— Full Year Double-Digit
Revenue Growth Aligned With Strength of ICF's Growth Markets
—
— 2024 Guidance Anticipates High Single-Digit
Organic Revenue Growth From Continuing Operations With Further
Margin Expansion —
Fourth Quarter Highlights:
- Revenue Increased 1% to $478
Million; Up 5% Excluding Divestitures
- Net Income Was $22 Million;
Diluted EPS Was $1.16, Inclusive of
$0.18 in Tax-Effected Net Special
Charges
- Non-GAAP EPS1 Was $1.68, Up 8%
- EBITDA1 Was $53.9
Million, Up 46%; Adjusted EBITDA1 Was
$57.0 Million, Up 3%
- Contract Awards Were $611
Million for a Book-to-Bill Ratio of 1.3
Full Year Highlights:
- Revenue Increased 10% to $1.96
Billion; Up 12% Excluding Divestitures
- Net Income Was $83 Million;
Diluted EPS Was $4.35, Inclusive of
$0.71 in Tax-Effected Net Special
Charges
- Non-GAAP EPS Was $6.50, Up
13%
- EBITDA Was $197.0 Million, Up
25%; Adjusted EBITDA Was $213.2
Million, Up 11%
- Contract Awards Were $2.3
Billion for a Book-to-Bill Ratio of 1.2
- Operating Cash Flow Was $152
Million
RESTON,
Va., Feb. 27, 2024 /PRNewswire/ -- ICF (NASDAQ:
ICFI), a global consulting and technology services provider,
reported results for the fourth quarter and full year ended
December 31, 2023.
Commenting on the results, John
Wasson, chair and chief executive officer, said, "Fourth
quarter results represented a solid finish to a year of
double-digit revenue growth for ICF, which demonstrated the
benefits of our expanded capabilities in key growth markets and the
strength of our diversified business model. Revenues increased 1%
year-on-year. Adjusting for the divestiture of our commercial
marketing business lines during 2023, fourth quarter revenue
increased 5% year-on-year, led by strong growth in revenues from
commercial energy clients and our state and local and international
government clients. U.S. federal government fourth quarter revenue
was approximately flat with the prior year due to a $5.3 million reduction in subcontractor and other
direct costs together with the anticipated roll-off of certain
small business contracts held by companies we acquired. We expect
year-on-year federal government revenue comparisons to increase
substantially in the second half of 2024 and grow at a high
single-digit rate for full year 2024.
"Full year 2023 revenue increased 10%, or by over 12% after
adjusting for the divestitures, reflecting double-digit growth in
revenues from both government and commercial clients. This
performance was led by our growth markets, which in the aggregate
accounted for approximately 80% of 2023 full year revenues from
continuing operations, up from approximately 75% in 2022.
"We continued to increase profitability in the fourth quarter
and full year, expanding adjusted EBITDA margin by 30 basis points
and 10 basis points, respectively. This progress reflected the
positive impact of higher utilization and our actions to reduce
facility costs, along with the benefits of ICF's greater scale.
"This also was another year of substantial contract awards,
which reached $2.3 billion.
Approximately 70% of 2023's contract wins represented new business,
underscoring ICF's strong competitive positioning in areas of high
demand from government and commercial clients. At year end, our
business development pipeline was a robust $9.7 billion, providing a substantial runway for
future growth."
Fourth Quarter 2023 Results
Fourth quarter 2023 total revenue was $478.4 million, similar to the $475.6 million reported in the fourth quarter of
2022 and up 4.9% from last year's fourth quarter revenues adjusted
for the divestitures. Subcontractor and other direct costs were
27.0% of total revenues compared to 28.7% in last year's fourth
quarter. Operating income was $36.9
million, up from $23.0 million, and operating margin on total
revenue expanded to 7.7% from 4.8%. Net income totaled $22.2 million, and diluted EPS was $1.16 per share, up from $8.9 million, and $0.47, respectively, in the fourth quarter of
2022. Fourth quarter 2023 net income and diluted EPS included
$4.4 million, or $0.18 per share, in tax-effected net special
charges.
