) Substance Abuse and Mental Health Services Administration
        (SAMHSA) to provide enterprise-wide content and technical web support
        related to the enhancement and maintenance of the SAMHSA.gov website and
        other SAMHSA-related microsites, subsites and subdomains.
    --  A recompete contract with the HHS National Institutes of Health to
        provide agile software development support services for the Office of
        Extramural Research enterprise grant management systems.

Public health and survey research:

    --  A follow-on agreement with U.S. Agency for International Development and
        the President's Malaria Initiative to strengthen country systems across
        sub-Saharan Africa to generate high quality health information used to
        support actions that address malaria.
    --  Two sub-agreements to support questionnaire design, programming of
        mobile devices for data collectors and data analysis for national level
        HIV surveys in Zambia and Botswana funded by the Centers for Disease
        Control and Prevention (CDC).
    --  Two recompete contracts with the Maryland Department of Health and a
        southwestern U.S. state department of health services to administer the
        Behavioral Risk Factor Surveillance System (BRFSS) survey that collects
        data from state residents about their health-related behaviors, chronic
        health conditions and use of preventive services.

Communications and outreach:

    --  A new contract with the CDC National Diabetes Prevention Program (DPP)
        to provide marketing and communication training, technical assistance,
        materials and evaluation support to 1815/1817 grantees to increase
        enrollment and retention in the National DPP lifestyle change program
        and Diabetes Self-Management Education.

Environmental planning:

    --  A master services agreement with a western U.S. water authority to
        provide environmental planning and implementation support.

Commercial Revenue Fourth Quarter 2019 Highlights

    --  Commercial revenue was $152.4 million, up 1.0 percent from the $150.9
        million reported in last year's fourth quarter. Commercial revenue
        accounted for 38 percent of total revenue compared to 40 percent of
        total revenue in the 2018 fourth quarter.
    --  Energy markets, which include energy efficiency programs, represented 39
        percent of commercial revenue. Marketing services accounted for 54
        percent of commercial revenue.

Key Commercial Contracts Awarded in the Fourth Quarter 2019

Commercial contract awards were $198.1 million in the fourth quarter of 2019. ICF was awarded more than 700 commercial projects globally during the third quarter including:

In Energy Markets:

    --  A contract with a midwestern U.S. utility to provide program
        implementation services for its residential energy efficiency programs.
    --  Multiple task orders with a south-central U.S. utility to provide
        program implementation and energy IT services for its portfolio of
        energy efficiency programs.
    --  A contract extension with a northwestern U.S. state energy organization
        to provide energy efficiency implementation services for its existing
        buildings program.
    --  Four task orders with a southwestern U.S. utility to support turnkey
        customer programs related to energy efficiency and electric vehicles as
        part of the utility's long-term sustainability plan.
    --  Two subcontract amendments with a midwestern U.S. utility to supports
        its residential energy efficiency programs.
    --  Multiple task orders with a renewable energy company to provide
        environment and planning services.
    --  A master services agreement and task order with a North American energy
        efficiency program to provide commercial and industrial retrofit
        services.

In Marketing Services:

    --  Multiple task orders with a U.S. health insurer to provide a variety of
        marketing services for its programs.
    --  Extensions of our retainer with a U.S. rail transportation system to
        continue providing loyalty services.
    --  A retainer with a hospitality website to provide public relations and
        social media services.
    --  A task order with a global hospitality company to continue providing
        loyalty services.
    --  Multiple task orders with a financial services provider to deliver
        end-to-end communications programs across both employee and customer
        audiences.

Recent Corporate Developments

On January 31, 2020, ICF announced that it had closed its acquisition of ITG, one of the leading and fastest growing providers of IT modernization and cloud-based platform services to the U.S. federal government. This transaction significantly expands ICF's IT modernization services and adds best-in-class IT platform expertise and partnerships.

In a separate release today, ICF announced new executive leadership roles designed to ensure and support ICF's continued growth. Notably, James Morgan, chief financial officer (CFO), will assume the newly created role of executive vice president and chief of business operations. Bettina Welsh, senior vice president for finance, will become CFO. These changes are effective February 29(th).

