Hill International, Inc. (NYSE:HIL) ("Hill" or the
"Company"), the global leader in managing construction
risk, announced today its financial results for the second quarter
ended June 30, 2020 (“Q2 2020”).
“While we are continuing to address the effects
of COVID-19 on certain aspects of our operations, Hill’s Q2 2020
performance improved across several metrics compared to the first
quarter of 2020 and we remain cautiously optimistic for the balance
of the year,” said Hill CEO Raouf Ghali. “We generated
operating profit and exited the second quarter in a strong
financial position. I am very proud of how our team has responded
to these challenges and their continuing commitment to serving our
global client base. During Q2 2020, we secured approximately $70
million of new awards in Europe, the Middle East, and the United
States. We continue to focus on global infrastructure
projects, which we believe are resilient, sustainable and potential
catalysts for economic growth as we emerge from this crisis.”
“We reported our sixth consecutive quarter of
positive Adjusted EBITDA, generated $6.4 million of cash from
operations and, when compared to March 31, 2020, increased our
total liquidity by $8.9 million to $27.8 million” said Todd
Weintraub, Hill’s Chief Financial Officer.
Q2 2020 Financial Results Overview
Hill's consulting fee revenue ("CFR") was $75.8
million, compared to $77.0 million in the second quarter of 2019
("Q2 2019"). CFR in Q2 of 2020 was negatively impacted by
approximately $10.0 million from deferred and canceled projects due
in large part to the uncertainties created by COVID-19.
Selling, general, and administrative
("SG&A") expenses were $26.9 million, or 35.5% of CFR, compared
to $27.4 million, or 35.6% of CFR, in Q2 2019. The Company is on
track to achieve the $10 million in corporate cost reductions in
2020 announced last quarter.
Operating profit for Q2 2020 was $3.3 million,
compared to operating profit of $4.6 million in Q2 2019. Adjusted
operating profit, a non-GAAP measure (see definition and
reconciliation below) was $4.8 million in Q2 2020 compared to $4.2
million in Q2 2019.
During Q2 2020, Hill determined to shut down its
operations in Brazil, which had become increasingly challenging due
to that country’s ongoing economic crisis and, more recently, the
impact of COVID-19. These market forces combined to produce a
negative impact on Hill’s total operations. In connection with the
closure, Hill recorded a non-recurring, non-cash loss of $4.1
million (“Brazil Office Closure”).
Net loss attributable to Hill in Q2 2020 was
$2.0 million, or $0.03 per diluted share, compared to net income
attributable to Hill of $1.6 million, or $0.03 per diluted share,
in Q2 2019, due primarily to the Brazil charge. Adjusted net
income, a non-GAAP measure (see definition and reconciliation in
the table below), improved to $3.6 million from $1.2 million in Q2
2019.
Adjusted EBITDA, a non-GAAP measure (see
definition and reconciliation below) rose 7.3% to $5.3 million in
Q2 2020 from $4.9 million in Q2 2019.
Financial Condition and
Backlog
Net cash provided by operating activities in Q2
2020 improved to $6.4 million from net cash used in operating
activities of $7.0 million in Q2 2019. Free cash flow (as defined
below) for Q2 2020 was $6.2 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 Q2
2019 was $(7.7) million, which represents net cash used in
operating activities, less $0.7 million in property and equipment
purchased during the quarter.
Unrestricted cash at June 30, 2020 was
$23.2 million, a $7.1 million improvement from March 31, 2020
and a $7.3 million increase from December 31, 2019. The Company had
approximately $4.6 million in available and undrawn credit
facilities at June 30, 2020, up $1.8 million from $2.8 million
at March 31, 2020. These improvements increased the Company's
total liquidity by $8.9 million from March 31, 2020.
Cash flow generation and the increases in cash
and liquidity during the quarter were achieved primarily from the
Company's operating activities. The Company is currently evaluating
the recently opened Main Street Lending Programs to determine its
eligibility.
Backlog (which is a non-GAAP measure; see
definition below) decreased to $647.9 million at June 30, 2020
as compared to $706.5 million at March 31, 2020 and $764.7
million December 31, 2019, which included re-evaluation and write
down of the realizable value of a number of contracts booked before
January 1, 2019, some of which were as a result of the impacts of
COVID-19. Backlog also declined in Q2 2020 as the result of other
COVID-related cancellations and scope reductions.