Non-GAAP EPS increased 7.7% to $1.68 per share, from the $1.56 per share reported in the comparable period
in 2022. EBITDA was $53.9 million,
46% above the $36.9 million reported
for the year-ago period. Adjusted EBITDA increased 3.3% to
$57.0 million, from $55.2 million for the comparable period in
2022.
Full Year 2023 Results
2023 total revenue was $1.96 billion, an increase of 10.3%
from $1.78 billion reported in the previous year and
12.3% higher when adjusting for the 2023 divestitures.
Subcontractor and other direct costs were 27.2% of total revenues
compared to 27.8% in 2022. Full year 2023 net income was $82.6
million, or $4.35 per diluted share, inclusive
of $17.6 million, or $0.71 per share of
tax-effected net special charges. This represents increases of
28.6% and 28.7%, respectively, from net income of $64.2
million, or $3.38 per diluted
share reported in 2022.
Non-GAAP EPS was $6.50 per share, up 12.7%
from $5.77 per share. EBITDA increased 25.3%
to $197.0 million, compared to $157.2
million reported in 2022. Adjusted EBITDA was $213.2
million, representing an 11.2% increase over $191.8
million in 2022.
Operating cash flow was $152.4
million in 2023. This compares to $162.2 million in the prior year, which benefited
by approximately $30 million related
to the timing of collections and disbursements.
Backlog and New Business
Total backlog was $3.8 billion at
the end of the fourth quarter of 2023. Funded backlog was
$1.8 billion, or approximately 47% of
the total backlog. The total value of contracts awarded in the 2023
fourth quarter was $611 million
representing a book-to-bill ratio of 1.28, and
trailing-twelve-month contract awards totaled $2.3 billion for a book-to-bill ratio of
1.18.
Government Revenue Fourth Quarter 2023 Highlights
Revenue from government clients was $368.6 million, up 4.0% year-over-year.
- U.S. federal government revenue was $263.9 million, stable with the $264.8 million reported in the fourth quarter of
2022, and was impacted by a year-over-year decrease in
subcontractor and other direct costs of $5.3
million in the quarter as well as the anticipated roll-off
of certain acquired small business contracts. Federal government
revenue accounted for 55.2% of total revenue, compared to 55.7% of
total revenue in the fourth quarter of 2022.
- U.S. state and local government revenue increased 16.7% to
$75.9 million, from $65.0 million in the year-ago quarter. State and
local government clients represented 15.9% of total revenue,
compared to 13.7% in the fourth quarter of 2022.
- International government revenue was $28.8 million, up 17.2% from the $24.6 million reported in the year-ago quarter.
International government revenue represented 6.0% of total revenue,
compared to 5.2% in the fourth quarter of 2022.
Key Government Contracts Awarded in the Fourth Quarter
2023
Notable government contract awards won in the fourth quarter of
2023 included:
Health and Social Programs
- Two new task orders with a combined value of $29.9 million with the U.S. Environmental
Protection Agency's Office of Pollution Prevention and Toxics to
assess the risk of chemical exposure to human health and the
environment.
- Four new subcontracts with a combined value of $17.1 million to support mental health programs,
including evaluation and communications services, for the U.S.
Substance Abuse and Mental Health Services Administration's 988
Suicide & Crisis Lifeline.
- A recompete blanket purchase agreement with a value of
$9.6 million with a U.S. federal
agency to provide communications engagement and education support
services.
- A recompete subcontract with a value of $9.4 million to support a comprehensive technical
assistance center contract for the U.S. Centers for Disease Control
and Prevention, Division of Overdose Prevention overdose prevention
programs.
Digital Modernization
- A recompete contract with a value of $33.1 million with the U.S. Centers for Medicare
and Medicaid Services (CMS) to continue the modernization of the
CMS system for kidney dialysis data.
- A new blanket purchase agreement with a value of $5.7 million with the U.S. General Services
Administration to provide data analytics services to the U.S.
Department of State.
