Hill International Reports Fourth Quarter and Full Year 2020 Financial Results NYSE:HIL

Full Year 2020 Highlights

  • Net cash provided by operating activities of $12.3 million and free cash flow (a non-GAAP measure) of $10.4 million
  • Consulting Fee Revenue (“CFR”) of $296.6 million
  • Net loss of $8.2 million, which included $11.7 million of non-cash charges and a $0.6 million non-recurring charge
  • Net income adjusted for these items (a non-GAAP measure) of $4.2 million
  • Adjusted EBITDA (a non-GAAP measure) of $19.0 million
  • Bookings of $360.9 million, producing a book-to-burn ratio of 121.7%
  • At December 31, 2020:
    • Total cash of $41.4 million
    • Total liquidity of $45.9 million

PHILADELPHIA, March 16, 2021 (GLOBE NEWSWIRE) — Hill International, Inc. (NYSE:HIL) (“Hill” or the “Company”), the global leader in managing construction risk, announced today its financial results for the fourth quarter (“Q4 2020”) and full year ended December 31, 2020.

“After a difficult start to the year due to the global impact of the COVID-19 pandemic on our operations, we generated momentum across our organization during the final three quarters of 2020 and have entered 2021 with a great sense of optimism,” said Hill Chief Executive Officer Raouf Ghali. “We generated CFR of nearly $300 million, exceeded our gross margin estimate by over 100 bps, and delivered strong growth in Adjusted EBITDA and free cash flow. We managed our costs efficiently throughout 2020 and ended the year with a cash and liquidity profile that ranked among the strongest in Hill’s recent history. We enjoyed another strong bookings year in 2020, and are encouraged by both the level of new awards we have secured thus far in 2021 and the outlook for additional new business development activity. Although our consulting fee revenue was negatively impacted by the pandemic due primarily to delayed project starts that manifested during most of 2020, we believe that many of these delayed projects will commence in 2021 as the effects of the pandemic subside.”

Mr. Ghali continued, “In 2020 we were awarded over $190 million in global infrastructure awards. We believe that infrastructure will be a key driver of economic recovery in a post-pandemic world and we are well-positioned to capitalize on anticipated stimulus-related spending in both the U.S. and the European Union. These projects will likely emphasize creating a modern and sustainable infrastructure focused on end markets such as transit, aviation, power, housing and buildings – areas in which Hill has a long and distinguished history of successful project completion. We remain committed to growing our business, expanding our reach, and delivering value to our stakeholders.”

“We more than doubled our unrestricted cash position to $34.2 million compared to year end 2019 and ended the year with robust free cash flow and a greatly improved liquidity profile,” said Todd Weintraub, Hill’s Chief Financial Officer. “We also were able to grow our adjusted EBITDA for 2020 by 12.4% over 2019 despite COVID-19 related headwinds to our CFR.”

Q4 2020 Financial Results Overview

Hill’s consulting fee revenue (“CFR”) declined to $72.2 million in Q4 2020 from $76.8 million in the fourth quarter of 2019 (“Q4 2019”), primarily due to delayed projects starts and certain project suspensions due to the COVID-19 pandemic.

Selling, general, and administrative (“SG&A”) expenses were $28.7 million, or 39.7% of CFR, compared to $23.6 million, or 30.7% of CFR, in Q4 2019. This increase is due to a net credit of $7.1 million received in Q4 2019 related to the collection of a fully reserved receivable from a project in Libya. Excluding this benefit, SG&A in Q4 2019 was $30.7 million, or 40.0% of CFR.

Operating profit for Q4 2020 was $6.3 million, a decrease from operating profit of $10.3 million in Q4 2019, driven primarily by the aforementioned collection of a reserved receivable in 2019 and the effects of COVID-19 on CFR when compared to last year’s fourth quarter. Adjusted operating profit, a non-GAAP measure (see definition and reconciliation below), improved to $5.9 million in Q4 2020 from $2.8 million in Q4 2019.

