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8-K - 8-K - Hill International, Inc.a13-19275_38k.htm

Exhibit 99.1

 

 

Hill International, Inc.

 

The Equity Group Inc.

John P. Paolin

 

Devin Sullivan

Senior Vice President of Marketing and

 

Senior Vice President

Corporate Communications

 

(212) 836-9608

(856) 810-6210

 

dsullivan@equityny.com

johnpaolin@hillintl.com

 

 

 

FOR IMMEDIATE RELEASE

 

Hill International Reports Third Quarter and First Nine Months 2013 Financial Results;

Strong Consulting Fee Growth of 26% Drives Net Earnings Up 96% in the Third Quarter

 

Marlton, NJ — November 4, 2013 — Hill International (NYSE:HIL), the global leader in managing construction risk, announced today its financial results for the third quarter and first nine months ended September 30, 2013 (see attached tables).

 

Total revenue for the third quarter of 2013 was $147.2 million, an increase of 22.8% from the third quarter of 2012.  Consulting fee revenue for the third quarter was a record $130.2 million, an increase of 25.7% from the third quarter of last year.

 

EBITDA (as defined below) for the third quarter of 2013 was $10.6 million, up 34.5% from the third quarter of 2012.  Operating profit for the third quarter was $8.3 million, an increase of 62.1% from the third quarter of last year.  Net earnings in the third quarter of 2013 were $2.6 million or $0.06 per diluted share, an increase of 96% from net earnings of $1.3 million, or $0.03 per diluted share, in the third quarter of 2012.

 

The company’s total backlog at September 30, 2013 was a record $951 million, up from $907 million at June 30, 2013.  Twelve-month backlog at September 30, 2013 was $382 million, unchanged from June 30, 2013.

 

“We are very pleased that our strong financial performance has continued for three consecutive quarters,” said Irvin E. Richter, Hill’s Chairman and Chief Executive Officer.  “This consistent performance, together with record total backlog and our first payments from Libya, bode well for a solid finish to 2013 and an even better 2014,” added Richter.

 

First Nine Months 2013 Results

 

Total revenue for the first nine months of 2013 was a record $431.7 million, an increase of 21.6% from the first nine months of 2012.  Consulting fee revenue for the first nine months was a record $381.2 million, an increase of 24.2% from the first nine months of last year.

 

EBITDA for the first nine months of 2013 was a record $32.1 million, a 135.4% increase from the first nine months of 2012. Operating profit for the first nine months was a record $25.5 million, up 359.3% from $5.6 million in the first nine months of last year.  Net earnings for the first nine months of 2013 were $2.9 million, or $0.07 per diluted share, as compared to a net loss of ($5.8 million), or ($0.15) per diluted share, for the first nine months of 2012.

 

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2013 Guidance

 

Based on the company’s performance in the first nine months, Hill is narrowing the range of guidance that it gave earlier this year. The company currently estimates that 2013 consulting fee revenue will be between $515 million and $520 million, which would equate to growth compared to 2012 of between approximately 23% and 25%. The prior guidance was for consulting fee revenue of between $510 million and $525 million.

 

Update on Libya

 

During the past several months, accounts receivable related to work performed by Hill prior to March 2011 pursuant to contracts with the Libyan government were reduced by approximately $3.1 million.  The reduction consisted of a cash payment by the Libyan Organization for the Development of Administrative Centres (“ODAC”) of approximately 3.0 million Libyan dinars (“LYD”) ($2.4 million) that was made directly to Hill and a cash payment of approximately LYD 800,000 ($700,000) that was made by ODAC to Libyan tax authorities on Hill’s behalf.  At September 30, 2013, the remaining accounts receivable outstanding related to Hill’s work in Libya amounted to approximately $57.0 million.  There is at present no agreement, understanding or timetable for further payments of Hill’s accounts receivable from ODAC or a return to work on Hill’s existing contracts. However, Hill’s management believes that these payments were made in good faith and are a positive indication that ODAC intends to satisfy its obligations to Hill.

