Hill International, Inc. (NYSE:HIL) ("Hill" or the
"Company"), the global leader in managing construction
risk, announced today its financial results for the third quarter
ended September 30, 2020 (“Q3 2020”).
“We reported a strong 2020 third quarter with
notable improvements in a variety of metrics, while at the same
maintaining stability across our operations as we continue to
address the effects of the COVID-19 pandemic," said Hill Chief
Executive Officer Raouf Ghali. "Our performance this quarter was
highlighted by strong bookings and cash flow generation, and a
return to net profitability. We generated $154.5 million in new
contract awards during the third quarter, representing the best new
bookings period this year These new projects cover multiple
geographies and end markets, including infrastructure. We
believe that this level of new bookings bodes well for our ability
to grow our revenue in 2021. Our consulting fee revenue was
negatively impacted by the pandemic, which caused delayed project
starts, delays in mobilizing billable staff and certain
suspensions. We remain confident that our global team of
construction management professionals will allow us to effectively
navigate these challenges, continue to provide the highest level of
client service, and build upon the strong business and operational
foundation reflected in our third quarter results."
Mr. Ghali concluded, "As a result of a recent
acquisition of an engineering license, Hill is now able to provide
resident engineering and inspection services in New York
State. We believe that the introduction of these high-value
services represents a significant potential growth engine in one of
our largest U.S. operating regions and reflects our commitment to
client service."
“Our backlog at quarter end was $672.9 million,
a $25 million improvement from June 30, 2020 and reflective of
strong third quarter bookings," said Todd Weintraub, Hill's Chief
Financial Officer. "Additionally, we generated $7.8 million of cash
from operations and, when compared to June 30, 2020, increased
our total liquidity, consisting of unrestricted cash and available
undrawn credit facilities, by $8.8 million to $36.6 million."
Q3 2020 Financial Results Overview
Hill's consulting fee revenue ("CFR") declined
to $71.5 million in Q3 2020 from $75.7 million in the third quarter
of 2019 ("Q3 2019"), primarily due to delayed projects starts,
slower staff mobilization and certain project suspensions due to
the COVID-19 pandemic.
Selling, general, and administrative
("SG&A") expenses were $25.6 million, or 35.8% of CFR, compared
to $27.4 million, or 36.2% of CFR, in Q3 2019. This decline was
primarily attributable to lower labor, corporate, and business
development expenses due to COVID-19 stay at home orders, partially
offset by a decline in bad debt recoveries.
Operating profit for Q3 2020 was $4.7 million, a
52.9% increase from operating profit of $3.1 million in Q3 2019,
driven primarily by lower SG&A expenses and favorable foreign
currency impacts when compared to last year's third quarter.
Adjusted operating profit, a non-GAAP measure (see definition and
reconciliation below) was $4.4 million in Q3 2020, compared to $4.3
million in Q3 2019.
Net income attributable to Hill in Q3 2020 was
$2.1 million, or $0.04 per diluted share, compared to net income
attributable to Hill of $2.5 million, or $0.04 per diluted share,
in Q3 2019. Adjusted net income, a non-GAAP measure (see definition
and reconciliation in the table below), was $1.8 million, compared
to $3.6 million in Q3 2019.
Adjusted EBITDA, a non-GAAP measure (see
definition and reconciliation below) was $4.8 million in Q3 2020,
compared to $5.6 million in Q3 2019.
Financial Condition and
Backlog
Net cash provided by operating activities in Q3
2020 improved to $7.8 million from net cash used in operating
activities of $0.7 million in Q3 2019. Free cash flow, a non-GAAP
measure (see definition below) for Q3 2020 was $7.7 million, which
represents net cash provided by operating activities, less $0.1
million in purchases of property and equipment during the quarter.
Free cash flow during Q3 2019 was $(2.1) million, which represents
net cash used in operating activities, less $1.4 million in
property and equipment purchased during the quarter.