Income tax expense in Q4 2020 rose to $4.4 million from an income tax benefit of $3.4 million in Q4 2019, due primarily to the reversal of an accrual related to the former claims business in 2019 and additional reserves recorded in 2020 related to uncertain tax positions.

Net loss attributable to Hill in Q4 2020 was $1.8 million, and included a $1.4 million non-cash charge related to the previously announced closure of Hill’s Brazil operations (“the Brazil charge”). Net income attributable to Hill in Q4 2019 was $12.1 million and included a $7.1 million collection of an outstanding receivable from Libya (“the Libya Receivable”). Adjusted net loss, a non-GAAP measure (see definition and reconciliation in the table below), was $0.7 million in Q4 2020, compared to adjusted net income of $4.6 million in Q4 2019. The change from 2019 to 2020 was primarily due to the reversal of a tax accrual in 2019 discussed above.

Adjusted EBITDA, a non-GAAP measure (see definition and reconciliation below), rose to $5.7 million in Q4 2020, compared to $4.0 million in Q4 2019.

2020 Financial Results Overview

CFR for 2020 declined to $296.6 million from $308.6 million, due to the factors described above.

SG&A decreased to $109.2 million in 2020 as compared to $116.9 million in 2019 (excluding the Libya receivable), reflecting the cost containment initiatives implemented by Hill in response to the COVID-19 pandemic.

Operating profit was $10.5 million in 2020 as compared to $18.5 million in 2019. Adjusted operating profit, a non-GAAP measure (see definition and reconciliation below) improved to $17.4 million from $12.9 million in 2019.

Income tax expense in 2020 was $7.1 million as compared to an income tax benefit of $1.1 million in 2019, due primarily to the same factors impacting Q4 2020 and 2019 discussed above.

Net loss attributable to Hill was $8.2 million, or $0.14 per share, in 2020, including the non-cash $5.5 million Brazil charge. Net income was $14.1 million, or $0.25 per share, in 2019 and included the $7.1 million Libya Receivable. Adjusted net income for 2020, a non-GAAP measure (see definition and reconciliation below), was $4.2 million compared to $8.4 million in 2019.

Financial Condition and Backlog

Net cash provided by operating activities rose to $12.3 million at December 31, 2020 from $10.0 million at December 31, 2019. Free cash flow, a non-GAAP measure (see definition below), for 2020 was $10.4 million, which represents net cash provided by operating activities, less $1.8 million in purchases of property and equipment during the year. Free cash flow in 2019 was $6.0 million, which represents net cash provided by operating activities, less $3.9 million in property and equipment purchased during the year.

Unrestricted cash at December 31, 2020 was $34.2 million, a $1.0 million improvement from September 30, 2020 and a $18.3 million increase from December 31, 2019. The Company had approximately $11.7 million in available and undrawn credit facilities at December 31, 2020, compared to $3.3 million at September 30, 2020 and $14.7 million at December 31, 2019. The Company’s total liquidity at December 31, 2020 was $45.9 million, as compared to $36.6 million at September 30, 2020 and $30.7 million at December 31, 2019.

Cash flow generation and the increases in cash and liquidity during the year were achieved primarily from the Company’s operating activities. The Company also benefited from the deferral of certain payroll taxes permitted under the Coronavirus Aid, Relief and Economic Security Act (the “CARES ACT”) and the suspension of the 401(k) matching for most of the year.

Backlog (which is a non-GAAP measure; see definition below) was $666.7 million at December 31, 2020.

2021 Financial Guidance

CFR for 2021 is expected to range between $320 – $330 million, representing an increase of between 8% – 11% from 2020. This increase is expected to consist of both new awards and extensions of existing contracts.

SG&A for 2021 is expected to increase from $109.2 million incurred in 2020. The outlook for SG&A reflects an anticipated rebound in activity as the effects of the COVID-19 pandemic subside and the Company’s activity increases. The Company will continue to manage SG&A and its association with CFR relative to the evolving effects of COVID-19.

Adjusted EBITDA for 2021 is expected to range between $20 and $22 million, up from Adjusted EBITDA of $19.0 million for 2020 and representing growth of 5% – 16%.

