Greetings, and welcome to the Hill International Fourth Quarter and Year End 2020 Financial Results Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder this conference is being recorded. It is now my pleasure to turn the call over to Devin Sullivan, with The Equity Group. Please go ahead, Sir.

Thank you, Kevin. Good morning everyone, and thank you for joining us today for Hill International's fourth quarter and full year 2020 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 business development activities. Although, we believe that the expectations, estimates and assumptions reflected in 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 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'd like to first draw your attention to Slide 2 and Slide 3, which cover the Safe Harbor and the definitions of non-GAAP measures that we will be presenting today. Turning to Slide 4, and now I'd like to turn the call over to Raouf Ghali, Hill's Chief Executive Officer. Raouf, please go ahead.

Thank you, Devin. Good morning everyone and thank you for joining us today to discuss our 2020 fourth quarter and full year results. I want to begin by thanking all of Hill's staff around the world. Their hard work, dedication, and commitment to client services during the pandemic helped us navigate the most challenging time in our history. The pandemic profoundly impacted our personal and business lives and Hill's professionals quickly rose to the challenge to provide seamless support to our clients around the world. This helped us create the road to recovery beginning in the second quarter of 2020 and positions us for continuing growth in 2021. We take great pride what we have accomplished and I remain grateful for the privilege of leading this extraordinary organization. Let's begin with an overview of our annual performance on Slide 4. We produced $296.6 million in CFR, which came in just below the end of our range due to several project deferments in the fourth quarter of 2020. I want to note that we estimate these COVID-19 related temporary suspensions have a negative impact of $25 million in CFR in 2020. We exceeded our gross margin estimate by over 100 basis points from the upper range of our guidance, benefited from our cost control initiatives with SG&A of $109 million, and generated adjusted EBITDA of $19 million at the upper end of our original 2020 guidance and right in the middle of our most recent guidance. We had a strong bookings year with new awards totaling $361 million producing a book to burn ratio of 122%. Most importantly, we exited 2020 in a very strong position to capitalize on new global opportunities as the effects of the pandemic subside and economic activities improved. Please turn to Slide 5. As noted above, our Q4 2020 CFR was impacted by project deferments due to COVID-19 which we expect would commence during 2021. Our SG&A for the quarter was $28.7 million, in line with the expected reduction. Year-over-year SG&A comparisons improved by $2 million. Just as a reminder, 2019 fourth quarter SG&A was reduced by $7.1 million, reflecting a net credit associated with the then collection of a fully reserved receivable from a project in Libya. Excluding the Libya receivable, SG&A in the 2020 fourth quarter was $30.7 million. As we said on previous calls, we expect that SG&A will gradually increase as revenue and normality returns post COVID-19 to yearly levels of $120 million. As we stated in our Q3 call, we expected that new awards activity would continue throughout the fourth quarter and they did with bookings of $83 million. These awards covered multiple geographies and project types with an emphasis on US, Europe and North Africa. We operated profitably and generated net cash from operations of $9 million and free cash flow of $8.3 million during the fourth quarter. Todd will discuss our financial results in greater detail shortly. Moving on to Slide 6, as you can see, our revenue profile in 2020 continued to reflect various geographic end market and client exposure, which allows us to quickly adopt to changing market environments. On a percentage basis, we increased our exposure in the U.S., Europe and Africa compared to 2019. In the U.S. the main thrust of growth is our infrastructure business. We also concluded several large assignments in Southern Europe in the energy, hospitality, and mega real estate development, while in Africa we secured large transportation and healthcare facilities. As we have stated previously, our Middle East exposure was still a very important part of our business, has declined by design as we focus more efforts on the U.S. infrastructure markets. We have a broad client exposure and our fee-based model mitigates threats typically associated with at risk [ph] construction services. It provides us with the flexibility to pursue complex dynamic long-term projects along with the added benefit of providing us with repeat business. We have continued to realize approximately 70% of our CFR from repeat clients, both in the U.S. and international. Moving on to Slide 7, we believe that infrastructure will be a key driver of economic recovery in a post pandemic world. In 2020 we secured over $190 million in infrastructure awards in the United States, Middle East, North Africa and Europe. Some of these projects are highlighted here, still it is estimated that there is a $2 trillion underinvestment in our nation's infrastructure. Following the passage of the COVID-19 stimulus plan, we believe that the infrastructure will compromise the next major spending initiative of the new administration. Any such plans will likely focus on creating a model and sustainable infrastructure focused on areas that include transit, power, housing and buildings, areas in which Hill has a long and distinguished history of successful project completion. We are closely monitoring activity in Washington regarding infrastructure spending proposals. We will also pursue projects in the EU, which will be funded under COVID-19 related stimulus programs that have an aggregate value in excess of €200 billion for 2021 alone. These projects would be in addition to those that have already been approved. Moving on to Slide 8, I remain very proud of the team and their continuing pursuit of new business. During 2020, Hill continued to see growth in the infrastructure sector around the world as demonstrated by our recent transit wins in California, New York and Saudi Arabia, as well as signs of recovery in the resort and residential markets. These infrastructure wins total more than $11 billion in total program and project value, while our new residential and tourism wins include landmark projects along the Mediterranean, North Africa's Atlas Mountains and Mexico. Moving on to Slide 9, this slide shows recent awards received by Hill for our projects in Spokane, Washington and Baltimore, Maryland. As we move into aware session I expect our teams and our clients will continue to earn additional accolades. On to Slide 10, as we noted, the last time we spoke, we acquired a licensed New York State Engineering Corporation, which would allow us to offer our New York City and State clients resin [ph] engineering and inspection services. As you know, Hill specializes in infrastructure projects, especially in the U.S. and this license enables us to organically expand and evolve our project management services throughout the New York metro region. For Hill's existing clients, this means Hill's can offer our support to more horizontal projects, including roadways, bridges and transit assignments. We have named this business Hill International Technical Services or HITS and have been working diligently to introduce this service to new and existing clients. We expect that HITS will serve as a significant growth engine for 2021 in Northeast region. Thank you for your attention, and I will now turn things over to Todd Weintraub, Hill's Chief Financial Officer. Todd, please go ahead.

