HIL - Earnings call transcript Q3 2021 | Hill International, Inc.

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Operator

Good day ladies and gentlemen, and welcome to your Hill International, Inc.

Third Quarter 2021 Financial Results Conference Call and Webcast. At lines have been placed on a listen-only mode, and the floor will be open for your questions and comments follow the presentation. At this time it is my pleasure to turn the floor over to your host, Devin Sullivan, Senior Vice President. Sir, the floor is yours.

Devin Sullivan

good for and XXXX Hill conference and joining you financial [ph], call. today us International's Tara morning, thank everyone, for results Thanks, third quarter

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

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

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

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

Raouf Ghali

last increase million U.S. CFR from U.S. of Western and our Thanks Devin. and of by in X% strong Good had driven several quarter Southeast Mid-Atlantic year's morning along operations, resumptions you important everyone, to third report quarter and financial We I'm very for $XX.X We produce to metrics. joining demonstrated Northeast today XXXX our in and Europe. programs quarter several third happy in results. and projects that success the new we thank us improvement awards discuss and a in large nearly continued the

While experiencing are markets has Africa, North Middle project East, some and headwinds many in the we of beginning which opening U.S., Europe parts see our deferrals. specifically to most we of are in the up caused

million. of fourth profitability to CFR XXXX. in will net the these continue quarter. believe return We $X.X income of by XX% this rose Despite income to However, EBITDA adjusted in grow $X.X deferrals, expect we to million these and reporting net quarter we $X.X Adjusted will commence projects that million. that

and of primary producing end XXX%. awards geographies awards rail new public highways, markets; educational roads a ratio produced and in We score bookings total transit. and utilities, book-to-burn including facilities covered best and also million, the new with These XXXX $XX.X and multiple secondary

the nine of ratio book-to-burn awards million in of year-to-date totaled $XXX.X first XXX%. a XXXX For months new resulting

November expect about booking awards recorded last Given year bookings have we end remain of we with the new optimistic and to year years of new above the this the $XXX year awards million new $XX through million. balance activity of for

free the million. reaching rose second Finally cash quarter, for consecutive $X.X

expect cash in generate the We to current free quarter. fourth

accommodate $XXX project booked portion substation, XX-year five-year Slide October major transmission, distribution, next $XX engineering extends is of of for generation, infrastructure and $XX.X recent population to services support million I not on which award strategy $XX special in Moving management Edison, a than new part to and one Southern energy some assignments that stated more of couple quarter billion million X. portfolio on. to of management of to the SCE asset projects, recent A highlight new largest has slides utilities growth. our a and earlier infrastructure from make of a want organization, provide California contract wins. add Hill's and SCE's in relationship The million and antiquated project developed to was equipment early of third groups. totaling booking from our replace nation's note

honored this support to in are them We vital endeavor.

Slide Moving X. on to

one the airports. Miami on XX services site PA and you'll at in infrastructure use as services to Thurgood The $XXX Airport country. the management Phase Baltimore-Washington rehab route the Romania, developments provides Construction flagship Administration XXXX. will International and inspection executive of Airport of air since next insiders, wins Aviation program Airport, construction services provision see and and slide, include program CMI services prominent support for Marshall Department’s the And years. XX project County billion site, Improvement of the the to of development city in been green Airport. has and projects Miami-Dade for for management X our This last providing general management capital International and upgrade administration support Martin project. services Philadelphia at for land the Capital Commission rail As and Turnpike Number Program and County's until Phase X as services XXXX. projects services the Maryland State ongoing most $X Aviation Hanna aviation Turnpike/I-XX the this for for over terminal encompass Philadelphia's project Interchange the program Construction Pennsylvania modernization management support million program mixed Capital sustainable well

Slide to X. on Moving

now were that previous EU We infrastructure $X.X harbors, and energy, as to the is infrastructure has you our in and each infrastructure infrastructure next monitor bill months and I project the one record the won ports each please total that of upgrades safe Chief bill are to bill across initiative. long as At of Europe. EU From experience to start the recipient to will billion XX% ahead. in transit years. protestant The figures and contained investment these well These $XXX present over which public passed President's excited bridges turn the the end your a the The track in roads ever overdue five are successful rail in substantial aviation; you'll water billion financed the to Through the will ensure national procurement The and efficiency infrastructure the desk. house to awards XXXX, and million the year of current to and under things to Hill's $XXX Hill and the released bill Todd expect we first new generation package also safety, of XXXX. for markets. we fortify is completion. We're in XXXX. the of attention. go allocates to countries next our by largest and and Weintraub, of in this are billion see continuing deliver areas of awards headed country Officer. Financial And stimulus over Thank necessary being program €XXX in Todd, transport country. goods nine

