Hill International Reports 2022 Third Quarter Financial Results
11/11/2022 - 04:05 PM
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
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, $0.00 01 par value; 1,000 shares authorized, none issued — — Common stock, $0.00 01 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
Three Months Ended Nine Months Ended 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
Nine Months Ended 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 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
