Investor Conference Call Scheduled Today at 9:00 am Eastern
HOUSTON, TX / ACCESSWIRE / March 11, 2021 / ENGlobal Corporation (NASDAQ:ENG), a leading provider of complete project solutions for renewable and traditional energy, today announced that, for the year ended December 26, 2020, the company posted a net loss of $625,000, or $(.02) per share, on revenue of $64,449,000, compared with a net loss of $1,466,000, or $(.05) per share, on revenue of $56,446,000 for the year ended December 28, 2019.
The company's $8.0 million, or 14.2 percent, improvement in revenue compared to the prior year was primarily the result of an increase in revenue from the Engineering, Procurement, Construction Management (EPCM) segment of $6.5 million, or 33.5 percent, to $25.9 million for 2020 as compared with $19.4 million in 2019. ENGlobal's continued performance on designing and delivering a complete modular hydrogen plant was largely responsible for this growth in revenue when compared to the prior year.
The company's reduced annual loss - an improvement of 57 percent over 2019 - was primarily the result of the increase in revenue and higher margin projects from the company's EPCM segment as well as a decrease of $0.5 million in SG&A expense year-over-year. However, COVID-related project delays and resulting inefficiencies experienced by the Company during the latter half of 2020 served to partially offset these improvements.
"I believe that ENGlobal is in a strong market position as we enter 2021", said newly appointed CEO Mark Hess. "First, we have extensive expertise in building renewable fuel process plants and facilities as well as over 35 years' experience in project execution in all sectors of the traditional oil and gas industry. Second, the company has successfully transitioned to vertically integrated project execution and delivery - including engineering and design to modular fabrication and automation integration. Third, despite the challenges posed by COVID in 2020, we made excellent progress in adding to our list of established technology and construction partners during the year. This accomplishment, in turn, has added to our differentiated capabilities - all of which we believe makes ENGlobal a more attractive, single source option for our clients' changing needs."
Mr. Hess continued: "Overall, we expect to have an increased ability to attract and perform the higher-value contracts that we are targeting, including the many attractive green and renewable energy projects in the $10 to $250 million range. As one metric of how our newly organized business model is just beginning to perform, the Company is now seeing a significant uptick in proposal activity with improving market conditions, with $278 million in proposals in process or issued to our clients already this year."
"During the latter half of 2020, many businesses were shut down, airlines were not flying and demand for many of our clients' products dwindled. Consequently, our business development efforts in many of our markets were severely hampered. Our backlog suffered as a result and we ended the year at about $24 million. Our focus the first part of this year is to rebuild our backlog as quickly as possible and we are investing heavily in our business development efforts to accomplish this goal."
At December 26, 2020, ENGlobal had cash on hand of $13.7 million compared to $8.3 million at December 28, 2019. The company's December 26, 2020 cash on hand included the proceeds from its previously disclosed $4.9 million PPP loan and borrowings of $1.5 million from its $6.0 million Revolving Credit Facility. The company expects the PPP loan to be entirely forgiven, and if so, only the Revolving Credit Facility would remain as debt.
