HIL - Earnings call transcript Q2 2021 | Hill International, Inc.

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Operator

Greetings, and welcome to Hill International Second Quarter 2021 Financial Results Conference Call and Webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. President Equity Vice Senior Sullivan, at Group. The Devin you. Thank

You may begin.

Devin Sullivan

Conference morning, Thanks, Second you Results everyone, for Good Quarter joining Financial International's thank Hill and Rob. for us XXXX Call. today

will be speakers and Weintraub, Chief company's today's Our Officer. Raouf Todd for Financial Chief Executive Ghali Officer; call

any risks historical is statements Securities set that XXXX, forward-looking Before limited the statements except including I'd certain meaning the remind belief be Litigation to call strategies, forward-looking to financial projects and of ability safe harbor on this our to by of everyone and to begin, during based it may intent concerning Private of Reform infrastructure not such protected information the or complete and statements but created and the other but within and and statements intent, current future objectives and forward-looking and activities. ability not undertake These pandemic, to projections Act statements limited we to thereby, forth for statements development any are that for our the governments to matters any like and made be support risks assumptions, statements. and are of the considered herein, maintain operations plans, our including subject willingness clients expectations, estimates and our uncertainties, uncertainties related business certain are COVID-XX

could forth in assumptions elsewhere the expenses forward-looking differ attention forward-looking will provide believe estimates our reports assumed safe conditions the or fully forward-looking unfavorable I have in statements harbor filed no and Risk materially we factors Factors X, obligation any cause our than forward-looking may are materially or contained morning. projections Exchange Although, from projected and as reflected your are actual Important revenue, in global results our to slides those presenting Commission, update our the intend do Securities in reasonable with non-GAAP our statements. we be the and measures, section, not undertake differ X and estimates results our be not in set that from the statement. expectations economic statements actual could and that realized of our draw anticipated. definitions and backlog to information We of may may impact the and be we adversely including will business, higher this any which to

to Executive Turning to go slide ahead. over X, Raouf, Chief Officer. now I'll Raouf Hill's please things turn Ghali,

Raouf Ghali

XXXX as year, This us hard results. Good Thank discuss you, thanking their infrastructure our the clients XX years joining quarter Hill professionals Hill's the of celebrating change. thank in is to world helping for for countries Devin. second I'll financial work and XX deliver around continued of morning, you today everyone, begin and always by X,XXX dedication.

of have an construction successful teams billion. recognized of more of value the experts delivered thousands aggregate $XXX internationally projects across Our world, with than

past Over our have legacy. Hill's created these decades, colleagues five

this Slide will they and X, growth we importantly, please. as year opportunities multiple offer More future beyond. pursue our

produced We recovery summary this of CFR, first look and performance have year's quarter picking million the $XX.X for up and year experienced The we second the abated XXXX. quarter. COVID-XX speed. let's quarter quarter the at a last our second from headwinds Now, up is global in of of first from

the of will US. that expect business to accelerate the year, the particularly continue in in We second half

pre-COVID our quarter and by remobilized end. reached levels staff staffing We have

this quarter one million, Our declining of slightly last quarter year. SG&A quarter, up second $XX.X was year's for from marginally from but the

pleased modest awards the resulting an very $X.X multiple of future On at in loss. also These $XXX bookings, We the we normality with water book-to-burn reported and a geographies net rail $XX.X As new levels years. a second revenue that expect return million reported the of ratio I'm annual of quarter income basis, we XXX.X%. came quarter. facilities. was and and approximately million SG&A covered will pace including gradually increase a post-COVID-XX, public new reach million XXXX during million. in Adjusted of roadways, transit EBITDA which and in in $X.X markets and aviation, end in

about half totaled the the XXXX, activity of first year. For of We of million resulting a remain for ratio awards XXX%. year-to-date balance new in $XXX this book-to-burn awards optimistic new

