Welcome to the ICF International Second Quarter 2014 Results Conference Call. [Operator Instructions] As a reminder, this conference is also being recorded on Wednesday, August 6, 2014, and cannot be reproduced or rebroadcasted without permission from the company. And now, I would like to turn the program over to Mr. Douglas Beck, Senior Vice President, Corporate Development. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review ICF's second quarter 2014 performance. With us today from ICF International are Sudhakar Kesavan, Chairman and CEO; John Wasson, President and COO; and James Morgan, CFO. 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 6, 2014 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 our CEO, Sudhakar Kesavan, to discuss the second quarter 2014 performance. Sudhakar?

Thanks, Doug, and good afternoon, everyone. Thank you for participating in today's call to review our second quarter and first half results, and discuss our outlook for the second half of the year. We saw strong growth in both gross revenue and service revenue in the second quarter. Gross revenues grew by 9.2% and service revenue grew by 9.5%. Overall, organic revenue growth was up 1% and the organic growth in our commercial, state and local, and international government businesses more than offset the 5% decline in our U.S. federal revenue. In our commercial area, we achieved strong organic growth in our digital interactive, energy infrastructure, energy advisory, and commercial health advisory markets. In addition, our acquisition of CITYTECH further increased the size of our digital interactive business. Energy efficiency revenues were slightly down this quarter compared to last year second quarter, but were modestly up for the first half, and we see continued growth there that John Wasson will discuss in a moment. Our domestic commercial business, which accounts for almost 90% of our commercial book, actually increased 17% compared to last year's second quarter. State and local revenues increased 28% compared to last year's levels, thanks primarily to our recent contract wins in the area of disaster recovery following superstorm Sandy. And our international government business grew 21% organically, benefiting from a doubling of sales last year; and total revenues were up 130%, reflecting the addition of Mostra, which we acquired in February of this year. In the aggregate, our commercial, state and local, and international government businesses accounted for 48% of total revenues in the second quarter, up from 41% in last year's second quarter. This was the result of our strategy to diversify our CS [ph] revenue sources in the face of the uncertain outlook for…

Thanks, Sudhakar, and good afternoon. Second quarter sales were solid across all of our client areas, with commercial showing considerable strength and accounting for 37% of total sales for the period. Our book-to-bill ratio for commercial markets in Q2 was 1.18. This was led by a new $24 million, 5-year environmental infrastructure contract with a major national utility to manage the environmental restoration of a large transmission line that we were already working on. This latest win was a very competitive procurement, and we were pleased to have the confidence of this utility to see this project through to its completion over the coming years. As Sudhakar mentioned, another area of our commercial business, our energy consulting work for the power sector, has been quite strong both in sales and revenue growth. There are 3 key reasons for this. First, the pace of mergers and acquisitions in the utility industry has accelerated, and therefore, our advisory business supporting such transactions is very healthy. Two, the surging natural gas resources are causing dramatic changes in our domestic energy supply mix, and we are one of the leading firms providing impartial assessments of gas market developments and what they mean for utilities, investors, consumers and, now, potential exporters. If you follow these developments, you will note that our studies of gas market developments and the implications for the industry are widely cited. This reflects our deep institutional knowledge and proprietary analytics, and as a result, stakeholders from, virtually, all perspectives see us as a trusted source of expertise and advice. Finally, the release of EPA's Clean Power Plan under Rule 111(d) under the Clean Air Act has far reaching implications for the entire power sector in setting a 30% reduction target for carbon from existing power plants by the year 2030. The…

