Hill International Reports 2022 Third Quarter Financial

PHILADELPHIA, Nov. 11, 2022 (GLOBE NEWSWIRE) — Hill International, Inc. (NYSE:HIL) (“Hill” or the “Company”), delivering the infrastructure of change, announced today its financial results for the third quarter and nine months ended September 30, 2022.

Third Quarter 2022 Overview

  • Total revenue increased to $109.6 million from $96.6 million in the prior year period.
  • Consulting Fee Revenue (CFR) rose 10.5% to $85.1 million from $77.1 million in the prior year period
  • Gross profit up 6.8% to $34.6 million from $32.4 million in the prior year period
  • Net loss of $(0.7) million, or $(0.01) per diluted share, compared to net income of $1.3 million, or $0.02 per diluted share in the prior year period
  • Net cash provided by operating activities in Q3 2022 was $1.4 million compared to net cash provided by operating activities of $6.2 million in Q3 2021.
  • Unrestricted cash at September 30, 2022 was $22.8 million compared to unrestricted cash of $21.8 million at December 31, 2021.
  • At September 30, 2022, the Company had approximately $3.6 million in available and undrawn credit facilities and total liquidity was $26.5 million.

Proposed Transaction with Global Infrastructure Solutions Inc.
As previously announced, the Company entered into a merger agreement with Global Infrastructure Solutions Inc. (GISI).

The transaction was approved by Hill shareholders on November 2, 2022. Pursuant to the terms of the Merger Agreement, the consummation of the Merger remains subject to various closing conditions, including but not limited to (i) the receipt of consent or authorization under certain foreign antitrust laws, and (ii) the absence of any order that has the effect of preventing, making illegal or otherwise prohibiting the consummation of the Merger. As of the date hereof, the Company continues to expect to complete the merger in the fourth calendar quarter of 2022.

For more information about the pending transaction with GISI, see the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 29, 2022.

Investor Communications
In light of the proposed merger with GISI, Hill will not host an earnings conference call or provide financial guidance in conjunction with this earnings release. For further detail and discussion of Hill’s financial performance please refer to Hill’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, which Hill intends to file with the SEC on November 14, 2022. The Company plans to continue to file reports with the SEC until the transaction has been completed.

About Hill International
Hill International, with more than 3,200 professionals in over 100 offices worldwide, provides program management, project management, construction management, project management oversight, construction claims, dispute resolution, advisory, facilities management, and other consulting services to clients in a variety of market sectors. Engineering News-Record magazine recently ranked Hill as one of the largest construction management firms 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 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 that the proposed merger with Global Infrastructure Solutions remains subject to the satisfaction of certain closing conditions. 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 SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

    September 30, 2022   December 31, 2021
Assets   (Unaudited)    
Cash and cash equivalents   $ 22,834     $ 21,821  
Cash – restricted     4,131       5,562  
Accounts receivable, net     136,267       119,516  
Current portion of retainage receivable     7,511       9,743  
Accounts receivable – affiliates     19,702       21,741  
Prepaid expenses and other current assets     9,224       9,937  
Income tax receivable     1,397       2,163  
Total current assets     201,066       190,483  
Property and equipment, net     8,416       8,895  
Cash – restricted, net of current portion     2,843       3,063  
Operating lease right-of-use assets     15,825       18,347  
Financing lease right-of-use assets     613       801  
Retainage receivable     5,910       7,491  
Acquired intangibles, net     2,963       3,002  
Goodwill     40,105       44,127  
Investments     1,139       2,038  
Deferred income tax assets     1,944       2,165  
Other assets     4,018       2,645  
Total assets   $ 284,842     $ 283,057  
Liabilities and Stockholders’ Equity        
Current maturities of notes payable and long-term debt   $ 31,335     $ 25,841  
Accounts payable and accrued expenses     74,028       63,856  
Income taxes payable     4,438       2,610  
Current portion of deferred revenue     4,406       4,088  
Current portion of operating lease liabilities     4,788       4,777  
Current portion of financing lease liabilities     250       246  
Other current liabilities     6,997       6,006  
Total current liabilities     126,242       107,424  
Notes payable and long-term debt, net of current maturities     28,816       29,302  
Retainage payable     326       279  
Deferred income taxes     918       959  
Deferred revenue     3,627       9,541  
Non-current operating lease liabilities     15,981       18,565  
Non-current financing lease liabilities     385       573  
Other liabilities     10,990       13,175  
Total liabilities     187,285       179,818  
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, 63,674 shares and 63,291 shares issued at September 30, 2022 and December 31, 2021, respectively     6       6  
Additional paid-in capital     219,116       217,471  
Accumulated deficit     (83,616 )     (83,813 )
Accumulated other comprehensive loss     (9,342 )     (1,813 )
Less treasury stock of 6,807 at September 30, 2022 and December 31, 2021     (29,056 )     (29,056 )
Hill International, Inc. share of equity     97,108       102,795  
Noncontrolling interests     449       444  
Total equity     97,557       103,239  
Total liabilities and stockholders’ equity   $ 284,842     $ 283,057  

