MARLTON, N.J., Nov. 4, 2009 (GLOBE NEWSWIRE) -- Hill International (NYSE:HIL), the global leader in managing construction risk, announced today financial results for the third quarter ended September 30, 2009 and for the first nine months of 2009 (see attached tables). Total revenue for the third quarter of 2009 grew to $103.2 million, an increase of 5.2% from the third quarter of 2008. Consulting fee revenue for the third quarter of 2009 declined slightly to $86.7 million, a decrease of 0.7% from the third quarter of 2008. That percentage growth was comprised of an organic 1.5% decrease in consulting fees offset by 0.8% growth from acquisitions.
Operating profit for the third quarter of 2009 improved to $8.2 million, an increase of 12.7% from the third quarter of 2008. Net earnings for the quarter grew to $5.8 million (or $0.15 per diluted share based on 39.5 million diluted shares), up 12.0% from the year earlier quarter.
Total backlog at the end of the third quarter of 2009 declined to $597 million from $611 million at June 30, 2009. Twelve-month backlog at the end of the third quarter of 2009 declined to $276 million from $279 million at June 30, 2009.
"We are pleased with Hill's financial performance during the third quarter," said Irvin E. Richter, Hill's Chairman and Chief Executive Officer. "We see numerous signs throughout our markets that the global economy is beginning to recover, and we have positive expectations for the fourth quarter and 2010," added Richter.
First Nine Months 2009 Results
Total revenue for the first nine months of 2009 rose to $311.5 million, an increase of 12.9% from the first nine months of 2008. Consulting fee revenue for the first nine months of 2009 grew to $270.4 million, an increase of 13.3% from the first nine months of 2008. That percentage growth was comprised of 9.2% organic growth, primarily from the Middle East and North Africa regions, plus 4.1% growth from acquisitions.
Operating profit for the first nine months of 2009 grew to $19.0 million, an increase of 3.1% from the first nine months of 2008, principally due to the increase in consulting fee revenue and equity in earnings of affiliates. Operating profit was negatively impacted by the currency devaluations and an increase in bad debt expense. Net earnings for the first nine months of 2009 declined to $14.9 million (or $0.37 per diluted share based on 40.3 million diluted shares), down 5.6% from the first nine months of 2008.
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. 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. 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.
Project Management Group. Total revenue at Hill's Project Management Group during the third quarter of 2009 grew to $81.1 million, an increase of 9.0% over the third quarter of 2008. Consulting fee revenue for the third quarter of 2009 at the Projects Group rose to $65.3 million, an increase of 0.7% from the third quarter of 2008. That percentage growth was all organic, primarily from the Middle East and North Africa regions. Operating profit for the Projects Group for the third quarter of 2009 was $12.1 million, an increase of 12.0% over the third quarter of 2008.
Total revenue at the Projects Group during the first nine months of 2009 grew to $245.6 million, an increase of 18.4% over the first nine months of 2008. Consulting fee revenue for the first nine months of 2009 at the Projects Group rose to $206.6 million, an increase of 19.1% from the first nine months of 2008. That percentage growth was comprised of 15.1% organic growth, primarily from the Middle East and North Africa regions, and 4.0% growth from the acquisitions last year of Gerens Management Group and Euromost Polska. Operating profit for the Projects Group for the first nine months of 2009 was $33.3 million, an increase of 22.8% over the first nine months of 2008.
Construction Claims Group. Total revenue at Hill's Construction Claims Group during the third quarter of 2009 declined to $22.1 million, a decrease of 6.6% from the third quarter of 2008. Consulting fee revenue for the third quarter of 2009 at the Claims Group declined to $21.4 million, a decrease of 4.7% from the third quarter of 2008. That percentage change was comprised of an 8.0% decline in consulting fees organically offset by 3.3% growth from the acquisitions last year of PCI Group and Chitester Management Systems. Operating profit for the Claims Group for the third quarter of 2009 was $1.8 million, a decrease of 29.3% from the third quarter of 2008.