2020 Financial Guidance
CFR for 2020 is expected to range between $300 -
$310 million, consisting of both new awards and extensions of
existing contracts.
Annual gross margin is targeted at 38% - 39% for
2020, consistent with previous guidance.
SG&A for 2020 is expected to approximate
$110 million, down from our previous estimate of $120 million and
reflecting the previously announced removal of an additional $10
million in annual corporate costs initiated in Q1 2020.
Adjusted EBITDA for 2020 is expected to range
between $16 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
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
Thursday, August 6, 2020 at 12:00 pm 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 65 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)
|
|
June 30, 2020 |
|
December 31, 2019 |
Assets |
|
(Unaudited) |
|
|
Cash and cash equivalents |
|
$ |
23,198 |
|
|
$ |
15,915 |
|
Cash - restricted |
|
4,423 |
|
|
4,666 |
|
Accounts receivable, net |
|
105,435 |
|
|
103,892 |
|
Current portion of retainage
receivable |
|
17,075 |
|
|
16,459 |
|
Accounts receivable -
affiliates |
|
23,237 |
|
|
18,776 |
|
Prepaid expenses and other
current assets |
|
12,658 |
|
|
9,340 |
|
Income tax receivable |
|
1,542 |
|
|
2,256 |
|
Total current assets |
|
187,568 |
|
|
171,304 |
|
Property and equipment,
net |
|
9,771 |
|
|
11,895 |
|
Cash - restricted, net of
current portion |
|
4,040 |
|
|
4,401 |
|
Operating lease right-of-use
assets |
|
15,279 |
|
|
17,451 |
|
Financing lease right-of-use
assets |
|
96 |
|
|
— |
|
Retainage receivable |
|
5,430 |
|
|
5,695 |
|
Acquired intangibles, net |
|
178 |
|
|
232 |
|
Goodwill |
|
44,431 |
|
|
48,024 |
|
Investments |
|
2,667 |
|
|
1,711 |
|
Deferred income tax
assets |
|
2,929 |
|
|
3,800 |
|
Other assets |
|
2,493 |
|
|
5,038 |
|
Total assets |
|
$ |
274,882 |
|
|
$ |
269,551 |
|
Liabilities and Stockholders’
Equity |
|
|
|
|
Current maturities of notes
payable and long-term debt |
|
$ |
1,828 |
|
|
$ |
1,792 |
|
Accounts payable and accrued
expenses |
|
66,914 |
|
|
65,172 |
|
Income taxes payable |
|
1,888 |
|
|
3,152 |
|
Current portion of deferred
revenue |
|
7,628 |
|
|
10,773 |
|
Current portion of operating
lease liabilities |
|
5,465 |
|
|
5,736 |
|
Current portion of financing
lease liabilities |
|
27 |
|
|
— |
|
Other current liabilities |
|
8,357 |
|
|
4,876 |
|
Total current liabilities |
|
92,107 |
|
|
91,501 |
|
Notes payable and long-term
debt, net of current maturities |
|
53,570 |
|
|
41,150 |
|
Retainage payable |
|
2,017 |
|
|
1,551 |
|
Deferred income taxes |
|
418 |
|
|
419 |
|
Deferred revenue |
|
1,321 |
|
|
3,041 |
|
Non-current operating lease
liabilities |
|
14,910 |
|
|
17,030 |
|
Non-current financing lease
liabilities |
|
69 |
|
|
— |
|
Other liabilities |
|
3,277 |
|
|
4,631 |
|
Total liabilities |
|
167,689 |
|
|
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, 62,609
shares and 62,708 shares issued at June 30, 2020 and December 31,
2019, respectively |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
214,161 |
|
|
212,759 |
|
Accumulated deficit |
|
(79,895 |
) |
|
(71,360 |
) |
Accumulated other comprehensive income (loss) |
|
1,279 |
|
|
(3,817 |
) |
Less treasury stock of 6,807
and 6,546 at June 30, 2020 and December 31, 2019, respectively |
|
(29,056 |
) |
|
(28,231 |
) |
Hill International, Inc.
