Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Hill International, Inc. | d8k.htm |
Exhibit 99.1
| Hill International, Inc. | The Equity Group Inc. | |
| John P. Paolin | Devin Sullivan | |
| Vice President of Marketing and Corporate Communications | Senior Vice President | |
| (856) 810-6210 | (212) 836-9608 | |
| johnpaolin@hillintl.com | dsullivan@equityny.com |
FOR IMMEDIATE RELEASE
Hill International Reports Fourth Quarter and Full Year 2010 Financial Results
Marlton, NJ – March 7, 2011 – 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, 2010 (see attached tables). Total revenue for the fourth quarter of 2010 grew to a record $128.1 million, an increase of 16.1% from the fourth quarter of 2009. Consulting fee revenue for the fourth quarter of 2010 rose to a record $101.2 million, an increase of 8.1% from the fourth quarter of 2009.
Operating profit for the fourth quarter of 2010 was $5.3 million, a decrease of 28.7% from the fourth quarter of 2009. Net earnings for the fourth quarter were $3.8 million (or $0.10 per diluted share based on 38.9 million diluted shares), down 17.2% from the prior year’s quarter.
Total backlog at the end of the fourth quarter of 2010 increased to a record $675 million from $599 million at the end of the third quarter of 2010. Twelve-month backlog at the end of the fourth quarter of 2010 increased to $275 million from $255 million at the end of the third quarter of 2010.
“We are pleased with Hill’s financial performance during the fourth quarter,” said Irvin E. Richter, Hill’s Chairman and Chief Executive Officer. “We continue to see improving markets for our services and we have positive expectations heading into 2011 especially given our strong growth in backlog during the quarter,” added Richter.
Full Year 2010 Results
Total revenue for 2010 rose to $451.8 million, an increase of 7.1% over 2009. Consulting fee revenue for 2010 grew to $382.1 million, an increase of 5.0% over 2009.
Operating profit for 2010 was $18.6 million, a decrease of 29.7% from 2009. Net earnings for 2010 declined to $14.2 million (or $0.36 per diluted share based on 39.8 million diluted shares), down 27.0% from 2009.
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, estimating and cost management, project labor agreement consulting and management consulting services.
Total revenue for the Projects Group during the fourth quarter of 2010 grew to $102.0 million, an increase of 18.1% over the fourth quarter of 2009. Consulting fee revenue for the fourth quarter of 2010 at the Projects Group rose to $76.0 million, an increase of 8.3% from the fourth quarter of 2009. Operating profit for the Projects Group for the fourth quarter of 2010 was $11.2 million, an increase of 12.1% from the fourth quarter of 2009.
Total revenue at the Projects Group for the full year 2010 grew to $352.8 million, an increase of 6.3% over 2009. Consulting fee revenue for 2010 at the Projects Group rose to $286.5 million, an increase of 3.5% over 2009. Operating profit for the Projects Group for 2010 was $36.1 million, a decrease of 16.7% from 2009.
Construction Claims Group. Hill’s Construction Claims Group provides claims preparation, analysis and review, litigation support, cost/damages assessment, delay/disruption analysis, contract review and assessment, adjudication, risk assessment, lender advisory and expert witness testimony services.
Total revenue for the Claims Group during the fourth quarter of 2010 grew to $26.1 million, an increase of 8.9% over the fourth quarter of 2009. Consulting fee revenue for the fourth quarter of 2010 at the Claims Group increased to $25.2 million, up 7.5% from the fourth quarter of 2009. Operating profit for the Claims Group for the fourth quarter of 2010 was $1.8 million, a decrease of 44.2% from the fourth quarter of 2009.
Total revenue at the Claims Group for the full year 2010 was $99.0 million, an increase of 10.2% over 2009. Consulting fee revenue for 2010 at the Claims Group was $95.6 million, an increase of 9.7% over 2009. Operating profit for the Claims Group for 2010 was $10.0 million, an increase of 20.9% from 2009.
Current Situation in Libya
Since 2007, Hill has been providing project management and construction supervision services on several major projects for the government of Libya. These projects relate to the construction of college and university facilities throughout the country. Due to the current civil unrest in Libya, the company has temporarily ceased all work in Libya and recently completed the safe demobilization of the vast majority of its expatriate employees and their families from the country. In addition, Hill currently has significant accounts receivable related to the work performed on these projects.
“We believe that when the current civil unrest is eventually resolved, the probability is high that we will continue to work on these projects,” said Richter. “We also believe that the amounts due will be collected, however, if we are unable to do so, there would be an adverse financial impact on Hill.”
