EXHIBIT 99.1
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NEWS RELEASE
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FOR IMMEDIATE RELEASE
ENGlobal Corporation
CONTACT: Natalie S. Hairston
(281) 878-1000
ir@ENGlobal.com
ENGLOBAL CORPORATION ANNOUNCES RECORD QUARTERLY RESULTS
HOUSTON, TX, AUGUST 3, 2005 - ENGlobal Corporation (AMEX: ENG), a leading
provider of engineering services, today reported net income of $0.06 per share
for the three months ended June 30, 2005, compared to $0.02 for the same period
in 2004. Revenue for the quarter totaled $59.4 million, an increase of
approximately $25.1 million, or 73%, compared to the second quarter of 2004. The
results for both revenue and net income represent new quarterly records for the
Company. For the six months ended June 30, 2005, ENGlobal reported its
cumulative net income at $0.10 per share, compared to $0.04 per share for the
same period in 2004.
Financial highlights for the second quarter of 2005 include the following:
- -- Net income increased 261% from the second quarter of 2004 to $1.5 million and
increased 174% to $2.4 million for the six months ended June 30, 2005.
- -- Revenue increased 73% from the second quarter of 2004 to $59.4 million and
increased 59% to $104 million for the six months ended June 30, 2005.
The Company believes the following factors contributed to its results:
1. The Company has realized significant revenue growth from the comparable
2004 periods. This growth has primarily been generated internally, as many
of the Company's operations have experienced increased activity in their
respective markets and geographical locations.
2. ENGlobal's operating income doubled for the current quarter compared to the
same period in 2004 - from 2.2% to 4.4% of revenue - due in part to a
decrease in selling, general and administrative expenses as a percentage of
revenue from 9.8% to 8.1%. The Company also reported fractional improvement
in its consolidated gross profit margin for the current quarter when
compared to the second quarter of 2004. However, due to frequent changes in
the margin that the Company receives on its lower margin procurement work,
the Company's consolidated gross profit margin varies from quarter to
quarter.
3. The Company's engineering segment continued to benefit from increasing
revenues generated primarily by its downstream clients and, to a lesser
extent, by its upstream and midstream clients. This segment accounted for
over 90% of ENGlobal's total revenue reported in the second quarter of
2005.
~ more ~
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654 N. Sam Houston Parkway E. o Suite 400 o Houston, Texas 77060
www.ENGlobal.com
ENGlobal Corporation Press Release
August 3, 2005
Page 2
4. ENGlobal Systems, Inc. continued its return to profitability, resulting
from the combination of increased revenues and improved profit margins.
This segment has reported improving profits in each of the first two
quarters of 2005, as compared to losses for the same periods of 2004.
The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005
will be filed with the Securities and Exchange Commission on or about August 10,
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
subsidiaries, now employs over 1,500 employees in 13 offices and occupies over
300,000 square feet of office and manufacturing space. In 2005 and 2004, the
Company was named the #1 fastest growing engineering firm in the United States
by ZweigWhite and was ranked #2 in 2003. Further information about the Company
and its subsidiaries is available at www.ENGlobal.com.
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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. Among other matters, the Company may not be
able to sustain the growth or the profitability that it has experienced in 2005.
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. In addition,
the information contained in this press release is subject to the risk factors
identified in the Company's most recent Form 10-K.
ENGlobal Corporation Press Release
August 3, 2005
Page 3
FINANCIAL HIGHLIGHTS
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(in thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
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2005 2004 2005 2004
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Income Statement Data:
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Revenue $ 59,419 $ 34,283 $ 104,049 $ 65,275
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Gross profit 7,450 4,139 13,297 8,300
Selling, general and administrative expense 4,835 3,371 9,052 6,680
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Operating income $ 2,615 $ 768 $ 4,245 $ 1,620
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Net income $ 1,520 $ 421 $ 2,441 $ 892
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Net income per share (basic and diluted) $ 0.06 $ 0.02 $ 0.10 $ 0.04
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Weighted average number of shares
outstanding (basic) 23,492,842 24,035,936 23,508,496 24,035,117
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Weighted average number of shares
outstanding (diluted) 24,156,525 24,347,589 24,155,176 24,346,990
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At June 30, 2005 At Dec. 31, 2004
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Balance Sheet Data:
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Working capital $13,539 $14,503
Property and equipment, net 5,662 5,262
Total assets 59,693 57,261
Long-term debt, net of current portion 12,855 15,585
Stockholders' equity $22,603 $20,051
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