Todd Weintraub

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

to will non-recurring expenses in fourth hit in million CFR XXXX QX $X.X $X.X CFR third grow and million quarter. XXXX us and allow non-cash that year's compared This expect the of SG&A million last respectively. we guide. noted million and $XX.X quarter included Raouf our $XX.X and was As to in

We discontinue XXXX. than ensure quarter higher costs of from remediation, million XXX continuing that expenses slowly costs operating to exchange to activities operating related to more creating profits or non-recurring and these losses Excluding compared of as gross or QX third of costs ops and The QX million XXXX. SOX decline have to grow compared foreign followed of year's labor SG&A XXXX XXX(k) XX.X% FX gross the expenses XXXX business profit increase a was by leverage. increased higher XX.X% profit to Company's last compared was non-cash resulting as green gain in $XX.X million $XX.X This of quarter in dollar gross the gross continued statement of were in XXXX to reported second from of This basis currency as SG&A profit expenses $XXX,XXX in profit CFR in increase. and a percentage $X.X income $XXX,XXX quarter. travel in match to XXXX decline due in offset and point to management an second reflected gross of of

share per $X.XX income to primarily period. allocation profitability with compared variance income quarter operating or to to million due was share of XXXX. returned the as well or tax as The $X.XX net the million just higher factors impacting per income, the expense of of also third discussed income We in $X.X prior year net $X.X to

continued third exposure. Moving profile the and part as infrastructure work. see third lead reflected driven in revenue large The the market end our our very you quarter, can to quarter X, geographic Slide in by U.S. client on operations to

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

discussed. an on our at basis the adjusted in adjusted adjusted Slide income items a basis increase a XX% On taking look in briefly reported operating EBITDA. XX% let's a profit, account just an on into XX% increase and and XX. we adjusted results net in We increase Now

EBITDA adjusted our improvements manage gross improved continuing costs X.X% year's operating while from margin third to to to to quarter. by more These last in Our in margin, create slowly driven line grow CFR leverage. top higher X.X% the and were

September quarter we to XX, the improve continue in position of and $XX.X Slide million rose total XXXX. in to the on $XX.X $XX.X million at our XXXX, from to first cash quarter XX, Moving million cash second

our our the quarters We first will third improvement quarter in fourth position and second, mirroring continue the and during of existing in discussions and to a which to the the our note, collections. first quarter XXXX timing cash in of in lenders. following cash outstanding cash seasonality the pursue On continue new related of expect improved actively or related debt that current both refinancing cash potential with to use and show our further we

as that reported Slide second just after seasonal the see cash to XXXX declines positive first the and quarters both for we XXXX. generated flow Moving the of you'll XX we largely consecutive mentioned, and quarter in

cash quarter XX, XX, improvement XXXX and we $XX.X in at expect XXXX $XX.X million that September liquidity first XXXX at increase a Total million, XXXX to XXXX. the continue $XX.X will $XX.X million We December the liquidity of be flow was June Total from fourth million. quarter. was positive XX, from

total XXth by positive the at Moving million September some during declined backlog $XXX.X negative to XX, offset existing to book-to-burn our Slide adjustments being our backlog. to quarter reflecting slightly

to at million XXX.X was Asia our Americas, in million perspective, the turn back XX, XXth. conversation your remained Africa East, East East the With business and backlog X.X% to I'll compared backlog From contrasts as to our at facilities not X.X% Pacific, Europe. followed and comprised XX-month XXXX. North Middle a Thank very North total compared time as much Middle concentrated Middle respect Raouf. and June to $XXX of you backlog to backlog these geographic total by of Our Africa June for Africa the

Raouf Ghali

Thank you, Todd.

Now let's XX. move Slide to

a to million in to roll project $XXX $XXX to year. into the are million, degree have East the in XXXX revised guidance our to million through million reflecting from next expected $XXX We COVID-XX lesser Middle $XXX projects defers U.S. and These commence over referrals and CFR

million now $XX the adjusted Our for likely the call time Thank today. million questions. we in I'll end come for at guidance your XXXX operator this unchanged will the open ask you range. And to EBITDA remains to to at $XX lower of although

Operator

Instructions] [Operator Enderlin Thank is from first for you. Partners. our with floor The now question MAZ questions. open Please ahead. go We'll take Pete

Pete Enderlin

specifically the is, and and In of Good the well, of aware I'd this could for that CFR potential also all a morning region could Todd, to Raouf looking other for I possibly that that and couple us that CFR thanks taking have by give generated, on questions. in greater terms it's if years. and elaborate depth contracts is really of some and win revenue sort rate geographical my at have if what and sort one point, you that you industry generated way last is just like you at of generation kind you're over have of market of possible by sector. if the how your done And share? of been on words the the,

questions into idea basic one, go is rolled how So the you CFR? that's a but about lot of generating

