Hill International, Inc. - Quarter Report: 2011 September (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2011

or

For the transition period from              to             

Commission File Number: 001-33961

HILL INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (856) 810-6200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.    Yes  ¨    No  x

There were 38,499,403 shares of the Registrant’s Common Stock outstanding at November 1, 2011.

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HILL INTERNATIONAL, INC. AND SUBDISIARIES

Index to Form 10-Q

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PART I — FINANCIAL INFORMATION

HILL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

See accompanying notes to consolidated financial statements.

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

See accompanying notes to consolidated financial statements.

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

See accompanying notes to consolidated financial statements.

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 — The Company

Hill International, Inc. (“Hill” or the “Company”) is a professional services firm headquartered in Marlton, New Jersey that provides project management and construction claims services to clients worldwide. Hill’s clients include the U.S. federal government, U.S. state and local governments, foreign governments, and the private sector. The Company is organized into two key operating divisions: the Project Management Group and the Construction Claims Group.

Recent regional civil unrest and global economic conditions, including disruption of financial markets, has adversely affected the Company’s business and results of operations, primarily by limiting its access to credit and disrupting its clients’ businesses. The reduction in financial institutions’ willingness or ability to lend has increased the cost of capital and reduced the availability of credit. In addition, continuation or worsening of general market conditions in the United States or other national economies important to its businesses may adversely affect its clients’ level of spending, ability to obtain financing, and ability to make timely payments to the Company for its services, which could require the Company to increase its allowance for doubtful accounts, negatively impact days sales outstanding and adversely affect the Company’s results of operations.

On October 17, 2011, the Company and the Lenders entered into a Forbearance and First Amendment to Credit Agreement whereby the Credit Agreement was amended and the Lenders agreed to forbear from enforcing their remedies against the Company through March 31, 2012 under certain circumstances (see Note 9). In exchange, among other things, borrowings under the Credit Facility (see Note 9) will be limited to $80,000,000 and the Company is precluded from certain activities without the Lenders’ consent. The Company will attempt to work with those lenders to restructure its debt or seek alternative sources of working capital.

Note 2 — Basis of Presentation

The accompanying unaudited interim consolidated financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission pertaining to reports on Form 10-Q and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, these statements include all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the consolidated financial statements.

The consolidated financial statements include the accounts of Hill and its wholly- and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The interim operating results are not necessarily indicative of the results for a full year.

Note 3 — Acquisitions

On February 28, 2011, the Company’s subsidiary, Gerens Hill International, S.A., indirectly acquired 60% of the outstanding common stock of Engineering S.A., one of the largest project management firms in Brazil with approximately 400 professionals. It has main offices in Rio de Janeiro and Sao Paulo and an additional office in Parauapebas. Engineering S.A. provides project management, construction management and engineering consulting services throughout Brazil. Total consideration amounted to 37,000,000 Brazilian Reais (approximately $22,320,000 at the date of acquisition) consisting of a cash payment of 22,200,000 Brazilian Reais (approximately $13,392,000) plus minimum additional payments due on each of April 30, 2012 and 2013 in the amount of 7,400,000 Brazilian Reais (approximately $4,464,000) each. Under certain circumstances, the Company may be required to pay 5,000,000 Brazilian Reais ($3,016,000) in addition to the minimum payments. The Company has made a preliminary allocation of the purchase price to the assets acquired and liabilities assumed, but the amounts may change upon finalization of the valuation process. Additionally, the Company has identified a contingency as it relates to an accrual of certain expenses by Engineering S.A. As of September 30, 2011, the amount, if any, has not been quantified. However, pursuant to the acquisition agreement, the Company believes it will have recourse to the sellers of Engineering S.A. for a portion of such contingent liability. The results of operations of the acquired company are not material to the Company’s consolidated results of operations.

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Note 4 — Comprehensive Earnings (Loss)

The following table summarizes the Company’s comprehensive earnings (loss):

Note 5 — Accounts Receivable

The components of accounts receivable are as follows:

At September 30, 2011, the accounts receivable related to the work performed under contracts in Libya amounted to $59,503,000. Due to the current political and economic uncertainty in Libya, the Company is unable to determine the effect this situation will have on our ability to collect this receivable. Management believes that the amount due will be collected, however, if future events preclude the Company’s ability to do so, there could be a significant adverse impact on its results of operations and liquidity.

