Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Hill International, Inc. | |
Entity Central Index Key | 1,287,808 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,748,900 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 24,922 | $ 24,089 |
Cash - restricted | 3,083 | 4,435 |
Accounts receivable, less allowance for doubtful accounts of $64,901 and $63,748 | 233,860 | 243,417 |
Accounts receivable - affiliate | 7,413 | 5,205 |
Prepaid expenses and other current assets | 9,559 | 10,299 |
Income taxes receivable | 4,854 | 4,146 |
Total current assets | 283,691 | 291,591 |
Property and equipment, net | 21,931 | 23,751 |
Cash - restricted, net of current portion | 1,049 | 259 |
Retainage receivable | 15,352 | 2,638 |
Acquired intangibles, net | 12,644 | 14,659 |
Goodwill | 76,230 | 74,893 |
Investments | 4,202 | 8,386 |
Deferred income tax assets | 19,584 | 19,724 |
Other assets | 6,468 | 6,662 |
Total assets | 441,151 | 442,563 |
Liabilities and Stockholders' Equity | ||
Current maturities of notes payable | 4,238 | 4,357 |
Accounts payable and accrued expenses | 102,629 | 112,457 |
Income taxes payable | 4,160 | 9,064 |
Deferred revenue | 10,183 | 11,310 |
Other current liabilities | 9,681 | 5,860 |
Total current liabilities | 130,891 | 143,048 |
Notes payable, net of current maturities | 141,108 | 140,626 |
Retainage payable | 2,460 | 1,929 |
Deferred income taxes | 16,411 | 16,341 |
Deferred revenue | 19,062 | 11,919 |
Other liabilities | 11,120 | 10,661 |
Total liabilities | 321,052 | 324,524 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 1,000 shares authorized, none issued | ||
Common stock, $.0001 par value; 100,000 shares authorized, 58,707 shares and 58,335 shares issued at June 30, 2016 and December 31, 2015, respectively | 6 | 6 |
Additional paid-in capital | 188,400 | 188,869 |
Retained earnings | 4,145 | 1,205 |
Accumulated other comprehensive loss | (45,082) | (46,866) |
Shareholders' equity before treasury stocks and noncontrolling interest | 147,469 | 143,214 |
Less treasury stock of 6,959 shares and 6,743 shares at June 30, 2016 and December 31, 2015, 00, at cost | (29,974) | (29,245) |
Hill International, Inc. share of equity | 117,495 | 113,969 |
Noncontrolling interests | 2,604 | 4,070 |
Total equity | 120,099 | 118,039 |
Total liabilities and stockholders' equity | $ 441,151 | $ 442,563 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 64,901 | $ 63,748 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 58,707 | 58,335 |
Treasury stock, shares | 6,959 | 6,743 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF EARNINGS | ||||
Consulting fee revenue | $ 152,614 | $ 159,738 | $ 309,919 | $ 310,879 |
Reimbursable expenses | 22,975 | 21,910 | 41,891 | 41,037 |
Total revenue | 175,589 | 181,648 | 351,810 | 351,916 |
Cost of services | 89,748 | 92,400 | 183,811 | 178,829 |
Reimbursable expenses | 22,975 | 21,910 | 41,891 | 41,037 |
Total direct expenses | 112,723 | 114,310 | 225,702 | 219,866 |
Gross profit | 62,866 | 67,338 | 126,108 | 132,050 |
Selling, general and administrative expenses | 54,642 | 56,652 | 112,367 | 115,575 |
Share of loss of equity method affiliates | 31 | 34 | 16 | 217 |
Operating profit | 8,193 | 10,652 | 13,725 | 16,258 |
Interest expense and related financing fees, net | 3,338 | 3,531 | 6,735 | 7,105 |
Earnings before income taxes | 4,855 | 7,121 | 6,990 | 9,153 |
Income tax expense | 3,378 | 2,586 | 4,059 | 3,770 |
Net earnings | 1,477 | 4,535 | 2,931 | 5,383 |
Less: net earnings (loss) - noncontrolling interests | (13) | 140 | (9) | 286 |
Net earnings attributable to Hill International, Inc. | $ 1,490 | $ 4,395 | $ 2,940 | $ 5,097 |
Basic earnings per common share - Hill International, Inc. | $ 0.03 | $ 0.09 | $ 0.06 | $ 0.10 |
Basic weighted average common shares outstanding (in shares) | 51,727 | 50,483 | 51,679 | 50,429 |
Diluted earnings per common share - Hill International, Inc. | $ 0.03 | $ 0.09 | $ 0.06 | $ 0.10 |
Diluted weighted average common shares outstanding (in shares) | 51,948 | 51,495 | 51,777 | 51,010 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS | ||||
Consolidated net earnings | $ 1,477 | $ 4,535 | $ 2,931 | $ 5,383 |
Foreign currency translation adjustment, net of tax | (53) | 2,150 | 381 | (7,280) |
Other, net | 22 | (76) | 56 | (135) |
Comprehensive earnings (loss) | 1,446 | 6,609 | 3,368 | (2,032) |
Comprehensive loss attributable to noncontrolling interests | (603) | (2,572) | (1,355) | (3,736) |
Comprehensive earnings attributable to Hill International, Inc. | $ 2,049 | $ 9,181 | $ 4,723 | $ 1,704 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net earnings | $ 2,931 | $ 5,383 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation and amortization | 5,200 | 5,423 |
Provision for bad debts | 3,326 | 2,441 |
Amortization of deferred loan fees | 889 | 889 |
Deferred tax expense | 605 | (1,033) |
Share based compensation | 1,257 | 1,461 |
Changes in operating assets and liabilities, net: | ||
Restricted cash | 633 | 229 |
Accounts receivable | 7,237 | (52,404) |
Accounts receivable - affiliate | (2,208) | (3,564) |
Prepaid expenses and other current assets | 844 | (437) |
Income taxes receivable | (622) | (1,347) |
Retainage receivable | (12,714) | 368 |
Other assets | 4,104 | (1,826) |
Accounts payable and accrued expenses | (11,060) | 30,562 |
Income taxes payable | (5,013) | 548 |
Deferred revenue | 5,546 | 5,067 |
Other current liabilities | 1,116 | (811) |
Retainage payable | 68 | 458 |
Other liabilities | 430 | 1,124 |
Net cash provided by (used in) operating activities | 2,569 | (7,469) |
Cash flows from investing activities: | ||
Purchase of businesses, net of cash acquired | (4,384) | |
Payments for purchase of property and equipment | (783) | (9,059) |
Net cash used in investing activities | (783) | (13,443) |
Cash flows from financing activities: | ||
Payments on term loans | (600) | (600) |
Net borrowings on revolving loans | 348 | 24,845 |
Proceeds from Philadelphia Industrial Development Corporation loan | 750 | |
Payments on Philadelphia Industrial Development Corporation loan | (27) | (13) |
Dividends paid to noncontrolling interest | (111) | (130) |
Proceeds from stock issued under employee stock purchase plan | 10 | 32 |
Proceeds from exercise of stock options | 204 | 137 |
Net cash (used in ) provided by financing activities | (176) | 25,021 |
Effect of exchange rate changes on cash | (777) | (2,662) |
Net increase in cash and cash equivalents | 833 | 1,447 |
Cash and cash equivalents - beginning of period | 24,089 | 30,124 |
Cash and cash equivalents - end of period | $ 24,922 | $ 31,571 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2016 | |
The Company | |
The Company | Note 1 - The Company Hill International, Inc. (“Hill” or the “Company”) is a professional services firm that provides program management, project management, construction management, construction claims and other consulting services primarily to the buildings, transportation, environmental, energy and industrial markets worldwide. Hill’s clients include the U.S. federal government, U.S. state and local governments, foreign governments and the private sector. The Company is organized into two key operating divisions: the Project Management Group and the Construction Claims Group. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation | |
Basis of Presentation | Note 2 — Basis of Presentation The accompanying unaudited interim consolidated financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission pertaining to reports on Form 10-Q and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, these statements include all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the consolidated financial statements. The consolidated financial statements include the accounts of Hill and its wholly- and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The interim operating results are not necessarily indicative of the results for a full year. |
Liquidity
Liquidity | 6 Months Ended |
Jun. 30, 2016 | |
Liquidity | |
Liquidity | Note 3 — Liquidity The amount of CFR attributable to operations in the Middle East and Africa has grown from approximately 32% in 2011 to approximately 51% of total consolidated CFR in the first half of 2016. There has been significant political upheaval and civil unrest in this region during this period. The Company has recently experienced a slowdown in its collections from its clients in the Middle East primarily due to the recent drop in oil prices. This has put a considerable strain on the Company’s liquidity. As a result, the Company has had to rely heavily on debt and equity transactions to fund its operations. See Note 4 for a further discussion of issues related to our liquidity. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2016 | |
Accounts Receivable. | |
Accounts Receivable | Note 4 — Accounts Receivable The components of accounts receivable are as follows (in thousands): June 30, 2016 December 31, 2015 Billed $ $ Retainage, current portion Unbilled Allowance for doubtful accounts ) ) $ $ In 2012, the Company commenced operations on the Muscat International Airport (the “Oman Airport”) project with the Ministry of Transportation and Communications (the “MOTC”) in Oman. The original contract term expired in November 2014. In October 2014, the Company applied for a twelve-month extension of time amendment (the “first extension”) which was subsequently approved in March 2016, and the Company continued to work on the Oman Airport project. The Company began to experience some delays in payment during the second quarter of 2015 when MOTC commenced its formal review and certification of the Company’s invoices. In December 2015, the Company began discussions with the MOTC on a second extension of time amendment, which was approved in March 2016, and has since commenced additional work, which management expects to last approximately 18 months. When the MOTC resumed payments in 2016, the Company received approximately $15,000,000 in March, approximately $1,800,000 in April and approximately $14,100,000 in June. At June 30, 2016, accounts receivable from Oman totaled approximately $31,400,000 of which approximately $15,200,000 was past due. Management expects to collect approximately $14,300,000 against the past-due accounts receivable in the third quarter of 2016. Any additional delays in payments from MOTC or other foreign governments may have a negative impact on the Company’s liquidity, financial covenants, financial positions and results of operations. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets | |
Intangible Assets | Note 5 — Intangible Assets The following table summarizes the Company’s acquired intangible assets (in thousands): June 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Client relationships $ $ $ Acquired contract rights Trade names Total $ $ $ $ Intangible assets, net $ $ Amortization expense related to intangible assets was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 $ $ $ $ The following table presents the estimated amortization expense based on our present intangible assets for the next five years (in thousands): Estimated Amortization Year Ending December 31, Expense 2016 (remaining 6 months) $ 2017 2018 2019 2020 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill | |
Goodwill | Note 6 — Goodwill The following table summarizes the changes in the Company’s carrying value of goodwill during 2016 (in thousands): Project Construction Total Management Claims Goodwill Balance, December 31, 2015 $ $ $ Additions — — — Translation adjustments ) Balance, June 30, 2016 $ $ $ |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2016 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | Note 7 — Accounts Payable and Accrued Expenses Below are the components of accounts payable and accrued expenses (in thousands): June 30, 2016 December 31, 2015 Accounts payable $ $ Accrued payroll Accrued subcontractor fees Accrued agency fees Accrued legal and professional fees Other accrued expenses $ $ |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Notes Payable and Long-Term Debt | |
Notes Payable and Long-Term Debt | Note 8 — Notes Payable and Long-Term Debt Outstanding debt obligations are as follows (in thousands): June 30, 2016 December 31, 2015 Term Loan Facility $ $ Domestic Revolving Credit Facility International Revolving Credit Facility Borrowings under revolving credit facilities with a consortium of banks in Spain Borrowing from Philadelphia Industrial Development Corporation Other notes payable — Less current maturities Notes payable and long-term debt, net of current maturities $ $ The Company and its subsidiary Hill International N.V. (the “Subsidiary”) are parties to a credit agreement with Société Générale (the “Agent”), TD Bank, N.A. and HSBC Bank USA, N.A. (collectively, the “U.S. Lenders”) consisting of a term loan facility of $120,000,000 (the “Term Loan Facility”) and a $30,000,000 U.S. dollar-denominated facility available to the Company (the “U.S. Revolver,” together with the Term Loan Facility, the “U.S. Credit Facilities”) and a credit agreement with the Agent (the “International Lender”) providing a €11,765,000 ($15,000,000 at closing and $13,086,000 at June 30, 2016) credit facility which is available to the Subsidiary (the “International Revolver” and together with the U.S. Revolver, the “Revolving Credit Facilities” and, together with the U.S. Credit Facilities, the “Secured Credit Facilities”). The U.S. Revolver and the International Revolver include sub-limits for letters of credit amounting to $25,000,000 and $10,000,000, respectively. The Secured Credit Facilities contain customary default provisions, representations and warranties, and affirmative and negative covenants, and require the Company to comply with certain financial and reporting covenants. The financial covenants consist of a Maximum Consolidated Net Leverage Ratio and an Excess Account Concentration requirement. The Consolidated Net Leverage Ratio is the ratio of consolidated total debt (minus cash of up to $10,000,000 held in the aggregate) to consolidated earnings before interest, taxes, depreciation, amortization, share-based compensation and other non-cash charges for the trailing twelve months. The Excess Account Concentration covenant permits the U. S. Lenders and the International Lender to increase the interest rates by 2.0% if, as of the last day of any fiscal quarter, either (a) the total of accounts receivable from all clients within any country not listed as a Permitted Country as defined in the Secured Credit Facilities (other than the United Arab Emirates) that are more than 120 days old (relative to the invoice date) constitute more than 10% of the total outstanding accounts receivable or (b) the total of accounts receivable from all clients located in the United Arab Emirates that are more than 120 days old (relative to the invoice date) constitute more than 14% of the total outstanding accounts receivable. The interest rate will be reset as soon as the accounts receivable over 120 days decline below the 10% or 14% levels. At June 30, 2016, the related accounts receivable did not exceed the limits described above. The following compares the Maximum Consolidated Net Leverage Ratio to the actual consolidated net leverage ratio: Period Ended Not to exceed Actual June 30, 2016 3.00 to 1.00 2.86 to 1.00 The U.S. Credit Facilities are guaranteed by certain U.S. subsidiaries of the Company, and the International Revolver is guaranteed by the Company and certain of the Company’s U.S. and non-U.S. subsidiaries. Term Loan Facility The interest rate on the Term Loan Facility will be, at the Company’s option, either: · the London Inter-Bank Offered Rate (“LIBOR”) for the relevant interest period plus 6.75% per annum, provided that such LIBOR shall not be lower than 1.00% per annum; or · the Base Rate (as described below) plus 5.75% per annum. The “Base Rate” is a per annum rate equal to the highest of (A) the prime rate, (B) the federal funds effective rate plus 0.50%, or (C) the LIBOR for an interest period of one month plus 1.0% per annum. Upon a default, the applicable rate of interest under the Secured Credit Facilities may increase by 2.0%. The LIBOR on the Term Loan Facilities (including when determining the Base Rate) shall in no event be less than 1.0% per annum. At June 30, 2016, the interest rate on the Term Loan was 7.75%. The Company has the right to prepay the Term Loan Facility in full or in part at any time without premium or penalty. The Company is required to make mandatory prepayments of the Term Loan Facility, without premium or penalty, (i) with net proceeds of any issuance or incurrence of indebtedness (other than that permitted under the Term Loan Facility) by the Company after the closing, (ii) with net proceeds from certain asset sales outside the ordinary course of business, and (iii) with 50% of the excess cash flow (as defined in the agreement) for each fiscal year of the Borrowers commencing with the first full fiscal year ending after closing (which percentage would be reduced to 25% if the Consolidated Net Leverage Ratio is equal to or less than 2.25 to 1.00 or reduced to 0% if the Consolidated Net Leverage Ratio is equal to or less than 1.50 to 1.00). The Term Loan Facility is generally secured by a first-priority security interest in substantially all assets of the Company and certain of the Company’s U.S. subsidiaries other than accounts receivable, cash proceeds thereof and certain bank accounts, as to which the Term Loan Facility is secured by a second-priority security interest. The Term Loan Facility has a term of six years, requires repayment of 0.25% of the original principal amount on a quarterly basis through September 30, 2020, the maturity date. Any amounts repaid on the Term Loan Facility will not be available to be re-borrowed. The Company incurred fees and expenses related to the Term Loan Facility aggregating $7,066,000 which have been deferred. The deferred fees are being amortized on a straight-line basis, which approximates the effective interest method, to interest and related financing fees, net over a six-year period which ends on September 30, 2020. Unamortized balances of $5,005,000 and $5,594,000 are included as an offset against the Term Loan balances in the consolidated balance sheets at June 30, 2016 and December 31, 2015, respectively. Revolving Credit Facilities The interest rate on borrowings under the U.S. Revolver will be, at the Company’s option from time to time, either the LIBOR for the relevant interest period plus 3.75% per annum or the Base Rate plus 2.75% per annum. At June 30, 2016, the interest rate was 6.25%. The interest rate on borrowings under the International Revolver will be the European Inter-Bank Offered Rate, or “EURIBOR,” for the relevant interest period (or at a substitute rate to be determined to the extent EURIBOR is not available) plus 4.00% per annum. At June 30, 2016, the interest rate was 4.00%. The Company will pay a commitment fee calculated at 0.50% annually on the average daily unused portion of the U.S. Revolver, and the Subsidiary will pay a commitment fee calculated at 0.75% annually on the average daily unused portion of the International Revolver. The ability to borrow under each of the U.S. Revolver and the International Revolver is subject to a “borrowing base,” calculated using a formula based upon approximately 85% of receivables that meet or satisfy certain criteria (“Eligible Receivables”) and that are subject to a perfected security interest held by either the U.S. Lenders or the International Lender, plus, in the case of the International Revolver only, 10% of Eligible Receivables that are not subject to a perfected security interest held by the International Lender, subject to certain exceptions and restrictions. The Company or the Subsidiary, as applicable, will be required to make mandatory prepayments under their respective Revolving Credit Facilities to the extent that the aggregate outstanding amount thereunder exceeds the then-applicable borrowing base, which payments will be made without penalty or premium. At June 30, 2016, the domestic borrowing base was $30,000,000 and the international borrowing base was €11,765,000 (approximately $13,086,000 at June 30, 2016). Generally, the obligations of the Company under the U.S. Revolver are secured by a first-priority security interest in the above-referenced accounts receivable, cash proceeds and bank accounts of the Company and certain of the Company’s U.S. subsidiaries, and a second-priority security interest in substantially all other assets of the Company and such subsidiaries. The obligations of the Subsidiary under the International Revolver would generally be secured by a first-priority security interest in substantially all accounts receivable, cash proceeds thereof and certain bank accounts of the Subsidiary and certain of the Company’s non-U.S. subsidiaries, and a second-priority security interest in substantially all other assets of the Company and certain of the Company’s U.S. and non-U.S. subsidiaries. The Revolving Credit Facilities have a term of five years and require payment of interest only during the term. Under the Revolving Credit Facilities, outstanding loans may be repaid in whole or in part at any time, without premium or penalty, subject to certain customary limitations, and will be available to