Commercial Revenue Fourth Quarter 2023 Highlights
Commercial revenue was $109.8
million, compared to $121.3
million reported in the fourth quarter of 2022, up 7.6%
compared to revenues of $101.7
million excluding divestitures in 2022.
- Commercial revenue accounted for 22.9% of total revenue
compared to 25.5% of total revenue in the 2022 fourth quarter.
- Energy markets revenue, which includes energy efficiency
programs, increased 8.8% and represented 87.8% of commercial
revenue.
Key Commercial Contracts Awarded in the Fourth
Quarter
Notable commercial awards won in the fourth quarter of 2023
included:
Energy Markets
- Two large multimillion-dollar recompete contracts with a
mid-Atlantic U.S. utility to implement its commercial and
residential energy efficiency programs.
- A large multimillion-dollar new contract with a mid-Atlantic
U.S. electric cooperative to serve as the implementer of its energy
efficiency programs.
- Five contract modifications with a Western U.S. gas utility to
continue to support its energy efficiency programs, with a focus on
residential and small commercial equity initiatives, agricultural
customer projects and emerging technology demonstrations.
- A large multimillion-dollar new contract with a Southern U.S.
utility to implement its energy efficiency and demand response
program portfolios.
- Five contract extensions and modifications with a Northeastern
U.S. utility to continue to implement its energy efficiency
programs.
- Two new contracts with a Southeastern U.S. utility to implement
its energy efficiency retrofit program and provide marketing
services for its business markets programs.
- A contract modification with a Northeastern U.S. utility to
continue to implement its energy efficiency retail products and
residential rebates programs.
- A new contract with a mid-Atlantic U.S. utility to implement a
behavioral-based energy efficiency program utilizing cloud
technology and analytics to engage customers.
- Multiple task orders with a Northeastern U.S. utility to
continue to provide marketing and advertising services as the
utility's agency of record.
Other Commercial
- A recompete contract with a value of $58.6 million with a Western U.S. state lottery
to continue to support the maintenance and operation of its
cloud-based website and improve the user experience.
Dividend Declaration
On February 27, 2024, ICF declared
a quarterly cash dividend of $0.14 per share, payable on April
12, 2024, to shareholders of record on March 22, 2024.
Recognitions
ICF received several important recognitions in 2023:
- Forbes named ICF one of America's Best Employers for Women for
the second consecutive year.
- ICF was included on Forbes' America's Best Management
Consulting Firms list for the eighth straight year and Best
Employers for Diversity list for the third straight year.
- ICF was awarded a Climate Leadership Award by the Climate
Registry for reducing carbon pollution and addressing climate
change in its social actions and client work.
- The Northern Virginia Chamber
of Commerce and the Professional Services Council awarded ICF
Government Contractor of the Year in the Over $300 Million category.
- ICF was ranked a Top Federal Industry Leader by Bloomberg in
its BGOV200 rankings.
Summary and Outlook
"2023 represented a year of significant accomplishments for ICF.
In addition to our strong financial performance, we completed the
integration of SemanticBits, streamlined our business through the
divestiture of our commercial marketing business and supported our
key growth markets by adding new competencies in the fast-growing
area of grid modernization and electrical engineering. We used our
substantial operating cash flow to repay debt, ending the year with
a net debt to EBITDA ratio of under 2.2. This gives us additional
flexibility to execute our acquisition growth strategy, which has
been a key element of the company's success to date. ICF exited
2023 with a strengthened business and financial posture,
positioning us for continued strong growth in 2024.
"Based on our strong backlog and current visibility, and the
ongoing positive trends in our key growth markets, we expect 2024
organic revenues from continuing operations to range from
$2.03 billion to $2.10 billion, representing year-on-year growth
of 5.2% at the midpoint when compared to reported 2023 and 8.5% at
the midpoint on continuing operations. EBITDA is expected to range
from $220 million to $230 million, reflecting year-on-year growth of
14.2% at the midpoint. Our guidance range for GAAP EPS is
$5.25 to $5.55, excluding special charges, and for
Non-GAAP EPS is $6.60 to $6.90. Assuming similar margins to the rest of
the business, the company's commercial marketing business lines are
estimated to have contributed $0.20
of Non-GAAP EPS in 2023, which will not recur in 2024. We expect
full year 2024 operating cash flow of approximately $155 million.
