Attached files

file filename
8-K - 8-K - Hill International, Inc.a13-18003_18k.htm

Exhibit 99.1

 

 

Hill International, Inc.

The Equity Group Inc.

John P. Paolin

Devin Sullivan

Senior Vice President of Marketing and
Corporate Communications

Senior Vice President
(212) 836-9608

(856) 810-6210

dsullivan@equityny.com

johnpaolin@hillintl.com

 

 

FOR IMMEDIATE RELEASE

 

Hill International Reports Second Quarter and First Half 2013 Financial Results;

Return to Profitability Driven by Record Revenues and Record EBITDA

 

Marlton, NJ — August 5, 2013 — Hill International (NYSE:HIL), the global leader in managing construction risk, announced today its financial results for the second quarter and first half ended June 30, 2013 (see attached tables).

 

Total revenue for the second quarter of 2013 was a record $148.5 million, an increase of 24.3% from the second quarter of 2012.  Consulting fee revenue for the second quarter was a record $128.4 million, an increase of 23.4% from the second quarter of last year.

 

EBITDA (as defined below) for the second quarter of 2013 was a record $11.9 million, up 122.4% from the second quarter of 2012.  Operating profit for the second quarter was a record $9.8 million, an increase of 207.8% from the second quarter of last year.  Net earnings in the second quarter of 2013 were $0.7 million or $0.02 per diluted share, an improvement from a net loss of ($0.3 million), or ($0.01) per diluted share, in the second quarter of 2012.

 

The company’s total backlog at June 30, 2013 was $907 million, down from $921 million at March 31, 2013. Twelve-month backlog at June 30, 2013 was $382 million, up slightly from $381 million at March 31, 2013.

 

“We are very pleased that our strong revenue growth drove a return to profitability in the second quarter,” said Irvin E. Richter, Hill’s Chairman and Chief Executive Officer.  “While this past quarter saw the best operational results in the company’s history, we believe the company will continue to strengthen in the second half of this year and heading into next year,” added Richter.

 

First Half 2013 Results

 

Total revenue for the first half of 2013 was a record $284.5 million, an increase of 21.0% from the first half of 2012.  Consulting fee revenue for the first half was a record $251.0 million, an increase of 23.5% from the first half of last year.

 

EBITDA for the first half of 2013 was a record $21.5 million, a 273.9% increase from the first half of 2012.  Operating profit for the first half was a record $17.2 million, up 3,647.6% from $0.5 million in the first half of last year.  Net earnings for the first half of 2013 were $0.3 million, or $0.01 per diluted share, as compared to a net loss of ($7.1 million), or ($0.18) per diluted share, for the first half of 2012.

 



 

2013 Guidance

 

Based on the company’s performance in the first half, Hill is adjusting upwards the guidance that it gave earlier this year.  The company currently estimates that 2013 consulting fee revenue will be between $510 million and $525 million, which would equate to growth compared to 2012 of between approximately 22% and 26%.  The prior guidance was for consulting fee revenue of between $500 million and $520 million.

 

Business Segment Results

 

In addition to providing consolidated financial results, Hill also reports separate financial results for its two operating segments: the Project Management Group and the Construction Claims Group.

 

Project Management Group.  Hill’s Project Management Group provides program management, project management, construction management, project management oversight, troubled project turnaround, staff augmentation, project labor agreement consulting, commissioning, estimating and cost management, and labor compliance services.

 

Total revenue at Hill’s Project Management Group during the second quarter of 2013 was a record $117.6 million, an increase of 28.0% from the second quarter of 2012.  Consulting fee revenue for the second quarter at the Projects Group was a record $99.0 million, an increase of 28.3% from the second quarter of last year.  Operating profit for the Projects Group for the second quarter of 2013 was a record $13.3 million, an increase of 88.4% from last year’s second quarter.

 

Total revenue at the Projects Group during the first half of 2013 was a record $225.2 million, an increase of 24.4% from the first half of 2012.  Consulting fee revenue for the Projects Group during the first half was a record $194.0 million, an increase of 29.0% from the first half of last year.  Operating profit for the Projects Group for the first half of 2013 was a record $25.7 million, an increase of 141.6% from last year’s first half.

