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ENGlobal Announces 1Q 2021 Financial Results

·9 min read

Investor Conference Call Scheduled Today at 9:00 am Eastern

HOUSTON, TX / ACCESSWIRE / May 6, 2021 / ENGlobal Corporation (NASDAQ:ENG), a leading provider of complete project solutions for renewable and traditional energy, today announced that, for the first quarter of 2021 ended March 27, it achieved net income of $46,000, or $.00 per share, on revenue of $12,449,000, compared to net income of $1,101,000, or $.04 per share, on revenue of $19,260,000 in the first quarter ended March 28, 2020.

"Our company, like most others in the energy industry, has been materially affected by the reaction to the COVID-19 epidemic," said chief executive Mark A. Hess. "We were fortunate that we were able to work through the backlog in place last year when the pandemic started.

"Currently, though, we see strong indications that our top and bottom line performance should improve as the year progresses. First, we are investing heavily in our business development efforts and we expect these efforts to produce renewed business opportunities. Second, thanks to the widespread availability and utilization of COVID-19 vaccines, there has been significant progress made in controlling the spread of the pandemic. This, in turn, is allowing people to go back to in-person work, which will help increase the demand for our clients' products.

"Additionally, we see signs that our market opportunities in green energy sectors such as renewable fuels and solar are continuing to improve. And, we have made further progress in adding to our list of established technology and construction partners, which, of course, makes ENGlobal a more attractive option for prospective clients. As the year progresses, therefore, we expect to have an increased ability to attract high-value contracts."

The company's decrease in quarterly revenue was primarily due to the decline in capital and maintenance spending by its client base as a direct result of the negative economic effects upon the energy industry caused by the COVID-19 pandemic. This trend was compounded by personal interaction restrictions that significantly hampered the company's business development efforts. ENGlobal's decrease in quarterly net income was primarily due to the company's decrease in quarterly revenue, partially offset by a $1.7 million employee retention credit recorded in Q1 2021 with no comparable occurrence in Q1 2020.

"We remain highly confident," he added, "that our strategic shift toward innovative, higher-value, modular engineered process and automation project delivery positions us quite well to achieve steadily improving quarterly results, especially as the market continues to rebound."

The following is a summary of the income statement for the three months ended March 27, 2021 and March 28, 2020:

(amounts in thousands)

Three months ended

March 27, 2021

Three months ended

March 28, 2020

Revenue

$

12,449

$

19,260

Gross Profit

1,004

3,260

Selling, General and Administrative Expenses

2,561

2,133

Operating Income (Loss)

(1,557

)

1,127

Net Income

46

1,101

The following table illustrates the composition of the company's revenue and profitability for its operations for the three months ended March 27, 2021 and March 28, 2020:

Three Months Ended

Three Months Ended

(amounts in thousands)

March 27, 2021

March 28, 2020

Segment

Total Revenue

% of Total Revenue

Gross Profit Margin

Operating Profit Margin

Total Revenue

% of Total Revenue

Gross Profit Margin

Operating Profit Margin

Commercial

$

10,048

80.7

%

9.1

%

(3.8

)%

$

16,510

85.7

%

17.2

%

12.2

%

Government Services

2,401

19.3

%

3.7

%

(5.0

)%

2,750

14.3

%

15.1

%

8.9

%

Consolidated

12,449

100.0

%

8.1

%

(12.5

)%

19,260

100.0

%

16.9

%

5.9

%

The following table presents certain balance sheet items as of March 27, 2021 and December 26, 2020:

(amounts in thousands)

As of

March 27, 2021

As of

December 26, 2020

Cash

$

13,927

$

13,706

Working capital

13,021

14,039

ENGlobal Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(amounts in thousands, except per share data)

For the Three Months Ended

March 27, 2021

March 28, 2020

Operating revenues

$

12,449

$

19,260

Operating costs

11,445

16,000

Gross profit

1,004

3,260

Selling, general and administrative expenses

2,561

2,133

Operating income (loss)

(1,557

)

1,127

Other income (expense):

Other income, net

1,684

1

Interest expense, net

(58

)

(5

)

Income from operations before income taxes

69

1,123

Provision for federal and state income taxes

23

22

Net income

46

1,101

Basic and diluted income per common share:

$

0.00

$

0.04

Basic and diluted weighted average shares used in computing income (loss) per share:

27,557

27,414

ENGlobal Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands, except share and per share amounts)

March 27, 2021

December 26, 2020

ASSETS

Current Assets:

