ICFI - Earnings call transcript Q2 2018

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Operator

Welcome to the ICF International Second Quarter 2018 Results Conference Call. My name is Vanessa, and I will be your operator for today's call. [Operator Instructions] As a reminder, this conference is being recorded on Thursday, August 2, 2018, and cannot be reproduced or rebroadcast without permission from the company. And now I would like to turn the program over to Lynn Morgen of Advisiry Partners.

Lynn Morgen

Thank you, Vanessa. thank XXXX joining performance. and ICF's to everyone, quarter second afternoon, you us for review Good and With Kesavan, John COO; Chairman today and Morgan, us from CEO; Wasson, ICF President are Sudhakar James CFO. and

in our are to we cause call, to actual that refer X, our forward-looking assist expectations conference this differ a press I release understanding These number you will management's statements During ICF performance. could results materially, to XXXX statements and events make our discussions August to and you subject filings SEC future of risks about of risks. those and for

consider discuss point, do call some obligation to addition, as information light. Sudhakar that may, this any of made In developments to turn presented call statements at Sudhakar. views the anticipate now We We to on Please forward-looking quarter that elect specifically future CEO, our over views during today, the statements today. disclaim but our would update in second are our so. cause ICF's XXXX based will performance. change. to I to Kesavan,

Sudhakar Kesavan

Thank energy and experienced substantial government both And marketing local and state strong you, from performance clients. clients. for you international Lynn, work, increase federal government growth revenue perspectives. in in from for work, both reflected government rates several our period for services We comparisons. and balanced quarter Results a the positive ICF was This markets from and year-on-year today's call. commercial participating our revenue thank combined a with all posted stable and in strong commercial

to exceptional and pipeline, growth quarter year second record-setting development contract and increase in us the earnings positioning for guidance, our business our revenue company continued full a and wins XXXX enabling had we growth. Additionally, of

capture in pipeline, activity by in contract both at our government one comprehensive and but thought of the provide context planning This the the the and was hurricane we resiliency greater risk last DMS management hundreds disaster been detail to deepens in capabilities. about were we growth billion that important stood recovery mitigation opportunities, which a at our with it growth with awarded news in a XX-person spending. a DMS risk management represent assists June clients minutes, Its key planning acquisition and there, we Disaster and Puerto strategies. to release industry-leading the today's developing Wasson quarter. quarter, second the few we related large of we business disaster our situations. which advisory used the disaster firm insurance, response Simultaneous announcing proposal speak noted of drivers. in project will investments and recovery As to issued increased led Rico efforts around $X.X of in to assist in additional Consultants, this earnings, of to public development John sector significant recovery has software our disaster end

disaster us response, recently our of are state together into capability. on This our preparedness and expands enhances their We and local with our acquisition awarded outstanding first-hand government market. reach recovery, contract, Rico working appreciation given which has Puerto augments and a and offerings, DMS the

both quarter remain our a catalysts last in place. discussed and of growth recovery growth we portion the pipeline, that the disaster business development markets additional significant While the commercial in in represented government

to signs XXXX our we contract earlier a and see this fiscal additional new awards the the market civilian XXXX starting were First, start, in we are due year. slow increased that budgets with approved that agency clients forward federal are to federal government After well-positioned move for RFPs.

opioid clients issues. of be second the their with health areas said, opportunity prevention, end funds That government specific and other this as general in year. in with we expertise to to health new will use public by agencies the combating obesity cessation, public the in appropriated by suicide of that priority Within being expect such unlikely arena, continue agency civilian ICF fiscal RFPs is well-positioned is it half abuse, timing, set, this the the of smoking Given that all dealing year. issued

