ENGlobal Corporation
(Nasdaq:ENG), a leading provider of engineered modular
solutions, today announced results for the first quarter ended
March 30, 2019.
The company reported a net loss of $1.0 million,
or $0.04 per diluted share, for the first quarter just ended
compared to a net loss of $1.2 million, or $0.04 per diluted share,
for the first quarter of 2018.
Management's Assessment
Mark Hess, ENGlobal’s Chief Financial Officer,
said: “Operating results have improved modestly with reduced losses
on both a year-over-year and sequential quarterly basis. Much of
this improvement can be attributed to management’s attention to
fixed overhead expense, which is approximately 10% lower than
during the first quarter of last year, notwithstanding additions of
key overhead personnel to support strategic initiatives.”
Mr. Hess continued: “It is also important to
note that our operations produced cash of $1.2 million during the
most recent quarter, which ended with a cash balance of
approximately $7.3 million.”
William Coskey, P.E., Chairman and Chief
Executive Officer, said: “We are encouraged by ENGlobal’s new
business opportunities and current high level of proposal activity.
Our booked backlog was approximately $30 million at the end of the
first quarter. Year-to-date through April 30, 2019, ENGlobal had
submitted new proposals totaling $102 million, with $90 million of
these proposals outstanding and awaiting a customer decision. The
company’s win rate has improved significantly this year, due
primarily to our estimating and proposal organization that was
strengthened in the fourth quarter of 2018.”
Mr. Coskey continued: “While ENGlobal has not
yet achieved consistent profitability primarily due to lack of
scale, we remain a debt free company and are continuing to evaluate
strategic opportunities aimed at increasing shareholder value.”
ENGlobal also announced it has been engaged to
perform various levels of work on three separate natural gas
liquids facilities that are planned for Texas and Louisiana. The
company has received a Limited Notice to Proceed on early
engineering activities for an LPG Export Terminal, as this work is
deemed critical in meeting the scheduled on-stream date in the
first half of 2021. This export terminal will include refrigeration
and storage for propane, butane and iso-butane products for loading
on VLGC ships for international transport. Additionally, the
company is performing an early FEED study for a second
propane/butane export facility, as well as a remote tank farm
facility with storage and ancillary equipment for the same
products. For commercial reasons, the dollar values of these
current engineering awards and potential extensions are not being
disclosed.
TABLES
The following is a summary of the income statement for the three
months ended March 30, 2019 and March 31, 2018:
(amounts in
thousands) |
Three months ended March 30,
2019 |
|
Three months ended March 31,
2018 |
Revenue |
$ |
12,163 |
|
|
$ |
13,188 |
|
Gross Profit |
|
1,338 |
|
|
|
1,413 |
|
General & Administrative
Expenses |
|
2,304 |
|
|
|
2,582 |
|
Operating Loss |
|
(966 |
) |
|
|
(1,169 |
) |
Net loss |
|
(974 |
) |
|
|
(1,200 |
) |
The following table presents certain balance sheet items as of
March 30, 2019 and December 29, 2018:
(amounts in
thousands) |
As of March 30, 2019 |
As of December 29, 2018 |
Cash |
$ |
7,297 |
$ |
6,060 |
Working capital |
|
12,337 |
|
13,725 |
The following table illustrates the composition
of the Company's revenue and profitability for its operations for
the three months ended March 30, 2019 and March 31, 2018:
|
Three months ended |
|
Three months ended |
(amounts in thousands) |
March 30, 2019 |
|
March 31, 2018 |
Segment |
Total Revenue |
% of Total Revenue |
Gross Profit Margin |
Operating Profit (Loss) Margin |
|
Total Revenue |
% of Total Revenue |
Gross Profit Margin |
Operating Profit
(Loss)Margin |
|
|
|
|
|
|
|
|
|
|
Engineering &
Construction |
$ |
5,633 |
46.3 |
% |
11.9 |
% |
1.5 |
% |
|
$ |
5,095 |
38.6 |
% |
8.2 |
% |
(0.2 |
)% |
Automation |
|
6,530 |
53.7 |
% |
10.2 |
% |
3.7 |
% |
|
|
8,093 |
61.4 |
% |
12.3 |
% |
3.6 |
% |
Consolidated |
$ |
12,163 |
100.0 |
% |
11.0 |
% |
(7.9 |
)% |
|
$ |
13,188 |
100.0 |
% |
10.7 |
% |
(8.9 |
)% |
|
|
|
|
|
|
|
|
|
|
The Company's Quarterly Report on Form 10-Q for the first
quarter ended March 30, 2019 is expected to be filed with the
Securities and Exchange Commission today reflecting these results
by the end of the day on Monday, May 13, 2019.
