Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Sep. 17, 2018 | |
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 | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,294,670 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 17,820 | $ 21,353 |
Cash - restricted | 4,535 | 4,407 |
Accounts receivable, less allowance for doubtful accounts of $73,412 and $72,850 | 140,408 | 147,611 |
Current portion of retainage receivable | 10,489 | 9,249 |
Accounts receivable - affiliates | 6,637 | 4,599 |
Prepaid expenses and other current assets | 8,612 | 9,053 |
Income tax receivable | 2,343 | 2,139 |
Total current assets | 190,844 | 198,411 |
Property and equipment, net | 12,067 | 12,004 |
Cash - restricted, net of current portion | 1,160 | 1,160 |
Retainage receivable | 12,845 | 13,095 |
Acquired intangibles, net | 3,525 | 3,908 |
Goodwill | 53,030 | 52,658 |
Investments | 4,300 | 3,639 |
Deferred income tax assets | 4,065 | 4,052 |
Other assets | 3,651 | 4,368 |
Total assets | 285,487 | 293,295 |
Liabilities and Stockholders’ Equity | ||
Current maturities of notes payable and long-term debt | 2,782 | 3,241 |
Accounts payable and accrued expenses | 78,642 | 83,221 |
Income taxes payable | 16,590 | 16,494 |
Current portion of deferred revenue | 8,651 | 13,945 |
Other current liabilities | 8,494 | 8,973 |
Total current liabilities | 115,159 | 125,874 |
Notes payable and long-term debt, net of current maturities | 37,413 | 34,541 |
Retainage payable | 709 | 599 |
Deferred income taxes | 942 | 933 |
Deferred revenue | 11,887 | 7,212 |
Other liabilities | 14,416 | 13,466 |
Total liabilities | 180,526 | 182,625 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 1,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.0001 par value; 100,000 shares authorized, 59,938 shares and 59,389 shares issued at March 31, 2018 and December 31, 2017, respectively | 6 | 6 |
Additional paid-in capital | 200,157 | 197,104 |
Accumulated deficit | (62,132) | (53,983) |
Accumulated other comprehensive loss | (3,590) | (4,011) |
Less treasury stock of 6,964 and 6,977 shares at March 31, 2018 and December 31, 2017, respectively | (29,986) | (30,041) |
Hill International, Inc. share of equity | 104,455 | 109,075 |
Noncontrolling interests | 506 | 1,595 |
Total equity | 104,961 | 110,670 |
Total liabilities and stockholders’ equity | $ 285,487 | $ 293,295 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 73,412 | $ 72,850 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 59,938,000 | 59,389,000 |
Treasury stock, shares | 6,964,000 | 6,977,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 113,897 | $ 116,120 |
Direct expenses | 79,212 | 78,509 |
Gross profit | 34,685 | 37,611 |
Selling, general and administrative expenses | 32,787 | 33,463 |
Share of profit (loss) of equity method affiliates | 800 | (34) |
Loss on performance bond | 7,938 | 0 |
Operating profit (loss) | (5,240) | 4,114 |
Interest and related financing fees, net | 1,334 | 749 |
Earnings (loss) from continuing operations before income taxes | (6,574) | 3,365 |
Income tax expense | 1,095 | 1,349 |
Earnings (loss) from continuing operations | (7,669) | 2,016 |
Discontinued operations: | ||
Loss from discontinued operations, net of tax | (482) | (4,251) |
Net loss | (8,151) | (2,235) |
Less: net earnings (loss) - noncontrolling interests | (2) | 119 |
Net loss attributable to Hill International, Inc. | $ (8,149) | $ (2,354) |
Basic earnings (loss) per common share from continuing operations (in dollars per share) | $ (0.14) | $ 0.04 |
Basic loss per common share from discontinued operations (in dollars per share) | (0.01) | (0.09) |
Basic earnings (loss) per common share - Hill International, Inc. (in dollars per share) | $ (0.15) | $ (0.05) |
Basic weighted average common shares outstanding (in shares) | 52,992 | 51,860 |
Diluted earnings (loss) per common share from continuing operations (in dollars per share) | $ (0.14) | $ 0.04 |
Diluted loss per common share from discontinued operations (in dollars per share) | (0.01) | (0.09) |
Diluted earnings (loss) per common share - Hill International, Inc. (in dollars per share) | $ (0.15) | $ (0.05) |
Diluted weighted average common shares outstanding (in shares) | 52,992 | 51,860 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (8,151) | $ (2,235) |
Foreign currency translation adjustment, net of tax | 421 | (1,558) |
Comprehensive loss | (7,730) | (3,793) |
Less: Comprehensive earnings (loss) attributable to non-controlling interests | (2) | 119 |
Comprehensive loss attributable to Hill International, Inc. | $ (7,728) | $ (3,912) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (8,151) | $ (2,235) |
Loss from discontinued operations | 482 | 4,251 |
Earnings (loss) from continuing operations | (7,669) | 2,016 |
Adjustments to reconcile net earnings to net cash provided by (used in): | ||
Depreciation and amortization | 1,291 | 1,595 |
Provision for bad debts | 24 | (526) |
Amortization of deferred loan fees | 6 | 444 |
Deferred tax provision (benefit) | (31) | 452 |
Stock based compensation | 451 | 461 |
Unrealized foreign exchange gains (losses) on intercompany balances | 1,446 | (1,831) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,469 | (2,617) |
Accounts receivable - affiliate | (2,035) | (1,615) |
Prepaid expenses and other current assets | 890 | (287) |
Income taxes receivable | (162) | 1,366 |
Retainage receivable | (725) | (310) |
Other assets | (533) | (2,037) |
Accounts payable and accrued expenses | (4,836) | 2,150 |
Income taxes payable | 99 | (328) |
Deferred revenue | (641) | (10,010) |
Other current liabilities | (1,278) | 156 |
Retainage payable | 108 | 39 |
Other liabilities | 582 | 185 |
Net cash used in continuing operations | (5,544) | (10,697) |
Net cash used in discontinued operations | (482) | (6,146) |
Net cash used in operating activities | (6,026) | (16,843) |
Cash flows from investing activities: | ||
Purchases of business | (122) | (123) |
Payments for purchase of property and equipment | (986) | (372) |
Net cash used in investing activities | (1,108) | (495) |
Cash flows from financing activities: | ||
Payments on term loans | (89) | (314) |
Net borrowings on revolving loans | 2,069 | 10,990 |
Proceeds from stock issued under employee stock purchase plan | 0 | 49 |
Proceeds from exercise of stock options | 2,350 | 0 |
Net cash provided by financing activities | 4,330 | 10,725 |
Effect of exchange rate changes on cash | (601) | 635 |
Net decrease in cash, cash equivalents and restricted cash | (3,405) | (5,978) |
Cash, cash equivalents and restricted cash — beginning of period | 26,920 | 30,262 |
Cash, cash equivalents and restricted cash — end of period | $ 23,515 | $ 24,284 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Hill International, Inc. (“Hill” or the “Company”) is a professional services firm that provides program management, project management, construction management 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. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2018 | |
Liquidity [Abstract] | |
Liquidity | Liquidity At March 31, 2018 our principal sources of liquidity consisted of $17,820 of cash and cash equivalents, $8,750 of available borrowing capacity under the Domestic Revolving Credit Facility, $2,475 of available borrowing capacity under the International Revolving Credit Facility and $2,011 under other foreign credit agreements. Additional information regarding the Company's credit facilities is set forth in Note 9 - Notes Payable and Long-Term Debt. The Company was not in compliance with the requirements of its Revolving Credit Facilities, which required the filing of its Form 10-Q for the second quarter of 2018 by August 14, 2018. The Company obtained a waiver of non-compliance of the related covenants in its Revolving Credit Facilities which now requires the Company to file its Form 10-Q for the first and second quarters of 2018 by September 30, 2018. If the Company does not file such report in accordance with this deadline, it will again be in noncompliance with the requirements of the Revolving Credit Facilities. The Company believes it will be in compliance with the requirements of its Revolving Credit Facilities upon the filing of its Form 10Q for the second quarter of 2018 by October 30, 2018. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Summary The accompanying unaudited interim consolidated financial statements were prepared in accordance with the rules and regulations of the SEC 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, 2017 . Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("U.S. 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 U.S. 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. Reclassification A reclassification was made in the presentation of the consolidated balance sheet as of December 31, 2017 . The Company adjusted the classification of current portion of retainage receivable from accounts receivable, less allowance for doubtful accounts to a new line item on the balance sheet, "current portion of retainage receivable." Current portion of retainage receivable is reported separately as a result of the Company's adoption of accounting standards update 2014-09, Revenue from Contracts with Customers (Topic 606). As a result, $9,249 was reclassified from accounts receivable, less allowance for doubtful accounts to current portion of retainage receivable to conform with current period reporting. Additionally, a reclassification was made in the presentation of the consolidated statement of cash flows for the three months ended March 31, 2017. As a result of the adoption of ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which addresses classification and presentation of changes in restricted cash on the statement of cash flows, the Company included restricted cash in the opening and closing "cash, cash equivalents and restricted cash" balance in this filing on the consolidated statement of cash flows for the three months ended March 31, 2017. Construction Claims Group Sale On December 20, 2016, the Company and its subsidiary Hill International N.V. (“Hill N.V.” and, collectively with the Company, the “Sellers”) entered into a Stock Purchase Agreement (as amended on May 3, 2017, the “Agreement”) with Liberty Mergeco, Inc. (the “US Purchaser”) and Liberty Bidco UK Limited (the “UK Purchaser” and, collectively with the US Purchaser, the “Purchasers”) pursuant to which the Purchasers were to acquire the Construction Claims Group by the US Purchaser’s acquisition of all of the stock of Hill International Consulting, Inc. from the Company and the UK Purchaser’s acquisition of all of the stock of Hill International Consulting B.V. from Hill N.V. The Construction Claims Group sale closed on May 5, 2017 with an effective date of April 30, 2017. For a detailed description of the transaction, see "Note 2 Discontinued Operations" in the Company's 2017 Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on August 31, 2018 . Loss on Performance Bond On February 8, 2018, the Company received notice from the First Abu Dhabi Bank ("FAB", formerly known as the National Bank of Abu Dhabi) that Public Authority of Housing Welfare of Kuwait submitted a claim for payment on a Performance Guarantee issued by the Company for approximately $7,938 for a project located in Kuwait. FAB subsequently issued, on behalf of the Company, a payment on February 15, 2018. The Company is taking legal action to recover the full Performance Guarantee amount. On September 20, 2018 the Kuwait First Instance Court dismissed the Company's case. The Company is currently in the process of filing an appeal before the Kuwait Court of Appeals. As a result of the First Instance Court decision, the Company fully reserved the performance guarantee payment above in the first quarter of 2018 and it is presented as "Loss on Performance Bond" on the consolidated statements of operations. Summary of Significant Accounting Policies (a) Foreign Currency Translations and Transactions Assets and liabilities of all foreign operations are translated at period-end rates of exchange while revenues and expenses are translated at the average monthly exchange rates. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity entitled accumulated other comprehensive loss until the entity is sold or substantially liquidated. Gains or losses arising from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency), including those resulting from intercompany transactions, are reflected in selling, general and administrative expenses in the consolidated statement of operations. The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned, are recorded in accumulated other comprehensive loss on the consolidated balance sheet. (b) Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and accounts receivable. The Company maintains its cash accounts with high quality financial institutions. Although the Company believes that the financial institutions with which it does business will be able to fulfill their commitments, there is no assurance that those institutions will be able to continue to do so. No single client accounted for 10% or more to revenue for the three months ended March 31, 2018 or 2017 . (c) Allowance for Doubtful Accounts The allowance for doubtful accounts is an estimate prepared by management based on identification of the collectability of specific accounts and the overall condition of the receivable portfolios. When evaluating the adequacy of the allowance for doubtful accounts, the Company specifically analyzes trade receivables, including retainage receivable, historical bad debts, client credits, client concentrations, client credit worthiness, current economic trends and changes in client payment terms. If the financial condition of clients were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Likewise, should the Company determine that it would be able to realize more of its receivables in the future than previously estimated, an adjustment to the allowance would increase earnings in the period such determination was made. The allowance for doubtful accounts is reviewed on a quarterly basis and adjustments are recorded as deemed necessary. (d) Retainage Receivable Retainage receivable represents balances billed but not paid by clients pursuant to retainage provisions in certain contracts and will be due upon completion of specific tasks or the completion of the contract. The current portion of retainage receivable is included in current portion of retainage receivable and the long-term portion of retainage receivable is included in retainage receivable in the consolidated balance sheets. (e) Income Taxes The Company estimates income taxes in each of the jurisdictions in which it operates. This process involves estimating its actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheets. The Company assesses the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent it believes recovery is not likely, the Company establishes a valuation allowance. To the extent the Company establishes a valuation allowance in a period, it must include an expense within the tax provision in the consolidated statements of earnings. The Company has recorded a valuation allowance to reduce the deferred tax asset to an amount that is more likely than not to be realized in future years. If the Company determines in the future that it is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position, that the deferred tax assets subject to the valuation allowance will be realized, then the previously provided valuation allowance will be adjusted. The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is more likely than not that the benefit will be ultimately realized. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. (f) Revenue Recognition The Company generates revenue primarily from providing professional services to its clients under various types of contracts. In providing these services, the Company may incur reimbursable expenses, which consist principally of amounts paid to subcontractors and other third parties and travel and other job related expenses that are contractually reimbursable from clients. The Company includes reimbursable expenses in computing and reporting its total revenue as long as the Company remains responsible to the client for the fulfillment of the contract and for the overall acceptability of all services provided. If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, incentive awards, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. These loss projects are re-assessed for each subsequent reporting period until the project is complete. Such revisions could occur at any time and the effects may be material. The Company evaluates contractual arrangements to determine how to recognize revenue. See footnote 4 Revenue from contracts with customers for more detail. (g) Earnings per Share Basic earnings per common share have 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 or the assumed vesting of stock awards using the treasury stock method, if dilutive. The Company has outstanding options to purchase approximately 5,339 shares and 6,754 shares for the three months ended March 31, 2018 and 2017 , respectively. All such options were excluded from the calculation of diluted earnings per share because they were antidilutive due to the Company's net loss from continuing operations. The following table provides a reconciliation to net earnings (loss) used in the numerator for earnings (loss) per share from continuing operations attributable to Hill: Three Months Ended March 31, 2018 2017 (Loss) earnings from continuing operations $ (7,669 ) $ 2,016 Less: net (loss) earnings - noncontrolling interest (2 ) 119 Net (loss) earnings from continuing operations attributable to Hill $ (7,667 ) $ 1,897 In 2017 the Company's Board of Directors ("Board") approved a monthly grant of Company stock valued at $80 per month to the Interim Chief Executive Officer ("ICEO") during his term of service, to be delivered to him on the last day of his service as ICEO. There is no circumstance in which these shares will not ultimately be issued, therefore, the shares to be issued under this grant are included in the calculation of basic weighted average shares outstanding. Basic shares outstanding included 42 shares related to this grant in the three months ended March 31, 2018 . See Note 11 - Share-Based Compensation for further details of this grant. (I) New Accounting Pronouncements Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or adoption will have minimal impact on its consolidated financial statements. For additional information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 4 to the consolidated financial statements in Item 8 of Form 10K for the year ended December 31, 2017 filed with the SEC on August 31, 2018 . See update below. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standard Update ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) or Accounting Standards Codification 606 (“ASC 606”). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09 to provide additional clarification and implementation instructions relating to (i) principal versus agent considerations, (ii) identifying performance obligations and licensing, (iii) narrow-scope improvements and practical expedients and (iv) technical corrections and improvements. However, none of the amendments change the core principle of the guidance in ASU 2014-09. The Company adopted this standard effective January 1, 2018. See Note 4 - Revenue from Contracts with Customers for further information regarding implementation and disclosures. In January 2016, the FASB issued ASU 2016-1, Financial Instruments - Overall (Topic 825-10) , which requires all equity investments to be measured at fair value with changes in fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this ASU also require an entity to (1) present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and (2) provide separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. In addition, the amendments in this pronouncement eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This ASU was effective for the Company commencing January 1, 2018. The adoption of this ASU did not have a significant impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. This ASU’s amendments add or clarify guidance on eight cash flow issues: debt prepayment, settlement of zero-coupon debt instruments, contingent consideration payments, insurance claim proceeds, life insurance proceeds, distributions from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The Company adopted this ASU effective January 1, 2018. The adoption of this ASU did not have a significant impact on the Company’s financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . Under the new standard, an entity is required to recognize the income tax consequences of an intra-entity transfer of an asset (with the exception of inventory) when the transfer occurs. Under previous U.S. GAAP, entities are prohibited from recognizing current and deferred income taxes for an intra-entity transfer until the asset is sold to a third party. Examples of assets that would be affected by the new guidance are intellectual property and property, plant, and equipment. The Company’s adoption of this ASU on January 1, 2018 did not have a material effect on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which addresses classification and presentation of changes in restricted cash on the statement of cash flows. The ASU requires an entity’s reconciliation of the beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include in cash and cash equivalents amounts generally described as restricted cash and restricted cash equivalents . The ASU does not define restricted cash or restricted cash equivalents. The Company defines restricted cash as collateral for letters of credit, bonds or guarantees on projects (for further details see Note 4 of the Company's 2017 form 10-K). The Company adopted this ASU on January 1, 2018 which resulted in restricted cash being included in the opening and closing balance of cash and cash equivalents on the cash flow statements. In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business , to clarify the definition of a business with the objective of providing a more robust framework to assist management when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the amendments of this ASU on January, 1 2018 and will apply its provisions prospectively to future business combinations. In May 2017, the FASB issued ASU 2017-9, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions The Company adopted this ASU on January 1, 2018 and will prospectively apply its provisions to any future award modifications. In February 2018, the FASB issued ASU No. 2018-3, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , that clarifies the guidance in ASU No. 2016-1, Financial Instruments-Overall (Subtopic 825-10) related to: Equity Securities without a Readily Determinable Fair Value- Discontinuation, Equity Securities without a Readily Determinable Fair Value- Adjustments, Forward Contracts and Purchased Options, Presentation Requirements for Certain Fair Value Option Liabilities, Fair Value Option Liabilities Denominated in a Foreign Currency and Transition Guidance for Equity Securities without a Readily Determinable Fair Value. The Company adopted this ASU on January 1, 2018 and it did not have a significant impact on its financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842), which will require the Company the recognize lease assets and lease liabilities (related to leases previously classified as operating under previous U.S. GAAP) on its consolidated balance sheet for all leases in excess of one year in duration. The ASU will be effective for the Company commencing January 1, 2019. The adoption of this ASU will impact the Company’s financial statements in that all existing leases will be recorded as right-of-use assets and liabilities and the timing and classification of associated lease expenses will change. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) - Credit Losses: Measurement of Credit Losses on Financial Instruments , which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing January 1, 2020 with early adoption permitted commencing January 1, 2019. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures but the Company does not believe this ASU will have a significant impact on its financial statements. In January 2017, the FASB issued ASU 2017-4, Intangibles - Goodwill and Other (Topic 350), which removes step 2 from the goodwill impairment test. As a result, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units’ fair value. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017, and the prospective transition method should be applied. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07 , Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Our equity incentive plans limit share-based awards to employees and directors of the Company and we do not expect this update to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period, for all entities. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and but does not expect this update to have a material impact on the Company's consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company adopted ASU 2014-09 on January 1, 2018. Under ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for such goods or services. The Company generates revenue primarily from providing professional services to its clients under various types of contracts. In providing these services, the Company may incur reimbursable expenses, which consist principally of amounts paid to subcontractors and other third parties and travel and other job related expenses that are contractually reimbursable from clients. The Company includes reimbursable expenses in computing and reporting its total revenue as long as the Company remains responsible to the client for the fulfillment of the contract and for the overall acceptability of all services provided. If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, incentive awards, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. Such revisions could occur at any time and the effects may be material. These loss projects are re-assessed for each subsequent reporting period until the project is complete. The Company evaluates contractual arrangements to determine how to recognize revenue. Below is a description of the basic types of contracts from which the Company may earn revenue: Time and Materials Contracts Under the time and materials arrangements, there are three different contract types, however all the types of contracts have the same economic factors based upon the time and materials. The contracts may be structured as basic time and materials, cost plus a margin or time and materials subject to a maximum contract value (the "cap value"). The majority of the Company’s contracts are for consulting projects where it bills the client monthly at hourly billing rates. The hourly billing rates are determined by contract terms. Under cost plus contracts, the Company charges its clients for its costs, including both direct and indirect costs, plus a fixed fee or rate. Under time and materials contracts with a cap value, the Company charges the clients for time and materials based upon the work performed. When the Company is reaching the cap value, the contract is renegotiated or the Company may cease work when the maximum contract value is reached. The Company is only entitled to consideration for the work it has performed, and the cap value is not a guaranteed contract value. Fixed Price Contracts Under fixed-price contracts, the Company’s clients pay an agreed amount negotiated in advance for a specified scope of work. Additionally, as noted under time and materials contracts, there may be instances that a contract is modified to extend the contract value past the cap. As the consideration is variable depending on the outcome of the contract renegotiation, the Company will estimate the total contract price in accordance with the variable consideration guidelines and will only include consideration that it expects to receive from the customer. Change Orders and Claims Change orders are modifications of an original contract that effectively change the provisions of the contract without adding new provisions. Either the Company or its client may initiate change orders. They may include changes in specifications or design, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Management evaluates when a change order is probable based upon its experience in negotiating change orders, the customer’s written approval of such changes or separate documentation of change order costs that are identifiable. Change orders are sometimes documented and terms of such change orders are agreed with the client before the work is performed. Sometimes circumstances require that work progresses before an agreement is reached with the client. Claims are amounts in excess of the agreed contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. Costs related to change orders and claims are recognized when they are incurred. U.S. Federal Acquisition Regulations The Company has contracts with the U.S. government that contain provisions requiring compliance with the U.S. Federal Acquisition Regulations (“FAR”). These regulations are generally applicable to all of its federal government contracts and are partially or fully incorporated in many local and state agency contracts. They limit the recovery of certain specified indirect costs on contracts subject to the FAR. Cost-plus contracts covered by the FAR provide for upward or downward adjustments if actual recoverable costs differ from the estimate billed under forward pricing arrangements. Most of the Company's federal government contracts are subject to termination at the convenience of the federal government. Contracts typically provide for reimbursement of costs incurred and payment of fees earned through the date of such termination. Federal government contracts that are subject to the FAR and that are required by state and local governmental agencies to be audited are performed, for the most part, by the Defense Contract Audit Agency (“DCAA”). The DCAA audits the Company’s overhead rates, cost proposals, incurred government contract costs and internal control systems. During the course of its audits, the DCAA may question incurred costs if it believes the Company has accounted for such costs in a manner inconsistent with the requirements of the FAR or Cost Accounting Standards and recommend that its U.S. government corporate administrative contracting officer disallow such costs. Historically, the Company has not incurred significant disallowed costs because of such audits. However, the Company can provide no assurance that the DCAA audits will not result in material disallowances of incurred costs in the future. The Company provides for a refund liability to the extent that it expects to refund some of the consideration received from a customer. Disaggregation of Revenues The Company has one operating segment, the Project Management Group, which reflects how the Company is being managed. Additional information related to the Company’s operating segment is provided in Note 14 - Segment and Related Information. The Project Management Group provides extensive construction and project management services to construction owners worldwide. The Company considered the type of customer, type of contract and geography for disaggregation of revenue. The Company determined that disaggregating by (1) contract type; and (2) geography would provide the most meaningful information to understand the nature, amount, timing, and uncertainty of its revenues. The type of customer does not influence the Company’s revenue generation. Ultimately, the Company is supplying the same services of 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 services and facilities management services. The Company’s contracts are generally long term contracts that are either based upon time and materials incurred or provide for a fixed price. The contract type will determine the level of risk in the contract while the geography will depict the level of global economic factors in relation to revenue recognition. The components of the Company’s revenue by contract type and geographic region for the three months ended March 31, 2018 are as follows: Three months ended March 31, 2018 Fixed Price T&M Total Percent of Revenue United States $ 3,056 $ 48,516 $ 51,572 45.2 % Latin America 1,821 991 2,812 2.5 % Europe 4,803 5,654 10,457 9.2 % Middle East 17,804 22,494 40,298 35.4 % Africa 38 6,665 6,703 5.9 % Asia/Pacific 581 1,474 2,055 1.8 % Total $ 28,103 $ 85,794 $ 113,897 100.0 % The Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company exercises judgment in determining if the contractual criteria are met to determine if a contract with a customer exists, specifically in the earlier stages of a project when a formally executed contract may not yet exist. Additionally, the Company considers the contracts with customers to be long-term contracts, however there are often termination provisions that allow the customer to terminate the contract at will. The Company typically has one performance obligation of 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 services and facilities management services. Performance obligations are delivered over time as the customer receives the service. It is either determined on a T&M right to invoice method or a cost input method for fixed price contracts. There are no significant payment terms in the contract with customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. The Company transfers control of its service over time and, therefore, satisfies a performance obligation and recognizes revenue over time by measuring the progress toward complete satisfaction of that performance obligation. The Company’s fixed price projects generally use a cost-based input method to measure its progress towards complete satisfaction of the performance obligation as the Company believes this best depicts the transfer of control to the customer. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Due to the nature of the work required to be performed on many of the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. The Company recognizes revenue over time by using the date the Company has the right to invoice the client as the triggering event for recognizing revenue for time and materials contracts in which the Company has a right to payment for performance completed to date throughout the contract until contract completion or cancellation. Accounts Receivable Accounts receivable includes amounts billed and currently due from customers and amounts for work performed which have not been billed to date. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables. Contract Assets and Liabilities Contract assets include unbilled amounts typically resulting from performance under long-term contracts when the revenue recognized exceeds the amount billed to the customer, and where the right to payment is not solely subject to the passage of time. Retainage receivable and current portion of retainage receivable are included in contract assets. The current portion of retainage receivable is a contract asset, which prior to the adoption of ASC 606, had been classified within accounts receivable. For periods beginning after December 31, 2017, amounts representing contract assets, which were previously included in “Accounts receivable” within the Consolidated Balance Sheets, have been reclassified as “Current portion of retainage receivable.” The Company’s contract liabilities consist of advance payments and billings in excess of revenue recognized as deferred revenue. The Company may also receive up-front payments related to mobilization costs, which, in most cases, are recognized ratably over the contract term. These contract liabilities are included within the Consolidated Balance Sheets as deferred revenue and current portion of deferred revenue. The Company classifies advance payments as retainage receivable or current portion of retainage receivable and billings in excess of revenue recognized as deferred revenue as current or noncurrent based on the timing of when revenue is expected to be recognized. The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s performance and customer payments. The amount of revenue that was recognized during the three months ended March 31, 2018 that was included in the deferred revenue balance at the beginning of the period was $5,615 . Remaining Performance Obligations The remaining performance obligations represent the aggregate transaction price of executed contracts with customers for which work has partially been performed or not started as of the end of the reporting period. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. The remaining performance obligations also include transaction prices of contracts with maximum contract values for which the Company is able to reasonably estimate the transaction price. As of March 31, 2018, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $137,978 . During the following 12 months, 58.2% of the remaining performance obligations are expected to be recognized as revenue and the balance recognized between 1 to 5 years. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable The components of accounts receivable are as follows: March 31, 2018 December 31, 2017 Billed $ 177,912 $ 186,411 Unbilled* 35,908 34,050 213,820 220,461 Allowance for doubtful accounts (73,412 ) (72,850 ) Accounts receivable, less allowance for doubtful accounts $ 140,408 $ 147,611 * Unbilled receivables primarily represent revenue earned on contracts, which the Company is contractually precluded from billing until predetermined future dates. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following table summarizes the Company’s acquired intangible assets: March 31, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Client relationships $ 11,763 $ 8,595 $ 16,397 $ 12,862 Acquired contract rights 1,007 1,007 1,007 1,007 Trade names 890 533 877 504 Total $ 13,660 $ 10,135 $ 18,281 $ 14,373 Intangible assets, net $ 3,525 $ 3,908 Amortization expense related to intangible assets was as follows: Three Months Ended March 31, 2018 2017 $343 $559 The following table presents the estimated amortization expense for the next five years : Estimated Amortization Expense Year ending December 31, 2018 (remaining 9 months) $ 726 2019 990 2020 728 2021 338 2022 265 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in the Company’s carrying value of goodwill during 2018 : Balance, December 31, 2017 $ 52,658 Translation adjustments 372 Balance, March 31, 2018 $ 53,030 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Below are the components of accounts payable and accrued expenses: March 31, 2018 December 31, 2017 Accounts payable $ 26,916 $ 32,345 Accrued payroll and related expenses 31,385 29,569 Accrued subcontractor fees 12,967 10,814 Accrued profit improvement plan items 3,890 3,425 Accrued agency fees 980 1,671 Accrued legal and professional fees 1,544 2,983 Other accrued expenses 960 2,414 $ 78,642 $ 83,221 |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | Notes Payable and Long-Term Debt The table below reflects the Company's credit facilities including notes payable and long-term debt: Interest Rate (1) Balance Outstanding Loan Maturity Interest Rate Type March 31, December 31, March 31, 2018 December 31, 2017 Secured Credit Facilities Hill International, Inc. - Société Générale 2017 Term Loan Facility 06/20/2023 Variable 7.10% 7.32% $ 29,775 $ 29,850 Hill International, Inc. - Société Générale Domestic Revolving Credit Facility 05/04/2022 Variable 6.69% 5.25% 6,400 3,300 Hill International N.V.. - Société Générale International Revolving Credit Facility 05/04/2022 Variable N/A 4.10% — — Unsecured Credit Facilities Hill International, Inc. - First Abu Dhabi Bank PJSC Overdraft Credit Facility (2) 06/30/2018 Variable 5.50% 5.50% 1,841 2,316 Engineering SA Services Technicos - Consortium of Brazilian Credit Facilities (3) 06/26/2018 Fixed 4.76% 4.76% — — Unsecured Notes Payable and Long-Term Debt Hill International Spain SA - Bankia, S.A. and Bankinter, S.A (4) 12/31/2021 Fixed 2.17% 2.17% 2,126 2,202 Hill International Spain SA - IberCaja Banco, S.A. (4) 12/31/2019 Variable 3.44% 3.37% 367 407 Philadelphia Industrial Development Corporation Loan 03/31/2027 Fixed 2.75% 2.75% 585 599 Total notes payable and long-term debt, gross $ 41,094 $ 38,674 Less: unamortized discount and deferred financing costs related to Societe Generale 2017 Term Loan Facility (899 ) (892 ) Notes payable and long-term debt $ 40,195 $ 37,782 Current portion of notes payable 2,956 3,406 Current portion of unamortized debt discount and deferred financing costs (174 ) (165 ) Current maturities of notes payable and long-term debt 2,782 3,241 Notes payable and long-term debt, net of current maturities 37,413 34,541 (1) Interest rates for variable interest rate debt are reflected on a weighted average basis through March 31, 2018 since inception. (2) Credit facility lender was formerly known as National Bank of Abu Dhabi. There is no stated maturity date as the loan is subject to periodic review by the bank. Therefore, the amount outstanding is reflected within the current maturities of notes payable and long-term debt. Balances outstanding are reflected in U.S. dollars based on the conversion rates from AED as of March 31, 2018 and December 31, 2017 . (3) The unsecured Engineering SA Services revolving credit facility are subject to automatic renewal every three months. (4) Balances outstanding are reflected in U.S. dollars based on the conversion rates from Euros as of March 31, 2018 and December 31, 2017 . Secured Credit Facilities On May 5, 2017 the Company entered into a credit agreement with Société Générale (the “Agent”) and other U.S. Loan Parties (the “U.S. Lenders”) consisting of (1) a $30,000 term loan (the "2017 Term Loan Facility"); (2) a $25,000 U.S. dollar-denominated revolving credit facility (the “Domestic Revolving Credit Facility”, together with the 2017 Term Loan Facility, the “U.S. Credit Facilities”); and (3) a credit agreement with the Agent (the “International Lender”) providing a €9,156 ( $10,000 at closing) revolving credit facility (the “International Revolving Credit Facility” and together with the Domestic Revolving Credit Facility, the “Revolving Credit Facilities” and, together with the U.S. Credit Facilities, the “Secured Credit Facilities”) which is available to Hill International N.V. The Domestic Revolving Credit Facility and the International Revolving Credit Facility include sub-limits for letters of credit amounting to $20,000 and €8,000 ( $9,130 at closing), 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 covenant is comprised of a maximum Consolidated Net Leverage Ratio of 3.00 to 1.00 for any fiscal quarter ending on or subsequent to March 31, 2017 for the trailing twelve months then-ended. The Consolidated Net Leverage Ratio is the ratio of (a) consolidated total debt (minus unrestricted cash and cash equivalents) to consolidated earnings before interest, taxes, depreciation, amortization, share-based compensation and other non-cash charges, including bad debt expense, certain one-time litigation and transaction related expenses, and restructuring charges for the trailing twelve months. In the event of a default, the U.S. Lender and the International Lender may increase the interest rates by 2.0% . The Company was in compliance with this financial covenant calculation for the March 31, 2018 test date. 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. The Company was not in compliance with the requirements of its Revolving Credit Facilities, which required the filing of its Form 10-Q for the second quarter of 2018 by August 14, 2018. The Company obtained a waiver of non-compliance of the related covenants in its Revolving Credit Facilities which now requires the Company to file its Form 10-Q for the first and second quarters of 2018 by September 30, 2018. If the Company does not file such report in accordance with this deadline, it will again be in noncompliance with the requirements of the Revolving Credit Facilities. The Company believes it will be in compliance with the requirements of its Revolving Credit Facilities upon the filing of its Form 10Q for the second quarter of 2018 by October 30, 2018. 2017 Term Loan Facility On June 21, 2017, the Company entered into the 2017 Term Loan Facility with a term of 6 years, requiring repayment of 1.0% of the original principal amount annually for the first five years. Any amounts repaid on the 2017 Term Loan Facility will not be available to be re-borrowed. The 2017 Term Loan Facility (along with interest thereon) 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 and cash proceeds thereof, as to which the 2017 Term Loan Facility (and the interest thereon) is secured by a second-priority security interest. Revolving Credit Facilities The Domestic Revolving Credit Facility and the International Revolving Credit Facility provide for letter of credit sub-limits in amounts of $20,000 and €8,000 ( $9,860 at March 31, 2018 ), respectively. The maximum Consolidated Net Leverage Ratio is 3.00 to 1.00 under the Revolving Credit Facilities for all test dates. The Revolving Credit Facilities require payment of interest only during the term and 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 the maturity date. The unamortized debt issuance costs of $2,300 and $2,400 are included in other assets in the consolidated balance sheet at March 31, 2018 and December 31, 2017 , respectively. The interest rate on borrowings under the Domestic Revolving Credit Facility are, at the Company’s option, either the LIBOR rate for the relevant interest period plus 3.75% per annum or the Base Rate plus 2.75% per annum. The interest rate on borrowings under the International Revolving Credit Facility 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 4.50% per annum. On June 21, 2017, borrowings under the International Revolving Credit Facility were paid in full and there have not been any subsequent borrowings through March 31, 2018 . Commitment fees are calculated at 0.50% annually on the average daily unused portion of the Domestic Revolving Credit Facility, and are calculated at 0.75% annually on the average daily unused portion of the International Revolving Credit Facility. Generally, the obligations of the Company under the Domestic Revolving Credit Facility are secured by a first-priority security interest in the Eligible Domestic Receivables, 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 Revolving Credit Facility are generally secured by a first-priority security interest in substantially all accounts receivable and cash proceeds thereof, 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. At March 31, 2018 the Company had $9,850 of outstanding letters of credit and $8,750 of available borrowing capacity under the Domestic Revolving Credit Facility. At March 31, 2018 , the Company had $4,428 of outstanding letters of credit and $2,475 of available borrowing capacity under the International Revolving Credit Facility. The availability under the International Revolving Credit Facility was reduced due to the borrowing base calculated for the three months ended December 31, 2017 from €9,156 ( $11,284 as of March 31, 2018 ) to €5,601 ( $6,903 ). |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table provides additional cash flow information: Three Months Ended March 31, 2018 2017 Interest and related financing fees paid $ 1,189 $ 3,500 Income taxes paid $ 1,148 $ 1,194 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation At March 31, 2018 , the Company had approximately 5,339 options outstanding with a weighted average exercise price of $4.49 . The Company did not grant any stock options during the three months ended March 31, 2018 . During the three months ended March 31, 2018 , options for approximately 30 shares with a weighted average exercise price of $5.06 lapsed and options for approximately 143 shares with a weighted average exercise price of $4.59 were forfeited. The Company recognized share-based compensation expense in selling, general and administrative expenses in the consolidated statement of operations totaling approximately $408 and $461 for the three months ended March 31, 2018 and 2017 , respectively. On May 10, 2017 the Company's Board of Directors approved a monthly grant of Company stock valued at $80 per month to the Interim Chief Executive Officer ("ICEO") during his term of service. At the end of each month during such period, the ICEO is entitled to $80 worth of Company stock based on the closing price of the Company's common stock on the last trading day of the month. The aggregate number of shares earned will be delivered to the ICEO on his last day of service as ICEO. During the three months ended March 31, 2018 , the ICEO accumulated 42 shares. The value of the shares accumulated is remeasured each reporting period. The change in value from the previous reporting period is recorded as an adjustment to compensation expense. The Company recorded compensation expense of $273 for the three months ended March 31, 2018 related to these monthly grants, which is included in the share-based compensation expense total reflected above. The ICEO has accumulated a total of 168 shares under this program. The ultimate value of these grants cannot be determined until the shares are delivered, therefore, the accumulated value of these shares is recorded in accrued expenses and will be reclassified to equity when the shares are ultimately delivered on the ICEO's last day of service. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The following table summarizes the changes in stockholders’ equity during the three months ended March 31, 2018 : Total Hill International, Inc. Stockholders Noncontrolling Interest Stockholders’ equity, December 31, 2017 $ 110,670 $ 109,075 $ 1,595 Net loss (8,151 ) (8,149 ) (2 ) Other comprehensive earnings (43 ) 421 (464 ) Comprehensive loss (8,194 ) (7,728 ) (466 ) Additional paid in capital 135 135 — Exercise of stock options 2,350 2,350 — Reversal of accrual for portion of ESA Put 745 745 — Acquisition of Additional interest in ESA (745 ) (122 ) (623 ) Stockholders’ equity, March 31, 2018 $ 104,961 $ 104,455 $ 506 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the three months ended March 31, 2018 and 2017 were (16.7)% and 40.1% , 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’s effective tax for the three months ended March 31, 2018 is lower than the comparable period of 2017, primarily due to U.S. losses as well as the mix of pretax earnings in jurisdictions included in the estimated annual effective tax rate. The 2017 Tax Act reduced the U.S. statutory tax rate from 35% to 21% beginning in 2018. The 2017 Tax Act requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and introduces a new U.S. tax on certain off-shore earnings referred to as Global Intangible Low-Taxed Income (GILTI) beginning in 2018. The Company is applying the guidance issued by the Securities and Exchange Commission in Staff Accounting Bulletin 118 when accounting for the enactment-date effects of the 2017 Tax Act. The guidance provides for a measurement period up to one year in which provisional amounts may be adjusted as an income tax expense or benefit in the period the adjustment is determined. As of March 31, 2018, the Company has not completed its accounting for the tax effects of the 2017 Tax Act and the provisional amounts recorded at December 31, 2017 were not adjusted during the quarter ended March 31, 2018. The Company will continue to analyze the impact of the 2017 Tax Act during the accounting measurement period. The Company’s actual results may materially differ from the Company’s current estimates due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies to interpret the 2017 Tax Act. The FASB allows companies to adopt an accounting policy to either recognize deferred taxes for GILTI or treat such as a tax cost in the year incurred. The Company has not yet determined its tax accounting policy and the Company has included in current income tax expense an immaterial amount related to its estimate of 2018 current year GILTI. The components of (loss) earnings before income taxes and the related income tax expense by the United States and foreign jurisdictions were as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 U.S. Foreign Total U.S. Foreign Total (Loss) earnings before income taxes (3,324 ) $ (3,250 ) $ (6,574 ) $ (5,475 ) $ 8,840 $ 3,365 Income tax expense, net 12 $ 1,083 $ 1,095 $ — $ 1,349 $ 1,349 The reserve for uncertain tax positions amounted to $2,842 and $2,676 at March 31, 2018 and December 31, 2017 , respectively, and is included in “Other liabilities” in the consolidated balance sheet at those dates. The Company’s policy is to record income tax related interest and penalties in income tax expense which amounted to $15 and $22 for the three months ended March 31, 2018 and 2017 , respectively. 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 ASC 740, 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. |