The following table illustrates the composition of the Company's revenue and profitability for its operations for the fiscal years ended December 26, 2020 and December 28, 2019:
| Year Ended | Year Ended | |||||||||||||||||||||||||||||||
| (amounts in thousands) | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||||
| 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 | $ | 25,929 | 40.2 | % | 9.1 | % | (0.3 | )% | $ | 19,436 | 34.4 | % | 8.4 | % | (4.3 | )% | ||||||||||||||||
| Automation | 38,520 | 59.8 | % | 15.8 | % | 11.7 | % | 37,010 | 65.6 | % | 17.0 | % | 12.4 | % | ||||||||||||||||||
| Consolidated | $ | 64,449 | 100.0 | % | 13.1 | % | (0.6 | )% | $ | 56,446 | 100.0 | % | 14.0 | % | (2.5 | )% | ||||||||||||||||
The following table illustrates the composition of the Company's revenue and profitability for its operations for the three months ended December 26, 2020 and December 28, 2019:
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
| (amounts in thousands) | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||||
| 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 | $ | 6,158 | 53.2 | % | 17.5 | % | 1.7 | % | $ | 3,888 | 23.3 | % | 1.5 | % | (14.9 | )% | ||||||||||||||||
| Automation | 5,419 | 46.8 | % | 23.3 | % | 8.6 | % | 12,800 | 76.7 | % | 22.7 | % | 19.2 | % | ||||||||||||||||||
| Consolidated | 11,577 | 100.0 | % | 20.2 | % | (5.3 | )% | 16,688 | 100.0 | % | 17.7 | % | 4.6 | % | ||||||||||||||||||
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) | 2020 | Fiscal Year | |||
Q1 | Q2 | Q3 | Q4 | 2020 | |
Revenue | $19,260 | $17,882 | $15,729 | $11,578 | $64,449 |
Gross Profit | 3,260 | 2,453 | 1,144 | 1,594 | 8,451 |
Gross Profit Margin | 16.9% | 13.7% | 7.3% | 13.8% | 13.1% |
General & Administrative Expenses | 2,133 | 2,314 | 2,174 | 2,213 | 8,834 |
Operating Income (Loss) | 1,127 | 139 | (1,030) | (619) | (383) |
Net Income (Loss) | 1,101 | 68 | (1,110) | (684) | (625) |
The following table presents certain balance sheet items as of December 26, 2020 and December 28, 2019:
| (amounts in thousands) | As ofDecember 26, 2020 | As ofDecember 28, 2019 | ||||||
| Cash and restricted cash | $ | 13,706 | $ | 8,307 | ||||
| Working capital | 14,039 | 11,289 | ||||||
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
| Year Ended December 26, | Year Ended December 28, | |||||||
| 2020 | 2019 | |||||||
| Operating revenues | $ | 64,449 | $ | 56,446 | ||||
| Operating costs | 55,998 | 48,530 | ||||||
| Gross profit | 8,451 | 7,916 | ||||||
| Operating costs and expenses: | ||||||||
| Selling, general, and administrative expenses | 8,834 | 9,317 | ||||||
| Operating loss | (383 | ) | (1,401 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense, net | (153 | ) | (31 | ) | ||||
| Other income, net | 14 | 49 | ||||||
| Loss before income taxes | (522 | ) | (1,383 | ) | ||||
| Provision for federal and state income taxes | (103 | ) | (83 | ) | ||||
| Net loss | $ | (625 | ) | $ | (1,466 | ) | ||
| Basic and diluted loss per common share | $ | (0.02 | ) | $ | (0.05 | ) | ||
| Basic and diluted weighted average shares used in computing loss per share: | 27,474 | 27,414 | ||||||
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share amounts)
| December 26, 2020 | December 28, 2019 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 13,706 | $ | 8,307 | ||||
| Trade receivables, net of allowances of $386 and $236 | 7,789 | 11,435 | ||||||
| Prepaid expenses and other current assets | 891 | 889 | ||||||
| Contract assets | 4,090 | 3,862 | ||||||
| Total Current Assets | 26,476 | 24,493 | ||||||
| Property and equipment, net | 1,263 | 1,033 | ||||||
| Goodwill | 720 | 720 | ||||||
| Other assets | ||||||||
| Right of use asset | 1,628 | 2,133 | ||||||
| Deposits and other assets | 351 | 307 | ||||||
| Total Other Assets | 1,979 | 2,440 | ||||||
| Total Assets | $ | 30,438 | $ | 28,686 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,138 | $ | 3,261 | ||||
| Accrued compensation and benefits | 3,048 | 2,783 | ||||||
| Current portion of leases | 1,541 | 1,041 | ||||||
| Contract liabilities | 1,258 | 5,438 | ||||||
| Current portion of note | 3,707 | - | ||||||
| Other current liabilities | 745 | 681 | ||||||
| Total Current Liabilities | 12,437 | 13,204 | ||||||
| Deferred payroll tax | 1,037 | - | ||||||
| Long term debt | 2,733 | - | ||||||
| Long term leases | 608 | 1,458 | ||||||
| Total Liabilities | 16,815 | 14,662 | ||||||
| Commitments and Contingencies (Note 15) | ||||||||
| Stockholders' Equity: | ||||||||