Thanks, John. Good afternoon, everyone. On a consolidated level, we achieved solid revenue growth in the second quarter. As Sudhakar noted, we took actions in the quarter to better align our resources with the changing mix of our business, and we incurred certain special charges related to those actions, which impacted a number of line items on the P&L. Specifically, we incurred $1.7 million in severance expenses associated with a reduction in staff of more than 80 personnel with annual salaries of approximately $10 million. Further, we recognized a currency loss of $0.5 million related to our closure of our Moscow office and nearly $100,000 acquisition-related expense. I will cover the financial impact of each of these items as I walk through the major elements of our income statement. We reported total revenue of $263.9 million, or 9.2% above last year's second quarter. Organic revenue growth, which is total revenue, excluding acquisitions completed within the last 12 months, was up 1% compared to last year's second quarter. Q2 2014 gross profit margin was 36.8%. Exclusive of the special severance costs, Q2 gross margin would've been approximately 37.3%, flat to 37.3% in Q2 of last year. Reported indirect and selling expenses for the second quarter were $74.2 million, up $6.6 million or 9.8% compared to the second quarter of 2013. The increase in indirect and selling expenses was primarily due to the additions of Mostra and CITYTECH, as well as severance related to the staff realignments and acquisition costs. Reported operating income of $17.6 million for this year's second quarter, up 1% year-over-year. Adjusted for the severance and M&A cost that I quantified earlier, operating income would've been $19.3 million, up 10.2% from the $17.6 million in operating income excluding M&A cost, reported in last year's second quarter. Reported EBITDA was…

Thanks, James. As you know, when we provided guidance for 2014, we had assumed relatively flat U.S. federal government revenues this year compared to 2013. The 6% decline in that business that we experienced in the first half, along with the softness in certain areas of our aviation consulting business, have caused us to revise our expectations. Our current expectations are for revenue of $1.015 billion to $1.045 billion, which at the midpoint equates to 8.5% growth over 2013 levels. Using the adjusted EPS of $1.06 in the first half, we are now looking at adjusted EPS of between $2.19 to $2.27 for the year, which at the midpoint, represents 12.6% year-on-year growth. On a GAAP basis, our diluted EPS guidance range is $2.12 to $2.20. We believe that the book in our business and the soft realignment that we undertook in the second quarter has positioned us to post positive earnings per share comparisons in each of the third and fourth quarters of this year. At the same time, we're adding resources in areas such as digital interactive, energy, environment, health care and public health, where we continue to see strong demand from both commercial and government clients. Operator, I would like to now open the call to questions.

[Operator Instructions] Our first question here is from Mr. Bill Loomis from Stifel. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: Sudhakar, did you -- when you were talking about the federal business, did you say that the work with EPA and HHS and the other clients you mentioned on the civil side, was actually up in the first half? Did I understand that right?

Yes, Bill. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: So when I do your percentages, and I know it's not precise because of rounding, but your public safety and defense looks like it was off about 16% year-over-year in the quarter. Can you tell us what -- tell us a little more about that. What the types of programs and clients drove that weakness in the quarter?

I think that, Bill, let me start and then John could perhaps expand on it. I think the one thing we see in the trend in that specifically, especially Homeland Security, is there's massive amount of conversion to small business set-aside. So contracts which we thought we were well-positioned for and et cetera, basically just switched to small business set-aside. So that's been the most significant impact, actually, the small business set-aside switch. John, you want to add something?

I think that's sort of been a strong driver. I think the second part of the story is that [indiscernible] contracts where we were a sub to primes, where the prime was not successful in keeping the work. And so it's both -- we've lost some work as the sub to primes did not win their re-compete, and then the small business set-aside. It's primarily on program management-related work within DHS. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then you mentioned about procurement activity picking up. What do you mean by that specifically in terms of just looking at the federal side? Are you seeing more increase in bid or proposal activity? Or are you actually seeing better award activity? And what was the book-to-bill in the quarter just for the federal business?

I would say that we've certainly seen a pickup in activity and are busy on the bid and proposal front. I would tell you, on the award front, we're still -- things are a bit slow and we're waiting on quite a few awards. And so we haven't seen as much of a pickup there. I think for Q2, our book to bill ratio in the federal space was 0.75. And year -- yes, 0.75. That's Q2, yes, 0.75.

Our next question here comes from Tobey Sommer from SunTrust.

What was organic growth in the quarter? And what does your guidance imply for organic growth in the back half of the year or 2014? Whichever number you want to give.

Organic growth, as I said, was 1%, and we anticipate low-single digits for the year.

Okay. And if the -- and if you gave this, I apologize. But what's the assumption for the federal government piece for growth in the back half of the year?

