| --- | --- | --- | --- | --- | --- | --- | |-------------|----------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | ICF Investor Presentation | | | | | | | August 2020 | | | | | | | Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events, or performances are forward-looking statements within the meaning of the federal securities laws. Our actual results may differ materially from those expressed in any forward-l ...

ICF International, Inc. (NASDAQ:ICFI) Q2 2020 Earnings Conference Call August 4, 2020 4:30 PM ET Company Participants Lynn Morgen - Investor Relations John Wasson - President and Chief Executive Officer Bettina Welsh - Chief Financial Officer Sudhakar Kesavan - Executive Chairman James Morgan - Chief, Business Operations Conference Call Participants Joseph Vafi - Canaccord Tobey Sommer - SunTrust Sam England - Berenberg Capital Andrew Nicholas - William Blair Kevin Steinke - Barrington Research Marc Riddick ...

PART I. FINANCIAL INFORMATION This section provides the company's unaudited consolidated financial statements and management's discussion of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, with notes detailing accounting policies and key financial changes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Summarizes the company's financial position, showing assets, liabilities, and equity at specific points in time | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $1,615,524 | $1,396,034 | $219,490 | 15.7% | | Total Current Assets | $419,041 | $434,717 | $(15,676) | (3.6%) | | Goodwill | $905,101 | $719,934 | $185,167 | 25.7% | | Other intangible assets, net | $66,558 | $25,829 | $40,729 | 157.7% | | Total Liabilities | $910,421 | $681,483 | $228,938 | 33.6% | | Long-term debt | $440,928 | $164,261 | $276,667 | 168.4% | | Total Stockholders' Equity | $705,103 | $714,551 | $(9,448) | (1.3%) | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Details the company's revenues, expenses, and net income over specific reporting periods | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Revenue | $353,987 | $366,717 | $(12,730) | (3.5%) | | Operating income | $22,782 | $22,542 | $240 | 1.1% | | Net income | $13,656 | $14,611 | $(955) | (6.5%) | | Basic EPS | $0.73 | $0.78 | $(0.05) | (6.4%) | | Diluted EPS | $0.72 | $0.76 | $(0.04) | (5.3%) | | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | :------- | | Revenue | $712,225 | $707,971 | $4,254 | 0.6% | | Operating income | $39,101 | $44,431 | $(5,330) | (12.0%) | | Net income | $24,268 | $29,929 | $(5,661) | (18.9%) | | Basic EPS | $1.29 | $1.59 | $(0.30) | (18.9%) | | Diluted EPS | $1.27 | $1.56 | $(0.29) | (18.6%) | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Reports the cash generated and used by operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | Change (in thousands) | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Net Cash Provided by (Used in) Operating Activities | $10,801 | $(47,946) | $58,747 | | Net Cash Used in Investing Activities | $(262,105) | $(16,335) | $(245,770) | | Net Cash Provided by Financing Activities | $254,366 | $57,492 | $196,874 | | Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $2,582 | $(6,682) | $9,264 | [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the figures presented in the consolidated financial statements [NOTE 1 - BASIS OF PRESENTATION AND NATURE OF OPERATIONS](index=6&type=section&id=NOTE%201%20-%20BASIS%20OF%20PRESENTATION%20AND%20NATURE%20OF%20OPERATIONS) Describes ICF International's professional services, client markets, U.S. GAAP basis, and recent accounting standard adoptions - The Company provides professional services and technology-based solutions to government and commercial clients, including management, marketing, technology, and policy consulting and implementation services[17](index=17&type=chunk) - Major clients include U.S. federal government departments and agencies (e.g., Department of Health and Human Services, Department of State, Department of Defense), U.S. state and local governments, international governments, and commercial clients worldwide[18](index=18&type=chunk) - The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), in Q1 2020, resulting in a **$0.5 million** cumulative-effect adjustment to opening retained earnings[28](index=28&type=chunk) [NOTE 2 – CONTRACT RECEIVABLES, NET](index=8&type=section&id=NOTE%202%20%E2%80%93%20CONTRACT%20RECEIVABLES%2C%20NET) Contract receivables, net, decreased by $36.8 million due to reduced billable amounts and increased allowance for doubtful accounts | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Billed and billable | $229,327 | $264,682 | $(35,355) | | Allowance for doubtful accounts | $(4,948) | $(3,506) | $(1,442) | | Contract receivables, net | $224,379 | $261,176 | $(36,797) | [NOTE 3 – GOODWILL](index=8&type=section&id=NOTE%203%20%E2%80%93%20GOODWILL) Goodwill increased by $185.2 million, primarily driven by the Incentive Technology Group (ITG) acquisition | Metric | Amount (in thousands) | | :------------------------------------ | :-------------------- | | Balance as of December 31, 2019 | $719,934 | | Goodwill resulting from business combination - ITG | $188,369 | | Effect of foreign currency translation | $(3,202) | | Balance as of June 30, 2020 | $905,101 | [NOTE 4 – LONG-TERM DEBT](index=8&type=section&id=NOTE%204%20%E2%80%93%20LONG-TERM%20DEBT) Long-term debt increased to $450.9 million, mainly due to a new $200.0 million term loan and increased revolving credit for the ITG acquisition | Debt Type | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Term Loan | $197,500 | $0 | $197,500 | | Revolving Credit | $256,292 | $165,444 | $90,848 | | Total before debt issuance costs | $453,792 | $165,444 | $288,348 | | Unamortized debt issuance costs | $(2,864) | $(1,183) | $(1,681) | | Total Long-term Debt | $450,928 | $164,261 | $286,667 | | Average Interest