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Note 6 — Intangible Assets

The following table summarizes the Company’s acquired intangible assets:

Amortization expense related to intangible assets totaled $2,698,000 and $1,433,000 for the three-months ended September 30, 2011 and 2010, respectively, and $7,409,000 and $3,838,000 for the nine-months ended September 30, 2011 and 2010, respectively. The following table presents the estimated amortization expense based on our present intangible assets for the next five years:

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Note 7 — Goodwill

The Company performs its annual goodwill impairment testing, by reporting unit, in the third quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Application of the goodwill impairment test requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur, and determination of the Company’s weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. The Company performed its annual impairment test effective July 1, 2011 and noted no impairment for either of its reporting units. Based on the valuation, the fair value of the Project Management unit and the Construction Claims unit exceeded their carrying values by $10,564,000 and $4,699,000, respectively.

The following table summarizes the changes in the Company’s carrying value of goodwill during 2011 (in thousands):

Note 8 — Accounts Payable and Accrued Expenses

Below are the components of accounts payable and accrued expenses:

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Note 9 — Notes Payable

Outstanding debt obligations are as follows:

The Company maintains a credit facility pursuant to the terms of a credit agreement (the “Credit Agreement”) dated as of June 30, 2009 among the Company and Bank of America, N.A., Capital One, N.A., The PrivateBank and Trust Company and PNC Bank N.A. (the “Lenders”) with Bank of America, N.A. acting as Agent. The Credit Agreement provided for borrowings of up to $100,000,000 and a letter of credit sub-facility of up to $30,000,000. Obligations under the Credit Agreement are collateralized by all of the Company’s assets, including, without limitation, accounts receivable, equipment, securities, financial assets and the proceeds of the foregoing, as well as by a pledge of 65% of the outstanding capital stock of its wholly owned subsidiary, Hill International N.V. The Credit Agreement expires on June 30, 2012. The Company incurred costs of approximately $1,741,000 in connection with establishing the credit facility. Such costs have been deferred and are being amortized to interest expense over the life of the loan.

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The Credit Agreement provides for Base Rate loans and Eurodollar Rate loans. Base Rate loans bear interest at a fluctuating rate per annum equal to the sum of (a) the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (iii) the Eurodollar Rate plus 1.00%, plus (b) an Applicable Rate which may vary between 1.75% and 2.50% depending on the Company’s consolidated leverage ratio at the time of the borrowing. Eurodollar Rate loans bear interest at a rate per annum equal to the British Bankers Association LIBOR Rate plus an Applicable Rate which may vary between 2.75% and 3.50% depending on the Company’s consolidated leverage ratio at the time of the borrowing.

The Credit Agreement contains covenants and certain restrictions on the incurrence of debt, on the making of investments, on the payment of dividends, on transactions with affiliates and other affirmative and negative covenants and events of default customary for facilities of its type. It also requires the Company to meet certain financial tests at any time that borrowings are outstanding under the facility including minimum consolidated net worth of $100,000,000 plus 50% of consolidated net earnings attributable to Hill International, Inc. for each quarter after June 30, 2009, consolidated leverage ratio not to exceed 2.50 to 1.00, a minimum consolidated fixed charge coverage ratio of 2.00 to 1.00 and a minimum ratio of consolidated billed and unbilled accounts receivable to consolidated senior indebtedness of 2.00 to 1.00. During 2011, the Company was in violation of certain of the financial covenants and, on June 29, 2011, the Company entered into a Forbearance Agreement, which was amended on August 16, 2011 and September 30, 2011 (as so amended, the “Forbearance Agreement”), whereby, among other things, the Agent and the Lenders agreed to forbear from enforcing their remedies against the Company with respect to the Company’s previously disclosed failure to comply with financial covenants under the Credit Agreement. Pursuant to its terms, the Forbearance Agreement expired on October 17, 2011.

At September 30, 2011, the Company was in violation of the consolidated leverage ratio and the consolidated fixed charge ratio covenants and certain administrative covenants. On October 17, 2011, the Company, the Agent and the Lenders (the “Parties”) entered into a Forbearance and First Amendment to Credit Agreement (the “Amendment”), whereby the Parties amended the Credit Agreement and the Lenders agreed to forbear from enforcing their remedies against the Company’s failure to comply with specified defaults (“Defined Defaults”) under the Credit Agreement. Specifically, the Lenders agree to forbear from enforcing their remedies against the Company with respect to the Company’s failure to comply with Defined Defaults through the earlier of (a) March 31, 2012 if the Company pays a fee of 0.60% of the Lenders’ aggregate commitments under the Credit Agreement by January 1, 2012 (the “Forbearance Extension Fee”); (b) January 1, 2012, if the Company does not pay the Forbearance Extension Fee by January 1, 2012; or (c) the date on which there is an occurrence of any Event of Default (as defined in the Credit Agreement) other than the Defined Defaults (the “Forbearance Period”).

