Hill International, Inc. (NYSE:HIL) ("Hill" or the "Company"),
the global leader in managing construction risk, announced today
that it filed its Quarterly Report on Form 10-Q for the third
quarter ended September 30, 2019. This release will be
followed by a conference call on November 7, 2019 at 8:30 am EST
with Hill Chief Executive Officer Raouf Ghali and Senior Vice
President and Chief Financial Officer Todd Weintraub.
Mr. Ghali commented, “The Company continued to
progress with its turnaround during the third quarter of 2019.
Sequential profitability improved again, bookings and book-to-burn
ratio remained strong and the lower cost base implemented
previously remained steady. Given the many opportunities we are
currently pursuing, and our continued focus on controlling costs, I
expect increased results to continue in the fourth quarter and
beyond. I look forward to providing further details of our
performance during our call."
Third Quarter Financial Results
Note that the Company believes a comparison of
2019 results to the comparable 2018 period is not meaningful due to
the high level of non-recurring items throughout 2018. The Company
believes a more meaningful comparison is a sequential comparison to
the immediately preceding quarter to demonstrate the Company’s
progress relative to its plan.
Hill's consulting fee revenue ("CFR") was $75.7
million for the quarter ended September 30, 2019, compared to
$77.0 million for the quarter ended June 30, 2019. Total
revenue for the quarter ended September 30, 2019 was $95.7
million, compared to $98.3 million for the quarter ended
June 30, 2019.
Mr. Weintraub added, “We have seen our bottom
line increase during the year due to effective cost management and
improved collections. This was somewhat offset by slightly
declining CFR due to backlog (as defined below), a leading CFR
indicator, declining throughout 2018. We expect CFR in the fourth
quarter and throughout 2020 to begin increasing, reflecting strong
bookings and increased backlog this year.”
Selling, general, and administrative
("SG&A") expenses were $29.3 million and $27.4 million in the
quarters ended September 30, 2019 and June 30, 2019,
respectively. SG&A was favorably impacted in both quarters by
reserve reductions, partially offset by non-cash share-based
compensation and unrealized foreign currency exchange movements.
The second quarter was also favorably impacted by the reversal of
over-accrued restructuring costs upon settling the last of those
costs. The net favorable impact was $0.4 million and $1.6 million
in the quarters ended September 30, 2019 and June 30,
2019, respectively.
Net income attributable to Hill was $2.5 million
and $1.6 million for the quarters ended September 30, 2019 and
June 30, 2019, respectively.
Adjusted EBITDA (as defined below), which
excludes certain effects of the SG&A items specified above,
improved to $5.6 million for the third quarter of 2019, compared to
$4.9 million for the second quarter of 2019 (see EBITDA and
adjusted EBITDA table below).
EBITDA
Earnings before interest, taxes, depreciation
and amortization ("EBITDA") from continuing operations is not a
measure of financial performance under U.S. generally accepted
accounting principles ("GAAP"). EBITDA, in addition to
operating profit, net income, and other GAAP measures, is a useful
indicator of Hill's financial and operating performance and its
ability to generate cash flow from operations that are available
for taxes and capital expenditures. Investors should recognize
that EBITDA might not be comparable to similarly titled measures of
other companies. The Company believes that EBITDA is useful to
investors and other external users of Hill's financial statements
in evaluating its operating performance because EBITDA is widely
used by investors to measure a company’s operating performance
without regard to items such as interest expense, taxes, and
depreciation and amortization, which can vary substantially from
company to company depending upon accounting methods and book value
of assets, capital structure and the method by which assets were
acquired. This measure should be considered in addition to, and not
as a substitute for or superior to, any measure of performance
prepared in accordance with GAAP.