Dividend Declaration

On February 27, 2020, ICF declared a quarterly cash dividend of $0.14 per share, payable on April 13, 2020 to shareholders of record on March 27, 2020.

2019 Recognitions

ICF received several important recognitions in 2019:

    --  For the fourth and second straight years, respectively, Forbes included
        ICF on two of its coveted annual lists: "America's Best Management
        Consulting Firms" and "America's Best Midsize Employers."
    --  ICF was named a "Fast Moving" brand by the Government Business Council
        in its 2019 Leading Brands in Government study.
    --  CDP (formerly the Climate Disclosure Project) recognized ICF for climate
        leadership by scoring our 2019 annual climate report as A-.
    --  ICF Next was named a "Strong Performer" among loyalty service providers
        by Forrester Research in The Forrester Wave(TM): Loyalty Service
        Providers, Q3 2019 and was recognized as a "Leader" in another loyalty
        report focused on technology platforms, The Forrester Wave(TM): Loyalty
        Technology Platforms, Q2 2019.
    --  ICF Next was named the Holmes Report's 2019 Digital Agency of the Year.

Summary and Outlook

"2019 was a record year for ICF, and we look forward to continued growth ahead in 2020. In government markets, our federal government business development pipeline was at record levels at 2019 year-end, and our acquisition of ITG, which closed in late January 2020, provides further visibility and additional growth opportunities. We are pleased with recent wins to provide disaster management services in new geographies and we continue to expect this area to be a long-term growth driver for ICF. In commercial markets, we have a robust energy efficiency pipeline and are engaged in several pilot programs that position ICF at the leading edge of distributed energy consulting work for utilities. Also, we continue to leverage our commercial marketing services, loyalty platforms and engagement capabilities across our client set.

"Our guidance for 2020 is based on our current backlog and portfolio of business and does not include any additional material contract wins or expansions in the disaster recovery arena, nor any material benefit from new disaster recovery-related mitigation contract awards or energy efficiency contract wins in California, all areas that represent long-term growth opportunities for ICF," Mr. Wasson noted.

For full year 2020, ICF expects revenue of $1.60 billion to $1.65 billion and EBITDA of $145.0 million to $155.0 million, representing year-on-year growth of 10 percent and 16 percent, respectively, at the midpoints. GAAP earnings per diluted share is expected to range from $3.45 to $3.75, exclusive of special charges. Non-GAAP diluted EPS is expected to range from $4.00 to $4.30. EPS guidance includes more than $0.30 per share in additional interest expense related to the ITG acquisition, as well as a higher tax rate. Per share guidance is based on a weighted average number of shares outstanding of 19.2 million. Operating cash flow is expected to be approximately $120 million, substantially ahead of 2019 levels.

Concluding, Mr. Wasson said, "The new executive leadership roles we announced today will ensure that ICF remains at the leading edge in our client work, while utilizing best practices across the company. Our growth profile and substantial bench strength enable us to leverage their leadership skills to strengthen areas that are critical to our continued success."

About ICF

ICF (NASDAQ:ICFI) is a global consulting services company with over 7,000 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 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.




                                                                                  
             
          ICF International, Inc. and Subsidiaries


                                                                               
              
         Consolidated Statements of Comprehensive Income


                                                                                              
          
                (Unaudited)




                                                            
       
       Three Months Ended                                           
              
       Twelve months ended


                                                              
       
        December 31,         
        
                December 31,




     
                (in thousands, except per share amounts)                           2019                                                                         2018       2019       2018




     Revenue                                                                     $396,636                                                                     $377,910 $1,478,525 $1,337,973



     Direct costs                                                                 264,027                                                                      249,057    953,187    857,508



     Operating costs and expenses:



     Indirect and selling expenses                                                 97,664                                                                       91,958    395,763    360,987



     Depreciation and amortization                                                  4,707                                                                        4,439     20,099     17,163



     Amortization of intangible assets                                              1,940                                                                        3,013      8,083     10,043




     Total operating costs and expenses                                           104,311                                                                       99,410    423,945    388,193






     Operating income                                                              28,298                                                                       29,443    101,393     92,272



     Interest expense                                                             (2,508)                                                                     (2,637)  (10,719)   (8,710)



