Opinion on  Hill International Inc. (HINT)     Sector: Services  >  Industry: Business Services
Strong Core Business and Key Acquisitions Paying Off For Hill International

Quick facts <o:p> </o:p>

<o:p>   </o:p> *Added to the Russell Microcap Index on <st1:date month="6" day="26" year="2007"> June 26 ^th ,2007 </st1:date>

<o:p>   </o:p> *Trailing P/E ratio ~17   whereas industry peers trade at much higher P/E’s: PCR (P/E 29), JEC (P/E 29),   FWLT (P/E 38), KBR (P/E 24) <o:p> </o:p>

<o:p>   </o:p> *Global presence and active contracts with a particular presence in <st1:country-region> <st1:place> Iraq </st1:place> </st1:country-region> <o:p> </o:p>

<o:p>   </o:p> *Wells Fargo owns 8% of the stock in their funds

<o:p>   </o:p> *~25 % short interest   (yahoo statistic)

<o:p>   </o:p> *PEG ratio of 0.85

Founded in 1976, Hill International is the largest independent construction management (CM ) firm in the <st1:country-region> <st1:place> United States </st1:place> </st1:country-region> .   They are also the largest constructions claims firm in the world.   With over 1500 employees and 70 offices worldwide, they offer construction consulting and support services from preconstruction through delivery.   They were ranked 3rd Fastest-Growing A/E/C Consulting Firm in the <st1:country-region> <st1:place> United Kingdom </st1:place> </st1:country-region> by Building ( www.building.com.uk ) and on June 11 ^th , featured with a cover story by ENR Magazine, (http://enr.construction.com/features/_Covers/2007/archives/070611.asp) . This issue also ranked them #10 (higher than KBR) in the Top 100 Construction Managers-for-fee category ( http://enr.construction.com/people/topLists/topCmFee/topcmfee... ), and #9 on Top 100 Program Manager 2007 list above FWLT and KBR

( http://enr.construction.com/people/topLists/topProgMgr/topPro... ).  

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Recent developments <o:p> </o:p>

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EARNINGS :

On May 14 ^th , Hill International reported that revenue for the first quarter of 2007 rose to $62.9 million, an increase of 71.0% from the first quarter of 2006.   Total backlog for the first quarter of 2007 increased to $257 million.   Twelve-month backlog at the end of the first quarter of 2007 grew to a record $134 million. Aside from the robust quarterly numbers, Hill’s Chairman and CEO commented: “We intend to build upon this strong performance during the remainder of 2007 and beyond.”   The conference call was very upbeat and mentioned margin expansion in the future.   We note that Hill's top line has grown at a compounded rate of more than 20% per year for the last five years which indicates a sustained growth trend rather than one-time results.   Furthermore, we are impressed by their revenue mix which includes federal, state, local, regional and even foreign government contracts.   They have expanded into these areas while maintaining core private sector contracts as the majority. <o:p> </o:p>

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NEW CONTRACTS :

Since the last quarterly earnings report, Hill International has continued to procure new contracts consistently.   On May 21 ^st , the joint venture of Hill International, LiRo Engineers, Lemley International and HDR received a contract from the New York Metropolitan Transportation Authority to provide construction management services during extension of the No. 7 Subway Line in <st1:city> <st1:place> New York City </st1:place> </st1:city> .   ( http://biz.yahoo.com/bw/070521/20070521006082.html?.v=1 )

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On May 23 ^rd , they were awarded a contract to manage the construction of major road, highway and bridge projects throughout <st1:country-region> <st1:place> Serbia </st1:place> </st1:country-region> . <o:p> </o:p>

( http://biz.yahoo.com/bw/070523/20070523005767.html?.v=1 ) <o:p> </o:p>

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On May 24 ^th , they were awarded significant new task orders to provide construction management support services in connection with the Iraq Reconstruction Program.

( http://biz.yahoo.com/bw/070524/20070524005777.html?.v=1 )

<o:p>   </o:p> On May 30 ^th they received a contract from Abu Dhabi National Hotels Co. to provide project management services during design and construction of a new 5-star hotel and beach resort located in <st1:place> <st1:city> Abu Dhabi </st1:city> , <st1:country-region> United Arab Emirates </st1:country-region> </st1:place> .

( http://biz.yahoo.com/bw/070530/20070530005707.html?.v=1 )

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This mix of contracts displays not only their expertise in gaining new business consistently but is also indicative of the extensive mix of projects and geographic reach which will sustain their currently high growth rate in the future.