Rate (Total) | 2.74% | 3.59% | (0.85%) | - On March 3, 2020, the Company amended its Credit Facility to add a new **$200.0 million** term loan facility and increase the revolving line of credit to **$600.0 million**, extending the maturity to March 3, 2025[32](index=32&type=chunk) - As of June 30, 2020, the Company had **$453.8 million** in long-term debt outstanding and **$340.9 million** in unused borrowing capacity under the Credit Facility[35](index=35&type=chunk) [NOTE 5 – LEASES](index=9&type=section&id=NOTE%205%20%E2%80%93%20LEASES) The company holds operating leases for facilities and equipment, with ROU assets of $139.2 million and total operating lease liabilities of $154.9 million | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total operating lease right-of-use assets | $139,189 | $133,965 | | Total operating lease liabilities | $154,949 | $151,750 (calculated from current and non-current) | | Rent Expense Type | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :---------------------- | :---------------------------------------- | :---------------------------------------- | | Operating lease costs | $18,770 | $17,505 | | Short-term lease costs | $873 | $1,003 | | Variable lease costs | $1 | $184 | | Total rent expense | $19,644 | $18,692 | - As of June 30, 2020, the Company had additional operating leases not yet commenced with a potential lease liability of **$129.1 million**, anticipated to commence over the next three years[39](index=39&type=chunk) [NOTE 6 – OTHER COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS](index=10&type=section&id=NOTE%206%20%E2%80%93%20OTHER%20COMPREHENSIVE%20%28LOSS%29%20INCOME%20AND%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated other comprehensive loss increased to $23.4 million, mainly due to foreign currency translation and interest rate hedge fair value changes | Component | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------------------------------ | :----------------------------- | :------------------------------- | | Foreign Currency Translation Adjustments | $(15,209) | $(10,995) | | Gain on Sale of Interest Rate Hedge Agreement | $1,368 | $1,634 | | Change in Fair Value of Interest Rate Hedge Agreements | $(9,590) | $(2,783) | | Total Accumulated Other Comprehensive Loss | $(23,431) | $(12,144) | - The Company expects to reclassify **$0.7 million** net gains related to the Gain on Sale of Interest Rate Hedge Agreement and **$3.7 million** net losses related to the Change in Fair Value of Interest Rate Hedge Agreement from accumulated other comprehensive loss into earnings during the next 12 months[43](index=43&type=chunk) [NOTE 7 – STOCKHOLDERS' EQUITY](index=12&type=section&id=NOTE%207%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) Total stockholders' equity decreased to $705.1 million, influenced by net income, equity compensation, dividends, and stock buybacks | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Stockholders' Equity | $705,103 | $714,551 | | Net income (six months) | $24,268 | N/A (period-specific) | | Equity compensation (six months) | $6,344 | N/A (period-specific) | | Dividends declared (six months) | $(5,273) | N/A (period-specific) | | Net payments for stock issuances and buybacks (six months) | $(23,024) | N/A (period-specific) | | Accumulated other comprehensive loss | $(23,431) | $(12,144) | [NOTE 8 – RESTRICTED CASH](index=13&type=section&id=NOTE%208%20%E2%80%93%20RESTRICTED%20CASH) Cash, cash equivalents, and restricted cash increased from $6.5 million to $9.1 million, with no non-current restricted cash | Metric | Beginning of Period 2020 (in thousands) | End of Period 2020 (in thousands) | | :-------------------------------------------------------------------------------- | :------------------------------------ | :------------------------------ | | Cash and cash equivalents | $6,482 | $9,064 | | Restricted cash - non-current | $0 | $0 | | Total of cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $6,482 | $9,064 | [NOTE 9 – REVENUE RECOGNITION](index=13&type=section&id=NOTE%209%20%E2%80%93%20REVENUE%20RECOGNITION) Revenue decreased 3.5% for three months but increased 0.6% for six months, driven by federal government growth offset by commercial declines | Client Market (3 Months) | June 30, 2020 (in thousands) | June 30, 2019 (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | | Energy, environment, and infrastructure | $151,481 | $166,520 | (9.0%) | | Health, education, and social programs | $148,528 | $134,346 | 10.6% | | Consumer and financial services | $22,538 | $35,821 | (37.1%) | | Client Type (3 Months) | June 30, 2020 (in thousands) | June 30, 2019 (in thousands) | % Change | | :----------------------- | :----------------------------- | :----------------------------- | :------- | | U.S. federal government | $170,748 | $141,253 | 20.9% | | U.S. state and local government | $57,982 | $73,101 | (20.7%) | | Commercial | $107,159 | $120,746 | (11.3%) | | Contract Mix (3 Months) | June 30, 2020 (in thousands) | June 30, 2019 (in thousands) | % Change | | :---------------------- | :----------------------------- | :----------------------------- | :------- | | Time-and-materials | $168,489 | $167,009 | 0.9% | | Fixed price | $123,970 | $146,967 | (15.7%) | | Cost-based | $61,528 | $52,741 | 16.7% | | Contract Balances | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | % Change | | :------------------------ | :----------------------------- | :------------------------------- | :------- | | Contract assets | $150,577 | $142,337 | 5.8% | | Contract liabilities | $(30,135) | $(37,413) | (19.5%) | | Net contract assets (liabilities) | $120,442 | $104,924 | 14.8% | - The Company had **$1.5 billion** in unfulfilled performance obligations as of June 30, 2020, expected to be satisfied in one to two