Hill International, the publicly traded Philadelphia construction-project management company, says it plans to cut at least $27 million, and as much as $38 million, from yearly expenses in cost-saving moves over the next year, under a plan arranged with help from New York-based consultant Alvarez & Marsal and approved by Hill’s board.
The company, which now employs 3,300 in more than 50 offices around the world, earlier this year eliminated more than 70 headquarters and support jobs after selling its construction-claims group to buyout investor Bridgepoint for $147 million. Hill mostly used those proceeds to pay down debt.
The earlier cuts shaved $8 million from Hill’s yearly expenses, the company said, and cost $2.6 million in severance and restructuring charges. The next round of cuts will cost another $6 million for severance, office closings and consolidations, and vendor cuts. The company says it expects consulting-fee revenue will slip to between $400 million and $425 million this year, down from about $433 million in 2016.
Past Hill clients have included major government-backed projects in European, Arab, Asian, and Latin American nations, and public construction jobs for Pennsylvania and other states, including work on the Pennsylvania Turnpike and the new State Correctional Institution Phoenix in Skippack Township, Montgomery County, which is scheduled for completion next month.
Hill says it has continued to land new business, with its backlog of jobs arranged but not yet performed at $893 million on June 30, up from $883 million at the end of March.
Shares traded higher after the latest cost-cutting announcement. Hill shares have mostly stuck at the $3-to-$5.50-a-share level over the last three years, not breaking out of the range following the construction-claims group sale or the departures of longtime chairman Irvin Richter and his son, former CEO David Richter, under pressure from activist investors seeking higher profits.