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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from                                          to 
Commission File Number: 001-33961
HILL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 20-0953973
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Commerce Square 
2005 Market Street, 17th Floor
Philadelphia, PA
19103
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:  (215) 309-7700

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001HIL
New York Stock Exchange ("NYSE")

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý     No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
Yes  ý     No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act
Large Accelerated Filer Accelerated Filer
Non-Accelerated Filer Smaller Reporting Company
   Emerging Growth Company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes   No  ý

There were 56,677,873 shares of the Registrant’s Common Stock outstanding at October 28, 2021.



HILL INTERNATIONAL, INC. AND SUBSIDIARIES
 
Index to Form 10-Q
 
 
   
   
 
   
 
   
 
   
 
   
 
   
   
   
   
   
   
   
   
   
   
   
   
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), and it is Hill International, Inc.'s (the "Company") 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 projections of revenues, earnings, margin, profit improvement, cost savings or other financial items; any statements of belief, any statements concerning the Company's plans, strategies and objectives for future operations; and any statements regarding future economic conditions or performance, are forward-looking statements.
 
These forward-looking statements are based on the Company's current expectations, estimates and assumptions and are subject to certain risks and uncertainties. Although the Company believes 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.
 
Those forward-looking statements may concern, among other things:
 
The markets for the Company's services;
Projections of revenues and earnings, anticipated contractual obligations, funding requirements or other financial items;
Statements regarding the impact and effect of the COVID-19 pandemic;
Statements concerning the Company's plans, strategies and objectives for future operations; and
Statements regarding future economic conditions or the Company's performance.
 
Important factors that could cause the Company's actual results to differ materially from estimates or projections contained in our forward-looking statements include:
 
The risks set forth in Item 1A, “Risk Factors,” in the Company's most recent Annual Report on Form 10-K;
Unfavorable global economic conditions may adversely impact its business;
Our backlog, which is subject to unexpected adjustments and cancellations, may not be fully realized as revenue;
Our expenses may be higher than anticipated;
Modifications and termination of client contracts;
Control and operational issues pertaining to business activities that the Company conducts pursuant to joint ventures with other parties; and
The ability to retain and recruit key technical and management personnel.
 
Other factors that may affect the Company's business, financial position or results of operations include:
 
Unexpected delays in collections from clients;
Risks related to the effect of the COVID-19 pandemic on the Company, including its employees and related costs and including any project cancellations, delays and modifications;
Risks of the Company's ability to obtain debt financing or otherwise raise capital to meet required working capital needs and to support potential future acquisition activities;
Risks of international operations, including uncertain political and economic environments, acts of terrorism or war, potential incompatibilities with foreign joint venture partners, foreign currency fluctuations, civil disturbances and labor issues; and
Risks related to contracts with governmental entities, including the failure of applicable governing authorities to take necessary actions to secure or maintain funding for particular projects with us, the unilateral termination of contracts by the governments and reimbursement obligations to the government for funds previously received.
 
The Company does not intend, and undertakes no obligation to, update any forward-looking statement other than as required by law. You should carefully review such cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends. Those cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this Form 10-Q, in our other filings with the Securities and Exchange Commission ("SEC") or in materials incorporated therein by reference.

