Rev 5.5
We have begun introducing more Engineering companies. RIG was the first feature. I am not familiar with some companies as many of you may be. If you would like to see a company featured and would like to make an overview submission of that company and services please make a suggestion and start writing.
In the eleventh hour a credit facility deal was announced on 31 May. The CF bank is PNC, which was an earlier predicted guess in the 8 May posting. The maximum amount is $35 million with a variable formula for borrowing capability. From the news release, “The PNC facility allows the Company to borrow up to $35 million pursuant to a borrowing base formula based primarily on the Company's eligible accounts receivable.” Obviously the CF comes with limitations. I do not believe any similar formula was in place on any previous CF. Is this the improved flexibility Mr. Pagano spoke of? Will those limitations help present management guide ENGlobal into a unknown future that recent past history is our only basis for prediction?
This entire result to acquire a new CF is quite an accomplishment and I find this impressive even with the formula limitations. I would like to know given the numbers and accounting methods (explored in previous analysis) is how they did it? More later. [That "more later" is now published as the DSO Discrepancy.]
With the immediate threat of bankruptcy removed I would expect some improvement in the stock for a period of time - that has not happened so far. However, just as a rising tide lifts all boats, the converse is true. The general economic outlook is poor and stocks are trending down on European worries and job reports. You can expect that investment risk in ENGlobal (just as any company) will be view accordingly with the environment. Investors will trend toward safe harbors. There is a new post out covering the CF and 8K with an overview analysis. It was quite a challenge to read at over 100 pages longer, including the preambles, than the 2009 CF. All the information was subject to verification, editing and expert analysis to get it correct for you. After you read it you see the announced preliminary information about the CF was spinning faster than pizza dough.
Newly Extended Life - In the 16 May posting I direct you to a key paragraph: "The real questions you have to ask yourself are: If you get a new CF, what is next? What has really changed or will change in the management practices that got us to this point in the last two years?"
Amendment To Previous Posting
I am changing an opinion made in the 1 April posting. Under the section headed “The South Louisiana Ethanol Project” I made the following statement as the second opinion finding: “…apparently from the way the document was worded ENG’s lawyers angered the court with their proceedings. ENG management should have supervised their lawyers.” Upon reflection and experience I wish to amend and elaborate. There are times when lawyers fail to do their jobs and there are more times when lawyers do their jobs well and the case fails anyway. There are many factors that can contribute to this later case. Such as, when the client got into a doomed project unprepared, performed weakly or was plain wrong, etc. This case started with a bad condition that ENGlobal was not licensed in the state they performed the work in! The PWA liens made by ENG in Louisiana were declared invalid.
It seems easy that most non-lawyer people quickly jump on the almost fun bandwagon to denigrate lawyers and their profession. In reality, most people know a lawyer that is a friend or family and they are, of course, an exception. Lawyers provide a necessary service to society.
Where as I believe that management should supervise legal council, that management should not circumvent a case or interfere with the strategy, especially when it is in motion. The real possibility overlooked is that cases and lawyers may experience interference. I observed this firsthand when I was ‘the client’ as COO of a conglomerate. My CEO made the case a real challenge for our lawyers and affected the case direction. I had to intervene to eventually win that case. Therefore, I changed the wording in the 1 April original section to reflect this possibility and to acknowledge the myriad of conditions good lawyers deal with.
I will strive to bring you truthful information, analysis and opinion based on facts and logic. When I discover that something needs to change or be revisited with expanded explanation I will do so. Thank you.
More news: If you try to access this blog from most of ENGlobal's system you will probably see it is blocked.
Now the ENGlobal day job monitoring will come from upper management and the IT guys. No wonder the hits started to spike from iPhone, Android and other smart phones. Engineering people are smart - they find a way. In my experience these situations usually backfire. You may draw your own conclusions. Good luck to everyone.
Comments are welcome.