Segment and Related Information
Segment and Related Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Related Information | Segment and Related Information The Company operates as one reporting segment, the Project Management Group, which reflects how the Company is managed. The Project Management Group provides 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 services and facilities management services. The following tables present certain information for the Project Management Group’s operations: Revenue by Geographic Region: Three Months Ended March 31, 2018 2017 United States $ 51,572 45.2 % $ 48,736 42.0 % Latin America 2,812 2.5 % 3,043 2.6 % Europe 10,457 9.2 % 10,190 8.8 % Middle East 40,298 35.4 % 45,776 39.4 % Africa 6,703 5.9 % 5,715 4.9 % Asia/Pacific 2,055 1.8 % 2,660 2.3 % Total $ 113,897 100.0 % $ 116,120 100.0 % For the three months ended March 31, 2018 and 2017 , the United States and the Middle East accounted for more than 10% of consolidated total revenue. Operating Profit (Loss): Three Months Ended 2018 2017 United States $ 7,333 $ 4,274 Latin America (304 ) (373 ) Europe 2,158 1,416 Middle East (4,226 ) 6,802 Africa 669 780 Asia/Pacific (337 ) 124 Corporate (10,533 ) (8,909 ) Total $ (5,240 ) $ 4,114 Depreciation and Amortization Expense: Three Months Ended 2018 2017 Project Management $ 1,059 $ 1,522 Corporate 232 73 Total $ 1,291 $ 1,595 Revenue By Client Type: Three Months Ended March 31, 2018 2017 U.S. federal government $ 3,872 3.4 % $ 3,221 2.8 % U.S. state, regional and local governments 33,551 29.5 % 35,240 30.3 % Foreign governments 33,806 29.7 % 36,582 31.5 % Private sector 42,668 37.4 % 41,077 35.4 % Total $ 113,897 100.0 % $ 116,120 100.0 % Property, Plant and Equipment, Net, by Geographic Location: March 31, 2018 December 31, 2017 United States $ 9,245 $ 9,434 Latin America 548 546 Europe 1,005 675 Middle East 1,091 1,164 Africa 101 105 Asia/Pacific 77 80 Total $ 12,067 $ 12,004 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General Litigation From time to time, the Company is a defendant or plaintiff in various legal proceedings which arise in the normal course of business. As such the Company is required to assess the likelihood of any adverse outcomes to these proceedings as well as potential ranges of probable losses. A determination of the amount of the provision required for commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each proceeding. 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 proceedings will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Knowles Limited (“Knowles”), a subsidiary of the Company, is a party to an arbitration proceeding instituted on July 8, 2014 in which Knowles claimed that it was entitled to payment for services rendered to Celtic Bioenergy Limited (“Celtic”). The arbitrator decided in favor of Knowles. The arbitrator’s award was appealed by Celtic to the U.K. High Court of Justice, Queen’s Bench Division, Technology and Construction Court (“Court”). On March 16, 2017, the Court (1) determined that certain relevant facts had been deliberately withheld from the arbitrator by an employee of Knowles and (2) remitted the challenged parts of the arbitrator’s award back to the arbitrator to consider the award in possession of the full facts. The Company is evaluating the impact of the judgment of the Court. Other The Company has identified a potential tax liability related to certain foreign subsidiaries’ failure to comply with laws and regulations of the jurisdictions, outside of their home country, in which their employees provided services. The Company has estimated the potential liability to be approximately $962 and is included in other liabilities in the consolidated balance sheet at March 31, 2018 . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 17, 2018, the Board appointed Raouf S. Ghali as Chief Executive Officer of Hill International, Inc. (the “Company”), effective as of October 1, 2018. In addition to his role as Chief Executive Officer, Mr. Ghali will continue to serve as a member of the Board of Directors (the "Board"). Also on August 17, 2018, the Board approved the termination of Mr. Ghali’s former Employment Agreement, and the Company and Mr. Ghali entered into a written termination agreement with respect to his former Employment Agreement. Further, the Board approved the following new compensation terms, also effective October 1, 2018: (1) Base Salary of $650,000 annually; (2) Participation in the Company’s Annual Incentive Bonus Plan with an annual target cash bonus of $675,000 , based on metrics to be determined by the Board; (3) Grant of $900,000 annually in shares of the Company’s common stock, 50% of which will be performance based (as determined by the Board) and 50% of which will be time vested; and (4) Participation in the Company’s 2016 Executive Retention Plan, pursuant to which Mr. Ghali will be entitled to severance equal to two times his annual base salary under certain circumstances. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary | Summary The accompanying unaudited interim consolidated financial statements were prepared in accordance with the rules and regulations of the SEC 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, 2017 . Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("U.S. 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 U.S. 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. |
Reclassification | Reclassification A reclassification was made in the presentation of the consolidated balance sheet as of December 31, 2017 . The Company adjusted the classification of current portion of retainage receivable from accounts receivable, less allowance for doubtful accounts to a new line item on the balance sheet, "current portion of retainage receivable." Current portion of retainage receivable is reported separately as a result of the Company's adoption of accounting standards update 2014-09, Revenue from Contracts with Customers (Topic 606). As a result, $9,249 was reclassified from accounts receivable, less allowance for doubtful accounts to current portion of retainage receivable to conform with current period reporting. Additionally, a reclassification was made in the presentation of the consolidated statement of cash flows for the three months ended March 31, 2017. As a result of the adoption of ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which addresses classification and presentation of changes in restricted cash on the statement of cash flows, the Company included restricted cash in the opening and closing "cash, cash equivalents and restricted cash" balance in this filing on the consolidated statement of cash flows for the three months ended March 31, 2017. |
Construction Claims Group Sale | Construction Claims Group Sale On December 20, 2016, the Company and its subsidiary Hill International N.V. (“Hill N.V.” and, collectively with the Company, the “Sellers”) entered into a Stock Purchase Agreement (as amended on May 3, 2017, the “Agreement”) with Liberty Mergeco, Inc. (the “US Purchaser”) and Liberty Bidco UK Limited (the “UK Purchaser” and, collectively with the US Purchaser, the “Purchasers”) pursuant to which the Purchasers were to acquire the Construction Claims Group by the US Purchaser’s acquisition of all of the stock of Hill International Consulting, Inc. from the Company and the UK Purchaser’s acquisition of all of the stock of Hill International Consulting B.V. from Hill N.V. The Construction Claims Group sale closed on May 5, 2017 with an effective date of April 30, 2017. For a detailed description of the transaction, see "Note 2 Discontinued Operations" in the Company's 2017 Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on August 31, 2018 . |
Foreign Currency Translations and Transactions | Foreign Currency Translations and Transactions Assets and liabilities of all foreign operations are translated at period-end rates of exchange while revenues and expenses are translated at the average monthly exchange rates. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity entitled accumulated other comprehensive loss until the entity is sold or substantially liquidated. Gains or losses arising from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency), including those resulting from intercompany transactions, are reflected in selling, general and administrative expenses in the consolidated statement of operations. The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned, are recorded in accumulated other comprehensive loss on the consolidated balance sheet. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and accounts receivable. The Company maintains its cash accounts with high quality financial institutions. Although the Company believes that the financial institutions with which it does business will be able to fulfill their commitments, there is no assurance that those institutions will be able to continue to do so. No single client accounted for 10% or more to revenue for the three months ended March 31, 2018 or 2017 . |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts is an estimate prepared by management based on identification of the collectability of specific accounts and the overall condition of the receivable portfolios. When evaluating the adequacy of the allowance for doubtful accounts, the Company specifically analyzes trade receivables, including retainage receivable, historical bad debts, client credits, client concentrations, client credit worthiness, current economic trends and changes in client payment terms. If the financial condition of clients were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Likewise, should the Company determine that it would be able to realize more of its receivables in the future than previously estimated, an adjustment to the allowance would increase earnings in the period such determination was made. The allowance for doubtful accounts is reviewed on a quarterly basis and adjustments are recorded as deemed necessary. |
Retainage Receivable and Revenue Recognition | Revenue Recognition The Company generates revenue primarily from providing professional services to its clients under various types of contracts. In providing these services, the Company may incur reimbursable expenses, which consist principally of amounts paid to subcontractors and other third parties and travel and other job related expenses that are contractually reimbursable from clients. The Company includes reimbursable expenses in computing and reporting its total revenue as long as the Company remains responsible to the client for the fulfillment of the contract and for the overall acceptability of all services provided. If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, incentive awards, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. These loss projects are re-assessed for each subsequent reporting period until the project is complete. Such revisions could occur at any time and the effects may be material. The Company evaluates contractual arrangements to determine how to recognize revenue. See footnote 4 Revenue from contracts with customers for more detail. Retainage Receivable Retainage receivable represents balances billed but not paid by clients pursuant to retainage provisions in certain contracts and will be due upon completion of specific tasks or the completion of the contract. The current portion of retainage receivable is included in current portion of retainage receivable and the long-term portion of retainage receivable is included in retainage receivable in the consolidated balance sheets. |
