ICF International Inc. (NASDAQ:ICFI) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 04:30 pm ET

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ICF International Inc. (NASDAQ:ICFI) Q2 2020 Earnings Conference Call - Final Transcript

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Operator
Operator

Welcome to the ICF International Second Quarter 2020 Earnings Conference Call. My name is Vanessa and I will be your operator for today's call. [Operator Instructions] Please note this conference is being recorded on Tuesday, August 4th, 2020 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 Advisory Partners. Please go ahead.

Executive
Lynn Morgen

Thank you, Vanessa. Good afternoon, everyone and thank you for joining us to review ICF's second quarter 2020 performance. Hosting the call today are John Wasson, ICF's President and CEO and Bettina Welsh, CFO. Joining them are Sudhakar Kesavan, Executive Chairman and James Morgan, Chief of Business Operations.

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 August 4th, 2020, 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 specifically disclaim any obligation to do so.

I will now turn the call over to ICF's CEO, John Wasson, to discuss second quarter 2020 performance. John?

Executive
John Wasson

Thank you, Lynn and thank you all for joining us to review our second quarter results and discuss our business outlook heading into the second half of the year. We were very pleased with ICF's strong performance in the second quarter, as it reflected considerable year-on-year and sequential growth in service revenue, which represents the work performed by ICF employees.

We also achieved very strong sequential comparisons across key profitability metrics, including GAAP EPS, non-GAAP EPS and EBITDA, each of which increased substantially over first quarter levels. These results demonstrate the resilience of ICF's diversified business model and our ability to pivot quickly to address changing business conditions. Much of the year-on-year decline in total revenues was tied to lower pass-through revenues, which were $22 million lower in this year's second quarter than in the comparable year ago quarter and $10 million below first quarter 2020 levels. This reduction was mitigated by strong revenue growth in our federal government and commercial energy businesses, with favorable business mix, lower G&A costs and higher utilization, driving higher year-on-year and sequential EBITDA.

Second quarter service revenue and profitability were above our expectations due to first-rate execution by ICF employees, who work closely with clients to meet their needs while working remotely, and to actions we have taken to reduce costs. ICF has learned to operate more efficiently in a physically distanced environment, and we will use these learnings to operate as a leaner organization in a post-COVID-19 world, particularly with respect to travel and