Yes, for the federal business, as far as revenue growth for the back half of the year? Is that your question? Yes, we're assuming that it's going to be kind of flat to low-single digit decline growth for the back half of the year.

So on a comparison basis, would that imply sequential improvement? Or would it -- what does that mean on a sequential basis compared to 2Q?

I would say, from a -- you're saying from kind of an H1 to H2 perspective? It's somewhat flat, maybe slightly up.

Okay. Kind of switching gears. Sudhakar, when you were speaking about international, you talked about eventually extending the company strategy that you've implemented here domestically to do more implementation work, which means more IT. Can you build that organically in your international footprint? Or is that something that's more likely to come via acquisition?

Yes, I think there's certainly a time to build it. I think, for us to be serious players, I think we'll have to make an acquisition. So I think that we have some implementation capability, Tobey, because we have a communications business, just like it is here, which is quite significant. We are the sixth largest independent PR firm in the United States based on PR Week ranking. Similarly, we -- that is all implementation work, which we do. We're getting the message out to our clients in the health industry or the energy industry, et cetera. So we have half the implementation capability with the acquisition of Mostra, and what we need is the other half where currently, we are doing -- we are teaming with other companies to provide the IT services. So we're certainly going to try and build it, but I think the better way would be through acquisitions if we want to be a player more quickly.

Okay. And then how do you feel like the integration is proceeding so far in maybe -- any more color on the DSOs would be helpful. Whether you think that will resolve itself, or kind of be an ongoing issue.

Do you want to cover acquisitions, John?

Sure. So I think in general, the integration is going quite well. I think with the Mostra acquisition there, we obviously added significant capabilities on the implementation side around communications, marketing. And I think we're seeing opportunities to bid deals in the European Commission that neither company would've bid without the marriage. And so I think on the business development front, we're positive on leveraging the Mostra acquisition. I think it's also the company has performed well and had a strong second quarter. And so it's -- certainly, I think the Mostra acquisition has gone as planned. CITYTECH, in the digital interactive space, I think has also been a very strong acquisition. It brought considerable capabilities around the Adobe platform, Amazon Web Services, so very complementary services to what we already had in the digital interactive technology space. It's performed well. And I think again, we see a lot of leverage points to cross-sell and grow the business. And so -- and certainly, in the second quarter, our digital interactive business grew quite robustly. So I think both the acquisitions that we did this year are going well, and generally, very positively.

Yes, Tobey. And then with regard to the DSOs, I mean, certainly the acquisitions that we've brought on board, the commercial and then the international with Mostra, they do have a longer billing cycle and collection cycle typically than what our U.S. government business would have. So that, as I mentioned during my part of the script, is -- it's having about a 4-day impact year-to-date on our DSOs. We do think that overall for the company as a whole, it's going to have -- and by the year end, it'll have about a 2-day impact on average. We certainly have some fairly large receivables associated with some of our acquisitions that are being collected during Q3 and Q4, so that will help to improve the situation to some degree. And overall then, going forward, as far as looking at the core legacy business, I mean it's really just timing issues associated with some of our existing billings and when we're making payments on prepaids and taxes and things of that nature, that's impacting cash flow. So I don't -- there's not a systemic issue there, it's just -- it'll flip in the second half of the year. So that's [indiscernible].

Just a couple of other ones I want to sneak in. If you could, it sounds like you've got some contract that's just kind of finalizing the terms in the energy efficiency space. Is it fair to say that you've kind of got some visibility into growth in that piece of the business improving? And then I was hoping you could make a comment about if you have opportunity to get more work related to superstorm Sandy as well.

On the energy efficiency front, I think it's certainly the case, I think, with the work's moved to the right to some extent. I think I mentioned, we had -- and as you said in your question, we had $50 million of contracts that are in final negotiation and are taking a little longer to finalize than we expected. We have another $50 million of proposals submitted, awaiting award. And so I think -- so we do have very good visibility, another $300 million of opportunities in the pipeline. And so I think the -- so we do have good visibility in the energy efficiency area. I think things have moved a bit to the right, but we're still quite optimistic and believe that as we go into 2015, certainly, we'll be in the high-single digits to low-double digit growth range for energy efficiency, and have visibility to make that happen.

