ENGlobal Corporation Announces First Quarter Results and Alliance Relationship with a Global Energy Company.Business Editors HOUSTON--(BUSINESS WIRE)--May 6, 2004 ENGlobal Corporation (AMEX AMEX See: American Stock Exchange :ENG ENG electronystagmography. ENG abbr. electronystagmography ENG enzootic nasal granuloma. ), a leading provider of engineering services, today reported net income of $0.02 per share for the quarter ended March 31, 2004, equivalent to results from the same period in 2003. ENGlobal also announced that it has been selected by a global energy company to become one of a very limited number of Preferred Service Providers for engineering services. ENGlobal expects this client to utilize its capabilities on a wide variety of upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger , midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. and downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). projects that will primarily be located on the Gulf Coast. Revenue for the most recent quarter totaled $31 million, an increase of approximately $8 million, or 35%, compared to the prior year period. This increase in revenue was primarily due to the continuation of several significant projects that began in 2003 in the Company's engineering segment. The Company's consolidated gross profit increased by $234,000 for the first quarter 2004 compared to the first quarter 2003. Gross profits for ENGlobal's engineering segment increased in the first quarter of 2004 over the first quarter of 2003 by $518,000, totaling $3.6 million in the most recent quarter. This improvement is the result of higher revenues in the engineering segment as well as internal efforts to improve utilization of personnel. Lower gross profit realized by ENGlobal's systems segment during the quarter partially offset the improvements in the engineering segment. However, the systems segment, as a whole, recorded significantly improved financial results late in the first quarter and was recently awarded two contracts valued at approximately $2 million. The systems segment appears to be experiencing a general increase in activity, to varying degrees, as measured in terms of proposals, bookings and shipments. Based on these trends, the Company expects that operating results from its systems segment may improve over the remainder of this year. Expenses related to selling, general and administrative, including depreciation and amortization increased $427,000, or 14.8%, for the first quarter 2004 as compared to the same period in 2003. Much of the increase resulted from start-up Start-up The earliest stage of a new business venture. expenses at ENGlobal Design Group Inc., which began operations earlier this year. ENGlobal Design Group Inc.'s financial results are consolidated into the Company's system segment. The Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2004 will be filed with the Securities and Exchange Commission on or about May 7, 2004 reflecting these results. As previously reported, the Company's newest operation, ENGlobal Design Group Inc., has relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. to new space at the Company's Tulsa Tulsa (tŭl`sə), city (1990 pop. 367,302), seat of Tulsa co., NE Okla., on the Arkansas River east of its junction with the Cimarron; inc. 1898. office at CitiPlex Tower. This subsidiary provides engineering and related services to various government and public sector clients, with projects primarily related to automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. fuel handling. This recent move is expected to provide these clients with greater access to the complete range of ENGlobal's resources, and improve the efficiency of the Company's Tulsa operations. Since beginning operations in January 2004, ENGlobal Design Group Inc. has been awarded over ten projects valued at approximately $5.5 million. Michael L. Burrow, ENGlobal's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "ENGlobal's core engineering segment continues to perform well, exceeding our budgetary expectations and also exceeding results from last year. Management is continuing to make decisions regarding the systems segment that we hope will allow this group to show improved financial results. We are encouraged by the trends we are seeing in this area, as well as by several new systems contracts that ENGlobal has been awarded. As a result, and based on current trends, management is optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that ENGlobal's financial results will improve over the remainder of this year."
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
For the three months ended
March 31
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2004 2003(a)
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Income Statement Data:
----------------------
Revenue $30,993 $23,006
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Net income per share (basic and diluted) .02 .02
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Weighted average number of shares
outstanding (basic) 24,034 22,861
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Weighted average number of shares
outstanding (diluted) 24,487 23,290
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As of
---------------------------
March 31, December 31,
2004 2003
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Balance Sheet Data:
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Working Capital $7,879 $6,505
Property and Equipment, net 4,721 4,302
Total Assets 40,609 42,530
Long-term Debt 8,526 8,129
Capital Leases 14 18
Stockholders' Equity 18,646 18,175
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(a) Income statement data for the three months ended March 31, 2003
does not take into account the conversion of the Company's Series A
Preferred Stock that occurred in August 2003.
About ENGlobal Corporation ENGlobal Corporation provides engineering services and systems principally to the petroleum refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. , pipeline, production, and process industries throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and internationally. ENGlobal's multi-disciplinary engineering services group develops projects from the initial planning stage through detailed design, procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , and construction management. The systems group develops, manufactures, installs, and services control and instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. systems utilized in various energy and process-related industries, and provides services and products that support the advanced automation and environmental technology fields. The Company, with its subsidiaries, now employs over 1,000 employees and occupies over 250,000 square feet of office and manufacturing space. Further information about the Company and its subsidiaries is available at www.ENGlobal.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2003, Form 10-Qs for the quarters ended March 31, 2004, June 30, 2003 and September 30, 2003, current Forms 8-K, and other SEC filings. Among other matters, there can be no assurance that operating results from the systems segment will improve or that the Company will provide significant services under its new contract or that the provision of those services will be profitable. In addition, the information contained in this press release is also subject to the risk factors identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2003. |
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