 

Construction Claims GroupHill’s Construction Claims Group provides claims consulting, management consulting, litigation support, expert witness testimony, cost/damages assessment, delay/disruption analysis, adjudication, lender advisory, risk management, forensic accounting, fraud investigation and project neutral services.

 

Total revenue at Hill’s Construction Claims Group during the second quarter of 2013 was a record $30.9 million, an increase of 12.1% from the second quarter of 2012.  Consulting fee revenue for the second quarter at the Claims Group was a record $29.4 million, an increase of 9.5% from last year’s second quarter.  Operating profit for the Claims Group for the second quarter of 2013 was $3.4 million, an increase of 34.1% from the prior year’s quarter.

 

Total revenue at the Claims Group during the first half of 2013 was $59.4 million, an increase of 9.3% from the first half of 2012.  Consulting fee revenue at the Claims Group for the first half was $57.0 million, an increase of 7.7% from the first half of last year.  Operating profit for the Claims Group for the first half of 2013 rose to a record $5.8 million, an increase of 57.2% over the first half of 2012.

 

The acquisition of Binnington Copeland & Associates, which closed at the end of May 2013, did not have a material impact on the financial results of the Claims Group in the second quarter.

 

Conference Call

 

David L. Richter, Hill’s President and Chief Operating Officer, and John Fanelli III, Hill’s Senior Vice President and Chief Financial Officer, will host a conference call on August 6, 2013, at 11:00 am Eastern Time to discuss the financial results for the second quarter and first half ended June 30, 2013.  Interested parties may

 



 

participate in the call by dialing (877) 423-9820 (Domestic) or (201) 493-6749 (International) approximately 10 minutes before the call is scheduled to begin and asking to be connected to the Hill International conference call.  The conference call will also be broadcast live over the Internet.  To listen to the live call, please go to the “Investor Relations” section of Hill’s website at www.hillintl.com, and click on “Financial Information,” and then “Conferences and Calls”.  Please go to the website at least 15 minutes early to register, download and install any necessary audio software.  If you are unable to participate in the live call, the conference call will be archived and can be accessed for approximately 90 days.

 

About Hill International

 

Hill International, with 3,900 employees in 100 offices worldwide, provides program management, project management, construction management, construction claims and other consulting services primarily to the buildings, transportation, energy environmental and industrial markets.  Engineering News-Record magazine recently ranked Hill as the 9th 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 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.  We do not intend, and undertake no obligation, to update any forward-looking statement.

 

(HIL-F)

 



 

HILL INTERNATIONAL, INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

(In 000’s, Except Per Share Data)

(Unaudited)

 

Consolidated Statement of Operations

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

128,427

 

$

104,069

 

$

250,983

 

$

203,266

 

Reimbursable expenses

 

20,037

 

15,359

 

33,554

 

31,975

 

Total revenue

 

148,464

 

119,428

 

284,537

 

235,241

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

75,357

 

59,801

 

148,055

 

118,263

 

Reimbursable expenses

 

20,037

 

15,359

 

33,554

 

31,975

 

Total direct expenses

 

95,394

 

75,160

 

181,609

 

150,238

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

53,070

 

44,268

 

102,928

 

85,003

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

43,230

 

41,071

 

85,689

 

84,543

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

9,840

 

3,197

 

17,239

 

460

 

 

 

 

 

 

 

 

 

 

 

Interest expense and related financing fees, net

 

6,281

 

3,150

 

11,768

 

7,991

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

3,559

 

47

 

5,471

 

(7,531

)

Income tax expense (benefit)

 

2,288

 

(471

)

4,162

 

(1,512

)

 

 

 

 

 

 

 

 

 

 

Consolidated net earnings (loss)

 

1,271

 

518

 

1,309

 

(6,019

)

 

 

 

 

 

 

 

 

 

 

Less: net earnings - noncontrolling interests

 

552

 

842

 

970

 

1,041

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Hill International, Inc.

 

$

719

 

$

(324

)

$

339

 

$

(7,060

)

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share - Hill International, Inc.

 

$

0.02

 

$

(0.01

)

$

0.01

 

$

(0.18

)

Basic weighted average common shares outstanding

 

38,826

 

38,590

 

38,745

 

38,558

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share - Hill International, Inc.