kilometer of billion NEYO's provide a This improvement. management work for will program the a important $X recreation the County County's new award the project our turn acquired to other to package Authority Pan of World of award was International for construction Slide the program Palmdale to This capital in roadway Airport was professionals. development. and an the contract provide US to services cost At Hill but at Central $XX for Slide our key program Gold X. XXX client the cleaner advanced contract This is investment country; airport And for manage encompasses Please NEYO airport. the management it reinforces the concessions award-winning not in and pleased India a slide end Phase project; ongoing we with properties Southeastern Miami-Dade support Philadelphia, an the at Saudi and to Gold major over next an and management Ashburn or material program, a ambitious X. municipality at Angeles Miami with wins; Extension for Airport. Line and consultancy company, of technical including NEYO strategic. Philadelphia firm The Aviation project spanning possess services quarter, Area for a now support center the award multibillion-dollar MCA continue in Department's am to Landholdings; consecutive modernization I Vision to XX Construction the in region, expertise waste management program projects Line highlights award with International market water LAWA the the part of properties providing Van This the Virginia; project and larger a community Madinah, We second Hill's years. clients look ability the industrial, the I a Metro have Airports leader light did to Foothill with healthcare thank to analysis wins a fine residential, ninth reputation X.X doing International project where country tenant contract support million project estimating project Phase contract from two expertise. sectors, environmental the on and services of from Xb a an Loudoun manner. continue capabilities, program. administration award President across specifically provides in India. a our has NEYO, to a our and not development great in the forward program development, rail project projects Nuys represents also management opportunities to areas program X resources Angeles country square Vice new hospital, and This the swift award us our brings announce, capital and recent some our additional one involve city we commercial, LAWA including Said Arabia's acquisition Foothill company India. in Kingdom for capital airport Romania's, to Madinah which things the also colleagues. XXXX Hill We largest for at Moving of to leverage of Los with welcome completing Airport, commercial of including manage Mneimne, Bucharest transaction and Los assistance want and retail facility Airport throughout multiple the built

it's on final is the US on know, focused, Slide through for way impossible working its the pending this X. would to point, The At legislation Moving to package currently look what like. us infrastructure Congress.

infrastructure airports, includes is things; of support projects and physical in the bridges of investment according government tunnels, dire those news. hard roads, suggest the and welcome will vital all in it other the repair federal and assets from almost However, This projects. President. any is ports public amongst entirely in invest need that to Rail in to indications largest national federal long-term our on transit and history focus infrastructure

projects Todd Europe, Outside infrastructure a on undertake added US, next-generation active committee US European package focused largest As Under noted quarter on in domestic identifying stimulus we financed opportunities. Hill. infrastructure EU the have Union please the potential things remains tourism. call, including projects to opportunities Thank Weintraub, about billion transition for over the and and our on the for ahead. these last you global infrastructure long-term airports, capitalize engine can Hill significant the Todd we initiatives green and is that and Hill growth EU on in energy optimistic believe airports, has positive its the to to this €XXX offers of now I agreed ever initiative, support invest Financial railways, to created We efficiency, these highways, for the on upgrades well-positioned Chief capitalize Officer. water Hill's and to hospitals will opportunities have turn growth. your are smart attention buildings and go infrastructure, impact

Todd Weintraub

including pick mobilization Thank quarter million, you second full on to an Raouf. return business awarded levels GAAP for on increased existing X. returns slide reflecting This CFR of staffing for the slide of pre-COVID certain to second from quarter up and activity, results overview things provides our the I'll to projects newly certain XXXX. projects. continuing $XX.X

gross the to SG&A due our XXX(k) an modest payments XXXX, result CFR Libya-based or last place period last foreign receipt year last SG&A discrete We quarter. normal dollar above-referenced income quarter $XXX in stay-at-home that second the was bad the recorded withholding remainder as increase partial of of reserved We of a were the end end reported the to million $XX.X were to was taxes in of reported million was exceeding offset income both that based lower normal the tax partially by when to QX costs the lifting The increased compared CFR we levels. receivables and million loss labor year. XX.X% XXXX. were an which exchange basis, orders The net of was in collection tax account in a COVID-XX of foreign levels in currency and increase well over uncertain in as tax reinstatement higher returns same million CFR just currency increased offset items results the increase the debt increase expense compared certain at or operating the to positions by project. guidance. income year driven each $X.X associated primarily and primarily items the of losses, of with profit year CFR $X.X due On company's from costs million higher of of year's receivable on $X.X discussed. was travel of to business $XX.X period by the the continue Libyan and this higher as recoveries XX.X% activity during as of million the expect in to as previously increase of to $XXX million against in to the increases to the the These compared of match higher

