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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 11, 2022

 

HILL INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Charter)

 

Delaware   001-33961   20-0953973

(State or other jurisdiction

of incorporation) 

 

(Commission

File Number) 

 

(IRS Employer

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

 

(Former name or former address, if changed since last report)

 

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

 

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

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨          Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ¨

 

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 new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On November 11, 2022, Hill International, Inc. (the “Company”) issued a press release announcing the results of operations for the third quarter and nine months ended September 30, 2022. A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.02.

 

The information provided pursuant to this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)          Exhibits.

 

Exhibit Number   Description
99.1   Press Release of the Company, dated November 11, 2022.
104   Cover Page Interactive Data File (embedded with the Inline XBRL document).

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  HILL INTERNATIONAL, INC.
     
  By: /s/ William H. Dengler, Jr.
  Name: William H. Dengler, Jr.
November 14, 2022 Title: Executive Vice President and Chief Administrative Officer

 

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Hill International Reports 2022 Third Quarter Financial Results

 

PHILADELPHIA, PA - November 11, 2022 - 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.

 

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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

 

### #### ###

 

 

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

   September 30,
2022
   December 31,
2021
 
    (Unaudited)      
Assets          
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 

 

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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,
 
   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 

 

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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 

 

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   Nine Months Ended September 30, 
   2022   2021 
Supplemental disclosures of cash flow information:        
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 

 

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