Raouf Ghali

on, Todd do. step take at and I'll please weigh like it, first Pete, a you'd in Okay. if later to

Okay.

really new award. if our of is of the mobilizing at on I our in projects most mean, CFR, the way, assignments time on of we what time, Most assignments. the we're physically CFR some phase is it the full and people the – require First first construction the securing generate and staff And the way be step obviously job, present, is. most not times the to generating depending

Pete Enderlin

other getting success and been I what… anything your awarded have talk In you of to me; was bit contracts say the that words going Can about win in a little – can people, number say, all you to about of other you excuse rates?

Raouf Ghali

recompetes on as mainly we the win the depending have. to Our recompetes, anywhere percentage well a that have obviously win win of up And the that ratio lot start it goes to the rate, sometimes sitting the year. let's is we that's If are, rate XX% XX%, and we depending U.S., we include goes why the probably where with in up. some our in in U.S. XX% between of U.S.

we around if I be bunch to put and all we think you on the in at if – XX% the win it it XX% one worldwide, them look will ratio.

probably unless... So one are at we out now, where right is of three

Pete Enderlin

Do you couple percentage next think rate of win the you of over can years? gain the

Raouf Ghali

effort now takes We what more pursuit. usually the the than right is is a pursuits to it, to sometimes, but smaller sometimes pursuits, always takes win a amount to striving because – gain striving small it than also win not focusing it focus the larger on we're pursuit rather same of to on major it

have make And and assigns the to is clients, sure all, the second our of is going the want more we're first to legs So part. we the part we can focusing going the that the every if that larger on to after the goal that focus keep funding – really want larger positive pursuit. pursuits positive ratio, I I rather impact a the than have forward. definite that'll win – of rather, pursuits on CFR when ratio, ratio would on but

Pete Enderlin

cases, is And cases compete that other cooperate you and of managers one in of them. large of you aspect that managers. with with more in all some some And the program construction

compete or decide So to whether is of there of cooperate? of thumb sort you rule how some

Raouf Ghali

It's many there to of competitors. we thumb. of the and typical team cases cases this – how one is basis with Many up the very the compete best industry. four. it's our Who's and we No, positioned isn't of and Really three a plus can make make win? one really we well what's strategy rule

in up strategy, based who instance decide winning and on So the that's with. we where we each team evaluate we

Pete Enderlin

several or segments could such by your into different airports of categories, of also ports evolve question, us you any whatever? some industry give sense one making for as or apologize major rates I or And Okay. questions, transportation the but win

Raouf Ghali

aviation average. higher is for in focused the than our very ratio been probably And on have we aviation the the sector. example now sector win Right

successfully a partners, we've up the team been on that our add really teaming plus think probably invested XX% with clients Pre-selling in really on I there. pre-selling the the our and we them. and have, the services, right the showing aviation at in we because resources general we're on lot value we've have

more dive into too like you But happy to end maybe if each be to and long than little think would I this. take do more into bit and go of these a Todd a detailed contact one can I'd on I it you'd markets.

Pete Enderlin

great. That's very helpful. much. Thank Very Okay. you

Raouf Ghali

Thank you.

Operator

with We'll ahead. Bill question Dezellem take Please next Capital. Tieton our from go

Bill Dezellem

you. Thank

the next of XX% running sorry, and out approximately, do bookings for at revenue XXXX all, would – thinking X.X revenue First look for your been above nine year quarter, correlate of to as of we XX%? has are book-to-burn growth approximately the months to and I'm growth that revenue CFR

Todd Weintraub

of correlate because I more go but can growth, you out some the contracts have than it It'll don't one-year. these think

those on of they're design you'll So could in one-year. phase, or it all the latter If mobilization contract. example, in in are. probably three and one the a the you have each where may year four additional for depends be It wins not phase what It a realize part.

would smaller go is the year the mobilization till be But a of So construction. into what they with first described trend the correct one. you

Bill Dezellem

but of a revenues directionally of So gotten up, magnitude little ahead myself. are I've order

Todd Weintraub

That is correct.