Under the terms of the Amendment, the Parties, among other things, agreed that during the Forbearance Period:

Additionally, the Company is precluded from certain activities, including limiting the amount of cash it accumulates, and is required to take certain actions, including providing additional monthly reporting to the Lenders. The Amendment also contains revised covenants with which the Company must comply regarding its consolidated fixed charge coverage ratio, the ratio of the Company’s consolidated billed and unbilled accounts receivable to consolidated senior indebtedness, and the aggregate public equity value of the Company’s common stock, as well as other covenants and certain restrictions relating to the retention of a financial advisor, the delivery of a refinancing proposal, updated financial projections, schedules and certificates, and Trademark Security Agreement to the Agent and other affirmative and negative covenants and events of default customary for facilities of its type. In connection with the Amendment, the Company paid the Lenders in October 2011 aggregate fees equal to 0.40% of the Lenders’ aggregate commitments under the Credit Facility, or $400,000. The Company also paid approximately $700,000 to the Agent in October 2011 as reimbursement for its out-of-pocket costs incurred in connection with the Amendment. These fees are being amortized over the period ending December 31, 2011.

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Since the waiver of violations is for a period of less than one year, all borrowings under the facility have been classified as current liabilities in the consolidated balance sheet.

As of September 30, 2011, the Company had $12,708,000 in outstanding letters of credit. Due to conditions of the Forbearance Agreement, total remaining availability at September 30, 2011 was $1,600,000.

The Company’s subsidiary, Gerens Hill International, S.A. (“Gerens”), maintains a revolving credit facility with 12 banks (the “Financing Entities”) in Spain providing for total borrowings of up to €4,870,000 (approximately $6,622,000 and $6,477,000 at September 30, 2011 and December 31, 2010, respectively), with interest at 6.50% of which €2,565,000 (approximately $3,488,000) and €4,870,000 (approximately $6,477,000) were utilized at September 30, 2011 and December 31, 2010, respectively. The total amount being financed (“Credit Contracts”) by each Financing Entity is between €353,000 (approximately $481,000) and €689,000 (approximately $937,000). The facility expires on December 17, 2016. The maximum available amount will be reduced to 75.0% at December 31, 2014 and 50.0% at December 31, 2015. To guarantee Gerens’ obligations resulting from the Credit Contracts, Gerens provided a guarantee in favor of each one of the Financing Entities, which, additionally, and solely in the case of unremedied failure to make payment, and at the request of each of the Financing Entities, shall grant a first ranking pledge over a given percentage of corporate shares of Hill International Brasil Participações Ltda. for the principal, interest, fees, expenses or any other amount owed by virtue of the Credit Contracts, coinciding with the percentage of credit of each Financing Entity with respect to the total outstanding borrowings under this facility.

Gerens also maintains an unsecured credit facility with the Caja Badajoz bank in Spain for €750,000 (approximately $1,020,000 and $997,000 at September 30, 2011 and December 31, 2010, respectively). The interest rate is the three-month EURIBOR rate plus 1.75% but no less than 4.00%. The rate was 3.31% at September 30, 2011 and 2.76% at December 31, 2010, respectively. At both September 30, 2011 and December 31, 2010, there were no borrowings under this facility which expires on December 24, 2011.

The credit facility with the National Bank of Abu Dhabi also allows for up to 150,000,000 AED (approximately $40,836,000 at both September 30, 2011 and December 31, 2010) in Letters of Guarantee of which 140,288,000 AED and 93,992,000 AED (approximately $38,192,000 and $25,588,000, respectively) were utilized at September 30, 2011 and December 31, 2010, respectively.

The Company also maintains a revolving credit loan payable with a European bank up to €1,000,000 (approximately $1,360,000 and $1,330,000 at September 30, 2011 and December 31, 2010, respectively), with interest rates at 1.54% plus Egnatia Bank’s prime rate of 5.00% (or 6.54%) at both September 30, 2011 and December 31, 2010, collateralized by certain assets of the Company. At both September 30, 2011 and December 31, 2010, there were no borrowings under this facility. The facility also allows for letters of guarantee up to €4,500,000 (approximately $6,119,000 at September 30, 2011) of which €800,000 (or $1,088,000) had been utilized at September 30, 2011. The loan has an expiration date of April 30, 2012.

