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Third Quarter 2009 Highlights Compared to Third Quarter 2008:
-- Breakeven earnings per diluted share, a decrease from $0.13
-- Revenue of $87.3 million, a decrease of 29%, with $7.6 million of the decrease due to a reduced level of pass-through procurement revenue
-- Consolidated gross profit margin as a percentage of revenue of 8.2%, a decrease from 11.1%
-- Continued strong liquidity, with positive cash flow from operations of $4.5 million and $18.5 million for the three and nine months ended September 30, 2009, respectively
-- 65% reduction of total long-term debt to $11.8 million from $34.0 million
Commenting on the results, ENGlobal’s Chairman and Chief Executive Officer, William A. Coskey, P.E., said, "Our breakeven financial results demonstrate the reality of the current market and the stabilization of industry trends. ENGlobal continues to benefit from its sustainable, although lower margin, sources of revenue, while the majority of our higher margin and large capital work has declined significantly. In the last two quarters, these sustainable sources of revenue have produced sufficient margin to approximately offset our fixed overhead expenses. This has allowed ENGlobal to keep its core business intact, thus positioning ourselves for recovery once market conditions improve.”
“Recently, we have been encouraged by improving signs within the industry, such as upward trends in our bi-weekly billable hours and utilization percentages, and we continue to pursue opportunities that could prove significant for our business. In summary, the current business environment remains challenging, although prospects for new business seem to be improving. We would like to thank our stockholders for their patience during this period.”
ENGlobal was recognized as the fastest growing architecture/ engineering firm by Zweig White, an architecture/engineering/ construction (A/E/C) industry management consulting firm in each of the last six years.
ENGlobal was recognized as one of the top engineering companies in the United States by Engineering News-Record ("ENR") in the publication's annual "Top 500 Design Firms" survey. Overall, ENGlobal placed 31 out of 500 firms having the highest revenue gained from design services performed during 2008.
Industry Overview:
EIA forecast world marketed energy consumption to increase by 71% from 2003 to 2030 and projected US energy consumption in 2030 to be 131.2 quadrillion btu. Energy consumption will increase more rapidly than energy production. (Source: Oil and Gas Journal, Feb. 19, 2007)
"Investments in refining capacity have been occurring on an ongoing basis, and the higher margins seen in 2004 and in 2005 prior to the impact of Hurricanes Katrina and Rita are clearly stimulating more refining investment.... The timing of the added refinery capacity in the United States and overseas could mean that refining margins may remain strong through 2010 if the demand trend continues unabated. The market for oil products will be supported additionally by an increasing push to lower sulfur levels in all
fuels worldwide." (Source: T. O'Connor, ICF Consulting, to House Government Reform Subcommittee on Energy and Resources) |
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Corporate Overview:
ENGlobal provides engineering and related project services principally to the energy industry throughout the United States and internationally. The Company, with its subsidiaries, now employs approximately 2,200 employees in 19 offices and occupies over 500,000 square feet of office and manufacturing space.
Engineering
ENGlobal’s engineering segment offers development, management and turnkey execution of engineered projects. ENGlobal also provides in-plant staffing, inspection, construction management and other field services throughout the United States. Among various subsidiaries, the engineering segment provides engineering and field services to the upstream, midstream and downstream energy industries and inspection services at industrial sites throughout the United States.
Construction
ENGlobal’s construction group provides construction management personnel and services in the areas of mechanical integrity, vendor and turnaround surveillance, field support, construction, inspection, and high-tech maintenance. Assignments include instrument technicians in client facilities, all of whom are qualified in ASNT, API and NACE inspection for on-stream, turnaround and shop surveillance services. ENGlobal provides support and uality assurance for maintenance, mechanical integrity and capital projects.
Automation
ENGlobal’s automation segment designs, assembles, programs, installs, integrates and services process control, analytical and heat tracing systems for specific applications in the energy and processing related industries. Among various divisions, the automation segment provides (i) control and instrumentation system design, engineering, fabrication, assembly and testing in-house, (ii) design, programming and fabrication of online process analyzer systems, and (iii) products and services supporting process heat tracing
systems. Products and services supporting the environmental technology fields are also offered by this group.
Land & Regulatory
ENGlobal’s land management group provides right-of-way acquisition and permitting, environmental compliance, governmental regulatory and related services to the power, energy, transportation, telecommunications and overnmental sectors.
The Company's stock is traded on The NASDAQ Global Market under the ticker symbol ENG. |
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| As of Feb 08, 2010 6:15 PM ET |
| Nasdaq |
ENG |
$2.90 |
 |
-0.03 |
-1.02% |
|
| Open: |
2.94 |
Prev Close: |
2.93 |
| Day High: |
2.97 |
Day Low: |
2.90 |
| Year High: |
6.47 |
Year Low: |
2.41 |
| Volume: |
40,868 |
| Market Cap: |
$79,480,761 |
| Outstanding: |
27,407,159 |
| Outstanding as of: |
Sep 30, 2009 |
| Quote delayed 20 minutes |
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