Hill International Restatement and Profit Improvement Plan Update
December 22 2017 - 6:50AM
Hill International (NYSE:HIL), the global leader in managing
construction risk, announced today several items related to the
Company’s restatement and financial outlook. This includes:
Restatement Filing Date
The Company intends to file the restated annual and quarterly
financial statements for the Non-Reliance Periods (years ended
December 31, 2016, 2015 and 2014 and the quarters ended March 31,
June 30, and September 30 in 2015 and 2016 and the quarter ended
March 31, 2017) during the first quarter of 2018.
Current Backlog Update
The Company’s total estimated backlog at September 30, 2017 was
$890 million compared to $895 million at June 30, 2017.
Twelve-month backlog was $320 million at September 30, 2017 and at
June 30, 2017. Our estimated net bookings for the first nine months
of 2017 was $351 million equating to a book-to-bill ratio of
120%.
2017-2018 Guidance Update
Based on current market conditions and the current backlog
amounts described above, the Company expects consulting fee revenue
between $385 million and $400 million for 2017 and between $400
million and $415 million for 2018.
Profit Improvement Plan (PIP) Update
The Company commenced the PIP in May 2017 following the
sale of the Construction Claims Group. The Company initially
identified gross, annualized pre-tax savings ranging from $27
million to $38 million. To date, we have reduced our annual labor
cost by approximately $17 million through targeted and
organizational changes, incurring pre-tax restructuring and other
charges of approximately $4 million through October 31, 2017 for
employee termination benefits and related costs. As a result of the
reductions already implemented, the partial year gross savings
through December 31, 2017 will be approximately $8 million,
with expected annual gross savings of approximately $32 million in
2018 increasing to approximately $38 million in 2019 and beyond.
The Company continues to seek additional cost savings opportunities
and expects to substantially complete the PIP during the second
quarter of 2018.
As previously disclosed, and in connection with
the accounting for the May 2017 sale of its Construction Claims
Group, the Company is reviewing the historical accounting for
certain foreign currency adjustments related to intercompany
balances, revenue recognition, and other matters (collectively, the
“Restatement Adjustments”). The Company, with the assistance of
outside financial consultants, is continuing to evaluate its
historical and current practices with respect to accounting for the
Restatement Adjustments in accordance with generally accepted
accounting principles in the United States.
Hill International, with more than 3,000
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 realized as revenue, we may
incur difficulties in implementing the PIP, our expenses may be
higher than anticipated, and the review of the Company’s
accounting, accounting policies and internal control over financial
reporting, and the preparation of and the audit or review, as
applicable, of restated filings may take longer than currently
anticipated or additional restatement adjustments may be
identified. We do not intend, and undertake no obligation, to
update any forward-looking statement.
Hill International, Inc. Elizabeth J. Zipf,
LEED AP BD+C Senior Vice President Hill International, Inc.
One Commerce Square 2005 Market Street, 17th Floor
Philadelphia, PA 19103 Tel: 215-309-7707
elizabethzipf@hillintl.com
Hill International, Inc. Marco A. Martinez SVP
& Interim Chief Financial Officer (215)
309-7951marcomartinez@hillintl.com
InvestorCom John Glenn Grau President (203)
295-7841 jgrau@investor-com.com
(HIL-G)