"We are proud of the many recognitions that ICF received in
2023. Listed above, they are emblematic of our culture of
inclusion, merit-based promotions and commitment to climate change,
and highlight ICF's deep domain expertise in energy and
environment, public health and life sciences and sustainability. As
we move ahead into 2024, we remain committed to maintaining the
outstanding corporate culture that has been integral to our
success," Mr. Wasson concluded.
1 Non-GAAP EPS, 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.
Special charges are items that were included within our
consolidated statements of comprehensive income 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.
About ICF
ICF is a global consulting and technology
services company with approximately 9,000 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 that 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.
Note on Forward-Looking Non-GAAP Measures
The company
does not reconcile its forward-looking non-GAAP financial measures
to the corresponding U.S. GAAP measures, due to the
variability and difficulty in making accurate forecasts and
projections and because not all of the information necessary for a
quantitative reconciliation of these forward-looking non-GAAP
financial measures (such as the effect of share-based compensation
or the impact of future extraordinary or non-recurring events like
acquisitions) is available to the company without unreasonable
effort. For the same reasons, the company is unable to estimate the
probable significance of the unavailable information. The company
provides forward-looking non-GAAP financial measures that it
believes will be achievable, but it cannot accurately predict all
of the components of the adjusted calculations, and
the U.S. GAAP financial measures may be materially
different than the non-GAAP financial measures.
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
|
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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
|
$ 478,352
|
|
$ 475,609
|
|
$ 1,963,238
|
|
$ 1,779,964
|
|
Direct costs
|
|
303,545
|
|
300,064
|
|
1,265,018
|
|
1,134,422
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Indirect and selling
expenses
|
|
123,354
|
|
136,718
|
|
505,162
|
|
486,863
|
|
Depreciation and
amortization
|
|
6,225
|
|
6,284
|
|
25,277
|
|
21,482
|
|
Amortization of
intangible assets
|
|
8,307
|
|
9,494
|
|
35,461
|
|
28,435
|
|
Total operating costs
and expenses
|
|
137,886
|
|
152,496
|
|
565,900
|
|
536,780
|
|
Operating
income
|
|
36,921
|
|
23,049
|
|
132,320
|
|
108,762
|
|
Interest,
net
|
|
(9,535)
|
|
(9,186)
|
|
(39,681)
|
|
(23,281)
|
|
Other income
(expense)
|
|
2,407
|
|
(1,939)
|
|
3,908
|
|
(1,501)
|
|
Income before income
taxes
|
|
29,793
|
|
11,924
|
|
96,547
|
|
83,980
|
|
Provision for income
taxes
|
|
7,631
|
|
3,046
|
|
13,935
|
|
19,737
|
|
Net income
|
|
$
22,162
|
|
$ 8,878
|
|
$ 82,612
|
|
$ 64,243
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 1.18
|
|
$ 0.47
|
|
$
4.39
|
|
$
3.41
|
|
Diluted
|
|
$ 1.16
|
|
$ 0.47
|
|
$
4.35
|
|
$
3.38
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
18,823
|
|
18,855
|
|
18,802
|
|
18,818
|
|
Diluted
|
|
19,025
|
|
19,065
|
|
18,994
|
|
19,033
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per common share
|
|
$ 0.14
|
|
$ 0.14
|
|
$
0.56
|
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income, net of tax
|
|
(1,516)
|
|
6,009
|
|
(3,752)
|
|
2,902
|
|
Comprehensive income,
net of tax
|
