Arpeggio Acquisition Corporation and Hill International, Inc. Announce Hill's Financial Results for First Quarter 2006; Net Revenue up 39.2% and Net Profit Up 86.7%.MARLTON Marlton can refer to several things:
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Arpeggio Acquisition Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : APGO APGO Association of Professors of Gynecology and Obstetrics APGO Association of Professional Geoscientists of Ontario , APGOW, APGOU) ("Arpeggio"), a specified purpose acquisition company, and Hill International, Inc. ("Hill"), a worldwide construction consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , have jointly announced the filing of Arpeggio's amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. with the Securities and Exchange Commission ("SEC") on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 26, 2006. The filing includes, among other items, unaudited financial results for Hill for the three months ended April 1, 2006 and April 2, 2005. As previously announced, Arpeggio and Hill have entered into a merger agreement pursuant to which Hill will merge See mail merge and concatenate. with and into Arpeggio. In its 2006 first quarter, Hill achieved revenue of $36.8 million as compared to $25.4 million in its 2005 first quarter, an increase of 45.0%. Hill's net revenue (defined as revenue less reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. expenses, or RLRE) in the first quarter of 2006 totaled $25.4 million as compared with $18.2 million in the 2005 first quarter, an increase of 39.2%. The increase in net revenue is primarily related to both higher domestic and overseas revenue in the company's Project Management Group of $4.7 million and $5.2 million, respectively, and an increase of $1.7 million in overseas Construction Claims Group revenue, partially offset by a $206,000 decrease in domestic Claims revenue. Gross profit increased to $11.4 million in the 2006 first quarter from $8.4 million in the corresponding 2005 period, an increase of 35.6%. Gross profit as a percentage of net revenue was 44.9% in the 2006 first quarter, down slightly from 46.1% in the same period in 2005. In the first quarter 2006, Hill's selling, general and administrative (SG&A) expense increased to $9.7 million from $7.5 million in the prior year quarter, but decreased as a percentage of net revenue to 38.2% from 40.9% in the prior year period. The increase in 2006 first quarter SG&A expense was related to $1.0 million of unapplied and indirect labor expense due to increases for staff required to produce and support the $11.4 million revenue increase. Additionally, expenses of $407,000 and $302,000 were related to, respectively, two litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. matters which have substantially concluded, and an increase in outside accounting fees due to increased auditing, tax and employment consulting requirements for expanded overseas offices and projects, as well as for preparation of the proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. filings in connection with the pending Arpeggio merger. An additional $345,000 in increased expense for the quarter ended April 1, 2006 was related to the expansion of overseas operations including executive, finance and business development travel, rent, communications, property and equipment depreciation, and property casualty and liability insurance. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the first quarter 2006 was $1.8 million, versus $1.2 million in the prior year period, an increase of 48.6%, principally due to higher net revenue and gross profit, offset by SG&A expense that grew at a slower rate. Hill's net income in the first quarter of 2006 was $1.2 million versus $661,000 in the year earlier quarter, an increase of 86.7%. Overall, profitability improved due to an increase in net revenue, partly offset by higher direct, SG&A, interest and tax expenses. About Hill Hill International, based in Marlton, NJ, has over 900 employees in 25 offices worldwide providing program management, project management, construction management and construction claims services. Engineering News-Record Engineering News-Record (widely known as ENR) is a weekly magazine that provides news, analysis, data and opinion for the construction industry worldwide. It has been published since 1874. It is owned by The McGraw-Hill Companies. magazine recently ranked Hill as the 18th largest construction management firm in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . About Arpeggio Arpeggio, based in New York, NY, was incorporated in April 2004 to acquire an operating business in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Arpeggio's initial public offering became effective June June: see month. 24, 2004 and was consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. on June 30, 2004, receiving net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $36.8 million through the sale of 6.8 million units at $6.00 per unit. Each unit was comprised of one share of Arpeggio common stock and two warrants, each with an exercise price of $5.00. As of March 31, 2006, Arpeggio held approximately $37 million in a trust account maintained by an independent trustee, which will be released upon the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the business combination. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, about Arpeggio, Hill and their combined business after completion of the proposed merger. Forward looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of Arpeggio's and Hill's managements, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions, weather and natural disasters, changing interpretations of generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environments, requirements or changes adversely affecting the businesses in which Hill is engaged; fluctuations in client demand; management of rapid growth; intensity of competition from other providers of project management and construction claims services; general economic conditions; geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. events and regulatory changes, as well as other relevant risks detailed in Arpeggio's filings with the SEC, including its report on Form 10-QSB for the quarter ended March 31, 2006. The information set forth herein should be read in light of such risks. Neither Arpeggio nor Hill assumes any obligation to update the information contained in this press release. The stockholders of Arpeggio are urged to read the proxy statement as well as all other relevant documents filed or to be filed with the SEC, because they contain important information about Arpeggio, Hill and the proposed merger. The final proxy statement will be mailed to stockholders of Arpeggio after it has been approved by the SEC. Arpeggio stockholders may obtain the proxy statement and any other relevant filed documents for free at the SEC's website (www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). Arpeggio, and its respective directors and officers may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of approvals from Arpeggio's stockholders in respect of the proposed transaction. Information regarding Arpeggio's participants is contained in the proxy statement.
