ENGlobal Reports Improved Results for Second Quarter 2019
Houston, Aug. 13, 2019 (GLOBE NEWSWIRE) -- ENGlobal (NASDAQ:ENG), a leading provider of engineered modular solutions, today reported that for the second quarter ended June 29, 2019, the company had a net loss of $517,000, or $(.02) per diluted share, on revenue of $13,621,000, compared to a net loss of $992,000, or $(.04) per diluted share, on revenue of $13,872,000 for the same period in 2018.
The company's Q2 2019 revenue grew 12% over Q1 2019, and its net loss was reduced by $457,000 over the same sequential periods. The sequential revenue improvement was primarily the result of the company's ongoing strategic business transition from that as an engineering design services and staffing provider to a supplier of higher-value, complete modular systems.
For the first six months of 2019, the company had a net loss of $1,491,000, or $(.05) per diluted share, on revenue of $25,784,000, compared to a net loss of $2,192,000, or $(.08) per diluted share, on revenue of $27,059,000 for the first half of 2018.
A major factor in the company's reduced net loss in the three- and six-month 2019 periods was reductions in SG&A expenses of 15 percent and 13 percent, respectively.
Chairman and CEO William A. Coskey, P.E., said, "ENGlobal's complete modular systems not only create numerous efficiencies for our customers but also utilize all of our Company's internal skills and resources. We are benefiting from business alliances previously formed with major process technology and construction firms, but also have a growing business development program of our own. As a result of these efforts, we are optimistic that one or more of our larger modular system proposals will be successful before the end of the year."
The CEO added, "The key to success for ENGlobal is additional scale for our business. We expect to enjoy improved revenue growth in the second half of the year due to our growing success in performing services on larger, higher-revenue projects than in the past. Effectively, we are transitioning from our historical work on thousands of engineering-only projects per year that averaged around $50,000 in revenue each, toward working on much larger scopes of work."
Mr. Coskey also said that the recent hiring of former Honeywell UOP executive Michael Clark, as well as several prominent in-house process engineers, designers and project managers, is expected to help the company fuel the increased revenue growth expected in the second half of this year and beyond.
Looking forward to 2020, Mr. Coskey said he believed that the current transition "has the potential to significantly increase our revenue while creating more favorable profit margins and improved earnings compared to 2019."
Additional remarks by the CEO are available in four recent news stories published by the Houston Business Journal at https://finance.yahoo.com/quote/ENG?p=ENG&.tsrc=fin-srch
For additional information on ENGlobal's Q2 2019 performance, please refer to its Form 10-Q filing on the company website, or at sec.gov.
ENGlobal Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(amounts in thousands, except per share data)
Condensed Consolidated Statements of Operations
(Unaudited)
(amounts in thousands, except per share data)
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||
| June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | ||||||||||||||
| Operating revenues | $ | 13,621 | $ | 13,872 | $ | 25,784 | $ | 27,059 | |||||||||
| Operating costs | 11,679 | 11,619 | 22,504 | 23,394 | |||||||||||||
| Gross profit | 1,942 | 2,253 | 3,280 | 3,665 | |||||||||||||
| Selling, general and administrative expenses | 2,450 | 2,869 | 4,755 | 5,451 | |||||||||||||
| Operating loss | (508 | ) | (616 | ) | (1,475 | ) | (1,786 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| Other income (expense), net | 26 | (373 | ) | 41 | (378 | ) | |||||||||||
| Interest expense, net | (4 | ) | (5 | ) | (6 | ) | (14 | ) | |||||||||