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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 September 30, 2021December 31, 2020
Assets(Unaudited)
Cash and cash equivalents$26,293 $34,229 
Cash - restricted3,811 3,752 
Accounts receivable, net115,049 98,186 
Current portion of retainage receivable11,813 11,775 
Accounts receivable - affiliates29,013 23,285 
Prepaid expenses and other current assets13,494 9,378 
Income tax receivable1,026 2,298 
Total current assets200,499 182,903 
Property and equipment, net8,816 9,443 
Cash - restricted, net of current portion3,069 3,432 
Operating lease right-of-use assets17,908 13,116 
Financing lease right-of-use assets692 288 
Retainage receivable6,988 6,044 
Acquired intangibles, net2,767 2,253 
Goodwill44,903 46,397 
Investments2,511 2,805 
Deferred income tax assets3,880 3,698 
Other assets2,268 1,620 
Total assets$294,301 $271,999 
Liabilities and Stockholders’ Equity
Current maturities of notes payable and long-term debt$22,780 $987 
Accounts payable and accrued expenses80,230 67,797 
Income taxes payable1,021 2,219 
Current portion of deferred revenue4,339 3,305 
Current portion of operating lease liabilities4,937 4,797 
Current portion of financing lease liabilities202 70 
Other current liabilities9,264 5,796 
Total current liabilities122,773 84,971 
Notes payable and long-term debt, net of current maturities29,442 48,294 
Retainage payable285 600 
Deferred income taxes1,299 1,210 
Deferred revenue7,527 7,488 
Non-current operating lease liabilities18,393 13,184 
Non-current financing lease liabilities502 186 
Other liabilities7,253 6,778 
Total liabilities187,474 162,711 
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, 63,249 shares and 62,920 shares issued at September 30, 2021 and December 31, 2020, respectively
6 6 
Additional paid-in capital216,942 215,010 
Accumulated deficit(81,467)(79,542)
Accumulated other comprehensive (loss) income(66)1,318 
Less treasury stock of 6,807 at September 30, 2021 and December 31, 2020
(29,056)(29,056)
Hill International, Inc. share of equity106,359 107,736 
Noncontrolling interests468 1,552 
Total equity106,827 109,288 
Total liabilities and stockholders’ equity$294,301 $271,999 
See accompanying notes to consolidated financial statements.
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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,
2021202020212020
Consulting fee revenue$77,061 $71,543 $227,158 $224,453 
Reimbursable expenses19,543 17,109 58,079 51,956 
Total revenue$96,604 $88,652 $285,237 $276,409 
Direct expenses64,196 59,998 194,314 190,078 
Gross profit$32,408 $28,654 $90,923 $86,331 
Selling, general and administrative expenses28,121 25,588 82,906 80,543 
Foreign currency exchange loss (benefit)511 (694)2,751 3,622 
 Plus: Share of profit of equity method affiliates551 983 1,805 2,021 
Operating profit$4,327 $4,743 $7,071 $4,187 
Less: Interest and related financing fees, net1,226 1,275 4,077 3,870 
Less: Other loss, net 152  3,654 
Earnings (loss) before income taxes$3,101 $3,316 $2,994 $(3,337)
Income tax expense1,784 1,071 4,653 2,776 
Net earnings (loss)$1,317 $2,245 $(1,659)$(6,113)
Less: net earnings - noncontrolling interests58 131 265 308 
Net earnings (loss) attributable to Hill International, Inc.$1,259 $2,114 $(1,924)$(6,421)
Basic earnings (loss) per common share - Hill International, Inc.$0.02 $0.04 $(0.03)$(0.11)
Basic weighted average common shares outstanding57,245 56,702 57,102 56,551 
Diluted earnings (loss) per common share - Hill International, Inc.$0.02 $0.04 $(0.03)$(0.11)
Diluted weighted average common shares outstanding57,245 56,702 57,102 56,551 
 
See accompanying notes to consolidated financial statements.
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HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
(In thousands)
(Unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net earnings (loss)$1,317 $2,245 $(1,659)$(6,113)
Foreign currency translation adjustment, net of tax(1,177)639 (2,733)5,385 
Comprehensive earnings (loss)140 2,884 (4,392)(728)
Less: Comprehensive (loss) earnings attributable to noncontrolling interests(32)376 (1,084)203 
Comprehensive earnings (loss) attributable to Hill International, Inc.$172 $2,508 $(3,308)$(931)
 
See accompanying notes to consolidated financial statements.

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands) 
 Common StockAdditional
Paid-in
Retained
Earnings
Accumulated Other
Comprehensive
Treasury StockHill Share of Stockholders’Non-controllingTotal
Stockholders’
 SharesAmountCapital(Deficit)Income (Loss)SharesAmountEquityInterestsEquity
Balance - December 31, 202062,920 $6 $215,010 $(79,542)$1,318 6,807 $(29,056)$107,736 $1,552 $109,288 
Net earnings (loss)— — — (3,184)— — — (3,184)207 (2,977)
Other comprehensive loss— — — — (297)— — (297)(1,259)(1,556)
Share-based compensation expense270 — 1,371 — — — — 1,371 — 1,371 
Shares issued under employee stock purchase plan44 — 95 — — — — 95 — 95 
Balance - June 30, 202163,234 $6 $216,476 $(82,726)$1,021 6,807 $(29,056)$105,721 $500 $106,221 
Net earnings— — — 1,259 — — — 1,259 58 1,317 
Other comprehensive loss— — — — (1,087)— — (1,087)(90)(1,177)
Share-based compensation expense3 — 443 — — — — 443 — 443 
Shares issued under employee stock purchase plan12 — 23 — — — — 23 — 23 
Balance - September 30, 202163,249 $6 $216,942 $(81,467)$(66)6,807 $(29,056)$106,359 $468 $106,827 
Balance - December 31, 201962,708 $6 $212,759 $(71,360)$(3,817)6,546 $(28,231)$109,357 $871 $110,228 
Net earnings (loss)— — — (8,535)— — — (8,535)177 (8,358)
Other comprehensive income (loss)— — — — 5,096 — — 5,096 (350)4,746 
Share-based compensation expense — 1,201 — — — — 1,201 — 1,201 
Shares issued under employee stock purchase plan162 — 201 — — — — 201 — 201 
Transfer of shares pledged as collateral (1)
(261)— — — — 261 (825)(825)— (825)
Balance - June 30, 202062,609 $6 $214,161 $(79,895)$1,279 6,807 $(29,056)$106,495 $698 $107,193 
Net earnings— — — 2,114 — — — 2,114 131 2,245 
Other comprehensive income— — — — 394 — — 394 245 639 
Share-based compensation expense — 415 — — — — 415 — 415 
Shares issued under employee stock purchase plan16 — 20 — — — — 20 — 20 
Balance - September 30, 202062,916 $6 $214,596 $(77,781)$1,673 6,807 $(29,056)$109,438 $1,074 $110,512 