<o:p>   </o:p> ACQUISITIONS :

<o:p>   </o:p> In September 2006 they completed the Knowles acquisition giving them a strong foothold in <st1:place> Europe </st1:place> .   Note that this is accretive to earnings going forward.  

<o:p>   </o:p> The recent acquisition of KJM ( http://www.kjmassoc.com ) was effective <st1:date month="5" day="1" year="2007"> May 1 2007 </st1:date> .   This company will give Hill a strong presence in the <st1:place> Western United States </st1:place> that they had previously lacked.   At a bargain price of just over $9 million in cash and restricted stock, they gained a profitable arm in a needed area that is generating over $16 million in revenues and will be immediately accretive to earnings.

<o:p>   </o:p> INDUSTRY :

Despite the slowing housing market (which Hill International has virtually NO exposure to), industrial spending continues to be growing worldwide and is expected to continue.   The global industrial market continues to be extremely large with $4.6 Trillion in 2006 Worldwide (Estimated). Program/Construction Management Fees for ENR’s Top 100 U.S. PM/CM Firms were up 18% to $8.7 Billion in 2006, from $7.4 Billion in 2005.   <o:p> </o:p>

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<o:p>   </o:p> Technical analysis <o:p> </o:p>

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From a technical standpoint, the stock has been in a gradual uptrend since May and a longer term uptrend since August of 2006.   It has worked its way up over the 50 day moving average and has been establishing a solid base to advance from. Importantly, the RSI remains strong and Stochastics are in the middle of their ascent higher.

More about the company <o:p> </o:p>

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The Richter family, which runs the company, continues to hold over half of the company’s outstanding shares. This insures that they have a vested stake in shareholder value as well as the company’s growth.   Anyone who is interested in Hill International should definitely look at the vast assortment of projects summarized and sorted by industry on their website: http://www.hillintl.com/?fa=market  

source: http://www.ringtheregister.com

Hill International Selected by Barwa as Project Manager for Luxury Mixed-Use Development in Qatar
Wednesday July 11, 9:40 am ET

full story: http://biz.yahoo.com/bw/070711/20070711005610.html?.v=1

Hill International Awarded $50 Million CM/Build Contract by the New York City Housing Authority
Monday July 23, 12:14 pm ET

MARLTON, N.J. & NEW YORK--(BUSINESS WIRE)--Hill International (Nasdaq:HINT - News), the worldwide construction consulting firm, announced today that it has been awarded a contract by the New York City Housing Authority to provide construction management/build ("CM/Build") services in connection with various capital construction projects on housing developments throughout New York City. The three-year contract, which has a one-year renewal option, has an estimated value to Hill of $50.0 million, which includes approximately $6.0 million of management services which will be provided by Hill and approximately $44.0 million of construction services which will be provided by subcontractors.

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The New York City Housing Authority (NYCHA) provides decent and affordable housing in a safe and secure living environment for low- and moderate-income residents throughout the five boroughs of New York City. NYCHA is the largest public housing authority in the United States, with approximately 13,100 employees. NYCHA owns, operates or maintains more than 178,000 apartments in more than 2,600 residential buildings providing housing for more than 408,000 authorized residents.

Hill's services under this CM/Build task-order contract will include pre-construction, construction, construction management and other related services on a requirements basis, including inspection, supervision, management, coordination and administration of all projects assigned to Hill under the contract.

"Hill has extensive experience managing CM/Build contracts for projects throughout New York City," said D. Clarke Pile, P.E., Hill's Senior Vice President and New York Regional Manager. "I am confident that we will help NYCHA achieve success on their capital construction program," Pile added.

Hill International, with 1,500 employees in 70 offices worldwide, provides program management, project management, construction management, and construction claims services. Engineering News-Record magazine recently ranked Hill as the 10th largest construction management firm in the United States. For more information on Hill, please visit our website at www.hillintl.com.

This press release may include certain statements that fall within the definition of "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties, overall economic and market conditions, competitors' and clients' actions, and weather conditions, which could cause actual results to differ materially from those anticipated, including those risks identified in Hill's filings with the Securities and Exchange Commission. Accordingly, such statements should be considered in light of these risks. Any prediction by Hill is only a statement of management's belief at the time the prediction is made. There can be no assurance that any prediction once made will continue thereafter to reflect management's belief, and Hill does not undertake to update publicly its predictions, whether as a result of new information, future events or otherwise.