Additionally, we Transportation, State, and see the Energy, Homeland for the potential in Security Departments opportunities Defense. of

the have sometime included to take as place revenue in up contract related in the the of late significant We not XXXX programs earliest, attendant in not dollars expect potential any to ramp quarter until the guidance, do fourth our see wins these at XXXX. to with we

we growth of first and new half our Second, on half this the European we expect opportunities expand continued clients. international as in substantially in this see and pipeline area execute with second increased working existing of in Union government year, our to contracts revenues business the

execution driver out related Third, loyalty catalysts have work the and efficiency into our plan as and an of our successful pleased by We spend, important our advisory the for our XXXX. two, for marketing commercial selling. associated in to benefit several marketing in extension roll services the we mandated of performance as government energy leadership with markets doing we transformation commercial with growth cross is program is sets. utilities, four, both and to share services positioned our of that half we that increase design aligned in gaining the see business is XXXX in client natural to advances; to To thanks finally, technology And market well leader as by three, move outsourcing the expect and four these industry. XXXX; arena, second finally, the we implementation; one, programs to energy projected California is we utility are and advisory up, continue through a the grow revenues continue the as from group we're to and existing program energy increase sum factors: from ICF, advising and clients excellent overall growth services digital to as these commercial wallet in efficiency utilities

billion, of the portion funded Our backlog at and backlog was at XX%. the first was the half end of $X.X the

Second awards ratio second and equivalent contract and to trailing quarter I supports XX%, for This John half consisting now of increased a billion, X.XX, $XXX the a book-to-bill new contract President million, brought review. business. will which over for into Wasson, XX primarily $X.X year-on-year, month turn to wins of our our ICF heading second to quarter XXXX. positive our call COO, strong momentum to John? business

John Wasson

and you, afternoon, everyone. Thank Sudhakar, good

quarter, then second positive half business XXXX are for In through our our Federal we the of a of contract to to clients namely X% the at up projects. pick federal revenue the quarter pleased This a the awards very included provide contract new Government of total of stronger revenues. in in up first and and the from second declined government substantially expect the XXXX, XX% and recovery of as in award local were client assist our in Revenues Revenues the the we global for quarter, million, to year's from at compared for the post-hurricanes revenue support U.S. much Maria. by in was quarter, wins infrastructure-related it new government large category portion Command, X.X% ramp up Rico last develop down our and accounted cyber accounted timing into years health a $XXX RFPs. the U.S. revenues second the pass appropriations lower up are move takes forward Combat in the between of Federal and USAID performance line by contract total to revenues. over quarter, the several due infectious of $XXX disease Air million business second Puerto Notable through the increased due this in in materially to and in half, Force contract we second surveillance. looking the flat a a under million, We detection X.X sequentially second $XX quarter. year-on-year revenues government phase for much but trends to and year. budget primarily represented half agency our time new X-year to generally government will begin focused just XXXX. with for given largest to expectation by agreement the X% primarily largely XX% quarter year-to-date X.X% second disaster early X-year ramp and revenues and USAID this of on in State win, wind-down Note that to Irma contract ramp-up in saw government Air

grant of under is nature multifamily, to also this role claims review work, and reimbursement and events. Puerto conduct make work government review on tasked contract a new is potential progress of to year's deliverables. as the and business believe funds skills area Rico future weather The catastrophic of of required, CDBG the housing contract that was of making visits, habitable. hurricanes, for assisting we with we the as the contract, Under by with of see government recovery site make to an we the difference process knowledge devastated projects federal this We are and demonstrated and structures expertise residential, areas consistent expand distribution these resilience Our develop with last an way small the this scope objective excellent are have there in ICF on applications, to FEMA-funded the to that with we initial contracts. HUD-funded this

increase opportunities to QX, Development be $X.X the by one the pipeline of we assistance the we Rico, the projects energy affected Puerto growth total areas, in disaster Community Islands, later meantime, the as the clinic. exceptional a but end category Texas, which CDBG HUD's and recovery under a In client appropriated the have other allocated at Rico, international in that to government driven Virgin last business, terms these call, we XX% of problem-solving reported entering on disaster this in XX% to strategically for by Virgin CDBG-related revenues. second technical in HUD was Congress housing announced and QX, of and $X.X funding including government year-on-year Grant third out one the awards first-half in billion pipeline Program. at to the date budgets of the during grants, storage on of are noted majority the is an The U.S. continue year. $XX support on monies, funded represented relevant recovery on billion namely Islands, in our recovery quarter of national infrastructure update Block Florida of In expect CDBG billion by and from Rounding support working small and several HUD-funded U.S. geographies, conference housing Puerto quarter's been the end to solar our