Non-GAAP Measures

The following measures below are not measures of financial performance under U.S. generally accepted accounting principles (“GAAP”) and should be considered in addition to and not as a substitute for, or superior to, the related measure of performance prepared in accordance with GAAP.

Backlog

Backlog represents the Company’s estimate of the amount of uncompleted projects under contract and awards in-hand that are expected to be recognized as CFR in future periods as a component of total revenue. Hill’s backlog is based upon the binding nature of the underlying contract, commitment or letter of intent, and other factors, including the economic, financial and regulatory viability of the project and the likelihood of the contract being extended, renewed or canceled. Although backlog reflects business that the Company considers to be firm, cancellations or scope adjustments may occur. It is an important indicator of future performance and is used by the Company in planning Hill’s operational needs. Backlog is not a measure defined in GAAP and the Company’s methodology for determining backlog may not be comparable to the methodology used by other companies in determining their backlog.

Adjusted Operating Profit (Loss)

Adjusted operating profit (loss) is operating profit (loss), adjusted to exclude non-recurring items and non-cash items including unrealized foreign currency exchange losses (gains), share-based compensation and the write-off of leasehold improvements previously included in property and equipment on the Company’s consolidated balance sheets. The Company believes that adjusted operating profit (loss) is useful to investors and other external users of Hill’s financial statements as a measure of a company’s core ongoing operations, without regard to generally non-recurring items and non-cash activity.

Adjusted Net Income (Loss) Attributable to Hill

Adjusted net income (loss) attributable to Hill is net income (loss) attributable to Hill, adjusted to exclude non-recurring and non-cash items including unrealized foreign currency exchange losses (gains), share-based compensation and the write-off of leasehold improvements previously included in property and equipment on the Company’s consolidated balance sheets. The Company believes that adjusted net income (loss) attributable to Hill is useful to investors and other external users of Hill’s financial statements as a measure of a company’s operating performance, without regard to generally non-recurring items and non-cash activity.

EBITDA and Adjusted EBITDA

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), in addition to operating profit, net income, and other GAAP measures, is a useful indicator of Hill’s financial and operating performance. Investors should recognize that EBITDA might not be comparable to similarly titled measures of other companies. The Company believes that EBITDA is useful to investors and other external users of Hill’s financial statements in evaluating its operating performance because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

Adjusted EBITDA is EBITDA, adjusted to exclude the impact of certain items, including non-recurring, one-time costs (as presented in the table below) and non-cash items such as unrealized foreign currency exchange losses (benefit) and share-based compensation expense. The Company believes that adjusted EBITDA helps its investors and other external users of Hill’s financial statements understanding of a company’s operating performance, without regard to non-recurring and other non-cash activity.

The Company does not provide a reconciliation of its 2020 financial guidance for such non-GAAP measure to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for non-recurring, one-time costs and other charges reflected in its reconciliation of historic numbers.

Free Cash Flow

Free cash flow, a non-GAAP measure, includes net cash provided by (used in) continuing operations, less purchases of property and equipment. Free cash flow is a useful indicator that provides additional perspective on Hill’s ability to generate cash that is available to the Company for taxes and other corporate purposes. Investors should recognize that free cash flow might not be comparable to similarly-titled measures of other companies. This measure should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP.

Conference Call

Management will host a conference call on Wednesday, March 17, 2021 at 9:00 am ET to discuss the results and business activities. Interested parties may participate in the call by dialing:

• (877) 407-9753 (Domestic) or
• (201) 493-6739 (International)

The call will also be accessible on the “Investor Relations” section of Hill’s website at www.hillintl.com. Click on “Financial Information” and then “Conferences and Calls”.

About Hill International

Hill International, with more than 2,700 professionals in approximately 69 offices worldwide, provides program management, project management, construction management, and other consulting services to clients in a variety of market sectors. Engineering News-Record magazine recently ranked Hill as the eighth-largest construction management firm in the United States. For more information on Hill, please visit our website at www.hillintl.com.

