ENGlobal Reports Second Quarter 2016 Results

HOUSTON, TX--(Marketwired - Aug 4, 2016) - ENGlobal, a leading provider of engineering and automation services, today announced results for the second quarter which ended June 25, 2016.

Revenue decreased $7.3 million to $13.8 million from $21.1 million, or a 34.7% decrease, for the three months ended June 25, 2016, as compared to the three months ended June 27, 2015. ENGlobal reported a net loss of $1.6 million for the second quarter of 2016, a decrease of $2.5 million compared to net income of $1.0 million reported for the prior year period. The net loss per diluted share was $0.06 for the second quarter just ended, compared to net income per diluted share of $0.03 for the second quarter of 2015.

Revenue decreased $26.5 million to $28.7 million from $44.2 million, or a 60.0% decrease, for the six months ended June 25, 2016, as compared to the six months ended June 27, 2015. ENGlobal reported a net loss of $2.4 million for the second quarter of 2016, a decrease of $4.0 million compared to net income of $1.6 million reported for the prior year period. The net loss per diluted share was $0.08 for the six months ended June 27, 2015 compared to net income per diluted share of $0.06 for the six months ended June 27, 2015.

In April 2015, the Company's Board of Directors authorized the repurchase of up to $2.0 million of the Company's common stock from time to time, based on prevailing market conditions. Through June 25, 2016, ENGlobal had repurchased approximately 499,344 shares of common stock for $0.5 million under this program. As of June 25, 2016, the remaining amount authorized for repurchase under this program was $1.5 million.

Management's Assessment
Mark Hess, ENGlobal's Chief Financial Officer stated: "We have been challenged by the significant decline in oil and gas prices and the resulting drop in our clients' activities. However, during the second and third quarters, the Company has taken significant specific steps to improve revenue generating opportunities, improve gross profit margins, and reduce administrative expenses. Benefits from these recently initiated measures should be realized in the quarters to come as we expect to move towards profitability."

Mr. Hess continued: "Although projects have been taking longer to be awarded, our backlog has increased from last year end and our pipeline is robust. Importantly, ENGlobal continues to generate positive cash flow. The Company's cash position increased from $7.8 million at the end of last year to $14.7 million as of June 25, 2016. We expect that our working capital will be adequate for ongoing operations."

William A. Coskey, P.E., Chairman and CEO of ENGlobal added: "Given our debt free balance sheet and diverse mix of business, ENGlobal remains well positioned to successfully navigate through the current industry environment. As stated before, ENGlobal has been using the current downturn to invest in our business through the addition of highly experienced project and business development professionals. As a direct result of these actions, the differentiated offerings under development have the potential to positively transform our business over time. We remain committed to realizing ENGlobal's full potential, and increasing shareholder value over the long term."

The following is a summary of the income statement for the three months and six months ended June 25, 2016 and June 27, 2015 can be found here:

The Company's Quarterly Report on Form 10-Q for the quarterly period ended June 25, 2016 is expected to be filed with the Securities and Exchange Commission reflecting these results by the end of the day today.