which business, foreign -- revenue. growth was revenues to growth growing up X/X that government clients European Excluding contracts impact marketing translation, over and exchange increased international communications driver the on representing the won of of primary months. positive past continued approximately with service XX%, The ramp for activities our XX

quarter to Both in national to new campaign from saw year-on-year XX% increased under just for for commercial, second year-to-date growth, opportunities, capabilities and commercial awards clients posted win continued market revenues Typically, attention we Moving energy and pitch the of and our clients strategy implementation outstanding marketing loyalty attract global Also, and to substantial revenues number to regional, in second work. services with significant of accounted revenues. X.X% awards were continued we work we and benefited significant creative leverage prestigious and Midsize from Report sales new programs, X%, Consumer to our which XX% the in recognition In clients and quarter. the Year named sales additional respectively, a of up our and of marketing, and lead by more commercial the digital of won broader and across Holmes lag. we loyalty service clients. the Agency the while aviation Agency Year, as

ICF representing million planning customer acquisition, contracts could integrated $XXX Coast either Our major a quarter, a focus their to ICF brought our yield on since the on program, blood experience for aviation expertise and expertise have integrated on that for won concession sales Olson West In positive sales programs public and results. and approximately for own. health firm donor the continues achieved executed together airport. have we our loyalty to combining second and help

strong have was energy markets and efficiency energy energy performance in our the execution The by efficiency both Finally, quarter Several programs. in Illinois, including energy reflected solid growth significantly regulatory New new and on California via and also expansion or advisory commercial are potential. And previously expanding support their growth parts existing from of significant electrification beneficial action. characterized the goals utility legislation we business. programs efficiency as discussed, energy Virginia, York to the states, offers

XXXX as the energy be of expended XX% energy, by the or to parties, ultimate reduction. associated The this year's third to The be energy expected alters have investor-owned its are ICF. with companies renewable greenhouse increased to third state by goal outsourcing first efficiency, released RFPs California's quarter, efficiency budgets is in gas non-utility and approach utility like

energy sector, of and posted impact utilities assisting of end the we resiliency the attention increasingly the quarter, well accelerating second will for performed distributed quarter to utility than These half opportunities or and programs, across energy there opportunities which first appears distributed in Our the growth quarter, $XX the the XXXX, in efficiency. our our future client half beginning consulting sets involve and also pilot of at planning grid. positive businesses power with development on states testing million and in infrastructure. utilities advisory this energy the also technologies, solid $XX a were believe the as thanks the as the state well, resources utility on as of traditional momentum a significant executed second several expect and resiliency first $XX XX through We've energy implementation to point beyond greater efforts regulators implies, year, $X.X address business of way poised quarter of million, year. also our and been programs increased our number XX million. In their our we billion activities, energy guidance resources in in between area summary, services work pay federal key and Of we restructurings distributed this and additional business pipeline of fourth the third

Our turnover Morgan, call James turn the now annualized was CFO, for personnel rate James? I'll financial XX%. over to our review. a

James Morgan

business. I'm improvement everyone. mid-single-digit was million quarter $XXX.X quarter to and our both Pass-through and of to clients. associated quarter our million revenues afternoon, was in Good for in second second million, year-ago to with from commercial the quarter. Revenue from quarter. revenue X.X% $XXX.X This Gross results $XXX.X half. year-ago strong increased X%, mostly in and to our driven solid pleased second the increased $XXX.X Service on increased XXXX of by in John. million, quarter year-over-year government you, a report of Thank the compared the million XXXX, profit for expectations financial second X.X% the international government XXXX. year-on-year, XX.X% revenues to growth $XXX.X $XXX million compared our second

However, only due that in to a equates point yield this quarter a basis-point mix $XX.X to second shift On pass-through's business lower XX.X%. the service quarter were aviation largely XX $XX.X compared and to and a lower XXXX. million due we the higher revenue. of to reported consulting Indirect decline margins, for to basis XXX in expenses gross revenue, margin in second million, mostly decline, selling

decline opportunities, growth, and quarter, proposal activity expenses In capture we key the considerably in to spending invest to selling in XX% approximately mentioned our indirect support but to associated continued last quarter. which in we year. the increase second is and the expected of half As of increased with for second the investments future we areas in quarter, accounted the second for disaster this recovery

level We decline expect this quarter even in of business the the expense fourth decrease in development higher third further quarter. and to

