ENGlobal Reports Third Quarter 2018 Results

HOUSTON, TX, Nov. 08, 2018 (GLOBE NEWSWIRE) -- ENGlobal (NASDAQ: ENG), a leading provider of engineered modular solutions, today announced results for the third quarter ended September 29, 2018.

ENGlobal reported a net loss of $197 thousand, or $0.01 per diluted share, for the third quarter just ended compared to $12.2 million, or $0.44 per diluted share, for the third quarter of 2017. Adjusted for non-recurring litigation expenses of $146 thousand and before non-cash charges for depreciation, amortization and stock compensation expense of $145 thousand, earnings for the quarter ended September 29, 2018 would have been $94 thousand, an indicator of adjusted cash earnings, which management believes is helpful to its investors to understand the earnings of our core business.

Revenue increased by $1.4 million to $14.3 million for the three months ended September 29, 2018 from $12.9 million for the three months ended September 30, 2017 while gross profit margins increased to 16.1% for the quarter ended September 29, 2018 as compared to 12.6% for the quarter ended September 30, 2017.

Management's Assessment

Mark Hess, ENGlobal's Chief Financial Officer stated: "We continue to see financial progress as represented by the sequential net income improvement reported for each of the three quarters this year, together with the positive adjusted earnings reported for this third quarter. Our cash and working capital are holding steady. Our working capital at the end of the quarter was $14.9 million, which we feel is sufficient to provide for near-term growth."

Mr. Hess continued: "Another positive is the significant reduction in SG&A expense on a year over year basis. For the quarter, adjusted for non-recurring litigation services expense, SG&A expense was $2.3 million, or a $9.2 million annual run rate. This SG&A result is a significant improvement when compared to $3.0 million, or a $12.0 million annual run rate in the year ago period. I'm also pleased to report that ENGlobal's firm and contracted backlog at the end of the third quarter of 2018 was approximately $33 million, which is the highest level achieved by the Company since early 2015."

William A. Coskey, P.E., Chairman and CEO of ENGlobal added: "Our mission for the near to midterm is straightforward and about growth - this being for our Company to generate significant internal revenue and margin growth while holding overhead costs down. We plan to accomplish this goal by leveraging our talents and resources to take on larger scopes of work, primarily for turnkey, engineered modular solutions which have technological differentiation. We are now developing larger opportunities for our vertically integrated business model - engineering, mechanical fabrication, automation design, systems integration and project support services, as clients desire for their projects to be supported by a single source supplier."

Mr. Coskey continued: "Given the above mission, our management team has defined seven business strategies, each with its own internal champion and execution plan. These seven areas of focus cover the range of upstream, midstream and downstream energy-related systems, and all fit very well with our engineering, automation and project execution heritage and experience. I look forward to reporting on the Company's progress regarding these initiatives."

he following is a summary of the income statement for the three months ended September 29, 2018 and September 30, 2017:

(amounts in thousands)	Three months ended September 29, 2018				Three months ended September 30, 2017
Revenue	$	14,255			$	12,896
Gross Profit		2,293				1,621
General & Administrative Expenses		2,483				3,041
Operating Loss		(190	)			(1,420	)
Net loss		(197	)			(12,154	)

The following table presents certain balance sheet items as of September 29, 2018 and December 30, 2017:

(amounts in thousands)	As of September 29, 2018		As of December 30, 2017
Cash	$	5,252	$	9,648
Working capital		14,942		16,846

The following table illustrates the composition of the Company's revenue and profitability for its operations for the three and nine
 months ended September 29, 2018 and September 30, 2017:

(amounts in thousands)	Three months ended September 29, 2018									Three Months ended September 30, 2017
			% of		Gross							% of		Gross
	Total		Total		Profit		Operating			Total		Total		Profit		Operating
Segment	Revenue		Revenue		Margin		Profit (Loss)			Revenue		Revenue		Margin		Profit (Loss)
Engineering & Construction	$	6,821	47.9	%	16.6	%	$	664		$	5,399	41.9	%	7.6	%	$	(105	)
Automation		7,434	52.1	%	15.6	%		527			7,497	58.1	%	16.1	%		511
Consolidated	$	14,255	100.0	%	16.1	%	$	(190	)	$	12,896	100.0	%	12.6	%	$	(1,420		)

