ENGlobal Reports Fourth Quarter and Fiscal Year 2018 Results

HOUSTON, March 28, 2019 (GLOBE NEWSWIRE) -- ENGlobal, a leading provider of engineered modular solutions to the energy industry, today announced a net loss of $5.7 million and a diluted loss per share of $0.21 for the fiscal year ended December 29, 2018. The Company incurred non-cash expenses for goodwill impairment, depreciation and amortization, and stock compensation of $2.7 million during 2018 and income tax expense of $0.1 million primarily due to state margin tax.

Management's Assessment

William Coskey, P.E., Chairman and Chief Executive Officer of ENGlobal said: "The Company is making strides to benefit from the multi-year strategic initiative we began in the fall of 2017. We have identified modular project execution offerings as the opportunity to which our capabilities are best applied, and focused our business development team on communicating these offerings to specific clients. Seven strategic initiatives have been identified where we can provide complete project execution that includes engineering, design, fabrication and integration of automated control systems as a complete packaged solution for our clients, preferably in a modular form. This "design it once - build it many times" concept has many merits for our clients including a single vendor interface, better control of costs, better control of schedule and lower safety risk, among other things, which is being well received by many of our clients."

Mr. Coskey continued: "One result of our positioning and sales efforts is that the new opportunities and proposal pipeline we track continues to increase. Many of these proposals are larger, but have not yet been awarded and have exceeded our expected award timing. Our backlog, which represents an estimate of projects that have not been completed, increased to $29.2 million at December 29, 2018. This compares to backlog of $24.1 million as of December 30, 2017. I expect our backlog will continue to increase over the course of 2019, based on current levels of proposal activity."

Mark Hess, ENGlobal's Chief Financial Officer, said: "We showed significant progress towards profitability through the first three quarters of 2018, reducing our quarterly loss to $197 thousand for the third quarter. However, during the fourth quarter the Company experienced significant, unforeseen employee benefit cost - that is anticipated to be short lived but which negatively impacted both our gross profit and SG&A. This trend reversal compounded by the Company's recent financial results also triggered an impairment of our goodwill in the fourth quarter."

Mr. Hess continued: "ENGlobal's cash on hand is trending positively, increasing $0.8 million during the fourth quarter, 2018 to a total of $6.1 million at December 29, 2018 and has continued to increase year to date in 2019 as we close out some of the larger in-process projects before investments in new projects are required. Although cash on hand has increased in the first quarter of 2019, gross profit has been negatively impacted by the delayed execution of current and expected project awards. As a result, our financial results for the first quarter are expected to be negatively impacted."

Mr. Hess continued: "We continue to be very mindful of our overhead structure, and total SG&A costs have continued to decrease. Although the Company has made investments in key individuals, product developments, new facilities and equipment, in addition to the increased employee benefit cost mentioned above, these areas of additional overhead cost have been more than offset by SG&A decreases in other areas of our business."

2018 Fiscal Year results as compared to 2017 Fiscal Year results:

Revenue decreased to $54.0 million for the fiscal year ended December 29, 2018, or 3.2%, from $55.8 million for the fiscal year ended December 30, 2017. ENGlobal reported a net loss of $5.7 million, or $0.21 per diluted share, for the fiscal year ended December 29, 2018, compared to net loss of $16.3 million, or $0.59 per diluted share, for the prior year period. The Company incurred income tax expense of $0.1 million during 2018 primarily due to state margin tax, compared to income tax expense of $10.1 million during 2017. The Company incurred non-cash expenses for goodwill impairment, depreciation and amortization, and stock compensation of $2.7 million during 2018 and the Company incurred non-cash expenses for depreciation and amortization and stock compensation of $1.6 million during 2017. No goodwill impairment was recorded in 2017.

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. The Company is not obligated to repurchase any dollar amount or specific number of shares of common stock under the repurchase program, which may be suspended, discontinued or reinstated at any time. The stock repurchase program was suspended on May 16, 2017 and reinstated on December 19, 2018. Through December 29, 2018, ENGlobal had repurchased and retired 1,212,773 shares of common stock at a total cost of $1.5 million, including 21,723 shares for $15 thousand in between December 19, 2018 and December 29, 2018.