years[51](index=51&type=chunk) [NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES](index=15&type=section&id=NOTE%2010%20%E2%80%93%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) The company uses fixed interest rate swaps as cash flow hedges, including a new $100.0 million swap entered in February 2020 - On February 20, 2020, the Company entered into a **$100.0 million** floating-to-fixed interest rate swap, designated as a cash flow hedge, with a fixed rate of **1.294%** per annum from February 28, 2020, to February 28, 2025[53](index=53&type=chunk)[54](index=54&type=chunk) [NOTE 11 – INCOME TAXES](index=15&type=section&id=NOTE%2011%20%E2%80%93%20INCOME%20TAXES) Effective income tax rates increased due to non-deductible losses, with unrecognized tax benefits rising to $2.7 million and $6.4 million in deferred Social Security taxes | Period | Effective Tax Rate 2020 | Effective Tax Rate 2019 | | :-------------------------- | :---------------------- | :---------------------- | | Three Months Ended June 30 | 29.0% | 26.2% | | Six Months Ended June 30 | 24.6% | 22.9% | | Metric | June 30, 2020 (in thousands) | June 30, 2019 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Unrecognized tax benefits | $2,700 | $200 | | Accrued penalty and interest | $100 | $100 | - The Company deferred payment of approximately **$6.4 million** of employer Social Security taxes during the quarter ended June 30, 2020, under the CARES Act[60](index=60&type=chunk) [NOTE 12 – ACCOUNTING FOR STOCK COMPENSATION](index=16&type=section&id=NOTE%2012%20%E2%80%93%20ACCOUNTING%20FOR%20STOCK%20COMPENSATION) The 2018 Omnibus Incentive Plan had 1,095,772 shares available for grant, with $4.0 million in stock-based compensation expense for the quarter - As of June 30, 2020, approximately **1,095,772 shares** were available for grant under the 2018 Omnibus Plan[62](index=62&type=chunk) - During the six months ended June 30, 2020, the Company granted **166,051 RSUs**, **112,479 CSRSUs**, and **55,264 PSAs**[63](index=63&type=chunk) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Stock-based compensation expense | $4,000 | $5,900 | | Unrecognized Compensation Expense (June 30, 2020) | Amount (in thousands) | Weighted-Average Period | | :------------------------------------------------ | :-------------------- | :---------------------- | | RSUs | $17,900 | 2.2 years | | CSRSUs | $9,400 | 1.9 years | | PSAs | $3,800 | 1.6 years | [NOTE 13 – FAIR VALUE](index=16&type=section&id=NOTE%2013%20%E2%80%93%20FAIR%20VALUE) Deferred compensation investments totaled $14.4 million and interest rate swap liabilities were $13.0 million, both Level 2 fair value measurements | Financial Instrument (June 30, 2020) | Total (in thousands) | Location on Balance Sheet | | :----------------------------------- | :------------------- | :------------------------ | | Deferred compensation investments | $14,435 | Other assets | | Deferred compensation plan liabilities | $14,353 | Other long-term liabilities | | Interest rate swaps | $13,044 | Other long-term liabilities | [NOTE 14 – BUSINESS COMBINATION](index=17&type=section&id=NOTE%2014%20%E2%80%93%20BUSINESS%20COMBINATION) The company acquired ITG for $255.0 million, resulting in $188.4 million in goodwill and $47.3 million in other intangible assets - On January 31, 2020, the Company acquired Incentive Technology Group, LLC (ITG) for **$255.0 million**[67](index=67&type=chunk) - The acquisition resulted in a preliminary allocation of approximately **$188.4 million to goodwill** and **$47.3 million to other intangible assets**[68](index=68&type=chunk) - The weighted average amortization period for the acquired intangible assets is **5.7 years**[68](index=68&type=chunk) [NOTE 15 – EARNINGS PER SHARE](index=17&type=section&id=NOTE%2015%20%E2%80%93%20EARNINGS%20PER%20SHARE) Diluted EPS decreased to $0.72 for three months and $1.27 for six months, with certain awards excluded from calculations | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Basic earnings per share | $0.73 | $0.78 | | Diluted earnings per share | $0.72 | $0.76 | | Dilutive effect of stock options, RSUs, and performance shares | 191 | 328 | | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Basic earnings per share | $1.29 | $1.59 | | Diluted earnings per share | $1.27 | $1.56 | | Dilutive effect of stock options, RSUs, and performance shares | 285 | 398 | - For the three months ended June 30, 2020, **19,755 weighted-average shares** were excluded from EPS calculation as anti-dilutive, and for the six months, **19,881 shares** were excluded[71](index=71&type=chunk) [NOTE 16 – SHARE REPURCHASE PROGRAM](index=18&type=section&id=NOTE%2016%20%E2%80%93%20SHARE%20REPURCHASE%20PROGRAM) The $100.0 million share repurchase program had $51.4 million remaining, with its Rule 10b5-1 plan terminated due to COVID-19 - As of June 30, 2020, **$51.4 million** remained available for share repurchases under the program[73](index=73&type=chunk) - The Rule 10b5-1 plan element of the share repurchase program was terminated on March 13, 2020, due to uncertainties associated with the COVID-19 pandemic[73](index=73&type=chunk) [NOTE 17 – SUBSEQUENT EVENTS](index=18&type=section&id=NOTE%2017%20%E2%80%93%20SUBSEQUENT%20EVENTS) The board approved a $0.14 per share cash dividend, and the company continues to assess the uncertain impacts of COVID-19 - On August 4, 2020, the Company's board of directors approved a **$0.14 per share cash dividend**, payable October 13, 2020[74](index=74&type=chunk) - The Company is continuously assessing the financial impacts of COVID-19 on its business, customers, employees, and capital markets, with future impacts remaining uncertain[75](index=75&type=chunk) [NOTE 18 – CONTINGENCIES](index=18&type=section&id=NOTE%2018%20%E2%80%93%20CONTINGENCIES) The company faces a $220.2 million lawsuit from the State of Louisiana regarding the Road Home Program, which it believes lacks merit - The State of Louisiana