| Loss from operations before income taxes | (486 | ) | (994 | ) | (1,440 | ) | (2,178 | ) | |||||||||
| Provision (benefit) for federal and state income taxes | 31 | (2 | ) | 51 | 14 | ||||||||||||
| Net loss | (517 | ) | (992 | ) | (1,491 | ) | (2,192 | ) | |||||||||
| Basic and diluted loss per common share: | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.08 | ) | |||||
| Basic and diluted weighted average shares used in computing loss per share: | 27,408 | 27,510 | 27,420 | 27,512 | |||||||||||||
ENGlobal Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands, except share amounts)
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands, except share amounts)
| June 29, 2019 | December 29, 2018 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 9,896 | $ | 6,060 | ||||
| Trade receivables, net of allowances of $202 and $202 | 8,189 | 10,211 | ||||||
| Prepaid expenses and other current assets | 725 | 1,096 | ||||||
| Contract assets | 2,190 | 3,175 | ||||||
| Total Current Assets | 20,945 | 20,542 | ||||||
| Property and equipment, net | 604 | 677 | ||||||
| Goodwill | 720 | 720 | ||||||
| Other assets | ||||||||
| Right of use asset | 2,619 | - | ||||||
| Deposits and other assets | 296 | 367 | ||||||
| Total Other Assets | 2,915 | 367 | ||||||
| Total Assets | $ | 25,184 | $ | 22,306 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 3,156 | $ | 3,172 | ||||
| Accrued compensation and benefits | 2,493 | 2,301 | ||||||
| Contract liabilities | 2,650 | 604 | ||||||
| Other current liabilities | 1,196 | 740 | ||||||
| Total Current Liabilities | 9,495 | 6,817 | ||||||
| Long Term Leases | 1,718 | - | ||||||
| Total Liabilities | 11,213 | 6,817 | ||||||
| Commitments and Contingencies (Note 8) | ||||||||
| Stockholders' Equity: | ||||||||
| Common stock - $0.001 par value; 75,000,000 shares authorized; 27,404,469 and 27,487,594 shares issued and outstanding at June 29, 2019 and December 29, 2018, respectively | 27 | 27 | ||||||
| Additional paid-in capital | 36,906 | 36,934 | ||||||
| Accumulated deficit | (22,962 | ) | (21,472 | ) | ||||
| Total Stockholders' Equity | 13,971 | 15,489 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 25,184 | $ | 22,306 | ||||
ENGlobal Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)
| For the Six Months Ended | |||||||||
| June 29, 2019 | June 30, 2018 | ||||||||
| Cash Flows from Operating Activities: | |||||||||
| Net loss | $ | (1,491 | ) | $ | (2,192 | ) | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||
| Depreciation and amortization | 177 | 289 | |||||||
| Share-based compensation expense | 32 | 122 | |||||||
| Changes in current assets and liabilities: | |||||||||
| Trade accounts receivable | 2,022 | (845 | ) | ||||||
| Contract assets | 985 | (1,720 | ) | ||||||
| Prepaid expenses and Other current assets | 492 | 396 | |||||||
| Accounts payable | (16 | ) | 869 | ||||||
| Accrued compensation and benefits | 192 | 68 | |||||||
| Contract liabilities | 2,046 | (417 | ) | ||||||
| Income taxes payable | (430 | ) | (60 | ) | |||||
| Other current liabilities | (44 | ) | (589 | ) | |||||
| Net cash provided by (used in) operating activities | $ | 3,965 | $ | (4,079 | ) | ||||
| Cash Flows from Investing Activities: | |||||||||
| Proceeds from notes receivable | 5 | 14 | |||||||
| Property and equipment acquired | (72 | ) | (65 | ) | |||||
| Net cash used in investing activities | $ | (67 | ) | $ | (51 | ) | |||
| Cash Flows from Financing Activities: | |||||||||
| Purchase of treasury stock | (61 | ) | - | ||||||
| Payments on capitalized leases | (1 | ) | (74 | ) | |||||
| Net cash used in financing activities | $ | (62 | ) | $ | (74 | ) | |||
| Net change in cash, cash equivalents and restricted cash | 3,836 | (4,204 | ) | ||||||
| Cash, cash equivalents and restricted cash, at beginning of period | 6,060 | 9,648 | |||||||
| Cash, cash equivalents and restricted cash, at end of period | $ | 9,896 | $ | 5,44 | |||||
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