Second, we ERP back-office in processes. of upgrading accelerated investment systems some our our and

increase of approximately for of which on And was infrastructure recently variety of of investments infrastructure development or to $XX.X growth second income $XXX,XXX business indirect XXXX, the million expense internally-maintained successful rules, related the compared $XX.X statement change EBITDA last the XX.X%, of the to business. of implementation resources our or resulted from impact margin to just the migrated expenses, expense. below and to software, associated quarter year's X.X% payroll The margin was XXXX. of we -- the to XX% moved a completed and reduction we system. in remainder the from that roughly expenses on XX.X% in due XX% fact, in of a accounted the and These In increase. for the of accounting for revenue the compared a in-the-cloud selling new quarter to the the human EBITDA software that of in depreciation geography Software-as-a-Service, increase some expense million. $XX.X EBITDA I in with $XX.X Adjusted investments was the factors Exclusive million million, quarter mentioned. second of the second service gross reflecting for acquisition-related adjusted

fourth was to $X.XX rate full as of a and and percentage tax and diluted to compared year quarter, quarter. second up in XX.X% per XX.X%. this year-over-year, further the As EPS as diluted charges the with from was $XX.X a result for the margin comparison revenue in expenses service lower metric approximately in the driven the XXXX income the as XX.X% million, share, some EBITDA Non-GAAP expected of amortization with decline. spending, the the This reported year, is quarter XXXX. improving year-ago even of which reported considerably EPS Net positive $X.XX, XX% increase incurred in related intangibles to for the XX.X% gross was quarter, third quarter levels during and of flat by the second second was of the in margins be adjusted excludes we increased the quarter expense $X.XX X.X% quarter, last of increased acquisition up

in increased compared As new quarter-end, our be to our This significant is second receivable million pulled XX.X fourth second cash positive of of the seen to contract of revenue be higher timing cash positive operating we At XXXX, wins. from while and you activity the to flow ahead have million, XXXX. $XX.X half flow negative related the into million, levels, guidance, by a $XX.X into first collection due from half liabilities quarter of of expect carried was as negative was forward markedly to utilization cash first the variance revised profitability compared the XXXX. half a driven to issues operating flow quarter operating

Given funds maintain XXX XXXX. in from forecasted capital the and the increase cash in for working of expectation year, second we to be million funds the our by to our operations million XXX flow of generated expected half operating

our invest our and year-over-year. our we to X.X CapEx These our $X.X to was efficiencies. operating contributed to efforts million As intellectual developing half which first earlier, of mentioned infrastructure improve in I up continue million, property

the yearend, the due facility Our debt of the Future Days seasonality. for part as more million our up in quarter of at cash higher to from was little as to acquisition by of half from than The XXXX timing the sales outstanding flow XX credit XX was second due first of than quarter collections. of second end the a Customer one well days day

We continue outstanding days of XX sales be XX for the the in to XXXX to anticipate days. to range

Now we'll help you several summarize item, our guidance line to fine-tune your on models. financial

of our half flows midpoint current lower based Looking the second the increased XX% fourth. revenue bid This and and XXXX disaster on third with will progressively our for our and that expectation guidance is EPS quarter expectation in XX% approximately at of our increased the EPS range, spending in associated is fall recovery. proposal

intangibles approximately anticipate We million. be in to expense to and XX expect $X.X XXXX. for of amount to We of to range XX depreciation the million million, amortization amortization our the

Our full expense will to $X.X million from year interest million. $X.X range

$XX to Our million range expected XXXX to are from million. capital $XX expenditures for

diluted we full effective anticipate the fully expect to average for for We be tax XX.X weighted shares million will our to of approximately XXXX. XX%, that close continue year and rate

the shares XXXX, remain dilution from dividend. payment debt; $X Our programs. have quarterly of half a in acquisitions; first employee pay the incentive of outlay the growth; partially XX,XXX Invest the our total priorities for million in offset to capital repurchased organic and Also of we down the allocation same:

our quarterly the Sudhakar. Lastly, back to dividend share, that, we call record of payable $X.XX shareholders to declare With are on to like October per to as X, pleased third turn XXXX. on of I'd the XXXX, XX, September