(1) Reflects 261 shares of the Company's common stock pledged as collateral under the terms of a secured promissory note payable to the Company. During the three months ended March 31, 2020, the Company exercised its right to retain the shares upon the note holder's agreement to relinquish the shares upon the promissory note maturity date.

See accompanying notes to consolidated financial statements.
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HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20212020
Cash flows from operating activities:
Net loss$(1,659)$(6,113)
Adjustments to reconcile net loss to net cash provided by (used in):
Depreciation and amortization1,856 3,380 
Recovery of bad debts(2,794)(1,306)
Amortization of deferred loan fees568 521 
Deferred tax expense(120)500 
Share-based compensation1,814 1,616 
Operating lease right-of-use assets3,306 3,163 
Loss on liquidation of subsidiary 4,064 
Foreign currency remeasurement losses2,510 3,622 
Deferred payroll tax payments 2,711 
Changes in operating assets and liabilities:
Accounts receivable(15,521)4,686 
Accounts receivable - affiliate(5,728)(6,294)
Prepaid expenses and other current assets(3,951)(2,418)
Income taxes receivable1,232 39 
Retainage receivable(953)(416)
Other assets(1,926)(2,643)
Accounts payable and accrued expenses13,181 1,641 
Income taxes payable(1,202)(1,161)
Deferred revenue1,482 (2,451)
Operating lease liabilities(2,698)(3,259)
Other current liabilities3,432 3,426 
Retainage payable(314)(730)
Other liabilities492 688 
Net cash (used in) provided by operating activities(6,993)3,266 
Cash flows from investing activities:
Purchase of NEYO Group(681) 
Purchase of property and equipment(1,197)(1,101)
Net cash used in investing activities(1,878)(1,101)
Cash flows from financing activities:
Proceeds from term loans 1,291 
Repayment of term loans(802)(666)
Proceeds from revolving loans29,785 38,486 
Repayment of revolving loans(25,816)(24,268)
Proceeds from stock issued under employee stock purchase plan118 221 
Net cash provided by financing activities3,285 15,064 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,654)(97)
Deconsolidated cash 9 
Net (decrease) increase in cash, cash equivalents and restricted cash(8,240)17,123 
Cash, cash equivalents and restricted cash — beginning of period41,413 24,982 
Cash, cash equivalents and restricted cash — end of period$33,173 $42,105 
 Nine Months Ended September 30,
Supplemental disclosures of cash flow information:20212020
Interest and related financing fees paid$3,520 $2,722 
Income taxes paid3,830 2,018 
Transfer of proceeds from shares pledged as collateral to treasury stock 825 
Cash paid for amounts included in the measurement of lease liabilities4,897 5,914 
Right-of-use assets obtained in exchange for operating lease liabilities8,568 288 
Right-of-use assets obtained in exchange for finance lease liabilities538 475 

 See accompanying notes to consolidated financial statements.
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HILL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
 

Note 1 — The Company
 
Hill International, Inc. (“Hill” or the “Company”) is a professional services firm that provides program management, project management, construction management and other consulting services primarily to the buildings, transportation, environmental, energy and industrial markets worldwide. Hill’s clients include the U.S. federal government, U.S. state and local governments, foreign governments and the private sector.

All amounts included in the following Notes to the Consolidated Financial Statements are in thousands, unless otherwise indicated, except per share data.

Note 2 — Liquidity
 
At September 30, 2021 and December 31, 2020, the Company's principal sources of liquidity consisted of $26,293 and $34,229 of cash and cash equivalents, respectively, $4,591 and $7,495 of available borrowing capacity under the Domestic Revolving Credit Facility, respectively, $1,614 and $1,085 of available borrowing capacity under the International Revolving Credit Facility, respectively, and $6,131 and $3,131 under other foreign credit agreements, respectively. Additional information regarding the Company's credit facilities is set forth in Note 9 - Notes Payable and Long-Term Debt.