|
$
20,646
|
|
$
14,887
|
|
$ 78,860
|
|
$ 67,145
|
|
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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Reconciliation of
Revenue, Adjusted for Impact of Exited
Business
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
478,352
|
|
$
475,609
|
|
$
1,963,238
|
|
$
1,779,964
|
|
Less: Revenue from
exited business (3)
|
|
(194)
|
|
(19,951)
|
|
(59,908)
|
|
(84,369)
|
|
Total Revenue, Adjusted
for Impact of Exited Business
|
|
$
478,158
|
|
$
455,658
|
|
$
1,903,330
|
|
$
1,695,595
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EBITDA and Adjusted EBITDA (4)
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 22,162
|
|
$
8,878
|
|
$
82,612
|
|
$
64,243
|
|
Interest,
net
|
|
9,535
|
|
9,186
|
|
39,681
|
|
23,281
|
|
Provision for income
taxes
|
|
7,631
|
|
3,046
|
|
13,935
|
|
19,737
|
|
Depreciation and
amortization
|
|
14,532
|
|
15,778
|
|
60,738
|
|
49,917
|
|
EBITDA
|
|
53,860
|
|
36,888
|
|
196,966
|
|
157,178
|
|
Impairment of
long-lived assets (5)
|
|
3,860
|
|
8,354
|
|
7,666
|
|
8,354
|
|
Acquisition and
divestiture-related expenses (6)
|
|
74
|
|
920
|
|
4,759
|
|
6,441
|
|
Severance and other
costs related to staff realignment (7)
|
|
1,911
|
|
1,134
|
|
6,366
|
|
6,302
|
|
Charges for facility
consolidations and office closures (8)
|
|
608
|
|
5,034
|
|
3,187
|
|
5,034
|
|
Expenses related to the
transfer to our new corporate headquarters
(9)
|
|
—
|
|
2,640
|
|
—
|
|
8,287
|
|
Expenses related to our
agreement for the sale of receivables (10)
|
|
—
|
|
240
|
|
—
|
|
240
|
|
Pre-tax gain from
divestiture of a business (11)
|
|
(3,287)
|
|
—
|
|
(5,712)
|
|
—
|
|
Total
Adjustments
|
|
3,166
|
|
18,322
|
|
16,266
|
|
34,658
|
|
Adjusted
EBITDA
|
|
$ 57,026
|
|
$ 55,210
|
|
$
213,232
|
|
$
191,836
|
|
|
|
|
|
|
|
|
|
|
Net Income Margin
Percent on Revenue (12)
|
|
4.6 %
|
|
1.9 %
|
|
4.2 %
|
|
3.6 %
|
|
EBITDA Margin Percent
on Revenue (13)
|
|
11.3 %
|
|
7.8 %
|
|
10.0 %
|
|
8.8 %
|
|
Adjusted EBITDA Margin
Percent on Revenue (13)
|
|
11.9 %
|
|
11.6 %
|
|
10.9 %
|
|
10.8 %
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Diluted EPS (4)
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Diluted
EPS
|
|
$
1.16
|
|
$
0.47
|
|
$
4.35
|
|
$
3.38
|
|
Impairment of
long-lived assets
|
|
0.20
|
|
0.44
|
|
0.40
|
|
0.44
|
|
Acquisition and
divestiture-related expenses
|
|
—
|
|
0.05
|
|
0.25
|
|
0.34
|
|
Severance and other
costs related to staff realignment
|
|
0.10
|
|
0.06
|
|
0.33
|
|
0.33
|
|
Expenses related to
facility consolidations and office closures
(14)
|
|
0.10
|
|
0.26
|
|
0.24
|
|
0.26
|
|
Expenses related to the
transfer to our new corporate headquarters
|
|
—
|
|
0.14
|
|
—
|
|
0.44
|
|
Expenses related to our
agreement for the sale of receivables
|
|
—
|
|
0.01
|
|
—
|
|
0.01
|
|
Pre-tax gain from
divestiture of a business
|
|
(0.17)
|
|
—
|
|
(0.30)
|
|
—
|
|
Amortization of
intangibles
|
|
0.44
|
|
0.50
|
|
1.87
|
|
1.49
|
|
Income tax effects of
the adjustments (15)
|
|
(0.15)
|
|
(0.37)
|
|
(0.64)
|
|
(0.92)
|
|
Non-GAAP Diluted
EPS
|
|
$
1.68
|
|
$
1.56
|
|
$
6.50
|
|
$
5.77
|
|
|
(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) Revenue
from the exited U.K. commercial marketing business (June 30, 2023),
U.S. commercial marketing business (September 11, 2023), and
Canadian mobile text aggregation business (November 1,
2023).
|
|
|
(4)
Reconciliations of EBITDA, Adjusted EBITDA, and Non-GAAP Diluted
EPS were calculated using numbers as reported in U.S.