Unrestricted cash at September 30, 2020 was
$33.3 million, a $10.1 million improvement from June 30, 2020
and a $17.4 million increase from December 31, 2019. The Company
had approximately $3.3 million in available and undrawn credit
facilities at September 30, 2020, compared to $4.6 million at
June 30, 2020. The Company's total liquidity was $36.6 million
at September 30, 2020, up $8.8 million from June 30,
2020.
Cash flow generation and the increases in cash
and liquidity during the quarter were achieved primarily from the
Company's operating activities.
Backlog (which is a non-GAAP measure; see
definition below) improved to $672.9 million at September 30,
2020 from $647.9 million at June 30, 2020, due to strong
booking activity, partially offset by COVID-related cancellations
and scope reductions. Backlog at September 30 also reflected
a joint venture agreement associated with Hill's Hamad
International Airport (HIA) project in Doha, Qatar. This
agreement allows Hill to elevate its client service and positions
the Company to work collaboratively with its new JV partner to
secure additional project work, some of which could be significant
in size and scope. The agreement decreased Hill's portion of the
HIA backlog by $45 million; however, the Company believes that this
reduction will be more than offset by the new projects that are
expected to be secured by Hill via this new JV relationship.
2020 Financial Guidance
CFR for 2020 is expected to range between $300 -
$310 million, consisting of both new awards and extensions of
existing contracts. However, the impact of the COVID-19
pandemic on project start dates and mobilization will likely result
in Hill reporting 2020 CFR at the lower end of this
range.
Annual gross margin is targeted at 38% - 39% for
2020, consistent with previous guidance.
SG&A for 2020 is expected to approximate
$107-109 million, down from the Company's prior estimate of $110
million. The revised outlook for SG&A reflects continuing
cost cutting measures in light of the lingering impact of COVID-19
on certain aspects of the Company's business. The Company will
continue to manage SG&A and its association with CFR relative
to the evolving effects of COVID-19.
Adjusted EBITDA for 2020 had been expected to
range between $16 million - $20 million; however, based on its
year-to-date performance the Company has increased the lower end of
this range and now expects Adjusted EBITDA for 2020 will range
between $18 million - $20 million.
Non-GAAP Measures
The following measures below are not measures of
financial performance under U.S. generally accepted accounting
principles ("GAAP") and should be considered in addition to and not
as a substitute for, or superior to, the related measure of
performance prepared in accordance with GAAP.
Backlog
Backlog represents the Company's estimate of the
amount of uncompleted projects under contract and awards in-hand
that are expected to be recognized as CFR in future periods as a
component of total revenue. Hill's backlog is based upon the
binding nature of the underlying contract, commitment or letter of
intent, and other factors, including the economic, financial and
regulatory viability of the project and the likelihood of the
contract being extended, renewed or canceled. Although backlog
reflects business that the Company considers to be firm,
cancellations or scope adjustments may occur. It is an important
indicator of future performance and is used by the Company in
planning Hill's operational needs. Backlog is not a measure defined
in GAAP and the Company's methodology for determining backlog may
not be comparable to the methodology used by other companies in
determining their backlog.
Adjusted Operating Profit
(Loss)
Adjusted operating profit (loss) is operating
profit (loss), adjusted to exclude non-recurring items and non-cash
items including unrealized foreign currency exchange losses
(gains), share-based compensation and the write-off of leasehold
improvements previously included in property and equipment on the
Company's consolidated balance sheets. The Company believes that
adjusted operating profit (loss) is useful to investors and other
external users of Hill's financial statements as a measure of a
company's core ongoing operations, without regard to generally
non-recurring items and non-cash activity.
Adjusted Net Income (Loss) Attributable
to Hill
Adjusted net income (loss) attributable to Hill
is net income (loss) attributable to Hill, adjusted to exclude
non-recurring and non-cash items including unrealized foreign
currency exchange losses (gains), share-based compensation and the
write-off of leasehold improvements previously included in property
and equipment on the Company's consolidated balance sheets. The
Company believes that adjusted net income (loss) attributable to
Hill is useful to investors and other external users of Hill's
financial statements as a measure of a company's operating
performance, without regard to generally non-recurring items and
non-cash activity.
