Hill International, Inc.

Greetings and welcome to Hill International's second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Devin Sullivan, Senior Vice President for the Equity Group. Thank you, Mr. Sullivan. You may begin.

Thank you. Good morning, everyone, and thank you for joining us today for Hill International's Second Quarter Financial Results Conference Call. Our speakers for today's call are Rav Ghali, Chief Executive Officer, and Todd Weintraub, the company'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 matter 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, infrastructure legislation may not be implemented, and our expenses may be higher than anticipated. We do not intend and undertake no obligation to update any forward-looking statement. We've prepared a presentation, which is available for your reference at our website, www.hillintl.com. The Safe Harbor provision applies to the information contained in those slides. Those slides also include definitions of the non-GAAP measures we will be discussing today. And now I'd like to turn things over to Rauf Ghali, Hill's Chief Executive Officer. Rauf, please go ahead.

Thank you, Dylan. Good morning. And thank you for joining us today to discuss our 2022 second quarter financial results. The strong start to the year that we reported in Q1 carried over into the second quarter of this year. Total revenue again topped $100 million. increasing to $105.7 million from $101.5 in the second quarter of 2021. Consulting fee revenue rose 12.9 percent to $87.7 from $77.7 million in the prior year period and represented our second consecutive $80 million plus CFR quarter. These increases reflect a return to pre-COVID project activity levels, including returns to full staffing on certain existing projects and mobilizations on certain newly awarded projects. New contract awards were 86.7 million. Operating profit improved to 4.5 million from $2.9 million in the second quarter of 2021. Net income improved to $1.4 million from a net loss just under half a million dollars in the prior year's second quarter. And adjusted EBITDA rose six and a half million from $3.8 million in the same period last year. We also entered the second half of 2022 with a strong backlog of $724 million. We are confident in our business outlook and expect a strong half of 2022 driven by new project starts and project resumptions. We continue to see strong and developing market trends and recorded a number of significant wins this past quarter. While many of our contracts were infrastructure related, the depth and breadth of our project management expertise attracted clients from a variety of end markets, including an extension to provide staff augmentation services to support procurement and sourcing for Merck's global projects and programs, a contract renewal with the City of Columbus to continue the Department of Water's ongoing upgrade and maintenance project, In the city of Cleveland, we are providing program and construction management services for the Dominion Gas Multi-Billion Dollar Citywide Pipeline Replacement Program. A major contract with a new client in the Midwest, Aqua Bounty, to help deliver a new high technology salmon farm in Ohio. In the transit sector, We placed a new team in Puerto Rico to support the trend Urbana rail program. And in Southern California, we were selected to manage the Metrolinx state of good repair program for systems wide track structures and signal rehabilitation projects. We also secured new projects internationally, including projects related to energy, residential development, and hospitality. Approximately 52.7% of new awards in 2022 second quarter were infrastructure related, none of which were associated with the Infrastructure Investment and Jobs Act. We believe that we are well positioned to capture the opportunities inherent in our industry. Our low-risk professional service model provides us with the flexibility and resiliency to grow under multiple economic circumstances. We have long-standing client relationships that continue to produce high levels of repeat business, a diverse revenue profile, and a team that has established an industry benchmark for client service. I remain grateful to Hill's professionals and their commitment to excellence. We reiterate our outlook for 2022. We are forecasting CFR of $340 to $350 million, an increase of 11 to 15% from 2021. Our adjusted EBITDA guidance for 2022 is expected to range between $22 to $24 million, up from adjusted EBITDA of $16.3 million and representing a growth of 35 to 47%. Thank you for your attention, and I'll turn now things over to Todd Weintraub, Health Chief Financial Officer. Todd, please go ahead.