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Hill International, Inc. (HIL)
Q3 2018 Earnings Conference Call
November 8, 2018 10:00 AM ET
John Grau – InvestorCom
Raouf Ghali – Chief Executive Officer
Greg Wolf – Interim Vice President and Interim Chief Financial Officer
Pete Enderlin – MAZ Partners
Matt Sweeney – Laughing Water Capital
Chris Colvin – Breach Inlet Capital
Charles Neuhauser – Mainwall Investment
Previous Statements by HIL
» Hill International's (HIL) Interim CEO Paul Evans on Q1 2017 Results - Earnings Call Transcript
» Hill International's (HIL) CEO David Richter on Q4 2016 Results - Earnings Call Transcript
» Hill International's (HIL) CEO David Richter on Q3 2016 Results - Earnings Call Transcript
Mr. Ghali will discuss the status of the company and expectations for Hill’s immediate and long-term future. Mr. Wolf will deal with Hill’s third quarter earnings for 2018. This will be followed by an opportunity for questions and answers from our shareholders, and then we will end the call. As a reminder, this call is being recorded.
John, please begin.
Thank you. To everyone on this call, please note the following: certain statements made on this call are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and it is our intent that such statements be protected by the safe harbor created thereby. Except for historical information and matters set forth herein, including any statements of belief or intent and any statements concerning our future plans and strategies are forward-looking statements. These forward-looking statements are based on our current expectations and assumptions and are subject to risks and uncertainties. We do not intend and undertake no obligation to update any forward-looking statement.
With that, let me turn the call over to Raouf Ghali, Hill International’s CEO.
Thank you, John, and thanks to everyone on the call for joining us this morning. Before we begin the discussion of our third quarter performance, I want to express that Hill International is entering an exciting new phase of growth and profitability. 2018 is a transition year. I’m confident our company is a much improved – in a much improved position and ready to realize the opportunities before us today and into 2019 and beyond.
Although revenue was lower in the third quarter and year-to-date compared to 2017, our adjusted EBITDA continues to improve period-over-period, as a result of our profit improvement plan. We are in the process of expanding our sales force to capture more opportunities throughout the world, and I’m very excited about our real focus and growth and profitability.
In my 25 years with Hill, I’ve seen the company grow from a 250 employee niche firm to an industry leader with more than 2,800 employees, operating across 5 continents. Our success, then and now, is directly attributed to the quality of personnel. Hill’s profitability is driven by the value-added service we consistently deliver to our clients. This formula has not changed.
Going forward, we will drive growth and profitability by winning new business, delivering the projects our client envision and attracting the best talent from around the world. After having addressed the challenges of the past 18 months, we are ready to focus on reemploying our formula for success. We will do this from a solid financial position.
We are current with all our SEC filings, and we have rightsized our organization. We’ve eliminated costs that were incurred with the development and execution of our profit improvement plan and bringing Hill current with its SEC filings.
And installed formal cost-control measures and policies company-wide to ensure health continues its culture of corporate accountability. These steps presented obstacles to the organization, but we do expect to see improvements in our financial position in both the short and long term.
Despite the challenges of last 18 months, Hill remains a trusted partner to our clients, and continue to win and execute major assignments in all markets where we operate. In the third quarter, our backlog has increased by $3 million to approximately $820 million over the second quarter 2018.
We continue to bid on exciting, viable and profitable opportunities. Many of these opportunities involve the type of large complex multiyear megaprojects, where Hill has traditionally excelled. As a reminder, our backlog is Consulting Fee Revenue, or CFR, which makes up the majority of our total revenue on our financial statements.
We are also planning to expand and promote several of our existing services where we have identified opportunities to realize profitable growth. These services are preconstruction support, advisory services and post-construction facility management. Delivering these services will further integrate Hill into our clients’ projects and programs and do so without impacting our risk profile.
All these moves are generating an atmosphere of excitement at Hill. I have visited numerous Hill offices and spoken with our employees in many of our regions, and all are ready to renew our emphasis on growth and deliver the quality of services our clients expect and drive greater returns for our shareholders.
I am, of course, equally enthusiastic about Hill’s prospects, and look forward to providing updates on the progress of our growth in future announcements and calls.
For today, I would like to share our expectations for 2018 revenues and mention some of the company’s most recent project wins.
For 2018, we continue to expect total revenue to be in the range of $420 million to $430 million, consistent with our last update of October 2018 – 2018. Our current quarterly run rate of approximately $100 million total revenue has leveled off, and we believe that future quarters will begin to see growth.