Cash

$

13,927

$

13,706

Trade receivables, net of allowances of $272 and $386

9,111

7,789

Prepaid expenses and other current assets

531

891

Employee retention credit

1,676

-

Contract assets

1,322

4,090

Total Current Assets

26,567

26,476

Property and equipment, net

1,223

1,263

Goodwill

720

720

Other assets

Right of use asset

1,539

1,628

Deposits and other assets

342

351

Total Other Assets

1,881

1,979

Total Assets

$

30,391

$

30,438

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

2,151

$

2,138

Accrued compensation and benefits

2,172

3,048

Current portion of leases

1,294

1,541

Contract liabilities

2,234

1,258

Current portion of note

4,579

3,707

Current portion of deferred payroll tax

519

-

Other current liabilities

597

745

Total Current Liabilities

13,546

12,437

Deferred payroll tax

519

1,037

Long-term debt

1,897

2,733

Long-term leases

715

608

Total Liabilities

16,677

16,815

Commitments and Contingencies (Note 8)

Stockholders' Equity:

Common stock - $0.001 par value; 75,000,000 shares authorized; 27,588,389 shares issued and outstanding at March 27, 2021 and 27,560,686 shares issued and outstanding at December 26, 2020

28

28

Additional paid-in capital

37,202

37,157

Accumulated deficit

(23,516

)

(23,562

)

Total Stockholders' Equity

13,714

13,623

Total Liabilities and Stockholders' Equity

$

30,391

$

30,438

ENGlobal Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)

For the Three Months Ended

For the Three Months Ended

March 27, 2021

March 28, 2020

Cash Flows from Operating Activities:

Net income

$

46

$

1,101

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

82

96

Share-based compensation expense

45

15

Changes in current assets and liabilities:

Trade accounts receivable

(1,322

)

655

Contract assets

2,768

(1,912

)

Other current assets

(1,307

)

165

Accounts payable

13

444

Accrued compensation and benefits

(876

)

(408

)

Contract liabilities

976

(1,801

)

Income taxes payable

19

258

Other current liabilities, net

(167

)

(97

)

Net cash provided by (used in) operating activities

$

277

$

(1,484

)

Cash Flows from Investing Activities:

Property and equipment acquired

(57

)

(34

)

Net cash used in investing activities

$

(57

)

$

(34

)

Cash Flows from Financing Activities:

Payments on finance leases

(36

)

(20

)

Interest on PPP loan

12

-

Proceeds from revolving credit facility

25

-

Net cash provided by (used in) financing activities

$

1

$

(20

)

Net change in cash

221

(1,538

)

Cash at beginning of period

13,706

8,307

Cash at end of period

$

13,927

$

6,769

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

58

$

5

Right of use assets obtained in exchange for new operating lease liability

$

256

$

963

Cash paid during the period for income taxes (net of refunds)

$

1

-

For further information on ENGlobal's first quarter 2021 financial results, please refer to its Quarterly Report on Form 10-Q to be filed with the SEC later today and included on the company's website at www.englobal.com, or on the SEC's website at www.sec.gov.

Conference Call
Management will host a conference call today at 9:00 am EDT to discuss the company's first quarter 2021 financial results and outlook for the remainder of the year. To participate in the conference call, please dial in five to ten minutes before the call:

(Toll Free) 888-506-0062 domestically, or 973-528-0011 internationally.
Entry code: 498183

The conference call will also be broadcast live over the Internet and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/41192

The teleconference replay will be available shortly after the completion of the live event through 9:00 am Eastern time on May 13, 2021. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 41192.

You may also access the replay by visiting the company's web site:

https://www.englobal.com/investors/events-and-presentations/

About ENGlobal
ENGlobal (NASDAQ:ENG) is a leading provider of complete project solutions for renewable and traditional energy throughout the United States and internationally. ENGlobal operates through two business segments: Commercial and Government Services. Further information about the Company and its businesses is available at www.ENGlobal.com.

Safe Harbor for Forward-Looking Statements
The statements above regarding the Company's expectations, its operations and certain other 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. All statements, other than statements of historical facts, included herein concerning, among other things, anticipated economic or market conditions, the Company's anticipated performance, the Company's ability to producerenewed business opportunities and the Company's ability to attract and perform higher-value contracts, are forward-looking statements. For a discussion of risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ENGlobal's filings with the Securities and Exchange Commission, including the Company's most recent reports on Form 10-K and 10-Q, and other SEC filings.

Click here to join our email list: https://www.englobal.com/investors/email-alerts/

CONTACT:
Mark A. Hess
Phone: (281) 878-1000
E-mail: ir@ENGlobal.com

Market Makers - Investor Relations
Jimmy Caplan
512-329-9505
Email: jimmycaplan@me.com

Market Makers - Media Relations
Rick Eisenberg
212-496-6828
Email: eiscom@msn.com

SOURCE: ENGlobal



View source version on accesswire.com:
https://www.accesswire.com/645037/ENGlobal-Announces-1Q-2021-Financial-Results