EBITDA and Adjusted EBITDA
Earnings before interest, taxes, depreciation
and amortization ("EBITDA"), in addition to operating profit, net
income, and other GAAP measures, is a useful indicator of Hill's
financial and operating performance. Investors should
recognize that EBITDA might not be comparable to similarly titled
measures of other companies. The Company believes that EBITDA
is useful to investors and other external users of Hill's financial
statements in evaluating its operating performance because EBITDA
is widely used by investors to measure a company’s operating
performance without regard to items such as interest expense,
taxes, and depreciation and amortization, which can vary
substantially from company to company depending upon accounting
methods and book value of assets, capital structure and the method
by which assets were acquired.
Adjusted EBITDA is EBITDA, adjusted to exclude
the impact of certain items, including non-recurring, one-time
costs (as presented in the table below) and non-cash items such as
unrealized foreign currency exchange losses (benefit) and
share-based compensation expense. The Company believes that
adjusted EBITDA helps its investors and other external users of
Hill’s financial statements understanding of a company’s operating
performance, without regard to non-recurring and other non-cash
activity.
The Company does not provide a reconciliation of
its 2020 financial guidance for such non-GAAP measure to GAAP due
to the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliation, including
adjustments that could be made for non-recurring, one-time costs
and other charges reflected in its reconciliation of historic
numbers.
Free Cash Flow
Free cash flow, a non-GAAP measure, includes net
cash provided by (used in) continuing operations, less purchases of
property and equipment. Free cash flow is a useful indicator that
provides additional perspective on Hill's ability to generate cash
that is available to the Company for taxes and other corporate
purposes. Investors should recognize that free cash flow might not
be comparable to similarly-titled measures of other companies. This
measure should be considered in addition to, and not as a
substitute for or superior to, any measure of performance prepared
in accordance with GAAP.
Conference Call
Management will host a conference call on
Tuesday, November 10, 2020 at 9:00 am ET to discuss the results and
business activities. Interested parties may participate in the call
by dialing:
- (877) 407-9753 (Domestic) or
- (201) 493-6739 (International)
The call will also be accessible on the
“Investor Relations” section of Hill’s website at
www.hillintl.com. Click on “Financial Information” and then
“Conferences and Calls”.
About Hill International
Hill International, with approximately 2,700
professionals in more than 69 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.
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 and any statements regarding
our expectations for the timing of our work on projects 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, including but not
limited to the effects of any continued spread of the COVID-19
