Press Release Details

Hill International Reports 2022 Third Quarter Financial Results

November 11, 2022 at 4:05 PM EST

PHILADELPHIA, Nov. 11, 2022 (GLOBE NEWSWIRE) -- Hill International, Inc. (NYSE:HIL) ("Hill" or the "Company"), delivering the infrastructure of change, announced today its financial results for the third quarter and nine months ended September 30, 2022.

Third Quarter 2022 Overview

  • Total revenue increased to $109.6 million from $96.6 million in the prior year period.
  • Consulting Fee Revenue (CFR) rose 10.5% to $85.1 million from $77.1 million in the prior year period
  • Gross profit up 6.8% to $34.6 million from $32.4 million in the prior year period
  • Net loss of $(0.7) million, or $(0.01) per diluted share, compared to net income of $1.3 million, or $0.02 per diluted share in the prior year period
  • Net cash provided by operating activities in Q3 2022 was $1.4 million compared to net cash provided by operating activities of $6.2 million in Q3 2021.
  • Unrestricted cash at September 30, 2022 was $22.8 million compared to unrestricted cash of $21.8 million at December 31, 2021.
  • At September 30, 2022, the Company had approximately $3.6 million in available and undrawn credit facilities and total liquidity was $26.5 million.

Proposed Transaction with Global Infrastructure Solutions Inc.
As previously announced, the Company entered into a merger agreement with Global Infrastructure Solutions Inc. (GISI).

The transaction was approved by Hill shareholders on November 2, 2022. Pursuant to the terms of the Merger Agreement, the consummation of the Merger remains subject to various closing conditions, including but not limited to (i) the receipt of consent or authorization under certain foreign antitrust laws, and (ii) the absence of any order that has the effect of preventing, making illegal or otherwise prohibiting the consummation of the Merger. As of the date hereof, the Company continues to expect to complete the merger in the fourth calendar quarter of 2022.

For more information about the pending transaction with GISI, see the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 29, 2022.

Investor Communications
In light of the proposed merger with GISI, Hill will not host an earnings conference call or provide financial guidance in conjunction with this earnings release. For further detail and discussion of Hill's financial performance please refer to Hill's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, which Hill intends to file with the SEC on November 14, 2022. The Company plans to continue to file reports with the SEC until the transaction has been completed.

About Hill International
Hill International, with more than 3,200 professionals in over 100 offices worldwide, provides program management, project management, construction management, project management oversight, construction claims, dispute resolution, advisory, facilities management, and other consulting services to clients in a variety of market sectors. Engineering News-Record magazine recently ranked Hill as one of the largest construction management firms 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, our expenses may be higher than anticipated and that the proposed merger with Global Infrastructure Solutions remains subject to the satisfaction of certain closing conditions. We do not intend, and undertake no obligation, to update any forward-looking statement.

Hill International, Inc.  The Equity Group Inc.
   
Elizabeth J. Zipf, LEED AP BD+C Devin Sullivan
Senior Vice President Hill International, Inc Senior Vice President
One Commerce Square (212) 836-9608
2005 Market Street, 17th Floor dsullivan@equityny.com
Philadelphia, PA 19103  
(215) 309-7707 Lena Cati
elizabethzipf@hillintl.com Vice President
  (212) 836-9611
  lcati@equityny.com


HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

  September 30, 2022 December 31, 2021
Assets (Unaudited)  
Cash and cash equivalents $22,834  $21,821 
Cash - restricted  4,131   5,562 
Accounts receivable, net  136,267   119,516 
Current portion of retainage receivable  7,511   9,743 
Accounts receivable - affiliates  19,702   21,741 
Prepaid expenses and other current assets  9,224   9,937 
Income tax receivable  1,397   2,163 
Total current assets  201,066   190,483 
Property and equipment, net  8,416   8,895 
Cash - restricted, net of current portion  2,843   3,063 
Operating lease right-of-use assets  15,825   18,347 
Financing lease right-of-use assets  613   801 
Retainage receivable  5,910   7,491 
Acquired intangibles, net  2,963   3,002 
Goodwill  40,105   44,127 
Investments  1,139   2,038 
Deferred income tax assets  1,944   2,165 
Other assets  4,018   2,645 
Total assets $284,842  $283,057 
Liabilities and Stockholders’ Equity    
Current maturities of notes payable and long-term debt $31,335  $25,841 
Accounts payable and accrued expenses  74,028   63,856 
Income taxes payable  4,438   2,610 
Current portion of deferred revenue  4,406   4,088 
Current portion of operating lease liabilities  4,788   4,777 
Current portion of financing lease liabilities  250   246 
Other current liabilities  6,997   6,006 
Total current liabilities  126,242   107,424 
Notes payable and long-term debt, net of current maturities  28,816   29,302 
Retainage payable  326   279 
Deferred income taxes  918   959 
Deferred revenue  3,627   9,541 
Non-current operating lease liabilities  15,981   18,565 
Non-current financing lease liabilities  385   573 
Other liabilities  10,990   13,175 
Total liabilities  187,285   179,818 
Commitments and contingencies    
Stockholders’ equity:    
Preferred stock, $0.0001 par value; 1,000 shares authorized, none issued      
Common stock, $0.0001 par value; 100,000 shares authorized, 63,674 shares and 63,291 shares issued at September 30, 2022 and December 31, 2021, respectively  6   6 
Additional paid-in capital  219,116   217,471 
Accumulated deficit  (83,616)  (83,813)
Accumulated other comprehensive loss  (9,342)  (1,813)
Less treasury stock of 6,807 at September 30, 2022 and December 31, 2021  (29,056)  (29,056)
Hill International, Inc. share of equity  97,108   102,795 
Noncontrolling interests  449   444 
Total equity  97,557   103,239 
Total liabilities and stockholders’ equity $284,842  $283,057 


HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   2022   2021  2022   2021 
Consulting fee revenue $85,142  $77,061 $254,262  $227,158 
Reimbursable expenses  24,429   19,543  63,275   58,079 
Total revenue $109,571  $96,604 $317,537  $285,237 
Direct expenses  74,917   64,196  213,620   194,314 
Gross profit  34,654   32,408  103,917   90,923 
Selling, general and administrative expenses  31,035   28,121  92,831   82,906 
Foreign currency exchange loss  803   511  3,730   2,751 
Plus: Share of profit of equity method affiliates  506   551  1,456   1,805 
Operating profit $3,322  $4,327 $8,812  $7,071 
Less: Interest and related financing fees, net  2,098   1,226  4,805   4,077 
Other loss, net  104     319    
Earnings before income taxes $1,120  $3,101 $3,688  $2,994 
Income tax expense  1,823   1,784  3,602   4,653 
Net earnings (loss) $(703) $1,317 $86  $(1,659)
Less: net (loss) earnings - noncontrolling interests  (14)  58  (112)  265 
Net (loss) earnings attributable to Hill International, Inc. $(689) $1,259 $198  $(1,924)
         
Basic (loss) earnings per common share - Hill International, Inc. $(0.01) $0.02 $  $(0.03)
Basic weighted average common shares outstanding  58,073   57,245  57,858   57,102 
         
Diluted (loss) earnings per common share - Hill International, Inc. $(0.01) $0.02 $  $(0.03)
Diluted weighted average common shares outstanding  58,073   57,245  59,767   57,102 


HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

  Nine Months Ended
September 30,
   2022   2021 
Cash flows from operating activities:    
Net earnings (loss)  86   (1,659)
Adjustments to reconcile net loss to net cash provided by (used in):    
Depreciation and amortization  1,784   1,856 
Recovery for bad debt  (431)  (2,794)
Amortization of deferred loan fees  344   568 
Deferred tax expense  140   (120)
Share-based compensation  1,589   1,814 
Operating lease right-of-use assets  3,908   3,306 
Foreign currency remeasurement losses  1,544   2,510 
Changes in operating assets and liabilities:    
Accounts receivable  (23,773)  (15,521)
Accounts receivable - affiliate  2,039   (5,728)
Prepaid expenses and other current assets  253   (3,951)
Income taxes receivable  399   1,232 
Retainage receivable  3,534   (953)
Other assets  (976)  (1,926)
Accounts payable and accrued expenses  13,440   13,181 
Income taxes payable  1,944   (1,202)
Deferred revenue  (4,351)  1,482 
Operating lease liabilities  (3,702)  (2,698)
Other current liabilities  1,139   3,432 
Retainage payable  47   (314)
Finance lease liabilities  (13)   
Other liabilities  (1,260)  492 
Net cash used in operating activities  (2,316)  (6,993)
Cash flows from investing activities:    
Purchase of NEYO Group     (681)
Purchase of property and equipment  (1,472)  (1,197)
Net cash used in investing activities  (1,472)  (1,878)
Cash flows from financing activities:    
Repayment of term loans  (505)  (802)
Proceeds from revolving loans  31,667   29,785 
Repayment of revolving loans  (25,336)  (25,816)
Proceeds from stock issued under employee stock purchase plan  56   118 
Net cash provided by financing activities  5,698   3,285 
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (2,548)  (2,654)
Net decrease in cash, cash equivalents and restricted cash  (638)  (8,240)
Cash, cash equivalents and restricted cash — beginning of period  30,446   41,413 
Cash, cash equivalents and restricted cash — end of period $29,808  $33,173 


  Nine Months Ended
September 30,
Supplemental disclosures of cash flow information:  2022   2021 
Interest and related financing fees paid $4,668  $3,520 
Income taxes paid  2,218   3,830 
Cash paid for amounts included in the measurement of lease liabilities  5,681   4,897 
Right-of-use assets obtained in exchange for operating lease liabilities  1,648   8,568 
Right-of-use assets obtained in exchange for finance lease liabilities     538