filed an administrative demand and lawsuit seeking approximately **$220.2 million** in alleged overpayments from the Road Home Program against ICF Emergency Management Services, L.L.C., a subsidiary of the Company[77](index=77&type=chunk)[78](index=78&type=chunk) - The Company believes the claim has no merit and intends to vigorously defend its position, thus no liability has been recorded as of June 30, 2020[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and outlook, covering COVID-19 impacts, revenue, costs, liquidity, and strategic focus [FORWARD-LOOKING STATEMENTS](index=20&type=section&id=FORWARD-LOOKING%20STATEMENTS) Outlines forward-looking statements and key risks, including government contract dependence, COVID-19 impacts, and acquisition integration challenges - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[80](index=80&type=chunk) - Key risk factors include dependence on government contracts, changes in federal government budgeting, impacts of COVID-19, results of government audits, dependence on cyclical commercial sectors, difficulties in integrating acquisitions, and the Road Home contract lawsuit[80](index=80&type=chunk) [Impacts of the COVID-19 Pandemic](index=21&type=section&id=Impacts%20of%20the%20COVID-19%20Pandemic) COVID-19 created uncertainty, impacting commercial services and leading to staff adjustments and deferred employer Social Security taxes - Government clients, accounting for approximately **69% of revenues** for the six months ended June 30, 2020, have largely continued to require services despite postponements and travel challenges[84](index=84&type=chunk) - Commercial marketing services, representing less than **12% of total revenues**, were impacted by travel restrictions and deferral/cancellation of marketing events[85](index=85&type=chunk) - The Company has implemented staff reductions, furloughs, and temporary wage reduction programs and deferred approximately **$6.4 million of employer Social Security taxes** under the CARES Act[86](index=86&type=chunk)[87](index=87&type=chunk) [OVERVIEW AND OUTLOOK](index=21&type=section&id=OVERVIEW%20AND%20OUTLOOK) ICF provides professional services across four markets, anticipating long-term demand and focusing on client relationships, larger engagements, and strategic acquisitions - The Company provides advisory, program implementation, analytics, digital, and engagement services to government and commercial clients[89](index=89&type=chunk) - Long-term demand for services is expected to grow due to concerns about clean energy, health promotion, natural disaster relief, and homeland security[91](index=91&type=chunk) - Strategic priorities include leveraging digital and client engagement capabilities, enhancing client relationships, seeking larger engagements, and evaluating strategic acquisition opportunities such as the recent ITG acquisition[92](index=92&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=23&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Financial statements rely on critical accounting policies and estimates, with management monitoring COVID-19 impacts on goodwill and intangible asset fair values - Critical accounting policies and estimates include revenue recognition, impairment of goodwill and other intangible assets, income taxes, and stock-based compensation[95](index=95&type=chunk) - The Company is monitoring COVID-19 impacts on goodwill and intangible asset fair values; future sustained impacts could result in material impairment recognition[97](index=97&type=chunk)[98](index=98&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=23&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) Refers to Note 1 for recent accounting pronouncements, including ASU 2020-04 on Reference Rate Reform - Recent accounting pronouncements are discussed in Note 1, including ASU 2020-04 on Reference Rate Reform, which the Company is currently evaluating for impact[29](index=29&type=chunk)[99](index=99&type=chunk) [SELECTED KEY METRICS](index=23&type=section&id=SELECTED%20KEY%20METRICS) The company tracks revenue by client markets, types, and contract mix to evaluate operations and business nature - Key metrics tracked include revenue by client market (breadth of expertise), client type (diversity of client base), and contract mix (degree of performance risk)[100](index=100&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) Revenue decreased 3.5% for three months but increased 0.6% for six months, while net income declined due to increased amortization and expenses [Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019](index=24&type=section&id=Three%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202019) Compares financial performance for the three months ended June 30, 2020, against the same period in 2019 | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Revenue | $353,987 | $366,717 | $(12,730) | (3.5%) | | Direct Costs | $223,407 | $235,053 | $(11,646) | (5.0%) | | Operating Income | $22,782 | $22,542 | $240 | 1.1% | | Interest expense | $(3,908) | $(2,934) | $(974) | 33.2% | | Net Income | $13,656 | $14,611 | $(955) | (6.5%) | - Revenue decrease was primarily due to a **$13.6 million decrease** from commercial clients (especially consumer and financial services, impacted by COVID-19) and decreases in state/local and international government clients, partially offset by a **$29.5 million increase** from federal government clients (including ITG acquisition)[103](index=103&type=chunk) - Amortization of intangible assets increased by **$1.4 million (67.5%)** due to the ITG acquisition[107](index=107&type=chunk) [Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019](index=25&type=section&id=Six%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202019) Compares financial performance for the six months ended June 30, 2020, against the same period in 2019 | Metric | 2020 (in thousands) | 