Total revenue at the Claims Group during the first nine months of 2009 declined to $65.9 million, a decrease of 3.8% from the first nine months of 2008. Consulting fee revenue for the first nine months of 2009 at the Claims Group declined to $63.8 million, a decrease of 2.2% from the first nine months of 2008. That percentage change was comprised of a 6.3% decrease in organic work offset by 4.1% growth from the acquisitions last year of PCI Group and Chitester Management Systems. Operating profit for the Claims Group for the first nine months of 2009 was $5.0 million, a decrease of 38.8% from the first nine months of 2008.
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 Thursday, November 5, 2009, at 11:00 am Eastern Time to discuss the financial results for the third quarter and first nine months of 2009. Interested parties may participate in the call by dialing (888) 787-0460 (Domestic) or (706) 679-3200 (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 "Presentations 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 2,300 employees in 80 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.
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-G)
HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In 000's, Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(Revised) (Revised)
(1) (1)
Consulting fee revenue $ 86,697 $ 87,274 $ 270,388 $ 238,702
Reimbursable expenses 16,498 10,826 41,085 37,171
--------- --------- --------- ---------
Total revenue 103,195 98,100 311,473 275,873
--------- --------- --------- ---------
Direct expenses 50,924 48,982 155,868 131,318
Reimbursable expenses 16,498 10,826 41,085 37,171
--------- --------- --------- ---------
Total direct expenses 67,422 59,808 196,953 168,489
--------- --------- --------- ---------
Gross profit 35,773 38,292 114,520 107,384
Selling, general and
administrative expenses 31,536 32,609 102,907 91,953
Equity in earnings of
affiliates (3,931) (1,563) (7,390) (2,994)
--------- --------- --------- ---------
Operating profit 8,168 7,246 19,003 18,425
Interest expense (income),
net 511 32 1,043 (317)
--------- --------- --------- ---------
Earnings before provision
for income taxes 7,657 7,214 17,960 18,742
Provision for income taxes 1,636 1,829 2,370 2,098
--------- --------- --------- ---------
Consolidated net earnings 6,021 5,385 15,590 16,644
Less: net earnings -
noncontrolling interests
(1) 189 178 680 846
--------- --------- --------- ---------
Net earnings attributable
to Hill International,
Inc.(1) $ 5,832 $ 5,207 $ 14,910 $ 15,798
========= ========= ========= =========
Basic earnings per common
share $ 0.15 $ 0.13 $ 0.37 $ 0.39
========= ========= ========= =========
Basic weighted average
common shares outstanding 38,839 40,997 39,911 40,866
========= ========= ========= =========
Diluted earnings per
common share $ 0.15 $ 0.13 $ 0.37 $ 0.38
========= ========= ========= =========
Diluted weighted average
common shares outstanding 39,466 41,472 40,292 41,282
========= ========= ========= =========
(1) Effective January 1, 2009, the company adopted an accounting
standard which requires the amount of consolidated net income
attributable to the parent and noncontrolling interests (formerly
minority interests) to be clearly identified and presented on the
face of the consolidated income statement, with retroactive adoption
of its presentation requirements.