Sudhakar Kesavan

James. Thank you,

pleased to on performance see that As our growth heard, horizon. the we we are with you date have the prospects and

XXXX. expected. The The to in heading resulted Second a of initially had funded increased the revenue in guidance XX%, expected be this of up to X.XXX GAAP diluted year-on-year midpoint and have for is of and $X.XX second an total we guidance X.X% from year year the of exclusive range wins, our approximately report normalizing half increase XXXX. represents billion $X.XX, X% growth charges. EPS Jobs into year-over-year XXXX, questions. higher of expect range our equivalent special We after backlog to of would pipeline full EPS dollars of expected now which of guidance of our to $X.XX. Cuts to growth XXXX. midpoint in Non-GAAP is growth, range rate for EPS has quarter visibility to billion diluted open now the the revenue to impact I full to GAAP Tax for X.XXX $X.XX call contract record Act EPS updated to and the like is any XXXX Operator, from levels

Operator

And SunTrust. thank And from Instructions] with you. We’ll Sommer now begin we our question-and-answer Tobey question first session. our have [Operator

Tobey Sommer

me in With of can a still that front this maybe I'm that streams block flow? of to started is Or we're you've taken Are -- respect has FEMA help little of work in, to money the between the sort that point? the to business familiar you and trying delineate recovery prior -- -- at your the it, the disaster us from it's work, with more already bit traditional traditional events? -- kind

John Wasson

Hi, proposal CDBG, those say, the Tobey, in capture I opportunities, John it's and HUD-related would phase. on Wasson. the are still

revenues, as seeing do of front material the impacted expect any remarks, second I the date, half the not my we on said we're in occur so, geographies. year. the in CDBG and awards, To to And those

so -- certainly they're -- And there's but not material, today. not,

Tobey Sommer

resources -- Is your you work recovery that the of of a that a stream bolstering what's I'm of steadier -- desire then part goal this full-time understand and made. trying been area? acquisition create to to long-term it's in kind And the in dedicated disaster this

Sudhakar Kesavan

Yes.

skills us pipeline steady stream horizon, skilled these are out, lot variety disaster no opportunity. planning of and think spending. the that The of And leverage will highly work, projects the their as increased. an we see when we number geographies. point, that a even which helps has there of help your where I -- in also, Tobey, -- disaster folks see or it significant the to us a think create there's disaster of recovery, in than We we are a pointed which

certainly So us to that certainly forward. to it on helps intend front we going which do

Tobey Sommer

With mean I the abuse, if by what new combating could in incremental government does of other the the respect and to was opioid terms federal consultants? you wondering funding -- the addressable market, ICFI the

John Wasson

say, would and Tobey. answer is that, I means, say kind and I I the of client. kind have Yes. the HHS numerically, of we you it significant know, can I'm largest our capabilities, not sure of size what is as market What would

think the the opportunities program front, assistance, opioid do, evaluation. we marketing at typically and things communications, CDC I training we the see and around technical on design, largest

we're has front. our there's upside are SAMHSA the are We I for think great way, so the likely material front SAMHSA CDC, say and have think we there. are opioid about in lot also at seeing activities we of treatment-related but spot, opioid our as most and a starting to received of we at optimistic would go state a I to is really and -- that the early out us it's grants opportunity will in money RFPs material funding, will to that. CDC play there really sweet sense new on more so with contract also that watching carefully, And and them. the signs a IDIQ on know, of flow additional you

Tobey Sommer

two you on? could then if RFPs. slated for And for last in on XQ? it then, utility the focused to On expected hospitality questions I'll come loyalty the queue. decision out a get back maybe, award relative industry it's my this California could to be customers? Energy me. And traditional how in they're with And other to your and respect big if for is those that business, the question, What timeline size

John Wasson

California with I'll start opportunities. the

of see start remarks, are see the the I in see to said -- I we think opportunities. starting year. them to end expect As through those to I the

really significant, -- awards think will they're as -- some next more we larger initial into be awards think later see in really go the I I opportunities there so larger XXXX. and we