GAAP.
|
|
|
(5)
Represents impairment of operating lease right-of-use and leasehold
improvement assets associated with exit from certain facilities,
and an intangible asset associated with exit of a
business.
|
|
|
(6) These
are primarily third-party costs related to acquisitions and
potential acquisitions, integration of acquisitions, and separation
of discontinued businesses or divestitures.
|
|
|
(7) These
costs are mainly due to involuntary employee termination benefits
for our officers, and employees who have been notified that they
will be terminated as part of a business reorganization or
exit.
|
|
|
(8) These
are exit costs associated with terminated leases or full office
closures that we either (i) will continue to pay until the
contractual obligations are satisfied but with no economic benefit
to us, or (ii) paid upon termination and cease-use of the leased
facilities.
|
|
|
(9) These
costs represent incremental non-cash lease expense associated with
a straight-line rent accrual during the "free rent" period in the
lease for our new corporate headquarters in Reston, Virginia.
We took possession of the new facility during the fourth quarter of
2021, while also maintaining and incurring lease costs for the
former headquarters in Fairfax, Virginia. The transition to the new
corporate headquarters was completed in the fourth quarter of
2022.
|
|
|
(10) These
costs include legal and structuring fees related to our 2022 Master
Receivables Purchase Agreement with MUFG Bank, Ltd. put in
place for the sale of our receivables.
|
|
|
(11)
Includes pre-tax gain of $2.5 million and of $3.2 million from the
divestitures of our U.S. commercial marketing and Canadian mobile
text aggregation businesses.
|
|
|
(12) Net
Margin Percent on Revenue was calculated by dividing net income by
revenue.
|
|
|
(13) EBITDA
Margin Percent and Adjusted EBITDA Margin Percent on Revenue were
calculated by dividing the non-GAAP measure by the corresponding
revenue.
|
|
|
(14) These
are exit costs related to actual office closures (previously
included in Adjusted EBITDA) and accelerated depreciation related
to fixed assets for planned office closures.
|
|
|
(15) Income
tax effects were calculated using the effective tax rate, adjusted
for discrete items, if any, of 21.1% and 25.5% for the three months
ended December 31, 2023 and 2022, respectively, and 22.8% and 28.0%
for the twelve months ended December 31, 2023 and 2022,
respectively.
|
|
ICF International,
Inc. and Subsidiaries
|
|
Consolidated Balance
Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
(in thousands,
except share and per share amounts)
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
6,361
|
|
$
11,257
|
|
Restricted
cash
|
|
3,088
|
|
1,711
|
|
Contract receivables,
net
|
|
205,484
|
|
232,337
|
|
Contract
assets
|
|
201,832
|
|
169,088
|
|
Prepaid expenses and
other assets
|
|
28,055
|
|
40,709
|
|
Income tax
receivable
|
|
2,337
|
|
11,616
|
|
Total Current
Assets
|
|
447,157
|
|
466,718
|
|
Property and
Equipment, net
|
|
75,948
|
|
85,402
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
|
1,219,476
|
|
1,212,898
|
|
Other intangible
assets, net
|
|
94,904
|
|
126,537
|
|
Operating lease -
right-of-use assets
|
|
132,807
|
|
149,066
|
|
Other assets
|
|
41,480
|
|
51,637
|
|
Total
Assets
|
|
$
2,011,772
|
|
$
2,092,258
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