10 comments:
You bet the hits are coming in strong from smartphones...me being one of them. I don't know anyone working at ENG that does not know about this blog. Those of us lowly employees who aren't told jack by upper management come here to find out what is going on in our own company. I find out so much more reading your blogs and the associated comments from them, than I get from anywhere else. Even though I feel I have no power over what is going on, I do like to know what is going on. Apparently I'm not the only one.
The word is spreading.... Regardless of ENGlobal's futile attempt to hush the flow of truth.
ENGlobal is Shooting the owls from the skies for they carry the truth to the masses! Keep it coming Pilot.... I get my Internet from Al Gore, you know, the guy who invented the Internet... lol :)
With the way things are at ENG now, we won't know that the credit facility wasn't taken care of. We just won't get our direct deposit, and our pass key won't work to get us into the building any longer! Upper management won't send out "pink slips", we just won't be able to go to work one day.
Thank you – lowly? It is not right you feel that way. I favor the family and teamwork approach. You are important to the survival of ENGlobal. People perform how they feel and management should self govern by that. I am glad you are getting some useful information. All the facts come directly from SEC filings. The ideas presented on those facts come from sound business practices; sound accounting practices; and observations. You may notice that there have been no challenges to facts and figures because ENGlobal is reporting them. Others and myself see “odd” happenings with Edd Pagano’s new accounting methods, strange number variations and trends that do not add up to compared to previous years of success. They don’t add up to a profit either. Information about the exodus of individuals comes obviously from those leaving and companies they apply to. The bottom line is the company is nose low in a dive. Can it be saved? I believe so.
Everyone has noticed that when times are bad that entities, whether companies or countries, always seem to resort to some sort of information control. History is a good fortuneteller where they end up. The only comment challenges I have met so far have been diverting questions from the facts and subject matter; have been of a personal nature or personal attacks. I have made warning to them to stick to the facts and business at hand and delete those that simply will not listen wanting to bash or accuse. I have been posting about IDS/ENGlobal since 1997 on Yahoo and later here on this blog. I used to be accused of pumping the stock and company when it was well managed. The stock went to over $18. I posted a trending down years ago and more so just before the more precipitous fall lately. I also set the past events straight. With two years in the hole and increasing deterioration the stock is currently $1.64. Now, I am accused of bashing. Anyone who has been around a while knows I never worked for ENGlobal or the competitors. I simply favor good and honest management practices – wherever they may be. I have simply revealed the truth behind the curtain that current ENGlobal management controls. They just pulled that curtain tighter. Do you like it?
Reply to Reply to 21 May, 2012 22:46
It always does. Doesn’t it? This is what I mean by actions backfiring. They invariably produces the equivalent of an underground system or actions and breeds mistrust. Just observe the next few days, the buzz will be about how do YOU get to the blog at work. It’s not fun if your at home. Always love the IT guys.
Reply to 21 May, 2012 23:03
Thank you – that is pretty funny. You may not be able to see the website from work but you can order a pizza…
Reply to 22 May, 2012 06:17
I would not like to think it would happen that way. I think you will hear something soon and after that I would think some changes in management will take place.
Any word on a line of credit?
That would be a material event and warrants a public release. If the news were leaked or released internally that would be inside information. My gut feeling feeling is that the deal is completed by the way the stock took a little jump yesterday (a leak) and by the end date of the extension. A deal would have to be in place now for everything timed to that date. At this point I would watch for a Tuesday release.
For those employees that are hanging in there and who haven't panicked, if there isn't an announcement Tuesday when should we abandon all hope and panic?
Another day and still no comments on the theoretical bank deal. Is anything gained by getting the deal inked and then not releasing any information to the employees, stockholders or public? I would think they would want to scream it from the mountain tops that they could live to fight another day.
Well you now have your CF deal. After looking at the size and breadth of that facility along with the controls imposed it appears that ENG is in an informal form of "Banking Receivership". Surrounding companies have reported an influx of applications from layoffs at ENG. Looks like they are having to cut overhead with this new facility. I did say to watch for changes in that post.
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