ICF International, Inc 8-K, filed Feb 28, 2023

ICF International, Inc. (ICFI)

8-K 2023-02-28 For: 2023-02-28

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Added on April 10, 2026

About this 8-K

ICF International, Inc filed this 8-K on February 28, 2023.

Items reported

Item 2.02: Financial results
Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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Delaware	001-33045	22-3661438
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1902 Reston Metro Plaza
Reston, Virginia		20190
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ICFI	The Nasdaq Global Select Market


99.1		Press Release dated February 28, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


Exhibit Number		Description
99.1		Press Release dated February 28, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	ICF International, Inc.

Date: February 28, 2023	By:	/s/ Barry Broadus
		Barry Broadus
		Senior Vice President & Chief Financial Officer


	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(in thousands, except per share amounts)	2022			2021			2022			2021
Revenue	$	475,609		$	387,985		$	1,779,964		$	1,553,048
Direct costs		300,064			246,667			1,134,422			979,570
Operating costs and expenses:
Indirect and selling expenses		136,718			114,472			486,863			430,572
Depreciation and amortization		6,284			4,815			21,482			19,478
Amortization of intangible assets		9,494			3,443			28,435			12,492
Total operating costs and expenses		152,496			122,730			536,780			462,542

Operating income		23,049			18,588			108,762			110,936
Interest, net		(9,186	)		(2,337	)		(23,281	)		(9,984	)
Other expense		(1,939	)		(282	)		(1,501	)		(862	)
Income before income taxes		11,924			15,969			83,980			100,090
Provision for income taxes		3,046			3,890			19,737			28,958
Net income	$	8,878		$	12,079		$	64,243		$	71,132

Earnings per Share:
Basic	$	0.47		$	0.64		$	3.41		$	3.77
Diluted	$	0.47		$	0.63		$	3.38		$	3.72

Weighted-average Shares:
Basic		18,855			18,877			18,818			18,868
Diluted		19,065			19,138			19,033			19,124

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

Other comprehensive income, net of tax		6,009			1,830			2,902			3,071
Comprehensive income, net of tax	$	14,887		$	13,909		$	67,145		$	74,203


(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) The calculation of EBITDA for the three months and the twelve months ended December 31, 2021 has been revised to conform to the current period calculation of EBITDA. Specifically, interest income of $0.1 million and $0.3 million was reclassified from "Other expense" to "Interest, net" on the consolidated statements of comprehensive income.

(5) Represents impairment of right-of-use lease assets associated with certain operating leases ceased to be used by us. The amount for the three months and twelve months ended December 31, 2021 have been revised to include $0.3 million and $0.3 million, respectively, in losses on disposal of fixed assets related to the leases to conform to the current presentation.

(6) These costs consist primarily of consultants and other outside third-party costs and integration costs associated with our acquisitions and/or potential acquisitions and divestitures.

(7) These costs are mainly due to involuntary employee termination benefits for Company officers or groups of employees who have been terminated as part of a consolidation or reorganization.

(8) 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 (i) continue to pay until the contractual obligation is satisfied but with no economic benefit to us or (ii) we contractually terminated the obligation and ceased utilizing the facilities.

(9) These costs are additional rent as a result of us taking possession of our new corporate headquarters in Reston, Virginia, during the fourth quarter of 2021 as well as losses from disposal of fixed assets that we recognized as a result of our transfer to Reston.

(10) These costs relate to equity awards under the departing officer’s severance agreement. As a result of the employment agreement, the departing officer was able to maintain certain equity awards beyond his retirement date, including performance-based awards that are subject to changes until they vest.

(11) 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 from time-to-time.

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

(13) Income tax effects were calculated using the effective tax rate, adjusted for discrete items, if any, of 25.5% and 28.9% for the three months ended December 31, 2022 and 2021, respectively, and 28.0% and 28.9% for the twelve months ended December 31, 2022 and 2021, respectively.


(in thousands, except share and per share amounts)	December 31, 2022			December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	11,257		$	8,254
Restricted cash		1,711			12,179
Contract receivables, net		232,337			237,684
Contract assets		169,088			137,867
Prepaid expenses and other assets		40,709			42,354
Income tax receivable		11,616			10,825
Total Current Assets		466,718			449,163
Property and Equipment, net		85,402			52,053
Other Assets:
Goodwill		1,212,898			1,046,760
Other intangible assets, net		126,537			79,645
Operating lease - right-of-use assets		149,066			177,417
Other assets		51,637			44,496
Total Assets	$	2,092,258		$	1,849,534

