ICF International, Inc. (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, reported results for the third quarter ended September 30, 2012.
First Nine Months 2012 Results
For the third quarter, revenue was $237.9 million, an 8.8 percent increase over the $218.7 million reported in the 2011 third quarter. Service revenue, total revenue less subcontractor and other direct costs, increased 12.4 percent to $176.2 million. EBITDA increased 10.6 percent to $23.2 million from $21 million, and EBITDA margin was 9.8 percent, up from 9.6 percent in the 2011 third quarter. Operating income, which included $1.1 million in higher amortization expenses related to recent acquisitions, was $16.9 million, an increase of 4.8 percent over the $16.1 million reported in last year’s third quarter. Net income was $9.6 million, or $0.48 per diluted share, compared to net income of $9.3 million, or $0.47 per diluted share, earned in the comparable 2011 period.
For the first nine months of 2012, revenue was $705.2 million, a 12.5 percent increase over the $626.8 million reported in the same period in 2011. Service revenue increased 14.9 percent to $532.6 million. EBITDA increased 14.9 percent to $69.2 million, and EBITDA margin was 9.8 percent, up from 9.6 percent in the first nine months of 2011. Operating income increased 13.6 percent to $51.2 million, net income was up 10.9 percent to $28.9 million, and earnings per diluted share were $1.44 compared to $1.31 for the first nine months of 2011.
Commenting on ICF’s third quarter results, Chairman and Chief Executive Officer Sudhakar Kesavan said, “As expected, revenue growth continued to be driven by substantial increases in business with our commercial and non-U.S. government clients, which in the aggregate accounted for 29 percent of total revenues, up from 24 percent in last year’s third quarter. This strong performance more than offset the continued headwinds in business with the U.S. Federal Government. Organic revenue growth
rates in 2012 have been affected in both the third quarter and first nine months of 2012 by a reduction as a percentage of revenue in subcontractor and other direct costs. As a result, reported organic growth for the third quarter was negative 1.7 percent. Organic growth for the first nine months of 2012 is a positive 1.9 percent.”
“We continued to achieve growth across all of our major markets in the third quarter. Energy, Environment, & Infrastructure increased 4.6 percent; Health, Social Programs, & Consumer/Financial increased 15.2 percent; and Public Safety & Defense increased 2.9 percent. In addition, business awards this quarter included a number of important strategic wins and a high percentage of new contracts versus re-competes with government and commercial clients,” Mr. Kesavan noted.