Forward Looking Statements

Certain statements contained herein 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 our plans, strategies, and objectives for future operations and any statements regarding our expectations for the timing of our work on projects 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 the effects of any continued spread of the COVID-19 virus or effects of decreased oil and gas prices. 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 statement.

Hill International, Inc.  The Equity Group Inc.
   
Elizabeth J. Zipf, LEED AP BD+C Devin Sullivan
Senior Vice President Hill International, Inc Senior Vice President
One Commerce Square (212) 836-9608
2005 Market Street, 17th Floor [email protected] 
Philadelphia, PA 19103  
(215) 309-7707 Lena Cati
[email protected]  Vice President
  (212) 836-9611
  [email protected] 

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

  December 31, 2020 December 31, 2019
Assets    
Cash and cash equivalents $34,229  $15,915 
Cash – restricted 3,752  4,666 
Accounts receivable, net 98,186  103,892 
Accounts receivable – affiliates, net 23,285  18,776 
Current portion of retainage receivable 11,775  16,459 
Prepaid expenses and other current assets 9,378  9,340 
Income taxes receivable 2,298  2,256 
Total current assets 182,903  171,304 
Property and equipment, net 9,443  11,895 
Cash – restricted, net of current portion 3,432  4,401 
Operating lease right-of-use assets 13,116  17,451 
Financing lease right-of-use assets 288   
Retainage receivable 6,044  5,695 
Acquired intangibles, net 2,253  232 
Goodwill 46,397  48,024 
Investments 2,805  1,711 
Deferred income tax assets 3,698  3,800 
Other assets 1,620  5,038 
Total assets $271,999  $269,551 
Liabilities and Stockholders’ Equity    
Current maturities of notes payable and long-term debt $987  $1,792 
Accounts payable and accrued expenses 67,797  65,172 
Income taxes payable 2,219  3,152 
Current portion of deferred revenue 3,305  10,773 
Current portion of operating lease liabilities 4,797  5,736 
Current portion of financing lease liabilities 70   
Other current liabilities 5,796  4,876 
Total current liabilities 84,971  91,501 
Notes payable and long-term debt, net of current maturities 48,294  41,150 
Retainage payable 600  1,551 
Deferred income tax liabilities 1,210  419 
Deferred revenue 7,488  3,041 
Non-current operating lease liabilities 13,184  17,030 
Non-current financing lease liabilities 186   
Other liabilities 6,778  4,631 
Total liabilities 162,711  159,323 
Commitments and contingencies    
Stockholders’ equity:    
Preferred stock, $0.0001 par value; 1,000 shares authorized, none issued    
Common stock, $0.0001 par value; 100,000 shares authorized, 62,920 and 62,708 shares issued at December 31, 2020 and 2019, respectively 6  6 
Additional paid-in capital 215,010  212,759 
Accumulated deficit (79,542) (71,360)
Accumulated other comprehensive income (loss) 1,318  (3,817)
Treasury stock of 6,807 and 6,546 at December 31, 2020 and 2019, respectively (29,056) (28,231)
Hill International, Inc. share of equity 107,736  109,357 
Noncontrolling interests 1,552  871 
Total equity 109,288  110,228 
Total liabilities and stockholders’ equity $271,999  $269,551 

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

  Three Months Ended December 31, (1) Twelve Months Ended December 31,
  2020 2019 2020 2019
Consulting fee revenue $72,162  $76,838  $296,615  $308,620 
Reimbursable expenses 19,953  6,989  71,909  67,817 
Total revenue 92,115  83,827  368,524  376,437 
Direct expenses 59,095  51,299  249,173  249,587 
Gross profit 33,020  32,528  119,351  126,850 
Selling, general and administrative expenses 28,672  23,580  109,215  109,746 
Foreign currency exchange (benefit) loss (699) (662) 2,923  1,159 
Plus: Share of profit of equity method affiliates 1,265  690  3,286  2,601 
Operating profit 6,312  10,300  10,499  18,546 
Less: Interest and related financing fees, net 1,354  1,387  5,224  5,795 
Plus: Other (loss) income, net (2,057) (155) (5,711) 394 
Income (loss) before income taxes 2,901  8,758  (436) 13,145 
Income tax expense (benefit) 4,358  (3,357) 7,134  (1,109)
Net (loss) income (1,457) 12,115  (7,570) 14,254 
Less: net income (loss) – noncontrolling interests 304  (6) 612  170 
Net (loss) income attributable to Hill International, Inc. $(1,761) $12,121  $(8,182) $14,084 
         
