The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, incl ...

| Delaware | 001-33045 | 22-3661438 | | --- | --- | --- | | (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | | incorporation or organization) | | Identification Number) | | 1902 Reston Metro Plaza, Reston | | 20190 | | Virginia | | | | (Address of principal executive offices) | | (Zip Code) | Registrant's telephone number, including area code:(703) 934-3000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number: 001-33045 ICF INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) Delaware 22-3661438 (State or other jurisdictio ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the period ended September 30, 2023, detailing the balance sheet, income statement, and cash flow statement, alongside notes, highlighting a **7.2% Q3 revenue increase**, improved operating cash flow to **$45.6 million**, and total assets of **$2.06 billion** [Consolidated Financial Statements (Balance Sheet, Income Statement, Cash Flow)](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets at **$2.055 billion**, Q3 2023 revenue at **$501.5 million** with net income of **$23.7 million**, and nine-month operating cash flow significantly improved to **$45.6 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $477,408 | $466,718 | | **Total Assets** | $2,055,120 | $2,092,258 | | **Total Current Liabilities** | $369,177 | $415,992 | | **Total Liabilities** | $1,161,790 | $1,239,047 | | **Total Stockholders' Equity** | $893,330 | $853,211 | Consolidated Income Statement Highlights (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $501,519 | $467,777 | $1,484,886 | $1,304,355 | | **Operating Income** | $31,901 | $28,234 | $95,399 | $85,713 | | **Net Income** | $23,740 | $19,105 | $60,450 | $55,364 | | **Diluted EPS** | $1.25 | $1.01 | $3.19 | $2.91 | Consolidated Cash Flow Highlights (Nine Months Ended, in thousands) | Cash Flow Activity | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $45,552 | $6,596 | | **Net Cash Used in Investing Activities** | $(3,389) | $(253,403) | | **Net Cash (Used in) Provided by Financing Activities** | $(47,064) | $239,025 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail that government clients comprise **76% of revenue**, CMY Solutions was acquired for **$32.6 million**, the effective tax rate decreased to **9.4%**, and total long-term debt is **$538.4 million** - Government clients (U.S. federal, state, local, and international) accounted for **76% of total revenue** for both the nine months ended September 30, 2023 and 2022[38](index=38&type=chunk) - On May 1, 2023, the Company acquired CMY Solutions, LLC for **$32.6 million** in cash. On July 21, 2023, it entered an agreement to sell its U.S. commercial marketing business for initial cash considerations of **$49.5 million**, resulting in a pre-tax gain of **$2.4 million**[62](index=62&type=chunk)[64](index=64&type=chunk) - The effective tax rate for the nine months ended September 30, 2023, was **9.4%**, a significant decrease from **23.2%** in the prior-year period. This was primarily due to the restructuring of Canadian entities and the winddown of its UK commercial marketing business[47](index=47&type=chunk)[48](index=48&type=chunk)[130](index=130&type=chunk) - As of September 30, 2023, the company had **$538.4 million** in total long-term debt outstanding before issuance costs, with an average interest rate of **6.6%**[34](index=34&type=chunk) - For the nine months ended September 30, 2023, the company repurchased **180,000 shares** for **$18.1 million**. As of September 30, 2023, **$93.7 million** remained available for share repurchases under the program[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses operational performance, highlighting a **7.2% Q3 2023 revenue increase**, a positive long-term outlook, Q3 Adjusted EBITDA of **$54.3 million**, and **$465.8 million** in available borrowing capacity [Overview and Outlook](index=24&type=section&id=Overview%20and%20Outlook) Management expresses a positive long-term outlook driven by demand in key markets and a strategy focused on enhancing client relationships, pursuing larger contracts, and strategic acquisitions - The company's strategy is to enhance client relationships, seek larger engagements spanning the entire program life cycle, and complete strategic acquisitions[84](index=84&type=chunk) - Management believes long-term demand will be driven by heightened concerns about the environment, clean energy, health promotion, disaster recovery, and homeland security threats[83](index=83&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section details financial results, showing Q3 2023 revenue growth of **7.2%** to **$501.5 million** and net income up **24.3%**, with nine-month revenue increasing **13.8%** to **$1.48 billion** Q3 2023 vs. Q3 2022 Financial Results (in thousands) | Metric | Q3 2023 | Q3 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $501,519 | $467,777 | 7.2% | | **Operating Income** | $31,901 | $28,234 | 13.0% | | **Net Income** | $23,740 | $19,105 | 24.3% | Nine Months 2023 vs. 2022 Financial Results (in thousands) | Metric | Nine Months 2023 | Nine Months 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $1,484,886 | $1,304,355 | 13.8% | | **Operating Income** | $95,399 | $85,713 | 11.3% | | **Net Income** | $60,450 | $55,364 | 9.2% | - The **7.2% revenue increase** in Q3 was driven by growth from U.S. state and local government (**$11.5 million**), commercial (**$10.0 million**), and U.S. federal government (**$7.7 million**) clients. The Energy, Environment, Infrastructure, and Disaster Recovery market grew by **14.4%**[110](index=110&type=chunk)[111](index=111&type=chunk) - The **13.8% revenue increase** for the nine-month period was driven by growth from U.S. federal government (**$104.1 million**), commercial (**$43.4 million**), and U.S. state and local government (**$37.5 million**) clients. The Health and Social Programs market grew by **21.3%**[121](index=121&type=chunk)[122](index=122&type=chunk) [Non-GAAP Measures](index=32&type=section&id=Non-GAAP%20Measures) The company presents non-GAAP measures, with Q3 2023 Adjusted EBITDA at **$54.3 million** and Non-GAAP Diluted EPS at **$1.81**, providing a clearer view of operational performance Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $23,740 | $19,105 | $60,450 | $55,364 | | **EBITDA** | $49,198 | $43,025 | $143,106 | $120,290 | | **Adjusted EBITDA** | $54,279 | $50,605 | $156,206 | $136,626 | Reconciliation to Non-GAAP Diluted EPS | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **U.S. GAAP Diluted EPS** | $1.25 | $1.01 | $3.19 | $2.91 | | **Non-GAAP Diluted EPS** | $1.81 | $1.61 | $4.81 | $4.23 | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$465.8 million** in available borrowing capacity, improved Days Sales Outstanding to **73 days**, and positive operating cash flow of **$45.6 million** - As of September 30, 2023, the company had **$465.8 million** in available borrowing capacity under its Credit Facility[142](index=142&type=chunk) - Days Sales Outstanding (DSO) improved to **73 days** at September 30, 2023, from **87 days** at September 30, 2022, partly due to a receivables purchase agreement and improved collection efforts[149](index=149&type=chunk) - For the nine months ended September 30, 2023, net cash from operating activities was **$45.6 million**, a significant increase from **$6.6 million** in the prior year period[155](index=155&type=chunk)[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the company's market risk disclosures since its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes in the disclosures regarding market risk since the company's last Annual Report[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no significant changes in internal controls identified - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters but does not anticipate any material adverse effect on its financial position, results of operations, or cash flows - The company does not expect ongoing legal proceedings to have a material adverse effect on its financial results[164](index=164&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes in the risk factors since the company's last Annual Report[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details share repurchase activity, noting no repurchases under the publicly announced program during Q3 2023, with only **91 shares** purchased for tax withholding - During the three months ended September 30, 2023, the company did not repurchase any shares under its publicly announced stock repurchase program[166](index=166&type=chunk) [Other Items (3, 4, 5, 6)](index=38&type=section&id=Other%20Items%20(3%2C%204%2C%205%2C%206)) This section covers remaining disclosures, including no defaults on senior securities, no mine safety disclosures, and the adoption of Rule 10b5-1 trading plans by the CEO and COO - In August 2023, the CEO, John Wasson, and the COO, James Morgan, each adopted a Rule 10b5-1 trading plan for the potential sale of company shares[170](index=170&type=chunk)[171](index=171&type=chunk) - The company reports no defaults upon senior securities (Item 3) and that mine safety disclosures are not applicable (Item 4)[168](index=168&type=chunk)[169](index=169&type=chunk)

