ENG - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to the ENG's 2022 First Quarter Financial Results Conference Call. At the request of ENG, today's call is being recorded, and will be available for replay on the Investor Relations section of the company's corporate website www.englobal.com.

You may access the replay by dialing toll free 877-481-4010 domestically or 919-882-2331 internationally, and referencing conference ID 44765. This replay will be available shortly after the completion of this event through 9:00 AM Eastern on May the 5. I would like to inform all parties that your lines have now been placed in a listen-only mode until the question-and-answer segment of the call begins. point, Rick like with Eisenberg, this call turn Eisenberg At to over Media Instructions] I to would the Communications. [Operator Relations Director go please ahead. Rick,

Rick Eisenberg

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

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

Spriggs, of company future provisions Litigation During about achieved statements such section forward-looking statements. this results by ENG's under Westerlind, Please forward differences of looking of could or materially Securities will XX-K. other the ENG’s appears XXXX. company may President. Darren the may Any the the such today's of representatives Act actual forward-looking make Harbor made the factors CFO; differ that statements from Private on and results cause Factors Reform discussion conference statements. today in are Safe Presenting A Roger call, Risk Company's in operating presentation the note call future that events be

Roger, available Darren? CEO, Darren, Darren ENG’s Spriggs. and Hess, And presentations, it to turn questions. the I'll for Following over Mark be will and now,

Darren Spriggs

you, to welcome those like for appreciation today. extend the I Rick. call and on would my Thank also

For costs. cost and by in direct we in $X direct operating operating to the which compared the $XXX,XXX year. in to revenue million reported last approximately $X.X operating underutilized related is quarter, lower $XXX,XXX the staff, Included million is period same

has proposal year which maintain increase workforce. last included Also the volume costs, costs increased same essential $XXX,XXX necessary our proposals. Our in current level of to to is staffing in direct over due is of period significantly the

to which more of client customers, investment that T&E, accessible office increase of legal interaction suffered The of the and leaders of is restrictions. the since success and panic. with is beginning relationships year, compared driven in which Our increase our our our period personal has in the non-recurring with our the lifting same by business travel related remaining are clients The $XXX,XXX last SG&A increased primarily $XX,XXX. now fees to the an included

not income income Our calculate tax, like income do tax use net of states that consists expense to tax state primarily in Texas.

offset per the against tax Our $X.XX $X.X net a $X.XX year. is compared of or to per for negative a or last net year it. federal million the loss profit expense an allowance income share valuation of adjustment We recorded the by recorded $XX,XXX share to

XXXX $XX.X Our by the of end to as backlog end is $XX.X last million. has second backlog of the The compared of backlog year. million $X.X increased million quarter consecutive of to was $XXX,XXX the our This increased. quarter third at

of quarter, off. pay year we $XX.X year, end last investments million. an and indication is the made was the it million, $XX.X that this are starting This last of in As it increase was backlog to

our hard a be office to later development in call. to website, see reminder, to our signs clients last industry. completed starting business a our corporate closer As base, rebranding our with will in to personnel on key you the redesigned we're elaborate relocated more the year, positive campaign, we client relationships Roger strong

of million. $X.X of was over year's of the $XX.X million million of balance the a decrease cash Our end last as $XX.X balance quarter,

but near-term $X.X Our revolving of loss with million refund capital $X change from along credit is retention to the related growth. capital tax and believe now working million We to sources decreased company's the of this you, our $X.X in capital $XX.X working to fund facility, availability be operations internally will Roger. million. and under credit for The primarily quarter, the million. ENGlobal's expected hand, And current other cash employee funds, included generated to on $XX.X working million an it sufficient

Roger Westerlind

everybody. morning, Darren. Thanks Good

have the off. pay before spoken indicated, about which Darren to As strategy, we start

things built the been -- in done is think another April we in to announced quarter, pay the first that the ago, the few a exceeded to have in we bookings all we weeks built highlights which is few a awarded off. US. A have up airplane as bookings we sustainable great starting actually be plant Our indication fuel

to phase will midyear first over We work then and EPC we expect the completed turn start that the we phase. and