be re-borrowed from time to time through expiration on September 30, 2019. The Company incurred fees and expenses related to the Revolving Credit Facilities aggregating $3,000,000 which has been deferred. The deferred fees are being amortized on a straight-line basis, which approximates the effective interest method, to interest expense and related financing fees, net over a five-year period which ends on September 30, 2019. Unamortized balances of $1,950,000 and $2,250,000 are included in other assets in the consolidated balance sheet at June 30, 2016 and December 31, 2015, respectively. At June 30, 2016 the Company had $8,052,000 of outstanding letters of credit and $4,948,000 of available borrowing capacity under the U.S. Revolver. At June 30, 2016, the Company had $1,201,000 of outstanding letters of credit and $4,035,000 of available borrowing capacity under the International Revolver and its other foreign credit agreements (See “Other Debt Arrangements” below for more information). Other Debt Arrangements In connection with the move of its corporate headquarters to Philadelphia, Pennsylvania, the Company received a loan from the Philadelphia Industrial Development Corporation in the amount of $750,000 which bears interest at 2.75%, is repayable in 144 equal monthly installments of $6,121 and matures on May 1, 2027. The Company’s subsidiary, Hill International (Spain) S.A. (“Hill Spain”), maintains a revolving credit facility with six banks (the “Financing Entities”) in Spain which initially provided for total borrowings of up to €5,640,000 with interest at 6.50% on outstanding borrowings. At December 31, 2015, total availability under this facility was reduced to 50.0% of the initial limit. At June 30, 2016, the total facility was approximately €2,670,000 (approximately $2,970,000) and borrowings outstanding were €2,652,000 (approximately $2,950,000). The amount being financed (“Credit Contracts”) by each Financing Entity is between €189,000 (approximately $211,000) and €769,000 (approximately $855,000). To guarantee Hill Spain’s obligations resulting from the Credit Contracts, Hill Spain provided a guarantee in favor of each one of the Financing Entities, which, additionally, and solely in the case of unremedied failure to make payment, and at the request of each of the Financing Entities, shall grant a first ranking pledge over a given percentage of corporate shares of Hill International Brasil Participacoes Ltda. for the principal, interest, fees, expenses or any other amount owed by virtue of the Credit Contracts, coinciding with the percentage of credit of each Financing Entity with respect to the total outstanding borrowings under this facility. The facility expires on December 17, 2016. Hill Spain also maintains an Instituto de Credito Oficial (“ICO”) loan with Bankia Bank in Spain for €75,000 (approximately $83,000) at June 30, 2016. The availability is reduced by €15,000 on a quarterly basis. At June 30, 2016, total borrowings outstanding were €75,000 (approximately $83,000). The interest rate at June 30, 2016 was 6.50%. The ICO loan expires on August 10, 2017. The Company maintains a credit facility with the National Bank of Abu Dhabi which provides for total borrowings of up to AED 11,500,000 (approximately $3,131,000 at June 30, 2016) collateralized by certain overseas receivables. There were no borrowings outstanding as of June 30, 2016. The interest rate is the one-month Emirate Interbank Offered Rate plus 3.50% (or 4.91% at June 30, 2016) but no less than 5.50%. This facility also allows for up to AED 200,000,000 (approximately $54,452,000 at June 30, 2016) of which AED 108,190,000 (approximately $29,456,000) was outstanding at June 30, 2016. The credit facility is subject to periodic review by the bank. Engineering S.A. maintains four unsecured revolving credit facilities with two banks in Brazil aggregating 2,380,000 Brazilian Reais (BRL) (approximately $734,000 at June 30, 2016), with a weighted average interest rate of 5.02% per month at June 30, 2016. There were no borrowings outstanding on any of these facilities which are renewed automatically every three months. The Company also maintains relationships with other foreign banks for the issuance of letters of credit, letters of guarantee and performance bonds in a variety of foreign currencies. At June 30, 2016, the maximum U.S. dollar equivalent of the commitments was $89,169,000 of which $37,975,000 is outstanding. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 9 — Supplemental Cash Flow Information The following table provides additional cash flow information (in thousands): Six Months Ended June 30, 2016 2015 Interest and related financing fees paid $ $ Income taxes paid $ $ Increase in other current liabilities and decrease in additional paid-in capital related to ESA Put Options $ $ — Increase in property and equipment from a tenant improvement allowance related to the relocation of the corporate headquarters $ — $ Increase in additional paid in capital from issuance of shares of common stock related to purchase of CPI $ — $ Increase in additional paid in capital from issuance of shares of common stock from cashless exercise of stock options $ $ |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings per Share | |
Earnings per Share | Note 10 — Earnings per Share Basic earnings per common share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share incorporates the incremental shares issuable upon the assumed exercise of stock options using the treasury stock method, if dilutive. Dilutive stock options increased the average common shares outstanding by approximately 221,000 shares for the three months ended June 30, 2016 and by approximately 98,000 shares for the six months ended June 30, 2016. Options to purchase 2,906,000 shares and 5,631,000 shares were excluded from the calculation of diluted earnings per common share for the three and six months ended June 30, 2016 because they were antidilutive. Dilutive stock options increased the average common shares outstanding by approximately 1,012,000 shares for the three months ended June 30, 2015 and by approximately 581,000 shares for the six months ended June 30, 2015. Options to purchase 3,198,000 shares and 3,871,000 shares were excluded from the calculation of diluted earnings per common share for the three and six months ended June 30, 2015 because they were antidilutive. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Share-Based Compensation | |
Share-Based Compensation | Note 11 — Share-Based Compensation At June 30, 2016, the Company had approximately 6,944,000 options outstanding with a weighted average exercise price of $4.10. During the six months ended June 30, 2016, the Company granted 765,000 options which vest over a five-year period and 10,000 options which vested immediately. The options have a weighted-average exercise price of $4.30 and a weighted average contractual life of 6.97 years. The aggregate fair value of the options was $1,075,000 calculated using the Black-Scholes valuation model. The weighted average assumptions used to calculate fair value were: expected life — 4.97 years; volatility — 57.4% and risk-free interest rate — 1.24%. During the first six months of 2016, options for approximately 365,000 shares with a weighted average exercise price of $2.61 were exercised, options for approximately 1,096,000 shares with a weighted average exercise price of $6.88 lapsed and options for 82,000 shares with a weighted average exercise price of $4.24 lapsed. During the six months ended June 30, 2016, employees purchased approximately 4,000 common shares, for an aggregate purchase price of $11,000, pursuant to the Company’s 2008 Employee Stock Purchase Plan. The Company recognized share-based compensation expense in selling, general and administrative expenses in the consolidated statement of operations totaling $599,000 and $700,000 for the three months ended June 30, 2016 and 2015, respectively, and $1,257,000 and $1,461,000 for the six months ended June 30, 2016 and 2015, respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | Note 12 — Stockholders’ Equity The following table summarizes the changes in stockholders’ equity during the six months ended June 30, 2016 (in thousands): Hill International, Noncontrolling Total Inc. Stockholders Interests Stockholders’ equity, December 31, 2015 $ $ $ Net earnings ) Other comprehensive (loss) ) Comprehensive earnings (loss) ) Additional paid in capital — Acquisition of treasury stock ) ) — Adjustment related to ESA Put Options ) ) — Dividends paid to noncontrolling interest ) — ) Stockholders’ equity, June 30, 2016 $ $ $ During March 2016, certain officers exercised an aggregate of 297,489 options with an exercise price of $2.45 through the Company on a cashless basis. The Company withheld 215,158 shares as payment for the options and placed those shares in treasury. The officers received a total of 112,331 shares from this transaction. During the six months ended June 30, 2016, the Company received $204,000 in cash from the exercise of stock options. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 13 — Income Taxes The effective tax rates for the three months ended June 30, 2016 and 2015 were 69.6% and 36.3%, respectively, and 58.1% and 41.2% for the six months ended June 30, 2016 and 2015, respectively. The Company’s effective tax rate represents the Company’s estimated tax rate for the year based on projected income and mix of income among the various foreign tax jurisdictions, adjusted for discrete transactions occurring during the period. The Company recognized an income tax expense (benefit) related to an increase in the reserve for uncertain tax positions totaling $0 and $245,000 for the three months ended June 30, 2016 and 2015 and $(14,000) and $ 245,000 for the six months ended June 30, 2016 and 2015. In addition, the Company recognized an income tax expense (benefit) resulting from adjustments to agree the prior year’s book amounts to the actual amounts per the tax returns totaling $535,000 and $(85,000) for the three months ended June 30, 2016 and 2015, respectively, and $535,000 and $0 for the six months ended June 30, 2016 and 2015, respectively. The Company’s effective tax rate in both years is higher than it otherwise would be primarily as a result of not recording an income tax benefit related to the U.S. net operating loss and various foreign withholding taxes. The components of earnings (loss) before income taxes and the related income tax expense by United States and foreign jurisdictions were as follows (in thousands): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 U.S. Foreign Total U.S. Foreign Total Earnings (loss) before income taxes $ ) $ $ $ ) $ $ Income tax expense, net $ — $ $ $ — $ $ Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 U.S. Foreign Total U.S. Foreign Total Earnings (loss) before income taxes $ ) $ $ $ ) $ $ Income tax expense, net $ — $ $ $ — $ $ The reserve for uncertain tax positions amounted to $939,000 and $996,000 at June 30, 2016 and December 31, 2015, respectively, and is included in “Other liabilities” in the consolidated balance sheets at those dates. The Company’s policy is to record income tax related interest and penalties in income tax expense. At both June 30, 2016 and December 31, 2015, potential interest and penalties related to uncertain tax positions amounting to $500,000 was included in the balance above. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC740, Income Taxes. They consider both positive and negative evidence. In making this determination, management assesses all of the evidence available at the time including recent earnings, internally-prepared income projections, and historical financial performance. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Business Segment Information | |