| Common stock - $0.001 par value; 75,000,000 shares authorized; 27,560,686 and 27,413,626 shares issued and outstanding at December 26, 2020 and December 28, 2019, respectively | 28 | 27 | ||||||
| Additional paid-in capital | 37,157 | 36,934 | ||||||
| Accumulated deficit | (23,562 | ) | (22,937 | ) | ||||
| Total Stockholders' Equity | 13,623 | 14,024 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 30,438 | $ | 28,686 | ||||
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
| Year Ended December 26, 2020 | Year Ended December 28, 2019 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (625 | ) | $ | (1,466 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 449 | 389 | ||||||
| Share-based compensation expense | 223 | 61 | ||||||
| Changes in current assets and liabilities: | ||||||||
| Trade accounts receivable | 3,646 | (1,224 | ) | |||||
| Contract assets | (228 | ) | (689 | ) | ||||
| Other current assets | (46 | ) | 245 | |||||
| Accounts payable | (1,123 | ) | 89 | |||||
| Accrued compensation and benefits | 1,301 | 482 | ||||||
| Contract liabilities | (4,180 | ) | 4,834 | |||||
| Income taxes payable | (57 | ) | 84 | |||||
| Other current liabilities, net | 121 | (140 | ) | |||||
| Net cash provided by (used in) operating activities | $ | (519 | ) | $ | 2,665 | |||
| Cash Flows from Investing Activities: | ||||||||
| Proceeds from notes receivable | - | 24 | ||||||
| Property and equipment acquired | (428 | ) | (345 | ) | ||||
| Net cash used in investing activities | $ | (428 | ) | $ | (321 | ) | ||
| Cash Flows from Financing Activities: | ||||||||
| Purchase of stock | - | (61 | ) | |||||
| Payments on finance leases | (93 | ) | (36 | ) | ||||
| Proceeds from PPP loan | 4,949 | - | ||||||
| Proceeds from revolving credit facility | 1,490 | - | ||||||
| Net cash provided by (used in) financing activities | $ | 6,346 | $ | (97 | ) | |||
| Net change in cash | 5,399 | 2,247 | ||||||
| Cash at beginning of year | 8,307 | 6,060 | ||||||
| Cash at end of year | $ | 13,706 | $ | 8,307 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for interest | $ | 153 | $ | 33 | ||||
| Right of use assets obtained in exchange for new operating lease liability | $ | 963 | $ | 2,854 | ||||
| Leased assets obtained in exchange for new finance lease liabilities | $ | 219 | $ | 351 | ||||
| Cash paid during the period for income taxes (net of refunds)$ | 86 | $ | 26 | |||||
For further information on ENGlobal's 2020 financial results, please refer to its Annual Report on Form 10-K 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 EST to discuss the company's 2020 financial results and outlook for 2021. To participate in the conference call, please dial in 5 to 10 minutes before the call:
(Toll Free) 888-506-0062 domestically, or 973-528-0011 internationally
Entry code: 441526
The conference call will also be broadcast live over the Internet and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/40284
The teleconference replay will be available shortly after the completion of the live event through 9:00am EST on March 18, 2021. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 40284.
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 provider of engineering and automation services primarily to the energy sector throughout the United States and internationally. ENGlobal operates through two business segments: Automation and Engineering. ENGlobal's Automation segment provides services related to the design, fabrication and implementation of distributed control, instrumentation and process analytical systems. The Engineering segment provides consulting services for the development, management and execution of projects requiring professional engineering, construction management, and related support services. Within ENGlobal's Automation segment, ENGlobal Government Services, Inc. provides engineering, design, installation, operations, and maintenance of various government, public sector, and international facilities, specializing in turnkey automation and instrumentation systems for the U.S. Defense industry worldwide. 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, the Company's ability to attract and perform the higher-value contracts that it is targeting, the Company's ability to realize project awards or contracts on its pending proposals, and the anticipated forgiveness of the Company's PPP loan, 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
SOURCE: ENGlobal
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https://www.accesswire.com/634886/ENGlobal-Announces-2020-Financial-Results
