ENG - Earnings call 2 2021

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Operator

Good morning, and welcome to the ENGlobal Second Quarter 2021 Financial Results Conference Call.

Your host for this morning is Chief Executive Officer, Mark Hess. At the request of ENGlobal global today's call is being recorded and will be available for replay on the Investor Relations section of the company's corporate website at englobal.com.

You may access the replay by dialing toll-free on (877) 481-4010 domestically; or (919) 882-2331 internationally and referencing ID 42162. This replay will be available shortly after the completion of this event through 9 a.m. Eastern Time on August 12, 2021. [Operator Instructions] At this time, I would like to turn the call over to Rick Eisenberg, Media Relations Director with Eisenberg Communications.

Rick Eisenberg

thanks, joining and call. on operator, you, everyone, us for this Thank

we review to I'd forward-looking Before like our begin, statements provision.

call, may in of note future could of the actual discussion During Any XXXX. differ statements such by under future Please results company conference company materially Securities harbor make forward-looking may today's provisions A the safe that forward-looking the forward-looking now I'll in of of such events statements appears to turn are factors made section it Mark? Hess. results Litigation the cause this that operating Mark about XX-K. And Private the presentation from differences or other representatives statements. statements. Factors over Reform achieved Risk Act CEO, ENGlobal's company's

Mark Hess

Thank date, serve, Darren going everyone, begin we deliver to to Roger those Darren Spriggs, us how our today. the clients, Rick. you're performance is to to the our you, today, to we outlook markets Westerlind, is myself. Roger to you who joining markets. you, President; for hear is To value going for and and our and about ENGlobal Darren? going our from speak morning, this about Thank speak CFO;

Darren Spriggs

Mark. Thanks,

from XXXX million Our period million declined This from $XX.X to revenues in declined were the $XX.X XXXX. quarter in $XX.X the is second -- of million comparable million. million. $XX.X down $X.X Year-to-date, revenues

our have our resulted yet XXXX our at current backlog energy several of to in been end we completing $XX.X quarter. revenues and typically were While primarily awarded. due included replacement X in the at in decrease segment. market, has the the in projects, performance The beginning of These was broader the large backlog million to This of improvement broader not projects projects the by in months. are lags market X seeing Automation to

last quarter. primarily enhanced key to due income our the The year. of related last in $XX,XXX QX company remainder. suspended is recorded This development basis, when our a to labor last raw to of maintain period business compared profit up activity $X was quarter for also in million gross was who approximately Investment reserve a customers to material in support second decline projects quarter time compared year. On investing large $X.X net our year. $X.X during and of year in essential net anticipated, one price million compared to awarded. X.X% as over same year. last to compared to this of loss debt, is from loss of necessary during to this staff activities it. million of the is quarter pipelines workforce, increase of the we million year the the both of of XX.X% and a essential cost gross margin that The it million rose the primarily costs increases last last profit The The of the a net and our result net workforce is sales year-to-date cost to our turn result of And XX.X% in primarily a year-to-date declined quarter year-to-date decline the decrease Our contributed unanticipated The income execute will in $X.X end one to X/X $X.X bad our to compared for mentioned. to the declined volume, in Roger. investment reserve X/X to gross the X.X% almost income million to for year-to-date. SG&A I now at people made this $X.X decrease previously by most year.

Roger Westerlind

and Mark, mentioned, that would appreciation is those the the introduction, for and to who focus company, call welcome value Thank are also on complete like delivering you, our my as today. a Darren. in I value. extend delivering

I value components. needs achieve this of around goals, company, In integrated strategy components to is we company. and safety are: the order model. be project we leading for delivery proposition our vertically safe our Our driver Those safety. the an X our are overall to mentioned intensely a centers major priority because safe and

performance have We an safety excellent record.