Business Segment Information | Note 14 — Business Segment Information The Company’s business segments reflect how executive management makes resource decisions and assesses its performance. The Company bases these decisions on the type of services provided (Project Management and Construction Claims) and secondarily by their geography (U.S./Canada, Latin America, Europe, the Middle East, Africa and Asia/Pacific). The Project Management business segment provides extensive construction and project management services to construction owners worldwide. Such services include program management, project management, construction management, project management oversight, troubled project turnaround, staff augmentation, project labor agreement consulting, commissioning, estimating and cost management, labor compliance and facilities management services. The Construction Claims business segment provides such services as claims consulting, management consulting, litigation support, expert witness testimony, cost/damages assessment, delay/disruption analysis, adjudication, lender advisory, risk management, forensic accounting, fraud investigation, Project Neutral and international arbitration services to clients worldwide. The Company evaluates the performance of its segments primarily on operating profit before corporate overhead allocations and income taxes. The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Consulting Fee Revenue (“CFR”) Three Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Total Revenue Three Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Operating Profit: Three Months Ended June 30, 2016 2015 Project Management before equity in loss of affiliate $ $ Share of loss of equity method affiliate ) ) Total Project Management Construction Claims Corporate ) ) Total $ $ Depreciation and Amortization Expense: Three Months Ended June 30, 2016 2015 Project Management $ $ Construction Claims Subtotal segments Corporate Total $ $ Consulting Fee Revenue by Geographic Region: Three Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % During the second quarter ended June 30, 2016, consulting fee revenue for the United Arab Emirates amounted to $28,471,000 representing 18.7% of the total. No other country other than the United States accounted for 10% or more of consolidated consulting fee revenue. During the second quarter ended June 30, 2015, consulting fee revenue for the United Arab Emirates amounted to $26,683,000 representing 16.7% of the total and Saudi Arabia’s consulting fee revenue amounted to $15,939,000 representing 10.0% of the total. No other country other than the United States accounted for 10% or more of consolidated consulting fee revenue. Total Revenue by Geographic Region: Three Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % During the second quarter ended June 30, 2016, total revenue for the United Arab Emirates amounted to $29,954,000 representing 17.1% of the total. No other country except for the United States accounted for 10% or more of consolidated total revenue. During the second quarter ended June 30, 2015, total revenue for the United Arab Emirates amounted to $29,461,000 representing 16.2% of the total. No other country except for the United States accounted for 10% or more of consolidated total revenue. Consulting Fee Revenue By Client Type: Three Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Total Revenue By Client Type: Three Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Property, Plant and Equipment, Net by Geographic Location: June 30, 2016 December 31, 2015 U.S./Canada $ $ Latin America Europe Middle East Africa Asia/Pacific Total $ $ U.S. $ $ Non-U.S. Total $ $ Consulting Fee Revenue (“CFR”) Six Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Total Revenue Six Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Operating Profit: Six Months Ended June 30, 2016 2015 Project Management $ $ Share of loss of equity method affiliate ) ) Total Project Management Construction Claims Corporate ) ) Total $ $ Depreciation and Amortization Expense: Six Months Ended June 30, 2016 2015 Project Management $ $ Construction Claims Subtotal segments Corporate Total $ $ Consulting Fee Revenue by Geographic Region: Six Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % During the six months ended June 30, 2016, consulting fee revenue for the United Arab Emirates amounted to $61,580,000 representing 19.9% of the total. No other country except the United States accounted for 10% or more of consolidated consulting fee revenue. During the six months ended June 30, 2015, consulting fee revenue for the United Arab Emirates amounted to $53,971,000 representing 17.4% of the total and Saudi Arabia’s consulting fee revenue amounted to $31,687,000 representing 10.2% of the total. No other country except the United States accounted for 10% or more of consolidated consulting fee revenue. Total Revenue by Geographic Region: Six Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % During the six months ended June 30, 2016, total revenue for the United Arab Emirates amounted to $64,723,000 representing 18.4% of the total. No other country except for the United States accounted for 10% or more of consolidated total revenue. During the six months ended June 30, 2015, total revenue for the United Arab Emirates amounted to $54,988,000 representing 15.6% of the total. No other country except for the United States accounted for 10% or more of consolidated total revenue. Consulting Fee Revenue By Client Type: Six Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Total Revenue By Client Type: Six Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % |
Client Concentrations
Client Concentrations | 6 Months Ended |
Jun. 30, 2016 | |
Client Concentrations | |
Client Concentrations | Note 15 — Client Concentrations The Company had no clients that accounted for 10% or more of consulting fees during the three- and six-month periods ended June 30, 2016 and 2015, respectively. The Company had no clients that accounted for 10% or more of total revenue during the three and six months ended June 30, 2016 and 2015, respectively. The Company has numerous contracts with U.S. federal government agencies that collectively accounted for 1.6% of total revenue during each of the three-month periods ended June 30, 2016 and 2015 and 1.6% and 1.7% of total revenue during the six-month periods ended June 30, 2016 and 2015, respectively. The Company has numerous contracts with U.S. federal government agencies that collectively accounted for 1.5% and 1.4% of consulting fee revenue during the three-month periods ended June 30, 2016 and 2015 and 1.6% and 1.5% of consulting revenue during the six-month periods ended June 30, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 16 — Commitments and Contingencies General Litigation From time to time, the Company is a defendant or plaintiff in various legal actions which arise in the normal course of business. As such the Company is required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of the provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter. The provision may change in the future due to new developments or changes in circumstances. Changes in the provision could increase or decrease the Company’s earnings in the period the changes are made. It is the opinion of management, after consultation with legal counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Acquisition-Related Contingencies As of June 30, 2016, our subsidiary, Hill International (Spain), S.A. (“Hill Spain”), owned an indirect 91% interest in Engineering S.A. (“ESA”), a firm located in Brazil. ESA’s shareholders entered into an agreement whereby the minority shareholders have a right to compel (“ESA Put Option”) Hill Spain to purchase any or all of their shares during the period from February 28, 2014 to February 28, 2021. Hill Spain also has the right to compel (“ESA Call Option”) the minority shareholders to sell any or all of their shares during the same time period. The purchase price for such shares shall be seven times the earnings before interest and taxes for ESA’s most recently ended fiscal year, net of any financial debt plus excess cash multiplied by a percentage which the shares to be purchased bear to the total number of shares outstanding at the time of purchase, but in the event the ESA Call Option is exercised by Hill Spain, the purchase price shall be increased by five percent. The ESA Put Option and the ESA Call Option must be made within three months after the audited financial statements of ESA have been completed. On June 17, 2016, the three remaining minority shareholders exercised their ESA Put Option claiming a value of BRL 8,656,000 (approximately $2,670,000 at June 30, 2016). The Company accrued the liability which is included in other current liabilities and as an adjustment to additional paid-in capital in the consolidated balance sheet at June 30, 2016. The amount is subject to negotiation and any difference will be recorded upon completion of the transaction. On October 31, 2014, our subsidiary Hill International (UK) Ltd. acquired all of the outstanding common stock of Angus Octan Scotland Ltd., which included its subsidiary companies Cadogan Consultants Ltd., Cadogan Consult Ltd. and Cadogan International Ltd. (collectively, “Cadogans”). The sellers of Cadogans are entitled to an earn-out based upon the average earnings before interest, taxes, depreciation and amortization for the two-year period ending on October 31, 2016 (which amount shall not be less than £0 or more than £200,000). The