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8-K - 8-K - Hill International, Inc.a15-6721_18k.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 Fourth Quarter and Full Year 2014 Financial Results

 

Marlton, NJ — March 12, 2015 — Hill International (NYSE:HIL), the global leader in managing construction risk, announced today financial results for the fourth quarter and full year ended December 31, 2014 (see attached tables).

 

Total revenue for the fourth quarter of 2014 was a record $169.1 million, an increase of 16.7% from the fourth quarter of 2013.  Consulting fee revenue for the fourth quarter was a record $148.7 million, an increase of 13.6% from the prior year’s fourth quarter.

 

EBITDA (as defined below) for the fourth quarter was $5.7 million, down 38.3% from the fourth quarter of 2013.  Operating profit for the fourth quarter was $3.3 million, a 52.2% decline from the prior year’s fourth quarter.  Net loss for the fourth quarter was ($3.5 million), or ($0.07) per diluted share, compared to a net loss of ($1.3 million), or ($0.03) per diluted share, in the fourth quarter of 2013.  The net loss in the fourth quarter of 2014 was negatively impacted by higher bad debt expense and higher income tax expense partially offset by lower interest expense.

 

The company’s total backlog at December 31, 2014 was a record $1.080 billion, up 0.7% from September 30, 2014.  Twelve-month backlog at December 31, 2014 was also a record at $470 million, a 2.8% increase from September 30, 2014.

 

“We had another strong quarter with record backlog driving record revenues, but we continue to be challenged in converting that growth into better profitability,” said David L. Richter, Hill’s President and Chief Executive Officer.  “Our focus in 2015 will be on more aggressively managing our overhead costs so we can deliver higher and more consistent profitability going forward,” added Richter.

 

Full Year 2014 Results

 

Total revenue for 2014 was a record $640.3 million, an increase of 11.0% from 2013.  Consulting fee revenue for 2014 was a record $575.8 million, an increase of 12.4% over the prior year.

 

EBITDA for 2014 was $37.8 million, an 8.4% decrease from 2013.  Operating profit for 2014 was $29.3 million, a 9.8% decrease from a year earlier.  Net loss for 2014 was ($10.9 million), or ($0.25) per diluted share, compared to net earnings of $1.6 million, or $0.04 per diluted share, during 2013.

 

The net loss in 2014 was primarily caused by one-time expenses of $10.8 million in connection with the company’s debt refinancing which closed in September 2014.

 



 

2015 Guidance

 

Based on current market conditions and the backlog amounts described above, the company estimates that consulting fee revenue in 2015 will be between $650 million and $675 million.  This guidance reflects approximately 13% to 17% growth in consulting fee revenue for the year.

 

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 fourth quarter of 2014 was a record $129.5 million, an increase of 15.8% from the fourth quarter of 2013.  Consulting fee revenue for the fourth quarter at the Projects Group was a record $110.2 million, an increase of 11.3% from the prior year’s fourth quarter.  Operating profit for the Projects Group for the fourth quarter was $11.4 million, a decrease of 2.6% from the fourth quarter of 2013.

 

Total revenue at the Projects Group during 2014 was a record $486.4 million, an increase of 7.5% from 2013.  Consulting fee revenue for the Projects Group during 2014 was a record $427.5 million, an increase of 8.9% from the prior year.  Operating profit for the Projects Group for 2014 was $48.5 million, down 0.3% from 2013.

 

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 fourth quarter of 2014 was $39.7 million, an increase of 19.7% from the fourth quarter of 2013.  Consulting fee revenue for the fourth quarter at the Claims Group was a record $38.5 million, an increase of 20.7% from the prior year’s fourth quarter.  Operating profit for the Claims Group for the fourth quarter of 2014 was $0.1 million, a decrease of 97.8% from the fourth quarter of 2013.

 

Total revenue at the Claims Group during 2014 was a record $153.8 million, an increase of 23.9% from 2013.  Consulting fee revenue for the Claims Group for 2014 was a record $148.3 million, an increase of 24.1% from the prior year.  Operating profit for the Claims Group for 2014 was $11.0 million, a decrease of 9.7% from 2013.

 

Conference Call

 

David L. Richter, Hill’s President and Chief Executive Officer, and John Fanelli III, Hill’s Senior Vice President and Chief Financial Officer, will host a conference call on March 13, 2015, at 11:00 am Eastern Time to discuss the financial results for the fourth quarter and full year ended December 31, 2014.  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 ask 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 from Hill’s website for approximately 90 days.

 

About Hill International

 

Hill International, with 4,600 employees in over 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 ninth largest construction management firm in the United States.  For more information on Hill, please visit our website at www.hillintl.com.

 

The Hill International, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5733

 

Forward-Looking Statements

 

Certain statements contained in this press release 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 contained in this press release, the matters set forth herein including, but not limited to, any projections of 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, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include: modifications and termination of client contracts; control and operational issues pertaining to business activities that we conduct on our own behalf or pursuant to joint ventures with other parties; difficulties we may incur in implementing our acquisition strategy; the need to retain and recruit key technical and management personnel; and unexpected adjustments and cancellations related to our backlog.  Additional factors that could cause actual results to differ materially from our forward-looking statements are set forth 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 December 31,

 

Years Ended December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

148,717

 

$

130,921

 

$

575,805

 

$

512,085

 

Reimbursable expenses

 

20,421

 

14,029

 

64,476

 

64,596

 

Total revenue

 

169,138

 

144,950

 

640,281

 

576,681

 

Cost of services

 

84,284

 

72,266

 

328,795

 

296,055

 

Reimbursable expenses

 

20,421

 

14,029

 

64,476

 

64,596

 