Bill Dezellem

Southern million component, mentioned not And contract $XX bookings? of Hill to was relative the California is you'd that Edison, the that that included in then actually why

Raouf Ghali

end awarded of were the the and make we all it equate Because you be of sense the quarter, so to transparent. after and numbers that

in cutoff book point we We backlog. in the have sue the – a them when

Todd Weintraub

other that the that And in fourth in fourth will be so you – quarter words, bookings. that included said in quarter

Bill Dezellem

that and million $XX Great. part of already Makes of perfect explains being success quarter. this up sense, your of north

Raouf Ghali

correct. is That

Bill Dezellem

handle does in that the with concept they even that require you. or surge, more are then get you of therefore infrastructure the those would use activity you spending I – to management to represent? might for that because be Thank But doing the question lead just than bear who demand not essentially this will dollars project and lastly, the bill to to all able cause internally of surge out. the me the external spending will as Okay. lead And try to a more

Raouf Ghali

even believe have spending surge our the competitive again been agencies directionally, before the using Yes, of correct. services. I you're the services and very our

So even as services, will the even expensive. need be dollars increase more we believe for those the

Bill Dezellem

infrastructure do from the quickly your the of how And anticipate through bill you benefits seeing flow in bookings?

Raouf Ghali

seeing We'd latter probably in bookings hope year. to the part coming next of some these of in start start

Bill Dezellem

both. you Great. Thank

Raouf Ghali

Thank you.

Operator

[Operator from Yake, question Instructions] ahead. Please Sam next go We'll take Investor. Private our

Sam Yake

I my taking the know help we've of Could in a increase the work business? oil some for seen in had does elaborate is One recently, Thanks question you price Yes. price I of Hill how increase maybe sharp the that in and area. questions. your oil may

Raouf Ghali

think increase Sure. positive Well allow the of public at sector of investors is will table and back the come the need the private think it, that's talking the what in and investments the of health But in it's up, other look both long-term and East, infrastructure needs price part make. to to they question the oil that believe to is. going and of really one Middle that's it your oil of what I if I we're I about, price

have last calmer much as years settled We fundamental, and several been been positive And a a the within has those stable complex and which it's have also well environment politically. there region. another is more

that and opportunities on for to will need both our positively us the services So we that we factors those meant believe impact both of the have.

Sam Yake

for us? have you can give us hopeful you do I Libya know situation? update about comments that. on update Is some you any any there made the And

Raouf Ghali

be government. to the to Libyan continue We talking

still be collecting funds; successful should the collecting expect most that. them, of minor if funds. to been in of have We so, some last I believe We I correct some quarter,

to be all We of expect funds. our collecting

the come stabilized that, bond the an Libya, stabilizing going Libya therefore back to will freely hoping things where believe of have government we're in elected at government, we – are normality. through end or there to As and things election December they're to

and priority very go the in been talks serious to the them with wanting talks of projects, the deep of which their to have work, one back are We facilities. educational with very, them projects priority projects wanting

money that So be we back. getting will our bullish, confident we're very hopeful, and

Sam Yake

so good. sounds Thanks That Okay. much.

Raouf Ghali

Thank you for our

Operator

Partners. with Pete MAZ Our go next we will question Enderlin return to Please ahead.

Pete Enderlin

and request I'm I was ask to It was how enter just the asked to I couldn't going same figure out withdraw queue. my sorry. to Well, the question.

you So much. very thank

Raouf Ghali

Thank you.

Operator

next return ahead. our for And Dezellem Tieton Bill to question go Please we'll with Capital.

Bill Dezellem

repaying you. prices Thank I'll to Relative jump have rising oil ability you? an interest that of bandwagon. does actually on much in and Libya's impact Libya on the the

Raouf Ghali

is? never owe not able funds No. From reserves once prices know a Libya's from what it's recover recognized to easier to pay. funds Obviously and they not bucket it, we it's financial. a I stable to the back as and Libya makes would what that I be money having their think say I the and are drop because oil to and said contractual, make always ability is, have the normal don't and our or pay is us about is with denied reserves. it because high go stability having things in Difficulty] help understand, [Technical healthy. and It's they've our quite think not this, even lot debt But they in country the What political to for much more they it. they've easier does

Bill Dezellem

that the it that opportunity in going are that sense that what will will matter paid the your matter fact terms election, be anticipate over results your will you of or it be just no outcome that the to helpful? Is the be of to election

Raouf Ghali

It stability, should country be be looking charge. country in what's required. much positive matter has us. doesn't is stability believe for believe We Once who will for and more I the things the

Bill Dezellem

Great. Thank you.

Operator

the back over further the And at this to team questions closing no turn for floor there management appear remarks. We'll time. to be

Raouf Ghali

you very Thank much.

all conferences presenting in be upcoming you day. Southwest speak IDEAS your Thank you. much have for will hope with time November, the to we a and including and very We wonderful this fall,

Operator

for you thank We your This again conclude does participation. teleconference. today's

at great time a have and may day. lines your disconnect You this

Hill International (HIL) 9 Nov 212021 Q3 Earnings call transcript