Second Quarter Results and Highlights

For the second quarter, core business1 revenue inclusive of the Macro acquisition increased 41 percent to $160.6 million, from the $113.7 million reported for last year's second quarter. Total revenue was $175.4 million and included revenue of $14.8 million from The Road Home contract, which was completed on schedule in June 2009. In last year's second quarter, total revenue was $184.1 million and included $70.4 million in Road Home contract revenue.

Gross profit was $71.5 million or 40.8 percent of revenue, up from $64.8 million or 35.2 percent of revenue in last year's second quarter. Net income was $5.2 million, or $0.33 per diluted share, including non-cash stock compensation expense of $2.1 million. For the 2008 second quarter, the Company reported net income of $7.9 million, or $0.52 per diluted share, which included non-cash stock compensation of $1.7 million. The fully diluted weighted average number of shares outstanding for the 2009 second quarter was 15.7 million compared to 15.2 million in last year's second quarter.

"Strong demand for ICF's advisory and implementation services continued across most of our key market areas in the second quarter. We also maintained solid profitability during this transition period marked by the completion of The Road Home contract and the integration of Macro International, which we acquired on March 31, 2009. Our Health, Human Services, and Social Programs market, which includes Macro, more than doubled and accounted for 48 percent of core business revenue. Organic growth for this market was 28 percent. Energy, Environment, and Infrastructure, which represented 43 percent of the core business, grew by 5 percent, reflecting continued 20 percent plus growth in domestic energy efficiency programs and climate change work, which more than offset the decline in our commercial aviation business and push-outs of certain state and local projects," said Sudhakar Kesavan, ICF Chairman and Chief Executive Officer.

"The integration of the Macro acquisition is proceeding on schedule, and we are working closely with our colleagues at Macro to tap into the significant cross-selling opportunities that leverage our combined capabilities and client relationships," Mr. Kesavan said.

Backlog and New Business Awards

Backlog was $1.2 billion at the end of the 2009 second quarter. Funded backlog was $448 million, or 37 percent of the total.

The total value of contracts awarded in the second quarter of 2009 was $143 million.

Key contracts won in the second quarter included:

Health Informatics: A new five-year contract valued at more than $60 million with the National Institutes of Health (NIH) to provide support for biomedical and clinical services, such as data collection and analysis, information dissemination, and outreach initiatives for multiple NIH Institutes and Centers. ICF will support key programs related to HIV/AIDS, genetics, cancer, rare diseases, dietary supplements, clinical trials, treatment guidelines, and other federal health initiatives.

IT Management Services: A new five-year task order valued at approximately $17 million under ICF's U.S. Department of State, Worldwide Program Management Support Services blanket purchase agreement (BPA) to provide program management support services to the Bureau of Consular Affairs, Consular Systems and Technology Division (CA/CST). These services cover nine program areas including information technology governance and planning, process improvement, earned value management, and program management.

Defense Software Support Services: A recompeted three-year contract valued at $9.3 million with the Defense Contract Management Agency (DCMA) to provide software support services to the Agency's Information Technology Customer Service organization and the eTools program. DCMA works directly with defense suppliers to ensure efficient, cost-effective delivery of supplies and services, and eTools is DCMA's Web-based suite of acquisitions services applications.

Transportation Security Program Management Support: A new five-year subcontract valued at $10 million with the Transportation Security Administration's (TSA) Office of Security Technology (OST) to provide program management and acquisition support. ICF is working to support the day-to-day operations of OST's program management office and its support organizations.

Summary and Outlook

"ICF continues to benefit from its established leadership in key growth markets," Mr. Kesavan noted. "Core business revenue, exclusive of The Road Home contract and the Macro acquisition, increased 9.2 percent year-over-year and 10.5 percent sequentially, and is on track to grow by about 15 percent in 2009 to approximately $500 million. Organic growth for the year is estimated at 12 percent to 13 percent."

"We are reaffirming our guidance for total full year 2009 revenues of $660 million to $680 million and earnings per diluted share of $1.30 to $1.35, based on approximately 15.8 million weighted average shares outstanding and an effective annual tax rate of 40.5 percent," Mr. Kesavan said.