(amounts in thousands)	Nine months ended September 29, 2018									Nine Months ended September 30, 2017
			% of		Gross							% of		Gross
	Total		Total		Profit		Operating			Total		Total		Profit		Operating
Segment	Revenue		Revenue		Margin		Profit (Loss)			Revenue		Revenue		Margin		Profit (Loss)
Engineering & Construction	$	18,568	44.9	%	15.5	%	$	1,453		$	16,976	41.1	%	10.3	%	$	128
Automation		22,746	55.1	%	13.5	%		1,079			24,360	58.9	%	16.9	%		2,017
Consolidated	$	41,314	100.0	%	14.4	%	$	(1,976	)	$	41,336	100.0	%	14.2	%	$	(3,638	)

                                                  
The Company's Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2018 is expected to be filed with the Securities and Exchange Commission reflecting these results by the end of the day on Thursday, November 8, 2018.

ENGlobal Receives Endorsed Systems Intergrator Status

    

ENGLOBAL ACHIEVES ENDORSED INTEGRATOR STATUS FROM AVEVA WONDERWARE
  

HOUSTON, TX, Sept. 18, 2018 (GLOBE NEWSWIRE) -- ENGlobal Corporation ("ENGlobal") announced today its achievement in being named an Endorsed Systems Integrator (ESI) by AVEVA Wonderware. This recognition, awarded to ENGlobal's Government Services and Automation groups, represents the highest level obtainable in AVEVA's Systems Integrator Program.

"Selection as an endorsed partner places ENGlobal in an exclusive group of only six integrators within the United States and nine worldwide that have achieved both the Wonderware Endorsed status and Controls Systems Integration Association certification. We are extremely pleased to have received this highest level of recognition for the Wonderware System Platform, which results from a stringent vetting process over two years." said John Kratzert, Senior VP - Automation of ENGlobal. "We fully expect that this mutually beneficial relationship will greatly accelerate our Company's ability to deliver projects with the latest technology to key government and commercial customers - especially as a result of our exposure to new AVEVA releases at early stages in the product cycle."

Endorsed Systems Integrator status is limited to a select number of firms in any region of the world and is by invitation only. Criteria for selection include technical and quality evaluations of multiple large integrations previously performed by the Company, training and certification of a significant number of programmers/technicians in the Wonderware suite of products, achievement of Controls Systems Integration Association (CSIA) certification, and sponsorship by Wonderware representatives.

AVEVA's Wonderware System Platform is one of the world's only responsive, scalable solution for supervisory, SCADA, Human Machine Interface (HMI), and Industrial Internet of Things (IIoT) applications that integrates the process with the enterprise. System Platform provides a collaborative, standards-based foundation that unifies people, processes, and assets across all facilities for continuous operational improvement and real-time decision support.

ENG: New Contract

ENGLOBAL ANNOUNCES PROCESS ANALYTICAL AWARD VALUED AT $11 MILLION
   

HOUSTON, TX, Aug. 14, 2018 (GLOBE NEWSWIRE) -- ENGlobal (NASDAQ: ENG), a leading provider of engineering and automation services, today announced that the Company has been selected by a major E&C firm as the supplier of Analytical Process Control and Continuous Emission Monitoring Systems for a major new ethane steam cracker on the U.S. Gulf Coast. The systems being supplied by ENGlobal will provide critical feedback information on both product quality and operating conditions for this new facility. Today's award, valued at approximately $11 million, will be performed by the Company's Automation business segment.

William A. Coskey, P.E., CEO of ENGlobal stated, "We are very excited and honored to be selected for this important Project. Today's award is an excellent example of how ENGlobal's vertically integrated model can be utilized to engineer, fabricate and integrate highly technical, modular solutions."

Mr. Coskey added: "I believe a large part of our success is a direct result of serving our E&C customer well on our previous work for them over the years - and specifically on a recently shipped, major analytical project. Through our team's successful execution and delivery, we were able to highlight both our technical and project management skills on major projects such as this one. "

ENGlobal's scope will include engineering, fabrication, integration and testing of analyzer shelters, field cabinets and field instrument stands consisting of approximately 140 process and continuous emission monitoring analyzers which utilize multiple technologies. Design of these systems is expected to commence immediately, with project execution being scheduled over the next 18 months.

