ENGlobal Corporation: 4Q & FY 2013 Results

ENGlobal Reports Fourth Quarter and Fiscal Year 2013 Results

HOUSTON, March 14, 2014 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading provider of engineering and automation services, today announced its financial results for the fourth quarter and fiscal year ended December 28, 2013.

Fourth Quarter 2013

Revenues in the fourth quarter of 2013 were approximately $25.3 million, a decrease of 51.4% from $52.1 million from the prior year period. ENGlobal reported net income of $0.4 million from continuing operations, or $0.02 per diluted share, for the quarter ended December 28, 2013, compared to a net loss of $2.5 million, or $(0.09) per diluted share, for the quarter ended December 29, 2012.

Fiscal Year 2013

Revenues for the year ended December 28, 2013 were $169.0 million, a decrease of approximately 25.8% from the $227.9 million posted for the year ended December 29, 2012. ENGlobal reported a net loss from continuing operations of $2.3 million, or $(0.08) per diluted share, for fiscal year 2013, compared to a net loss of $30.1 million from continuing operations, or $(0.32) per diluted share, for fiscal year 2012.

Management's Assessment

Mark A. Hess, ENGlobal's Chief Financial Officer, said: "During 2012 and 2013, we divested a large portion of our engineering operations and implemented a number of initiatives in order to restore profitability to our core operations. This is reflected in the decrease in our revenues, direct costs and SG&A expense year-over-year. While we are a smaller company, we are a more profitable one. Our remaining business is largely reflected in our fourth quarter 2013 results, which show an increase in our gross profit margins from approximately 10% to approximately 19% when comparing the 2012 and 2013 periods. The increase in gross profit was primarily a result of a changing mix of our business toward a higher percentage of upstream and automation activities, operating under high margin contracts, reducing the number of higher risk projects, and focusing on project execution. Our annualized fourth quarter 2013 SG&A expense was approximately $17 million, which is higher than we anticipate going forward yet significantly lower than fiscal year 2012. As a result of our increased margin and reduced expenses, our net income from continuing operations in the fourth quarter of 2013 was $362,000 as compared to a net loss from continuing operations of $2.5 million in the same period in 2012."

Mr. Hess continued. "Another sign of our major transformation is that we ended 2012 with approximately $738,000 in unrestricted cash and borrowings of $26.8 million, while we ended 2013 with approximately $4.0 million in unrestricted cash and an undrawn working capital facility as a result of the divestiture and subsequent liquidation of our non-core business units. Consequently, we believe that ENGlobal is in a much stronger financial position."

"ENGlobal turned a major corner in 2013, financially-speaking as well as in many other respects," said William A. Coskey, P.E., Chairman and Chief Executive Officer of ENGlobal. "Our employees are executing projects extremely well with what I believe is the best, collegial management team in our Company's history. As a result of our new culture, we are building long-lasting relationships with our valued clients, and growing into some exciting areas of activity. I would like to thank all of our stakeholders – our customers, employees and investors – for their ongoing support."

The following table illustrates the composition of the Company's revenue for the fiscal years ended December 28, 2013 and December 29, 2012: (see table on the following link)

http://www.englobal.com/profiles/investor/ResLibraryView.asp?ResLibraryID=68737&BzID=702&Nav=0&LangID=1&s=0&Category=64

The Company's Annual Report on Form 10-K for the year ended December 28, 2013 will be filed with the Securities and Exchange Commission today reflecting these results.