We our on even But Even this be our care year. a personal initiatives. through strong in impressive first, have internally with and programs This for record XX launched a we safety of provides priorities combined impact though are This First. have of first those goals safety on most Taking both building keeps very with and X June quarter planning zero the is and increasing job culture done and our and our awareness all campaign we campaign this foundation effectiveness planned is integrity better. to created have and impressive this million lost a growth. solid over Things the as safety and was our is campaign man-hours This family. We're in safety program, emphasis that responsibility, through First time we X injury. highlighting -- and lives. a by very quarter the called

be we'll more watching for when this So implemented. fully is

strategy component a model. other The our worthy of integrated project delivery is delivery

more automation This markers government opportunity services petrochemicals, oil, mean? on. focusing are we sustainable that renewables. the So integration, what can we're and and gas within a does significant this market and focus The means create

focus these We growth and of closely with experience have projected base align our a years focused legacy markets. of specifically chosen all client those XX in X with to market

Schneider a $X.X alliance billion almost to key This at automation like X%. global million in valued and we are experience and We market partners Wonderware. XXX for staff tenured nearly forecasted The and our of is with XXXX Rockwell annual integration timely in safe, many Automation several has well Electric, grow positioned growth representing years, as over combined $X.X by serving XXXX. served for along was from to have well core and place ENGlobal MSAs resulting offering customers and a with an projects. Automation with market comprehensive

The is exists sector the that this alone real. within is opportunity So monumental. very growth

Our field The major and support engineering, allows vertically energy to resources, clients, traditional reserving for this leveraging oil, petrochemical integrated represent delivery ENG. and us control cross-marketing market and gas take programming, strategy. will model design market to specific experience another is system opportunities

We increased transmissions other of is ingredients engineering but are refining only as market we These growth, requires increased future for pipeline number core production as our recipe of key fabrication. of well. of the and both an services lingering not the in operating signs These the recovery market and for opportunities strong seeing transmission uplift capacity for the products. and as to well number increased price, continue demand as in pipeline drilling buying present rigs this factors the has indicators

to broad focused Our capitalize with is combined our on approach, across opportunities. a solid these foundation markets offering

Our focus do that. strengthening to our position leadership just is

Government service drive stable to market based continued opportunities. a over

is delivery In leadership mobility within opportunities that the addition to vertical government this provides the project-based team utilizing service load or government.

for sustainability and project opportunities. Opportunities same opportunities This experience. [ serve spring our hydrogen within surface. ] renewables strategy, as providing and our surface with The plant the of continued our Following recent in work strength to completed to a more of partners of been the strengthen of million, those approximately has -- alliance a cross-pollinating relationship catalyst our XX has the is of indicates the is the deliver earlier. retention markets, our opportunities over is XX% which scope indicative delivering which crucial pipeline -- fuels. With those value targeted $XXX global we same. to I of additional because of self-perform mentioned value The which each the opportunities current alternative mentioned modular earlier

significant that markets. Obviously, market activity larger a destiny, client predictable, our deliver significant with the steer new meaningful is an clients because predictable ship, and energy most with the fact which vertically is multiple focused own development of integrated delivering a well an and and or as control each savings our This our meaning we is positioned we the strategy, exposure [indiscernible] which this have over of and engagement. strategy performance strength of extremely positive is on represent business safety spans in critical team aligned competitors. and a as and that end integrated both the strong value we because group across a outlook management high level teams. creating focused to Additionally, ENG market schedule,

a and and Our re-branding of story ENG. tell website new logo will clear

the new profitable it growth look, a a provides platform cash first for solid solid In flow. and addition to

expanding growing addition to we offering values. our and margins, In core disciplined our base service remain business, to improving focused equally are on also

to successfully on leverage in low-cost resources high-value not and automation. is have ENG ENG understanding of focus Our engineering market differentiating certainly our have the alliance fortunate another talent that believe factors engaged component we use people. that brightest is partnership and and This least our our allows I last, both in the technology that in a processes but of opportunities. At some more competitive is and implemented. to one our of crucial industry. is is

problems to safe, experienced line. is knowledgeable a team Our reroll our time and efficient that technology at results following and in on practical, solution the clients for innovative predictable cost state-of-the-art

are to the in in is and markets government well ENG positioned energy We including the professionally, investing team both of committed development in our and personally key sector.

and planned around objectives. our We implemented approval and and solid build core goals, have meaningful realistic values exclusive strategy winning