ENG 2Q Release

ENGlobal Reports Second Quarter 2018 Results
   
HOUSTON, TX, Aug. 09, 2018 (GLOBE NEWSWIRE) --

ENGlobal, a leading provider of engineering and automation services, today announced results for the second quarter ended June 30, 2018.

ENGlobal reported a net loss of $1.0 million for the second quarter of 2018 as compared to a $0.9 million net loss reported for the prior year period. Net loss per diluted share was $0.04 and $0.03 for the second quarter just ended and for the second quarter of 2017, respectively.

Adjusted for non-recurring costs, the Company posted a net loss of $0.3 million for the second quarter of 2018, as compared to a net loss of $0.9 million for the second quarter of 2017. During the second quarter of 2018, the Company settled two litigation matters, representing all outstanding litigation, and retained an investment banking firm. The non-recurring costs incurred during the quarter associated with these actions of approximately $0.7 million were recorded as $0.3 million in SG&A and $0.4 million in Other Expense.

Revenue decreased by $2.1 million to $13.9 million for the three months ended June 30, 2018 from $16.0 million for the three months ended July 1, 2017 while gross profit margins increased to 16.2% for the quarter ended June 30, 2018 as compared to 15.7% for the quarter ended July 1, 2017.

Management's Assessment

Mark Hess, ENGlobal's Chief Financial Officer stated: "Our revenue decline on a quarter over quarter basis is primarily due to a couple of large projects that were completed last year, including the Caspian Pipeline Consortium project, and a reduction in procurement activities in our Automation segment. The decline was partially offset by revenue resulting from our focus on engineered modular solutions, which produced slightly higher margins.  Our SG&A for the quarter, adjusted for a one-time cost, was $2.6 million, or a $10.4 million annual run rate, which is the lowest SG&A level we have had in many years."

Mr. Hess continued: "As expected, with the shift from a pure staffing business model to that of providing more turnkey systems, we have seen a shift in our working capital from cash to other components. We expect this shift to continue in the near term as the volume of turnkey execution increases. However, our overall working capital at the end of the quarter was $15.0 million, which we feel is sufficient to provide for our near-term growth."

William A. Coskey, P.E., Chairman and CEO of ENGlobal added: "I am encouraged by the increase in volume of engineered modular systems that we have produced thus far this year and I expect that ENGlobal's strategy of delivering these systems with turnkey execution will continue to become a larger part of our business going forward.  We expect that long-term financial improvement can be realized as a result of increasing project scope which serves to better leverage our resources. Our management is focused on eight well-defined areas of modular project execution, which we are excited about and believe have excellent potential for growing our Business."

Mr. Coskey continued: "We have positioned ourselves as a vertically integrated supplier and are proud to offer our heritage of engineering and design capabilities combined with modular fabrication and automation expertise. This combination of skills, together with our complete project support services, is a unique enhancement to our historical operation and a strategy that is appealing to our clientele. Based on recent trends, I continue to believe that we will see an inflection point and improved financial metrics in future quarters."

The following is a summary of the income statement for the three months ended June 30, 2018 and July 1, 2017:

 (amounts in thousands)

	Three months ended June 30, 2018				Three months ended July 1, 2017
Revenue	$	13,872			$	15,966
Gross Profit		2,253				2,513
General & Administrative Expenses		2,869				3,057
Operating Loss		(616	)			(544	)
Net loss		(992	)			(895	)

The following table presents certain balance sheet items as of June 30, 2018 and December 30, 2017:

(amounts in thousands)	As of June 30, 2018		As of December 30, 2017
Cash	$	5,444	$	9,648
Working capital		15,019		16,846

The following table illustrates the composition of the Company's revenue and profitability for its operations for the three and six months ended June 30, 2018 and July 1, 2017:

(amounts in thousands)	Three months ended June 30, 2018									Three Months ended July 1, 2017
			% of		Gross							% of		Gross
	Total		Total		Profit		Operating			Total		Total		Profit		Operating
Segment	Revenue		Revenue		Margin		Profit  (Loss)			Revenue		Revenue		Margin		Profit (Loss)
Engineering & Construction	$	6,652	48.0	%	20.0	%	$	799		$	10,018	62.7	%	14.1	%	$	309
Automation		7,220	52.0	%	12.8	%		260			5,948	37.3	%	16.7	%		1,008
Consolidated	$	13,872	100.0	%	16.2	%	$	(616	)	$	15,966	100.0	%	15.7	%	$	(544	)

