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