virus or effects of decreased oil and gas prices. 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, 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. |
|
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
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In thousands)
|
|
September 30, 2020 |
|
December 31, 2019 |
Assets |
|
(Unaudited) |
|
|
Cash and cash equivalents |
|
$ |
33,270 |
|
|
$ |
15,915 |
|
Cash - restricted |
|
4,680 |
|
|
4,666 |
|
Accounts receivable, net |
|
104,764 |
|
|
103,892 |
|
Current portion of retainage
receivable |
|
12,540 |
|
|
16,459 |
|
Accounts receivable -
affiliates |
|
25,070 |
|
|
18,776 |
|
Prepaid expenses and other
current assets |
|
12,148 |
|
|
9,340 |
|
Income tax receivable |
|
1,822 |
|
|
2,256 |
|
Total current assets |
|
194,294 |
|
|
171,304 |
|
Property and equipment,
net |
|
9,485 |
|
|
11,895 |
|
Cash - restricted, net of
current portion |
|
4,155 |
|
|
4,401 |
|
Operating lease right-of-use
assets |
|
14,022 |
|
|
17,451 |
|
Financing lease right-of-use
assets |
|
271 |
|
|
— |
|
Retainage receivable |
|
6,113 |
|
|
5,695 |
|
Acquired intangibles, net |
|
165 |
|
|
232 |
|
Goodwill |
|
45,253 |
|
|
48,024 |
|
Investments |
|
3,055 |
|
|
1,711 |
|
Deferred income tax
assets |
|
3,104 |
|
|
3,800 |
|
Other assets |
|
2,520 |
|
|
5,038 |
|
Total assets |
|
$ |
282,437 |
|
|
$ |
269,551 |
|
Liabilities and Stockholders’
Equity |
|
|
|
|
Current maturities of notes
payable and long-term debt |
|
$ |
3,261 |
|
|
$ |
1,792 |
|
Accounts payable and accrued
expenses |
|
68,452 |
|
|
65,172 |
|
Income taxes payable |
|
1,951 |
|
|
3,152 |
|
Current portion of deferred
revenue |
|
9,180 |
|
|
10,773 |
|
Current portion of operating
lease liabilities |
|
5,025 |
|
|
5,736 |
|
Current portion of financing
lease liabilities |
|
70 |
|
|
— |
|
Other current liabilities |
|
7,999 |
|
|
4,876 |
|
Total current liabilities |
|
95,938 |
|
|
91,501 |
|
Notes payable and long-term
debt, net of current maturities |
|
54,362 |
|
|
41,150 |
|
Retainage payable |
|
823 |
|
|
1,551 |
|
Deferred income taxes |
|
418 |
|
|
419 |
|
Deferred revenue |
|
1,887 |
|
|
3,041 |
|
Non-current operating lease
liabilities |
|
14,141 |
|
|
17,030 |
|
Non-current financing lease
liabilities |
|
274 |
|
|
— |
|
Other liabilities |
|
4,082 |
|
|
4,631 |
|
Total liabilities |
|
171,925 |
|
|
159,323 |
|
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, 62,916
shares and 62,708 shares issued at September 30, 2020 and December
31, 2019, respectively |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
214,596 |
|
|
212,759 |
|
Accumulated deficit |
|
(77,781 |
) |
|
(71,360 |
) |
Accumulated other comprehensive income (loss) |
|
1,673 |
|
|
(3,817 |
) |
Less treasury stock of 6,807
and 6,546 at September 30, 2020 and December 31, 2019,
respectively |
|
(29,056 |
) |
|
(28,231 |
) |
Hill International, Inc.
share of equity |
|
109,438 |
|
|
109,357 |
|
Noncontrolling interests |
|
1,074 |
|
|
871 |
|
Total equity |
|
110,512 |
|
|
110,228 |
|
Total liabilities and stockholders’ equity |
|
$ |
282,437 |
|
|
$ |
269,551 |
|
|
|
|
|
|
|
|
|
|
HILL INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Consulting fee revenue |
|
$ |
71,543 |
|
|
$ |
75,747 |
|
|
$ |
224,453 |
|
|
$ |
231,782 |
|