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

    Three Months Ended
September 30,
  Nine Months Ended
September 30,
      2022       2021     2022       2021  
Consulting fee revenue   $ 85,142     $ 77,061   $ 254,262     $ 227,158  
Reimbursable expenses     24,429       19,543     63,275       58,079  
Total revenue   $ 109,571     $ 96,604   $ 317,537     $ 285,237  
Direct expenses     74,917       64,196     213,620       194,314  
Gross profit     34,654       32,408     103,917       90,923  
Selling, general and administrative expenses     31,035       28,121     92,831       82,906  
Foreign currency exchange loss     803       511     3,730       2,751  
Plus: Share of profit of equity method affiliates     506       551     1,456       1,805  
Operating profit   $ 3,322     $ 4,327   $ 8,812     $ 7,071  
Less: Interest and related financing fees, net     2,098       1,226     4,805       4,077  
Other loss, net     104           319        
Earnings before income taxes   $ 1,120     $ 3,101   $ 3,688     $ 2,994  
Income tax expense     1,823       1,784     3,602       4,653  
Net earnings (loss)   $ (703 )   $ 1,317   $ 86     $ (1,659 )
Less: net (loss) earnings – noncontrolling interests     (14 )     58     (112 )     265  
Net (loss) earnings attributable to Hill International, Inc.   $ (689 )   $ 1,259   $ 198     $ (1,924 )
                 
Basic (loss) earnings per common share – Hill International, Inc.   $ (0.01 )   $ 0.02   $     $ (0.03 )
Basic weighted average common shares outstanding     58,073       57,245     57,858       57,102  
                 
Diluted (loss) earnings per common share – Hill International, Inc.   $ (0.01 )   $ 0.02   $     $ (0.03 )
Diluted weighted average common shares outstanding     58,073       57,245     59,767       57,102  

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

    Nine Months Ended
September 30,
      2022       2021  
Cash flows from operating activities:        
Net earnings (loss)     86       (1,659 )
Adjustments to reconcile net loss to net cash provided by (used in):        
Depreciation and amortization     1,784       1,856  
Recovery for bad debt     (431 )     (2,794 )
Amortization of deferred loan fees     344       568  
Deferred tax expense     140       (120 )
Share-based compensation     1,589       1,814  
Operating lease right-of-use assets     3,908       3,306  
Foreign currency remeasurement losses     1,544       2,510  
Changes in operating assets and liabilities:        
Accounts receivable     (23,773 )     (15,521 )
Accounts receivable – affiliate     2,039       (5,728 )
Prepaid expenses and other current assets     253       (3,951 )
Income taxes receivable     399       1,232  
Retainage receivable     3,534       (953 )
Other assets     (976 )     (1,926 )
Accounts payable and accrued expenses     13,440       13,181  
Income taxes payable     1,944       (1,202 )
Deferred revenue     (4,351 )     1,482  
Operating lease liabilities     (3,702 )     (2,698 )
Other current liabilities     1,139       3,432  
Retainage payable     47       (314 )
Finance lease liabilities     (13 )      
Other liabilities     (1,260 )     492  
Net cash used in operating activities     (2,316 )     (6,993 )
Cash flows from investing activities:        
Purchase of NEYO Group           (681 )
Purchase of property and equipment     (1,472 )     (1,197 )
Net cash used in investing activities     (1,472 )     (1,878 )
Cash flows from financing activities:        
Repayment of term loans     (505 )     (802 )
Proceeds from revolving loans     31,667       29,785  
Repayment of revolving loans     (25,336 )     (25,816 )
Proceeds from stock issued under employee stock purchase plan     56       118  
Net cash provided by financing activities     5,698       3,285  
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (2,548 )     (2,654 )
Net decrease in cash, cash equivalents and restricted cash     (638 )     (8,240 )
Cash, cash equivalents and restricted cash — beginning of period     30,446       41,413  
Cash, cash equivalents and restricted cash — end of period   $ 29,808     $ 33,173  
    Nine Months Ended
September 30,
Supplemental disclosures of cash flow information:     2022       2021  
Interest and related financing fees paid   $ 4,668     $ 3,520  
Income taxes paid     2,218       3,830  
Cash paid for amounts included in the measurement of lease liabilities     5,681       4,897  
Right-of-use assets obtained in exchange for operating lease liabilities     1,648       8,568  
Right-of-use assets obtained in exchange for finance lease liabilities           538  

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