Greetings, and welcome to Hill International Q2 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 the 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 Q2 financial results conference call. Our speakers for today's call are Raouf 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, concluding 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. I'd now like to turn things over to Raouf Ghali, Hill's Chief Executive Officer. Raouf, please go ahead. Thank you, Devin. Good morning, and thank you for joining us today to discuss our 2022 Q2 financial results. The strong start to the year that we reported in Q1 carried over into the Q2 of this year. Total revenue again topped $100 million, increasing to $105.7 million from $101.5 million in the Q2 of 2021. Consulting fee revenue rose 12.9% to $87.7 million 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 Q2 of 2021. Net income improved to $1.4 million from a net loss just under half a million dollars in the prior year's Q2. Adjusted EBITDA rose $6.5 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 expects 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 Division of Water's ongoing upgrade and maintenance project. In the City of Cleveland, we are providing program and construction management services for the Dominion Energy multi-billion dollar citywide pipeline replacement program. A major contract with a new client in the Midwest, AquaBounty, 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 Tren Urbano rail program. In Southern California, we were selected to manage the Metrolink State of Good Repair program for system-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 Q2 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 million-$350 million, an increase of 11%-15% from 2021. Our adjusted EBITDA guidance for 2022 is expected to range between $22-$24 million, up from adjusted EBITDA of $16.3 million, and representing a growth of 35%-47%. Thank you for your attention. I'll now turn things over to Todd Weintraub, Hill's Chief Financial Officer. Todd, please go ahead. Thank you, Raouf. Revenue increased in the quarter, coming in at $105.7 million, compared to $101.5 million in last year's Q2. CFR for the quarter increased 12.9% to $87.7 million from $77.7 million in the Q2 of 2021, reflecting an increase in project activity to pre-COVID levels. For the quarter, most of our revenue was generated in the Americas, followed by the Middle East, Asia Pacific Group, Europe, and then Africa. Gross profit improved to $37.4 million from $31.3 million in last year's Q2, driven by the higher CFR and improved contract margins. SG&A expenses rose 19% to $32.3 million, which is 86.4% of total gross profit, from $27.1 million or 86.6% of total gross profit in last year's Q2. The year-over-year increase in SG&A can be attributed to investments in Hill's business development team and a higher level of revenue. Our SG&A this year also includes a $632,000 charge related to a bond being called. We have received a final court order to have the bond returned to us and expect this charge to be reversed in the second half of 2022. SG&A expenses in last year's Q2 had been reduced by $474,000 from bad debt recoveries on a fully reserved Libyan-based project. Excluding the impacts of that Libyan bad debt recovery and the bond cost just mentioned, our SG&A expenses in Q2 2022 and Q2 2021 would have been 84.7% for this year and 88.1% last year of gross profit, respectively. This more accurately reflects our efforts to ensure that costs grow more slowly than gross profit. As previously discussed, we've reduced the run rate of G&A expenses by approximately $4 million annually from the run rate, the initial impact of which began being realized this quarter. These savings were achieved primarily by realigning certain parts of our workforce to improve utilization and efficiency. Operating income in the Q2 improved $4.5 million from $2.9 million in last year's Q2, driven by higher CFR and improved gross profit, partially offset by an increase in foreign exchange currency losses and higher SG&A to support our growth initiatives. On an adjusted basis, adjusted operating profit nearly doubled to $6.3 million from $3.3 million last year's Q2. Net income for the quarter improved to $1.4 million or $0.02 per share, compared to a net loss of approximately $500,000 or -$0.01 per share in the year-ago period. Adjusted net income improved to $3.2 million from an adjusted net loss of $74,000 in last year's Q2. Adjusted EBITDA for the 2022 Q2 improved to $6.5 million from $3.8 million in last year's Q2. the reconciliations for these adjusted figures are included in our press release. Our unrestricted cash position at June 30, 2022 was $20.3 million, and total liquidity was $28.5 million. Net cash used in operating activities was $400,000, which is a significant improvement from the $3.3 million use of cash in the Q1 of this year. Free cash flow for the quarter was negative $800,000, which also includes $400,000 in purchases of property and equipment. Again, this is a significant improvement from the negative $4.1 million