26,000
|
|
$
23,250
|
|
Accounts
payable
|
|
134,503
|
|
135,778
|
|
Contract
liabilities
|
|
21,997
|
|
25,773
|
|
Operating lease
liabilities
|
|
20,409
|
|
19,305
|
|
Finance lease
liabilities
|
|
2,522
|
|
2,381
|
|
Accrued salaries and
benefits
|
|
88,021
|
|
85,991
|
|
Accrued subcontractors
and other direct costs
|
|
45,645
|
|
45,478
|
|
Accrued expenses and
other current liabilities
|
|
79,129
|
|
78,036
|
|
Total Current
Liabilities
|
|
418,226
|
|
415,992
|
|
Long-term
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
404,407
|
|
533,084
|
|
Operating lease
liabilities - non-current
|
|
175,460
|
|
182,251
|
|
Finance lease
liabilities - non-current
|
|
13,874
|
|
16,116
|
|
Deferred income
taxes
|
|
26,175
|
|
68,038
|
|
Other long-term
liabilities
|
|
56,045
|
|
23,566
|
|
Total
Liabilities
|
|
1,094,187
|
|
1,239,047
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred stock, par
value $.001 per share; 5,000,000 shares
authorized; none issued
|
|
—
|
|
—
|
|
Common stock, $.001 par
value; 70,000,000 shares authorized; 23,982,132 and 23,771,596
shares
issued; and 18,845,521
and 18,883,050 shares outstanding at December 31, 2023 and
2022,
respectively
|
|
24
|
|
23
|
|
Additional paid-in
capital
|
|
421,502
|
|
401,957
|
|
Retained
earnings
|
|
775,099
|
|
703,030
|
|
Treasury stock,
5,136,611 and 4,906,209 shares at December 31, 2023 and 2022,
respectively
|
|
(267,155)
|
|
(243,666)
|
|
Accumulated other
comprehensive loss
|
|
(11,885)
|
|
(8,133)
|
|
Total Stockholders'
Equity
|
|
917,585
|
|
853,211
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
2,011,772
|
|
$
2,092,258
|
|
ICF International,
Inc. and Subsidiaries
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
Years
ended
|
|
|
December 31,
|
|
(in
thousands)
|
|
2023
|
|
2022
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
Net income
|
|
$
82,612
|
|
$
64,243
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Provision for credit
losses
|
|
1,164
|
|
248
|
|
Deferred income taxes
and unrecognized income tax benefits
|
|
(17,634)
|
|
7,428
|
|
Non-cash equity
compensation
|
|
14,861
|
|
13,171
|
|
Depreciation and
amortization
|
|
60,738
|
|
49,917
|
|
Facilities
consolidation reserve
|
|
—
|
|
(317)
|
|
Amortization of debt
issuance costs
|
|
1,996
|
|
1,305
|
|
Impairment of
long-lived assets
|
|
7,666
|
|
8,412
|
|
Gain on divestiture of
a business
|
|
(7,590)
|
|
—
|
|
Other adjustments,
net
|
|
(1,368)
|
|
1,283
|
|
Changes in operating
assets and liabilities, net of the effects of
acquisitions:
|
|
|
|
|
|
Net contract
assets and liabilities
|
|
(38,422)
|
|
(41,634)
|
|
Contract
receivables
|
|
20,939
|
|
19,732
|
|
Prepaid expenses
and other assets
|
|
18,579
|
|
(20,737)
|
|
Operating lease
assets and liabilities, net
|
|
3,544
|
|
(1,466)
|
|
Accounts
payable
|
|
(1,489)
|
|
30,003
|
|
Accrued salaries
and benefits
|
|
2,175
|
|
(3,337)
|
|
Accrued
subcontractors and other direct costs
|
|
(269)
|
|
6,965
|
|
Accrued expenses
and other current liabilities
|
|
(4,757)
|
|
24,742
|
|
Income tax
receivable and payable
|
|
9,277
|
|
(1,526)
|
|
Other
liabilities
|
|
361
|
|
3,774
|
|
Net Cash Provided by
Operating Activities
|
|
152,383
|
|
162,206
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
Capital expenditures
for property and equipment and capitalized software
|
|
(22,337)
|
|
(24,475)
|
|
Payments for business