     Other expense                                                                  (134)                                                                       (170)     (501)     (735)




     Income before income taxes                                                    25,656                                                                       26,636     90,173     82,827



     Provision for income taxes                                                     6,277                                                                        7,941     21,235     21,427




     Net income                                                                   $19,379                                                                      $18,695    $68,938    $61,400






     Earnings per Share:



     Basic                                                                          $1.03                                                                        $0.99      $3.66      $3.27




     Diluted                                                                        $1.01                                                                        $0.97      $3.59      $3.18






     Weighted-average Shares:



     Basic                                                                         18,835                                                                       18,838     18,816     18,797




     Diluted                                                                       19,234                                                                       19,333     19,224     19,335






     Cash dividends declared per common share                                       $0.14                                                                        $0.14      $0.56      $0.56






     Other comprehensive income (loss), net of tax                                  6,258                                                                      (4,407)       407    (6,683)




     Comprehensive income, net of tax                                             $25,637                                                                      $14,288    $69,345    $54,717


                                                                                                                                                         
              
                ICF International, Inc. and Subsidiaries


                                                                                                                                                     
              
                Reconciliation of Non-GAAP financial measures(2)


                                                                                                                                                                        
              
                (Unaudited)




                                                                                                             
              
                Three Months Ended                                                    
              
                Twelve months ended


                                                                                                                
              
                December 31,           
              
                December 31,




       
                (in thousands, except per share amounts)                                                                                           2019                                                                                           2018                                                                  2019                                       2018




       
                
                  Reconciliation of Service Revenue

    ---


       Revenue                                                                                                                                     $396,636                                                                                       $377,910                                                            $1,478,525                                 $1,337,973



       Subcontractor and other direct costs (3)                                                                                                   (144,728)                                                                                     (138,296)                                                            (475,717)                                 (412,216)



       Service revenue                                                                                                                             $251,908                                                                                       $239,614                                                            $1,002,808                                   $925,757






       
                
                  Reconciliation of EBITDA and Adjusted EBITDA

    ---


       Net income                                                                                                                                   $19,379                                                                                        $18,695                                                               $68,938                                    $61,400



       Other expense                                                                                                                                    134                                                                                            170                                                                   501                                        735



       Interest expense                                                                                                                               2,508                                                                                          2,637                                                                10,719                                      8,710



       Provision for income taxes                                                                                                                     6,277                                                                                          7,941                                                                21,235                                     21,427



       Depreciation and amortization                                                                                                                  6,647                                                                                          7,452                                                                28,182                                     27,206



       EBITDA                                                                                                                                        34,945                                                                                         36,895                                                               129,575                                    119,478



       Adjustment related to impairment of intangible assets (4)                                                                                                                                                                                                                                                         1,728



       Special charges related to acquisitions (5)                                                                                                    1,574                                                                                            748                                                                 1,771                                      1,361



       Special charges related to severance for staff realignment (6)                                                                                   453                                                                                            559                                                                 1,774                                      1,554


        Special charges related to facilities consolidations, office closures, and our future
         corporate headquarters (7)                                                                                                                      454                                                                                                                                                                 717                                        115



       Adjustment related to bad debt reserve (8)                                                                                                                                                                                                   1,240                                                                 (782)                                     1,240




       Total special charges                                                                                                                          2,481                                                                                          2,547                                                                 5,208                                      4,270



       Adjusted EBITDA                                                                                                                              $37,426                                                                                        $39,442                                                              $134,783                                   $123,748






       EBITDA Margin Percent on Revenue (9)                                                                                                            8.8%                                                                                          9.8%                                                                 8.8%                                      8.9%



       EBITDA Margin Percent on Service Revenue (9)                                                                                                   13.9%                                                                                         15.4%                                                                12.9%                                     12.9%



       Adjusted EBITDA Margin Percent on Revenue (9)                                                                                                   9.4%                                                                                         10.4%                                                                 9.1%                                      9.2%



       Adjusted EBITDA Margin Percent on Service Revenue (9)                                                                                          14.9%                                                                                         16.5%                                                                13.4%                                     13.4%





       
                
