ENGlobal Reports Fourth Quarter and Record Fiscal Year 2008 Results.HOUSTON -- ENGlobal (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ENG ENG electronystagmography. ENG abbr. electronystagmography ENG enzootic nasal granuloma. ), a leading provider of engineering and related project services, announced today its financial results for the fourth quarter and fiscal year ended December 31, 2008. * Record $0.66 earnings per diluted share for the year, an increase of 47% * Record $0.15 earnings per diluted share for any fourth quarter, an increase of 200% * Record revenue for the year of $493.3 million, an increase of 36% * Record revenue for any fourth quarter of $136.0 million, an increase of 43% * Positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $8.4 million for the year * 97% of year-over-year revenue increase attributable to organic or non-acquisition growth * Total backlog at December 31 increased 13% year-over-year to $326 million ENGlobal reported fourth quarter net income of $4.1 million, or $0.15 per diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , for the quarter ended December 31, 2008. This represents an increase of 186% over net income of $1.4 million and an increase of 200% over diluted earnings per share of $0.05 for the same period last year. Fourth-quarter revenue increased to a record $136.0 million, 43% higher than the $95.2 million for the fourth quarter of fiscal year 2007. The following table illustrates the composition of the Company's revenue and profitability for the three months ended December 31, 2008 and 2007, respectively: [TABLE OMITTED] For the full fiscal year 2008, ENGlobal reported net income of $18.3 million and earnings per diluted share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.66. This represents an increase of 46% over net income of $12.5 million and an increase of 47% over earnings per diluted share of $0.45 for the same period in 2007. Non-GAAP net income for the year 2008 was $0.73 per diluted share. Non-GAAP adjustments for the full year 2008 consisted of the exclusion of $1.8 million in amortization expense for acquired intangibles related to acquisitions, and $1.2 million in non-cash share-based compensation expenses. Revenue for fiscal year 2008 was a record $493.3 million - 36% higher than fiscal year 2007. The following table illustrates the composition of the Company's revenue for the fiscal year ended December 31, 2008 and 2007, respectively: [TABLE OMITTED] The Company estimates its current backlog, $326 million as of December 31, 2008, is approximately 13% higher than the $289 million reported for the same prior year period. ENGlobal benefited from a decrease in selling, general and administrative ("SG&A") expenses during the year. Overall SG&A expenses decreased $2.6 million, or 7.5%, from $34.8 million in 2007 to $32.2 million for the twelve months ended December 31, 2008. As a percentage of revenue, SG&A decreased from 9.6% in 2007 to 6.5% in 2008. SG&A finished the year relatively in line with the Company's targeted baseline of $7.5 million per quarter and $30 million for the year ended December 31, 2008. Due to a general slowing in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying collections, the Company's days of sales outstanding increased to 64 days at December 31, 2008, from 61 days at December 31, 2007. Bad debt expense was approximately .03% and .08% of revenue for the years ended December 31, 2008 and 2007, respectively. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , net of current portion, decreased 20%, or $5.1 million, from $23.6 million at December 31, 2007 to $29.3 million at December 31, 2008. As a percentage of stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. , long-term debt decreased to 31% from 53% at these dates. The decrease in long-term debt primarily relates to timing on final bi-weekly payroll payments. Cash on hand at December 31, 2008 totaled $1.0 million and availability under the Company's credit facility totaled $27.1 million resulting in total liquidity of $28.1 million. At December 31, 2008, the amount outstanding on the line of credit was $22.5 million compared to $30.1 million at September 30, 2008. Management's Assessment: Commenting on the quarter and year end results, ENGlobal's Chairman and Chief Executive Officer, William A. Coskey, P.E., said, "Our stockholders should be pleased with our record 2008 results, especially given the economic and industry downturn that began late in the year. It's impressive that our net income grew 46% year-over-year - and faster than our 36% revenue growth rate. It's also impressive that all four of our operating groups participated to some degree, as each recorded growth in both revenue and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the full year. "Our business, like most others in the current environment, is facing the headwind head·wind or head wind n. A wind blowing directly against the course of an aircraft or ship. headwind Noun a wind blowing directly against the course of an aircraft or ship of reduced spending by our clients. While about 75% of ENGlobal's new work is currently coming from sources not tied to large capital projects, our 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 thus far in 2009 have trended down from fourth quarter 2008 levels. However, I expect that conditions will improve as the year progresses, and remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the potential positive impact from a number of large project opportunities." ENGlobal's employee count decreased to approximately 2,300 for the quarter ended December 31, 2008. Of this amount, approximately 2,200 employees are billable to clients. ENGlobal averaged 221,000 billable hours per two-week period during the fourth quarter 2008, a 14% increase, when compared to 193,000 billable hours in the same period in 2007. The fourth quarter 2008 average represents an 8% decrease over 239,000 billable hours in the third quarter 2008. The Company's overall utilization percentage, inclusive of inclusive of prep. Taking into consideration or account; including. overhead personnel, was approximately 90% for the fourth quarter 2008, compared with approximately 91% for the comparable period of 2007. ENGlobal has calculated its overall utilization percentage at approximately 90% since 2004. The Company will host a conference call to discuss its quarterly results at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (10:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT ). To participate in the conference call, please dial (877) 407-8031 (Domestic) or (201) 689-8031 (International) approximately 10 minutes before the scheduled start time and request the "ENGlobal Fourth Quarter and Fiscal Year 2008 Earnings Conference Call." If you are unable to join the call, a replay will be available approximately three hours after the conclusion of the call until Monday, March 30, 2009. The replay can be accessed by dialing (877) 660-6853 (Domestic) or (201) 612-7415 (International), Account #286, Conference ID #311616. The call will be webcast live at www.englobal.com in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section, and an audio archive will be available on the Company's website shortly after the call concludes. The Company's Annual Report on 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, 2008 will be filed with the Securities and Exchange Commission on March 16, 2009 reflecting these results. About ENGlobal ENGlobal provides engineering, construction, automation, land and regulatory services principally to the energy sector 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. The Company has over 2,300 employees in 20 offices and occupies about 500,000 square feet of office and fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. space. ENGlobal has been named one of the fastest growing engineering firms in the United States and Canada by ZweigWhite in each of the last five years. Further information about the Company and its businesses 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 The statements above regarding the Company's expectations regarding fourth quarter financial results 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 including, but not limited to: (1) our ability to respond appropriately to the current worldwide economic situation; (2) our ability to achieve its business strategy while effectively managing costs and expenses; (3) our ability to collect accounts receivable in a timely manner; (4) our ability to accurately estimate costs and fees on fixed-price contracts; (5) the effect of changes in laws and regulations with which the Company must comply and the associated costs of compliance with such laws and regulations, either currently or in the future, as applicable; (6) the effect of increases and decreases in the price of oil; (7) the effect of changes in accounting policies and practices as may be adopted by regulatory agencies, as well as by the FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ; (8) the effect on our competitive position within its market area in view of, among other things, the increasing consolidation with its services industries; and (8) our ability to increase or renew our line of credit. 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. In addition, reference is hereby made to cautionary statements set forth in the Company's most recent reports on Form 10-K and 10-Q, and other SEC filings. Also, the information contained in this press release is subject to the risk factors identified in the Company's most recent Form 10-K. This press release includes certain non-generally accepted accounting principle ("non-GAAP") financial measures. The accompanying information provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). The Company's non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, cash flow from operating activities or any other GAAP measure of liquidity or financial performance. Click here to join our email list: http://www.b2i.us/irpass.asp?BzID=702&to=ea&s=0. [TABLE OMITTED] |
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