free cash flow that we reported last quarter. We expect to generate a positive cash flow for the remainder of 2022. We have retained a debt advisor to assist in the refinancing of our facilities maturing in 2023 and are conducting a formal process to secure this funding. We granted exclusivity this week to a potential lender after receiving a non-binding term sheet from them based on their preliminary due diligence. They're now conducting confirmatory diligence, and we expect to refinance these facilities by the end of 2022. As Raouf noted, our backlog this quarter was approximately $724 million. Bill's twelve-month backlog at June 30, 2022 was $250 million. From a geographic perspective, backlog remained concentrated in the Americas, followed by the Middle East Asia Group, Africa, and then Europe. Thanks very much for your time, and I'll now turn the conversation back to Raouf. Thank you, Todd. Thank you all for your time today, and I'll ask now the operator to open the call to questions. Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. If you'd like to ask your question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Peter Enderlin with MAZ Partners. Please proceed with your question. Thank you. Good morning. Hi, Pete. The book-to-bill ratio in the Q2 was approximately one, I think, and that was down from 1.2 in the Q1. Were there any specific puts and takes in that or any specific reason why you had somewhat of a slowdown, which seems to be a little contrary to the trends in the industry? Pete, no, there isn't. A lot of our awards are sometimes lumpy. We had very strong awards, and we closed on a lot in the Q4 of last year. Last quarter was a very strong quarter. It's pretty logical that this quarter some of the procurement wasn't catching up fast enough for us to close all the projects to have the same amount. We're expecting a very strong third and Q4 again on bookings. Mm-hmm. Okay. Along the same lines, Europe and Africa together, which may not be the right way to look at it, but they were both sort of on a combined basis, about flat in terms of CFR. How do you relate that to the economic environment in those two areas? Again, both these regions have had a very significant growth in the last two or three years. We're expecting them to continue having some growth. Some of the revenue lagged this month or this quarter because of some delays in remobilizing and mobilizing some of the new awards. We believe our plan is that we're gonna be catching up, and you're gonna see the expected growth for both these regions by the end of the year. Mm-hmm. We've already got the staff in, got the mobilization ongoing. Okay. Accounts receivable were up quite a bit in the quarter in comparison to the revenues. Is there any specific reason for that? Yes. I n general, obviously an increase in revenue is gonna lead to an increase in accounts receivable. Right. It's actually normal on the international side for receivables to increase more than the revenue. A primary reason for that is the value-added tax. For example if we book $1 million in revenue in locations that have the VAT that leads to its 10% rate. Receivables will increase by $1.1 million, essentially. When you collect that, then it comes down by more. In a rising revenue environment, it is normal that you would see the receivables go up by, you know, kind of a higher rate than the revenues would. Well, fair enough, Todd. Most of the strength in the revenues has been domestic. Is there some structural reason why accounts receivable are going up more there in relation to the revenue? Well, there's a number of reasons. Part of it is the VAT, but part of it is also just remember, we report everything in U.S. dollars, so part of it has to do with exchange rates too. You know, the dollar has been over the course of the year quite strong against some of the other currencies that we do business in, particularly the Egyptian pound and the euro. The U.S. dollar has been pretty strong against those. When you look at the local currencies, you know, it's more muted. W hen you look at the exchange rates, that kind of contributes to what you're seeing as well. T hat's relatively the main reason we've looked at this has to do with the VAT. Notwithstanding that, the plurality of the revenue is in the U.S., the majority is still, you know, coming internationally. Over half of our revenue is international, much of that subject to the VAT. Right. Got it. One last one for me. Do you guys have any comment at all on the letter, I guess it was only a letter from Godspeed proposing an acquisition? Well, obviously we've seen the letter. We've received the letter. The board is reviewing it. We haven't commented on the letter, and we have no comments today. Okay, thanks a lot. Thank you. Our next question comes from the line of Bill Dezellem with Tieton Capital Management. Please proceed with your question. Great. Thank you. Raouf, you mentioned in your opening remarks that none of the new projects in the US were tied to the infrastructure bill. If we did hear that correctly, what's the timeframe that you are currently