 

$

0.02

 

$

(0.01

)

$

0.01

 

$

(0.18

)

Diluted weighted average common shares outstanding

 

38,943

 

38,590

 

38,950

 

38,558

 

 



 

Selected Segment Data

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Project Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

98,979

 

$

77,175

 

$

193,977

 

$

150,316

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

117,588

 

$

91,880

 

$

225,167

 

$

180,918

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

36,390

 

$

29,351

 

$

71,115

 

$

55,843

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percent of consulting fee revenue

 

36.8

%

38.0

%

36.7

%

37.2

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

23,056

 

$

22,272

 

$

45,425

 

$

45,209

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses as a percentage of consulting fee revenue

 

23.3

%

28.9

%

23.4

%

30.1

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

13,334

 

$

7,079

 

$

25,690

 

$

10,634

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

13.5

%

9.2

%

13.2

%

7.1

%

 

 

 

 

 

 

 

 

 

 

Construction Claims

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

29,448

 

$

26,894

 

$

57,006

 

$

52,950

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

30,876

 

$

27,548

 

$

59,370

 

$

54,323

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

16,680

 

$

14,917

 

$

31,813

 

$

29,160

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percent of consulting fee revenue

 

56.6

%

55.5

%

55.8

%

55.1

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

13,296

 

12,393

 

$

25,990

 

$

25,456

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses as a percentage of consulting fee revenue

 

45.2

%

46.1

%

45.6

%

48.1

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

3,384

 

$

2,524

 

$

5,823

 

$

3,704

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

11.5

%

9.4

%

10.2

%

7.0

%

 



 

Selected Other Financial Data

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

128,427

 

$

104,069

 

$

250,983

 

$

203,266

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

148,464

 

$

119,428

 

$

284,537

 

$

235,241

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

53,070

 

$

44,268

 

$

102,928

 

$

85,003

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percentage of consulting fee revenue

 

41.3

%

42.5

%

41.0

%

41.8

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (excluding corporate expenses)

 

$

36,352

 

$

34,665

 

$

71,415

 

$

70,665

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (excluding corporate expenses) as a percentage of consulting fee revenue

 

28.3

%

33.3

%

28.5

%

34.8

%

 

 

 

 

 

 

 

 

 

 

Corporate expenses

 

$

6,878

 

$

6,406

 

$

14,274

 

$

13,878

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses as a percentage of consulting fee revenue

 

5.4

%

6.2

%

5.7

%

6.8

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

9,840

 

$

3,197

 

$

17,239

 

$

460

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

7.7

%

3.1

%

6.9

%

0.2

%

 

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

64.3

%

(1,002.1

)%

76.1

%

20.1

%

 



 

Selected Balance Sheet Data

 

 

 

June 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,825

 

$

16,716

 

Accounts receivable, net

 

$

235,964

 

$

211,176

 

Current assets

 

$

294,139

 

$

257,270

 

Total assets

 

$

445,993

 

$

421,673

 

Current liabilities

 

$

149,539

 

$

150,135

 

Total debt

 

$

133,591

 

$

109,456

 

Stockholders’ equity:

 

 

 

 

 

Hill International, Inc. share of equity

 

$

125,529

 

$

127,546

 

Noncontrolling interest

 

$

12,151

 

$

13,557

 

Total equity

 

$

137,680

 

$

141,103

 

 

EBITDA Reconciliation

(Unaudited)

 

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the second quarter of 2013 were $11.9 million compared to $5.4 million in the second quarter of 2012. EBITDA for the first six months of 2013 were $21.5 million compared to $5.7 million in the first six months of 2012. EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management believes EBITDA, in addition to operating profit, net earnings and other GAAP measures, is a useful indicator of Hill’s financial and operating performance and its ability to generate cash flows from operations that are available for taxes and capital expenditures. Investors should recognize that EBITDA 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. A reconciliation of EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation S-K follows:

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

719

 

$

(324

)

$

339

 

$

(7,060

)

Interest expense, net

 

6,281

 

3,150

 

11,768

 

7,991

 

Income tax expense (benefit)

 

2,288

 

(471

)

4,162

 

(1,512

)

Depreciation and amortization

 

2,657

 

3,017

 

5,196

 

6,322

 

EBITDA

 

$

11,945

 

$

5,372

 

$

21,465

 

$

5,741