Turning to slide XX.

Phase end in geographic can US exposure. see, in in Gold Tren the you Sky City quarter our market our included heavy by Clara second As York to work very Airport. in and Valley reflected lead part task Harbor Rico, operations the New client second Line large the Xb quarter Urbano revenue profile the continued Puerto International infrastructure driven that and The International Philadelphia in Airport, Transportation Transit rail Phoenix road Santa California, orders, system Metro

where the exposure Africa Middle also position. maintain We East, a we Europe dominant have to in and continue industry healthy a

on an that operating Now, we taking XX. adjusted to reported in was results into due positive and our basis year-to-date down account let's briefly from basis profit just COVID XXXX adjusted less XXXX profit an slide on items and adjusted levels, and payroll we positive related costs. lower reserve discussed, Adjusted look experience the impacts, at higher to EBITDA. favorable operating CFR On

the by adjusted of expect resulting to were half net net for We impacted reverse discussed factors. tax the second these income income second over for half in income same the was negatively by items EBITDA full impacted previously. items the and and growth also Adjusted the Adjusted year-over-year each year.

Turning slide to XX.

XXXX $XX.X position March from improved million cash XX, at $XX.X XX. June at Our million

continue from We the the position believe of of for occurred first to end quarter, the in cash improvement year trend remainder the which that a same material will the XXXX. our show

refinancing cash reported the to On that of we that believe we year-end $XX.X the in will substantial and reaching potential to unrestricted made unrestricted a million outstanding exceed note, progress debt cash at have related continue year-end. continue an with agreement our pursue lenders. We

of we are we cannot details the favorable Although time, the to close this end and before be specific the third current provide expect at terms to expected quarter.

seasonal flow Moving see -- first generating XX reported cash you'll positive the a largely in as XXXX. quarter and quarter XXXX we to returned just the after positive second both of we generate mentioned, and slide the that to in declines

free that of in that XXXX. flow of expect the remaining quarters in We positive accelerate we cash will and XXXX be half the flow each second cash will of

Our and to credit access at previous total year-end. compared XX, our liquidity million XX at lines including $XX.X the million, June up was XXXX $XX.X March million $XX.X at from to of

Turning slide to XX.

Our million $XXX XXXX. total totaled June backlog at XX,

our Africa Our XX-month backlog years. the to total backlog States. March in the backlog East these level backlog XXXX highest $XXX to facilities at remains our June increases Asia million, in XXXX. From the and with XX, XXXX contracts Americas been in Africa compared North perspective, and concentrated has business, to two compared the of X.X% XX% XX, management backlog respect East a the With was December geographic and slight We at XX-month declines Middle XX United in comprised Middle Europe showed and Pacific.

expect your continue I'll Raouf. time, over We and back increase that for much turn conversation percentage time. the to now Thanks will very to

Raouf Ghali

Todd. Thanks,

to Moving slide XX. on

this our reiterating now $XXX come you million Adjusted consisting previously between the forecast and of announced Based million. earlier existing to today, on at certain of operator new conditions current guidance our to is questions. year, of awards business the million for for extensions be lower are project that the range cancellations I to will deferrals your call We million end considering CFR and in will both XXXX and we ask open to XXXX. $XXX expect for and $XX time contracts. Thank $XX to EBITDA occurred

Operator

a comes Please from Thank question proceed you. Zola private Machai [Operator [ph] Instructions] first your Our with question. investor.