Total direct expenses

 

104,705

 

86,295

 

393,271

 

360,651

 

Gross profit

 

64,433

 

58,655

 

247,010

 

216,030

 

Selling, general and administrative expenses

 

61,105

 

51,688

 

217,730

 

183,572

 

Operating profit

 

3,328

 

6,967

 

29,280

 

32,458

 

Interest and related financing fees, net

 

3,651

 

5,607

 

30,485

 

22,864

 

Earnings before income taxes

 

(323

)

1,360

 

(1,205

)

9,594

 

Income tax expense

 

2,987

 

2,060

 

8,411

 

6,043

 

Net (loss) earnings

 

(3,310

)

(700

)

(9,616

)

3,551

 

Less: net earnings - noncontrolling interest

 

174

 

566

 

1,263

 

1,922

 

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

 

$

(3,484

)

$

(1,266

)

$

(10,879

)

$

1,629

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.07

)

$

(0.03

)

$

(0.25

)

$

0.04

 

Basic weighted average common shares outstanding

 

50,370

 

39,538

 

44,370

 

39,098

 

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

 

$

(0.07

)

$

(0.03

)

$

(0.25

)

$

0.04

 

Diluted weighted average common shares outstanding

 

50,370

 

39,538

 

44,370

 

39,322

 

 



 

Selected Segment Data

 

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Project Management

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

110,237

 

$

99,042

 

$

427,515

 

$

392,602

 

Total revenue

 

$

129,483

 

$

111,817

 

$

486,442

 

$

452,517

 

Gross profit

 

$

43,143

 

$

40,147

 

$

164,669

 

$

148,599

 

Gross profit as a percent of consulting fee revenue

 

39.1

%

40.5

%

38.5

%

37.8

%

Selling, general and administrative expenses

 

$

31,748

 

$

28,445

 

$

116,153

 

$

99,917

 

SG&A expenses as a percentage of consulting fee revenue

 

28.8

%

28.7

%

27.2

%

25.4

%

Operating profit

 

$

11,395

 

$

11,702

 

$

48,516

 

$

48,682

 

Operating profit as a percent of consulting fee revenue

 

10.3

%

11.8

%

11.3

%

12.4

%

 

 

 

 

 

 

 

 

 

 

Construction Claims

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

38,480

 

$

31,879

 

$

148,290

 

$

119,483

 

Total revenue

 

$

39,655

 

$

33,133

 

$

153,839

 

$

124,164

 

Gross profit

 

$

21,290

 

$

18,508

 

$

82,341

 

$

67,431

 

Gross profit as a percent of consulting fee revenue

 

55.3

%

58.1

%

55.5

%

56.4

%

Selling, general and administrative expenses

 

$

21,235

 

$

15,966

 

$

71,345

 

$

55,260

 

SG&A expenses as a percentage of consulting fee revenue

 

55.2

%

50.1

%

48.1

%

46.2

%

Operating profit

 

$

55

 

$

2,542

 

$

10,996

 

$

12,171

 

Operating profit as a percent of consulting fee revenue

 

0.1

%

8.0

%

7.4

%

10.2

%

 



 

Selected Other Financial Data

 

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Consulting fee revenue

 

$

148,717

 

$

130,921

 

$

575,805

 

$

512,085

 

Total revenue

 

$

169,138

 

$

144,950

 

$

640,281

 

$

576,681

 

Gross profit

 

$

64,433

 

$

58,655

 

$

247,010

 

$

216,030

 

Gross profit as a percentage of consulting fee revenue

 

43.3

%

44.8

%

42.9

%

42.2

%

Selling, general and administrative expenses (excluding corporate expenses)

 

$

52,983

 

$

44,411

 

$

187,498

 

$

155,177

 

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

 

35.6

%

33.9

%

32.6

%

30.3

%

Corporate expenses

 

$

8,122

 

$

7,277

 

$

30,232

 

$

28,395

 

Corporate expenses as a percentage of consulting fee revenue

 

5.5

%

5.6

%

5.3

%

5.5

%

Operating profit

 

$

3,328

 

$

6,967

 

$

29,280

 

$

32,458

 

Operating profit as a percent of consulting fee revenue

 

2.2

%

5.3

%

5.1

%

6.3

%

Effective income tax rate

 

(924.8

)%

151.5

%

(697.9

)%

63.0

%

 



 

Selected Balance Sheet Data

 

 

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

30,124

 

$

30,381

 

Accounts receivable, net

 

194,256

 

232,011

 

Current assets

 

257,099

 

297,893

 

Accounts receivable, Libya

 

49,659

 

 

Total assets

 

464,984

 

449,102

 

Current liabilities

 

137,935

 

151,515

 

Total debt

 

128,236

 

133,261

 

Stockholders’ equity:

 

 

 

 

 

Hill International, Inc. share of equity

 

154,112

 

131,144

 

Noncontrolling interests

 

8,674

 

11,887

 

Total equity

 

$

162,786

 

$

143,031

 

 

EBITDA Reconciliation

 

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the fourth quarter of 2014 were $5.7 million compared to $9.2 million in the fourth quarter of 2013.  EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”).  Management believes EBITDA, in addition to operating profit, net income 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 December 31,

 

Years Ended December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(3,484

)

$

(1,266

)

$

(10,879

)

$

1,629

 

Interest and related financing fees, net

 

3,651

 

5,607

 

30,485

 

22,864

 

Income tax expense

 

2,987

 

2,060

 

8,411

 

6,043

 

Depreciation and amortization

 

2,547

 

2,835

 

9,823

 

10,756

 

EBITDA

 

$

5,701

 

$

9,236

 

$

37,840

 

$

41,292