Company accrued the potential additional consideration of £200,000 ($269,000) which is included in other current liabilities in the consolidated balance sheet at June 30, 2016. Two of the selling shareholders of Cadogans may receive an earn-out in annual installments of up to £100,000 ($135,000 at June 30, 2016), which will be charged to earnings, provided that Cadogans’ EBITDA for each of the years ending October 31, 2016, 2017, 2018 and 2019 is greater than £396,000 ($533,000). In connection with the acquisition of IMS Proje Yonetimi ve Danismanlik A.S. (“IMS”) on April 15, 2015, the Company had accrued approximately TRY 6,100,000 for a Holdback Purchase Price of TRY 4,400,000 plus a potential Additional Purchase Price of (i) TRY 1,700,000 if earnings before interest, income taxes, depreciation and amortization for the twelve month period subsequent to the closing date (“EBITDA”) exceeds TRY 3,500,000 or (ii) TRY 1,500,000 if EBITDA is less than TRY 3,500,000 but not less than TRY 3,200,000. During the six months ended June 30, 2016, the Company paid approximately TRY 2,909,000 (approximately $1,032,000) against the Holdback Purchase Price. The balance of the Holdback Purchase price of approximately TRY 1,491,000 (approximately $529,000) is included in other current liabilities in the consolidated balance sheet at June 30, 2016. IMS’s EBITDA through the one-year anniversary of the acquisition date was not sufficient to earn any of the Additional Purchase Price and the liability was eliminated by a credit of approximately $673,000 to selling, general and administrative expenses for the three- and six-month periods ended June 30, 2016. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounts Receivable. | |
Components of accounts receivable | The components of accounts receivable are as follows (in thousands): June 30, 2016 December 31, 2015 Billed $ $ Retainage, current portion Unbilled Allowance for doubtful accounts ) ) $ $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets | |
Summary of acquired intangible assets | The following table summarizes the Company’s acquired intangible assets (in thousands): June 30, 2016 December 31, 2015 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Client relationships $ $ $ Acquired contract rights Trade names Total $ $ $ $ Intangible assets, net $ $ |
Summary of amortization expense related to intangible assets | Amortization expense related to intangible assets was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 $ $ $ $ |
Estimated amortization expense of intangible assets for the next five years | The following table presents the estimated amortization expense based on our present intangible assets for the next five years (in thousands): Estimated Amortization Year Ending December 31, Expense 2016 (remaining 6 months) $ 2017 2018 2019 2020 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill | |
Summary of changes in the Company's carrying value of goodwill | The following table summarizes the changes in the Company’s carrying value of goodwill during 2016 (in thousands): Project Construction Total Management Claims Goodwill Balance, December 31, 2015 $ $ $ Additions — — — Translation adjustments ) Balance, June 30, 2016 $ $ $ |
Accounts Payable and Accrued 26
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounts Payable and Accrued Expenses | |
Components of accounts payable and accrued expenses | Below are the components of accounts payable and accrued expenses (in thousands): June 30, 2016 December 31, 2015 Accounts payable $ $ Accrued payroll Accrued subcontractor fees Accrued agency fees Accrued legal and professional fees Other accrued expenses $ $ |
Notes Payable and Long-Term D27
Notes Payable and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Payable and Long-Term Debt | |
Summary of outstanding debt obligations | Outstanding debt obligations are as follows (in thousands): June 30, 2016 December 31, 2015 Term Loan Facility $ $ Domestic Revolving Credit Facility International Revolving Credit Facility Borrowings under revolving credit facilities with a consortium of banks in Spain Borrowing from Philadelphia Industrial Development Corporation Other notes payable — Less current maturities Notes payable and long-term debt, net of current maturities $ $ |
Schedule of requirements for the Maximum Consolidated Net Leverage Ratio And Actual Ratio | Period Ended Not to exceed Actual June 30, 2016 3.00 to 1.00 2.86 to 1.00 |
Supplemental Cash Flow Inform28
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Cash Flow Information | |
Schedule of additional cash flow information | The following table provides additional cash flow information (in thousands): Six Months Ended June 30, 2016 2015 Interest and related financing fees paid $ $ Income taxes paid $ $ Increase in other current liabilities and decrease in additional paid-in capital related to ESA Put Options $ $ — Increase in property and equipment from a tenant improvement allowance related to the relocation of the corporate headquarters $ — $ Increase in additional paid in capital from issuance of shares of common stock related to purchase of CPI $ — $ Increase in additional paid in capital from issuance of shares of common stock from cashless exercise of stock options $ $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity | |
Summary of changes in stockholders' equity | The following table summarizes the changes in stockholders’ equity during the six months ended June 30, 2016 (in thousands): Hill International, Noncontrolling Total Inc. Stockholders Interests Stockholders’ equity, December 31, 2015 $ $ $ Net earnings ) Other comprehensive (loss) ) Comprehensive earnings (loss) ) Additional paid in capital — Acquisition of treasury stock ) ) — Adjustment related to ESA Put Options ) ) — Dividends paid to noncontrolling interest ) — ) Stockholders’ equity, June 30, 2016 $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Schedule of components of earnings (loss) before income taxes and the related income tax expense by the United States and foreign jurisdictions | The components of earnings (loss) before income taxes and the related income tax expense by United States and foreign jurisdictions were as follows (in thousands): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 U.S. Foreign Total U.S. Foreign Total Earnings (loss) before income taxes $ ) $ $ $ ) $ $ Income tax expense, net $ — $ $ $ — $ $ Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 U.S. Foreign Total U.S. Foreign Total Earnings (loss) before income taxes $ ) $ $ $ ) $ $ Income tax expense, net $ — $ $ $ — $ $ |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Segment Information | |
Consulting Fee Revenue and Total Revenue | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Consulting Fee Revenue (“CFR”) Three Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Total Revenue Three Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Consulting Fee Revenue (“CFR”) Six Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % Total Revenue Six Months Ended June 30, 2016 2015 Project Management $ % $ % Construction Claims Total $ % $ % |
Operating Profit | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Operating Profit: Three Months Ended June 30, 2016 2015 Project Management before equity in loss of affiliate $ $ Share of loss of equity method affiliate ) ) Total Project Management Construction Claims Corporate ) ) Total $ $ Operating Profit: Six Months Ended June 30, 2016 2015 Project Management $ $ Share of loss of equity method affiliate ) ) Total Project Management Construction Claims Corporate ) ) Total $ $ |
Depreciation and Amortization Expense | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Depreciation and Amortization Expense: Three Months Ended June 30, 2016 2015 Project Management $ $ Construction Claims Subtotal segments Corporate Total $ $ Depreciation and Amortization Expense: Six Months Ended June 30, 2016 2015 Project Management $ $ Construction Claims Subtotal segments Corporate Total $ $ |
Consulting Fee Revenue and Total Revenue by Geographic Region | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Consulting Fee Revenue by Geographic Region: Three Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % Total Revenue by Geographic Region: Three Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % Consulting Fee Revenue by Geographic Region: Six Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % Total Revenue by Geographic Region: Six Months Ended June 30, 2016 2015 U.S./Canada $ % $ % Latin America Europe Middle East Africa Asia/Pacific Total $ % $ % U.S. $ % $ % Non-U.S. Total $ % $ % |
Consulting Fee Revenue and Total Revenue By Client Type | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Consulting Fee Revenue By Client Type: Three Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Total Revenue By Client Type: Three Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Consulting Fee Revenue By Client Type: Six Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % Total Revenue By Client Type: Six Months Ended June 30, 2016 2015 U.S. federal government $ % $ % U.S. state, regional and local governments Foreign governments Private sector Total $ % $ % |
Property, Plant and Equipment, Net by Geographic Location | The following tables reflect the required disclosures for the Company’s reportable segments (in thousands): Property, Plant and Equipment, Net by Geographic Location: June 30, 2016 December 31, 2015 U.S./Canada $ $ Latin America Europe Middle East Africa Asia/Pacific Total $ $ U.S. $ $ Non-U.S. Total $ $ |
The Company (Details)
The Company (Details) | 6 Months Ended |
Jun. 30, 2016division | |
The Company | |
Number of key operating divisions | 2 |
Liquidity (Details)
Liquidity (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2011 | |
Consulting fee revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% | |
Middle East and Africa | |||||
Consulting fee revenue (as a percent) | 51.00% | 32.00% |
Accounts Receivable - Componene
Accounts Receivable - Componenets of Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Components of accounts receivable | ||
Billed | $ 257,032 | $ 267,592 |
Retainage, current portion | 3,904 | 13,660 |
Unbilled | 37,825 | 25,913 |
Accounts receivable, gross | 298,761 | 307,165 |
Allowance for doubtful accounts | (64,901) | (63,748) |
Total | $ 233,860 | $ 243,417 |
Accounts Receivable - General (
Accounts Receivable - General (Details) - MOTC - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jun. 30, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2014 | Sep. 30, 2016 | |
Accounts Receivable | ||||||
Extension period for the completion of the project | 18 months | 12 months | ||||