Increase of Stock Repurchase Program
During 2010, Hill purchased approximately 2,182,000 shares of its common stock pursuant to its previously authorized $40 million Stock Repurchase Program at a cost of approximately $9.3 million, or an average price of $4.28 per share. Since the inception of the program in November 2008, the company has purchased approximately 5,834,000 shares of its common stock for an aggregate purchase price of approximately $24.4 million, or an average price of $4.19 per share.
Earlier today, Hill’s Board of Directors approved an increase in the Stock Repurchase Program to $60 million and extended the program until December 31, 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 Tuesday, March 8, 2011, at 11:00 am Eastern Time to discuss the financial results for the fourth quarter and full year 2010. Interested parties may participate in the call by dialing (877) 407-8037 (Domestic) or (201) 689-8037 (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 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 3,000 employees in 100 offices worldwide, provides program management, project management, construction management and construction claims and consulting services. Engineering News-Record magazine recently ranked Hill as the 8th 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 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-G)
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HILL INTERNATIONAL, INC. AND SUBSIDIARIES
EARNINGS RELEASE TABLES
(In 000’s, Except Per Share Data)
(Unaudited)
Consolidated Statements of Earnings
| Three Months
Ended December 31, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Consulting fee revenue |
$ | 101,203 | $ | 93,623 | $ | 382,099 | $ | 364,010 | ||||||||
| Reimbursable expenses |
26,867 | 16,687 | 69,659 | 57,772 | ||||||||||||
| Total revenue |
128,070 | 110,310 | 451,758 | 421,782 | ||||||||||||
| Cost of services |
53,831 | 52,540 | 213,349 | 209,052 | ||||||||||||
| Reimbursable expenses |
26,867 | 16,687 | 69,659 | 57,772 | ||||||||||||
| Total direct expenses |
80,698 | 69,227 | 283,008 | 266,824 | ||||||||||||
| Gross profit |
47,372 | 41,083 | 168,750 | 154,958 | ||||||||||||
| Selling, general and administrative expenses |
42,097 | 34,420 | 151,634 | 136,683 | ||||||||||||
| Equity in earnings of affiliates |
(69 | ) | (832 | ) | (1,503 | ) | (8,222 | ) | ||||||||
| Operating profit |
5,344 | 7,495 | 18,619 | 26,497 | ||||||||||||
| Interest expense, net |
942 | 693 | 3,144 | 1,737 | ||||||||||||
| Earnings before provision for income taxes |
4,402 | 6,802 | 15,475 | 24,760 | ||||||||||||
| Provision for income taxes |
521 | 2,206 | 481 | 4,577 | ||||||||||||
| Consolidated net earnings |
3,881 | 4,596 | 14,994 | 20,183 | ||||||||||||
| Less: net earnings – noncontrolling interests |
106 | 33 | 778 | 713 | ||||||||||||
| Net earnings attributable to Hill International, Inc. |
$ | 3,775 | $ | 4,563 | $ | 14,216 | $ | 19,470 | ||||||||
| Basic earnings per common share |
$ | 0.10 | $ | 0.12 | $ | 0.36 | $ | 0.49 | ||||||||
| Basic weighted average common shares outstanding |
38,250 | 38,912 | 39,258 | 39,659 | ||||||||||||
| Diluted earnings per common share |
$ | 0.10 | $ | 0.12 | $ | 0.36 | $ | 0.49 | ||||||||
| Diluted weighted average common shares outstanding |
38,874 | 39,630 | 39,824 | 40,124 | ||||||||||||
Selected Segment Data
| Three Months
Ended December 31, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Project Management |
||||||||||||||||
| Consulting fee revenue |
$ | 76,043 | $ | 70,216 | $ | 286,466 | $ | 276,811 | ||||||||
| Total revenue |
$ | 102,001 | $ | 86,374 | $ | 352,796 | $ | 331,987 | ||||||||
| Gross profit |
$ | 33,397 | $ | 27,706 | $ | 115,342 | $ | 108,362 | ||||||||
| Gross profit as a percent of consulting fee revenue |
