ENGlobal reported cumulative net income of $0.51 per diluted share, compared to $0.40per diluted share for the same period in 2007 and increase of over 25%.
Revenue met Englobal’s preliminary report target totaling $123.2 million, an increase of approximately $26.4 million, or 27.3%, compared to the third quarter of 2007.
The Company estimates its current backlog is approximately 15% higher than the $298 million reported for the fiscal year ended December 31, 2007.
ENGlobal benefited from a decrease in selling, general and administrative ("SG&A") expenses during the third quarter. As a percentage of revenue, SG&A decreased to 6.0% for the three months ended September 30, 2008 from 8.9% for the comparable period in 2007. Total SG&A expense decreased $1.2 million, or 14.0%, to $7.4 million for the three months ended September 30, 2008, from $8.6 million for the comparable prior-year period. SG&A is in line with the Company's targeted baseline of $7.5 million per quarter and $30 million for the year ended December 31, 2008.
ENGlobal averaged 241,000 billable hours per two-week period during the third quarter 2008, a 20% increase, when compared to 201,000 billable hours in the same period in 2007. The third quarter 2008 average represents a 2% increase over 237,000 billable hours in the second quarter 2008.
The Company’s overall utilization percentage, inclusive of overhead personnel, is approximately 92% for the third quarter 2008 compared to 91% for the comparable period of 2007.
100% of quarter-over-quarter revenue increase attributable to organic or non-acquisition growth.
ENGlobal’s Chairman and Chief Executive Officer, William A. Coskey, P.E., said, “While the third quarter financial results were impacted due to the storms, they were also impacted by an increase in employee benefit costs and operational issues in our Automation and Construction segments. All of these issues resulted in a reduction of approximately 10 to 12 cents in earnings per share during the quarter. The Company has already begun implementing a plan to make improvements in these areas.”
This statement is key to calculate continuing operations. A 10 to 12 cent reduction in EPS due to special items indicate by adding this to the reported upside earnings of .13 yields a continuing operations EPS of .23 to .25 cents in Q3 2008. This represents an increase of 65 – 79% in continuing operations compared to Q3 2007.
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