Hill International Announces Profit Improvement Plan and Reiterates Full Year 2017 Revenue Guidance
August 21 2017 - 6:45AM
Hill International (NYSE:HIL), the global leader in managing
construction risk, today announced that the Company and its Board
of Directors have undertaken several initiatives to improve
performance. With the assistance of outside consultants, Alvarez
& Marsal, the Company is taking steps to reduce its cost
structure and identify and implement revenue enhancements. The
Company identified estimated annualized pre-tax savings ranging
from $27.0 million to $38.0 million. The Company expects the
actions necessary to obtain these savings will be substantially
completed by June 30, 2018.
The Company began reductions in mid-May 2017
following the sale of the Company’s Construction Claims Group. At
this point, the Company has reduced its back office workforce by
more than 70 employees, incurring pre-tax restructuring and other
charges of approximately $1.2 million for employee termination
benefits and related costs as well as $1.4 million in other pre-tax
restructuring charges. As a result of the reductions which have
already been implemented, the partial year savings through December
31, 2017 will be approximately $3.5 million (excluding
restructuring related costs), with expected annual net savings of
approximately $8.0 million in 2018 and beyond.
The Company expects to incur additional future
charges of approximately $6.0 million, primarily representing costs
relating to additional employee related terminations, facilities
closures, consolidations and relocations, and vendor
rationalization.
Current Backlog The Company’s
total backlog at June 30, 2017 was $895 million, up 1.3% from $883
million at March 31, 2017. Twelve-month backlog at June 30, 2017
was $320 million, down 1.2% from $324 million at March 31, 2017.
Our net bookings during the second quarter of 2017 of $113 million
equates to a book-to-bill ratio of 112%. Our net bookings during
the first half of 2017 of $261 million equates to a book-to-bill
ratio of 133%.
2017 Guidance Based on current
market conditions and the backlog amounts described above, the
Company reiterates its previously issued guidance that consulting
fee revenue in 2017 will be between $400 million and $425 million.
This guidance reflects an approximate 2% to 8% decrease in
consulting fee revenue for the year compared to 2016.
About Hill International Hill
International, with 3,300 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.
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 projections of
revenues, earnings, profit improvement, cost savings or other
financial items; any statements concerning our 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 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 realizable as revenue, we
may incur difficulties in implementing our Profit Improvement Plan,
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. John Fanelli
IIIExecutive Vice President and Chief Financial Officer (215)
309-7906johnfanelli@hillintl.com
The Equity Group Inc. Devin SullivanSenior Vice
President (212) 836-9608dsullivan@equityny.com
(HIL-G)