Income Taxes | Income Taxes The Company estimates income taxes in each of the jurisdictions in which it operates. This process involves estimating its actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheets. The Company assesses the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent it believes recovery is not likely, the Company establishes a valuation allowance. To the extent the Company establishes a valuation allowance in a period, it must include an expense within the tax provision in the consolidated statements of earnings. The Company has recorded a valuation allowance to reduce the deferred tax asset to an amount that is more likely than not to be realized in future years. If the Company determines in the future that it is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position, that the deferred tax assets subject to the valuation allowance will be realized, then the previously provided valuation allowance will be adjusted. The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is more likely than not that the benefit will be ultimately realized. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. |
Earnings per Share | Earnings per Share Basic earnings per common share have 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 or the assumed vesting of stock awards using the treasury stock method, if dilutive. The Company has outstanding options to purchase approximately 5,339 shares and 6,754 shares for the three months ended March 31, 2018 and 2017 , respectively. All such options were excluded from the calculation of diluted earnings per share because they were antidilutive due to the Company's net loss from continuing operations. The following table provides a reconciliation to net earnings (loss) used in the numerator for earnings (loss) per share from continuing operations attributable to Hill: Three Months Ended March 31, 2018 2017 (Loss) earnings from continuing operations $ (7,669 ) $ 2,016 Less: net (loss) earnings - noncontrolling interest (2 ) 119 Net (loss) earnings from continuing operations attributable to Hill $ (7,667 ) $ 1,897 In 2017 the Company's Board of Directors ("Board") approved a monthly grant of Company stock valued at $80 per month to the Interim Chief Executive Officer ("ICEO") during his term of service, to be delivered to him on the last day of his service as ICEO. There is no circumstance in which these shares will not ultimately be issued, therefore, the shares to be issued under this grant are included in the calculation of basic weighted average shares outstanding. Basic shares outstanding included 42 shares related to this grant in the three months ended March 31, 2018 . See Note 11 - Share-Based Compensation for further details of this grant. |
New Accounting Pronouncements | New Accounting Pronouncements Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or adoption will have minimal impact on its consolidated financial statements. For additional information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 4 to the consolidated financial statements in Item 8 of Form 10K for the year ended December 31, 2017 filed with the SEC on August 31, 2018 . See update below. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standard Update ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) or Accounting Standards Codification 606 (“ASC 606”). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09 to provide additional clarification and implementation instructions relating to (i) principal versus agent considerations, (ii) identifying performance obligations and licensing, (iii) narrow-scope improvements and practical expedients and (iv) technical corrections and improvements. However, none of the amendments change the core principle of the guidance in ASU 2014-09. The Company adopted this standard effective January 1, 2018. See Note 4 - Revenue from Contracts with Customers for further information regarding implementation and disclosures. In January 2016, the FASB issued ASU 2016-1, Financial Instruments - Overall (Topic 825-10) , which requires all equity investments to be measured at fair value with changes in fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this ASU also require an entity to (1) present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and (2) provide separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. In addition, the amendments in this pronouncement eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This ASU was effective for the Company commencing January 1, 2018. The adoption of this ASU did not have a significant impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. This ASU’s amendments add or clarify guidance on eight cash flow issues: debt prepayment, settlement of zero-coupon debt instruments, contingent consideration payments, insurance claim proceeds, life insurance proceeds, distributions from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The Company adopted this ASU effective January 1, 2018. The adoption of this ASU did not have a significant impact on the Company’s financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . Under the new standard, an entity is required to recognize the income tax consequences of an intra-entity transfer of an asset (with the exception of inventory) when the transfer occurs. Under previous U.S. GAAP, entities are prohibited from recognizing current and deferred income taxes for an intra-entity transfer until the asset is sold to a third party. Examples of assets that would be affected by the new guidance are intellectual property and property, plant, and equipment. The Company’s adoption of this ASU on January 1, 2018 did not have a material effect on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which addresses classification and presentation of changes in restricted cash on the statement of cash flows. The ASU requires an entity’s reconciliation of the beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include in cash and cash equivalents amounts generally described as restricted cash and restricted cash equivalents . The ASU does not define restricted cash or restricted cash equivalents. The Company defines restricted cash as collateral for letters of credit, bonds or guarantees on projects (for further details see Note 4 of the Company's 2017 form 10-K). The Company adopted this ASU on January 1, 2018 which resulted in restricted cash being included in the opening and closing balance of cash and cash equivalents on the cash flow statements. In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business , to clarify the definition of a business with the objective of providing a more robust framework to assist management when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the amendments of this ASU on January, 1 2018 and will apply its provisions prospectively to future business combinations. In May 2017, the FASB issued ASU 2017-9, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions The Company adopted this ASU on January 1, 2018 and will prospectively apply its provisions to any future award modifications. In February 2018, the FASB issued ASU No. 2018-3, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , that clarifies the guidance in ASU No. 2016-1, Financial Instruments-Overall (Subtopic 825-10) related to: Equity Securities without a Readily Determinable Fair Value- Discontinuation, Equity Securities without a Readily Determinable Fair Value- Adjustments, Forward Contracts and Purchased Options, Presentation Requirements for Certain Fair Value Option Liabilities, Fair Value Option Liabilities Denominated in a Foreign Currency and Transition Guidance for Equity Securities without a Readily Determinable Fair Value. The Company adopted this ASU on January 1, 2018 and it did not have a significant impact on its financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842), which will require the Company the recognize lease assets and lease liabilities (related to leases previously classified as operating under previous U.S. GAAP) on its consolidated balance sheet for all leases in excess of one year in duration. The ASU will be effective for the Company commencing January 1, 2019. The adoption of this ASU will impact the Company’s financial statements in that all existing leases will be recorded as right-of-use assets and liabilities and the timing and classification of associated lease expenses will change. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) - Credit Losses: Measurement of Credit Losses on Financial Instruments , which provides guidance regarding the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. This ASU will be effective for the Company commencing January 1, 2020 with early adoption permitted commencing January 1, 2019. The Company is in the process of assessing the impact of this ASU on our consolidated financial statements and disclosures but the Company does not believe this ASU will have a significant impact on its financial statements. In January 2017, the FASB issued ASU 2017-4, Intangibles - Goodwill and Other (Topic 350), which removes step 2 from the goodwill impairment test. As a result, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units’ fair value. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017, and the prospective transition method should be applied. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07 , Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Our equity incentive plans limit share-based awards to employees and directors of the Company and we do not expect this update to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period, for all entities. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements and but does not expect this update to have a material impact on the Company's consolidated financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Earnings Per Share | The following table provides a reconciliation to net earnings (loss) used in the numerator for earnings (loss) per share from continuing operations attributable to Hill: Three Months Ended March 31, 2018 2017 (Loss) earnings from continuing operations $ (7,669 ) $ 2,016 Less: net (loss) earnings - noncontrolling interest (2 ) 119 Net (loss) earnings from continuing operations attributable to Hill $ (7,667 ) $ 1,897 |
Revenue from Contracts with C25
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The components of the Company’s revenue by contract type and geographic region for the three months ended March 31, 2018 are as follows: Three months ended March 31, 2018 Fixed Price T&M Total Percent of Revenue United States $ 3,056 $ 48,516 $ 51,572 45.2 % Latin America 1,821 991 2,812 2.5 % Europe 4,803 5,654 10,457 9.2 % Middle East 17,804 22,494 40,298 35.4 % Africa 38 6,665 6,703 5.9 % Asia/Pacific 581 1,474 2,055 1.8 % Total $ 28,103 $ 85,794 $ 113,897 100.0 % |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable | The components of accounts receivable are as follows: March 31, 2018 December 31, 2017 Billed $ 177,912 $ 186,411 Unbilled* 35,908 34,050 213,820 220,461 Allowance for doubtful accounts (73,412 ) (72,850 ) Accounts receivable, less allowance for doubtful accounts $ 140,408 $ 147,611 * Unbilled receivables primarily represent revenue earned on contracts, which the Company is contractually precluded from billing until predetermined future dates. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of acquired intangible assets | The following table summarizes the Company’s acquired intangible assets: March 31, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Client relationships $ 11,763 $ 8,595 $ 16,397 $ 12,862 Acquired contract rights 1,007 1,007 1,007 1,007 Trade names 890 533 877 504 Total $ 13,660 $ 10,135 $ 18,281 $ 14,373 Intangible assets, net $ 3,525 $ 3,908 |
Summary of amortization expense related to intangible assets | Amortization expense related to intangible assets was as follows: Three Months Ended March 31, 2018 2017 $343 $559 |
Summary of estimated amortization expense of intangible assets for the next five years | The following table presents the estimated amortization expense for the next five years : Estimated Amortization Expense Year ending December 31, 2018 (remaining 9 months) $ 726 2019 990 2020 728 2021 338 2022 265 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 2018 : Balance, December 31, 2017 $ 52,658 Translation adjustments 372 Balance, March 31, 2018 $ 53,030 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of components of accounts payable and accrued expenses | Below are the components of accounts payable and accrued expenses: March 31, 2018 December 31, 2017 Accounts payable $ 26,916 $ 32,345 Accrued payroll and related expenses 31,385 29,569 Accrued subcontractor fees 12,967 10,814 Accrued profit improvement plan items 3,890 3,425 Accrued agency fees 980 1,671 Accrued legal and professional fees 1,544 2,983 Other accrued expenses 960 2,414 $ 78,642 $ 83,221 |
Notes Payable and Long-Term D30