                  Reconciliation of Non-GAAP Diluted EPS

    ---


       Diluted EPS                                                                                                                                    $1.01                                                                                          $0.97                                                                 $3.59                                      $3.18



       Adjustment related to impairment of intangible assets                                                                                                                                                                                                                                                              0.09



       Special charges related to acquisitions                                                                                                         0.08                                                                                           0.04                                                                  0.10                                       0.07



       Special charges related to severance for staff realignment                                                                                      0.02                                                                                           0.03                                                                  0.09                                       0.08


        Special charges related to facility consolidations, office closures, and our future
         corporate headquarters                                                                                                                         0.02                                                                                                                                                                0.08                                       0.01



       Adjustment related to bad debt reserve                                                                                                                                                                                                        0.06                                                                (0.04)                                      0.06



       Amortization of intangibles                                                                                                                     0.10                                                                                           0.16                                                                  0.42                                       0.52



       Income tax effects on amortization, special charges, and adjustments (10)                                                                     (0.05)                                                                                        (0.09)                                                               (0.18)                                    (0.19)



       Non-GAAP EPS                                                                                                                                   $1.18                                                                                          $1.17                                                                 $4.15                                      $3.73





                     (2) These tables provide reconciliations of non-GAAP financial measures to the most applicable GAAP numbers. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered supplemental in nature and not as a substitute for financial information prepared
                      in accordance with GAAP. Other companies may define similarly titled non-GAAP measures differently and, accordingly, care should be exercised in understanding how we define these measures.





       
                (3) Subcontractor and Other Direct Costs is Direct Costs excluding Direct Labor and Fringe Costs.





       
                (4) Adjustment related to impairment of intangible assets: We recognized impairment expense of $1.7 million in the second quarter of 2019 related to intangible assets associated with a historical business acquisition.





       
                (5) Special charges related to acquisitions, consisting primarily of consultants and other outside party costs, and an increase in the contingent consideration liability from a previous acquisition.





       
                (6) Special charges related to severance for staff realignment: These costs are mainly due to involuntary employee termination benefits for our officers and groups of employees who have been notified that they will be terminated as part of a consolidation or reorganization.




                     (7) Special charges related to facility consolidations, office closures, and our future corporate headquarters: These costs are exit costs associated with terminated leases or full office closures.  The exit costs include charges incurred under a contractual obligation that existed as of the date of the accrual and for which we
                      will continue to pay until the contractual obligation is satisfied but with no economic benefit to us.  Additionally, we incurred one-time charges with respect to the execution of a new lease agreement for our corporate headquarters.




                     (8) Adjustment related to bad debt reserve: During 2018, we established a bad debt reserve for amounts due from a utility client that had filed for bankruptcy and included the reserve as an adjustment due to its relative size. The adjustment in 2019 reflects a favorable revision of our prior estimate of collectability based on a
                      third party acquiring the receivables.





       
                (9) EBITDA Margin Percent and Adjusted EBITDA Margin Percent were calculated by dividing the non-GAAP measure by the corresponding revenue.





       
                (10) Income tax effects were calculated using an effective U.S. GAAP tax rate of 24.5% and 29.8% for the three months ended December 31, 2019 and 2018, respectively, and 23.6% and 25.9% for the years ended December 31, 2019 and 2018, respectively.


                                                                                     
              
                ICF International, Inc. and Subsidiaries


                                                                                           
              
                Consolidated Balance Sheets


                                                                                                   
              
                (Unaudited)





     
                (in thousands, except share and per share amounts)                                                           
              
              December 31, 2019      
     
     December 31, 2018




     
                
                  ASSETS



     
                Current Assets:



     Cash and cash equivalents                                                                                                                                       $6,482                     $11,694



     Contract receivables, net                                                                                                                                      261,176                     230,966



     Contract assets                                                                                                                                                142,337                     126,688



     Prepaid expenses and other assets                                                                                                                               17,402                      16,253



     Income tax receivable                                                                                                                                            7,320                       6,505




     
                Total Current Assets                                                                                                                              434,717                     392,106



     
                Property and Equipment, net                                                                                                                        58,237                      48,105



     
                Other Assets:



     Restricted cash - non-current                                                                                                                                                               1,292