 

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 third quarter of 2013 was $115.5 million, an increase of 24.6% from the third quarter of 2012.  Consulting fee revenue for the third quarter at the Projects Group was a record $99.6 million, an increase of 29.0% from the third quarter of last year.  Operating profit for the Projects Group for the third quarter of 2013 was $11.3 million, an increase of 40.9% from last year’s third quarter.

 

Total revenue at the Projects Group during the first nine months of 2013 was a record $340.7 million, an increase of 24.5% from the first nine months of 2012.  Consulting fee revenue for the Projects Group during the first nine months was a record $293.6 million, an increase of 29.0% from the first nine months of last year.  Operating profit for the Projects Group for the first nine months of 2013 was a record $37.0 million, an increase of 98.3% from last year’s first nine months.

 

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 third quarter of 2013 was a record $31.7 million, an increase of 16.7% from the third quarter of 2012.  Consulting fee revenue for the third quarter at the Claims

 

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Group was a record $30.6 million, an increase of 16.0% from last year’s third quarter.  Operating profit for the Claims Group for the third quarter was $3.8 million, an increase of 44.1% from the prior year’s third quarter.

 

Total revenue at the Claims Group during the first nine months of 2013 was a record $91.0 million, an increase of 11.8% from the first nine months of 2012.  Consulting fee revenue at the Claims Group for the first nine months was a record $87.6 million, an increase of 10.4% from the first nine months of last year.  Operating profit for the Claims Group for the first nine months of 2013 rose to a record $9.6 million, an increase of 51.8% over the first nine months of 2012.

 

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 November 5, 2013, at 11:00 am Eastern Time to discuss the financial results for the third quarter and first nine months ended September 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 4,000 employees in 100 offices worldwide, provides program management, project management, construction management, construction claims and other consulting services primarily to the buildings, transportation, environmental, energy 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)

 

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

EARNINGS RELEASE TABLES

(In 000’s, Except Per Share Data)

(Unaudited)

 

Consolidated Statement of Operations

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

130,181

 

$

103,565

 

$

381,164

 

$

306,831

 

Reimbursable expenses

 

17,013

 

16,322

 

50,567

 

48,297

 

Total revenue

 

147,194

 

119,887

 

431,731

 

355,128

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

75,734

 

58,459

 

223,789

 

176,722

 

Reimbursable expenses

 

17,013

 

16,322

 

50,567

 

48,297

 

Total direct expenses

 

92,747

 

74,781

 

274,356

 

225,019

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

54,447

 

45,106

 

157,375

 

130,109

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

46,195

 

40,016

 

131,884

 

124,559

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

8,252

 

5,090

 

25,491

 

5,550

 

 

 

 

 

 

 

 

 

 

 

Interest expense and related financing fees, net

 

5,489

 

4,757

 

17,257

 

12,748

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

2,763

 

333

 

8,234

 

(7,198

)

Income tax (benefit) expense

 

(179

)

(1,109

)

3,983

 

(2,621

)

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

2,942

 

1,442

 

4,251

 

(4,577

)

 

 

 

 

 

 

 

 

 

 

Less: net earnings - noncontrolling interests

 

386

 

138

 

1,356

 

1,179

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2,556

 

$

1,304

 

$

2,895

 

$

(5,756

)

 

 

 

 

 

 

 

 

 

 

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

 

$

0.06

 

$

0.03

 

$

0.07

 

$

(0.15

)

Basic weighted average common shares outstanding

 

39,351

 

38,226

 

38,949

 

38,446

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.06

 

$

0.03

 

$

0.07

 

$

(0.15

)

Diluted weighted average common shares outstanding

 

39,494

 

38,566

 

39,135

 

38,446

 

 

4



 

Selected Segment Data

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Project Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

99,583

 

$

77,194

 

$

293,560

 

$

227,510

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

115,533

 