In March 2020, the World Health Organization declared COVID-19 a global pandemic as a result of the further spread of the virus into all regions of the world, including those regions where the Company's primary operations occur. Variants of the virus continue to emerge in various region and countries worldwide. The Company is focused on preserving its principal sources of liquidity and managing its cash flow and will continue to evaluate the potential short-term and long-term implications of COVID-19 on its consolidated statements of operations. The Company believes that it has adequate liquidity and business plans to continue to operate the business and mitigate the risks associated with COVID-19 for the next 12 months from November 8, 2021, the date of this filing. Additional disclosure on the impact of COVID-19 on the Company is included in Part I. Item 2 Management's Discussion and Analysis section of this Form 10-Q.

Note 3 — Basis of Presentation
 
Summary
 
The accompanying unaudited interim consolidated financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") pertaining to reports on Form 10-Q and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Accordingly, the accompanying unaudited interim consolidated financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. In the opinion of management, these statements include all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the consolidated financial statements. The consolidated financial statements include the accounts of Hill and its wholly and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The interim operating results are not necessarily indicative of the results for a full year.

NEYO Group Acquisition

On June 30, 2021, the Company acquired all of the equity interests of NEYO Group, a 120-person firm specializing in cost management and estimating support and also providing project management, project monitoring, and other services. NEYO maintains offices in Bangalore, Chennai, Delhi, and Mumbai, as well as project offices in Hyderabad, Pune, and Kolkata.
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Reclassification

Certain geographic regions have been combined in tables throughout the document including in Note 4 - Revenue from Contract with Clients and Note 12 - Segment and Related Information. In the current year, Americas includes United States and Latin America and Middle East/Asia/Pacific includes Middle East and Asia/Pacific. The related presentation for the three and nine months ended September 30, 2020 has been recast to conform to current year presentation.

Other Loss, net

During the nine months ended September 30, 2020, a loss of $4,064 was recognized due to the bankruptcy filing and deconsolidation of our operating subsidiary in Brazil (see Note 15), net of other non-operating income of $65. An additional $345 of other income was recognized during the three months ended March 31, 2020, representing the cancellation of a loan agreement made with the PIDC-Local Development Corporation that was funded to the Company on October 24, 2014 as part of the city of Philadelphia's (the "City") Economic Stimulus Program. In February 2020, the City agreed to cancel this loan as a result of the Company satisfying all obligations upon which cancellation of such debt was conditioned in such loan agreement.

Summary of Significant Accounting Policies

(a)                                 Foreign Currency Translations and Transactions

Assets and liabilities of all foreign operations are translated at period-end rates of exchange while revenues and expenses are translated at the average monthly exchange rates. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity titled accumulated other comprehensive income (loss) until the entity is sold or substantially liquidated. Gains or losses arising from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency), including those resulting from intercompany transactions, are reflected in the Company's consolidated statements of operations. The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned and permanent equity has been elected, are recorded in accumulated other comprehensive income (loss) on the Company's consolidated balance sheets.

(b)                                 Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and accounts receivable.

The Company maintains its cash accounts with high quality financial institutions. Although the Company believes that the financial institutions with which it does business will be able to fulfill their commitments, there is no assurance that those institutions will be able to continue to do so.

No single client accounted for 10% or more of total revenue for the three and nine months ended September 30, 2021 or 2020.

There was one client in Africa who represents 10% or more to gross accounts receivable at September 30, 2021 and December 31, 2020, respectively, which represents 14% and 16% of the gross accounts receivable balance at September 30, 2021 and December 31, 2020, respectively. These amounts were fully reserved for at September 30, 2021 and December 31, 2020.

(c)                                 Allowance for Doubtful Accounts

The allowance for doubtful accounts is an estimate prepared by management based on identification of the collectability of specific accounts and the overall condition of the receivable portfolios. When evaluating the adequacy of the allowance for doubtful accounts, the Company specifically analyzes trade receivables, including retainage receivable, historical bad debts, client credits, client concentrations, current economic trends and changes in client payment terms. If the financial condition of clients were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Likewise, should the Company determine that it would be able to realize more of its receivables in the future than previously estimated, an adjustment to the allowance would increase earnings in the period such determination was made. The allowance for doubtful accounts is reviewed on a quarterly basis and adjustments are recorded as deemed necessary.

