ENGlobal Corporation Announces Improved Third Quarter Results and Record Backlog.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- 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 $0.03 per share on revenues of $37.2 million for the quarter ended Sept. 30, 2004. These results reflect increases when compared to the prior year quarter ended Sept. 30, 2003, which produced net income of $0.02 per share on revenues of $35.4 million. Results for the nine months ended Sept. 30, 2004, also compare favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the same nine months of 2003, with net income increasing from $0.06 to $0.07 per share, and revenue increasing from approximately $88 million to $103 million for the two comparison periods. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. L. Burrow, P.E., ENGlobal's chairman and chief executive officer, stated, "In previous reports, I have made general observations that our industry appears to be strengthening and we have recently received what we believe may be confirmation of this trend. The new work awarded to ENGlobal climbed steadily during recent months, from $5.3 million in June June: see month. , to $6.8 million in July July: see month. , $10.3 million in August and a record $18 million for September September: see month. ." Mr. Burrow continued, "This improved business environment has resulted in a record backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. for ENGlobal of approximately $82 million, with billable hours Billable Hours is a Canadian comedy series, which airs on Showcase. Set in the fictional Toronto law firm of Fagen & Harrison, the series focuses on three young lawyers struggling to balance their expectations in life with the difficult realities of building a career also showing increases since July. Another encouraging sign for our business is the significantly improved financial results for our Systems segment this quarter." While contracts may be modified, expanded or canceled, historically ENGlobal has successfully completed its work under a high percentage of its outstanding contracts. The Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended Sept. 30, 2004, will be filed with the Securities and Exchange Commission on or about Nov. 11, 2004, reflecting these results. 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 1,300 employees and occupies over 275,000 square feet of office and manufacturing space. In 2004, the Company was named the fastest growing engineering firm in the United States by ZweigWhite. 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 Dec. 31, 2003, Form 10-Q's for the quarters ended Sept. 30, 2004, June 30, 2004 and March 31, 2004, current Forms 8-K, and other SEC filings. Among other matters, there can be no assurance that operating results will continue to be as good or better than the operating results from the current quarter, that financial performance of the systems segment will continue to be profitable, that contracts will not be canceled at a higher rate than ENGlobal has previously experienced, or that the Company's operations as a whole will continue to 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 Dec. 31, 2003.
Financial Highlights
(In Thousands, Except Per Share Data)
Quarter Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2004 2003(a) 2004 2003(a)
----------- ----------- ----------- -----------
Revenue $37,272 $35,435 $102,547 $87,713
Costs and expense:
Direct cost 32,452 31,094 89,291 75,221
Selling, general and
administrative 3,257 2,933 9,536 8,554
Depreciation and
amortization 321 217 858 595
Operating Income $1,242 $1,191 $2,862 $3,343
Other income (expense) 24 (316) 52 (360)
Interest income
(expense), net (122) (204) (418) (611)
=========== =========== =========== ===========
Income before tax 1,144 671 2,496 2,372
Provision for income
tax 389 277 849 901
Loss from discontinued
operations, net of
tax -- (12) -- (47)
----------- ----------- ----------- -----------
Net income/(loss) $755 $382 $1,647 $1,424
Preferred stock
dividends -- 27 -- 131
----------- ----------- ----------- -----------
Earnings available to
common stockholders $755 $355 $1,647 $1,293
================================================
Basic and diluted
earnings per share:
Net income/(loss) per
share (basic) .03 .02 .07 .06
Net income/(loss) per
share (diluted) .03 .01 .07 .05
Weighted average
number of shares
outstanding (basic) 24,060,689 23,447,429 24,043,734 23,056,609
Weighted average
number of shares
outstanding
(diluted) 24,216,826 24,061,823 24,199,871 23,637,894
Other Operational
Information
----------------------
Revenues by business
segment:
Engineering $32,796 $32,376 $92,730 $75,948
Systems 4,476 3,059 9,817 11,765
----------- ----------- ----------- -----------
Total 37,272 35,435 102,547 87,713
=========== =========== =========== ===========
Selected Balance Sheet
Data
----------------------- As of
September 30, 2004 December 31, 2003
----------------------- -----------------------
Balance sheet data:
Property and
equipment, net $4,755 $4,302
Total assets 43,768 42,530
Long-term debt, net
of current portion 7,939 7,506
Capital leases, net
of current portion 2 12
Stockholders' equity 19,288 18,175
(a) Income statement data for the quarter and nine months ended Sept.
30, 2003, does not take into account the conversion of the
Company's Series A Preferred Stock that occurred in August 2003.
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