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Revenue | $712,225 | $707,971 | $4,254 | 0.6% | | Direct Costs | $454,023 | $451,002 | $3,021 | 0.7% | | Operating Income | $39,101 | $44,431 | $(5,330) | (12.0%) | | Interest expense | $(7,433) | $(5,387) | $(2,046) | 38.0% | | Net Income | $24,268 | $29,929 | $(5,661) | (18.9%) | - Revenue increase was driven by a **$52.9 million increase** from federal clients (including ITG acquisition), offset by decreases in commercial and state/local government contracts[113](index=113&type=chunk) - Operating income decreased by **12.0%** due to a constant gross margin, increased amortization of intangible assets, and higher indirect and selling expenses[118](index=118&type=chunk) [NON-GAAP MEASURES](index=26&type=section&id=NON-GAAP%20MEASURES) Presents non-GAAP measures like Service Revenue, EBITDA, and Non-GAAP Diluted EPS, used by management to evaluate operational performance [Service Revenue](index=26&type=section&id=Service%20Revenue) Defines and reconciles service revenue, a non-GAAP measure excluding subcontractor and other direct costs - Service revenue represents revenue less subcontractor and other direct costs, considered a key source of profit from services provided by employees[122](index=122&type=chunk) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenue | $353,987 | $366,717 | | Subcontractor and other direct costs | $(92,789) | $(114,381) | | Service revenue | $261,198 | $252,336 | | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | | Revenue | $712,225 | $707,971 | | Subcontractor and other direct costs | $(195,625) | $(214,280) | | Service revenue | $516,600 | $493,691 | [EBITDA and Adjusted EBITDA](index=27&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Defines and reconciles EBITDA and Adjusted EBITDA, non-GAAP measures for evaluating operating performance - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate operating performance, with Adjusted EBITDA further eliminating impacts of certain non-recurring items[124](index=124&type=chunk)[125](index=125&type=chunk) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income | $13,656 | $14,611 | | EBITDA | $31,325 | $30,214 | | Adjusted EBITDA | $32,501 | $32,712 | | Metric | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net income | $24,268 | $29,929 | | EBITDA | $55,676 | $59,000 | | Adjusted EBITDA | $60,466 | $61,170 | [Non-GAAP Diluted Earnings per Share](index=28&type=section&id=Non-GAAP%20Diluted%20Earnings%20per%20Share) Defines and reconciles non-GAAP diluted EPS, excluding specific non-recurring and non-cash items - Non-GAAP diluted EPS excludes the impact of impairment of intangible assets, acquisition expenses, severance, facility costs, bad debt reserve adjustments, amortization of intangible assets, and income tax effects[132](index=132&type=chunk) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | | Diluted EPS | $0.72 | $0.76 | | Non-GAAP EPS | $0.89 | $0.97 | | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :----------------------------- | :----------------------------- | | Diluted EPS | $1.27 | $1.56 | | Non-GAAP EPS | $1.71 | $1.85 | [LIQUIDITY AND CAPITAL RESOURCES](index=28&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity was impacted by a $288.3 million Credit Facility draw for the ITG acquisition, with management confident in sufficient liquidity despite COVID-19 [Liquidity and Borrowing Capacity](index=28&type=section&id=Liquidity%20and%20Borrowing%20Capacity) Discusses the company's liquidity position, borrowing capacity, and strategies for managing financial resources - The Company increased its borrowing capacity by **$200.0 million** through a new term loan facility in March 2020, drawing upon the Credit Facility to fund the ITG acquisition and working capital needs[134](index=134&type=chunk) - Management believes internally generated funds, available bank borrowings, and cash on hand will provide sufficient liquidity to fund ongoing operations, capital expenditures, acquisitions, dividends, and share repurchases[137](index=137&type=chunk) - A **$100.0 million** floating-to-fixed interest rate swap was entered into on February 20, 2020, to hedge variable rate indebtedness[146](index=146&type=chunk) [Cash Flow](index=30&type=section&id=Cash%20Flow) Analyzes cash flows from operating, investing, and financing activities, highlighting significant changes and drivers | Cash Flow Activity | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net Cash Provided by (Used in) Operating Activities | $10,801 | $(47,946) | | Net Cash Used in Investing Activities | $(262,105) | $(16,335) | | Net Cash Provided by Financing Activities | $254,366 | $57,492 | - Operating cash flows improved significantly to **$10.8 million provided** in 2020 from **$47.9 million used** in 2019, primarily due to a decrease in contract receivables[148](index=148&type=chunk) - Investing activities used **$262.1 million**, largely due to the **$253.1 million ITG acquisition**[149](index=149&type=chunk) - Financing activities provided **$254.4 million**, mainly from net advances on the Credit Facility[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses market risks, including potential impacts of COVID-19 on interest rates and foreign currency fluctuations - The COVID-19 outbreak may affect interest rates and cause foreign currency fluctuations, impacting market risk[151](index=151&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective, with no significant changes in internal controls over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2020[152](index=152&type=chunk) - No significant changes in internal controls over financial reporting were identified[152](index=152&type=chunk) - Control systems provide reasonable, but not absolute, assurance due to inherent limitations and resource constraints[153](index=153&type=chunk) PART II. OTHER INFORMATION