Engineering S.A. maintains three revolving credit lines with two banks in Brazil for 1,700,000, 200,000 and 1,000,000 Brazilian Reais each (approximately $922,000, $109,000 and $543,000, respectively), with monthly interest rates of 2.87%, 5.30% and 2.75%, respectively. There were no borrowings outstanding on any of these facilities at September 30, 2011 which are renewed automatically every three months.

Note 10 — Supplemental Cash Flow Information

The following table provides additional cash flow information:

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Note 11 — Equity in Earnings of Affiliates

Equity in earnings of affiliates primarily reflects the Company’s ownership of 33.33% of the members’ equity of Stanley Baker Hill, LLC (“SBH”), 50.0% of the members’ equity of Hill Petrol and 50.0% of the members’ equity of Hill TMG.

Stanley Baker Hill

SBH was a joint venture formed in February 2004 between Stanley Consultants, Inc., Michael Baker, Jr. Inc. and Hill. SBH had a contract for an indefinite delivery and indefinite quantity for construction management and general architect-engineer services for facilities in Iraq with the U.S. Army Corps of Engineers. The Iraq Reconstruction Program was completed in late 2010.

At December 31, 2010, the Company reported receivables totaling $270,000 from SBH for work performed by the Company as a subcontractor to SBH. Such amounts were paid in accordance with the subcontract agreement between the Company and SBH.

Revenue from SBH pursuant to such subcontract agreement for the three-month periods ended September 30, 2011 and 2010 was $0 and $2,693,000, respectively, and $0 and $11,206,000 for the nine-month periods ended September 30, 2011 and 2010, respectively.

Hill Petrol

Hill International Petrol (Egypt) E.S.C. (“Hill Petrol”) is a joint stock company formed on November 20, 2007 between Hill International S.A. (Hill), the Egyptian National Gas Holding Company (EGAS) and the Egyptian Natural Gas Company (GASCO). The ownership interests of the company are 50% Hill, 40% EGAS and 10% GASCO. The company was formed to jointly participate in the field of project management for oil and gas projects.

Hill TMG

Equity in earnings of affiliates also reflects ownership by the Company of 50.0% of the members’ equity of Hill TMG, a joint venture formed in May 2008 between Talaat Moustafa Group Holding Co. (“TMG”), and Hill. Hill TMG was managing the construction of several of TMG’s largest developments in Egypt and elsewhere in the Middle East.

At September 30, 2011 and December 31, 2010, the Company reported receivables totaling $1,679,000 and $1,728,000, respectively, for work performed by the Company as a subcontractor to Hill TMG. Such amounts are payable in accordance with the subcontract agreement between the Company and Hill TMG.

Revenue from Hill TMG pursuant to such subcontract agreement for the three-month periods ended September 30, 2011 and 2010 was $0 and $286,000, respectively and for the nine-month periods ended September 30, 2011 and 2010 was $79,000 and $1,097,000, respectively.

The following table summarizes the Company’ equity in earnings (losses) of affiliates:

Note 12 — (Loss) Earnings per Share

Basic (loss) earnings per common share have been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted (loss) earnings per common share incorporate the incremental shares issuable upon the assumed exercise of stock options, warrants and unit purchase options, if dilutive. Dilutive shares were 449,381 shares and 449,540 shares for the three-month periods ended September 30, 2011 and 2010, respectively, and 0 shares and 546,875 shares for the nine-month periods ended September 30, 2011 and September 30, 2010, respectively. Certain stock options were excluded from the calculation of diluted (loss) earnings per common share because their effect was antidilutive. The total number of such shares excluded from diluted (loss) earnings per common share was 2,593,137 shares and 1,466,880 shares for the three-month periods ended September 30, 2011 and 2010, respectively, and 2,328,963 shares and 1,284,518 shares for nine-month periods ended September 30, 2011 and 2010, respectively.

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Note 13 — Share-Based Compensation

At September 30, 2011, the Company had 3,837,541 options outstanding with a weighted average exercise price of $5.29. During the nine-month period ended September 30, 2011, the Company granted 285,000 options which vest over a five-year period, 907,336 options which vest over a four-year period and 61,725 options which vested immediately. The options have a weighted average exercise price of $6.97 and a weighted-average contractual life of 5.45 years. The aggregate fair value of the options was $3,214,000 calculated using the Black-Scholes valuation model. The weighted average assumptions used to calculate fair value were: expected life — 4.05 years; volatility — 52.4% and risk-free interest rate — 1.58%. During the nine-month period ended September 30, 2011, options for 12,000 shares with a weighted average exercise price of $2.45 were exercised, options for 53,000 shares with a weighted average exercise price of $4.73 were forfeited and options for 60,000 shares with a weighted average exercise price of $6.09 lapsed.