share of equity |
|
106,495 |
|
|
109,357 |
|
Noncontrolling interests |
|
698 |
|
|
871 |
|
Total equity |
|
107,193 |
|
|
110,228 |
|
Total liabilities and stockholders’ equity |
|
$ |
274,882 |
|
|
$ |
269,551 |
|
HILL INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Consulting fee revenue |
|
$ |
75,760 |
|
|
$ |
77,035 |
|
|
$ |
152,910 |
|
|
$ |
156,035 |
|
Reimbursable expenses |
|
18,689 |
|
|
21,222 |
|
|
34,847 |
|
|
40,905 |
|
Total revenue |
|
$ |
94,449 |
|
|
$ |
98,257 |
|
|
$ |
187,757 |
|
|
$ |
196,940 |
|
Direct expenses |
|
65,032 |
|
|
|
66,955 |
|
|
130,080 |
|
|
134,202 |
|
Gross profit |
|
29,417 |
|
|
31,302 |
|
|
57,677 |
|
|
62,738 |
|
Selling, general and
administrative expenses |
|
26,857 |
|
|
27,407 |
|
|
54,955 |
|
|
58,744 |
|
Foreign currency exchange loss
(benefit) |
|
265 |
|
|
8 |
|
|
4,316 |
|
|
(18 |
) |
Plus: Share of profit of
equity method affiliates |
|
1,014 |
|
|
717 |
|
|
1,038 |
|
|
1,131 |
|
Operating profit (loss) |
|
$ |
3,309 |
|
|
$ |
4,604 |
|
|
$ |
(556 |
) |
|
$ |
5,143 |
|
Interest and related financing
fees, net |
|
1,296 |
|
|
1,411 |
|
|
2,595 |
|
|
2,923 |
|
Other loss, net |
|
(3,847 |
) |
|
— |
|
|
(3,502 |
) |
|
— |
|
(Loss) earnings before income
taxes |
|
$ |
(1,834 |
) |
|
$ |
3,193 |
|
|
$ |
(6,653 |
) |
|
$ |
2,220 |
|
Income tax expense |
|
102 |
|
|
1,493 |
|
|
1,705 |
|
|
2,588 |
|
Net (loss) earnings |
|
$ |
(1,936 |
) |
|
$ |
1,700 |
|
|
$ |
(8,358 |
) |
|
$ |
(368 |
) |
Less: net earnings -
noncontrolling interests |
|
18 |
|
|
83 |
|
|
177 |
|
|
150 |
|
Net (loss) earnings attributable to Hill International, Inc. |
|
$ |
(1,954 |
) |
|
$ |
1,617 |
|
|
$ |
(8,535 |
) |
|
$ |
(518 |
) |
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per common
share - Hill International, Inc. |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.01 |
) |
Basic weighted average common
shares outstanding |
|
56,409 |
|
|
56,032 |
|
|
56,476 |
|
|
55,989 |
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per
common share - Hill International,Inc. |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.01 |
) |
Diluted weighted average common
shares outstanding |
|
56,409 |
|
|
56,032 |
|
|
56,476 |
|
|
55,989 |
|
HILL INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)(Unaudited)
|
Three Months Ended June 30,(1) |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net loss |
(1,936 |
) |
|
1,700 |
|
|
(8,358 |
) |
|
|
(368 |
) |
|
|
Adjustments to reconcile net
loss to net cash provided by (used in): |
|
|
|
|
|
|
|
|
Depreciation and amortization |
251 |
|
|
794 |
|
|
2,675 |
|
|
|
1,585 |
|
|
|
(Recovery) provision for bad debts |
(531 |
) |
|
(1,491 |
) |
|
(1,010 |
) |
|
|
(557 |
) |
|
|
Amortization of deferred loan fees |
173 |
|
|
182 |
|
|
348 |
|
|
|
361 |
|
|
|
Deferred tax expense (benefit) |
184 |
|
|
(13 |
) |
|
674 |
|
|
|
(362 |
) |
|
|
Share-based compensation |
802 |
|
|
801 |
|
|
1,201 |
|
|
|
1,042 |
|
|
|
Operating lease right-of-use assets |
(843 |
) |
|
1,156 |
|
|
1,956 |
|
|
|
2,564 |
|
|
|
Loss on liquidation of subsidiary |
4,064 |
|
|
— |
|
|
4,064 |
|
|
|
— |
|
|
|
Foreign currency remeasurement losses (gains) |
(986 |
) |
|
(445 |
) |
|
3,390 |
|
|
|
(956 |
) |
|
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