Is that a question on Sandy, Tobey?

Yes, please, and that's my last one.

Yes, I think Sandy, basically, we won a large contract. And we won it last quarter and we are starting off on it, and we believe that it will get cranking away nicely. Part of the reason why our organic growth on local work is as high as it is, is because of the fact that we've gotten a lot more Sandy work. And I will note that you are the one who predicted it before we did.

So I would just add. I think, Sudhakar is actually right. I mean, we actually have a suite of contracts up there, several contracts that are housing-related, which we've been working on for 3 or 4 -- more than a year, I think, at this point. And then we just recently won in the last quarter or 2 an environmental contract to support some of the environmental reviews on -- around rebuilding in New Jersey, and so that contract is getting up. We're starting that contract. It is winding up. We're doing more work on it, I expect that will drive additional growth. So I think we will see more growth out of Sandy, certainly, for this year.

[Operator Instructions] And our next question here comes from Tim McHugh from William Blair & Company. Timothy McHugh - William Blair & Company L.L.C., Research Division: I guess first, just the government sector. So if you're looking for, I think, you said flattish to slightly down revenue. Don't you -- I mean, how do you factor in the comp in Q4 here versus the government shutdown? Is that really implying that you're going to continue to see kind of mid-single-digit declines and more on, I guess, an underlying basis? Is that right way to think about it?

Yes. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. That's straightforward, I guess. And then the guidance here, just the revenue, if I run the math, it's kind of, to be very precise, the midpoint is coming down by 1.4%, but you're bringing down the EPS by closer to 4%. I guess, I would've thought the margin is lower on the government side of the business. Are we getting negative leverage of operating costs? Or I guess, why is the drag on EPS bigger than the drag on revenue?

Yes, keep in mind, too, that we certainly have incurred quite a bit in -- with regard to the severance cost that we have, and we talked about that. So I mean, that's one of the biggest hits that's having a larger hit on EPS than what it is on the revenue side, Tobey (sic) [Timothy]. Timothy McHugh - William Blair & Company L.L.C., Research Division: Well, yes, I was looking at the adjusted numbers, kind of excluding that.

Yes. So I think that the fundamental situation here is, Tim, that the -- what we are trying to do is make sure that the aviation business, which is a very profitable business, is not doing as well as we would like it to do. So that, certainly, has an impact on our margins. And second, the -- we are certainly trying to make sure that the -- while the international business is growing quite rapidly, we need to make sure that we now focus on the profitability of the international business, which should be around slightly more than the government business here, but is not quite there yet. So we are focused on that, too. So when you merge all those things, the margins get affected a little bit. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. All right. I guess -- and then just as we go into next year, I guess, are we seeing the full impact of kind of the contract losses in the defense and homeland sector? Or will that kind of carry forward into next year? I'm trying to -- I know you're not ready to give guidance yet, but I'm trying to think whether you can stay flattish or even start to grow in the government sector next year.

I think, yes. I think fundamentally, what I was trying to say, that's something which we're obviously looking at, and given that there are certain sectors in our government business which are growing and we have very significant -- HHS is our biggest federal client by far, 3x or 4x the next one. So I think that if we can crank up the growth in our traditional domain area, rich places which are already growing, then some of the areas where potentially, especially Homeland Security, et cetera, where we don't have that much work. If that stays flat and the other parts start growing, we could potentially have positive comps going forward next year. So I think that the sense I have is that if HHS grows a little bit, that is a huge impact on our overall government revenue. And I think, generally, those trends are good. So I'm more optimistic that year-on-year trends next year will be positive on the government side, because we would have flushed out all the agencies or areas where we potentially work where we have perhaps -- don't have a real, strong discriminator, or where the small business set-aside impacts have all been washed through in the whole procurement cycle. So I'm hoping that it's not like one of these things which goes down consistently. I think that we are seeing the flattening out and up, and the positive growth in certain markets where we have the biggest market share and where we have the biggest revenue. So I'm hoping that, that improves going forward next year.

And at this time, I'm showing no further questions from the audience. I will now turn the call back over to management for closing remarks.

Thank you very much for joining us, and we will see you for the third quarter call sometime in the late fall.