Thank you, Raouf. I'll pick things up from Slide 11. This slide provides an overview of our GAAP results for the fourth quarter and full year of 2020. CFR for the fourth quarter of 2020 was $72.2 million, a slight increase from Q3 2020, but a decline from $76.8 million in last year's fourth quarter. As Raouf noted, this decline reflected the late project starts due to large part to uncertainties driven by COVID-19. Selling, general and administrative expenses were $28.7 million or 37.9% of CFR compared to $23.6 million or 30.2% of CFR in Q4 2019. As mentioned, last year's fourth quarter SG&A was reduced by $7.1 million reflecting the net credit associated with the Libya receivable. Excluding that transaction, SG&A in last year's fourth quarter was $30.7 million or 40% of CFR. SG&A in the 2020 fourth quarter, reflected higher than normal professional fees related to remediation of control activities and higher than normal unapplied and indirect labor due to PTO taken in December as the company had previously instituted a user or loser policy. Operating profit for Q4 was $6.3 million compared to $10.3 million in last year's fourth quarter, reflecting both slightly lower CFR due to the effects of COVID-19 and the positive impact of the Libya receivable, in last year's fourth quarter. We incurred a net loss of $1.8 million in the quarter compared to income of $12.1 million in last year's Q4. In addition to the lower CFR, net income in the 2019 fourth quarter included the $7.1 million for the receivable we spoke about, and the $3.6 million income tax benefit, as opposed to a $4.4 million income expense that we incurred in Q4 2020. The variance in income tax was related to the reversal of an accrual relating to the former claims business in 2019, and additional accruals for uncertain tax positions in 2020. Q4 2020 also included a non-cash write-off of $1.4 million related to our exit from the Brazil market. Now let's take a look at our results on an adjusted basis on Slide 12. Adjusting for non-cash share based compensation, unrealized FX losses and the Libya collection and Brazil write-off just mentioned, operating profit rose to $5.9 million in the 2020 fourth quarter from $2.8 million in 2019 fourth quarter, due primarily to lower SG&A costs overall from COVID related cost savings initiatives. Adjusting for these same items, net loss was $700,000 compared to net income of $4.6 million in last year's Q4, due mainly to the variance in income taxes mentioned before. We reported adjusted EBITDA of $5.7 million in the 2020 fourth quarter, up from $4 million in last year's Q4. Turning to slide 13. We continue to maintain a strong focus on liquidity management and cash generation. You'll see that we improved our cash position by $18.3 million from year-end 2019 and finished the year with an unrestricted cash position of $34.2 million. Total liquidity at December 31, 2020, including access to our lines of credit was $45.9 million, up from $36.4 million at September 30, 2020 and $19.8 million from December 31, 2019. Free cash flow in Q4 2020 was $8.3 million, the third consecutive quarter of positive cash flow, following the impact of COVID-19 on this metric in the 2020 first quarter. It is worth noting that cash flow generation during the year was achieved mostly from operating results and strong collections. Cash flow from Q2 onwards, was also aided by payroll taxes deferred as permitted by the CARES Act, the suspension of the 401(k) match, and the deferral of some rent, which together totaled approximately $5 million. The deferred rent wasn't [ph] paid in January and February of this year, the deferred payroll taxes will be paid half later this year, and half in 2022, and the 401(k) match was resumed beginning January 1, 2021. If you'll turn your attention to Slide 14, our backlog remained essentially stable at $666.7 million from September 30, 2020. Last quarter I mentioned the impacts to our backlog of a joint venture agreement, associated with our Hamad International Airport Project in Doha, Qatar. Specifically, the agreement decreased sales backlog associated with this project by approximately $45 million in exchange for the opportunity to work collaboratively on future projects secured via this JV relationship. From a geographic perspective, our backlog remained concentrated in the U.S. Compared to the third quarter of 2020, backlog in Africa and Europe, increased for the three months ended December 31, 2020, with a slight decline in the Middle East, which are stuck [ph] to our facilities management business, these contracts comprised 4.2% of our backlog at December 31, 2020. Thank you very much for your time, and I'll now turn the conversation back to Raouf.

Thank you, Todd. Let's go to Slide 15. We finished 2020 strong and remain cautiously optimistic for 2021. With respect to guidance, based on current business conditions and considering certain previously announced project deferrals and cancellations that occurred earlier this year, we expect CFR to range between $320 million to $330 million, consisting of both new awards and extensions of existing contracts. SG&A for 2021 is expected to increase from $109.2 million incurred in 2020, driven by an anticipated rebound in economic activities as the effects of the COVID-19 pandemic subside and the company's activity increases. We will continue to manage SG&A and its association with CFR relative to the evolving effects of COVID-19. Adjusted EBITDA for 2021 is forecasted to be between $20 million to $22 million. Thank you for your time today and I will now ask the operator to open the call to questions.

Thank you. [Operator instructions]

If there are no questions at this time, I'll turn the floor back over for any further or closing comments.

Thank you. As we announced on Monday, we will be hosting a one-on-one meeting at the Roth Conference today. Thank you all very much for your time. On behalf of Hill's 2700 employees around the world, I thank you for your continued support of Hill International. Have a wonderful day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

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