Financial Data and Key Metrics Changes - Revenues increased by 18.2% year-over-year to $500.1 million, driven by 10% organic growth and the acquisition of SemanticBits [13][40] - Net income was $20.3 million, or $1.07 per diluted share, including $3.5 million in tax-affected M&A and severance charges [40] - Non-GAAP EPS increased by 18.8% to $1.57 per share, benefiting from long-term tax strategies [41] - Operating cash flow is projected to be approximately $150 million for 2023 [15][44] Business Line Data and Key Metrics Changes - Commercial energy revenues increased by 22% in the second quarter, reflecting strong demand for energy efficiency programs and advisory services [59] - The climate business saw strong demand, driven by funding for decarbonization programs, with revenues up 30% [60][61] - The disaster recovery market continued to grow at a double-digit rate, with a new $32.1 million contract announced for Puerto Rico [37] Market Data and Key Metrics Changes - Contract awards were up 28% year-on-year, with a trailing 12-month book-to-bill ratio of 1.3, indicating strong future revenue growth [34] - The business development pipeline reached a record $10.3 billion, representing nearly 20% growth compared to the previous year [34][69] - Increased interest in AI among federal government clients is expected to benefit the company [38] Company Strategy and Development Direction - The divestiture of the commercial marketing group was a strategic decision to focus on key growth markets [14][69] - The acquisition of CMY Solutions is expected to expand the addressable market within the electrical sector and enhance technology capabilities [27][36] - The company aims to leverage its scale to pursue larger contracts and enhance its competitive positioning [34][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong contract wins for the second half of the year, driven by a robust pipeline and favorable market conditions [47] - The company anticipates continued growth in federal, commercial, and state and local markets, supported by bipartisan funding for public health and IT modernization [84] - Management expects the impact of the IIJA and IRA to drive further growth opportunities into 2024 [75] Other Important Information - The company executed $100 million in interest rate swaps, increasing fixed-rate debt to approximately 60% of total debt [21] - A quarterly cash dividend of $0.14 per share was announced, payable on October 13, 2023 [21] - The company has removed the non-GAAP financial measure of service revenue from public filings in line with SEC guidelines [15] Q&A Session Summary Question: What is the expectation for strong contract wins in the second half of the year? - Management indicated confidence in strong contract wins due to a robust pipeline and significant proposals in negotiation [47] Question: How does the company view its size and scale in relation to deal sizes? - Management noted that the company has been able to pursue larger opportunities due to its scale, particularly in the energy sector [48][72] Question: How will the divestiture of the commercial marketing group affect EPS guidance? - Management reaffirmed EPS guidance, stating that tax strategies will help offset any lost EPS from the divestiture [73] Question: What is the impact of the IIJA and IRA on the company's pipeline? - Management reported positive momentum from IIJA and IRA, with significant opportunities emerging in the pipeline [75] Question: Will service revenue continue to be monitored internally? - Management confirmed that while service revenue will not be included in public communications, it will still be monitored internally [78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-33045 ICF International, Inc. (Exact name of Registrant as Specified in its Charter) | Delaware | 22-3661438 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Employer | | Incorporation or Organization) | Identification No.) | | 1902 Reston Metro Plaza, Reston, VA | 20190 | | (Address of Principal Executive Offices) | (Zip Code) | | Registrant's telephone number, in ...

ICF International, Inc. (NASDAQ:ICFI) Q1 2023 Earnings Conference Call May 9, 2023 4:30 PM ET Company Participants Lynn Morgen - AdvisIRy Partners John Wasson - Chairman and CEO Barry Broadus - CFO James Morgan - COO Conference Call Participants Joseph Vafi - Canaccord Genuity Jack Wilson - Truist Securities Kevin Steinke - Barrington Research Operator Welcome to the First Quarter 2023 ICF Earnings Conference Call. My name is Grace, and I will be your Operator for today's call. [Operator Instructions] I w ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-33045 Securities registered pursuant to Section 12(b) of the Act. | Title of each class | Trading Symbols(s) | Name of each exc ...