Unidentified Analyst

Hey good good morning quarter. everyone. Congratulations on a

an to you any question basis NEYO EBITDA acquisition or Group. on valuation adjusted of on Could for ask Just that? on basis some what a the light the throw paid an wanted metric was

Todd Weintraub

precise amount paid we for -- it. was the haven't It disclosed that we

mentioned a a in scope haven't cash you believe flows, can rough that want if the the material I look financial you statement at not or standpoint, probably comments the a As of we transaction. idea, from disclosed on some that. get get was it significant you financially exact if price of to but

Unidentified Analyst

was to another add York. licensed engineering year you. acquisition thank one may I corporation Okay, If made just with regard more New Last question. the there in

how that's so previous to wanted your acquisition going on Just far. the get and a What's feel been on so it's going how take on far?

Raouf Ghali

we fully other I that. our to registered acquisition -- this name we operational. license generating you that and with take revenue have and on acquired. together that opportunities we're It us have being through I'll and give Okay. can of That's delays a several next we going this been feel completed very our We partners good JV year, have the now by -- shortlisted been now be license there has moving the in in question. some Because the into COVID we took license progress. name.

Unidentified Analyst

Perfect. end. That'd Thank be my from you.

Raouf Ghali

very much. Thank you

Operator

Please comes question Partners. next Pete with Enderlin from Our MAZ

Peter Enderlin

Good morning. you. Thank

question expenses; for bigger the mix I the think First reimbursable XX% overall? those through a revenues that much way the quarter the just some quarter. in that's a pass-through Is expenses, were up flow specific or there CFR in than increase reason particular but a on

Raouf Ghali

the-- have do don't have Todd, a you knowledge of a I --

Todd Weintraub

there's that what -- It's jobs. used there's no it's bigger just Yes, particular think said being Peter on it you indicates I there. sub-consultants story more

but more of period Just last it's compared that. to than just composed -- as due to particular jobs mix the the something to as this --

Peter Enderlin

subcontractors use specifically that's going So, see it? is that's a trend not greater of to a sustainable

Raouf Ghali

in business do to the just to there's mean nothing no going any There's on I depend that. that about strategic particular It's mix. particular period. underlying No, strategy

where everything other As know and supplement. we There's sub-consultants revenue all there's you the projects is use many bring larger on we where contracts primarily don't any to do CFR. subcontractors in ones the

particular is. So, mix it what the of a really just matter is

Peter Enderlin

also pretty similar lines increase that? What $XX million. along Okay. affiliates And receivable had behind then from was accounts big a

Todd Weintraub

ones. receivable have affiliates So, of we is a large have typically we from couple JVs the -- accounts particular

of that then the receivable concern there's clients flow ultimately just and the about Hill. from So, the through back no JV to to timing collections

it. down yes, and we're the will going the third about not to So, of end concerned should increase; balance be there it's you That by in third levels. quarter see that was quarter an normal collected money back the quite

Peter Enderlin

you. And of anything terms Was small the And booked Thank that in acquisition but that much add mention, significant a Okay. added It in very backlog? there did add? a then business quarter. that small was the to it the did NEYO? I how new financial think, the to structure, was acquisition

Todd Weintraub

Yes.

haven't the is we've thing really cash the only think again, So disclosed -- on statement. we I financially flow

we the or those specifics it's metrics. the You see but backlog not financially Again, or EBITDA price, material haven't of can purchase to any disclosed about company.

and publicly haven't So information. we it adds backlog more but some absent disclosed EBITDA, that

Pete Enderlin

million restricted us restrictions Okay. And restriction then Thank remind the cash are? what that those or $X you. just of

Raouf Ghali

collateral $XX have is little The that XX. that where as to projects. majority some of of you we a certain that various million those. June that cover post we've we have bonding and to that about, bonds of or we through to believe and bonding collateralize cover don't certain all Substantially, cash collateral, facility projects requirements of there I outstanding we cash cash to have projects the but a facilities is do of to that have in facilities about no for have give and relates number have in idea do most We to part got we for

up set for. cash have the for non-collateral which backing bonds to refers just cash So facility a restricted don't we

Pete Enderlin

Authority I Port the that me. have think, Miami-Dade does the of of yesterday win $X.X or your to Thanks. just morning it. a financing. New in one And is do Got of County announced that financing Miami, terms the nothing last also then port billion I like where bond this mean York Port for The New airports available? includes Airport with Jersey, or recently one

Raouf Ghali

New -- Pete, it of I does authorities believe the like it's port not not York.