anticipating that the infrastructure bill projects will kick in? M aybe taking that one step further, are you expecting it to be any sort of a step function increase in your activity or simply a continuing of the growth trend? The first part of the question is, we're expecting towards the end of this year to see activities from the bill really start to come through. Revenue generation is gonna be coming slowly, as awards are given and we are mobilizing. It's gonna be a trend that slowly starts boosting our revenue. I'm not sure I can answer the second question correctly, if it's gonna be a step or it's going to be just an increase in steady revenue. It depends on how they're going to package this. We believe there's going to be some major programs that are gonna come out that will really be, in some cases, material, and would have a larger step in our revenue. I cannot confirm this because we haven't seen any of the RFPs hit the street yet. Understood. Next question is relative to your sales force. As you become healthier and your CFR is beginning to grow again, have you been expanding the sales force? T he question should potentially be tied to the infrastructure bill, but I am not wanting to limit the question to the United States. T ake it as you may please. We have not yet increased our sales force. We think our sales force as it is right now is adequate. Todd and I referred to the business development activities, and those were really from the sales force, not the increase of it, but more travel activities being meeting in person with clients and prospective clients, going to conferences, and other means of selling our services. Obviously as the market starts really heating up, we will then determine whether we need to increase our workforce at that time. Right now we think we're sufficient, and we're trying to keep our SG&A at levels where a bigger portion drops to the bottom line. We certainly do appreciate that. T aking that a step further, if you were to make the decision that you did want to increase your sales force, where in the world would you anticipate that would be the first place that you would increase the sales force? Our largest sales force is in the U.S. I think we would add potentially some more in the U.S., just because of what we're expecting as far as needs for our services and the gap in it. Internationally we have a very, very small sales force, and we use the seller doer model. We may potentially look at in Europe and potentially the Middle East of adding there some resources, but it's not for right now. We're not planning to have anything for this year. Thank you. Maybe this question is somewhat similar or related, but geographic expansion. How are you viewing that if at all? Well, I think we've referred to that, I think in the past. Our plan is, as our priority is to expand our services within the footprint that we have. We need critical mass in the existing footprint. That's how we're going to be reaching higher operating levels, as well as, you know, net income. The priority is obviously cross-selling different services, and to new clients within the existing footprint. That does not limit that we're gonna say we will never expand geographically, but that's for sure not our priority. Excellent. Thank you. May we switch to facilities management? That wasn't referenced in the press release or your opening remarks, and yet I think it's one of your initiatives to build the business. Update us where you are with the facilities management, please. I think facilities management is continuing to be a good portion of our business overseas, in Middle East and North Africa in particular. We're looking now at Europe, potentially of having several assignments and opportunities that we hope to close on in the near future. The reason we didn't mention it because there wasn't any material moves, either positive or negative to it. We're hoping again in the next couple of quarters to be able to report on couple of opportunities that have been pending to close for some time now, but have not yet closed. Up to now, it still maintains the level it has maintained, so there was really no urgency to mention it. No, that's understood. I believe that you had quite the large contract that you announced in Saudi Arabia right before COVID closed things down. Where does that contract stand relative to activity resuming and the need to have management of the facilities, meaning that people are back in them? Hill, I assume you're referring to the schools project that we received in Saudi Arabia. Just to give you an update on that, we have mobilized around 40 to 50 people on that, on those projects. Continues to be there. There are opportunities for us to grow in that particular contract as well in the future. Great, thank you. Not just by extending that, but by adding other facilities to it. A couple thousand facilities. If I'm way off, please correct me, b ut if you were to add additional facilities to that contract, would it be a meaningful number or a small number relative to the starting base? No, I think it would be a meaningful number. Is that one of the