CEO Letter to ENGlobal Employees, Stockholders, Clients and Vendors

October 29, 2008

Dear ENGlobal Employees, Stockholders, Clients and Vendors:

During the past few months, we have all been inundated with gloomy financial news about what the future might hold. With this open letter, I do not intend to bother you with my impression of how our country's financial situation got to where it is today, because we have all heard the same news and can form our own views. To me, in its simplest terms, the economy currently lacks a critical ingredient - and that's confidence.

When consumers like you and me are confident, we willingly spend money on a variety of wants and needs, and this one factor makes up about two-thirds of all economic activity. When businesses are confident about future prospects, they readily make investments in anticipation of a future return on their investment. When banks are healthy and confident about getting repaid, they loan money, which is crucial to making the other two functions work.

I read this morning that consumer confidence has now "plunged" to the lowest level on record. So, in case there was any doubt left, any sense of optimism our nation has about the future, at least for now, has been replaced by another emotion - fear. While some part of this fear is being driven by reality and current events, I believe that we are all affected in a significant way by a steady stream of negative news. In somewhat of a self-fulfilling prophesy, we can all blame what's going on as a "bad economy," but the crisis we really face is one of confidence.

My mission with this correspondence is not to be an economic reporter - there are already more than enough folks covering that subject. But, I felt it was timely and important to share my optimistic perspective about our industry and our Company, especially given the times we now live in. Please consider the following ten factors, and why I believe they will serve as positive influences for ENGlobal's business going forward:

1. ENGlobal is fortunate to have served many of our valued clients over a long period of time, and these strong alliance relationships are the foundation of our business.

2. Our business relies on small to mid-sized projects, many of which fall into the "run and maintain" category. We are not nearly as dependent on huge grass roots capital projects as most others in our industry.

3. Our In-Plant staff remains a strong part of our Company, and not only provides valuable services for our clients, but is also a daily point-of-contact with them. This dedicated group has historically provided a steady source of business for ENGlobal.

4. Many of the projects we work on are not economically motivated, but instead are required for our clients to comply with various government regulations. We expect that regulatory oversight of our clients' industries will continue to increase over time, with some examples of these projects being: Process Safety Management (OSHA), Environmental Mandates (EPA), and Pipeline Integrity (DOT).

5. A significant part of our Automation Group's work is driven by our clients' need to replace aging and obsolete distributed control system (DCS) and analytical equipment. While at times these expenditures can be deferred, the need to replace DCS and other equipment has provided a reliable and recurring source of projects. We are focusing our efforts on improving operational efficiencies that will allow us to fully capitalize on these opportunities.

6. With the help of an acquisition by our Construction Group, ENGlobal is building a great reputation for its planning and implementation work on process plant turnarounds, another source of recurring business. We are currently investing in the future of this business and, coupled with this acquisition, we have greatly expanded the level of service we are able to provide on engineering, procurement, and construction (EPC) projects.

7. Three of our larger clients have publicly expressed that their spending plans for 2009 are basically unchanged from 2008 if, as their forecasts assume, the price of crude continues at around its current $65 level. I expect that this same "very little has changed" attitude will be heard from many of our other large midstream and downstream clients over the near term.

8. I believe our country has finally grown tired of being held captive to foreign sources of energy (as well we should). Both political parties have expressed their commitment to making energy independence a top priority. While there have been many false promises in the past, I anticipate that any real progress in this area will create work for ENGlobal.

9. About half of the states in the U.S. have enacted Renewable Portfolio Standards, which mandate a timeline and percentage for electricity generation from renewable sources such as wind, solar, geothermal, and biomass. Also, the Investment Tax Credit for these renewable energy projects was due to expire on December 31, 2008, but was extended as part of the recent "bailout" legislation. I believe these two factors, working together, will serve to drive demand for alternative energy projects in the future.

10. It is a fact that facilities in the energy industry, as well as in many other industries, are aging. No grass roots refinery has been built in the U.S. since 1976, and many of the country's large pipelines were installed over 50 years ago. Maintaining and rebuilding this aging infrastructure - an ENGlobal core competency - is going to be a future necessity that will benefit our Company.
As a result of these and other factors, ENGlobal has had recent success in continuing to land new work, in spite of the economic conditions you read about in the news. Even with our success and our belief that we have excellent prospects, we are not totally immune to the economic turmoil that may lie ahead. But my main message to you should be obvious: We firmly believe our Company is well positioned to ride-out any storms.

As always, our employees can help by being totally committed to quality and client satisfaction. My goal for ENGlobal is not just to meet our clients' expectations, but to look for ways to totally impress them by always going the extra mile. As a start, we need to be continuously asking questions in order to understand what our clients want. Next, we need to look for ways to give them positive surprises, which they don't often expect from service providers. I can guarantee that delivering on this one simple but important concept will be more effective for our business than 1,000+ PowerPoint presentations.

In closing, we want you to know that we expect continued success going forward, including a record level of performance and financial results from operations during the current year and a strong potential for 2009. I hope you will consider joining me by not running with the fearful crowd, but instead by showing the world some confidence. It will definitely be a breath of fresh air for those around you.

Thank you for your continued support of ENGlobal.

Sincerely,

William A. Coskey, P.E.

http://b2i.api.edgar-online.com/EFX_dll/EdgarPro.dll?FetchFilingConvPDF1?SessionID=XItMW3gtDXKbj-9&ID=6215684

Hedge Fund Operations

Here is the video that Jim Cramer made in late 2006 and caused enormous controversy. Jim Cramer talks about how hedge funds operate.What is so surprising is that after being off and on the Internet repeatedly theStreet.com decided they would repost it (for how long this time?) for the attention.

