Hill International, Inc.

Good day, ladies and gentlemen, and welcome to your Hill International Inc. Third Quarter 2021 Financial Results Conference Call and Webcast. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following 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.

Thank you, Taryn. Good morning, everyone, and thank you for joining us today for Hill International's third quarter 2021 financial results conference call. Our speakers for today's call will be Raouf Ghali, Chief Executive Officer, and Todd Weintraub, Hill's Chief Financial Officer. Before we begin, I'd like to remind everyone that certain statements made during this call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 intent, any statements concerning financial projections, our plans, strategies, and objectives for future operations, are forward-looking statements. These forward-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, the 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 are reasonable, Actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our 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 that unfavorable global economic conditions may adversely impact our business, our backlog may not be fully realized as revenue, and our expenses may be higher than anticipated. We do not intend and undertake no obligation to update any forward-looking statements. I will draw your attention to slides two and three, which provide safe harbor information and definitions of the non-GAAP measures we will be presenting. These non-GAAP measures apply to both the presentation itself and our remarks. Turning to slide four, I will turn things over to Raouf Ghali, PIL's Chief Executive Officer. Raouf, please go ahead.

Raouf Ghali, Chief Executive Officer, PIL's Chief Executive Officer, Thanks, Devon. Good morning, everyone, and thank you for joining us today to discuss our 2021 third quarter financial results. We had a very strong quarter, and I'm happy to report that we demonstrated improvement along several important metrics. we produced 77.1 million of CFR, a nearly 8% increase from last year's third quarter, driven in large by continued success in our Western U.S. operations, the resumptions of several projects and programs in the Northeast U.S., and new awards in the Southeast, Mid-Atlantic, and Europe. While we are beginning to see many of our markets opening up, specifically in most parts of the U.S., Europe, and North Africa, we are experiencing some headwinds in the Middle East, which has caused project deferrals. However, we believe that these projects will commence in 2022. Despite these deferrals, we expect that CFR will continue to grow in the fourth quarter. We returned to profitability this quarter, reporting net income of $1.3 million and adjusted net income of $2.8 million. Adjusted EBITDA rose by 33% to $6.4 million. We also produced the best bookings quarter in 2021, with new awards totaling $92.6 million producing a book-to-burn ratio of 120%. These new awards covered multiple geographies and end markets, including public utilities, roads and highways, primary and secondary educational facilities, and rail and transit. For the first nine months of 2021, new awards totaled $274.5 million resulting in a year-to-date book-to-burn ratio of 121 percent. Given the $71 million of new bookings we have recorded through November, we remain optimistic about new awards activity for the balance of the year and expect to end this year with new awards above last year's booking of 361 million. Finally, Free cash flow rose for the second consecutive quarter, reaching $6.1 million. We expect to generate free cash flow in the current fourth quarter. Moving on to slide five. The next couple of slides highlight some of our recent wins. I want to make special note of a recent award from Southern California Edison. one of the nation's largest utilities that was booked in early October and not part of our $92.6 million in third quarter bookings stated earlier on. A new five-year $125 million contract, of which Hill's portion is $56 million, extends a 10-year relationship to provide project management and support services for assignments from SCE's major projects organization, transmission, substation, distribution, generation, and asset management strategy and engineering groups. SCE has developed a portfolio of energy infrastructure projects totaling more than $11 billion to replace antiquated equipment and add new infrastructure to accommodate population growth. We are honored to support them in this vital endeavor. Moving on to slide six. As you'll see on this slide, our infrastructure wins include providing program management services for the Miami-Dade County Aviation Department's $5 billion capital program, encompassing Miami International Airport, as well as the county's executive and general aviation airports. This project will support modernization projects over the next 15 years. Capital program administration support services for the city of Philadelphia's ongoing capital program at Philadelphia International Airport. Construction management and inspection services to the Maryland Aviation Administration until 2026. Hale has been providing the CMI support services for air site, land site, and terminal projects at Baltimore, Washington, Thrugood, Marshall Airport, and Martin State Airport since 2015. Construction management services to the Pennsylvania Turnpike Commission for the $200 million PA Turnpike I-95 interchange Phase II project, the provision services for Phase II of the rehab and upgrade of Rail Route No. 10 in Romania, and project and construction management services for flagship mixed-use development in Cyprus, one of the most prominent green and sustainable developments in the country. Moving on to slide seven. We are excited that the $1.2 billion infrastructure bill passed the House and is headed to the President's desk. The bill will deliver $550 billion of investment to fortify our national infrastructure over the next five years, from bridges and roads to transit and rail, energy, ports, and harbors water and aviation, you'll see the current figures that the bill allocates to each one of these end markets. These are areas in which Hill has substantial experience and a track record of successful project completion. Through the first nine months of 2021, 46% of our total new awards were in infrastructure, and we won 193 million of infrastructure awards the previous year in 2020. The upgrades contained in this bill are necessary and long overdue to ensure public safety as well as the efficiency and safe transport of goods across the country. We are also continuing to monitor infrastructure projects in the EU under the Next Generation EU Initiative, the largest stimulus package ever financed in Europe. At present, the 750 billion euro program is being released to each country, and we expect procurement to start by the recipient countries in 2022. Thank you for your attention, and I will now turn things over to Todd Weintraub, Hill's Chief Financial Officer. Todd, please go ahead.