larger deals that you're hoping you can announce in the next few quarters? Or is that in addition to what you were previously referring to? No, those I was referring to was in addition to this one. These are brand-new assignments with new clients. Well, wish you luck on all of those. Thank you very much. Lastly, if I may continue to take more time. The $600,000 charge for the bond, can you explain that in more detail? I apologize. It's just not a concept that I am familiar with. If you want me to take it offline, that's fine. Would love whatever explanation that you can provide behind just maybe not the individual client, but just the phenomenon that happened. Yeah. Hill, let me So- Go ahead. Go ahead, Todd. Maybe you wanna take it. Go ahead. Okay. It's on quite a few of our projects, particularly international, we're required to put up a performance bond as we win these. The requirements for a client to call the performance bonds are pretty low. They pretty much just have to put in a letter to the bank and it happens, and the onus becomes on us to recover that. That's what happened. A client, without getting into who or why, really we didn't feel had anything to do with our performance. It was more about other things going on in the project, called this bond. W e've got to make good on it. We've got to record the charge. We immediately went to court and we had our day in court pretty quickly, and we got a final court order. It now has to be returned. We can't reverse the charge until, you know, we actually recover that, which we expect to happen later this year. Just to add a little bit of color to that, I would mention that in the history of the company since 1979, I think that we've had three bonds called. You know, it's always a risk. It can happen, but it's not common. It's very rare that it actually does happen. In this case, we'll be able to recover it. Raouf, did you want to add anything to that? No, I think you've given sufficient color there. Does that clarify? That does clarify. Thank you. I appreciate that. My final question is in response to the prior questioner's question about activity levels. Do we understand correctly that or did we hear correctly that you are feeling like the activity level is picking up and you are gaining momentum in terms of orders and therefore future revenues? That is correct. Great. Thank you. Our next question comes from the line of Michael Rasner, a Private Investor. Please proceed with your question. Good morning. My question is actually in regards to the letter from Godspeed Capital. I know you stated that you guys won't comment on that right now. My question is, has Hill or will Hill be hiring an outside firm to explore other suitors? Or, that's something that won't be commented on right now. Well, Michael, we're a publicly listed company. We have not. We're always for sale, as you know. The board has not decided yet, made any decisions on hiring anybody, and we're not commenting on any process. Okay, thank you very much. That was my question. Our next question comes from the line of Steve Schnipper, a private investor. Please proceed with your question. Morning, guys. Good quarter. Still hammering a little bit on the takeover offer, which I know you're not commenting on. My concern is you received a buyout offer about three weeks ago. I've never seen, in all my years of investing, a public company that never acknowledged it. You didn't put out an 8-K. You didn't put out a statement that says, "We've received it. We'll review it in due course." It wasn't in your 10-Q until you got to a Q&A on a conference call. Can you explain the disclosure process from the company of why you consider this a non-material event and chose not to even acknowledge it? I mean, we've obviously discussed any whether or not it required a response from the company with our SEC counsel. We've taken advice on that. As you know, it was not a private offer. It was a public offer. It is out there, it's publicly disclosed, and there's no requirement for us to publicly respond to that, a nd we've chosen not to publicly respond. As Raouf said, you know, the board is evaluating and deciding steps. There's frankly nothing to report at this point. That's an interesting position by counsel, because just because somebody says something doesn't absolve, in my mind, in my experience, the company of saying, "We actually received it. You know, we received this." Just because somebody says, "I sent the letter," doesn't mean that there's any reality to it. The company says, "We get it, and we'll consider it." I mean, that's a very strange thing to not have to disclose it, but if your counsel signed it off, you know. All right. Interesting. I hope your disclosures in the future on this process will be better than relying on some third party to send those out to investors. It's a little concerning. Thank you. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you very much for your time, and have a wonderful day. We look forward to speaking with you in connection with our 2022 Q3 financial results. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.