Financial Data and Key Metrics Changes - The company reported a record year in 2022 with total revenue increasing by 14.6% to $1.78 billion and service revenue up 15.8% to $1.29 billion, driven by strong performance across federal, state, local, and commercial energy client categories [26][35] - Adjusted EBITDA margin on service revenue increased to 14.9% in 2022 from 14.3% in 2021, with adjusted EBITDA rising by 20.6% to $191.8 million [35][34] - Non-GAAP EPS for the fourth quarter increased by 31.1% to $1.56, while full-year non-GAAP EPS rose by 19.7% to $5.77 [14][15] Business Line Data and Key Metrics Changes - Revenues from federal government clients surged by 45.6% year-on-year in Q4, comprising 15.4% organic growth and contributions from acquisitions [28] - The IT modernization and public health sectors are key growth areas, with IT modernization growing at 15% annually and expected to maintain double-digit growth [21][20] - Revenues from commercial energy clients increased by 17% in Q4, reflecting strong demand for energy efficiency and clean energy advisory services [30] Market Data and Key Metrics Changes - Revenues from state and local governments grew by 7% in Q4, driven by disaster management and environmental services [8] - The international government business faced challenges due to the completion of a significant project and currency translation effects, but mid-single-digit growth is expected in 2023 [9] - The company ended 2022 with a business development pipeline of over $8.5 billion, a 20% increase from the previous year [10] Company Strategy and Development Direction - The company aims for double-digit revenue growth in 2023, with a focus on high-growth markets such as IT modernization, public health, and climate resilience [5][11] - Strategic investments and acquisitions are expected to enhance capabilities and drive future growth, with a goal to achieve high single-digit organic service revenue growth through 2024 [11][39] - The company is prioritizing debt repayment while maintaining its dividend policy and share repurchase program [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities presented by the IIJA and IRA, anticipating significant growth in climate and resilience services [20] - The company remains optimistic about its ability to navigate the current economic environment, citing its resilience and the stability of its revenue streams [58] - Management highlighted the importance of maintaining a strong workforce and culture to support growth objectives [19] Other Important Information - The company repurchased 176,375 shares at an average price of $96.18 per share in 2022, with $112 million remaining under its share repurchase authorization [16] - The company declared a quarterly cash dividend of $0.14 per share, reinforcing its commitment to returning value to shareholders [37] Q&A Session Summary Question: Timing of contract awards and financial impact related to the infrastructure bill - Management expects material growth opportunities from the IIJA to ramp up in 2024 and 2025, with a pipeline of $100 million to $150 million in opportunities [40] Question: Impact of renewable energy project delays on the company - Management noted that while developers face interconnection challenges, the company remains busy with advisory work related to renewable projects [22] Question: Insights on IT modernization and consultative selling - Management emphasized the importance of engaging clients on both domain expertise and technology modernization to differentiate their offerings [85] Question: Balancing debt repayment versus M&A - Management indicated a focus on debt repayment in the first half of 2023, while remaining open to potential acquisition opportunities if they arise [75][92] Question: Talent availability and recruitment efforts - Management acknowledged the need to add talent to meet growth objectives and highlighted ongoing investments in recruiting and maintaining a strong culture [78]

Part I [Business](index=7&type=section&id=ITEM%201%2E%20BUSINESS) ICF International, Inc. provides professional services and technology-based solutions to government (76% of 2022 revenue) and commercial clients Revenue and Total Backlog (in millions) | Metric | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | :--- | | **Revenue** | $1,780.0 | $1,553.0 | $1,506.9 | | **Total Backlog** | $3,856.2 | $3,198.9 | $2,897.6 | - The company's primary services cover the entire project life cycle, including Advisory, Program Implementation, Analytics, Digital, and Engagement Services[22](index=22&type=chunk) Client Type Revenue Percentage | Client Type | 2022 Revenue % | 2021 Revenue % | 2020 Revenue % | | :--- | :--- | :--- | :--- | | Government | 76% | 71% | 65% | | Commercial | 24% | 29% | 35% | Largest Government Clients Revenue Percentage | Largest Government Clients | 2022 Revenue % | 2021 Revenue % | 2020 Revenue % | | :--- | :--- | :--- | :--- | | Dept. of Health and Human Services | 23% | 20% | 17% | | Dept. of State | 6% | 5% | 5% | | Dept. of Defense | 4% | 5% | 6% | Backlog (in millions) | Backlog (in millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Funded | $1,786.9 | $1,593.5 | $1,522.3 | | Unfunded | $2,069.3 | $1,605.4 | $1,375.3 | | **Total Backlog** | **$3,856.2** | **$3,198.9** | **$2,897.6** | - As of December 31, 2022, the company had approximately **9,000 employees globally**, with an overall employee turnover of **20.6%** for 2022[24](index=24&type=chunk)[90](index=90&type=chunk) [Risk Factors](index=21&type=section&id=ITEM%201A%2E%20RISK%20FACTORS) The company faces significant risks from its heavy reliance on government contracts, challenges in integrating acquisitions, cybersecurity threats, and international operational risks - A majority of revenue is derived from U.S. government contracts (**76% in 2022**), making the company vulnerable to changes in government spending, budget delays, and shutdowns[16](index=16&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - Fixed-price contracts, which accounted for **45% of 2022 revenue**, expose the company to risks of cost overruns and reduced profitability if costs are not accurately estimated and controlled[118](index=118&type=chunk)[119](index=119&type=chunk) - Acquisitions present integration challenges and risks of goodwill impairment, with goodwill and purchased intangibles accounting for approximately **64% of total assets** as of December 31, 2022[138](index=138&type=chunk)[140](index=140&type=chunk) - The company faces continuous and evolving cybersecurity risks, including threats to its systems and sensitive client data, which could lead to liability and reputational harm[131](index=131&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - International operations are subject to risks including the negative effects of Brexit on UK and EU business, geopolitical instability such as the war in Ukraine, and foreign currency fluctuations[127](index=127&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=ITEM%201B%2E%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the U.S. Securities and Exchange Commission - None[173](index=173&type=chunk) [Properties](index=34&type=section&id=ITEM%202%2E%20PROPERTIES) The company leases all its office space globally, including its corporate headquarters in Reston, Virginia - The company leases approximately **1.4 million square feet** of office space in over **82 locations globally**[175](index=175&type=chunk) - The corporate headquarters in Reston, Virginia, comprises approximately **208,274 square feet** under a lease extending through May 2039[174](index=174&type=chunk) [Legal Proceedings](index=34&type=section&id=ITEM%203%2E%20LEGAL%20PROCEEDINGS) The company is involved in various legal matters in the ordinary course of business, with a specific litigation resolved in February 2023 without material impact - The company is involved in various legal matters arising in the ordinary course of business, which are not expected to have a material adverse effect on its financial position[176](index=176&type=chunk) - Litigation related to the Road Home contract with the State of Louisiana was resolved on February 17, 2023, with the impact not being material to the company's consolidated financial statements[177](index=177&type=chunk)[492](index=492&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=ITEM%204%2E%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[178](index=178&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=ITEM%205%2E%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on NASDAQ, pays quarterly dividends, and maintains a share repurchase program with $111.9 million remaining available as of December 31, 2022 - The company's common stock is traded on the NASDAQ Global Select Market under the ticker symbol "**ICFI**"[181](index=181&type=chunk) - A share repurchase program is in place with an authorized aggregate of up to **$200.0 million**, with approximately **$111.9 million** remaining available for repurchases as of December 31, 2022[191](index=191&type=chunk)[270](index=270&type=chunk) - During the three months ended December 31, 2022, the company did not repurchase any shares under its publicly announced share repurchase program[191](index=191&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=ITEM%207%2E%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In fiscal year 2022, revenue grew 14.6% to $1.78 billion, while operating