|
|
Three Months Ended September 30, 2019 |
|
Three Months Ended June 30, 2019 |
(in thousands) |
|
|
|
|
Income (loss) from
continuing operations |
|
2,507 |
|
|
1,700 |
|
Less: net earnings -
non-controlling interests |
|
26 |
|
|
83 |
|
Net income (loss) attributable to Hill
International, Inc. |
|
$ |
2,481 |
|
|
$ |
1,617 |
|
|
|
|
|
|
Interest and related financing
fees, net |
|
1,485 |
|
|
1,411 |
|
Income tax (benefit) expense |
|
(340 |
) |
|
1,493 |
|
Depreciation and amortization
expense |
|
850 |
|
|
794 |
|
EBITDA |
|
$ |
4,476 |
|
|
$ |
5,315 |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
Profit Improvement Plan and Other
One-Time Cost Recovery |
|
— |
|
|
(1,072 |
) |
Share-based compensation(1) |
|
296 |
|
|
801 |
|
Unrealized foreign currency
translation loss (benefit) |
|
858 |
|
|
(147 |
) |
Adjusted
EBITDA |
|
$ |
5,630 |
|
|
$ |
4,897 |
|
|
|
|
|
|
|
|
|
|
(1) Share-based compensation excludes
amounts paid related to the Profit Improvement Plan during the
quarter ended September 30, 2019 and accrued in previous
quarters.
Backlog
Backlog is not a measure defined in GAAP and the
Company's methodology for determining backlog may not be comparable
to the methodology used by other companies in determining their
backlog. Hill's backlog represents CFR, which includes the
Company's estimate of the amount of contracts and awards in-hand
that the Company expects to recognize as CFR in future periods as a
component of total revenue and is based upon the binding nature of
the underlying contract, commitment or letter of intent, and other
factors, including the economic, financial and regulatory viability
of the project and the likelihood of the contract being extended,
renewed or canceled. Although backlog reflects business that the
Company considers to be firm, cancellations or scope adjustments
may occur.
The Company's book-to-burn ratio, another
non-GAAP measure, is determined by taking new CFR bookings and
dividing it by CFR for the applicable period. The Company believes
that this measure is useful to investors and other external users
of Hill's financial statements since this metric allows them to
monitor the Company's business development efforts to ensure the
growth of the Company's backlog and its business over time.
Conference Call
Mr. Ghali, and Mr. Weintraub will host a
conference call on Thursday, November 7, 2019, at 8:30 am Eastern
Standard Time to discuss the results.
Interested parties may participate in the call
by dialing (877) 511-3236 (Domestic) or (786) 815-8670
(International) approximately 10 minutes before the call is
scheduled to begin and asking to be connected to the Hill
International Conference Call. To listen to the live call online,
please go to the “Investor Relations” section of Hill’s website
at www.hillintl.com and click on “Financial Information,” and
then “Conferences and Calls.” Please go to the website at least 15
minutes early to register, download, and install any necessary
audio software. If you are unable to participate in the live call,
the conference call will be archived on Hill’s website and
accessible for approximately 90 days.
About Hill International
Hill International, with approximately 2,700
professionals in more than 50 offices worldwide, provides program
management, project management, construction management, and other
consulting services to clients in a variety of market sectors.
Engineering News-Record magazine recently ranked Hill as the
eighth-largest construction management firm in the United States.
For more information on Hill, please visit our website at
www.hillintl.com.
Forward Looking Statements
Certain statements contained herein may be
considered "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, and it is our
intent that any such statements be protected by the safe harbor
created thereby. Except for historical information, the matters set
forth herein including, but not limited to, any statements of
belief or intent, any statements concerning our plans, strategies,
and objectives for future operations are forward-looking
statements. These forward-looking statements are based on our
current expectations, estimates and assumptions and are subject to
certain risks and uncertainties. Although we believe that the
expectations, estimates, and assumptions reflected in our
forward-looking statements are reasonable, actual results could
differ materially from those projected or assumed in any of our
forward-looking statements. Important factors that could cause our
actual results to differ materially from estimates or projections
contained in our forward-looking statements are set forth in the
Risk Factors section and elsewhere in the reports we have filed
with the Securities and Exchange Commission, including that
unfavorable global economic conditions may adversely impact our
business, our backlog may not be fully realized as revenue, and our
expenses may be higher than anticipated. We do not intend, and
undertake no obligation, to update any forward-looking
statement.
Hill International, Inc.Elizabeth J. Zipf, LEED
AP BD+CSenior Vice President, Global Marketing and
CommunicationsHill International, Inc.One Commerce Square2005
Market Street, 17th FloorPhiladelphia, PA 19103Tel:
215-309-7707elizabethzipf@hillintl.com
Hill International, Inc.Todd WeintraubSenior
Vice President and Chief Financial Officer(215)
309-7951toddweintraub@hillintl.com
(HIL-G)
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