Notes Payable and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of outstanding debt obligations | The table below reflects the Company's credit facilities including notes payable and long-term debt: Interest Rate (1) Balance Outstanding Loan Maturity Interest Rate Type March 31, December 31, March 31, 2018 December 31, 2017 Secured Credit Facilities Hill International, Inc. - Société Générale 2017 Term Loan Facility 06/20/2023 Variable 7.10% 7.32% $ 29,775 $ 29,850 Hill International, Inc. - Société Générale Domestic Revolving Credit Facility 05/04/2022 Variable 6.69% 5.25% 6,400 3,300 Hill International N.V.. - Société Générale International Revolving Credit Facility 05/04/2022 Variable N/A 4.10% — — Unsecured Credit Facilities Hill International, Inc. - First Abu Dhabi Bank PJSC Overdraft Credit Facility (2) 06/30/2018 Variable 5.50% 5.50% 1,841 2,316 Engineering SA Services Technicos - Consortium of Brazilian Credit Facilities (3) 06/26/2018 Fixed 4.76% 4.76% — — Unsecured Notes Payable and Long-Term Debt Hill International Spain SA - Bankia, S.A. and Bankinter, S.A (4) 12/31/2021 Fixed 2.17% 2.17% 2,126 2,202 Hill International Spain SA - IberCaja Banco, S.A. (4) 12/31/2019 Variable 3.44% 3.37% 367 407 Philadelphia Industrial Development Corporation Loan 03/31/2027 Fixed 2.75% 2.75% 585 599 Total notes payable and long-term debt, gross $ 41,094 $ 38,674 Less: unamortized discount and deferred financing costs related to Societe Generale 2017 Term Loan Facility (899 ) (892 ) Notes payable and long-term debt $ 40,195 $ 37,782 Current portion of notes payable 2,956 3,406 Current portion of unamortized debt discount and deferred financing costs (174 ) (165 ) Current maturities of notes payable and long-term debt 2,782 3,241 Notes payable and long-term debt, net of current maturities 37,413 34,541 (1) Interest rates for variable interest rate debt are reflected on a weighted average basis through March 31, 2018 since inception. (2) Credit facility lender was formerly known as National Bank of Abu Dhabi. There is no stated maturity date as the loan is subject to periodic review by the bank. Therefore, the amount outstanding is reflected within the current maturities of notes payable and long-term debt. Balances outstanding are reflected in U.S. dollars based on the conversion rates from AED as of March 31, 2018 and December 31, 2017 . (3) The unsecured Engineering SA Services revolving credit facility are subject to automatic renewal every three months. (4) Balances outstanding are reflected in U.S. dollars based on the conversion rates from Euros as of March 31, 2018 and December 31, 2017 . |
Supplemental Cash Flow Inform31
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of additional cash flow information | The following table provides additional cash flow information: Three Months Ended March 31, 2018 2017 Interest and related financing fees paid $ 1,189 $ 3,500 Income taxes paid $ 1,148 $ 1,194 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of changes in stockholders' equity | The following table summarizes the changes in stockholders’ equity during the three months ended March 31, 2018 : Total Hill International, Inc. Stockholders Noncontrolling Interest Stockholders’ equity, December 31, 2017 $ 110,670 $ 109,075 $ 1,595 Net loss (8,151 ) (8,149 ) (2 ) Other comprehensive earnings (43 ) 421 (464 ) Comprehensive loss (8,194 ) (7,728 ) (466 ) Additional paid in capital 135 135 — Exercise of stock options 2,350 2,350 — Reversal of accrual for portion of ESA Put 745 745 — Acquisition of Additional interest in ESA (745 ) (122 ) (623 ) Stockholders’ equity, March 31, 2018 $ 104,961 $ 104,455 $ 506 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of (loss) earnings before income taxes and the related income tax expense by the United States and foreign jurisdictions | The components of (loss) earnings before income taxes and the related income tax expense by the United States and foreign jurisdictions were as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 U.S. Foreign Total U.S. Foreign Total (Loss) earnings before income taxes (3,324 ) $ (3,250 ) $ (6,574 ) $ (5,475 ) $ 8,840 $ 3,365 Income tax expense, net 12 $ 1,083 $ 1,095 $ — $ 1,349 $ 1,349 |
Segment and Related Informati34
Segment and Related Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | The following tables present certain information for the Project Management Group’s operations: Revenue by Geographic Region: Three Months Ended March 31, 2018 2017 United States $ 51,572 45.2 % $ 48,736 42.0 % Latin America 2,812 2.5 % 3,043 2.6 % Europe 10,457 9.2 % 10,190 8.8 % Middle East 40,298 35.4 % 45,776 39.4 % Africa 6,703 5.9 % 5,715 4.9 % Asia/Pacific 2,055 1.8 % 2,660 2.3 % Total $ 113,897 100.0 % $ 116,120 100.0 % |
Schedule of Operating Profit (Loss) | Operating Profit (Loss): Three Months Ended 2018 2017 United States $ 7,333 $ 4,274 Latin America (304 ) (373 ) Europe 2,158 1,416 Middle East (4,226 ) 6,802 Africa 669 780 Asia/Pacific (337 ) 124 Corporate (10,533 ) (8,909 ) Total $ (5,240 ) $ 4,114 |
Schedule of Depreciation and Amortization Expense | Depreciation and Amortization Expense: Three Months Ended 2018 2017 Project Management $ 1,059 $ 1,522 Corporate 232 73 Total $ 1,291 $ 1,595 |
Schedule of Revenue By Client Type | Revenue By Client Type: Three Months Ended March 31, 2018 2017 U.S. federal government $ 3,872 3.4 % $ 3,221 2.8 % U.S. state, regional and local governments 33,551 29.5 % 35,240 30.3 % Foreign governments 33,806 29.7 % 36,582 31.5 % Private sector 42,668 37.4 % 41,077 35.4 % Total $ 113,897 100.0 % $ 116,120 100.0 % |
Schedule of Property, Plant and Equipment, Net by Geographic Location | Property, Plant and Equipment, Net, by Geographic Location: March 31, 2018 December 31, 2017 United States $ 9,245 $ 9,434 Latin America 548 546 Europe 1,005 675 Middle East 1,091 1,164 Africa 101 105 Asia/Pacific 77 80 Total $ 12,067 $ 12,004 |
Liquidity (Details)
Liquidity (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Liquidity [Line Items] | ||
Cash and cash equivalents | $ 17,820 | $ 21,353 |
U.S. Revolver | Letters of credit | ||
Liquidity [Line Items] | ||
Line of Credit Facility, Remaining Borrowing Capacity | 8,750 | |
Foreign credit agreements | International Revolver | Revolving credit facility | ||
Liquidity [Line Items] | ||
Line of Credit Facility, Remaining Borrowing Capacity | 2,011 | |
Foreign credit agreements | Other Foreign Banks | International Revolver | Revolving credit facility | ||
Liquidity [Line Items] | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 2,475 |
Basis of Presentation - Reclass
Basis of Presentation - Reclassification (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Current portion of retainage receivable | $ 10,489 | $ 9,249 |
Basis of Presentation - Loss on
Basis of Presentation - Loss on Performance Bond (Details) - USD ($) $ in Thousands | Feb. 08, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Loss Contingencies [Line Items] | |||
Loss on performance bond | $ 7,938 | $ 0 | |
Performance Guarantee | |||
Loss Contingencies [Line Items] | |||
Loss on performance bond | $ 7,938 |
Basis of Presentation - Earning
Basis of Presentation - Earnings per Share (Details) - USD ($) shares in Thousands, $ in Thousands | May 10, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Total number of shares excluded from diluted earnings per common share (in shares) | 5,339 | 6,754 | |
(Loss) earnings from continuing operations | $ (7,669) | $ 2,016 | |
Less: net (loss) earnings - noncontrolling interest | (2) | 119 | |
Net (loss) earnings from continuing operations attributable to Hill | $ (7,667) | $ 1,897 | |
Employee Stock Option | ICEO | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate fair value of options granted | $ 80 | ||
Options granted (in shares) | 42 |
Revenue from Contracts with C39
Revenue from Contracts with Customers - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)segment | |
Revenue from Contract with Customer [Abstract] | |
Number of operating segments | segment | 1 |
Revenue recognized | $ 5,615 |
Remaining performance obligations | $ 137,978 |
Remaining performance obligations, percentage | 58.20% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, expected term | 12 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, expected term | 4 years |
Revenue from Contracts with C40
Revenue from Contracts with Customers - Revenue from Contracts with Customers (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 113,897 |
Percent of Revenue | 100.00% |
United States | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 51,572 |
Percent of Revenue | 45.20% |
Latin America | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 2,812 |
Percent of Revenue | 2.50% |
Europe | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 10,457 |
Percent of Revenue | 9.20% |
Middle East | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 40,298 |
Percent of Revenue | 35.40% |
Africa | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 6,703 |
Percent of Revenue | 5.90% |
Asia/Pacific | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 2,055 |
Percent of Revenue | 1.80% |
Fixed Price | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 28,103 |
Fixed Price | United States | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,056 |
Fixed Price | Latin America | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,821 |
Fixed Price | Europe | |
Disaggregation of Revenue [Line Items] | |
Revenue | 4,803 |
Fixed Price | Middle East | |
Disaggregation of Revenue [Line Items] | |
Revenue | 17,804 |
Fixed Price | Africa | |
Disaggregation of Revenue [Line Items] | |
Revenue | 38 |
Fixed Price | Asia/Pacific | |
Disaggregation of Revenue [Line Items] | |
Revenue | 581 |
T&M | |
Disaggregation of Revenue [Line Items] | |
Revenue | 85,794 |
T&M | United States | |
Disaggregation of Revenue [Line Items] | |
Revenue | 48,516 |
T&M | Latin America | |
Disaggregation of Revenue [Line Items] | |
Revenue | 991 |
T&M | Europe | |
Disaggregation of Revenue [Line Items] | |
Revenue | 5,654 |
T&M | Middle East | |
Disaggregation of Revenue [Line Items] | |
Revenue | 22,494 |
T&M | Africa | |
Disaggregation of Revenue [Line Items] | |
Revenue | 6,665 |
T&M | Asia/Pacific | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 1,474 |
Accounts Receivable - Component
Accounts Receivable - Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Components of accounts receivable | ||
Billed | $ 177,912 | $ 186,411 |
Unbilled | 35,908 | 34,050 |
Accounts receivable, gross | 213,820 | 220,461 |
Allowance for doubtful accounts | (73,412) | (72,850) |
Accounts receivable, less allowance for doubtful accounts | $ 140,408 | $ 147,611 |
Intangible Assets - Acquired (D
Intangible Assets - Acquired (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Summary of acquired intangible assets | ||
Gross Carrying Amount | $ 13,660 | $ 18,281 |
Accumulated Amortization | 10,135 | 14,373 |
Intangible assets, net | 3,525 | 3,908 |
Client relationship | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 11,763 | 16,397 |
Accumulated Amortization | 8,595 | 12,862 |
Contract | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 1,007 | 1,007 |
Accumulated Amortization | 1,007 | 1,007 |
Trade name | ||
Summary of acquired intangible assets | ||
Gross Carrying Amount | 890 | 877 |
Accumulated Amortization | $ 533 | $ 504 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense related to intangible assets | $ 343 | $ 559 |
Estimated amortization expense of intangible assets for the next five years | ||
2018 (remaining 9 months) | 726 | |
2,018 | 990 | |
2,019 | 728 | |
2,020 | 338 | |
2,021 | $ 265 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Summary of changes in carrying value of goodwill during 2017 | |
Balance, December 31, 2017 | $ 52,658 |
Translation adjustments | 372 |
Balance, March 31, 2018 | $ 53,030 |
Accounts Payable and Accrued 45
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Components of accounts payable and accrued expenses | ||
Accounts payable | $ 26,916 | $ 32,345 |
Accrued payroll and related expenses | 31,385 | 29,569 |
Accrued subcontractor fees | 12,967 | 10,814 |
Accrued profit improvement plan items | 3,890 | 3,425 |
Accrued agency fees | 980 | 1,671 |
Accrued legal and professional fees | 1,544 | 2,983 |
Other accrued expenses | 960 | 2,414 |
Accounts payable and accrued expenses, net | $ 78,642 | $ 83,221 |
Notes Payable and Long-Term D46
Notes Payable and Long-Term Debt - Summary of Outstanding Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Summary of outstanding debt obligations | ||
Total notes payable and long-term debt, gross | $ 41,094 | $ 38,674 |
Less: unamortized discount and deferred financing costs related to Societe Generale 2017 Term Loan Facility | (899) | (892) |
Notes payable and long-term debt | 40,195 | 37,782 |
Current portion of notes payable | 2,956 | 3,406 |
Current portion of unamortized debt discount and deferred financing costs | (174) | (165) |
Current maturities of notes payable and long-term debt | 2,782 | 3,241 |
Notes payable and long-term debt, net of current maturities | $ 37,413 | $ 34,541 |
Hill International, Inc. - Société Générale 2017 Term Loan Facility | Secured Debt | ||
Summary of outstanding debt obligations | ||
Variable interest rate | 7.10% | 7.32% |
Total notes payable and long-term debt, gross | $ 29,775 | $ 29,850 |
Hill International, Inc. - Société Générale Domestic Revolving Credit Facility | Secured Debt | ||