(d)                                    Retainage Receivable

Retainage receivable represents balances billed but not paid by clients pursuant to retainage provisions in certain contracts and will be due upon completion of specific tasks or the completion of the contract.
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(e)                                 Income Taxes

The Company estimates income taxes in each of the jurisdictions in which it operates. This process involves estimating its actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheets. The Company assesses the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent it believes recovery is not likely, the Company establishes a valuation allowance. To the extent the Company establishes a valuation allowance in a period, it must include an expense within the tax provision in the consolidated statements of operations. The Company has recorded a valuation allowance to reduce the deferred income tax assets to an amount that is more likely than not to be realized in future years. If the Company determines in the future that it is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position, that the deferred tax assets subject to the valuation allowance will be realized, then the previously provided valuation allowance will be adjusted.

The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is more likely than not that the benefit will be ultimately realized. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods.

(f)                                 Revenue Recognition

The Company generates revenue primarily from providing professional services to its clients under various types of contracts. In providing these services, the Company may incur reimbursable expenses, which consist principally of amounts paid to subcontractors and other third parties and travel and other job related expenses that are contractually reimbursable from clients. The Company includes reimbursable expenses in computing and reporting its total revenue as long as the Company remains responsible to the client for the fulfillment of the contract and for the overall acceptability of all services provided.

If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, incentive awards, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. These loss projects are re-assessed for each subsequent reporting period until the project is complete. Such revisions could occur at any time, and the effects may be material.

See Note 4 - Revenue from Contracts with Clients for more detail regarding how the Company recognizes revenue under each type of its contractual arrangements.

(g)                                    Restricted Cash

Restricted cash primarily represents cash collateral required to be maintained in foreign bank accounts to serve as collateral for letters of credit, bonds or guarantees on certain projects. The cash will remain restricted until the respective project has been completed, which typically is greater than one year.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows:
September 30, 2021December 31, 2020
Cash and cash equivalents$26,293 $34,229 
Cash - restricted3,811 3,752 
Cash - restricted, net of current portion3,069 3,432 
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows$33,173 $41,413 
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(h)                                    Earnings (loss) per Share

Basic earnings (loss) per common share have been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share incorporates the incremental shares issuable upon the assumed exercise of stock options and the assumed vesting of stock and deferred and restricted stock unit awards using the treasury stock method, if dilutive.

The Company has outstanding options to purchase approximately 1,353 shares and 1,589 shares at September 30, 2021 and 2020, respectively. In addition, the Company had 1,038 and 715 restricted and deferred stock units outstanding at September 30, 2021 and 2020, respectively. These awards were excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2021 and 2020 because they were anti-dilutive.

The following table provides a reconciliation to net loss used in the numerator for loss per share attributable to Hill:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net earnings (loss)$1,317 $2,245 $(1,659)$(6,113)
Less: net earnings - noncontrolling interests58 131 265 308 
Net earnings (loss) attributable to Hill International, Inc.$1,259 $2,114 $(1,924)$(6,421)
Basic weighted average common shares outstanding57,245 56,702 57,102 56,551 
Effect of dilutive securities:
Stock options    
Unvested share-based compensation units    
Diluted weighted average common shares outstanding57,245 56,702 57,102 56,551 
Basic and diluted earnings (loss) per common share - Hill International, Inc.$0.02 $0.04 $(0.03)$(0.11)

(i)                                    New Accounting Pronouncements

Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or adoption will have minimal impact on its consolidated financial statements.

For additional information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 3 to the consolidated financial statements in Item 8 of Form 10-K for the year ended December 31, 2020 filed with the SEC on March 16, 2021. See update below.

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Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in ASC 740 and improves how certain income tax-related guidance is applied. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption was permitted. The amendments in this update were applied prospectively. The Company adopted the new standard as of January 1, 2021. The standard did not have a material impact on the Company’s consolidated financial position or results of operations upon adoption.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) - Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement of credit losses on financial instruments.  The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing January 1, 2023. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures.

Note 4 — Revenue from Contracts with Clients

The Company recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for such goods or services.

Below is a description of the basic types of contracts from which the Company may earn revenue:

Time and Materials Contracts

Under the time and materials (“T&M”) arrangements, contract fees are based upon time and materials incurred. The contracts may be structured as basic time and materials, cost plus a margin or time and materials subject to a maximum contract value (the "cap value"). Due to the potential limitation of the cap value, the economic factors of the contracts subject to a cap value differ from the economic factors of basic T&M and cost plus contracts. The majority of the Company’s contracts are for consulting projects where it bills the client monthly at hourly billing rates. The hourly billing rates are determined by contract terms. Under cost plus a margin contracts, the Company charges its clients for its costs, plus a fixed fee or rate. Under time and materials contracts with a cap value, the Company charges the clients for time and materials based upon the work performed however there is a cap or a not