For additional information on ENGlobal's Q1 2019 performance,
please refer to its Form 10-Q filing on the company website, or at
sec.gov.
About ENGlobal
ENGlobal (Nasdaq:ENG) is a leading provider of
engineered modular solutions to the energy sector throughout the
United States and internationally. ENGlobal operates through
two business segments: Automation and Engineering. ENGlobal's
Automation segment provides services related to the design,
integration and implementation of process distributed control and
analyzer systems, advanced automated data gathering systems and
information technology. Within the Automation segment,
ENGlobal's Government Services group provides engineering, design,
installation and operation and maintenance of various government,
public sector and international facilities, and specializes in the
turnkey installation and maintenance of automation and
instrumentation systems for the U.S. Defense industry worldwide.
The Engineering segment provides multi-disciplined engineering
services relating to the development, management and execution of
projects requiring professional engineering and related project
management services. Further information about the Company and
its businesses is available at www.ENGlobal.com.
Safe Harbor for Forward-Looking Statements
The statements above regarding the Company's
expectations regarding its operations and certain other matters
discussed in this press release may constitute forward-looking
statements within the meaning of the federal securities laws and
are subject to risks and uncertainties including, but not limited
to: (1) our ability to identify, evaluate, and complete any
strategic alternative in connection with our review of strategic
alternatives; (2) the impact of the announcement of our review of
strategic alternatives on our business, including our financial and
operating results, or our employees, suppliers and customers; (3)
our ability to realize project awards on our pending proposals, and
the timing, scope and amount of any related awards; (4) the effect
of economic downturns and the volatility and level of oil and
natural gas prices; (5) our ability to retain existing customers
and attract new customers; (6) our ability to accurately estimate
the overall risks, revenue or costs on a contract; (7) the risk of
providing services in excess of original project scope without
having an approved change order; (8) our ability to execute our
expansion into the modular solutions market and to execute our
updated business growth strategy to position the Company as a
leading provider of higher value industrial automation and
Industrial Internet of Things services to its customer base; (9)
our ability to attract and retain key professional personnel; (10)
our ability to fund our operations and grow our business utilizing
cash on hand, internally generated funds and other working capital;
(11) our ability to obtain additional financing, including pursuant
to a new credit facility, when needed: (12) our dependence on one
or a few customers; (13) the risks of internal system failures of
our information technology systems, whether caused by us,
third-party service providers, intruders or hackers, computer
viruses, malicious code, cyber-attacks, phishing and other cyber
security problems, natural disasters, power shortages or terrorist
attacks; (14) our ability to realize revenue projected in our
backlog and our ability to collect accounts receivable and process
accounts payable in a timely manner; (15) the uncertainties related
to the U.S. Government’s budgetary process and their effects on our
long-term U.S. Government contracts; (16) the risk of unexpected
liability claims or poor safety performance; (17) our ability to
identify, consummate and integrate potential acquisitions; (18) our
reliance on third-party subcontractors and equipment manufacturers;
(19) our ability to satisfy the continued listing standards of
NASDAQ with respect to our common stock or to cure any continued
listing standard deficiency with respect thereto; and (20) the
effect of changes in laws and regulations, including U.S. tax laws,
with which the Company must comply and the associated cost of
compliance with such laws and regulations . Actual results and the
timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due
to a number of factors detailed from time to time in ENGlobal's
filings with the Securities and Exchange Commission. In addition,
reference is hereby made to cautionary statements set forth in the
Company's most recent reports on Form 10-K and 10-Q, and other SEC
filings.
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Contacts:
Mark A. Hess, CFO (281) 878-1000 ir@ENGlobal.com
Market Makers - Investor Relations Jimmy Caplan 512-329-9505
jimmycaplan@me.com
Market Makers - Media Relations Rick Eisenberg 212-496-6828
eiscom@msn.com
SOURCE: ENGlobal Corporation
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