ENGlobal Announces Asset Acquisition of Engineering Design Group, Inc.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Jan. 28, 2004

ENGlobal Corporation (AMEX: ENG) announced today that a subsidiary, ENGlobal Design Group, Inc., has completed the acquisition of certain assets of Tulsa-based Engineering Design Group, Inc. ("EDG"). With this acquisition, ENGlobal expects to gain additional capabilities related to the design, installation and maintenance of various government and public sector facilities. Currently, the most active sector is the Automated Fuel Handling Systems that serve the U.S. military.

Formed in 1961, EDG originally provided engineering and design services to the oil, gas, petrochemical, and pipeline industries on a worldwide basis, with capabilities later expanding to serve municipal water and electric utilities as well as the national defense, NASA, and aerospace industries. EDG currently employs 40 associates and produced 2003 annual revenues of approximately $15 million. Under the terms of the agreement, ENGlobal Design Group, Inc. acquired specified assets of EDG by issuing a $300,000 five-year subordinated promissory note together with an earnout structure based on revenues of the EDG operation over the next five years. There was no cash or stock consideration paid, or EDG debt assumed, as a result of this transaction. ENGlobal intends to expand its existing lease space at Tulsa's CityPlex Tower to accommodate the EDG operation, and anticipates that the operation will move during the second quarter of this year.

As one of only three qualified suppliers, EDG was recently awarded a five-year, indefinite delivery and quantity contract from the Space and Naval Warfare Systems Command (SPAWAR) to provide services and supplies for Automated Fuel Handling Equipment (AFHE), supporting the Department of Defense and other agencies. During the last five years, EDG has performed contracts valued in excess of $60 million for this agency.

ENGlobal Corporation's President, William A. Coskey, stated, "With this transaction, ENGlobal expands its strategic growth into government-related engineering, design and construction management services. The addition of EDG also represents a significant increase to our base operations in Tulsa. We very much look forward to the new opportunities that will be created with this new member of the ENGlobal team."

The Company also updated the status of its pending acquisition of Spectrum Design Services, Inc. ("SDS"), a Houston-based multi-discipline engineering design firm. ENGlobal's management is continuing its assessment and due diligence phase regarding SDS' operations. Further information will be made available as negotiations progress.

About ENGlobal Corporation

ENGlobal Corporation provides engineering services and engineered systems principally to the petroleum refining, petrochemical, and pipeline and process industries throughout the United States and across the globe. ENGlobal's multi-discipline engineering and design staff develops projects from the initial planning stage through detailed design, procurement, and construction management. The Engineered Systems Group develops, manufactures, installs, and services control and instrumentation systems utilized in various energy and process-related industries while its Technologies Division provides services and products that support the advanced automation and environmental technology fields. The Constant Power Division fabricates industrial grade uninterruptible electrical power systems and battery chargers. The Company, with its subsidiaries, now employs over 1,000 employees and occupies over 200,000 square feet of office and manufacturing space. Further information about the Company and its subsidiaries is available at www.englobal.com.

Safe Harbor for Forward-Looking Statements

Certain 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 including, but not limited to, the Company's ability to achieve its business strategy while effectively managing costs and expenses. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors detailed from time to time in ENGlobal's filings with the Securities and Exchange Commission. Reference is hereby made to cautionary statements set forth in the Company's Form 10-K for the year ended December 31, 2002, Form 10-Q's for the quarters ended March 31, 2003, June 30, 2003 and September 30, 2003, current Forms 8-K, and other SEC filings. Moreover, the discussion in this press release of the Company's proposed acquisitions is subject to risks which include the fact that such acquisitions may not close, may close on less favorable terms than desired, or may close but not be successfully and profitably integrated by the Company.