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	23,250		$	10,000
Accounts payable		135,778			105,652
Contract liabilities		25,773			39,665
Operating lease liabilities - current		19,305			34,901
Finance lease liabilities - current		2,381			—
Accrued salaries and benefits		85,991			85,517
Accrued subcontractors and other direct costs		45,478			39,400
Accrued expenses and other current liabilities		78,036			61,496
Total Current Liabilities		415,992			376,631
Long-term Liabilities:
Long-term debt		533,084			411,605
Operating lease liabilities - non-current		182,251			191,805
Finance lease liabilities - non-current		16,116			—
Deferred income taxes		68,038			41,913
Other long-term liabilities		23,566			24,110
Total Liabilities		1,239,047			1,046,064

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; 23,771,596 and 23,535,671 shares issued; and 18,883,050 and 18,876,490 shares outstanding at December 31, 2022 and 2021, respectively		23			23
Additional paid-in capital		401,957			384,984
Retained earnings		703,030			649,298
Treasury stock, 4,906,209 and 4,659,181 shares at December 31, 2022 and 2021, respectively		(243,666	)		(219,800	)
Accumulated other comprehensive loss		(8,133	)		(11,035	)
Total Stockholders’ Equity		853,211			803,470
Total Liabilities and Stockholders’ Equity	$	2,092,258		$	1,849,534


	Years ended
	December 31,
(in thousands)	2022			2021
Cash Flows from Operating Activities
Net income	$	64,243		$	71,132
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		248			10,912
Deferred income taxes		7,428			8,816
Non-cash equity compensation		13,171			13,230
Depreciation and amortization		49,917			31,970
Facilities consolidation reserve		(317	)		(302	)
Amortization of debt issuance costs		1,305			617
Impairment of long-lived assets		8,412			7,901
Other adjustments, net		1,283			1,099
Changes in operating assets and liabilities, net of the effects of acquisitions:
Net contract assets and liabilities		(41,634	)		3,069
Contract receivables		19,732			(19,021	)
Prepaid expenses and other assets		(20,737	)		4,529
Operating lease assets and liabilities, net		(1,466	)		(5,481	)
Accounts payable		30,003			13,479
Accrued salaries and benefits		(3,337	)		(5,616	)
Accrued subcontractors and other direct costs		6,965			(38,575	)
Accrued expenses and other current liabilities		24,742			26,697
Income tax receivable and payable		(1,526	)		(12,802	)
Other liabilities		3,774			(1,449	)
Net Cash Provided by Operating Activities		162,206			110,205

Cash Flows from Investing Activities
Capital expenditures for property and equipment and capitalized software		(24,475	)		(19,932	)
Payments for business acquisitions, net of cash acquired		(237,280	)		(174,549	)
Proceeds from working capital adjustments related to prior business acquisition		2,911			—
Net Cash Used in Investing Activities		(258,844	)		(194,481	)

Cash Flows from Financing Activities
Advances from working capital facilities		1,583,936			881,037
Payments on working capital facilities		(1,446,125	)		(773,264	)
Receipt of restricted contract funds		15,721			264,214
Payment of restricted contract funds		(25,959	)		(319,990	)
Debt issuance costs		(4,907	)		—
Proceeds from exercise of options		602			2,848
Dividends paid		(10,547	)		(10,565	)
Net payments for stockholder issuances and buybacks		(21,218	)		(20,040	)
Payments on business acquisition liabilities		(1,132	)		(1,007	)
Net Cash Provided by Financing Activities		90,371			23,233
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		(1,198	)		(511	)

Decrease in Cash, Cash Equivalents, and Restricted Cash		(7,465	)		(61,554	)
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period		20,433			81,987
Cash, Cash Equivalents, and Restricted Cash, End of Period	$	12,968		$	20,433

Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest	$	22,782		$	10,331
Income taxes	$	16,476		$	34,132
Non-cash investing and financing transactions:
Share repurchases transacted but not settled and paid	$	—		$	552
Tenant improvements funded by lessor	$	20,253		$	—
Acquisition of property and equipment through finance lease	$	18,319		$	—


Revenue by client markets	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2022			2021			2022			2021
Energy, environment, and infrastructure		38	%		43	%		37	%		42	%
Health, education, and social programs		51	%		44	%		51	%		44	%
Safety and security		7	%		7	%		7	%		7	%
Consumer and financial		4	%		6	%		5	%		7	%
Total		100	%		100	%		100	%		100	%


Revenue by client type	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2022			2021			2022			2021
U.S. federal government		56	%		47	%		55	%		47	%
U.S. state and local government		14	%		16	%		15	%		15	%
International government		5	%		8	%		6	%		9	%
Government		75	%		71	%		76	%		71	%
Commercial		25	%		29	%		24	%		29	%
Total		100	%		100	%		100	%		100	%


Revenue by contract mix	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2022			2021			2022			2021
Time-and-materials		40	%		40	%		40	%		41	%
Fixed-price		47	%		44	%		45	%		41	%
Cost-based		13	%		16	%		15	%		18	%
Total		100	%		100	%		100	%		100	%


(14) 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.

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