ENGlobal Corporation: 3Q - OMG

HOUSTON, Nov. 19, 2012 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading provider of energy-related project delivery solutions, announced today its financial results for its third quarter ended September 29, 2012. ENGlobal reported a net loss of $22.3 million, or $0.83 per diluted share, for the quarter ended September 29, 2012, compared to a net loss of $1.3 million, or $0.05 per diluted share for the same period last year. Included in the third quarter 2012 results were one-time, non-cash charges of approximately $17.5 million, primarily relating to goodwill impairments and a write-down of the assets of the Field Solutions segment that was classified as held-for-sale at quarter end, in addition to charges on completed fixed price projects.

Commenting on the results, William A. Coskey, P.E., ENGlobal's Founder, Chairman and Chief Executive Officer, said, "To a large extent, the third quarter is comprised of heritage financial items that have impacted our Company and mask some recent improving financial trends in our business.  For example, we continue to see gradual improvements across several of our working capital-related metrics. I am very pleased with current business activity in our operations, and also the progress we have made on several fronts since August 1st of this year."

Mr. Coskey continued, "While we are disappointed in the quarterly results, we believe that the measures that are being implemented should begin to have a positive impact. During the quarter, we continued to make progress on our strategic priorities, including collaborating with our management consultant to improve financial performance, reorganizing our management team, pursuing opportunities to improve margins and reduce expenses, and completing the divestiture of our Land and Right-of-Way division of the Field Solutions segment. One thing I can say with certainty is that our management team is engaged and energized, and working hard to produce better results going forward."

Third quarter revenues decreased to $57.5 million, 5% lower than the $60.5 million for the third quarter of fiscal year 2011, primarily due to a decrease in revenue from the Gulf Coast region of the Engineering and Construction segment.

In response to the reduced activity levels expected for the remainder of 2012, the Company began reducing overhead and selling, general and administrative ("SG&A") staff levels beginning in June and has continued this effort throughout the third quarter. Overall, SG&A expenses decreased $0.5 million from $6.7 million in the three months ended September 30, 2011, to $6.2 million in the third quarter of 2012. As a percentage of revenue, SG&A expense decreased to 10.7% for the three months ended September 29, 2012, from 11.0% for the comparable prior year period.

ENGlobal continues to negotiate with its lender and work with its management consultant to restore the Company's compliance with its credit facility.

The Company's Quarterly Report on Form 10-Q for the quarter ended September 29, 2012 will be filed with the Securities and Exchange Commission today reflecting these results. The Company will not be hosting an earnings conference call for the quarter ended September 29, 2012.