During the nine-month period ended September 30, 2011, the Company issued 62,000 shares of restricted common stock to certain of its officers under the Company’s 2007 Restricted Stock Grant Plan.

During the nine-month period ended September 30, 2011, employees purchased 148,636 common shares, for an aggregate purchase price of $543,000, pursuant to the Company’s 2008 Employee Stock Purchase Plan.

The Company recognized share-based compensation expense in selling, general and administrative expenses in the consolidated statement of operations totaling $833,000 and $517,000 for the three-month periods ended September 30, 2011 and 2010, respectively, and $2,360,000 and $1,673,000 for the nine-month periods ended September 30, 2011 and 2010, respectively.

Note 14 — Stockholders’ Equity

On November 10, 2008, the Board of Directors approved a stock repurchase program whereby the Company may purchase shares of its common stock up to a total purchase price of $20,000,000. On August 4, 2009, the Board of Directors amended the stock repurchase program to increase the authorized amount to $40,000,000 and extend the program to December 31, 2012. On March 7, 2011, the Board of Directors approved an increase in the Stock Repurchase Program to $60,000,000 and extended the program to December 31, 2012. Through September 30, 2011, the Company has purchased 5,834,369 shares of its common stock under this program for an aggregate purchase price of $24,438,000, or $4.19 per share. At September 30, 2011, the Company was in violation of certain loan covenants (see Note 9). As a result, the Company is prohibited from making any further repurchases of its common stock.

The following table summarizes the changes in stockholders’ equity during the nine months ended September 30, 2011:

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Note 15 — Income Taxes

During the three-month periods ended September 30, 2011 and 2010, the Company recognized income tax benefits in the reserve for uncertain tax positions of $0 and $914,000, respectively, due to the expiration of the statue of limitations related to the filing of certain income tax returns and income tax expense of $382,000 and $177,000, respectively, resulting from adjustments to agree the prior year’s book amount to the actual amounts per the tax returns. During the nine-month periods ended September 30, 2011 and 2010, the Company recognized income tax benefits of $995,000 and $1,654,000, respectively, due to the expiration of the statute of limitations related to the filing of certain income tax returns resulting in a reduction in the reserves for uncertain tax positions. Also, during the nine-month periods ended September 30, 2011 and 2010, the Company recognized an increase in the reserve for uncertain tax positions of $520,000 and $1,552,000, respectively, primarily related to foreign subsidiaries.

The following table indicates the changes to the Company’s uncertain tax positions for the nine-month periods ended September 30, 2011 and 2010, including interest and penalties.

The Company’s policy is to record income tax related interest and penalties in income tax expense. At September 30, 2011, potential interest and penalties related to uncertain tax positions amounting to $100,000 was included in the balance above.

The balance is included in “Other Liabilities” in the consolidated balance sheet at September 30, 2011.

The effective tax expense rates for the three-month periods ended September 30, 2011 and 2010 were 1140.5% and 0.0%, respectively, and the effective income tax expense (benefit) rates for the nine-month periods ended September 30, 2011 and 2010 were 25.5% and (0.4%), respectively. Excluding the effect of the reserve adjustment and the provision to return adjustment as described above, the effective income tax (benefit) expense rates would have been 2177.3% and 14.8% for the three-month periods ended September 30, 2011 and 2010, respectively, and 24.2% and 10.3% for the nine-month periods ended September 30, 2011 and 2010, respectively.

Note 16 — Business Segment Information

The Company’s business segments reflect how executive management makes resource decisions and assesses its performance. The Company bases these decisions on the type of services provided (Project Management and Construction Claims) and secondarily by their geography (U.S./Canada, Latin America, Europe, the Middle East, North Africa and Asia/Pacific).

The Project Management business segment provides extensive construction and project management services to construction owners worldwide. Such services include program management, project management, construction management, project management oversight, troubled project turnaround, staff augmentation, estimating and cost management, project labor agreement consulting and management consulting services.

The Construction Claims business segment provides such services as claims preparation, analysis and review, litigation support, cost/damages assessment, delay/disruption analysis, contract review and adjudication, risk assessment, lender advisory and expert witness testimony services to clients worldwide.

The Company evaluates the performance of its segments primarily on operating profit before corporate overhead allocations and income taxes.

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The following tables reflect the required disclosures for the Company’s reportable segments (in thousands):

Consulting Fee Revenue (“CFR”)

Total Revenue:

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Operating (Loss) Profit:

Depreciation and Amortization Expense:

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Consulting Fee Revenue by Geographic Region: