ICF International (ICFI) Q4 2006 earnings summary

Executive summary

• FY2006 revenue rose 86.9% to $331.3m, driven mainly by The Road Home contract and Caliber; net income increased to $11.9m from $2.0m.

• The Road Home represented 35% of FY2006 revenue and 53% in Q4, supporting rapid growth but materially increasing contract concentration and execution risk.

Financial highlights

• Revenue was $331.3m versus $177.2m in 2005; operating income was $22.9m versus $5.6m.

• Net income was $11.9m versus $2.0m; diluted EPS was $1.10 versus $0.21.

• EBITDA from continuing operations was $26.5m versus $11.1m; operating cash flow was $17.5m versus $2.2m.

• Q4 revenue reached $113.9m, operating income $15.0m, net earnings $9.2m, and diluted EPS $0.65.

• Adjusted for the $2.7m IPO bonus and $4.3m lease-abandonment charge, indirect and selling expenses were 24.2% of revenue, versus 33.9% in 2005.

Outlook and guidance

• Road Home revenue growth from production ramp and accelerated work was expected to continue into 2007, then decline later in 2007 and beyond as applications are processed.

• Growth priorities include larger end-to-end assignments, higher-margin commercial energy work, improved contract mix, operating leverage, and selective acquisitions.

• Management cited climate and carbon markets, homeland security, health and social programs, government transformation, and information-clearinghouse demand as opportunities.