Q4 2020 Hill International Inc Earnings Call

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Greetings and welcome to the Hill International fourth quarter and year end 2020 financial results Conference call.

Anyone should require operator assistance. Please press star zero on your telephone keypad.

But shouldn't answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Devin Sullivan with the equity group. Please go ahead Sir.

Thank you Kevin Good morning, everyone and thank you for joining us today from Hill Internationals fourth quarter and full year 2020 financial results Conference call.

Our speakers for today's call will be Robert Golly, Chief Executive Officer.

Todd Weintraub, those chief financial Officer.

Before we begin I'd like to remind everyone that certain statements made during this call maybe considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 19, net but and it is our intent that any such statements be protected by the safe Harbor created thereby.

Except for historical information the matters set forth herein, including but not limited to any statements of belief or intense any statements concerning financial projections, our plans strategies and objectives for future operations are forward looking statements.

And looking statements are based on our current expectations estimates and assumptions and are subject to certain risks and uncertainties, including but not limited to risks and uncertainties related to the COVID-19 pandemic.

Willingness and ability of governments and other clients to undertake and complete infrastructure projects and our ability to maintain and support business development activities.

Although we believe that the expectations estimates and assumptions reflected in our forward looking statements on reasonable actual results could differ materially from those projected or assumed in any of our forward looking statements.

Important factors that could cause actual results to differ materially from estimates or projections contained in our forward looking statements are set forth in the risk factors section and elsewhere in the reports we have filed with the Securities and Exchange Commission, including the unfavorable global economic conditions may adversely impact our business, our backlog may not be fully realized as.

Revenue in our expenses may be higher than anticipated.

On intent and undertake no obligation to update any forward looking statements.

I'd like to first draw your attention to slides, two and slide three which cover the safe Harbor and the definitions of non-GAAP measures that we will be presenting today.

Turning to slide four I'd now like to turn the call over to <unk> Ghali Hill, Chief Executive Officer growth. Please go ahead.

Thank you Devin.

Good morning, everyone and thank you for joining us today to discuss our 2024th quarter and full year results.

I want to begin by thanking all of Hill staff around the world.

Hard work dedication.

And commitment to client services during the pandemic helped us navigate the most challenging time in our history.

The pandemic profoundly impacted our personal and business lives and Helen Hill professionals quickly rose to the challenge to provide seamless support to our clients around the world.

This helped us create the road to recovery beginning in the second quarter of 2020 and positioned us for continued growth in 2021.

We take great pride.

We have accomplished and I remain grateful for the privilege I'm reading this extra ordinary.

Organization.

Let's begin with an overview of our annual performance on slide four.

We produced.

$296 6 million in CFR.

Which came in just below the end of our range due to several project departments in the fourth quarter of 2020.

I want to note that.

We estimate these COVID-19 related temporary suspensions had a negative impact of $25 million in CFR in 2020.

We exceeded our gross margin estimates by over on 100 basis points from the upper range of our guidance.

Benefiting from our cost control initiatives with SG&A of $109 million.

And generated adjusted EBITDA of $19 million.

The upper end of our original 2020 guidance.

And right in the middle of our most recent guidance.

We had a strong bookings year with new awards totaling $361 million, producing a book to burn ratio of 122%.

Most importantly.

We exited 2020, and a very strong position to capitalize on new global opportunities as the effects of the pandemic subside and economic activity has improved.

Please turn to slide five.

As noted above our Q4 2020 CFR was impacted by project departments due to COVID-19, which we expect will commence during 2021.

Our SG&A for the quarter was $28 7 million in line with the expected reduction.

Year over year, SG&A comparisons improved by $2 million.

Just as a reminder, 2019 fourth quarter SG&A was reduced by $7 1 million, reflecting a net credit associated with the ascend collection.

Fully reserved receivable from a project in Libya.

Excluding the Libya receivable.

SG&A in the 'twenty to 'twenty fourth quarter was 37.

$7 million.

As we said on previous calls we expect debt SG&A will gradually increase.

As revenue and normality returns post COVID-19, two a yearly levels of $120 million.

As we stated in our Q3 call we expected that New awards activity would continue throughout the fourth quarter and they did with bookings of $83 million.

These awards.

Covered multiple geographies and project types with an emphasis on U S Europe and North Africa.

We operated profitably and generate a Nash net.

Cash from operations of $9 million and free cash flow of $8 3 million during the fourth quarter.

Todd will discuss our financial results in greater detail shortly.

Moving on to slide six.

As you can see our revenue profile in 2020 continues to reflect very geographic and market.

<unk> client exposure, which allows us to quickly adapt to changing market environments.

On a percentage basis.

We increased our exposure in the U S Europe and Africa compared to 2019.

In the U S. The main thrust of growth is our infrastructure business.

We also conclude.

Concluded several largest assignments in southern Europe, and the energy hospitality and Mega Real estate development, while in Africa, we secured large transportation and health care facilities.

As we have stated previously our middle East exposure, while still a very important part of our business has declined by design as we focus more efforts.

On the U S infrastructure markets.

We have a broad client exposure and our fee based model mitigates threads typically associated with at risk construction services.

Provides us with the flexibility to pursue comp.

Complex dynamic long term projects.

Along with the added benefit of providing us with repeat business.

We have continued to realize approximately 70% of our CFR from repeat clients both in the U S and internationally.

Moving on to slide seven.