Basic (loss) income per common share – Hill International, Inc. $(0.03) $0.21  $(0.14) $0.25 
Basic weighted average common shares outstanding 56,756  56,566  56,603  56,280 
         
Diluted (loss) income per common share – Hill International, Inc. $(0.03) $0.21  $(0.14) $0.25 
Diluted weighted average common shares outstanding 56,756  56,566  56,603  56,280 

(1) Amounts for the three months ended December 31, 2020 and 2019 are unaudited.

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

  Three Months Ended December 31,(1) Twelve Ended December 31,
  2020 2019 2020 2019
Cash flows from operating activities:        
Net (loss) income (1,457) 12,115  (7,570) 14,254 
Adjustments to reconcile net (loss) income to net cash provided by (used in):        
Depreciation and amortization 658  1,389  4,038  3,824 
Recovery of bad debts (634) (8,414) (1,940) (11,360)
Amortization of deferred loan fees 178  176  699  715 
Deferred tax expense 282  92  782  751 
Share-based compensation 390  260  2,006  2,514 
Lease right-of use assets 972  (37) 4,135  3,899 
Loss on liquidation of subsidiary 1,437    5,501   
Foreign currency remeasurement losses (gains) (699) (1,009) 2,923  (905)
Accounts receivable 8,777  13,327  13,463  27,315 
Accounts receivable – affiliates 1,785  6,791  (4,509) 485 
Prepaid expenses and other current assets 3,567  (1,656) 1,149  (3,792)
Income taxes receivable (458) (756) (419) (1,504)
Retainage receivable 79  2,759  (337) 200 
Other assets (2,050) (1,084) (4,693) (164)
Accounts payable and accrued expenses (1,886) (9,471) (245) (14,934)
Deferred payroll tax payments 912    3,623   
Income taxes payable 209  (4,417) (952) (5,703)
Deferred revenue (651) (319) (3,102) (2,554)
Lease liabilities (1,363) (269) (4,622) (4,630)
Other current liabilities (2,258) 388  1,168  124 
Retainage payable (222)   (952) 624 
Other liabilities 1,444  (602) 2,132  820 
Net cash provided by operating activities 9,012  9,263  12,278  9,979 
Cash flows from investing activities:        
Purchase of property and equipment (742) (978) (1,843) (3,936)
Acquisition of Grandfathered Engineering Corporation license (1,050)   (1,050)  
Net cash used in investing activities (1,792) (978) (2,893) (3,936)
Cash flows from financing activities:        
Proceeds from term loan borrowings 19    1,310   
Payments on term loans (227) (265) (893) (1,060)
Proceeds from revolving loans 15,144  27,226  53,630  37,296 
Repayment of revolving loans (23,509) (36,384) (47,777) (41,361)
Proceeds from stock issued under employee stock purchase plan 24  27  245  194 
Net cash provided by (used in) financing activities (8,549) (9,396) 6,515  (4,931)
Effect of foreign exchange rate changes on cash 637  933  540  763 
Deconsolidated cash     9   
Net increase in cash, cash equivalents and restricted cash (692) (178) 16,431  1,875 
Cash, cash equivalents and restricted cash — beginning of year     24,982  23,107 
Cash, cash equivalents and restricted cash — end of year     $41,413  $24,982 
  Twelve Months Ended December 31,
Supplemental disclosures of cash flow information: 2020 2019
Interest and related financing fees paid $4,670  $5,347 
Income taxes paid 3,748  4,821 
Transfer of proceeds from shares pledged as collateral to treasury stock 825   
Cash paid for amounts included in the measurement of lease liabilities 8,448  8,164 
Right-of-use assets obtained in exchange for operating lease liabilities (2) 1,293  21,351 
Right-of-use assets obtained in exchange for finance lease liabilities 288   
Cancellation of PIDC-Local Development Corporation forgivable loan 345   