2,579 |
|
|
4,953 |
|
|
(1,624 |
) |
|
|
10,343 |
|
|
|
Accounts receivable - affiliate |
1,681 |
|
|
(4,970 |
) |
|
(4,462 |
) |
|
|
(5,188 |
) |
|
|
Prepaid expenses and other current assets |
(977 |
) |
|
(1,147 |
) |
|
(3,585 |
) |
|
|
(596 |
) |
|
|
Income taxes receivable |
350 |
|
|
(402 |
) |
|
305 |
|
|
|
(601 |
) |
|
|
Retainage receivable |
1,010 |
|
|
(235 |
) |
|
255 |
|
|
|
(1,482 |
) |
|
|
Other assets |
(2,577 |
) |
|
391 |
|
|
(1,346 |
) |
|
|
1,081 |
|
|
|
Accounts payable and accrued expenses |
2,837 |
|
|
(9,336 |
) |
|
4,801 |
|
|
|
(2,485 |
) |
|
|
Income taxes payable |
(1,681 |
) |
|
302 |
|
|
(1,250 |
) |
|
|
1,322 |
|
|
|
Deferred revenue |
(1,522 |
) |
|
(548 |
) |
|
(4,516 |
) |
|
|
(3,971 |
) |
|
|
Operating lease liabilities |
(843 |
) |
|
(1,375 |
) |
|
(2,166 |
) |
|
|
(2,817 |
) |
|
|
Other current liabilities |
2,966 |
|
|
2,177 |
|
|
3,662 |
|
|
|
2,208 |
|
|
|
Retainage payable |
436 |
|
|
(26 |
) |
|
465 |
|
|
|
25 |
|
|
|
Other liabilities |
(283 |
) |
|
510 |
|
|
(33 |
) |
|
|
288 |
|
|
|
Net cash (used in) provided by
operating activities |
6,378 |
|
|
(7,022 |
) |
|
(4,554 |
) |
|
|
1,436 |
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
(139 |
) |
|
(702 |
) |
|
(972 |
) |
|
|
(1,575 |
) |
|
|
Net cash used in investing
activities |
(139 |
) |
|
(702 |
) |
|
(972 |
) |
|
|
(1,575 |
) |
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from term loans |
1,265 |
|
|
— |
|
|
1,265 |
|
|
|
— |
|
|
|
Repayment of term loans |
(217 |
) |
|
(265 |
) |
|
(434 |
) |
|
|
(531 |
) |
|
|
Proceeds from revolving loans |
9,404 |
|
|
(4,543 |
) |
|
28,196 |
|
|
|
5,311 |
|
|
|
Repayment of revolving loans |
(8,332 |
) |
|
7,669 |
|
|
(16,168 |
) |
|
|
(993 |
) |
|
|
Proceeds from stock issued under employee stock purchase plan |
151 |
|
|
113 |
|
|
201 |
|
|
|
147 |
|
|
|
Net cash provided by financing
activities |
2,271 |
|
|
2,974 |
|
|
13,060 |
|
|
|
3,934 |
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
(333 |
) |
|
99 |
|
|
(846 |
) |
|
|
(934 |
) |
|
|
Deconsolidated cash |
9 |
|
|
— |
|
|
9 |
|
|
|
— |
|
|
|
Net (decrease) increase in
cash, cash equivalents and restricted cash |
8,168 |
|
|
(4,651 |
) |
|
6,679 |
|
|
|
2,861 |
|
|
|
Cash, cash equivalents and
restricted cash — beginning of period |
|
|
|
|
24,982 |
|
|
|
23,107 |
|
|
|
Cash, cash equivalents and
restricted cash — end of period |
|
|
|
|
$ |
31,661 |
|
|
|
$ |
25,968 |
|
|
|
|
|
Six Months Ended June 30, |
Supplemental
disclosures of cash flow information: |
|
2020 |
|
2019 |
Interest and
related financing fees paid |
|
$ |
2,141 |
|
|
$ |
2,774 |
|
Income taxes
paid |
|
1,425 |
|
|
1,980 |
|
Transfer of
proceeds from shares pledged as collateral to treasury stock |
|
825 |
|
|
— |
|
Cash paid for
amounts included in the measurement of lease liabilities |
|
3,831 |
|
|
4,068 |
|
Right-of-use
assets obtained in exchange for operating lease liabilities
(2) |
|
347 |
|
|
18,689 |
|
Right-of-use
assets obtained in exchange for finance lease liabilities |
|
96 |
|
|
— |
|
(1) Amounts for the three months ended June 30, 2020
and 2019 calculated based on the change between the six months
ended June 30, 2020 and 2019 and the three months ended
March 31, 2020 and 2019.