And occur, the the I in most I expect, think significant opportunities half would will second of so XXXX.

of In you do loyalty want? programs, terms

Sudhakar Kesavan

Yes.

becomes some seeing terms programs, industry of -- than In think their important, of we I services customer as restructures, progressive more the more the utility the are they're model. having because more certain for other loyalty the need offering believe that, utilities Tobey, traditional as --

that, as midterm, longer-term, So to see interest. they an medium-term more there is It of a be is think going opportunity. I

millions a customers. entities works front. we the to some or the spoken because there of taken have of as three for have of have platform We there know, few -- really opportunities are and of typical utilities certainly larger steps are well that They one who customers billions with them or two you on see But these large entities.

but are going it we medium-term to about So it's be optimistic burn.

Operator

Our from Loop Vafi Joseph next comes Capital. with question

Joseph Vafi

along time, guide the that the that talking to perhaps, Nice wondering, maybe this the half, in perhaps, extent is of are second pivot when last acceleration line guidance I'm kind to But some you of up and up. to see been little you that business here it's conservatism I your quickly. questioning, releasing actually outlook, to about actually versus the kind able from what think of while. able guide a were accelerate the

follow-ups. have Just couple trying of it I can inflect then a model a and for how business the up, to get and feel

Sudhakar Kesavan

Yes.

James here. let sure Joe, I'm and add. me I John think -- start will

that we I have reasonable in think think, basically, I been, our guidance.

the which exactly is contracts up the the going schema, to We have work. good to clients the ramp used visibility and be after in understanding winning by

disaster We have a front. good the sense recovery on

local some and -- also, hoping additional second which other we contracts, which to the federal We state half for of in and the some help. disclosed, the have contracts, year, full, work as up we're also of ramp won we've will will

have So up super no which two were I the we getting going were not certainty think the think accrue the the more that there was that I guidance. are across a with don't to revenues trying be associated -- we quarters, we is to broad-based way sense, -- over we why next are conservative.

just that's and know to think have we I the we guidance. up now decided why more,

James Morgan

would too. add to Yes. I that,

running as the quickly, quickly and announced, staffing up those, full-bore. far and that I contract the have, certainly, Puerto we is that, staffed growth, we've able Rico and fully quite gone cyber running, And that up the we're As wins ability the and mean company win would of fast revenue support the well, within be job for pivot to to say has I there, we've and staffed the that too.

as So running. and revenues, support the being we're off as to far the able company increased

John Wasson

I just water I is add. Coast. energy Wasson. here And the driven second I and will new by a the mean, also This think energy part front, on -- half growth the be infrastructure around efficiency West would contract of in there's on John the

pretty year. the and get as and staff up base said, effectively clear up, And them half where second and running visibility, broad fully them a so to it's James able and going have be here of of and clear Sudhakar pretty in we to contracts, we're we're the

Joseph Vafi

could the then of but I of them sounds it the got to you've one not be because of a here compelling? it answer don't bids got the be on inject follow-up to to it's I bit of in it project fair like piece kind -- Would support the then Is on pretty some people because you've staffing say line it little a management don't ever part sight And the sounds that you've to puzzle more back of bids strategy ask there mean biggest -- it good make to good that acquired, could to software. growth. have your have like acquisition. I Well going of this group on just

John Wasson

across work Yes -- focus, management, mean, risk have into we bring that significant would complementary that FEMA certainly things. Absolutely. -- and set think, do risk certainly calculation, mitigation no. analysis, I I around and comprehensive add capability insurance solutions. I and more us the be They grant work of are more done grant to do. value say the a They expertise two housing leveraged on also but around of historically can we've will traditional a the capabilities

help they the And their FEMA local electric infrastructure, think of rebuild communities we to the to play in. part schools, want capability that's of are I helping a One quite business at certainly that experienced resources. to is that tap things dollars them hospitals, maximize

I specific of capabilities expertise both suite state, So we clients. think and and can to they bring the both of federal, allow and bring, the will kind expand local us

Sudhakar Kesavan

And grants they utility which which hand just which to that one called which them disasTRAX, resiliency speaks intellectual help do some we helping good resiliency well disaster also which recovery I you planning. leverage. add can planning. tracks for a Yes. would do itself, that, they're is property And as out, utilities is have software, in certainly they a

obviously, utilities ability, that have that, across and is of think we So multiple number replicable a large utilities we certainly clients.