(amounts in thousands)	Six months ended June 30, 2018									Six Months ended July 1, 2017
			% of		Gross							% of		Gross
	Total		Total		Profit		Operating			Total		Total		Profit		Operating
Segment	Revenue		Revenue		Margin		Profit  (Loss)			Revenue		Revenue		Margin		Profit (Loss)
Engineering & Construction	$	11,747	43.4	%	14.9	%	$	789		$	11,577	40.7	%	11.5	%	$	234
Automation		15,312	56.6	%	12.5	%		552			16,863	59.3	%	17.3	%		1,505
Consolidated	$	27,059	100.0	%	13.5	%	$	(1,786	)	$	28,440	100.0	%	14.9	%	$	(2,218	)

The Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 is expected to be filed with the Securities and Exchange Commission reflecting these results by the end of the day on Thursday, August 9, 2018.

New Englobal Alliance

ENGLOBAL ANNOUNCES NEW ALLIANCE TASK FORCE
   
HOUSTON, TX, June 06, 2018 (GLOBE NEWSWIRE) -- ENGlobal (NASDAQ: "ENG") announced today its recently formed alliance task force that when fully staffed is expected to result in incremental revenue in excess of $6 million per year for the Company. This newly dedicated group has been organized to perform engineering and project related services on a planned, multiyear series of projects on behalf of a major independent exploration and production company.

Initially, ENGlobal's efforts will be directed to oil and gas well site and centralized production facilities that are based on a standardized, modular design methodology.  Based on the currently planned scopes of work, the Company believes this task force could grow to over 30 full-time employees over the course of this year. The task force is currently staffed at just over half this level, with a majority being new hires having related experience. The Company also sees excellent potential in extending the standardized, modular design methodology to additional facility types for its clientele.

Michael M. Patton, P.E., Senior V.P. stated: "ENGlobal is honored to be selected to support our valued client in this important multi-year program. We fully expect that our client will realize significant value through our association - in terms of design efficiencies, lower installed cost, expedited schedule, and a safer work environment that is provided through modularization. ENGlobal is very well positioned for assignments such as this one, given our exceptional, full-service capabilities for engineering, designing, fabricating and automating modular engineered systems."

ENGlobal Announces $15 Million Contract Addition

ENGLOBAL ANNOUNCES $15 MILLION IN GOVERNMENT AWARDS
   

HOUSTON, TX, May 24, 2018 (GLOBE NEWSWIRE) -- ENGlobal Corp. (NASDAQ: ENG) announced today that its ENGlobal Government Services subsidiary (EGS) has received two modifications to existing contracts totaling approximately $15 million from the U.S. Department of Defense.  The first modification will increase the Company's scope of work by approximately $3 million and the second modification for approximately $12 million will extend certain ongoing capital and maintenance projects for two years.

William A. Coskey, P.E., Chairman and CEO of ENGlobal stated: "This significant increase in scope of work from our government client is a result of the ongoing exceptional performance provided by the EGS team.  We at ENGlobal greatly value our long history of providing the U.S. Military with fuel supply chain and IT related services."

For over 30 years, EGS has provided the federal government with design, installation, and maintenance of Automated Fueling Systems, Automated Tank Gauges (ATG), Supervisory Control and Data Acquisition (SCADA) development and integration, cyber security, and modular engineered solutions.

ENG 1 Q Results

    

ENGlobal Reports First Quarter 2018 Results
   

HOUSTON, May 10, 2018 (GLOBE NEWSWIRE) -- ENGlobal a leading provider of engineering and automation services, today announced results for the first quarter ended March 31, 2018.

ENGlobal reported a net loss of $1.2 million for the first quarter of 2018 which was an increase in net loss of $0.3 million as compared to the prior year period. Net loss per diluted share was $0.04 for the first quarter just ended as compared to a net loss of $0.03 for the first quarter of 2017. ENGlobal reported an improved loss from operations, which was $1.2 million for the first quarter of 2018, a decrease of $0.5 million as compared to the $1.7 million operating loss for the prior year period.