Accounts receivable | $ 31,400,000 | |||||
Collection amount applied to receivables | 14,100,000 | $ 1,800,000 | $ 15,000,000 | |||
Accounts receivable, past due | $ 15,200,000 | |||||
Forecast | ||||||
Accounts Receivable | ||||||
Management expects to collection receivables | $ 14,300,000 |
Intangible Assets - Acquired (D
Intangible Assets - Acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of acquired intangible assets | ||
Gross Carrying Amount | $ 39,263 | $ 49,851 |
Accumulated Amortization | 26,619 | 35,192 |
Intangible assets, net | 12,644 | 14,659 |
Client relationships | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 34,145 | 34,891 |
Accumulated Amortization | 23,329 | 22,668 |
Acquired contract rights | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 2,342 | 12,256 |
Accumulated Amortization | 1,916 | 11,287 |
Trade names | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 2,776 | 2,704 |
Accumulated Amortization | $ 1,374 | $ 1,237 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Intangible Assets | ||||
Amortization expense related to intangible assets | $ 1,153 | $ 1,611 | $ 2,438 | $ 3,031 |
Estimated amortization expense of intangible assets for the next five years | ||||
2016 (remaining 6 months) | 1,975 | 1,975 | ||
2,017 | 3,153 | 3,153 | ||
2,018 | 2,055 | 2,055 | ||
2,019 | 1,787 | 1,787 | ||
2,020 | $ 1,295 | $ 1,295 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Summary of changes in carrying value of goodwill during 2016 | |
Balance at the beginning of the period | $ 74,893 |
Translation adjustments | 1,337 |
Balance at the end of the period | 76,230 |
Project Management | |
Summary of changes in carrying value of goodwill during 2016 | |
Balance at the beginning of the period | 49,739 |
Translation adjustments | 2,560 |
Balance at the end of the period | 52,299 |
Construction Claims | |
Summary of changes in carrying value of goodwill during 2016 | |
Balance at the beginning of the period | 25,154 |
Translation adjustments | (1,223) |
Balance at the end of the period | $ 23,931 |
Accounts Payable and Accrued 39
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Components of accounts payable and accrued expenses | ||
Accounts payable | $ 33,076 | $ 44,200 |
Accrued payroll | 49,285 | 50,724 |
Accrued subcontractor fees | 6,364 | 5,905 |
Accrued agency fees | 5,245 | 6,564 |
Accrued legal and professional fees | 1,007 | 1,186 |
Other accrued expenses | 7,652 | 3,878 |
Accounts payable and accrued expenses, net | $ 102,629 | $ 112,457 |
Notes Payable and Long-Term D40
Notes Payable and Long-Term Debt - Summary of Outstanding Debt Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of outstanding debt obligations | ||
Long-term Debt, Total | $ 145,346 | $ 144,983 |
Less current maturities | 4,238 | 4,357 |
Notes payable and long-term debt, net of current maturities | 141,108 | 140,626 |
Term loan | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | 112,895 | 112,906 |
Term loan | Philadelphia Industrial Development Corporation | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | 683 | 710 |
Revolving credit facility | Domestic Revolving Credit Facility | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | 17,000 | 17,500 |
Revolving credit facility | International Revolving Credit Facility | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | 11,735 | 10,715 |
Revolving credit facility | Consortium of banks in Spain | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | $ 3,033 | 3,013 |
Other notes payable | ||
Summary of outstanding debt obligations | ||
Long-term Debt, Total | $ 139 |
Notes Payable and Long-Term D41
Notes Payable and Long-Term Debt - Term Loan Facilities and Revolving Credit Facilities (Details) | Sep. 26, 2014USD ($) | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 26, 2014EUR (€) | Sep. 26, 2014USD ($) |
Other Foreign Banks | ||||||
Notes Payable and Long-Term Debt | ||||||
Maximum borrowing capacity | $ 89,169,000 | |||||
US Dollar Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Effective interest rate (as a percent) | 6.25% | |||||
US Dollar Revolver | LIBOR | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 3.75% | |||||
US Dollar Revolver | Base Rate | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 2.75% | |||||
International Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Effective interest rate (as a percent) | 4.00% | |||||
International Revolver | EURIBOR | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 4.00% | |||||
Secured Credit Facilities | ||||||
Notes Payable and Long-Term Debt | ||||||
Cash excluded from consolidated net leverage ratio | $ 10,000,000 | |||||
Debt instrument increase in applicable interest rate for past due account receivable limit exceeded | 2.00% | 2.00% | ||||
Consolidated net leverage ratio not to exceed | 3 | |||||
Actual net consolidated leverage ratio | 2.86 | |||||
Increase in applicable interest rate upon default (as a percent) | 2.00% | |||||
Term loan | ||||||
Notes Payable and Long-Term Debt | ||||||
Aggregate principal amount | $ 120,000,000 | |||||
Effective interest rate (as a percent) | 7.75% | |||||
Mandatory prepayment percentage of the excess cash flow for each fiscal year with the first full fiscal year upon the achievement and maintenance of certain metrics | 50.00% | |||||
Mandatory prepayment percentage of the excess cash flow for each fiscal year with the first full fiscal year upon the achievement net leverage ration is equal to or less than 2.25 | 25.00% | |||||
Consolidated net leverage limit for mandatory prepayment percentage of 25% | 2.25 | |||||
Mandatory prepayment percentage of the excess cash flow for each fiscal year with the first full fiscal year upon the achievement net leverage ration is equal to or less than 1.50 | 0.00% | |||||
Consolidated net leverage limit for mandatory prepayment percentage of 0% | 1.50 | |||||
Term of debt | 6 years | |||||
Quarterly principal payment, percentage | 0.25% | 0.25% | ||||
Deferred financing fees | $ 7,066,000 | |||||
Debt issuance costs amortization term | 6 years | |||||
Unamortized balances of expenses and fees | 5,005,000 | $ 5,594,000 | ||||
Term loan | LIBOR | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 6.75% | |||||
Term loan | LIBOR | Minimum | ||||||
Notes Payable and Long-Term Debt | ||||||
Variable interest rate basis floor (as a percent) | 1.00% | |||||
Term loan | One Month LIBOR | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 1.00% | |||||
Term loan | One Month LIBOR | Minimum | ||||||
Notes Payable and Long-Term Debt | ||||||
Variable interest rate basis floor (as a percent) | 1.00% | |||||
Term loan | Base Rate | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 5.75% | |||||
Term loan | Federal Funds effective rate | ||||||
Notes Payable and Long-Term Debt | ||||||
Basis of effective interest rate (as a percent) | 0.50% | |||||
Revolving credit facility | ||||||
Notes Payable and Long-Term Debt | ||||||
Term of debt | 5 years | |||||
Deferred financing fees | $ 3,000,000 | |||||
Debt issuance costs amortization term | 5 years | |||||
Revolving credit facility | US Dollar Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Maximum borrowing capacity | 30,000,000 | $ 30,000,000 | ||||
Unused facility commitment fees percentage | 0.50% | |||||
Percentage of eligible receivables that are subject to a perfected security interest which are used in calculation of borrowing base | 85.00% | |||||
Revolving credit facility | International Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Maximum borrowing capacity | € 11,765,000 | 13,086,000 | € 11,765,000 | 15,000,000 | ||
Unused facility commitment fees percentage | 0.75% | |||||
Percentage of eligible receivables that are subject to a perfected security interest which are used in calculation of borrowing base | 85.00% | |||||
Percentage of eligible receivables that are not subject to a perfected security interest which are used in calculation of borrowing base | 10.00% | |||||
Revolving credit facility | International Revolver | Other Foreign Banks | Foreign credit agreements | ||||||
Notes Payable and Long-Term Debt | ||||||
Amounts outstanding | 1,201,000 | |||||
Available borrowing capacity | 4,035,000 | |||||
Revolving credit facility | Other Assets. | ||||||
Notes Payable and Long-Term Debt | ||||||
Unamortized balances of expenses and fees | 1,950,000 | $ 2,250,000 | ||||
Letters of credit | US Dollar Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Maximum borrowing capacity | 25,000,000 | |||||
Amounts outstanding | 8,052,000 | |||||
Available borrowing capacity | $ 4,948,000 | |||||
Letters of credit | International Revolver | ||||||
Notes Payable and Long-Term Debt | ||||||
Maximum borrowing capacity | $ 10,000,000 | |||||
Non Permitted Country | Secured Credit Facilities | Maximum | ||||||
Notes Payable and Long-Term Debt | ||||||
Percentage of receivables more than 120 days old | 10.00% | 10.00% | ||||
United Arab Emirates | Secured Credit Facilities | Maximum | ||||||
Notes Payable and Long-Term Debt | ||||||
Percentage of receivables more than 120 days old | 14.00% | 14.00% |
Notes Payable and Long-Term D42
Notes Payable and Long-Term Debt - Hill Spain (Details) | 6 Months Ended | |||||
Jun. 30, 2016USD ($)item | Jun. 30, 2016EUR (€)installment | Jun. 30, 2016USD ($)installment | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Sep. 26, 2014USD ($) | |
Description of terms of credit agreement | ||||||
Total debt | $ 145,346,000 | $ 144,983,000 | ||||
Revolving credit facility | Consortium of banks in Spain | ||||||
Description of terms of credit agreement | ||||||
Total debt | 3,033,000 | 3,013,000 | ||||
Term loan | ||||||
Description of terms of credit agreement | ||||||
Aggregate principal amount | $ 120,000,000 | |||||
Total debt | 112,895,000 | 112,906,000 | ||||
Term loan | Philadelphia Industrial Development Corporation | ||||||
Description of terms of credit agreement | ||||||
Aggregate principal amount | $ 750,000 | |||||
Interest rate (as a percent) | 2.75% | 2.75% | ||||
Number of installments | installment | 144 | 144 | ||||
Amount payable in each installment | $ 6,121 | |||||
Total debt | $ 683,000 | $ 710,000 | ||||
Hill Spain | Revolving credit facility | Consortium of banks in Spain | ||||||
Description of terms of credit agreement | ||||||
Interest rate (as a percent) | 6.50% | 6.50% | ||||
Total debt | € 2,652,000 | $ 2,950,000 | ||||
Number of banks involved in revolving credit facility | item | 6 | |||||
Borrowing capacity | 2,670,000 | 2,970,000 | € 5,640,000 | |||
Reduction in maximum available amount percentage | 50.00% | 50.00% | ||||
Hill Spain | Revolving credit facility | Consortium of banks in Spain | Minimum | ||||||