Reimbursable expenses |
|
17,109 |
|
|
19,923 |
|
|
51,956 |
|
|
60,828 |
|
Total revenue |
|
$ |
88,652 |
|
|
$ |
95,670 |
|
|
$ |
276,409 |
|
|
$ |
292,610 |
|
Direct expenses |
|
59,998 |
|
|
64,086 |
|
|
190,078 |
|
|
198,288 |
|
Gross profit |
|
28,654 |
|
|
31,584 |
|
|
86,331 |
|
|
94,322 |
|
Selling, general and
administrative expenses |
|
25,588 |
|
|
27,422 |
|
|
80,543 |
|
|
86,163 |
|
Foreign currency exchange
(benefit) loss |
|
(694 |
) |
|
1,839 |
|
|
3,622 |
|
|
1,824 |
|
Plus: Share of profit of equity
method affiliates |
|
983 |
|
|
780 |
|
|
2,021 |
|
|
1,911 |
|
Operating profit |
|
$ |
4,743 |
|
|
$ |
3,103 |
|
|
$ |
4,187 |
|
|
$ |
8,246 |
|
Interest and related financing
fees, net |
|
1,275 |
|
|
1,485 |
|
|
3,870 |
|
|
4,408 |
|
Other (loss) income, net |
|
(152 |
) |
|
549 |
|
|
(3,654 |
) |
|
549 |
|
Earnings (loss) before income
taxes |
|
$ |
3,316 |
|
|
$ |
2,167 |
|
|
$ |
(3,337 |
) |
|
$ |
4,387 |
|
Income tax expense (benefit) |
|
1,071 |
|
|
(340 |
) |
|
2,776 |
|
|
2,248 |
|
Net (loss) earnings |
|
$ |
2,245 |
|
|
$ |
2,507 |
|
|
$ |
(6,113 |
) |
|
$ |
2,139 |
|
Less: net earnings -
noncontrolling interests |
|
131 |
|
|
26 |
|
|
308 |
|
|
176 |
|
Net earnings (loss) attributable to Hill International, Inc. |
|
$ |
2,114 |
|
|
$ |
2,481 |
|
|
$ |
(6,421 |
) |
|
$ |
1,963 |
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common
share - Hill International, Inc. |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
(0.11 |
) |
|
$ |
0.03 |
|
Basic weighted average common
shares outstanding |
|
56,702 |
|
|
56,549 |
|
|
56,551 |
|
|
56,178 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
common share - Hill International,Inc. |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
(0.11 |
) |
|
$ |
0.03 |
|
Diluted weighted average common
shares outstanding |
|
56,702 |
|
|
56,549 |
|
|
56,551 |
|
|
56,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HILL INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)(Unaudited)
|
|
Three Months Ended September 30,(1) |
|
Nine Months Ended September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
2,245 |
|
|
2,507 |
|
|
(6,113 |
) |
|
2,139 |
|
Adjustments to reconcile net
(loss) income to net cash provided by (used in): |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
705 |
|
|
850 |
|
|
3,380 |
|
|
2,435 |
|
(Recovery) provision for bad debts |
|
(296 |
) |
|
(2,389 |
) |
|
(1,306 |
) |
|
(2,946 |
) |
Amortization of deferred loan fees |
|
173 |
|
|
178 |
|
|
521 |
|
|
539 |
|
Deferred tax expense (benefit) |
|
(174 |
) |
|
1,021 |
|
|
500 |
|
|
659 |
|
Share-based compensation |
|
415 |
|
|
1,212 |
|
|
1,616 |
|
|
2,254 |
|
Operating lease right-of-use assets |
|
1,207 |
|
|
1,372 |
|
|
3,163 |
|
|
3,936 |
|
Loss on liquidation of subsidiary |
|
— |
|
|
— |
|
|
4,064 |
|
|
— |
|
Foreign currency remeasurement losses |
|
232 |
|
|
1,060 |
|
|
3,622 |
|
|
104 |
|
Deferred payroll tax payments |
|
2,711 |
|
|
— |
|
|
2,711 |
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
6,310 |
|
|
3,645 |
|
|
4,686 |
|
|
13,988 |
|
Accounts receivable - affiliate |
|
(1,832 |
) |
|
(1,118 |
) |
|
(6,294 |
) |
|
(6,306 |
) |
Prepaid expenses and other current assets |
|
1,167 |
|
|
(1,540 |
) |
