HOUSTON, TX--(Marketwired - Mar 9, 2017) - ENGlobal, a leading provider of engineering and automation services, today announced a net loss of $2.3 million and a diluted loss per share of $0.08 for the fiscal year ended December 31, 2016.
2016 Fiscal Year results as compared to 2015 Fiscal Year results:
Revenue decreased to $59.2 million for the fiscal year ended December 31, 2016, or a 25.6% decrease, from $79.6 million for the fiscal year ended December 26, 2015. ENGlobal reported a net loss of $2.3 million, or $0.08 per diluted share, for the fiscal year ended December 31, 2016, compared to net income of $10.5 million, or $0.38 per diluted share, for the prior year period. During the fiscal year ended December 31, 2016, the Company incurred non-cash expenses for depreciation, amortization and stock compensation of $1.6 million as compared to $2.0 million for the comparable period in 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 February 28, 2017, ENGlobal has repurchased and retired 1,127,894 shares of common stock at a total cost of $1,407,106 under this program and the remaining amount authorized for repurchase under this program was $592,894.
Management's Assessment
Mark Hess, ENGlobal's Chief Financial Officer, said: "2016 was a challenging year for ENGlobal. With client spending on a decline, it was difficult to keep our work force utilized, which put downward pressure on our gross profit margins. During 2016, we trimmed our SG&A expenses over $1.8 million by streamlining our business processes, reducing our reliance on outside services and reducing our capital spending. This reduction was somewhat offset by the investments we made in people, equipment and facilities to support our modularized solutions initiative resulting in a net reduction in SG&A of $0.8 million from last year. While we realize our SG&A level is higher than it could be for a company our size, we have maintained our current overhead structure in anticipation of higher volumes."
Mr. Hess continued, "During 2016 we were able to bill and collect a significant portion of the retainage on the large project we are working on in Kazakhstan and Russia, which helped increase our cash position at the end of the year to $15.7 million. We expect to redeploy the majority of these funds in the execution of anticipated projects in the coming year."
William Coskey, P.E., Chairman and Chief Executive Officer of ENGlobal, said: "After several years of turning the business around and basically 'hunkering down' in a tough environment, I believe ENGlobal is now better positioned than at any time in its history. We're excited about the opportunity to engage in larger scopes of work which is now made possible as a result of our modular project delivery initiative. Throughout our Company, we've been making the necessary investments in key personnel and facilities in support of our business and our clients are responding positively. We're seeing more and larger opportunities as a result of our strengthened set of project capabilities. In summary, our team is excited about the strategy and I believe we have an excellent opportunity for renewed growth and improved results in the future."
The following table illustrates the composition of the Company's revenue and profitability for its operations for the fiscal years ended December 31, 2016 and December 26, 2015:
| Year Ended | Year Ended | ||||||||||||||||
| (amounts in thousands) | December 31, 2016 | December 26, 2015 | |||||||||||||||
| Segment | Total Revenue | % of Total Revenue | Gross Profit Margin | Operating Profit Margin | Total Revenue | % of Total Revenue | Gross Profit Margin | Operating Profit Margin | |||||||||
| Engineering & Construction | $ | 33,266 | 56.2% | 12.1% | 2.2% | $ | 49,277 | 61.9% | 14.1% | 8.6% | |||||||
| Automation | 25,958 | 43.8% | 23.5% | 12.6% | 30,328 | 38.1% | 30.7% | 22.5% | |||||||||
| Consolidated | $ | 59,224 | 100.0% | 17.1% | (5.5)% | $ | 79,605 | 100.0% | 20.4% | 2.6% | |||||||
| Three Months Ended | Three Months Ended | ||||||||||||||||
| (amounts in thousands) | December 31, 2016 | December 26, 2015 | |||||||||||||||
| Segment | Total Revenue | % of Total Revenue | Gross Profit Margin | Operating Profit Margin | Total Revenue | % of Total Revenue | Gross Profit Margin | Operating Profit Margin | |||||||||
| Engineering & Construction | $ | 8,266 | 56.6% | 13.7% | 3.5% | $ | 11,103 | 64.4% | 10.0% | 4.4% | |||||||
| Automation | 6,336 | 43.4% | 24.8% | 15.1% | 6,137 | 35.6% | 43.2% | 33.4% | |||||||||
| Consolidated | 14,602 | 100.0% | 18.5% | (3.0)% | 17,240 | 100.0% | 21.8% | 2.9% | |||||||||
| (amounts in thousands) | 2016 | Fiscal Year | ||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | 2016 | ||||||||||||||||
| Revenue | $ | 14,812 | $ | 13,842 | $ | 15,968 | $ | 14,602 | $ | 59,224 | ||||||||||
| Gross Profit | 1,673 | 1,853 | 3,881 | 2,705 | 10,112 | |||||||||||||||
| Gross Profit Margin | 11.3 | % | 13.4 | % | 24.3 | % | 18.5 | % | 17.1 | % | ||||||||||
| General & Administrative Expenses | 3,390 | 3,313 | 3,511 | 3,136 | 13,350 | |||||||||||||||
| Operating Income (Loss) | (1,717 | ) | (1,460 | ) | 370 | (431 | ) | (3,238 | ) | |||||||||||
| Net Income (Loss) | (749 | ) | (1,603 | ) | 489 | (479 | ) | (2,342 | ) | |||||||||||
| (amounts in thousands) | As of December 31, 2016 |
As of December 26, 2015 |
||||
| Cash | $ | 15,687 | $ | 7,806 | ||
| Working capital | 22,200 | 25,554 | ||||
| Credit facility balance | -- | -- | ||||
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