Hill International, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
April 1, April 2,
2006 2005
----------- ----------
Revenue $ 36,808 $ 25,388
Reimbursable Expenses $ 11,457 $ 7,175
Revenue, less reimbursable expenses $ 25,351 $ 18,213
Direct Expenses $ 13,962 $ 9,813
Gross Profit $ 11,389 $ 8,400
Selling, general and administrative expenses $ 9,676 $ 7,448
Equity in affiliate $ (66)$ (245)
---------- ----------
Operating income (loss) $ 1,779 $ 1,197
Interest expense, net $ 190 $ 131
---------- ----------
Income (loss) before provision for
income taxes $ 1,589 $ 1,066
Provision (benefit) for income taxes $ 355 $ 405
---------- ----------
Net income (loss) $ 1,234 $ 661
========== ==========
Net income (loss) per share
Basic $ 0.20 $ 0.11
========== ==========
Diluted $ 0.16 $ 0.09
========== ==========
Basic weighted average shares outstanding 6,093 6,000
Diluted weighted average shares outstanding 7,527 7,331
Note: Per share numbers relate to Hill's
outstanding shares, not Arpeggio's
Hill International, Inc. and Subsidiaries
Balance Sheets
(In US dollars) (In thousands)
April 1, December 31,
2006 2005
ASSETS (unaudited)
------ ------------- ------------
Current Assets
Cash & Cash Equivalents 1,338 2,716
Cash - restricted 923 1,040
Accounts Receivable, Net 35,038 27,623
Accounts Receivable - related party 193 611
Prepaid expenses and other current assets 2,433 1,361
Total Current Assets 39,925 33,351
Property & Equipment, net 3,341 2,842
Cash - Restricted 2,955 2,169
Retainage Receivable, Net 1,262 964
Intangibles, Net 1,338 148
Deferred Tax Assets, Net 542 451
Investment in Affiliate 459 393
Other Assets, primarily deferred costs of
merger 1,495 405
------------- ------------
Total Assets 51,317 40,723
LIABILITIES & SHAREHOLDERS' EQUITY
----------------------------------
Current Liabilities
Due to Bank 1,221 190
Current Portion of L-T Debt 10,616 10,156
Current Portion of Capital Lease Obligations 150 186
Accounts Payable and Accrued Expenses 18,021 13,757
Deferred Tax Liability 1,863 2,136
Income Taxes Payable 3,185 1,923
Other Current Liabilities 4,877 3,359
------------- ------------
Total Current Liabilities 39,933 31,707
------------- ------------
Long-Term Debt, Net of Current Maturities 1,093 ---
Capital Lease Obligations, Net of Current
Maturities 11 32
Retainage Payable 1,165 877
Other Liabilities 1,944 1,948
------------- ------------
Total Liabilities 44,146 34,564
Total Shareholders' Equity 7,171 6,159
------------- ------------
Total Liabilities & Shareholders'
Equity 51,317 40,723
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