Pete Enderlin

Yes.

Raouf Ghali

think I separate. it's

Pete Enderlin

you. luck Okay. for a half. All Well, good Thank right. the second Thanks lot.

Todd Weintraub

Thank you.

Raouf Ghali

Thank you, Peter

Operator

comes next with proceed Tieton Bill from question. Please Dezellem Our with your Capital. question

Bill Dezellem

you. Thank

relative of the any work acquisition India? XXX the to of the acquisition do to part there people outside of were NEYO for is all, that First potential

Raouf Ghali

estimating -- outside to I'll potential take that QS definitely. company. for Yes, a most work is There question. It's do outside for mainly them work.

So outside India work by our with. part place think in doing even they they're in travel can busy projects of resources the there's of offices plenty do our for them that they we other work be of India But to to work will itself I as well. in India and need if very

Bill Dezellem

not question of where I is lower with industries. in the India Raouf, I'm is to headed been oftentimes of cost this your multiple spirit Indian has to labor referring and the outside industry. used that was

that's use on where So potential to and those a wondering actually we're some increase resources if there's margin projects? your

Raouf Ghali

that definitely, to able local -- yes. of one the NEYO is just to fulfilling is And having what addition answer upside be to do you That of exactly acquired is is opportunities. the and in described

Bill Dezellem

And please give you would Appreciate Libyan then AR dollar-based please? update your an on Great. collecting US second that. us

Raouf Ghali

Sure.

a of matter other debt. collecting of it's on continues it before calls recognize to said The the I've a government financial Libyan As issue. matter it's being a politics Libya not

We mean government for new And Libya as -- client are Libyan of at the We as are them other but situation -- The with. on for, and the recovery support well one is I our answer to it's give debt, part in it's believe I imminent, we answer with the cannot looking to is the that in when interim the it's and this straight old of with to manage talks discussions in opportunities constant government. with work that Libya. going have be. political debt we in and both a a timing that

Bill Dezellem

taxes Todd, lastly, the then want did to left out. feel exceed normal you don't level? I And Why

Todd Weintraub

discrete two items. were There

Group. to FIN the we're have we And was it the was of assessment them still Claims relates some it back filing returns that. those Claims a returns position -- in returns. Group Those the tax of audit under sale way made the all for or still One have XX been -- uncertain relates and and post to an

expenses. it of with our positions. We are assessment generally that reserve to we disallowance what But we're for reason the tax vague of some conservative uncertain was terms challenging for pretty expense rather as in

was And after withholding due some item. had with that other in need expenses the So do major be those law are to withholding changed one terms in taxes. incurred. Qatar when the to The of taxes

So the to related a taxes we of -- some to had business was timing of paid we our that kind that in withholding Qatar. accelerate taxes

So was catch-up. of that a a bit

bit two two are million the discrete in a little was those items. of them So that Between $X under expense.

Bill Dezellem

both. you, Thank Great.

Operator

session. have to the We At of time, Ghali closing like reached this I'd end call over comments. for to the question-and-answer turn Raouf back the

Raouf Ghali

fall, D.A. Thank some you Diversified Davidson with the hope wonderful time Conference very presenting day. you upcoming much including and we at be your in will to for a this speak of much. Hill you conferences very have Thank and September, there. & Service Industrials

Operator

today's This concludes conference.

You time participation. and lines at your your may for this you thank disconnect

Hill International (HIL) 10 Aug 212021 Q2 Earnings call transcript