As announced, a Texas. group construction in also West opened we

As a I our will to have a also bit come bookings back later, of government little in we number group.

rate, then we reiterate pay done, So which to have off. believe the to things again we

great new office. have a We

increased investing fabrication have We by Anderson. in capabilities

tool system, managing which business. relation our have implemented We is great to a customer a

We have new a construction division.

working low-cost work we center engineering Brazil, the key execute with high-value, continue a We to bidding. are in which is

company, our which successful. rebranded have is think very we We

we et engaged on marketing the months. have XX a working now last the for on clients big account have in cetera. campaign entertained We LinkedIn, a social key for We're strategy media,

We over a lot of across a months. which new place has have a now been management number six in team, at look We of opportunities for industries.

have Our place works alliance in working discussed strategies we partners broken we're And the segment in is down place have as for in. before, nicely. we and

standardized, example forward. Northern a as So the -- be our will think build few fuel we is going this US. out weeks very, release This another specific signed airplane to a for a of sustainable We modulized, we're client a press ago, our highlights, few second very is strategy up good project. in

that XXX for projects, expanding of of We we to million. have also in these a excess expect ENGlobal and value on group. We're the be number

it have and So from projects. be will the of renewables. here And a energy number we labeled side, energy in on

in off. finally over our high for million and oil a SCADA engineering Obviously, one we we two €XXX as Government opportunities, that, automation system, Thank our to OxyConaco a won XXX as automation in quotes significant spread we as amount where and actively systems, million with you. from the in great For bidding in XXX XTLPXX, gas said, we Oxy et that the expect Chevron, of awards, Over for million here the for Midstream, for services, price, have outstanding over one pay we the In contracts work petrochemical, are our cetera. again, business have [ph, well. I for illustrates a In and well. DoD. to Exxon oil, almost have identified four In Jenny. project our we group, earlier number group, Western have hard starts

Operator

Ladies floor you. questions [Operator Instructions] is for open and now Thank gentlemen, the

Your first question Campbell. your coming from Jeffrey your is Please pose announce question. and affiliation

Jeffrey Campbell

begins renewable the think you do Hi. went project obviously one first of FID from I Jeff huge scope the confidence awaiting Alliance into question fuel, Campbell a first expanded projects, that ENGlobal. expanding renewable scope Partners. did, This is the Global is My vote you what the of an diesel diesel? versus potentially factors in observation, this jet wondering was in with

Mark Hess

the think, diesel expertise able the unit. hydrogen unit both I as to were Well, we as which demonstrate is well RDU, our renewable on

so And X,XXX include RDU. hydrogen standard and have would investing the day developing been barrel per both plant and which plant, we on complete a the

to So had demonstrate that the that we to expertise, the to certain client had extent. that able and we were pre-designed we a package

And think, brought them onboard. so I that's, what

we -- to Haldor recommended technology were were them partner, our by Topsoe. they Additionally,

And so from I confidence think partner. that's a great vote our of technology

Jeffrey Campbell

settled based the spot? a Is the on and that's some as sweet of, this arrived that, bids? it out seeing barrel the Is you're Is feedstock on form Mark, factor at? standard? some, it up following is technological that customer on sort why the Just color volume there? in maybe the of, that discussions kind various how bid, X,XXX your you even on And

Mark Hess

Well, has think in has answer -- bridge the Haldor a is I to most what been standard X,XXX the that's product. barrel that requested marketplace. hydrogen a day

standard unit built kind just, to of, we – standard on so process. their And

Jeffrey Campbell

kind that to of seeing Yes, interesting And that could if you makes how to if there in? in sense. lot it Roger a us the number going bid I was growth give a much stuff missed of, out general on -- of I Permian just Basin. was on some comments as like making allusion being is lot it. was you're on, a sounded wondering, projects the,

