Attached files
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| 8-K - CURRENT REPORT - ENGLOBAL CORP | eng_8k.htm |
Exhibit
99.1
ENGlobal Announces 1Q 2021 Financial Results
Investor Conference Call Scheduled Today at 9:00 am
Eastern
HOUSTON, TX, May 6, 2021 -- ENGlobal Corporation
(NASDAQ:ENG), a leading provider of complete project
solutions for renewable and traditional energy, today announced that, for the first quarter of
2021 ended March 27, it achieved net income of $46,000, or $.00 per
share, on revenue of $12,449,000, compared to net income of
$1,101,000, or $.04 per share, on revenue of $19,260,000 in the
first quarter ended March 28, 2020.
"Our company, like most others in the energy industry, has been
materially affected by the reaction to the COVID-19
epidemic,” said chief executive Mark A. Hess. “We were
fortunate that we were able to work through the backlog in place
last year when the pandemic started.
“Currently, though, we see strong indications that our top
and bottom line performance should improve as the year progresses.
First, we are investing heavily in our business development efforts
and we expect these efforts to produce renewed business
opportunities. Second, thanks to the widespread availability and
utilization of COVID-19 vaccines, there has been significant
progress made in controlling the spread of the pandemic. This, in
turn, is allowing people to go back to in-person work, which will
help increase the demand for our clients’
products.
“Additionally, we see signs that our market opportunities in
green energy sectors such as renewable fuels and solar are
continuing to improve. And, we have made further progress in adding
to our list of established technology and construction partners,
which, of course, makes ENGlobal a more attractive option for
prospective clients. As the year progresses, therefore, we expect
to have an increased ability to attract high-value
contracts.”
The company’s decrease in quarterly revenue was
primarily due to the decline in capital and maintenance spending by
its client base as a direct result of the negative economic effects
upon the energy industry caused by the COVID-19 pandemic. This
trend was compounded by personal interaction restrictions that
significantly hampered the company’s business development
efforts. ENGlobal’s decrease in quarterly net income was
primarily due to the company’s decrease in quarterly revenue,
partially offset by a $1.7 million employee retention credit
recorded in Q1 2021 with no comparable occurrence in Q1
2020.
"We remain highly confident,” he added, “that our
strategic shift toward innovative, higher-value, modular engineered
process and automation project delivery positions us quite well to
achieve steadily improving quarterly results, especially as the
market continues to rebound."
The following is a summary of the income statement for the three
months ended March 27, 2021 and March 28, 2020:
|
(amounts
in thousands)
|
Three months
ended
March 27,
2021
|
Three months
ended
March 28,
2020
|
|
Revenue
|
$12,449
|
$19,260
|
|
Gross
Profit
|
1,004
|
3,260
|
|
Selling, General
and Administrative Expenses
|
2,561
|
2,133
|
|
Operating Income
(Loss)
|
(1,557)
|
1,127
|
|
Net
Income
|
46
|
1,101
|
The following table illustrates the composition of the
company's revenue and profitability for its operations for the
three months ended March 27, 2021 and March 28, 2020:
|
|
Three Months
Ended
|
Three Months
Ended
|
||||||
|
(amounts in
thousands)
|
March 27,
2021
|
March 28,
2020
|
||||||
|
Segment
|
Total
Revenue
|
% of Total
Revenue
|
Gross Profit
Margin
|
Operating Profit
Margin
|
Total
Revenue
|
% of Total
Revenue
|
Gross Profit
Margin
|
Operating Profit
Margin
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$10,048
