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NEWS RELEASE
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FOR IMMEDIATE RELEASE
ENGlobal Corporation
CONTACT: Natalie S. Hairston
(281) 821-3200
ENGLOBAL CORPORATION ANNOUNCES IMPROVED THIRD QUARTER RESULTS
AND RECORD BACKLOG
HOUSTON, TX, NOVEMBER 9, 2004 - ENGlobal Corporation (AMEX: ENG), 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 September 30, 2004. These
results reflect increases when compared to the prior year quarter ended
September 30, 2003, which produced net income of $0.02 per share on revenues of
$35.4 million. Results for the nine months ended September 30, 2004 also compare
favorably 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 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, to $6.8 million in July, $10.3
million in August and a record $18 million for September." Mr. Burrow continued,
"This improved business environment has resulted in a record backlog for
ENGlobal of approximately $82 million, with billable hours 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 for the quarter ended September 30,
2004 will be filed with the Securities and Exchange Commission on or about
November 11, 2004 reflecting these results.
About ENGlobal Corporation
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ENGlobal Corporation provides engineering services and systems principally to
the petroleum refining, petrochemical, pipeline, production, and process
industries throughout the United States and internationally. ENGlobal's
multi-disciplinary engineering services group develops projects from the initial
planning stage through detailed design, procurement, and construction
management. The systems group develops, manufactures, installs, and services
control and instrumentation 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.
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600 Century Plaza Drive o Suite 140 o Houston, Texas 77073
www.ENGlobal.com
ENGlobal Corporation Press Release
November 9, 2004
Page 2
Safe Harbor for Forward-Looking Statements
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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,
2003, Form 10-Q's for the quarters ended September 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 December 31, 2003.
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
Quarter Ended Nine Months Ended
September 30, September 30,
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2004 2003* 2004 2003*
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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)
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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)
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Net income/(loss) $ 755 $ 382 $ 1,647 $ 1,424
Preferred stock dividends -- 27 -- 131
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Earnings available to common
stockholders $ 755 $ 355 $ 1,647 $ 1,293
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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
Quarter Ended Nine Months Ended
September 30, September 30,
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2004 2003* 2004 2003*
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Other Operational Information
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Revenues by business segment:
Engineering $ 32,796 $ 32,376 $ 92,730 $ 75,948
Systems 4,476 3,059 9,817 11,765
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Total 37,272 35,435 102,547 87,713
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Selected Balance Sheet Data As of
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September 30, 2004 December 31, 2003
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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
* Income statement data for the quarter and nine months ended September 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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