ENGlobal Reports Second Quarter 2017 Results
HOUSTON, TX--(Marketwired - Aug 9, 2017) - ENGlobal, a leading provider of engineering and automation services, today announced results for the second quarter ended July 1, 2017.
Highlights for the quarter include improved financial trends, as indicated by quarterly comparisons which show sequential and year-over-year increases in Revenue and Gross Profit Margin, along with decreases in SG&A expense.
ENGlobal reported net loss of $0.9 million for the second quarter of 2017 which was a $0.7 million improvement over a net loss of $1.6 million reported for the prior year period. Net loss per diluted share was ($0.03) and ($0.06) for the second quarter just ended and for the second quarter of 2016, respectively. Revenue increased by $2.1 million to $16.0 million from $13.9 million, or a 15.3% increase, for the three months ended July 1, 2017, as compared to the three months ended June 25, 2016.
Management's Assessment
Mark Hess, ENGlobal's Chief Financial Officer stated: "It is important to note that our pre-tax loss for the quarter was $0.5 million, or a $1.0 million improvement over our pre-tax loss last year and a $1.2 million improvement over the pre-tax loss for the first quarter. Compounding the loss for the second quarter of this year was a tax provision for the quarter of $0.4 million, which increased our loss to $0.9 million after tax. This provision was unusually high and is primarily the result of stock options that expired during the quarter and a slight reduction in the expected annual income tax benefit rate."
Mr. Hess continued: "It is encouraging that the Company has shown improvement in revenue, profit margin, and SG&A for the second quarter results, as reported today. While still early, we believe these metrics are an indication that the investments made in talent and facilities to build a vertically integrated business are beginning to produce results. As expected, we have seen a shift from cash to other components of our working capital with this increase in activity. We expect this shift to continue in the near term as our volumes increase."
William A. Coskey, P.E., Chairman and CEO of ENGlobal added: "We expect that ENGlobal's strategy of delivering engineered modular systems with turnkey execution will continue to become a larger part of our business going forward. We also expect that long-term financial improvement can be realized as a result of increased project scope which serves to leverage our resources."
Mr. Coskey continued: "ENGlobal is now proud to offer a complete set of skills for modular project execution -- engineering, mechanical fabrication, automation configuration, and automaton integration. This combination of skills, together with our complete project support services, is a new message from ENGlobal that is resonating with our clientele."
The following is a summary of the income statement for the three months ended July 1, 2017 and June 25, 2016:
| (amounts in thousands) | Three months ended July 1, 2017 |
Three Months ended June 25, 2016 |
||||||
| Revenue | $ | 15,966 | $ | 13,842 | ||||
| Gross Profit | 2,513 | 1,853 | ||||||
| General & Administrative Expenses | 3,057 | 3,313 | ||||||
| Operating Loss | (544 | ) | (1,460 | ) | ||||
| Net loss | (895 | ) | (1,603 | ) | ||||
| (amounts in thousands) | As of July 1, 2017 |
As of December 31, 2016 |
||||
| Cash | $ | 11,172 | $ | 15,687 | ||
| Working capital | 20,196 | 22,200 | ||||
| (amounts in thousands) | Three months ended July 1, 2017 | Three Months ended June 25, 2016 | ||||||||||||||
| % of | Gross | Operating | % of | Gross | Operating | |||||||||||
| Total | Total | Profit | Profit | Total | Total | Profit | Profit | |||||||||
| Segment | Revenue | Revenue | Margin | Margin | Revenue | Revenue | Margin | Margin | ||||||||
| Engineering & Construction | $10,095 | 63.2% | 17.6% | 8.9% | $8,257 | 59.7% | 9.6% | 0.4% | ||||||||
| Automation | 5,871 | 36.8% | 12.5% | 3.5% | 5,585 | 40.3% | 19.1% | 5.2% | ||||||||
| Consolidated | $15,966 | 100.0% | 15.7% | (3.4)% | $13,842 | 100.0% | 13.4% | (10.5)% | ||||||||
| (amounts in thousands) | Six months ended July 1, 2017 | Six Months ended June 25, 2016 | ||||||||||||||
| % of | Gross | Operating | % of | Gross | Operating | |||||||||||
| Total | Total | Profit | Profit | Total | Total | Profit | Profit | |||||||||
| Segment | Revenue | Revenue | Margin | Margin | Revenue | Revenue | Margin | Margin | ||||||||
| Engineering & Construction | $18,260 | 64.2% | 14.9% | 5.1% | $16,784 | 58.6% | 8.5% | (0.6)% | ||||||||
| Automation | 10,180 | 35.8% | 15.0% | 3.8% | 11,870 | 41.4% | 17.7% | 4.9% | ||||||||
| Consolidated | $28,440 | 100.0% | 14.9% | (7.8)% | $28,654 | 100.0% | 13.4% | (11.1)% | ||||||||
The Company's
Quarterly Report on Form 10-Q for the quarterly period ended July 1,
2017 is expected to be filed with the Securities and Exchange Commission
reflecting these results by the end of the day on Wednesday, August 9,
2017.
