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ICF International Inc. (ICFI)
Q4 2007 Earnings Call
March 11, 2008 5:00 pm ET
Douglas Beck – Sr. VP
Sudhakar Kesavan – Chairman, President & CEO
John Wasson – Exec. VP & COO
Alan Stewart – Sr. VP & CFO
Jason Kupferberg - UBS
Joseph Vafi - Jefferies & Company
William Loomis - Stifel Nicolaus
Tim Mchugh - William Blair & Company
Tim Quillin - Stephens Inc.
Previous Statements by ICFI
» ICF International Inc. Q4 2008 Earnings Call Transcript
» ICF International Inc. Q3 2008 Earnings Call Transcript
» ICF International, Inc. Q2 2008 Earnings Call Transcript
Good evening and welcome to the ICF fourth quarter 2007 earnings financial call. During this conference call we will make forward-looking statements to assist you in understanding ICF management’s expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially and I refer you to our March 11, 2008 press release and our SEC filings for discussions of those risks. In addition our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today but we specifically disclaim any obligation to do so. During this call we will refer you to non-GAAP financial measures such as backlog and EBITDA. A reconciliation of these measures to the most directly comparable GAAP measures is available in the Investor Relations sections of our website. I will now turn the call over to our CEO, Sudhakar Kesavan to discuss fourth quarter 2007 highlights.
Thank you Doug and good evening everyone. This was another quarter of strong financial performance. This speaks to the very positive trend that we have seen in our markets and the increasingly greater recognition that ICF is gaining for its long standing domain expertise in areas which have become front burner issues for government and commercial clients. We are also seeing the benefits of expanding our domestic and global footprint through the acquisitions we completed in the last 15 months.
We completed four acquisitions in 2007 and one in early 2008. ICF has a good consolidation platform for small and mid sized companies seeking to grow. We have a solid track record of successful acquisitions and the range of firms that we look for are not the typical ones that tradition government IT service providers seek out.
Let me take a moment here and spell out our strategic intent. Ours is a differentiated growth strategy predicated on three distinct elements. First growing revenues by strengthening our competitive position in our four key markets; energy and climate change, environment and infrastructure, health human services and social programs and homeland security and defense. Second gaining scale in our implementation business that provides IT and human capital solutions. And third increasing profitability by doing more implementation work by winning larger contracts, building our business with commercial clients and leveraging our corporate infrastructure.
We intend to do this through strong organic growth supplemented by acquisitions in these markets. We are also pleased that the legacy ICF business has shown strong growth. Revenues from our core advisory and implementation services business excluding all acquisitions and The Road Home program revenues grew 20.8% for the fourth quarter of 2007 as compared to the fourth quarter of 2006. Gross revenues for the fourth quarter of 2007 including acquisitions but excluding The Road Home program revenue grew 45.4% this quarter over the fourth quarter of 2006. The growth for the entire year over the previous year for the core business excluding now all acquisitions and The Road Home program revenues was 10.5%.
In a call last year I had suggested that it was my goal that we reach a run rate of 10% to 12% of organic growth by the end of the fourth quarter for our core business. I am pleased that we substantially exceeded that goal. We believe that over the past year we have executed well in completing complimentary acquisitions and generating strong organic growth. I am confident that we can continue this execution strategy over the next year.
Finally I would like to note that yesterday we added two distinguished independent Directors to our Board; Eileen O’Shea Auen who was most recently CEO of APS Healthcare and has significant experience in the managed health care industry, Richard Feldt is CEO of Evergreen Solar a family company on NASDAQ and brings large experience with the renewable energy and clean technologies industry. Both Eileen and Rick have tremendous track records in growing companies in the healthcare and energy industries and we welcome their expertise and experience.
I would now like to ask John Wasson our Chief Operating Officer to review our new business and operating activities and to describe the way we are integrating our acquisitions and addressing the growth opportunities they provide.
Thank you Sudhakar and good evening. First let me give you an update on The Road Home contract. We completed 90,000 closings by the end of 2007 and we passed 100,000 closings milestone in early March, nearly nine months ahead of the original contract schedule. These closings have corresponded to over $6 billion in payment benefits to eligible homeowners. The seventh amendment to our original contract was executed in December, 2007 and increased its value by $156 million. This increase was necessitated by the need to process approximately 50% more homeowner applications than stipulated in our original contract.