income declined 2.0% and net income fell 9.7% due to increased amortization, higher interest expenses, and lower gross margins [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Financial Performance (in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | $1,780.0 | $1,553.0 | +14.6% | | **Operating Income** | $108.8 | $110.9 | -2.0% | | **Net Income** | $64.2 | $71.1 | -9.7% | - Revenue growth was primarily driven by a **$245.3 million** increase from U.S. federal government clients and a **$25.2 million** increase from U.S. state and local government clients[238](index=238&type=chunk) - Operating income as a percentage of revenue decreased to **6.1% in 2022** from **7.1% in 2021**, mainly due to lower gross margins, higher indirect expenses, and increased amortization from recent acquisitions[245](index=245&type=chunk) - Net interest expense increased by **133.2% to $23.3 million**, driven by higher average debt balances to fund acquisitions and a rise in average interest rates from **1.6% in 2021 to 3.3% in 2022**[246](index=246&type=chunk) - The effective income tax rate for 2022 was **23.5%**, a decrease from **28.9% in 2021**[248](index=248&type=chunk) [Non-GAAP Measures](index=46&type=section&id=Non-GAAP%20Measures) Non-GAAP Adjusted EBITDA (in thousands) | (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net income | $64,243 | $71,132 | $54,959 | | EBITDA | $157,178 | $142,044 | $122,133 | | Total Adjustments | $34,658 | $16,985 | $20,514 | | **Adjusted EBITDA** | **$191,836** | **$159,029** | **$142,647** | Non-GAAP Diluted EPS | Per Share Data | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | U.S. GAAP Diluted EPS | $3.38 | $3.72 | $2.87 | | **Non-GAAP Diluted EPS** | **$5.77** | **$4.82** | **$4.17** | - Adjustments to derive non-GAAP measures primarily include impairment of long-lived assets, acquisition-related expenses, severance costs, facilities consolidation costs, and amortization of intangibles[254](index=254&type=chunk)[258](index=258&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flow Summary (in thousands) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $162,206 | $110,205 | | Net cash used in investing activities | ($258,844) | ($194,481) | | Net cash provided by financing activities | $90,371 | $23,233 | - As of December 31, 2022, the company had **$556.3 million** of outstanding debt and **$440.0 million** of available borrowing capacity under its Credit Facility[260](index=260&type=chunk)[264](index=264&type=chunk) - Cash used in investing activities in 2022 included **$237.3 million** for the acquisitions of SemanticBits and Blanton[274](index=274&type=chunk) - The company declared and paid cash dividends of **$0.14 per share** each quarter during 2022[271](index=271&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=ITEM%207A%2E%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include interest rate fluctuations on variable-rate debt and foreign currency exchange rate risk, mitigated by interest rate swaps - The company is exposed to interest rate risk on its variable-rate debt, where a **1% increase in interest rates** would have increased 2022 interest expense by approximately **$5.9 million**[277](index=277&type=chunk) - To manage interest rate risk, the company had four interest rate swap agreements with a total aggregate notional amount of **$200.0 million** as of December 31, 2022[277](index=277&type=chunk) - The company is subject to foreign currency exchange rate risk, with a **10% increase or decrease** in the value of the U.S. dollar against all currencies estimated to impact revenue by approximately **1%**, or **$13.5 million**[279](index=279&type=chunk) [Controls and Procedures](index=52&type=section&id=ITEM%209A%2E%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, excluding recent acquisitions - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[283](index=283&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022[284](index=284&type=chunk) - The assessment of internal controls excluded the 2022 acquisitions of SemanticBits and Blanton, which together represented **1.2% of total assets** and **3.8% of total revenues** for the year[285](index=285&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, and Other Matters](index=54&type=section&id=ITEMS%2010-14) Information for Items 10 through 14 is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=55&type=section&id=ITEM%2015%2E%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the financial statements and exhibits filed with the Form 10-K, noting the omission of certain schedules - This item contains the list of financial statements included in the report, such as the Consolidated Balance Sheets and Statements of