Description of terms of credit agreement | ||||||
Total amount being financed by Financing Entity | 189,000 | 211,000 | ||||
Hill Spain | Revolving credit facility | Consortium of banks in Spain | Maximum | ||||||
Description of terms of credit agreement | ||||||
Total amount being financed by Financing Entity | € 769,000 | $ 855,000 |
Notes Payable and Long-Term D43
Notes Payable and Long-Term Debt - Other Debt Arrangements (Details) | Sep. 26, 2014 | Jun. 30, 2016AEDitemloanfacility | Jun. 30, 2016BRL | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) |
Other Foreign Banks | |||||
Description of terms of credit agreement | |||||
Maximum borrowing capacity | $ 89,169,000 | ||||
Letters of credit outstanding | 37,975,000 | ||||
Revolving credit facility | |||||
Description of terms of credit agreement | |||||
Term of debt | 5 years | ||||
Revolving credit facility | National Bank of Abu Dhabi | |||||
Description of terms of credit agreement | |||||
Amounts outstanding | 0 | ||||
Line of credit | National Bank of Abu Dhabi | |||||
Description of terms of credit agreement | |||||
Maximum borrowing capacity | AED 11,500,000 | $ 3,131,000 | |||
Line of credit | National Bank of Abu Dhabi | Emirates InterBank Offered Rate | |||||
Description of terms of credit agreement | |||||
Reference rate | one-month Emirates InterBank Offer Rate | ||||
Basis of effective interest rate (as a percent) | 3.50% | ||||
Effective interest rate (as a percent) | 4.91% | ||||
Line of credit | National Bank of Abu Dhabi | Emirates InterBank Offered Rate | Minimum | |||||
Description of terms of credit agreement | |||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | |
Letters of credit | National Bank of Abu Dhabi | |||||
Description of terms of credit agreement | |||||
Maximum borrowing capacity | AED 200,000,000 | $ 54,452,000 | |||
Amounts outstanding | AED 108,190,000 | 29,456,000 | |||
Hill Spain | ICO loan | Bankia Bank | |||||
Description of terms of credit agreement | |||||
Maximum borrowing capacity | € 75,000 | $ 83,000 | |||
Decrease in amount on quarterly basis | € | € 15,000 | ||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | 6.50% | |
Amounts outstanding | € 75,000 | $ 83,000 | |||
Engineering S.A. | Revolving credit facility | |||||
Description of terms of credit agreement | |||||
Maximum borrowing capacity | BRL 2,380,000 | 734,000 | |||
Amounts outstanding | $ 0 | ||||
Number of revolving credit lines maintained by Engineering S.A. | item | 4 | ||||
Number of banks involved in revolving credit facility | loanfacility | 2 | ||||
Weighted average interest rate (as a percent) | 5.02% | 5.02% | 5.02% | 5.02% | |
Period of automatic renewal | 3 months |
Supplemental Cash Flow Inform44
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Summary of additional cash flow information | ||
Interest and related financing fees paid | $ 5,924 | $ 6,174 |
Income taxes paid | 7,390 | 1,258 |
Increase in property and equipment from a tenant improvement allowance related to the relocation of the corporate headquarters | 3,894 | |
Additional Paid-in Capital | ||
Summary of additional cash flow information | ||
Increase in additional paid in capital from issuance of shares of common stock from cashless exercise of stock options | 729 | 361 |
Engineering S.A. | Additional Paid-in Capital | ||
Summary of additional cash flow information | ||
Increase in other current liabilities and decrease in additional paid-in capital related to ESA Put Options | $ 2,670 | |
CPI | Additional Paid-in Capital | ||
Summary of additional cash flow information | ||
Increase in additional paid in capital from issuance of shares of common stock related to purchase of CPI | $ 530 |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings per Share | ||||
Dilutive stock options (in shares) | 221,000 | 1,012,000 | 98,000 | 581,000 |
Total number of shares excluded from diluted earnings per common share | 2,906,000 | 3,198,000 | 5,631,000 | 3,871,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-Based Compensation | ||||
Options outstanding (in shares) | 6,944,000 | 6,944,000 | ||
Weighted average exercise price of outstanding options (in dollars per share) | $ 4.10 | $ 4.10 | ||
Weighted average exercise price of options granted (in dollars per share) | $ 4.30 | |||
Weighted-average contractual life of options granted | 6 years 11 months 19 days | |||
Aggregate fair value of options granted (in dollars) | $ 1,075,000 | |||
Options exercised (in shares) | 365,000 | |||
Weighted average exercise price of options exercised (in dollars per share) | $ 2.61 | |||
Share-based compensation expense recognized (in dollars) | $ 599,000 | $ 700,000 | $ 1,257,000 | $ 1,461,000 |
Weighted average assumptions used to estimate the fair value of options granted | ||||
Average expected life | 4 years 11 months 19 days | |||
Volatility (as a percent) | 57.40% | |||
Weighted average risk-free interest rate (as a percent) | 1.24% | |||
Exercise price of 6.88 | ||||
Share-Based Compensation | ||||
Options lapsed (in shares) | 1,096,000 | |||
Weighted average exercise price of options lapsed (in dollars per share) | $ 6.88 | |||
Exercise price of 4.24 | ||||
Share-Based Compensation | ||||
Options lapsed (in shares) | 82,000 | |||
Weighted average exercise price of options lapsed (in dollars per share) | $ 4.24 | |||
2008 Employee Stock Purchase Plan | ||||
Share-Based Compensation | ||||
Shares purchased | 4,000 | |||
Aggregate purchase price | $ 11,000 | |||
Options vesting over a five-year period | ||||
Share-Based Compensation | ||||
Options granted (in shares) | 765,000 | |||
Award vesting period | 5 years | |||
Options vested immediately | ||||
Share-Based Compensation | ||||
Options granted (in shares) | 10,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Increase (decrease) in stockholders' equity | |||||
Balance at the beginning of the period | $ 118,039,000 | ||||
Net earnings | $ 1,477,000 | $ 4,535,000 | 2,931,000 | $ 5,383,000 | |
Other comprehensive (loss) | 437,000 | ||||
Comprehensive earnings (loss) | 3,368,000 | ||||
Additional paid in capital | 2,202,000 | ||||
Acquisition of treasury stock | (729,000) | ||||
Adjustment related to ESA Put Options | (2,670,000) | ||||
Dividends paid to noncontrolling interest | (111,000) | $ (130,000) | |||
Balance at the end of period | 120,099,000 | $ 120,099,000 | |||
Other disclosures | |||||
Weighted average exercise price of options exercised (in dollars per share) | $ 2.61 | ||||
Cash proceeds from the exercise of stock options | $ 204,000 | ||||
Hill International, Inc. Stockholders | |||||
Increase (decrease) in stockholders' equity | |||||
Balance at the beginning of the period | 113,969,000 | ||||
Net earnings | 2,940,000 | ||||
Other comprehensive (loss) | 1,783,000 | ||||
Comprehensive earnings (loss) | 4,723,000 | ||||
Additional paid in capital | 2,202,000 | ||||
Acquisition of treasury stock | (729,000) | ||||
Adjustment related to ESA Put Options | (2,670,000) | ||||
Balance at the end of period | 117,495,000 | 117,495,000 | |||
Noncontrolling Interests | |||||
Increase (decrease) in stockholders' equity | |||||
Balance at the beginning of the period | 4,070,000 | ||||
Net earnings | (9,000) | ||||
Other comprehensive (loss) | (1,346,000) | ||||
Comprehensive earnings (loss) | (1,355,000) | ||||
Dividends paid to noncontrolling interest | (111,000) | ||||
Balance at the end of period | $ 2,604,000 | $ 2,604,000 | |||
Officers | |||||
Other disclosures | |||||
Options exercised (in shares) | 297,489 | ||||
Weighted average exercise price of options exercised (in dollars per share) | $ 2.45 | ||||
Withheld shares as payment for the options (in shares) | 215,158 | ||||
Shares received from transaction | 112,331 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Effective income tax rate (as a percent) | 69.60% | 36.30% | 58.10% | 41.20% | |
Increase in reserve due to tax positions taken in foreign jurisdictions | $ 0 | $ 245,000 | $ (14,000) | $ 245,000 | |
Income tax expense resulting from adjustments | 535,000 | (85,000) | 535,000 | 0 | |
Components of earnings before income taxes | |||||
Earnings (loss) before income taxes | 4,855,000 | 7,121,000 | 6,990,000 | 9,153,000 | |
Income tax expense, net | 3,378,000 | 2,586,000 | 4,059,000 | 3,770,000 | |
Reserve for uncertain tax positions | 939,000 | 939,000 | $ 996,000 | ||
Potential interest and penalties related to uncertain tax positions | 500,000 | 500,000 | $ 500,000 | ||
Federal | |||||
Components of earnings before income taxes | |||||
Earnings (loss) before income taxes | (4,962,000) | (6,191,000) | (13,488,000) | (16,631,000) | |
Foreign | |||||
Components of earnings before income taxes | |||||
Earnings (loss) before income taxes | 9,817,000 | 13,312,000 | 20,478,000 | 25,784,000 | |
Income tax expense, net | $ 3,378,000 | $ 2,586,000 | $ 4,059,000 | $ 3,770,000 |
Business Segment Information -
Business Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue | ||||
Consulting Fee Revenue | $ 152,614 | $ 159,738 | $ 309,919 | $ 310,879 |
Consulting fee revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Total Revenue | $ 175,589 | $ 181,648 | $ 351,810 | $ 351,916 |
Total revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Project Management | ||||
Revenue | ||||
Consulting Fee Revenue | $ 110,126 | $ 116,464 | $ 226,705 | $ 228,581 |
Consulting fee revenue (as a percent) | 72.20% | 72.90% | 73.10% | 73.50% |
Total Revenue | $ 131,845 | $ 137,052 | $ 266,215 | $ 267,047 |
Total revenue (as a percent) | 75.10% | 75.40% | 75.70% | 75.90% |
Construction Claims | ||||
Revenue | ||||
Consulting Fee Revenue | $ 42,488 | $ 43,274 | $ 83,214 | $ 82,298 |
Consulting fee revenue (as a percent) | 27.80% | 27.10% | 26.90% | 26.50% |
Total Revenue | $ 43,744 | $ 44,596 | $ 85,595 | $ 84,869 |
Total revenue (as a percent) | 24.90% | 24.60% | 24.30% | 24.10% |
Business Segment Information 50
Business Segment Information - Operating Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Profit: | ||||
Share of loss of equity method affiliate | $ (31) | $ (34) | $ (16) | $ (217) |
Operating profit | 8,193 | 10,652 | 13,725 | 16,258 |
Operating segment | Project Management | ||||
Operating Profit: | ||||
Project Management | 11,618 | 15,041 | 23,623 | 27,829 |
Share of loss of equity method affiliate | (31) | (34) | (16) | (217) |
Total Project Management | 11,587 | 15,007 | 23,607 | 27,612 |
Operating segment | Construction Claims | ||||
Operating Profit: | ||||
Operating profit | 4,556 | 4,772 | 7,429 | 7,105 |
Corporate | ||||
Operating Profit: | ||||
Operating profit | $ (7,950) | $ (9,127) | $ (17,311) | $ (18,459) |
Business Segment Information 51
Business Segment Information - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Depreciation and Amortization Expense: | ||||