$

92,752

 

$

340,700

 

$

273,670

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

37,337

 

$

30,405

 

$

108,452

 

$

86,248

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percent of consulting fee revenue

 

37.5

%

39.4

%

36.9

%

37.9

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

26,047

 

$

22,393

 

$

71,472

 

$

67,602

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses as a percentage of consulting fee revenue

 

26.2

%

29.0

%

24.3

%

29.7

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

11,290

 

$

8,012

 

$

36,980

 

$

18,646

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

11.3

%

10.4

%

12.6

%

8.2

%

 

 

 

 

 

 

 

 

 

 

Construction Claims

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

30,598

 

$

26,371

 

$

87,604

 

$

79,321

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

31,661

 

$

27,135

 

$

91,031

 

$

81,458

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

17,110

 

$

14,701

 

$

48,923

 

$

43,861

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percent of consulting fee revenue

 

55.9

%

55.7

%

55.8

%

55.3

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

13,304

 

12,060

 

$

39,294

 

$

37,516

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses as a percentage of consulting fee revenue

 

43.5

%

45.7

%

44.9

%

47.3

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

3,806

 

$

2,641

 

$

9,629

 

$

6,345

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

12.4

%

10.0

%

11.0

%

8.0

%

 

5



 

Selected Other Financial Data

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

130,181

 

$

103,565

 

$

381,164

 

$

306,831

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

147,194

 

$

119,887

 

$

431,731

 

$

355,128

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

54,447

 

$

45,106

 

$

157,375

 

$

130,109

 

 

 

 

 

 

 

 

 

 

 

Gross profit as a percentage of consulting fee revenue

 

41.8

%

43.6

%

41.3

%

42.4

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (excluding corporate expenses)

 

$

39,351

 

$

34,453

 

$

110,766

 

$

105,118

 

 

 

 

 

 

 

 

 

 

 

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

 

30.2

%

33.3

%

29.1

%

34.3

%

 

 

 

 

 

 

 

 

 

 

Corporate expenses

 

$

6,844

 

$

5,563

 

$

21,118

 

$

19,441

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses as a percentage of consulting fee revenue

 

5.3

%

5.4

%

5.5

%

6.3

%

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

8,252

 

$

5,090

 

$

25,491

 

$

5,550

 

 

 

 

 

 

 

 

 

 

 

Operating profit as a percent of consulting fee revenue

 

6.3

%

4.9

%

6.7

%

1.8

%

 

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

(6.5

)%

(333.0

)%

48.4

%

36.4

%

 

6



 

Selected Balance Sheet Data

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

26,639

 

$

16,716

 

Accounts receivable, net

 

$

236,014

 

$

211,176

 

Current assets

 

$

298,254

 

$

257,270

 

Total assets

 

$

451,157

 

$

421,673

 

Current liabilities

 

$

149,686

 

$

150,135

 

Total debt

 

$

132,230

 

$

109,456

 

Stockholders’ equity:

 

 

 

 

 

Hill International, Inc. share of equity

 

$

130,484

 

$

127,546

 

Noncontrolling interest

 

$

12,012

 

$

13,557

 

Total equity

 

$

142,496

 

$

141,103

 

 

EBITDA Reconciliation

(Unaudited)

 

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the third quarter of 2013 were $10.6 million compared to $7.9 million in the third quarter of 2012.  EBITDA for the first nine months of 2013 were $32.1 million compared to $13.6 million in the first nine 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 interest, 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 September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

2,556

 

$

1,304

 

$

2,895

 

$

(5,756

)

Interest expense, net

 

5,489

 

4,757

 

17,257

 

12,748

 

Income tax expense (benefit)

 

(179

)

(1,109

)

3,983

 

(2,621

)

Depreciation and amortization

 

2,725

 

2,923

 

7,921

 

9,245

 

EBITDA

 

$

10,591

 

$

7,875

 

$

32,056

 

$

13,616

 

 

7