The following table illustrates the composition of the Company's revenue and profitability for its operations for the fiscal years ended December 29, 2018 and December 30, 2017:

	Year Ended									Year Ended
(amounts in thousands)	December 29, 2018									December 30, 2017
Segment	Total Revenue		% of Total Revenue		Gross Profit Margin		Operating Profit (Loss) Margin			Total Revenue		% of Total Revenue		Gross Profit Margin		Operating Profit (Loss) Margin
Engineering & Construction	$	24,152	44.7	%	12.5	%	4.7	%		$	22,595	40.5	%	4.9	%	(7.9	)%
Automation		29,844	55.3	%	13.1	%	(2.5	)%			33,170	59.5	%	16.1	%	6.5	%
Consolidated	$	53,996	100.0	%	12.8	%	(9.6	)%		$	55,765	100.0	%	11.5	%	(11.0	)%

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

	Three Months Ended									Three Months Ended
(amounts in thousands)	December 29, 2018									December 30, 2017
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	$	5,583	44.0	%	2.4	%	(5.6	)%		$	5,619	38.9	%	(11.3	)%	(28.5	)%
Automation		7,098	56.0	%	11.9	%	(25.6	)%			8,811	61.1	%	13.7	%	5.1	%
Consolidated		12,681	100.0	%	7.7	%	(25.3	)%			14,430	100.0	%	4.0	%	(17.4	)%

The following is a summary of the Company's statement of operations for the last four quarters which may be helpful in analyzing our ongoing business:

(amounts in thousands)		2018												Fiscal Year
	Q1			Q2			Q3			Q4					2018
Revenue	$	13,188		$	13,872		$	14,255		$	12,681			$	53,996
Gross Profit		1,413			2,253			2,293			974				6,933
Gross Profit Margin		10.7	%		16.2	%		16.1	%		7.7	%			12.8	%
General & Administrative Expenses		2,582			2,869			2,483			2,096				10,030
Goodwill impairment		-			-			-			2,086				2,086
Operating Loss		(1,169	)		(616	)		(190	)		(3,208	)			(5,183	)
Net Loss		(1,200	)		(992	)		(197	)		(3,282	)			(5,671	)

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

(amounts in thousands)	As of December 29, 2018		As of December 30, 2017
Cash and restricted cash	$	6,060	$	9,648
Working capital		13,725		16,846

The Company's Annual Report on Form 10-K for the year ended December 29, 2018 is expected to be filed with the Securities and Exchange Commission today reflecting these results.

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.

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.

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 Seeks to Increase Shareholder Value

    

ENGlobal Engages B. Riley FBR for Review of Strategic Alternatives to Increase Shareholder Value

Houston, TX, April 18, 2018 (GLOBE NEWSWIRE) -- ENGlobal Corporation, a leading provider of engineering and automation services, announced today that its Board of Directors has initiated a review of strategic alternatives. These alternatives could include strategic mergers, reverse mergers, the issuance or buyback of public shares, or the purchase or sale of specific assets, in addition to other potential actions aimed at increasing shareholder value.

For this purpose, the Company has engaged B. Riley FBR, Inc., a subsidiary of B. Riley Financial, Inc. (NASDAQ:RILY) as its exclusive financial advisor to help identify, analyze, negotiate, and close any potential transaction or series of transactions.

"We are undertaking this important review of alternative strategies in order to increase value for our shareholders while continuing to enhance our extensive range of project execution services," said William A. Coskey, P.E., CEO and Chairman of ENGlobal. "The B. Riley FBR team has demonstrated their extensive knowledge of our industry and also showcased their deep understanding of the opportunities available to ENGlobal as a public platform. We're pleased to have chosen them as our partner for this process and are confident we will find a solution that achieves the Company's overall objectives."

The Company does not intend to disclose or comment on developments related to its review unless and until the Board has approved a specific transaction or otherwise determined that further disclosure is appropriate.  There can be no assurance that the Board's strategic review will result in any transaction, or any assurance as to its outcome or timing.

ENGlobal Wins Modular Environmental Project

HOUSTON, TX--(Marketwired - Mar 21, 2017) - ENGlobal, a leading provider of engineering and automation services, today announced that it was awarded an environmental project valued at over $1 million, with the potential to expand to a larger scope. Located in the Southeast U.S, this environmentally driven installation will provide cleaner air and enhanced plant operability, while significantly benefitting from ENGlobal's accelerated schedule.

This award highlights the Company's integrated approach for providing engineered modular solutions utilizing its heritage professional skills together with its more recently formed fabrication capability. Execution of this important project will involve multiple ENGlobal capabilities, including engineering, automation, procurement and fabrication, for the key elements of an industrial recycling facility.

"We believe that our vertically integrated approach to project delivery will continue to benefit our targeted markets," said William A. Coskey, P.E., CEO of ENGlobal. "We are delighted to be selected as a critical partner for this environmental project."

ENGlobal 4Q and FY 2016 Results

ENGlobal Reports Fourth Quarter and Fiscal Year 2016 Results

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%

The following table illustrates the composition of the Company's revenue and profitability for its operations for the three months ended December 31, 2016 and December 26, 2015:

	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%

The following is a summary of the Company's income statement for the last four quarters which may be helpful in analyzing our ongoing business:

(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	)

The following table presents certain balance sheet items as of December 31, 2016 and December 26, 2015:

(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			--			--

The Company's Annual Report on Form 10-K for the year ended December 31, 2016 is expected to be filed with the Securities and Exchange Commission today reflecting these results.