So if there, be us a you sense that bids would helpful. collectively, the of of size out give the could

Mark Hess

group. There great will renewables, have oil talked I really the one now other just we I and there, diesel renewable we airplane enough a I think, never I truly out to fuel, change is I to then close have sustainable in we But question think, and and There enough in a we are enough in see which our the it's XXX which have. example. same big per what And funnel happen. the is we is, really approach, think in in have probably the But same which we government we same think the right? one about where the think Now se. way. need the is across gas, we

will to will. I just succeed. continue doesn't show in it the figures know think convinced just that I I'm few. we I to think, gave We trust play. need and yet. I And is a example It the

Jeffrey Campbell

In went back standpoint past, the it touched automation I from of and solutions. on talked -- it itself. when we've automation touch press seemed reread the initiatives on Permian release, Okay. expansion to ENG within about the And customer

business So just color on improvement. where could little give you've if a within create automation I was to wondering you targeted your

Mark Hess

The continue ABB content. ABB, I which picked ENG in is content, to first was up the doing thing we need use which phrase,

can the with buildings you're else content, we engineer, control take et system, where maximum So going it fabricate, global airplane an if to and do. sustainable everything but as then populate we fuel you we cetera, also meaning example, and

these, for time external if right? process. use in that, is is to that funnel we're from Conoco if So that on point like here automation, if on a view. The PXX And if there sale. Houston, a we in the company your Jeffrey. the we and And a say, even a so further, drive, MSAs safety should you're you surrounded one of and resigned, see going big have signed side, or have, obviously, to of number, we for with to of answers the are I sale part which internal cost of number stick build we are if example, automation, you part of both by any question, the -- this demand, for we we So

Jeffrey Campbell

mentioned And some last the helpful. it I that's release construction on-site my is, was seems be Yeah, press Okay. momentum. initiative getting the that guess in to question

thought, just was that I'd adding I the prior businesses, the So is of effort? of this sort book business or to ENG what lacking ask, to what sort

Roger Westerlind

they and smaller project one stop maybe are the What $X millions, want talking is few clients million. the a for shop EPC a

what and that that to one-stop for hard on to a have in margins. subcontract, is It's margins to scope simply job let's smaller So half do little request the obviously a shop. our listen and we here decided offer clients say,

we time before that was long the are following what So exited ago reserve. the a by they gas Aecon oil developed is script and

stand to is for full on is was doing that one sustainable And – we just Aecon smaller that do the plan That the fuel. So we're which with done is with is for the that. is perform about Doug project. airplane going talked deliver of self to has to Fieldgate, EPC like legs what nothing

Jeffrey Campbell

I that congratulations hard as labor No, year and clarity. work this of fruits Okay. Well, goes Good. to appreciate that the on again, seeing year the on. last we're all looking forward all

Roger Westerlind

you. you Thank Thank so much.

Operator

Thank you.

Your from you. Nostas of Nostas next over Victor is the Victor, to question coming Group.

Victor Nostas

just how Yes. Hi. get investment to take know, to wanted will the do long decision? it I final you think

Roger Westerlind

mean, by that user is of to the us I plan, is the goal end which the shared July. close with by end

but on that, it's appropriate, let's more, that pieces. As moving But we it is there of will I'm you it's can't it's lot put realize so sure – When advanced, disclose schedule. we way. far, well a

Victor Nostas

Thank you.

Roger Westerlind

welcome. You’re

Operator

[Operator me Instructions] to you no queue. hand to questions Would Okay. further for the like closing? back There in appears be

Mark Hess

Yes, Jenny, please. Yes.

Operator

back hand Rick to over I'll your final remarks. for

Rick Eisenberg

no further operator. have remarks, I

we I call. think the end can

Operator

today's call. thank you conclude so conference ladies gentlemen. and Well, much, Perfect. This Okay. does

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

Englobal (ENGC) 8 May 222022 Q1 Earnings call transcript