offering leveraged one our So offerings, quite sort service service of utility it more by which our... additional adds to is easily

John Wasson

front helpful that utility overtime. open them on doors swing for I We quite will be the think can

Joseph Vafi

materials then I'm curious And kind large sort? housekeeping subcontractors, actual is some that one one. or pass-through, of little international is that that just just of

John Wasson

a it's significant a and of also business -- of I and use marketing and costs. communication those subcontractors activities, be do both. marketing I mean events they lot mix around European think so material our but can we do communication

So it's both.

Joseph Vafi

here the of for breakout Glad second kind the half. to see

Operator

from next have Guo Company. Cowen question and with Lucy our We

Lucy Guo

I want understand, on follow-up outlook. second the to just a half

per numbers but revenues million quarter, XX average, similar quickly. need, run So or terms around SG&A, It I a on of looks so. rate XX just like costs on incremental in run you rather million using

get earnings, adjusted to of I'm sort eventually how just is on especially that SG&A wondering, much midpoint. second your ERP Is quarter in can business get there order to number, decrease spending that the per all half? over on in to listed and the items of fair? EPS $X.XX You of developments you the

James Morgan

we'll bids as the mentioned, of we we put slow be down, we little first those of had Yes. This less of -- than what year. the front our expect be disaster going half in to the able up the a combination the QX. of we in is half year back investments recovery half of by the end James, total driven the a to indirects Lucy. in That's yes, some to the bit Certainly, being as and year than

contract jobs, our have then The it, the increase labor up these new which expenses. as ability part of is are ramping other utilization, we too, to and and we cost is wins, on costs, indirect biggest just our the reduces

So big that's a driver.

the are So probably it more the service first say come couple the just half will of about forward, bit. be, running we would on if so. you of XX% points year, bit for that under expect indirects just think at And for a less. the if look you revenues, our or little of to percentage end I'd of you half, somewhere And the back day, as indirects little of at we're a expecting going a kind a that down

Lucy Guo

if it And mistaken. more or my also be should of I like going was XX%, on percentage pass-through. believe good that I'm that question number XX%, had that next previously around not Is you XX%, be is total a XX%? to

James Morgan

to more XX% be XX%. will like the latter, It

Lucy Guo

calibrate we So can elaborate that.

James Morgan

Right.

Lucy Guo

Yes, increase, new more the for business previous spend the for X around expectation X clarification on And X thought was the development one year. I million million, the million, numbers.

that You may half? second have just QX, X the so Or to increase? X in more number million did less The in million... spent

James Morgan

increased for providing our more not also did QX. activities then internal investments remember I no, number, QX, some of was don't but number some it in But spent in the increase. we and that we

Lucy Guo

of is terms in the well kind projects? the of run place. Or as that second just there jumping revenue half for onetime? International QX, the rate was in to all good over I'm use something

John Wasson

James up project. a a last that. as XX projects that ramping we've said, driving mean, really had of won it that onetime wasn't we've I I XX are mean number over the I to think

the second of north for we'll expect XX%. we think we'll be I still -- half year the of certainly is

James Morgan

full year… the For

John Wasson

I'm Revenue sorry. growth --

think XX% but it's we the be currency-adjusted like kind total we'll it's XX% maintain I reported this of to quarter, year, robust. For don't going XX%, of quite of growth. north kind full going be to

Lucy Guo

for like Global question, after available contract on, Last VSP damage X and late incumbents, year? million? this think information all property Residential thing, in right? it There potentially, just next and a year, early I then this looks maybe was of they curious, maybe multi-award there north is Or it the September, late are are This into seeing RFP, year. publicly is Vanguard. potentially, award, $XXX emergency bidding bid sorry information, this -- a so So I -- the before a FEMA services. pass -- a for sorry, --

you interested would this. something be in if wondering, just So guys like

John Wasson

Yes.

