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 | ||||||