This section contains additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters, including the Road Home Program lawsuit, but expects no material adverse financial impact - The Company is involved in various legal matters, including the Road Home Program lawsuit, but believes ultimate liability will not have a material adverse effect on its financial position, results of operations, or cash flows[156](index=156&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, emphasizing potential adverse impacts of health epidemics like COVID-19 on demand, staffing, and financial results - New risk factors include those related to health epidemics and pandemics like COVID-19, which may materially adversely affect demand for services, staffing, client decision-making, global business conditions, and capital access[157](index=157&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - The pandemic could cause delays in client performance, including timely payments, and affect the Company's workforce due to illness, quarantines, or government actions[159](index=159&type=chunk)[160](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 791 common shares from employees at $64.87 per share for tax withholding obligations | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :---------------- | :----------------------------- | :--------------------------- | | May 1 - May 31 | 791 | $64.87 | | Total (3 months) | 791 | $64.87 | - These repurchases were from employees to pay required withholding taxes related to the settlement of restricted stock units and performance-based share awards[162](index=162&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported by the company - No defaults upon senior securities were reported[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable[165](index=165&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[166](index=166&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including Credit Facility amendments, CEO/CFO certifications, and iXBRL financial statements - Exhibits include the First Amendment to Fifth Amended and Restated Business Loan and Security Agreement, CEO and CFO certifications, and financial statements in iXBRL format[167](index=167&type=chunk)

| --- | --- | --- | --- | --- | --- | |-------------------------------------------------|-------|-------|----------------------------------------|-------|-------| | | | | | | | | | | | | | | | ICF Investor Presentation & Services Conference | | | Baird 2020 Global Consumer, Technology | | | | June 2, 2020 | | | | | | ICF Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events, or performances are forward-looking statements within the meaning of ...

ICF International, Inc. (NASDAQ:ICFI) Q1 2020 Earnings Conference Call May 5, 2020 4:30 PM ET Company Participants Lynn Morgen - Investor Relations John Wasson - President and Chief Financial Officer Sudhakar Kesavan - Executive Chairman Bettina Welsh - Chief Financial Officer Conference Call Participants Tobey Sommer - SunTrust Joseph Vafi - Canaccord Andrew Nicholas - William Blair Kevin Steinke - Barrington Research Marc Riddick - Sidoti & Company Operator Welcome to the First Quarter 2020 ICF Earnings C ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2020 unaudited financials show total assets at $1.68 billion driven by the ITG acquisition, revenue at $358.2 million, and net income at $10.6 million, alongside increased debt and negative operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,684,023** | **$1,396,034** | | Cash and cash equivalents | $58,661 | $6,482 | | Goodwill | $905,177 | $719,934 | | **Total Liabilities** | **$993,267** | **$681,483** | | Long-term debt | $506,979 | $164,261 | | **Total Stockholders' Equity** | **$690,756** | **$714,551** | - Goodwill increased by **$185.2 million**, primarily due to the acquisition of Incentive Technology Group (ITG)[10](index=10&type=chunk)[32](index=32&type=chunk) - Long-term debt increased significantly to **$517.0 million** from **$164.3 million**, mainly to finance the ITG acquisition[10](index=10&type=chunk)[33](index=33&type=chunk) [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income (Unaudited) | (in thousands, except per share) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Revenue** | **$358,238** | **$341,254** | | Operating income | $16,319 | $21,889 | | **Net income** | **$10,612** | **$15,318** | | Diluted EPS | $0.55 | $0.80 | - Revenue increased by **5.0%** year-over-year, while operating income decreased by **25.4%** and net income decreased by **30.7%**[12](index=12&type=chunk)[101](index=101&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (Unaudited) | (in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($15,232) | ($12,688) | | Net Cash Used in Investing Activities | ($257,725) | ($9,358) | | Net Cash Provided by Financing Activities | $325,874 | $14,444 | - Cash used in investing activities significantly increased due to a **$253.0 million** payment for the acquisition of ITG[15](index=15&type=chunk)[135](index=135&type=chunk) - Cash provided by financing activities increased substantially due to net advances of **$354.6 million** from the credit facility, primarily to fund the ITG acquisition[15](index=15&type=chunk)[136](index=136&type=chunk) [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - On January 31, 2020, the Company acquired Incentive Technology Group, LLC (ITG) for **$255.0 million**, resulting in **$188.3 million** of goodwill and **$47.3 million** of other intangible assets[67](index=67&type=chunk)[68](index=68&type=chunk) - On March 3, 2020, the Company amended its Credit Facility, adding a new **$200.0 million** term loan and increasing the total facility to **$800.0 million** ($200M term, $600M revolving). Total debt outstanding was **$520.0 million** as of March 31, 2020[33](index=33&type=chunk) - The company had **$1.5 billion** in