acquisitions, net of cash acquired
|
|
(32,664)
|
|
(237,280)
|
|
Proceeds from working
capital adjustments related to prior business
acquisition
|
|
—
|
|
2,911
|
|
Proceeds from
divestiture of a business
|
|
51,328
|
|
—
|
|
Net Cash Used in
Investing Activities
|
|
(3,673)
|
|
(258,844)
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
Advances from working
capital facilities
|
|
1,245,198
|
|
1,583,936
|
|
Payments on working
capital facilities
|
|
(1,372,474)
|
|
(1,446,125)
|
|
Proceeds from other
short-term borrowings
|
|
48,532
|
|
—
|
|
Repayments of other
short-term borrowings
|
|
(41,653)
|
|
—
|
|
Receipt of restricted
contract funds
|
|
7,672
|
|
15,721
|
|
Payment of restricted
contract funds
|
|
(8,084)
|
|
(25,959)
|
|
Debt issuance
costs
|
|
—
|
|
(4,907)
|
|
Payments of principal
portion of finance leases
|
|
(2,438)
|
|
—
|
|
Proceeds from exercise
of options
|
|
279
|
|
602
|
|
Dividends
paid
|
|
(10,537)
|
|
(10,547)
|
|
Net payments for
stockholder issuances and buybacks
|
|
(19,083)
|
|
(21,218)
|
|
Payments on business
acquisition liabilities
|
|
—
|
|
(1,132)
|
|
Net Cash (Used in)
Provided by Financing Activities
|
|
(152,588)
|
|
90,371
|
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents, and Restricted
Cash
|
|
359
|
|
(1,198)
|
|
|
|
|
|
|
Decrease in Cash,
Cash Equivalents, and Restricted Cash
|
|
(3,519)
|
|
(7,465)
|
|
Cash, Cash
Equivalents, and Restricted Cash, Beginning of
Period
|
|
12,968
|
|
20,433
|
|
Cash, Cash
Equivalents, and Restricted Cash, End of Period
|
|
$
9,449
|
|
$
12,968
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
|
Interest
|
|
$
34,093
|
|
$
22,782
|
|
Income taxes
|
|
$
26,190
|
|
$
16,476
|
|
Non-cash investing and
financing transactions:
|
|
|
|
|
|
Tenant improvements
funded by lessor
|
|
$
568
|
|
$
20,253
|
|
Acquisition of property
and equipment through finance lease
|
|
$
337
|
|
$
18,319
|
|
ICF International,
Inc. and Subsidiaries
|
|
Supplemental
Schedule (16) (17)
|
|
|
|
|
|
|
|
|
|
|
Revenue by client
markets
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Energy, environment,
infrastructure, and disaster recovery
|
|
44 %
|
|
40 %
|
|
41 %
|
|
40 %
|
|
Health and social
programs
|
|
41 %
|
|
41 %
|
|
42 %
|
|
40 %
|
|
Security and other
civilian & commercial
|
|
15 %
|
|
19 %
|
|
17 %
|
|
20 %
|
|
Total
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by client
type
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
U.S. federal
government
|
|
55 %
|
|
56 %
|
|
55 %
|
|
55 %
|
|
U.S. state and local
government
|
|
16 %
|
|
14 %
|
|
16 %
|
|
15 %
|
|
International
government
|
|
6 %
|
|
5 %
|
|
5 %
|
|
6 %
|
|
Government
|
|
77 %
|
|
75 %
|
|
76 %
|
|
76 %
|
|
Commercial
|
|
23 %
|
|
25 %
|
|
24 %
|
|
24 %
|
|
Total
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by contract
mix
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Time-and-materials
|
|
41 %
|
|
40 %
|
|
41 %
|
|
40 %
|
|
Fixed-price
|
|
46 %
|
|
47 %
|
|
45 %
|
|
45 %
|
|
Cost-based
|
|
13 %
|
|
13 %
|
|
14 %
|
|
15 %
|
|
Total
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
(16) 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.
|
|
|
(17) During
the first quarter of 2023, we re-aligned our client markets from
four to three and reclassified the 2022 percentages to conform to
the current presentation.
|
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SOURCE ICF