     Goodwill                                                                                                                                                       719,934                     715,644



     Other intangible assets, net                                                                                                                                    25,829                      35,494



     Operating lease - right-of-use assets                                                                                                                          133,965



     Other assets                                                                                                                                                    24,535                      21,221




     
                Total Assets                                                                                                                                   $1,397,217                  $1,213,862






     
                
                  LIABILITIES and STOCKHOLDERS' EQUITY



     
                Current Liabilities:



     Accounts payable                                                                                                                                              $134,578                    $102,599



     Contract liabilities                                                                                                                                            37,413                      33,494



     Operating lease liabilities - current                                                                                                                           32,500



     Accrued salaries and benefits                                                                                                                                   52,130                      44,103



     Accrued subcontractors and other direct costs                                                                                                                   45,619                      58,791



     Accrued expenses and other current liabilities                                                                                                                  35,742                      39,072




     
                Total Current Liabilities                                                                                                                         337,982                     278,059



     
                Long-term Liabilities:



     Long-term debt                                                                                                                                                 165,444                     200,424



     Operating lease liabilities - non-current                                                                                                                      119,250



     Deferred rent                                                                                                                                                                              13,938



     Deferred income taxes                                                                                                                                           37,621                      40,165



     Other long-term liabilities                                                                                                                                     22,369                      20,859




     
                Total Liabilities                                                                                                                                 682,666                     553,445





     
                Contingencies





     
                Stockholders' Equity:



     Preferred stock, par value $.001; 5,000,000 shares authorized; none issued


      Common stock, $.001 par value; 70,000,000 shares authorized; 22,846,374 and 22,445,576 shares issued; and
       18,867,555 and 18,817,495 shares outstanding at December 31, 2019 and December 31, 2018, respectively                                                              23                          22



     Additional paid-in capital                                                                                                                                     346,795                     326,208



     Retained earnings                                                                                                                                              544,840                     486,442



     Treasury stock, 3,978,819 and 3,628,081 shares at December 31, 2019 and 2018, respectively                                                                   (164,963)                  (139,704)



     Accumulated other comprehensive loss                                                                                                                          (12,144)                   (12,551)




     
                Total Stockholders' Equity                                                                                                                        714,551                     660,417




     
                Total Liabilities and Stockholders' Equity                                                                                                     $1,397,217                  $1,213,862


                                        
              
                ICF International, Inc. and Subsidiaries


                                          
              
                Consolidated Statements of Cash Flows


                                                       
              
                (Unaudited)




                                                                                                       Years ended


                                                                                                       December 31,




     
                (in thousands)                                                                              2019       2018



                   Cash Flows from Operating Activities



     Net income                                                                                            $68,938    $61,400


      Adjustments to reconcile net income to net cash provided
       by operating activities:



     Bad debt expense                                                                                          624      2,480



     Deferred income taxes                                                                                   (123)     5,100



     Non-cash equity compensation                                                                           15,818     11,506



     Depreciation and amortization                                                                          28,182     27,206



     Deferred rent                                                                                         (1,247)       523



     Facilities consolidation reserve                                                                        (274)     (260)


      Remeasurement of contingent acquisition liability                                                                   505



     Amortization of debt issuance costs                                                                       507        510



     Impairment of long-lived assets                                                                         1,728



     Other adjustments, net                                                                                    181        449


      Changes in operating assets and liabilities, net of the
       effect of acquisitions:



     Net contract assets and liabilities                                                                  (11,963)  (14,148)



     Contract receivables                                                                                 (31,300)  (60,096)



     Prepaid expenses and other assets                                                                       1,997    (6,650)



     Accounts payable                                                                                       31,949     28,309



     Accrued salaries and benefits                                                                           8,012    (2,159)



     Accrued subcontractors and other direct costs                                                        (12,293)    10,762


      Accrued expenses and other current liabilities                                                        (4,951)    11,120



     Income tax receivable and payable                                                                     (4,489)   (2,063)



     Other liabilities                                                                                         144        176



                   Net Cash Provided by Operating Activities                                                 91,440     74,670




                   Cash Flows from Investing Activities


      Capital expenditures for property and equipment and
       capitalized software                                                                                (26,901)  (21,812)