the inspect I'm think about, the familiar to even go with storms, damage in get that potentially, Those of kind variety on FEMA, for commercial facilities do think, first, inspectors consultants a -- you've basis. assistance, contracts very having I residential, focused field the to it's immediately the whether X in can different talked out bids field large and on of, I looking teams tend after facilities. down stringers send of or as-needed to large, tap, they those an energy-related the they and who on have

do. and -- area an they on all that's that's so And

major component. that's so it's a And --

be variety we our integrated players that's firms spot. a tell out there not us to going our not those. like for who of would So be tap programs. more can something you, do sweet subcontractors that's to I There's

out the implement know teams We program, the go a but financial a that homes. go of a of all So under manager. people out rules. to similarly FEMA. firm and and as doing calculation, like when the housing the all we subcontractor, inspect We're we're tap need We'll program we

spot sweet on implementing and programs, inspectors. integrated our going really is really field not So deep the

And how look contracts. those so that's we that, at

will see sweet So I think prime spot. those and don't our something as be we

Lucy Guo

reflecting just half the increase sure, second be already award -- you've I booked, upside? the it to is anything lastly in so would wanted correct the incremental make interpret And to guidance is mostly

John Wasson

Yes.

as I based mean, we'd into the contracts based the I recovery-related questions the to and guidance. disaster arena. on said the year, we're any our material recovery, we on now, the it's that -- in space win awards not across awards something and upping federal take new think then those. we've we if right in see to -- think material We're guidance. had the Obviously, earlier assuming were energy related guidance in we've I disaster a that for the But later won, to have have this then visibility look from the we

Operator

our and [Operator Riddick And Instructions] have Company. question with next Sidoti Marc from we

Marc Riddick

Rico. was you any And have the past them jobs? of in working to a you customers wondering do wondering was have go want I to made moment. back I experience just I that that. question, if working I with after the you'd or Quick of a sense acquisition a Puerto overlap mention in have had and for you're then follow-up together

John Wasson

John, this Marc. I -- is think

I think first think this the worked with is I time intensely. we've the -- them

And of we've the history leadership -- have their we're senior I the this who certainly, aware work. working -- based think in firm know know FEMA-related long-standing on aspects folks on company of firm, of reputation. this our of the

we certainly them, well. familiar with And so know them we're

opportunities I the Rico intensely. them working to think present with this Puerto

I relationships. then some state-level bring think which don't they for we a more we do -- utilities, disaster-resilience-related on In much the largely They sets And side terms than do folks, client for know they're relationships. of what these side. client of FEMA They CDBG are do. the have complementary lot work we to but the obviously,

complementary state it's the think utility and I largely and So given local the federal split. across FEMA-CDBG

Marc Riddick

to going wanted things commercial for just to side the I moment. shift of then gears And a

months? you the into You maybe far the and just you're looks a what many I'm made pipeline what like next -- if as some spending growth opportunities, the in marketing of mentioned activity. dive that seeing that and that, over deeper digital in into marketplace little coming wondering could as

John Wasson

been in there. see that would Well, certainly business our Yes. having two, driving opportunity what's very growth. here our the is really say significant -- a We last or quarter growth I robust loyalty

quite and health leadership engagement can couple last in position a both healthcare, doing commercial market services marketing health care and also We on successful, been of portfolio quarters, obviously, front, delivery, there, have robust pipeline. portfolio, care the across and and payers working bring. work a across our of for capabilities -- we We've the

business. sources our for a marketing turned actually the that's nice area healthcare us, growth and so arena And quite into

on in trend, most mid- think a We but I here, quarter the areas. comfortable comfortable X% So potentially it remains the quarter. and to I obviously. kind I'd growth say generally we're are that Energy a market mid-single-digit are long-term services. with robust we certainly Energy X% expect single-digits. call the those that growth high say at growth i in significant growth were of that two we efficiency, stronger wouldn't market. be the a this would a to mode even at

Operator

I closing this now remarks. at I see will time. further questions over no have to we call for turn management the

Sudhakar Kesavan

Thank development you date on call. We you. all to ICF. keeping forward on today's at in the Thank participating up for you look

Operator

conference you, participating. thank this our We you thank today. gentlemen, ladies concludes for And for and

now may You disconnect.

ICF International (ICFI) 5 Aug 182018 Q2 Earnings call transcript