|
(2,418 |
) |
|
(2,136 |
) |
Income taxes receivable |
|
(266 |
) |
|
(147 |
) |
|
39 |
|
|
(748 |
) |
Retainage receivable |
|
(671 |
) |
|
(1,077 |
) |
|
(416 |
) |
|
(2,559 |
) |
Other assets |
|
(1,297 |
) |
|
(161 |
) |
|
(2,643 |
) |
|
920 |
|
Accounts payable and accrued expenses |
|
(3,160 |
) |
|
(2,978 |
) |
|
1,641 |
|
|
(5,463 |
) |
Income taxes payable |
|
89 |
|
|
(2,608 |
) |
|
(1,161 |
) |
|
(1,286 |
) |
Deferred revenue |
|
2,065 |
|
|
1,736 |
|
|
(2,451 |
) |
|
(2,235 |
) |
Operating lease liabilities |
|
(1,093 |
) |
|
(1,544 |
) |
|
(3,259 |
) |
|
(4,361 |
) |
Other current liabilities |
|
(236 |
) |
|
(2,472 |
) |
|
3,426 |
|
|
(264 |
) |
Retainage payable |
|
(1,195 |
) |
|
599 |
|
|
(730 |
) |
|
624 |
|
Other liabilities |
|
721 |
|
|
1,134 |
|
|
688 |
|
|
1,422 |
|
Net cash provided by operating
activities |
|
7,820 |
|
|
(720 |
) |
|
3,266 |
|
|
716 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(129 |
) |
|
(1,383 |
) |
|
(1,101 |
) |
|
(2,958 |
) |
Net cash used in investing
activities |
|
(129 |
) |
|
(1,383 |
) |
|
(1,101 |
) |
|
(2,958 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from term loans |
|
26 |
|
|
— |
|
|
1,291 |
|
|
— |
|
Repayment of term loans |
|
(232 |
) |
|
(264 |
) |
|
(666 |
) |
|
(795 |
) |
Proceeds from revolving loans |
|
10,290 |
|
|
4,759 |
|
|
38,486 |
|
|
10,070 |
|
Repayment of revolving loans |
|
(8,100 |
) |
|
(3,984 |
) |
|
(24,268 |
) |
|
(4,977 |
) |
Proceeds from stock issued under employee stock purchase plan |
|
20 |
|
|
20 |
|
|
221 |
|
|
167 |
|
Net cash provided by financing
activities |
|
2,004 |
|
|
531 |
|
|
15,064 |
|
|
4,465 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
749 |
|
|
764 |
|
|
(97 |
) |
|
(170 |
) |
Deconsolidated cash |
|
— |
|
|
— |
|
|
9 |
|
|
— |
|
Net increase in cash, cash
equivalents and restricted cash |
|
10,444 |
|
|
(808 |
) |
|
17,123 |
|
|
2,053 |
|
Cash, cash equivalents and
restricted cash — beginning of period |
|
|
|
|
|
24,982 |
|
|
23,107 |
|
Cash, cash equivalents and
restricted cash — end of period |
|
|
|
|
|
$ |
42,105 |
|
|
$ |
25,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
Supplemental disclosures of
cash flow information: |
|
2020 |
|
2019 |
Interest and related financing fees paid |
|
$ |
2,722 |
|
|
$ |
4,113 |
|
Income taxes paid |
|
2,018 |
|
|
2,484 |
|
Transfer of proceeds from
shares pledged as collateral to treasury stock |
|
825 |
|
|
— |
|
Cash paid for amounts included
in the measurement of lease liabilities |
|
5,914 |
|
|
6,062 |
|
Right-of-use assets obtained
in exchange for operating lease liabilities (2) |
|
288 |
|
|
19,340 |
|
Right-of-use assets obtained
in exchange for finance lease liabilities |
|
475 |
|
|
— |
|
|
|
|
|
|
|
|
(1) Amounts for the three months ended
September 30, 2020 and 2019 calculated based on the change
between the nine months ended September 30, 2020 and 2019 and
the three months ended June 30, 2020 and 2019.(2) Amount
for the nine months ended September 30, 2019 relates to the
Company's January 1, 2019 adoption of Accounting Standards Update
("ASU") 2016-2, Leases (Topic - 842). See Note 14 -
Leases to the Company's Consolidated Financial Statements for the
period ended September 30, 2020.