Summary of outstanding debt obligations | ||
Variable interest rate | 6.69% | 5.25% |
Total notes payable and long-term debt, gross | $ 6,400 | $ 3,300 |
Hill International N.V.. - Société Générale International Revolving Credit Facility | Secured Debt | ||
Summary of outstanding debt obligations | ||
Fixed interest rate | 4.10% | |
Total notes payable and long-term debt, gross | $ 0 | $ 0 |
Hill International, Inc. - First Abu Dhabi Bank PJSC Overdraft Credit Facility | ||
Summary of outstanding debt obligations | ||
Variable interest rate | 5.50% | 5.50% |
Total notes payable and long-term debt, gross | $ 1,841 | $ 2,316 |
Engineering SA Services Technicos - Consortium of Brazilian Credit Facilities | ||
Summary of outstanding debt obligations | ||
Fixed interest rate | 4.76% | |
Total notes payable and long-term debt, gross | $ 0 | |
Engineering SA Services Technicos - Consortium of Brazilian Credit Facilities | Unsecured Debt | ||
Summary of outstanding debt obligations | ||
Fixed interest rate | 4.76% | |
Total notes payable and long-term debt, gross | $ 0 | |
Hill International Spain SA - Bankia, S.A. and Bankinter, S.A | Unsecured Debt | ||
Summary of outstanding debt obligations | ||
Fixed interest rate | 2.17% | 2.17% |
Total notes payable and long-term debt, gross | $ 2,126 | $ 2,202 |
Hill International Spain SA - IberCaja Banco, S.A. | Unsecured Debt | ||
Summary of outstanding debt obligations | ||
Variable interest rate | 3.44% | 3.37% |
Total notes payable and long-term debt, gross | $ 367 | $ 407 |
Philadelphia Industrial Development Corporation Loan | Unsecured Debt | ||
Summary of outstanding debt obligations | ||
Fixed interest rate | 2.75% | 2.75% |
Total notes payable and long-term debt, gross | $ 585 | $ 599 |
Notes Payable and Long-Term D47
Notes Payable and Long-Term Debt - Term Loan Facilities and Revolving Credit Facilities (Details) | Jun. 21, 2017 | May 05, 2017EUR (€) | May 31, 2017 | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | May 05, 2017USD ($) |
Notes Payable and Long-Term Debt | ||||||||
Long-term Debt | $ 40,195,000 | $ 37,782,000 | ||||||
Term loan payable | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Aggregate principal amount | $ 30,000,000 | |||||||
Term of debt | 6 years | |||||||
Quarterly principal payment, percentage | 1.00% | |||||||
Revolving credit facility | Other Assets | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Unamortized balances of expenses and fees | 2,300,000 | $ 2,400,000 | ||||||
Secured Credit Facilities | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Debt covenant leverage ratio limit | 3 | |||||||
Increase in applicable interest rate upon default (as a percent) | 2.00% | |||||||
Revolving credit facility | Secured Credit Facilities | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Consolidated net leverage ratio | 3 | |||||||
U.S. Revolver | British Bankers Association LIBOR Rate | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Basis of effective interest rate (as a percent) | 3.75% | |||||||
U.S. Revolver | Base Rate | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Basis of effective interest rate (as a percent) | 2.75% | |||||||
U.S. Revolver | Letters of credit | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | 20,000,000 | |||||||
Amounts outstanding | 9,850,000 | |||||||
Available borrowing capacity | 8,750,000 | |||||||
U.S. Revolver | Revolving credit facility | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Aggregate principal amount | 25,000,000 | |||||||
Unused facility commitment fees percentage | 0.50% | |||||||
U.S. Revolver | Secured Credit Facilities | Letters of credit | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | 20,000,000 | |||||||
International Revolver | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | 11,284,000 | |||||||
International Revolver | EURIBOR | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Basis of effective interest rate (as a percent) | 4.50% | |||||||
International Revolver | Letters of credit | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | 9,860,000 | $ 9,130,000 | 8,000,000 | |||||
International Revolver | Revolving credit facility | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | € 9,156,000 | € 5,601,000 | 6,903,000 | 10,000,000 | ||||
Unused facility commitment fees percentage | 0.75% | |||||||
International Revolver | Revolving credit facility | Foreign credit agreements | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Available borrowing capacity | 2,011,000 | |||||||
International Revolver | Secured Credit Facilities | Letters of credit | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Maximum borrowing capacity | $ 8,000,000 | |||||||
Other Foreign Banks | International Revolver | Revolving credit facility | Foreign credit agreements | ||||||||
Notes Payable and Long-Term Debt | ||||||||
Amounts outstanding | 4,428,000 | |||||||
Available borrowing capacity | $ 2,475,000 |
Supplemental Cash Flow Inform48
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of additional cash flow information | ||
Interest and related financing fees paid | $ 1,189 | $ 3,500 |
Income taxes paid | $ 1,148 | $ 1,194 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | May 10, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 408 | $ 461 | |
Exercise price 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding (in shares) | 5,339,000 | ||
Weighted average exercise price of outstanding options (in dollars per share) | $ 4.49 | ||
Exercise price 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options lapsed (in shares) | 30,000 | ||
Weighted average exercise price of options lapsed (in dollars per share) | $ 5.06 | ||
Exercise price 3 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options forfeited (in shares) | 143,000 | ||
Weighted average exercise price of options forfeited (in dollars per share) | $ 4.59 | ||
Employee Stock Option | ICEO | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding (in shares) | 168,000 | ||
Options granted (in shares) | 42,000 | ||
Aggregate fair value of options granted | $ 80 | ||
Compensation expense | $ 273 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Increase (decrease) in stockholders' equity | ||
Stockholders’ equity, December 31, 2017 | $ 110,670 | |
Net loss | (8,151) | $ (2,235) |
Other comprehensive earnings | (43) | |
Comprehensive loss | (8,194) | |
Additional paid in capital | 135 | |
Exercise of stock options | 2,350 | |
Reversal of accrual for portion of ESA Put | 745 | |
Acquisition of Additional interest in ESA | (745) | |
Stockholders’ equity, March 31, 2018 | 104,961 | |
Non-controlling Interests | ||
Increase (decrease) in stockholders' equity | ||
Stockholders’ equity, December 31, 2017 | 1,595 | |
Net loss | (2) | |
Other comprehensive earnings | (464) | |
Comprehensive loss | (466) | |
Additional paid in capital | 0 | |
Exercise of stock options | 0 | |
Reversal of accrual for portion of ESA Put | 0 | |
Acquisition of Additional interest in ESA | (623) | |
Stockholders’ equity, March 31, 2018 | 506 | |
Hill International, Inc. Stockholders | ||
Increase (decrease) in stockholders' equity | ||
Stockholders’ equity, December 31, 2017 | 109,075 | |
Net loss | (8,149) | |
Other comprehensive earnings | 421 | |
Comprehensive loss | (7,728) | |
Additional paid in capital | 135 | |
Exercise of stock options | 2,350 | |
Reversal of accrual for portion of ESA Put | 745 | |
Acquisition of Additional interest in ESA | (122) | |
Stockholders’ equity, March 31, 2018 | $ 104,455 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||
Effective income tax rate (as a percent) | (16.70%) | 40.10% | |
Components of (loss) earnings before income taxes | |||
(Loss) earnings before income taxes | $ (6,574) | $ 3,365 | |
Income tax expense, net | 1,095 | 1,349 | |
Penalties and interest expense | 15 | 22 | |
Other liabilities | |||
Components of (loss) earnings before income taxes | |||
Reserve for uncertain tax positions | 2,842 | $ 2,676 | |
U.S. | |||
Components of (loss) earnings before income taxes | |||
(Loss) earnings before income taxes | (3,324) | (5,475) | |
Income tax expense, net | 12 | 0 | |
Foreign | |||
Components of (loss) earnings before income taxes | |||
(Loss) earnings before income taxes | (3,250) | 8,840 | |
Income tax expense, net | $ 1,083 | $ 1,349 |
Segment and Related Informati52
Segment and Related Information - Revenue by Geographic Region (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Number of reporting units | segment | 1 | |
Revenues | $ 113,897 | $ 116,120 |
Revenues (as a percent) | 100.00% | 100.00% |
U.S./Canada | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 51,572 | $ 48,736 |
Revenues (as a percent) | 45.20% | 42.00% |
Latin America | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 2,812 | $ 3,043 |
Revenues (as a percent) | 2.50% | 2.60% |
Europe | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 10,457 | $ 10,190 |
Revenues (as a percent) | 9.20% | 8.80% |
Middle East | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 40,298 | $ 45,776 |
Revenues (as a percent) | 35.40% | 39.40% |
Africa | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 6,703 | $ 5,715 |
Revenues (as a percent) | 5.90% | 4.90% |
Asia/Pacific | ||
Consulting Fee Revenue and Total Revenue by Geographic Region: | ||
Revenues | $ 2,055 | $ 2,660 |
Revenues (as a percent) | 1.80% | 2.30% |
Segment and Related Informati53
Segment and Related Information - Operating Profit (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Profit (Loss) | ||
Operating profit (loss) | $ (5,240) | $ 4,114 |
Operating segment | United States | ||
Operating Profit (Loss) | ||
Operating profit (loss) | 7,333 | 4,274 |
Operating segment | Latin America | ||
Operating Profit (Loss) | ||
Operating profit (loss) | (304) | (373) |
Operating segment | Europe | ||
Operating Profit (Loss) | ||
Operating profit (loss) | 2,158 | 1,416 |
Operating segment | Middle East | ||
Operating Profit (Loss) | ||
Operating profit (loss) | (4,226) | 6,802 |
Operating segment | Africa | ||
Operating Profit (Loss) | ||
Operating profit (loss) | 669 | 780 |
Operating segment | Asia/Pacific | ||
Operating Profit (Loss) | ||
Operating profit (loss) | (337) | 124 |
Corporate | ||
Operating Profit (Loss) | ||
Operating profit (loss) | $ (10,533) | $ (8,909) |
Segment and Related Informati54
Segment and Related Information - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Depreciation and Amortization Expense | ||
Depreciation and amortization expense | $ 1,291 | $ 1,595 |
Operating segment | Project Management | ||
Depreciation and Amortization Expense | ||
Depreciation and amortization expense | 1,059 | 1,522 |
Corporate | ||
Depreciation and Amortization Expense | ||
Depreciation and amortization expense | $ 232 | $ 73 |
Segment and Related Informati55
Segment and Related Information - Revenue by Client Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Consulting Fee Revenue and Total Revenue By Client Type: | ||
Revenues | $ 113,897 | $ 116,120 |
Revenues (as a percent) | 100.00% | 100.00% |
U.S. federal government | ||
Consulting Fee Revenue and Total Revenue By Client Type: | ||
Revenues | $ 3,872 | $ 3,221 |
Revenues (as a percent) | 3.40% | 2.80% |
U.S. state, regional and local governments | ||
Consulting Fee Revenue and Total Revenue By Client Type: | ||
Revenues | $ 33,551 | $ 35,240 |
Revenues (as a percent) | 29.50% | 30.30% |
Foreign governments | ||
Consulting Fee Revenue and Total Revenue By Client Type: | ||
Revenues | $ 33,806 | $ 36,582 |
Revenues (as a percent) | 29.70% | 31.50% |
Private sector | ||
Consulting Fee Revenue and Total Revenue By Client Type: | ||
Revenues | $ 42,668 | $ 41,077 |
Revenues (as a percent) | 37.40% | 35.40% |
Segment and Related Informati56
Segment and Related Information - Property, Plant and Equipment, Net by Geographic Location (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | $ 12,067 | $ 12,004 |
U.S./Canada | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | 9,245 | 9,434 |
Latin America | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | 548 | 546 |
Europe | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | 1,005 | 675 |
Middle East | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | 1,091 | 1,164 |
North Africa | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | 101 | 105 |
Asia/Pacific | ||
Property, Plant and Equipment, Net by Geographic Location: | ||
Property, plant and equipment, net | $ 77 | $ 80 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Other liabilities | |
Loss Contingencies [Line Items] | |
Potential tax liability related to certain foreign subsidiaries | $ 962 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - Chief Executive Officer $ in Thousands | Aug. 17, 2018USD ($) |
Subsequent events | |
Annual base salary | $ 650 |
Target cash bonus | 675 |
Annual share-based compensation | $ 900 |
Performance vesting | |
Subsequent events | |
Vesting rights | 50.00% |
Time vesting | |
Subsequent events | |
Vesting rights | 50.00% |