It is about 10 minutes long and very revealing all the way through to the end with real examples. By the way, when hes talking about moving a stock up or down - the method used is illegal because it is matched trading - it is just hard to catch. This is an educational view into the Level 2 world. I think all traders and professionals in publicly traded companies should see it - at least for knowledge exposure.

Link: http://link.brightcove.com/services/link/bcpid1459183594/bctid1163950434

ENGlobal Notes & Comments 3Q 2008

ENGlobal’s stock has been hit hard and I believe this is primarily by hedge funds and short interest. The bashers are heavy at it working the board as well as weak-minded negative posts touting other companies’ failures or sellers of other stocks as if ENGlobal logically follows by osmosis. ENGlobal is making money and growing at 80+ % for 2008. ENG will probably get a Zwieg White ranking for growth again this year. Next year analysts expect $1.01 – so get a grip folks.

When times are bad for hedge funds, and I think they are, I believe they will get meaner like we just saw. I am guessing most saw how Friday, 10 October ended after the surge up. Individuals cannot put orders in that fast on all the exchanges that was simultaneously used. This is a well-known computer trading cycle called a “Pump and Dump”. It was vicious too - up $1.18 and whipsawed down $1.00 with large blocks collected on the close from the shock drop. If this isn’t manipulation then I don't know what is. I am sure they sold out near the top and bought those blocks back at the close. They may have even shorted and bought back – why not, if you have that much control? These criminals are getting mean, desperate or both. You can see by the chart above how ENG is pushed farther down than the averages (click on it to enlarge).

All of this shows that stock can be controlled by hedge funds and less by free and fair markets when fear and manipulation are present. I have written the NASDAQ and SEC Enforcement about the computer manipulation. I got a response too. I have provided them with 45 basher ID’s also. If asked, I am sure Yahoo will give up the IP addresses considering they gave up those of Chinese freedom writers, which sent them to prison. I don’t think they are interested in basher individuals but more so with connections to hedgies.

The price of oil and ENGlobal: It really depends on how low oil goes. Contracts given out by oil companies are based on $45-50 a barrel, some as low as $35. I learned this directly from ENG senior management. Small dips do not affect ENGlobal’s earning capability. I think it affects people’s perception more and thereby the stock price. So until they see good earnings and growth associated with the memory of an oil dip they won’t break that hasty generalization.

ENGlobal is more than oil related. They serve chemical, gas, pipeline, construction and any industry automation. Are you starting to get the diversity and safer picture now? No matter how low oil gets pipelines still need inspecting and repair. The population and consumption is still growing. More right of ways are needed for oil, gas and transmission lines. It was announced that all ENG groups are expected to grow, with bigger growth from Construction and Automation. These are the higher margin groups. ENG announced a couple of DCS retrofits for automation. I have researched and found these can almost double the present one-year backlog. If you have this much backlog you can get through some dips.

I sense that the markets will bounce back soon and our economic recovery will probably be slow. But understand that the economy has been ailing for some time and ENGlobal has performed with good earnings and growth. Good luck to everyone.

Louis Navellier Newsletter and Recommendations

October 2, 2008

Don't Let This Buying Opportunity Pass You By

I know I don't have to say this, but we're witnessing one of the most volatile periods in market history. It may seem like ordinary investors don't stand a chance right now, but don't despair. I'll admit it's hard to spot the opportunities amidst the chaos, but there are opportunities and I'm here to find them for you.

Consider Warren Buffett's actions lately. In late September, Buffett's Berkshire Hathaway invested at least $5 billion in Goldman Sachs to stave off fears that the large investment bank could face the same squeeze as Bear Stearns and Lehman Brothers. Berkshire also dipped into its cash cauldron when its MidAmerican Energy unit announced that it would purchase troubled utility Constellation Energy Group (CEG). And just yesterday, Buffett said he will buy $3 billion in preferred shares of General Electric (GE) because "GE is the symbol of American business to the world."

Is Buffett offering up this money as charity? Hardly. He's trying to profit—something he's pretty good at doing. And believe me, Buffett is definitely on to something.

Here's one of my tricks to finding great profit opportunities—watch the panic levels. The panic on Wall Street has been laid on thick in recent weeks. When the fear is this pervasive, almost everyone who is going to sell stock has already sold. More bad news will only push stocks down by so much. Case in point: GE has always been a market mover. When the company missed earnings in April it dragged the Dow down by 2%. But last week GE slashed its guidance for the third quarter and the whole year, and Wall Street didn't bat an eye. On the other hand, in these challenging times a handful of good news can make a stock feel like a real winner. And when that happens, we see stock prices skyrocket! Buffett is too smart to think that GE's current troubles will last forever, and is banking on huge returns once the stock recovers. Obviously, most of us can't buy a HUGE ownership stake in a company like Buffett did. But now more than ever is! the time for long term investors to "lock and load." A year or two down the line it'll be the smartest move you ever made!

This is one of the best buying opportunities we'll see in our lifetimes. The earnings environment is about to improve and there's still nearly $4 trillion in cash sitting on the sidelines waiting to flood back in.

Our strategy is clear. Those stocks with the strongest sales and earnings will lead the way when investors begin to jump pack into the market. As a Blue Chip Growth subscriber, you know that we've identified several stocks that are poised to rally in the weeks and months ahead. When markets recover, it usually isn't a graceful move up. It's a mad dash for stocks that leaves the timid holding cash and missing out on all the fun.

I believe that most of us will look back on this period as the best buying opportunity for fundamentally superior stocks in our lifetimes. And I don't want you to miss out!

I'll have the next issue of What's Working on Wall Street Now next Thursday, October 9.
Sincerely,Louis Navellierhttp://www.navelliergrowth.com/