43.9 | % | 39.5 | % | 40.3 | % | 39.1 | % | ||||||||
| Selling, general and administrative expenses |
$ | 22,260 | $ | 18,538 | $ | 80,774 | $ | 73,267 | ||||||||
| SG&A expenses as a percent of consulting fee revenue |
29.3 | % | 26.4 | % | 28.2 | % | 26.5 | % | ||||||||
| Operating profit before equity in earnings of affiliates |
$ | 11,137 | $ | 9,168 | $ | 34,568 | $ | 35,095 | ||||||||
| Equity in earnings of affiliates |
69 | 832 | 1,503 | 8,222 | ||||||||||||
| Operating profit |
$ | 11,206 | $ | 10,000 | $ | 36,071 | $ | 43,317 | ||||||||
| Operating profit as a percent of consulting fee revenue |
14.7 | % | 14.2 | % | 12.6 | % | 15.6 | % | ||||||||
| Construction Claims |
||||||||||||||||
| Consulting fee revenue |
$ | 25,160 | $ | 23,406 | $ | 95,633 | $ | 87,199 | ||||||||
| Total revenue |
$ | 26,069 | $ | 23,935 | $ | 98,962 | $ | 89,795 | ||||||||
| Gross profit |
$ | 13,975 | $ | 13,375 | $ | 53,408 | $ | 46,596 | ||||||||
| Gross profit as a percent of consulting fee revenue |
55.5 | % | 57.1 | % | 55.8 | % | 53.4 | % | ||||||||
| Selling, general and administrative expenses |
$ | 12,139 | $ | 10,085 | $ | 43,397 | $ | 38,319 | ||||||||
| SG&A expenses as a percent of consulting fee revenue |
48.2 | % | 43.1 | % | 45.4 | % | 43.9 | % | ||||||||
| Operating profit |
$ | 1,836 | $ | 3,290 | $ | 10,011 | $ | 8,277 | ||||||||
| Operating profit as a percent of consulting fee revenue |
7.3 | % | 14.1 | % | 10.5 | % | 9.5 | % | ||||||||
Selected Other Financial Data
| Three Months
Ended December 31, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Consulting fee revenue |
$ | 101,203 | $ | 93,622 | $ | 382,099 | $ | 364,010 | ||||||||
| Total revenue |
$ | 128,070 | $ | 110,309 | $ | 451,758 | $ | 421,782 | ||||||||
| Gross profit |
$ | 47,372 | $ | 41,081 | $ | 168,750 | $ | 154,958 | ||||||||
| Gross profit as a percent of consulting fee revenue |
46.8 | % | 43.9 | % | 44.2 | % | 42.6 | % | ||||||||
| Selling, general and administrative expenses (excluding Corporate expenses) |
$ | 34,399 | $ | 28,623 | $ | 124,171 | $ | 111,586 | ||||||||
| Selling, general and administrative expenses (excluding Corporate expenses) as a percentage of consulting fee revenue |
34.0 | % | 30.6 | % | 32.5 | % | 30.7 | % | ||||||||
| Corporate expenses |
$ | 7,698 | $ | 5,796 | $ | 27,463 | $ | 25,097 | ||||||||
| Corporate expenses as a percent of consulting fee revenue |
7.6 | % | 6.2 | % | 7.2 | % | 6.9 | % | ||||||||
| Operating profit |
$ | 5,344 | $ | 7,494 | $ | 18,619 | $ | 26,497 | ||||||||
| Operating profit as a percent of consulting fee revenue |
5.3 | % | 8.0 | % | 4.9 | % | 7.3 | % | ||||||||
| Effective income tax rate |
16.7 | % | 32.5 | % | 3.1 | % | 18.5 | % | ||||||||
Selected Balance Sheet Data
| December 31, 2010 | December 31, 2009 | |||||||
| Cash and cash equivalents |
$ | 39,406 | $ | 30,923 | ||||
| Accounts receivable, net |
$ | 180,856 | $ | 130,900 | ||||
| Current assets |
$ | 237,466 | $ | 183,602 | ||||
| Total assets |
$ | 371,851 | $ | 291,539 | ||||
| Current liabilities |
$ | 104,465 | $ | 82,657 | ||||
| Total debt |
$ | 74,959 | $ | 28,244 | ||||
| Stockholders’ equity |
$ | 168,094 | $ | 159,640 | ||||
EBITDA Reconciliation
EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter of 2010 was $8.1 million, a decrease of 13.5% from the fourth quarter of 2009. 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, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income attributable to Hill |
$ | 3,775 | $ | 4,560 | $ | 14,216 | $ | 19,470 | ||||||||
| Interest expense, net |
942 | 694 | 3,144 | 1,737 | ||||||||||||
| Income taxes expense |
521 | 2,207 | 481 | 4,577 | ||||||||||||
| Depreciation and amortization |
2,880 | 1,929 | 10,001 | 7,343 | ||||||||||||
| EBITDA |
$ | 8,118 | $ | 9,390 | $ | 27,842 | $ | 33,127 | ||||||||