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NEWS RELEASE
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FOR IMMEDIATE RELEASE
ENGlobal Corporation (SM) CONTACT: Natalie S. Hairston
(281) 821-3200
ENGLOBAL CORPORATION ANNOUNCES YEAR-END RESULTS
HOUSTON, March 30, 2005 - ENGlobal Corporation (AMEX: ENG), a leading provider
of engineering services, today reported record revenue and net income for its
sixth consecutive year. For the fiscal year ended December 31, 2004, net income
increased to $2.4 million, or 10 cents per basic share, compared to net income
of $2.2 million, or 9 cents per basic share, for the prior year. During 2004,
the Company increased its total revenue 20.3% to $148.9 million in 2004 from
$123.7 million in 2003.
Revenue, gross profit and selling, general and administrative expenses ("SG&A")
recognized from acquisitions during the first 12 months of their operation
within ENGlobal is categorized as "Acquisition" activity. Revenue from acquired
companies accounted for 7.0% of total revenue, increasing 447% to $10.4 million
in revenue in 2004 from $1.9 million in revenue in 2003. The Company generated
gross profits from acquisitions of $1.7 million in 2004, an increase of 689.2%
from 2003.
Total SG&A expenses increased 13.4% to $14.1 million in 2004 from $12.4 million
in 2003. SG&A expenses not directly related to acquisitions remained
approximately level from 2003 and 2004, and decreased as a percentage of total
revenue. The change in working capital was also favorable, increasing to $14.5
million on December 31, 2004, as compared to $6.5 million on December 31, 2003.
The Company also reported that overall gross profit increased to $18.6 million
in 2004 from $17 million in 2003. Gross profit from engineering labor increased
8.1% to $14.8 million in 2004 from $13.7 million in 2003. As one measure of the
Company's internal growth, labor-based revenue, without the addition of revenue
from acquisitions, totaled $85.9 million, $77.5 million and $69.2 million in
2004, 2003 and 2002, respectively.
The Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2004 will be filed with the Securities and Exchange Commission on or before
March 31, 2005 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
~ more ~
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600 Century Plaza Drive o Suite 140 o Houston, Texas 77073
www.ENGlobal.com
ENGlobal Corporation Press Release
March 30, 2005
Page 2
subsidiaries, now employs over 1,400 employees in 12 offices and occupies over
300,000 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.
FINANCIAL HIGHLIGHTS
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(in thousands, except per share data)
Years Ended December 31
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2004 2003
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Revenue $148,888 $123,719
Net Income 2,364 2,157
Working Capital $ 14,503 $ 6,505
Property and Equipment, net 5,262 4,302
Total Assets 57,261 42,530
Long-term Debt, net of current portion 15,585 7,506
Long-term Capital Leases, net of current portion 0 12
Stockholders' Equity $ 20,051 $ 18,175
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Basic and diluted earnings per share:
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Net income per share (basic and diluted) .10 .09
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Weighted average number of shares
outstanding (basic) 23,455 23,301
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Weighted average number of shares
outstanding (diluted) 23,786 23,734
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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,
2004, 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. 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, 2004.
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