HILL INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(In thousands)
The following table includes a reconciliation of these non-GAAP
measures to its most directly comparable GAAP measure:
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Operating profit |
|
$ |
4,743 |
|
|
$ |
3,103 |
|
|
$ |
4,187 |
|
|
$ |
8,246 |
|
Adjustments to operating
profit |
|
|
|
|
|
|
|
|
Share-based compensation (1) |
|
415 |
|
|
296 |
|
|
1,616 |
|
|
1,338 |
|
Unrealized foreign currency exchange loss |
|
(760 |
) |
|
858 |
|
|
3,399 |
|
|
359 |
|
Write-off of leasehold improvement (2) |
|
— |
|
|
— |
|
|
1,582 |
|
|
— |
|
Non-recurring activity (3) |
|
— |
|
|
— |
|
|
636 |
|
|
146 |
|
Adjusted operating
profit |
|
$ |
4,398 |
|
|
$ |
4,257 |
|
|
$ |
11,420 |
|
|
$ |
10,089 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
2,245 |
|
|
2,507 |
|
|
(6,113 |
) |
|
2,139 |
|
Less: net earnings -
noncontrolling interests |
|
131 |
|
|
26 |
|
|
308 |
|
|
176 |
|
Net earnings (loss)
attributable to Hill International, Inc. |
|
$ |
2,114 |
|
|
$ |
2,481 |
|
|
$ |
(6,421 |
) |
|
$ |
1,963 |
|
Adjustments to net (loss)
earnings attributable to Hill International, Inc. |
|
|
|
|
|
|
|
|
Interest and related financing fees, net |
|
1,275 |
|
|
1,485 |
|
|
3,870 |
|
|
4,408 |
|
Income tax expense (benefit) |
|
1,071 |
|
|
(340 |
) |
|
2,776 |
|
|
2,248 |
|
Depreciation and amortization expense (2) |
|
705 |
|
|
850 |
|
|
3,380 |
|
|
2,435 |
|
EBITDA |
|
5,165 |
|
|
4,476 |
|
|
3,605 |
|
|
11,054 |
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
Share-based compensation (1) |
|
415 |
|
|
296 |
|
|
1,616 |
|
|
1,338 |
|
Unrealized foreign currency exchange loss |
|
(760 |
) |
|
858 |
|
|
3,399 |
|
|
359 |
|
Brazil Office Closure |
|
— |
|
|
— |
|
|
4,064 |
|
|
— |
|
Non-recurring activity (3) |
|
— |
|
|
— |
|
|
636 |
|
|
146 |
|
Adjusted
EBITDA |
|
$ |
4,820 |
|
|
$ |
5,630 |
|
|
$ |
13,320 |
|
|
$ |
12,897 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Hill International, Inc. |
|
$ |
2,114 |
|
|
$ |
2,481 |
|
|
$ |
(6,421 |
) |
|
$ |
1,963 |
|
Adjustments to net (loss)
earnings attributable to Hill International, Inc. |
|
|
|
|
|
|
|
|
Share-based compensation (1) |
|
415 |
|
|
296 |
|
|
1,616 |
|
|
1,338 |
|
Unrealized foreign currency exchange (benefit) loss |
|
(760 |
) |
|
858 |
|
|
3,399 |
|
|
359 |
|
Write-off of leasehold improvement (2) |
|
— |
|
|
— |
|
|
1,582 |
|
|
— |
|
Brazil Office Closure |
|
— |
|
|
— |
|
|
4,064 |
|
|
— |
|
Non-recurring activity (3) |
|
— |
|
|
— |
|
|
636 |
|
|
146 |
|
Adjusted net
income |
|
$ |
1,769 |
|
|
$ |
3,635 |
|
|
$ |
4,876 |
|
|
$ |
3,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Share-based compensation excludes amounts paid related to
the Company's Profit Improvement Plan during Q3 2019 and accrued in
previous quarters.
(2) The write-off of leasehold improvements that was incurred
during the quarter ended March 31, 2020 as a result of the sublease
of the Company's corporate headquarters as part of its cost
reduction initiatives was included in depreciation and amortization
expense and is reflected in SG&A in the Company's consolidated
statements of operations.
(3) Non-recurring activity includes costs
incurred/(recovered) from the Company's Profit Improvement Plan
during Q2 2019 and the settlement of Hill's employer tax liability
under its former subsidiary recognized during Q2 2020, which are
both reflected in SG&A within the Company's consolidated
statements of operations.
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