(2) Amount for the six months ended June 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 June 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 June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Operating profit
(loss) |
|
$ |
3,309 |
|
|
|
$ |
4,604 |
|
|
|
$ |
(556 |
) |
|
|
$ |
5,143 |
|
|
Adjustments to operating
profit (loss) |
|
|
|
|
|
|
|
|
Share-based compensation |
|
802 |
|
|
|
801 |
|
|
|
1,201 |
|
|
|
1,042 |
|
|
Unrealized foreign currency exchange loss (benefit) |
|
56 |
|
|
|
(147 |
) |
|
|
4,159 |
|
|
|
(499 |
) |
|
Write-off of leasehold improvement (1) |
|
— |
|
|
|
— |
|
|
|
1,582 |
|
|
|
— |
|
|
Non-recurring activity(2) |
|
636 |
|
|
|
(1,072 |
) |
|
|
636 |
|
|
|
146 |
|
|
Adjusted operating
profit |
|
$ |
4,803 |
|
|
|
$ |
4,186 |
|
|
|
$ |
7,022 |
|
|
|
$ |
5,832 |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings |
|
(1,936 |
) |
|
|
1,700 |
|
|
|
(8,358 |
) |
|
|
(368 |
) |
|
Less: net earnings -
noncontrolling interests |
|
18 |
|
|
|
83 |
|
|
|
177 |
|
|
|
150 |
|
|
Net (loss) earnings
attributable to Hill International, Inc. |
|
$ |
(1,954 |
) |
|
|
$ |
1,617 |
|
|
|
$ |
(8,535 |
) |
|
|
$ |
(518 |
) |
|
Adjustments to net (loss)
earnings attributable to Hill International, Inc. |
|
|
|
|
|
|
|
|
Interest and related financing fees, net |
|
1,296 |
|
|
|
1,411 |
|
|
|
2,595 |
|
|
|
2,923 |
|
|
Income tax expense |
|
102 |
|
|
|
1,493 |
|
|
|
1,705 |
|
|
|
2,588 |
|
|
Depreciation and amortization expense (1) |
|
251 |
|
|
|
794 |
|
|
|
2,675 |
|
|
|
1,585 |
|
|
EBITDA |
|
(305 |
) |
|
|
5,315 |
|
|
|
(1,560 |
) |
|
|
6,578 |
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
Share-based compensation |
|
802 |
|
|
|
801 |
|
|
|
1,201 |
|
|
|
1,042 |
|
|
Unrealized foreign currency exchange loss (benefit) |
|
56 |
|
|
|
(147 |
) |
|
|
4,159 |
|
|
|
(499 |
) |
|
Brazil Office Closure |
|
4,064 |
|
|
|
— |
|
|
|
4,064 |
|
|
|
— |
|
|
Non-recurring activity(2) |
|
636 |
|
|
|
(1,072 |
) |
|
|
636 |
|
|
|
146 |
|
|
Adjusted
EBITDA |
|
$ |
5,253 |
|
|
|
$ |
4,897 |
|
|
|
$ |
8,500 |
|
|
|
$ |
7,267 |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
attributable to Hill International, Inc. |
|
$ |
(1,954 |
) |
|
|
$ |
1,617 |
|
|
|
$ |
(8,535 |
) |
|
|
$ |
(518 |
) |
|
Adjustments to net (loss)
earnings attributable to Hill International, Inc. |
|
|
|
|
|
|
|
|
Share-based compensation |
|
802 |
|
|
|
801 |
|
|
|
1,201 |
|
|
|
1,042 |
|
|
Unrealized foreign currency exchange loss (benefit) |
|
56 |
|
|
|
(147 |
) |
|
|
4,159 |
|
|
|
(499 |
) |
|
Write-off of leasehold improvement (1) |
|
— |
|
|
|
— |
|
|
|
1,582 |
|
|
|
— |
|
|
Brazil Office Closure |
|
4,064 |
|
|
|
— |
|
|
|
4,064 |
|
|
|
— |
|
|
Non-recurring activity(2) |
|
636 |
|
|
|
(1,072 |
) |
|
|
636 |
|
|
|
146 |
|
|
Adjusted net
income |
|
$ |
3,604 |
|
|
|
$ |
1,199 |
|
|
|
$ |
3,107 |
|
|
|
$ |
171 |
|
|
(1) 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.
(2) 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.
(HIL-G)
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