HILL INTERNATIONAL, INC. AND SUBSIDIARIES
Selected Segment Data
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(in thousands)
Project Management
------------------
Consulting fee revenue $ 65,255 $ 64,776 $ 206,595 $ 173,483
Total revenue $ 81,092 $ 74,430 $ 245,613 $ 207,430
Gross profit $ 24,899 $ 25,748 $ 81,052 $ 69,730
Gross profit margin 38.2% 39.7% 39.2% 40.2%
Depreciation and
amortization $ 1,085 $ 841 $ 3,021 $ 2,265
Operating profit before
equity in earnings of
affiliates $ 8,165 $ 9,238 $ 25,926 $ 24,135
Equity in earnings of
affiliates 3,931 1,563 7,390 2,994
--------- --------- --------- ---------
Operating profit $ 12,096 $ 10,801 $ 33,316 $ 27,129
Operating profit margin 18.5% 16.7% 16.1% 15.6%
Construction Claims
-------------------
Consulting fee revenue $ 21,442 $ 22,498 $ 63,793 $ 65,219
Total revenue $ 22,103 $ 23,670 $ 65,860 $ 68,443
Gross profit $ 10,874 $ 12,544 $ 33,468 $ 37,654
Gross profit margin 50.7% 55.8% 52.5% 57.7%
Depreciation and
amortization $ 579 $ 529 $ 1,711 $ 1,463
Operating profit $ 1,780 $ 2,517 $ 4,988 $ 8,148
Operating profit margin 8.3% 11.2% 7.8% 12.5%
HILL INTERNATIONAL, INC. AND SUBSIDIARIES
Selected Other Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2009 2008 2009 2008
(in thousands) ---- ---- ---- ----
(Revised) (Revised)
(1) (1)
Consulting fee revenue $ 86,697 $ 87,274 $ 270,388 $ 238,702
Total revenue $ 103,195 $ 98,100 $ 311,473 $ 275,873
Gross profit $ 35,773 $ 38,292 $ 114,520 $ 107,384
Gross profit as a percent
of consulting fee revenue 41.3% 43.9% 42.4% 45.0%
Selling, general and
administrative expenses
(excluding Corporate
expenses) $ 25,828 $ 26,537 $ 83,606 $ 75,102
Selling, general and
administrative expenses
(excluding Corporate
expenses) as a percentage
of consulting fee revenue 29.8% 30.4% 30.9% 31.5%
Corporate expenses $ 5,708 $ 6,072 $ 19,301 $ 16,852
Corporate expenses as a
percent of consulting fee
revenue 6.6% 7.0% 7.1% 7.0%
Operating profit $ 8,168 $ 7,246 $ 19,003 $ 18,425
Operating profit as a
percent of consulting fee
revenue 9.4% 8.3% 7.0% 7.7%
Effective income tax rate 21.4% 25.4% 13.2% 11.2%
(1) Effective January 1, 2009, the company adopted an accounting
standard which requires the amount of consolidated net income
attributable to the parent and noncontrolling interests (formerly
minority interests) to be clearly identified and presented on the
face of the consolidated income statement, with retroactive adoption
of its presentation requirements. The new presentation changed the
2008 effective income tax benefit rate.
HILL INTERNATIONAL, INC. AND SUBSIDIARIES
Selected Balance Sheet Data
(Unaudited)
September 30, 2009 December 31, 2008
------------------ -----------------
(in thousands) (Unaudited) (Revised)(1)
Cash and cash equivalents $ 29,586 $ 20,430
Accounts receivable, net $ 141,051 $ 118,124
Current assets $ 191,012 $ 161,492
Total assets $ 292,368 $ 254,041
Current liabilities $ 84,719 $ 80,563
Total debt $ 36,085 $ 18,887
Stockholders' equity $ 149,909 $ 139,016
(1) Effective January 1, 2009, the company adopted an accounting
standard which requires that the ownership interests in subsidiaries
held by parties other than the parent to be presented within the
equity section of the consolidated balance sheet. The amount formerly
captioned as minority interests in the 2008 consolidated balance
sheet has been reclassified to stockholders' equity as noncontrolling
interests.
EBITDA Reconciliation
(Unaudited)
EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of 2009 rose to $9.9 million, an increase of 14.4% from the third quarter of 2008. 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 Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(in thousands)
Net income attributable
to Hill $ 5,832 $ 5,207 $ 14,910 $ 15,798
Interest expense (income),
net 511 32 1,043 (317)
Income taxes 1,636 1,829 2,370 2,098
Depreciation and
amortization 1,900 1,565 5,414 4,248
--------- --------- --------- ---------
EBITDA $ 9,879 $ 8,633 $ 23,737 $ 21,827
========= ========= ========= =========