|
80.7%
|
9.1%
|
(3.8)%
|
$16,510
|
85.7%
|
17.2%
|
12.2%
|
|
Government
Services
|
2,401
|
19.3%
|
3.7%
|
(5.0)%
|
2,750
|
14.3%
|
15.1%
|
8.9%
|
|
Consolidated
|
12,449
|
100.0%
|
8.1%
|
(12.5)%
|
19,260
|
100.0%
|
16.9%
|
5.9%
|
The following table presents certain balance sheet items as
of March 27, 2021 and December 26, 2020:
|
(amounts in
thousands)
|
As
of
March 27,
2021
|
As
of
December 26,
2020
|
|
Cash
|
$13,927
|
$13,706
|
|
Working
capital
|
13,021
|
14,039
|
ENGlobal Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(amounts in thousands, except per share data)
|
|
For the Three
Months Ended
|
|
|
|
March 27,
2021
|
March 28,
2020
|
|
Operating
revenues
|
$12,449
|
$19,260
|
|
Operating
costs
|
11,445
|
16,000
|
|
Gross
profit
|
1,004
|
3,260
|
|
|
|
|
|
Selling, general
and administrative expenses
|
2,561
|
2,133
|
|
Operating
income (loss)
|
(1,557)
|
1,127
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
Other income,
net
|
1,684
|
1
|
|
Interest expense,
net
|
(58)
|
(5)
|
|
Income
from operations before income taxes
|
69
|
1,123
|
|
|
|
|
|
Provision
for federal and state income taxes
|
23
|
22
|
|
|
|
|
|
Net
income
|
46
|
1,101
|
|
|
|
|
|
Basic
and diluted income per common share:
|
$0.00
|
$0.04
|
|
|
|
|
|
Basic
and diluted weighted average shares used in computing income (loss)
per share:
|
27,557
|
27,414
|
|
|
|
|
ENGlobal Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands, except share and per share
amounts)
|
|
March
27, 2021
|
December
26, 2020
|
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash
|
$13,927
|
$13,706
|
|
Trade receivables,
net of allowances of $272 and $386
|
9,111
|
7,789
|
|
Prepaid expenses
and other current assets
|
531
|
891
|
|
Employee retention
credit
|
1,676
|
—
|
|
Contract
assets
|
1,322
|
4,090
|
|
Total Current
Assets
|
26,567
|
26,476
|
|
Property
and equipment, net
|
1,223
|
1,263
|
|
Goodwill
|
720
|
720
|
|
Other
assets
|
|
|
|
Right of use
asset
|
1,539
|
1,628
|
|
Deposits and other
assets
|
342
|
351
|
|
Total Other
Assets
|
1,881
|
1,979
|
|
Total
Assets
|
$30,391
|
$30,438
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$2,151
|
$2,138
|
|
Accrued
compensation and benefits
|
2,172
|
3,048
|
|
Current portion of
leases
|
1,294
|
1,541
|
|
Contract
liabilities
|
2,234
|
1,258
|
|
Current portion of
note
|
4,579
|
3,707
|
|
Current portion of
deferred payroll tax
|
519
|
—
|
|
Other current
liabilities
|
597
|
745
|
|
Total Current
Liabilities
|
13,546
|
12,437
|
|
|
|
|
|
Deferred
payroll tax
|
519
|
1,037
|
|
Long-term
debt
|
1,897
|
2,733
|
|
Long-term
leases
|
715
|
608
|
|
Total
Liabilities
|
16,677
|
16,815
|
|
Commitments
and Contingencies (Note 8)
|
|
|
|
Stockholders’
Equity:
|
|
|
|
Common stock -
$0.001 par value; 75,000,000
shares authorized; 27,588,389 shares issued and outstanding at
March 27, 2021 and 27,560,686 shares issued and outstanding at
December 26, 2020
|
28
|
28
|
|
Additional paid-in
capital
|
37,202
|
37,157
|
|
Accumulated
deficit
|
(23,516)
|
(23,562)
|
|
Total
Stockholders’ Equity
|
13,714
|
13,623
|
|
Total Liabilities
and Stockholders’ Equity
|
$30,391
|
$30,438
|
ENGlobal Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)
|
|
For the Three
Months Ended
|
|
|
|
March 27,
2021
|
March 28,
2020
|
|
Cash
Flows from Operating Activities:
|
|
|
|
Net
income
|
$46
|
$1,101
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
82
|
96
|
|
Share-based
compensation expense
|
45
|
15
|
|
Changes in current
assets and liabilities:
|
|
|
|
Trade accounts
receivable
|
(1,322)
|
655
|
|
Contract
assets
|
2,768
|
(1,912)
|
|
Other current
assets
|
(1,307)
|
165
|
|
Accounts
payable
|
13
|
444
|
|
Accrued
compensation and benefits
|
(876)
|
(408)
|
|
Contract
liabilities
|
976
|
(1,801)
|
|
Income taxes
payable
|
19
|
258
|
|
Other current
liabilities, net
|
(167)
|
(97)
|
|
Net cash provided
by (used in) operating activities
|
$277
|
$(1,484)
|
|
|
|
|
|
Cash
Flows from Investing Activities:
|
||
|
Property and
equipment acquired
|
(57)
|
(34)
|
|
Net cash used in
investing activities
|
$(57)
|
$(34)
|
|
|
|
|
|
Cash
Flows from Financing Activities:
|
|
|
|
Payments on finance
leases
|
(36)
|
(20)
|
|
Interest on PPP
loan
|
12
|
—
|
|
Proceeds from
revolving credit facility
|
25
|
—
|
|
Net cash provided
by (used in) financing activities
|
$1
|
$(20)
|
|
Net change in
cash
|
221
|
(1,538)
|
|
Cash
at beginning of period
|
13,706
|
8,307
|
|
Cash
at end of period
|
$13,927
|
$6,769
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Cash paid during
the period for interest
|
$58
|
$5
|
|
Right of use assets
obtained in exchange for new operating lease liability
|
$256
|
$963
|
|
Cash paid during
the period for income taxes (net of refunds)
|
$1
|
—
|
For further information on ENGlobal's first quarter 2021 financial
results, please refer to its Quarterly Report on Form 10-Q to be
filed with the SEC later today and included on the company's
website at www.englobal.com,
or on the SEC's website at www.sec.gov.
Conference Call
Management will host a conference call today at 9:00am EDT to
discuss the company's first quarter 2021 financial results and
outlook for the remainder of the year. To participate in the
conference call, please dial in five to ten minutes before the
call:
(Toll Free) 888-506-0062
domestically, or 973-528-0011
internationally.
Entry code: 498183
The conference call will also be broadcast live over the Internet
and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/41192
The teleconference replay will be available shortly after the
completion of the live event through 9:00 am Eastern time on May
13, 2021. You may access the replay by dialing (Toll Free)
877-481-4010
domestically, or 919-882-2331
internationally, and referencing
conference ID 41192.
You may also access the replay by visiting the company's web
site:
https://www.englobal.com/investors/events-and-presentations/
About ENGlobal
ENGlobal (NASDAQ:ENG) is a leading provider of complete project
solutions for renewable and traditional energy throughout the
United States and internationally. ENGlobal operates through two
business segments: Commercial and Government Services. Further
information about the Company and its businesses is available
at www.ENGlobal.com.
Safe Harbor for Forward-Looking Statements
The statements above regarding the Company's expectations, its
operations and certain other matters discussed in this press
release may constitute forward-looking statements within the
meaning of the federal securities laws and are subject to risks and
uncertainties. All statements, other than statements of historical
facts, included herein concerning, among other things, anticipated
economic or market conditions, the Company’s anticipated
performance, the Company’s ability to produce
renewed business
opportunities and the Company's ability to attract and perform
higher-value contracts, are forward-looking statements. For a
discussion of risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ENGlobal's filings with the Securities and Exchange
Commission, including the Company's most recent reports on Form
10-K and 10-Q, and other SEC filings.
Click here to join our email list: https://www.englobal.com/investors/email-alerts/
CONTACT:
Mark A. Hess
Phone: (281) 878-1000
E-mail: ir@ENGlobal.com
Market Makers - Investor Relations
Jimmy Caplan
512-329-9505
Email: jimmycaplan@me.com
Market Makers - Media Relations
Rick Eisenberg
212-496-6828
Email: eiscom@msn.com