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ICF International (ICFI) Misses on Q4 Earnings, Tops Revenues

Zacks Equity Research

ICF International, Inc. ICFI reported mixed fourth-quarter 2018 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.

Non-GAAP earnings per share (EPS) of $1.17 missed the consensus mark by 6 cents but improved 50% on a year-over-year basis. Revenues came in at $377.9 million, which outpaced the consensus mark by $28 million and increased 17.7% year over year.

Shares of the company have gained 15% year to date compared with the 14.4% rise of the industry it belongs to.


Let’s delve deeper in to the numbers:

Revenues in Detail

Revenues from government clients of $226 million improved 21.7% year over year. U.S. federal government revenues of $131.5 million increased 2.1% year over year and contributed 35% to total revenues. U.S. state and local government revenues of $62.2 million surged 115.2% year over year and contributed 16% to total revenues. International government revenues totaled $32.3 million, up 15% year over year and contributed 8% to total revenues.

Commercial revenues totaled $151.9 million, up 12% from the year-ago quarter’s tally and contributed 40% to total revenues. Energy markets contributed 39% to commercial revenues and Marketing services contributed 54% to the same.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $2.4 billion and $1.1 billion at the end of the fourth quarter, respectively. The total value of contracts awarded was $285.8 million, representing a book-to-bill ratio of 1.4.

Operational Results

Adjusted EBITDA was $39.4 million, up 25.5% from the year-ago quarter’s figure. Adjusted EBITDA margin was 16.5% of service revenues, up 210 basis points (bps) year over year. The increase in adjusted EBITDA margin was due to seasonal strength, higher utilization related to the ramp up of new contracts, higher level of incentive fee payments and significant increase in higher margin service revenues.

Balance Sheet

At the end of fourth quarter, cash and cash equivalents balance was $11.7 million compared with $5.8 million at the end of the previous quarter. The company had long-term debt of $200.4 million compared with $232.5 million at the end of the prior quarter.

ICF gained $64.3 million of cash from operating activities and spent $6.2 million on capex. The company purchased 214,000 shares for $13.9 million and paid dividends of $7.9 million in 2018. It declared a quarterly cash dividend of 14 cents per share, payable on Apr 16, 2019 to shareholders of record as on Mar 29, 2019.

2019 Outlook

Management expects total revenues between $1.45 billion and $1.50 billion, which is above the Zacks Consensus Estimate of $1.41 billion.

Non-GAAP EPS is expected in the range of $4.05-$4.25. The mid-point of the raised guidance is below the Zacks Consensus Estimate of $4.21.

Zacks Rank & Upcoming Releases

ICF currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are keenly awaiting reports of key players like Charles River Associates CRAI, Stericycle SRCL and FactSet FDS. While Charles River Associates and Stericycle will release fourth-quarter 2018 results on Feb 28, FactSet will announce second-quarter fiscal 2019 results on Mar 26.

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