      Payments for business acquisitions, net of cash received                                              (3,569)  (34,575)



                   Net Cash Used in Investing Activities                                                   (30,470)  (56,387)




                   Cash Flows from Financing Activities



     Advances from working capital facilities                                                              686,830    573,991



     Payments on working capital facilities                                                              (721,809) (579,817)



     Payments on capital expenditure obligations                                                           (1,621)   (3,726)



     Debt issue costs                                                                                                   (21)



     Proceeds from exercise of options                                                                       2,914      5,842



     Dividends paid                                                                                       (10,540)   (7,915)


      Net payments for stockholder issuances and buybacks                                                  (23,414)  (17,125)



                   Net Cash Used in Financing Activities                                                   (67,640)  (28,771)


                   Effect of Exchange Rate Changes on Cash, Cash
                    Equivalents, and Restricted Cash                                                            166      (792)





                   Decrease in Cash, Cash Equivalents, and Restricted Cash                                  (6,504)  (11,280)


                   Cash, Cash Equivalents, and Restricted Cash, Beginning
                    of Period                                                                                12,986     24,266



                   Cash, Cash Equivalents, and Restricted Cash, End of
                    Period                                                                                   $6,482    $12,986





                   Supplemental disclosure of cash flow information:



     Cash paid during the period for:



     Interest                                                                                              $10,424     $9,893




     Income taxes                                                                                          $26,595    $14,870



      Non-cash investing and financing transactions:


      Deferred and contingent consideration arising from
       businesses acquired                                                                  
              $          -    $8,391




     Capital expenditure obligations                                                       
              $          -    $6,121


                                                                      
              
                ICF International, Inc. and Subsidiaries


                                                                            
              
                Supplemental Schedule(11)(12)






                   Revenue by client markets                               Three Months Ended                                        Twelve months ended


                                                                              December 31,                                               December 31,



                                                                                         2019                                                        2018               2019    2018



      Energy, environment, and
       infrastructure                                                                     44%                                                        42%               45%    42%


      Health, education, and social
       programs                                                                           40%                                                        41%               37%    40%



     Safety and security                                                                  8%                                                         8%                8%     8%


      Consumer and financial services                                                      8%                                                         9%               10%    10%



     
                Total                                                                 100%                                                       100%              100%   100%







                   Revenue by client type                                  Three Months Ended                                        Twelve months ended


                                                                              December 31,                                               December 31,



                                                                                         2019                                                        2018               2019    2018




     U.S. federal government                                                             35%                                                        35%               38%    41%


      U.S. state and local government                                                     18%                                                        16%               19%    14%



     International government                                                             9%                                                         9%                8%     9%




     
                Government                                                             62%                                                        60%               65%    64%



     
                Commercial                                                             38%                                                        40%               35%    36%



     
                Total                                                                 100%                                                       100%              100%   100%







                   Revenue by contract mix                                 Three Months Ended                                        Twelve months ended


                                                                              December 31,                                               December 31,



                                                                                         2019                                                        2018               2019    2018




     Time-and-materials                                                                  49%                                                        48%               48%    44%



     Fixed-price                                                                         37%                                                        38%               38%    39%



     Cost-based                                                                          14%                                                        14%               14%    17%



     
                Total                                                                 100%                                                       100%              100%   100%







                   (11) As is shown in the supplemental schedule, we track revenue by key metrics that provide useful information about the nature of our operations.
                    Client markets provide insight into the breadth of our expertise.  Client type is an indicator of the diversity of our client base.  Revenue by
                    contract mix provides insight in terms of the degree of performance risk that we have assumed.




                   (12) Certain immaterial revenue percentages in the prior year have been reclassified due to minor adjustments and reclassification within contract
                    mix.

Investor Contacts:
Lynn Morgen, ADVISIRY PARTNERS, lynn.morgen@advisiry.com +1.212.750.5800
David Gold, ADVISIRY PARTNERS, david.gold@advisiry.com +1.212.750.5800
Company Information Contact:
Lauren Dyke, ICF,
lauren.dyke@ICF.com +1.571.373.5577

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SOURCE ICF