unfulfilled performance obligations as of March 31, 2020, which it expects to satisfy, on average, in one to two years[54](index=54&type=chunk) - A quarterly cash dividend of **$0.14 per share** was approved on May 5, 2020[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported Q1 2020 revenue growth of 5.0% to $358.2 million, a 25.4% decline in operating income to $16.3 million due to acquisition costs, and increased Days Sales Outstanding to 88 days, while monitoring COVID-19 impacts - The company is monitoring the impact of the COVID-19 pandemic, noting that while government work has seen continuity, commercial marketing services, representing **less than 15%** of 2019 revenue, will likely be impacted[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) Q1 2020 vs Q1 2019 Performance | (dollars in thousands) | 2020 | 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $358,238 | $341,254 | $16,984 | 5.0% | | Direct Costs | $230,616 | $215,949 | $14,667 | 6.8% | | Operating Income | $16,319 | $21,889 | ($5,570) | (25.4%) | | Net Income | $10,612 | $15,318 | ($4,706) | (30.7%) | - The increase in revenue was driven by a **$14.6 million** increase in government client revenue, particularly from U.S. federal government clients[101](index=101&type=chunk) - Operating income decreased primarily due to increased indirect and selling expenses, costs related to the ITG acquisition, and higher amortization of intangible assets[103](index=103&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) Reconciliation of Diluted EPS to Non-GAAP Diluted EPS | | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Diluted EPS | $0.55 | $0.80 | | Special charges & Amortization | $0.34 | $0.09 | | Income tax effects | ($0.06) | ($0.02) | | **Non-GAAP EPS** | **$0.83** | **$0.87** | - Days-sales-outstanding (DSO) increased to **88 days** for Q1 2020 from **83 days** in Q4 2019, largely due to slow payments from disaster relief and rebuild efforts. Excluding these efforts, DSO was **78 days**[126](index=126&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its market risk disclosures since its last Annual Report on Form 10-K - There have been no material changes in the disclosures discussed in the section entitled "Quantitative and Qualitative Disclosures About Market Risk" in Part II, Item 7A of the company's Annual Report[137](index=137&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period, with no significant changes to internal controls over financial reporting during the quarter - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[138](index=138&type=chunk) - No significant changes in internal controls over financial reporting occurred during the quarter[138](index=138&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a $220.2 million claim from the State of Louisiana regarding the Road Home Program, which it believes lacks merit and has not recorded as a liability, alongside other ordinary course legal matters - The company is involved in a lawsuit with the State of Louisiana, which is seeking approximately **$220.2 million** in alleged overpayments related to the Road Home Program contract that ended in 2009[78](index=78&type=chunk)[79](index=79&type=chunk) - The company believes the claim has no merit, intends to defend its position vigorously, and has not recorded a liability as of March 31, 2020[79](index=79&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights potential material adverse effects from health epidemics like COVID-19 on demand, workforce, client decision-making, and global business conditions - A new risk factor was added concerning health epidemics and pandemics, such as COVID-19, which may have material adverse effects on the business[143](index=143&type=chunk) - Specific risks include impacts on demand for services, availability of staff and partners, slowdown of client decision-making, and potential reprioritization of client spending[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2020, the company repurchased 310,139 shares at an average price of $77.34 per share, including 206,820 shares under its repurchase program and 103,319 shares for tax withholding obligations Share Repurchase Activity for Q1 2020 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2020 | 74,269 | $90.33 | 41,800 | | Feb 2020 | 64,317 | $81.96 | 64,317 | | Mar 2020 | 171,553 | $69.99 | 100,703 | | **Total** | **310,139** | **$77.34** | **206,820** | - During the quarter, **206,820 shares** were repurchased under the stock repurchase program. The company also repurchased **103,319 shares** from employees to satisfy tax withholding obligations[148](index=148&type=chunk)[149](index=149&type=chunk) [Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported - None[150](index=150&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[151](index=151&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) None reported - None[152](index=152&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed, including the First Amendment to the company's Business Loan and Security Agreement, certifications by the Principal Executive Officer and Principal Financial Officer, and iXBRL data files - Key exhibits filed include the First Amendment to the Fifth Amended and Restated Business Loan and Security Agreement, and certifications from the CEO and CFO pursuant to Sarbanes-Oxley[153](index=153&type=chunk)

ICF International, Inc. (NASDAQ:ICFI) Q4 2019 Earnings Conference Call February 27, 2020 4:30 PM ET Company Participants Lynn Morgen - Founding Partner, AdvisIRy Partners, IR Sudhakar Kesavan - Executive Chairman John Wasson - President and CEO James Morgan - CFO Conference Call Participants Joseph Vafi - Canaccord Genuity Tobey Sommer - SunTrust Trevor Romeo - William Blair Kevin Steinke - Barrington Research Marc Riddick - Sidoti & Company Operator Good afternoon, and welcome to the Fourth Quarter and Ful ...

