Hill International (NYSE:HIL), the global leader in managing
construction risk, announced today several items related to the
Company's financial outlook and restatement filing update.
2017-2018 Guidance Update
The Company reiterates its previously issued 2018
guidance and expects consulting fee revenue between $400 million
and $415 million for 2018. As of March 23, 2018, the Company had
approximately $15 million in cash and $37 million in debt or a net
debt position of approximately $22 million.
Our current backlog as of February 28, 2018 is
approximately $862 million. The Company's total estimated backlog
at December 31, 2017 was $845 million compared to $831 million at
December 31, 2016.
Paul Evans, our Interim CEO, commented: “Now that
the organizational changes are behind us and the profit improvement
plan is nearing completion, we are focused on profitability and
growth for the business. We believe 10 to 12% EBITDA margins are
achievable once our profit improvement plan is complete and
restatement and restructuring costs are behind us. We are also
making substantial progress on the restatement; however, the
release schedule has been extended from our original expected
dates. We look forward to getting the restatement behind us and
sharing our progress with the public and investment community in
the near future.”
Restatement Filing Update
The Company intends to file the restatement of its
previously issued financial statements for the years ended December
31, 2016, 2015 and 2014 included in the Company’s Annual Reports on
Form 10-K and the Quarterly Report on Form 10-Q for the quarter
ended March 31, 2017 in the second quarter of 2018. The Company
also plans to file its Quarterly Reports on Form 10-Q for the
quarters ended June 30 and September 30, 2017, inclusive of the
restatement of prior comparative periods, and its Annual Report on
Form 10-K for the year ended December 31, 2017 by the end of second
quarter of 2018 and its Quarterly Report on Form 10-Q for the
quarter ending March 31, 2018 in the third quarter of 2018, at
which point the Company will be current with its regulatory
filings. The Company expects to schedule an earnings call for the
first quarter 2018 financial results shortly after the Company
becomes current in its filings.
The financial statements for the restatement
periods (previously announced on December 22, 2017 to be filed
during the first quarter of 2018) are substantially complete, but
cannot be filed until the Company’s independent public accounting
firm has completed its 2017 audit procedures to ensure that no
material events or transactions requiring disclosure have
subsequently occurred. Given the extensive amount of work already
completed by EisnerAmper LLP (“EisnerAmper”), who served as the
Company’s independent public accounting firm during the periods
being restated, and in order to file as expeditiously as possible,
the Audit Committee, as announced by the Company in a Form 8-K
filed on March 30, 2018, dismissed KPMG LLP (“KPMG”) as its
independent registered public accounting firm, with no
disagreements, and appointed EisnerAmper to serve as the Company’s
independent registered public accounting firm.
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.
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 projections of
revenues, earnings, EBITDA margin, profit improvement, cost savings
or other financial items; any statements of belief, 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, 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.
Non-GAAP Financial Measures
EBITDA, a non-GAAP performance measure used by
management, is defined as net earnings plus interest expense,
income tax expense and depreciation and amortization. EBITDA does
not purport to be an alternative to net earnings as a measure of
financial and operating performance or ability to generate cash
flows from operations that are available for taxes and capital
expenditures. Because not all companies use identical calculations,
our presentation of EBITDA may not be comparable to other similarly
titled measures of other companies. We use, and we believe
investors benefit from the presentation of, EBITDA in evaluating
our operating performance because it provides us and our investors
with an additional tool to compare our operating performance on a
consistent basis by removing the impact of certain items that
management believes do not directly reflect our core operations. We
believe that EBITDA is useful to investors and other external users
of our financial statements in evaluating our 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.
Using EBITDA as a performance measure has material
limitations as compared to net earnings, or other financial
measures as defined under U.S. GAAP as it excludes certain
recurring items that may be meaningful to investors. EBITDA
excludes interest expense; however, as we have borrowed money in
order to finance transactions and operations, interest expense is
an element of our cost structure and can affect our ability to
generate revenue and returns for our stockholders. Further, EBITDA
excludes depreciation and amortization; however, as we use capital
and intangible assets to generate revenues, depreciation and
amortization are a necessary element of our costs and ability to
generate revenue. Finally, EBITDA excludes income taxes; however,
as we are organized as a corporation, the payment of taxes is a
necessary element of our operations. Because of these exclusions
from EBITDA, any measure that excludes interest expense,
depreciation and amortization and income taxes has material
limitations as compared to net earnings. When using EBITDA as a
performance measure, management compensates for these limitations
by comparing EBITDA and net earnings in each period, so as to allow
for the comparison of the performance of the underlying core
operations with the overall performance of the company on a
full-cost, after-tax basis. Using both EBITDA and net earnings to
evaluate the business allows management and investors to (a) assess
our relative performance against our competitors and (b) monitor
our capacity to generate returns for our stockholders.
The EBITDA margin referenced in this release is a
margin that management believes is reflective of profit margins
achieved by companies that provide services similar to the Company.
The margin is not a projection of Company performance for any
particular period. Accordingly, the Company is not able to provide
reconciliation to a GAAP measure without unreasonable
effort.
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) 309-7951
marcomartinez@hillintl.com
InvestorCom John Glenn Grau
President (203) 295-7841 jgrau@investor-com.com
(HIL-G)