Comprehensive Income[300](index=300&type=chunk) - A detailed list of exhibits filed with the report is provided, including corporate governance documents, material contracts, and certifications[302](index=302&type=chunk) Financial Statements and Notes [Note 2 - Summary of Significant Accounting Policies](index=68&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company's significant accounting policies include revenue recognition, goodwill impairment testing, leases, capitalized software, stock-based compensation, and income taxes - Revenue is primarily recognized over time, and for fixed-price contracts, the company uses a percentage-of-completion method based on the ratio of actual costs incurred to total estimated costs[356](index=356&type=chunk)[360](index=360&type=chunk) - Goodwill is tested for impairment annually as of October 1, with no impairment required for 2022 based on a qualitative assessment for its single aggregated reporting unit[374](index=374&type=chunk)[375](index=375&type=chunk) - The company operates in a single reportable segment providing professional services, with revenue from U.S. federal government clients representing **55% of total revenue in 2022**[392](index=392&type=chunk)[393](index=393&type=chunk) [Note 10 - Long-Term Debt](index=79&type=section&id=NOTE%2010%20-%20LONG-TERM%20DEBT) As of December 31, 2022, the company had $556.3 million in total long-term debt and amended its credit agreement in May 2022, extending maturity to May 2027 Debt Components (in millions) | Debt Component | Outstanding Balance (Dec 31, 2022, in millions) | | :--- | :--- | | Term Loan | $288.8 | | Delayed-Draw Term Loan | $220.0 | | Revolving Credit | $52.6 | | **Total before debt issuance costs** | **$561.4** | - On May 6, 2022, the company amended and restated its credit agreement, extending the maturity to May 6, 2027, and increasing its borrowing capacity[417](index=417&type=chunk) - As of December 31, 2022, the company had unused borrowing capacity of **$545.4 million** from its revolving line of credit, with **$440.0 million** available after considering financial limitations[420](index=420&type=chunk) [Note 11 – Revenue Recognition](index=81&type=section&id=NOTE%2011%20%E2%80%93%20REVENUE%20RECOGNITION) The company disaggregates revenue by client market, type, and contract mix, with $1.5 billion in unfulfilled performance obligations as of December 31, 2022 Revenue by Client Market (2022, in thousands) | Revenue by Client Market (2022) | Amount (in thousands) | Percentage | | :--- | :--- | :--- | | Health, education, and social programs | $906,081 | 51% | | Energy, environment, and infrastructure | $664,996 | 37% | | Safety and security | $129,357 | 7% | | Consumer and financial | $79,530 | 5% | Revenue by Contract Mix (2022, in thousands) | Revenue by Contract Mix (2022) | Amount (in thousands) | Percentage | | :--- | :--- | :--- | | Fixed-price | $802,804 | 45% | | Time-and-materials | $713,581 | 40% | | Cost-based | $263,579 | 15% | - As of December 31, 2022, the company had **$1.5 billion** in unfulfilled performance obligations, which it expects to satisfy over the next two years[427](index=427&type=chunk) [Note 16 – Business Combinations](index=91&type=section&id=NOTE%2016%20%E2%80%93%20BUSINESS%20COMBINATIONS) In 2022, the company acquired SemanticBits for $220.0 million and Blanton & Associates, adding digital modernization capabilities and goodwill - On July 13, 2022, the company acquired SemanticBits, LLC for a preliminary purchase price of **$220.0 million in cash**[467](index=467&type=chunk)[468](index=468&type=chunk) - The SemanticBits acquisition resulted in the recognition of **$159.7 million in goodwill** and **$64.1 million in intangible assets**[469](index=469&type=chunk) - On September 1, 2022, the company acquired Blanton & Associates, an environmental consulting firm, resulting in **$9.7 million of goodwill** and **$11.4 million of intangible assets**[465](index=465&type=chunk) [Note 20 - Commitments and Contingencies](index=96&type=section&id=NOTE%2020%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company has contingent liabilities from letters of credit and guarantees, with a long-standing litigation resolved in February 2023 without material financial impact - As of December 31, 2022, the company was contingently liable under **$2.0 million** in open standby letters of credit and **$9.2 million** in guarantees[489](index=489&type=chunk) - Litigation with the State of Louisiana concerning the Road Home Program, which concluded in 2009, was resolved on February 17, 2023, with the resolution not having a material impact on the company's financial statements[491](index=491&type=chunk)[492](index=492&type=chunk)