Revenue Sources and Client Relationships - Approximately 38% of the company's revenue in 2019 was derived from federal government contracts, with 27% from state and local governments and international governments[89] - Commercial clients contributed approximately 35%, 36%, and 38% of revenue in 2019, 2018, and 2017 respectively, indicating a growing reliance on these clients[105] - The company’s client relationships and professional reputation are critical for winning new contracts and renewing existing ones, impacting revenue stability[94] Risks Related to Government Contracts - The company faced risks related to government budgeting and spending priorities, which could lead to delays or cancellations of expected funding[86] - Changes in government spending priorities could lead to delayed payments or failure to pay, affecting cash flow[90] - The company’s contracts may allow clients to terminate or modify them at their convenience, which could adversely affect revenue[104] Financial Performance and Cost Management - The company derived 38%, 39%, and 39% of its revenue from fixed-price contracts in 2019, 2018, and 2017 respectively, exposing it to risks of cost overruns[103] - The unpredictability of earnings could increase on fixed-price contracts if the company cannot accurately estimate and control contract costs[101] - The company may not receive revenue corresponding to the full amount of its backlog, which could adversely affect revenue and operating results[99] Compliance and Regulatory Risks - The company is subject to various compliance risks, including potential civil and criminal penalties for failing to adhere to complex laws and regulations[110] - The company must ensure compliance with various privacy and data protection laws, which could result in substantial costs and affect operational results[131] - The company may incur significant penalties under Privacy and Data Protection Laws, including fines up to 4% of annual worldwide revenue for non-compliance[131] International Operations and Market Risks - International operations expose the company to risks such as currency fluctuations and compliance with foreign laws, which could adversely affect profitability[122] - The U.K.'s exit from the EU may disrupt operations and create uncertainties regarding trade and regulatory environments[123] - Ongoing uncertainties surrounding Brexit could negatively impact customer and investor confidence, leading to market volatility[125] Cybersecurity and Technology Risks - The company faces continuous and evolving cybersecurity risks, with high-profile data breaches highlighting a hostile information security environment[127] - The company’s success in competitive digital marketing services depends on its ability to develop and integrate new technologies and respond to rapid changes in technology[134] Financial Instruments and Debt Management - The company had an aggregate of $165.4 million of outstanding indebtedness under a credit facility maturing on May 17, 2022, which increased due to the January 2020 acquisition of ITG[141] - Changes affecting the availability of LIBOR may impact the company’s financial instruments and future financing efforts[145] - A 1% increase in interest rates would increase interest expense by approximately $2.7 million, impacting annual net income and operating cash flows by a comparable amount[290] Board Governance and Dividend Policy - The company’s board of directors is divided into three classes, making it more difficult for stockholders to change the composition of the board[142] - The board of directors has the discretion to declare future dividends, which are subject to factors such as future earnings and cash flows[147] - Future dividends are not assured, and incorrect market expectations regarding dividends may negatively affect stock price[147] Interest Rate and Currency Risks - The company is exposed to fluctuations in interest rates for borrowings under the Credit Facility and foreign exchange rate risk[289] - The company uses interest rate swap arrangements to hedge interest rate risk, not for speculative purposes[290] - The company held approximately $7.1 million in cash in foreign bank accounts to mitigate foreign currency conversion risks[290] - A 10% increase or decrease in the value of the U.S. dollar against all currencies would have an estimated impact on revenue of approximately 1.3%, or $17.7 million[290]

ICF International, Inc. (NASDAQ:ICFI) Q3 2019 Earnings Conference Call November 6, 2019 4:30 PM ET Company Participants Lynn Morgen - AdvisIRy Partners Sudhakar Kesavan - Executive Chairman John Wasson - President & Chief Executive Officer James Morgan - Chief Financial Officer Conference Call Participants Andrew Nicholas - William Blair Tobey Sommer - SunTrust Sam England - Berenberg Kevin Steinke - Barrington Research Marc Riddick - Sidoti & Company Operator Welcome to the ICF International Third Quarter ...

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 September 30, 2019 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 Ju ...