Revenue increased $0.7 million to $13.2 million, or a 5.7% increase, from $12.5 million for the three months ended March 31, 2018, as compared to the three months ended April 1, 2017. Overall, SG&A expenses declined by $0.8 million for the three months ended March 31, 2018 as compared to the prior year period.

Management's Assessment

William A. Coskey, P.E., Chairman and CEO of ENGlobal stated: "I continue to believe that 2018 will prove to be an inflection year whereby our Company returns to profitability. There are several factors that appear to be coming together - the most important of which are recent project awards and the growing level of higher probability, targeted opportunities in our proposal pipeline. A good leading indicator is that we are now hiring for our operations again, after several years of downsizing staff. We also expect both our mechanical fabrication and automation integration operations to be very busy with new work during the second and third quarters of this year."

Mr. Coskey continued: "ENGlobal's formula for success is straightforward and achievable: 1) increasing our volume of work and utilization of resources in an improving industry environment, 2) incrementally improving margins given increased demand and higher value service mix, 3) excellence in project execution, and 4) achieving significant leverage on our reduced fixed overhead structure. Obviously, the recovery in our business and in our marketplace has taken much longer than anyone desires, including myself. I would like to thank our shareholders for their patience during this time, as we expect to be able to deliver improving results in future quarters."

Mark Hess, ENGlobal's Chief Financial Officer stated: "We continue to operate our Business with a clean capital structure. The Company continues to have no bank debt, and at quarter end had approximately $16 million of working capital which is expected to provide for our near-term operations and growth. We have previously recorded a $11.3 million valuation allowance against our deferred tax assets and therefore these assets are fully reserved and are no longer reflected as a net asset on the Balance Sheet. There was no dilution to ENGlobal common stockholders during the first quarter - as our shares outstanding remained constant at approximately 27.5 million during the quarter."

ENGlobal Corporation provides its engineering and professional expertise principally to the energy industry through two segments: Engineering, Procurement and Construction Management ("EPCM") which includes mechanical fabrication, and Automation engineering and integrated products ("Automation").

The extension of ENGlobal's service offerings into fabrication has positioned the Company as a vertically integrated service provider capable of engineering, project execution, mechanical fabrication, automation engineering and automation related systems integration. This positioning as a full-service provider provides a differentiating factor, which reduces clients' coordination of multiple vendors and improves control of their schedules. This strategy and positioning has also allowed the Company to pursue larger scopes of work centered around many different types of modularized engineered systems.

The Company has also started a multi-year strategic initiative to significantly strengthen its Automation capabilities in the areas of distributed control systems design and replacement, advanced data capture design, human machine interface design, machine learning, cyber security, and artificial intelligence. One result of these strategies is that ENGlobal's proposal pipeline continues to increase both for its EPCM and Automation services. Many of these proposals have not been awarded and have exceeded our expected award timing, which would imply that many customers will release awards when they are more comfortable that commodity prices have stabilized at a sufficient level.

The following is a summary of the income statement for the three months ended March 31, 2018 and April 1, 2017:

(amounts in thousands)		Three months ended March 31, 2018					Three Months ended April 1, 2017
Revenue			$	13,188				$	12,473
Gross Profit				1,413					1,731
General & Administrative Expenses				2,582					3,406
Operating Loss				(1,169	)				(1,675	)
Net Loss				(1,200	)				(878	)

The following table presents certain balance sheet items as of March 31, 2018 and December 30, 2017:

(amounts in thousands)		As of March 31, 2018					As of December 30, 2017
Cash			$	6,767				$	9,648
Working capital				15,888					16,846

The following table illustrates the composition of the Company's revenue and profitability for its operations for the three months ended March 31, 2018 and April 1, 2017:

(amounts in thousands)		Three months ended March 31, 2018																	Three Months ended April 1, 2017
							% 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			$	5,095				38.6	%			8.2	%			(0.2	)%			$	5,629				45.1	%			8.8	%			(1.3	)%
Automation				8,093				61.4	%			12.3	%			3.6	%				6,844				54.9	%			18.1	%			7.3	%
Consolidated			$	13,188				100.0	%			10.7	%			(8.9	)%			$	12,473				100.0	%			13.9	%			(13.4	)%

The Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 is expected to be filed with the Securities and Exchange Commission reflecting these results by the end of the day on Thursday, May 10, 2018.