(1) Amounts for the three months ended December 31, 2020 and 2019 calculated based on the change between years ended December 31, 2020 and 2019 and the nine months ended September 30, 2020 and 2019 and are unaudited.
(2) Amount for the year December 31, 2019 relates to the Company’s January 1, 2019 adoption of Accounting Standards Update (“ASU”) 2016-2, Leases (Topic 842). See Note 14 – Leases to the Company’s Consolidated Financial Statements for the year ended December 31, 2020.

HILL INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(In thousands)

The following table includes a reconciliation of these non-GAAP measures to its most directly comparable GAAP measure:

  Three Months Ended
December 31,
 Twelve Months Ended December 31,
  2020 2019 2020 2019
         
Operating profit $6,312  $10,300  $10,499  $18,546 
Adjustments to operating profit        
Share-based compensation (1) 390  260  2,006  1,598 
Unrealized foreign currency exchange (benefit) loss (765) (1,172) 2,634  (814)
Collection of Libya receivable, net (2)   (7,124)   (7,124)
Write-off of leasehold improvement (3)     1,582   
Non-recurring activity (4)   500  636  646 
Adjusted operating profit $5,937  $2,764  $17,357  $12,852 
         
Net (loss) income (1,457) 12,115  (7,570) 14,254 
Less: net income (loss) – noncontrolling interests 304  (6) 612  170 
Net (loss) income attributable to Hill International, Inc. $(1,761) $12,121  $(8,182) $14,084 
Adjustments to net earnings (loss) attributable to Hill International, Inc.        
Interest and related financing fees, net 1,354  1,387  5,224  5,795 
Income tax expense (benefit) 4,358  (3,357) 7,134  (1,109)
Depreciation and amortization expense (3) 658  1,389  4,038  3,824 
EBITDA 4,609  11,540  8,214  22,594 
Adjustments to EBITDA:        
Share-based compensation (1) 390  260  2,006  1,598 
Unrealized foreign currency exchange (benefit) loss (765) (1,172) 2,634  (814)
Collection of Libya receivable, net (2)   (7,124)   (7,124)
Brazil Office Closure 1,437    5,501   
Non-recurring activity (4)   500  636  646 
Adjusted EBITDA $5,671  $4,004  $18,991  $16,900 
         
Net (loss) income attributable to Hill International, Inc. $(1,761) $12,121  $(8,182) $14,084 
Adjustments to net (loss) earnings attributable to Hill International, Inc.        
Share-based compensation (1) 390  260  2,006  1,598 
Unrealized foreign currency exchange (benefit) loss (765) (1,172) 2,634  (814)
Collection of Libya receivable, net (2)   (7,124)   (7,124)
Write-off of leasehold improvement (3)     1,582   
Brazil Office Closure 1,437    5,501   
Non-recurring activity (4)   500  636  646 
Adjusted net (loss) income $(699) $4,585  $4,177  $8,390 

(1) Share-based compensation excludes amounts paid related to the Company’s Profit Improvement Plan during 2019 and accrued in previous years.

(2) The three and twelve months ended December 31, 2019 includes amount collected, net of amounts paid to subcontractors and other fees.

(3) The write-off of leasehold improvements that was incurred during the twelve months ended December 31, 2020 as a result of the sublease of the Company’s corporate headquarters as part of its cost reduction initiatives was included in depreciation and amortization expense and is reflected in SG&A in the Company’s consolidated statements of operations.

(4) Non-recurring activity includes costs incurred/(recovered) from the Company’s Profit Improvement Plan during 2019 and the settlement of Hill’s employer tax liability under its former subsidiary recognized during 2020, which are both reflected in SG&A within the Company’s consolidated statements of operations.

(HIL-G)


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