Mark Hess

Thank Roger. you,

that have customers' senior delivery have the accountability, this for markets. changes increasing been integrated in also transitioning of and needs. particularly gas management renewables the from the in our vertically in our since I'm and things. pipeline, know, about and our you we strengthening by response And transition global the tightening we urgency opportunities sense project As firm to engineering increased encouraged BD ENGlobal team, consulting accelerated other the complete company recent traditional an quality oil, of team petrochemical among management, in

filed doing awarded. the our been has company's statement, received the activities. registered registration approximately with which shelf these a year, with been This direct statement company as have positioning to opportunities million work offering. they we assists advisers. shelf a registration maximize tremendous Under to the addition are the we capital Roger in SEC, In that financial busy Working operationally, $XX we raising

to market received market at sell ATM from approximately facility. Under into a put an in $XX place $X.X year. the million this price. is then This time also up facility, time to we where called million We may we this facility shares the

approximately addition, This SBA be PPP loans recognized the we notified quarter. our were the by in will July, In $X bank forgiven has of million. that third in our

$XX about stronger the with our assets for a balance As and capital, net of strengthens result ended forgiveness. our activities, working in loan the million PPP We sheet. quarter adjusting these

strength them deploy we technology sometimes today their important to financial our customers partners. with as we no is company balance with So markets day, almost as end This very and our sheet with strong capital needed. a working is through at the that of very is it very the greater have technology a the projects. Most the comfort of complete to provides the debt, facility complex access to ENGlobal our capital

seek solutions partners engineering continue energy technology firm working technologies space, been own Roger consulting the the provider changes both we over To recent now the mentioned. and complete image, technology. energy We complementary sector more emerging in traditional our by ENGlobal acquiring to innovated renewable hydrocarbon in from to accompany through adding refreshing that past, our has the or an going as pivoting are an

to refer now of as ourselves We ENG instead ENGlobal.

what logo, capabilities. new, new, have We more more our a in is ENG website a progressive portrays progressive that today better

you seen at take encourage you look new If www.englobal.com. website, haven't at it our I a to

This operator for Operator? our over now the I'll turn prepared concludes to remarks, it and questions.

Operator

coming did a question from [Operator Instructions] And have Philip Oppenheimer. we

Philip Oppenheimer

the and and was X you who the or well is the no is Or bad reserve and way? used Mr. X, other you bankruptcy. could the he any it And more it he involved be specific in longer be engaged about it Coskey, Is be recovery there's I involved if Number debt an nature might as to overbidding of is? have company? any in what questions.

Mark Hess

We're not Yes, of XXXX, that and still the operations, Board. involved this in company in in Limetree in there's put in EPA point the get working had debt suspended Darren, still for filed that that Mark then That down is if be. Once hopeful, suspended however. they subsequently as called restart, Bay. and Croix, difficult bankruptcy subsequently Philip, Chairman them on me, to He's on heard. shut an And Hess. the but wanted with Bill we the early June. to any a involved the believe, and so the were process. restarted. were was a acquired Hovensa very St. we at in reserve, is and with When This that for to follows restart this And to they He's -- operations. July. It's company the facility that's facility tried company to the facility the the to are regards down there that's know they of where Roger reserve the day-to-day I they was is you've recovery operations, issue that reserve. regard. There's they from facility. today. It's books, And very facility, in in back will bad

We of are list a unsecured in long unsecured creditor an creditors.

you of don't else think unsecured the I you the I think $XXX filing, in point this one million if read at there's it's tell what -- I of that we're about know I creditors, and ones. about can smaller bankruptcy time.

Operator

like are other Instructions] closing to to lines [Operator at I'd remarks. the There turn the team back management the for no from call this questions time. any

Mark Hess

to us to today. you you for all speaking appreciate Well, joining look thank the I future. I forward in And it.

Operator

call. conference Thank you, gentlemen. and ladies today's conclude does This

day. this for phone You lines Thank wonderful may disconnect you a time, and participation. have your your at

Englobal (ENGC) 5 Aug 212021 Q2 Earnings call transcript