Depreciation and amortization expenses | $ 2,544 | $ 2,983 | $ 5,200 | $ 5,423 |
Operating segment | ||||
Depreciation and Amortization Expense: | ||||
Depreciation and amortization expenses | 2,390 | 2,879 | 4,891 | 5,275 |
Operating segment | Project Management | ||||
Depreciation and Amortization Expense: | ||||
Depreciation and amortization expenses | 1,638 | 2,077 | 3,392 | 3,713 |
Operating segment | Construction Claims | ||||
Depreciation and Amortization Expense: | ||||
Depreciation and amortization expenses | 752 | 802 | 1,499 | 1,562 |
Corporate | ||||
Depreciation and Amortization Expense: | ||||
Depreciation and amortization expenses | $ 154 | $ 104 | $ 309 | $ 148 |
Business Segment Information 52
Business Segment Information - Revenue by Geographic Region (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 152,614,000 | $ 159,738,000 | $ 309,919,000 | $ 310,879,000 |
Consulting fee revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Total Revenue | $ 175,589,000 | $ 181,648,000 | $ 351,810,000 | $ 351,916,000 |
Total revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
U.S./Canada | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 41,401,000 | $ 39,909,000 | $ 80,660,000 | $ 75,166,000 |
Consulting fee revenue (as a percent) | 27.10% | 25.00% | 26.00% | 24.20% |
Total Revenue | $ 59,612,000 | $ 56,275,000 | $ 112,340,000 | $ 105,615,000 |
Total revenue (as a percent) | 33.90% | 31.00% | 31.90% | 30.00% |
Latin America | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 5,804,000 | $ 6,855,000 | $ 11,896,000 | $ 14,664,000 |
Consulting fee revenue (as a percent) | 3.80% | 4.30% | 3.80% | 4.70% |
Total Revenue | $ 5,862,000 | $ 6,881,000 | $ 11,964,000 | $ 14,694,000 |
Total revenue (as a percent) | 3.30% | 3.80% | 3.40% | 4.20% |
Europe | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 22,460,000 | $ 21,317,000 | $ 43,602,000 | $ 41,429,000 |
Consulting fee revenue (as a percent) | 14.70% | 13.30% | 14.10% | 13.30% |
Total Revenue | $ 23,449,000 | $ 22,306,000 | $ 45,369,000 | $ 43,720,000 |
Total revenue (as a percent) | 13.40% | 12.30% | 12.90% | 12.40% |
Middle East | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 66,716,000 | $ 75,857,000 | $ 142,776,000 | $ 150,131,000 |
Consulting fee revenue (as a percent) | 43.70% | 47.50% | 46.10% | 48.40% |
Total Revenue | $ 69,480,000 | $ 79,232,000 | $ 149,133,000 | $ 155,994,000 |
Total revenue (as a percent) | 39.60% | 43.60% | 42.40% | 44.40% |
Africa | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 6,895,000 | $ 7,041,000 | $ 13,749,000 | $ 14,104,000 |
Consulting fee revenue (as a percent) | 4.50% | 4.40% | 4.40% | 4.50% |
Total Revenue | $ 7,801,000 | $ 8,040,000 | $ 15,630,000 | $ 16,239,000 |
Total revenue (as a percent) | 4.40% | 4.40% | 4.40% | 4.60% |
Asia/Pacific | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 9,338,000 | $ 8,759,000 | $ 17,236,000 | $ 15,385,000 |
Consulting fee revenue (as a percent) | 6.20% | 5.50% | 5.60% | 4.90% |
Total Revenue | $ 9,385,000 | $ 8,914,000 | $ 17,374,000 | $ 15,654,000 |
Total revenue (as a percent) | 5.40% | 4.90% | 5.00% | 4.40% |
U.S. | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 40,682,000 | $ 39,159,000 | $ 79,287,000 | $ 73,582,000 |
Consulting fee revenue (as a percent) | 26.70% | 24.50% | 25.60% | 23.70% |
Total Revenue | $ 58,834,000 | $ 55,466,000 | $ 110,899,000 | $ 103,941,000 |
Total revenue (as a percent) | 33.50% | 30.50% | 31.50% | 29.50% |
Non - U.S. | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 111,932,000 | $ 120,579,000 | $ 230,632,000 | $ 237,297,000 |
Consulting fee revenue (as a percent) | 73.30% | 75.50% | 74.40% | 76.30% |
Total Revenue | $ 116,755,000 | $ 126,182,000 | $ 240,911,000 | $ 247,975,000 |
Total revenue (as a percent) | 66.50% | 69.50% | 68.50% | 70.50% |
United Arab Emirates | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 28,471,000 | $ 26,683,000 | $ 61,580,000 | $ 53,971,000 |
Consulting fee revenue (as a percent) | 18.70% | 16.70% | 19.90% | 17.40% |
Total Revenue | $ 29,954,000 | $ 29,461,000 | $ 64,723,000 | $ 54,988,000 |
Total revenue (as a percent) | 17.10% | 16.20% | 18.40% | 15.60% |
Saudi Arabia | ||||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||||
Consulting Fee Revenue | $ 15,939,000 | $ 31,687,000 | ||
Consulting fee revenue (as a percent) | 10.00% | 10.20% |
Business Segment Information 53
Business Segment Information - Revenue by Client Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Consulting Fee Revenue and Total Revenue By Client Type: | ||||
Consulting Fee Revenue | $ 152,614 | $ 159,738 | $ 309,919 | $ 310,879 |
Consulting fee revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Total Revenue | $ 175,589 | $ 181,648 | $ 351,810 | $ 351,916 |
Total revenue (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
U.S. federal government | ||||
Consulting Fee Revenue and Total Revenue By Client Type: | ||||
Consulting Fee Revenue | $ 2,320 | $ 2,310 | $ 4,870 | $ 4,766 |
Consulting fee revenue (as a percent) | 1.50% | 1.40% | 1.60% | 1.50% |
Total Revenue | $ 2,782 | $ 2,837 | $ 5,722 | $ 5,849 |
Total revenue (as a percent) | 1.60% | 1.60% | 1.60% | 1.70% |
U.S. state, regional and local governments | ||||
Consulting Fee Revenue and Total Revenue By Client Type: | ||||
Consulting Fee Revenue | $ 25,074 | $ 22,200 | $ 48,123 | $ 42,291 |
Consulting fee revenue (as a percent) | 16.40% | 13.90% | 15.50% | 13.60% |
Total Revenue | $ 40,496 | $ 35,454 | $ 75,817 | $ 66,609 |
Total revenue (as a percent) | 23.10% | 19.50% | 21.60% | 18.90% |
Foreign governments | ||||
Consulting Fee Revenue and Total Revenue By Client Type: | ||||
Consulting Fee Revenue | $ 44,962 | $ 53,699 | $ 97,528 | $ 108,245 |
Consulting fee revenue (as a percent) | 29.50% | 33.60% | 31.50% | 34.90% |
Total Revenue | $ 48,242 | $ 57,587 | $ 104,560 | $ 115,726 |
Total revenue (as a percent) | 27.50% | 31.70% | 29.70% | 32.90% |
Private sector | ||||
Consulting Fee Revenue and Total Revenue By Client Type: | ||||
Consulting Fee Revenue | $ 80,258 | $ 81,529 | $ 159,398 | $ 155,577 |
Consulting fee revenue (as a percent) | 52.60% | 51.10% | 51.40% | 50.00% |
Total Revenue | $ 84,069 | $ 85,770 | $ 165,711 | $ 163,732 |
Total revenue (as a percent) | 47.80% | 47.20% | 47.10% | 46.50% |
Business Segment Information 54
Business Segment Information - Property, Plant and Equipment, Net by Geographic Location (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | $ 21,931 | $ 23,751 |
U.S./Canada | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 12,565 | 13,581 |
Latin America | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 1,049 | 1,031 |
Europe | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 2,825 | 3,084 |
Middle East | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 3,809 | 3,980 |
Africa | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 905 | 1,120 |
Asia/Pacific | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 778 | 955 |
U.S. | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | 12,565 | 13,581 |
Non - U.S. | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, Plant and Equipment, Net by Geographic Location | $ 9,366 | $ 10,170 |
Client Concentrations (Details)
Client Concentrations (Details) - customer | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Total revenue | Customer concentration | ||||
Concentrations of Credit Risk | ||||
Number of 10% clients | 0 | 0 | 0 | 0 |
Total revenue | Contracts with U.S. federal government agencies | ||||
Concentrations of Credit Risk | ||||
Percentage of concentration risk | 1.60% | 1.60% | 1.70% | |
Consulting fee revenue | Customer concentration | ||||
Concentrations of Credit Risk | ||||
Number of 10% clients | 0 | 0 | 0 | 0 |
Consulting fee revenue | Contracts with U.S. federal government agencies | ||||
Concentrations of Credit Risk | ||||
Percentage of concentration risk | 1.50% | 1.40% | 1.60% | 1.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 17, 2016BRLshareholder | Apr. 15, 2015TRY | Oct. 31, 2014GBP (£)shareholder | Oct. 31, 2014USD ($)shareholder | Jun. 30, 2016USD ($) | Jun. 30, 2016TRY | Jun. 30, 2016GBP (£) | Jun. 30, 2016USD ($) | Jun. 17, 2016USD ($) | Oct. 31, 2014USD ($) |
ESA | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Number of minority shareholders who exercised Put Option | shareholder | 3 | |||||||||
Value of shares purchased on exercise of put options | BRL 8,656,000 | $ 2,670,000 | ||||||||
IMS | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Acquisition consideration payable | TRY 4,400,000 | |||||||||
Contingent consideration arrangement, evaluation period | 12 months | |||||||||
Contingent consideration | TRY 6,100,000 | |||||||||
Cash consideration transferred | TRY 2,909,000 | $ 1,032,000 | ||||||||
Increase (decrease) in the contingent consideration | $ | $ (673,000) | (673,000) | ||||||||
IMS | EBITDA Target 1 | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Contingent consideration | 1,700,000 | |||||||||
IMS | EBITDA Target 2 | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Contingent consideration | 1,500,000 | |||||||||
IMS | Other Current Liabilities | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Acquisition consideration payable | TRY 1,491,000 | $ 529,000 | ||||||||
IMS | Minimum | EBITDA Target 1 | ||||||||||
Acquisition-Related Contingencies | ||||||||||
EBITDA Target | 3,500,000 | |||||||||
IMS | Minimum | EBITDA Target 2 | ||||||||||
Acquisition-Related Contingencies | ||||||||||
EBITDA Target | 3,200,000 | |||||||||
IMS | Maximum | EBITDA Target 2 | ||||||||||
Acquisition-Related Contingencies | ||||||||||
EBITDA Target | TRY 3,500,000 | |||||||||
Hill Spain | ESA | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Ownership interest acquired (as a percent) | 91.00% | 91.00% | 91.00% | 91.00% | ||||||
Multiple of earnings for determining purchase price of minority shares | 7 | 7 | 7 | 7 | ||||||
Call option Purchase price premium if exercised by Gerens Hill (as a percent) | 5.00% | 5.00% | 5.00% | |||||||
Call/put option exercise period after audited financial statements | 3 months | 3 months | 3 months | |||||||
Hill International (UK) Ltd | Cadogans | ||||||||||
Acquisition-Related Contingencies | ||||||||||
Acquisition consideration payable | £ 200,000 | $ 269,000 | ||||||||
Contingent consideration arrangement, evaluation period | 2 years | 2 years | ||||||||
Contingent consideration, minimum | £ | £ 0 | |||||||||
Contingent consideration | £ | £ 200,000 | |||||||||
Number of selling shareholders | shareholder | 2 | 2 | ||||||||
Maximum annual earn-out installment | £ 100,000 | $ 135,000 | ||||||||
EBITDA Target | £ 396,000 | $ 533,000 |