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Englobal Corp (ENG) SEC Filing 10-K Annual Report for the fiscal year ending Saturday, December 25, 2021

SEC Filings

ENG Annual Reports

Englobal Corp

CIK: 933738 Ticker: ENG

  EXHIBIT 99.1

 

ENG Announces 2021 Year-End Results

 

Management to host conference call today at 9:00am EST to discuss financial results and outlook for 2022

 

HOUSTON, March 10, 2022 --

ENG (NASDAQ:ENG), a leading provider of innovative, complete project delivery solutions for the energy industry, today announced that, for the year ended December 25, 2021, the company had a net loss of $5,685,000, or $(.18) per share, on revenue of $36,410,000, compared with a net loss of $625,000, or $(.02) per share, on revenue of $64,449,000 for the year ended December 26, 2020.

 

The company’s year-over-year decrease in revenue was primarily the result of the non-renewal of several large commercial segment projects due to the effects of COVID-19 in the energy industry. ENG’s 2021 $5.1 million increase in net loss compared to 2020 was primarily the result of the decrease in annual revenue due to COVID-19, a 15 percent reduction in gross margin, and a $4.0 million increase in SG&A expenses, which includes $1.9 million in increased business development costs and a bad debt reserve of $1.4 million. These negative impacts were partially offset by employee retention credits in the first and third quarters of 2021 totaling $3.1 million as well as a $5.0 million forgiveness of the company's April 2020 PPP loan credited in the third quarter of 2021.

 

At December 25, 2021, ENG had cash on hand of $19.2 million compared to $13.7 million at December 26, 2020, and long-term debt of about $1.0 million.

 

“Although it’s clear that our 2021 financial performance was adversely affected by disruptions to our business caused by COVID-19,” said chief executive Mark Hess, “we believe we are strongly positioned to make a turnaround in 2022, as our backlog in last year’s Q4 increased.

 

“Additionally, unlike most of last year, customers are back in the office, we are engaging them more easily, and more projects are being planned and funded. We have also added on-site construction to our suite of client services, a move that’s already attracted additional business and which is expected to boost our revenue and earnings starting next quarter.”

 

“Thus far in the first quarter of 2022, he continued, ENG has been awarded a $4.4 million contract extension by the U.S. Defense Logistics Agency, $2.2 million in orders to build parking lot security trailers, and has been selected by a confidential client to design, engineer and fabricate a major renewable fuels plant intended to produce 100 million gallons per year of sustainable aviation fuel and renewable diesel.

 

“Given the continued internal personnel and proposal progress, the recent awards across several of the business lines, and the improving energy backdrop in both carbon-based and renewable markets, ENG believes it is well positioned to capitalize and to meaningfully increase backlog as the rest of this year and the subsequent years unfold.”

 

 
1

 

 

The following table illustrates the composition of the Company's revenue and profitability for its operations for the fiscal years ended December 25, 2021 and December 26, 2020:

 

 

 

Year Ended

 

 

Year Ended

 

(amounts in thousands)

 

December 25, 2021

 

 

December 26, 2020

 

Segment

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit (Loss) Margin

 

 

Operating Profit (Loss) Margin

 

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit Margin

 

 

Operating Profit (Loss)

Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$ 27,986

 

 

 

76.9 %

 

 

(5.6 )%

 

 

(30.7 )%

 

$ 54,368

 

 

 

84.4 %

 

 

12.7 %

 

 

6.6 %

Government Services

 

 

8,424

 

 

 

23.1 %

 

 

11.0 %

 

 

0.4 %

 

 

10,081

 

 

 

15.6 %

 

 

15.4 %

 

 

8.8 %

Consolidated

 

$ 36,410

 

 

 

100.0 %

 

 

(1.8 )%

 

 

(37.0 )%

 

$ 64,449

 

 

 

100.0 %

 

 

13.1 %

 

 

(0.6 )%

 

The following table illustrates the composition of the Company's revenue and profitability for its operations for the three months ended December 25, 2021 and December 26, 2020:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

(amounts in thousands)

 

December 25, 2021

 

 

December 26, 2020

 

Segment

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit (Loss) Margin

 

 

Operating Profit (Loss) Margin

 

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit Margin

 

 

Operating Profit (Loss) Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$ 4,845

 

 

 

69.6 %

 

 

(24.6 )%

 

 

(53.3 )%

 

$ 9,188

 

 

 

79.4 %

 

 

12.6 %

 

 

3.5 %

Government Services

 

 

2,116

 

 

 

30.4 %

 

 

13.1 %

 

 

2.9 %

 

 

2,390

 

 

 

20.6 %

 

 

18.2 %

 

 

10.6 %

Consolidated

 

 

6,691

 

 

 

100.0 %

 

 

(13.1 )%

 

 

(55.1 )%

 

 

11,578

 

 

 

100.0 %

 

 

13.8 %

 

 

(5.3 )%

 

The following is a summary of the Company’s statement of operations for the last four quarters which may be helpful in analyzing our ongoing business:

 

 (amounts in thousands)

 

2021

 

 

Fiscal Year

 

 

 

 Q1

 

 

 Q2

 

 

 Q3

 

 

 Q4

 

 

2021

 

Revenue

 

$ 12,449

 

 

$ 11,079

 

 

$ 5,921

 

 

$ 6,961

 

 

$ 36,410

 

Gross Profit (Loss)

 

 

1,004

 

 

 

82

 

 

 

(814 )

 

 

(915 )

 

 

(643 )

Gross Profit (Loss) Margin

 

 

8.1 %

 

 

0.7 %

 

 

(13.7 )%

 

 

(13.1 )%

 

 

(1.8 )%

General & Administrative Expenses

 

 

2,561

 

 

 

4,264

 

 

 

3,089

 

 

 

2,919

 

 

 

12,833

 

Operating Loss

 

 

(1,557 )

 

 

(4,182 )

 

 

(3,903 )

 

 

(3,834 )

 

 

(13,476 )

Net Income (Loss)

 

 

46

 

 

 

(4,256 )

 

 

2,401

 

 

 

(3,876 )

 

 

(5,685 )

 

The following table presents certain balance sheet items as of December 25, 2021 and December 26, 2020:

 

(amounts in thousands)

 

As of

December 25, 2021

 

 

As of

December 26, 2020

 

Cash

 

$ 19,202

 

 

$ 13,706

 

Working capital

 

 

26,263

 

 

 

14,039

 

 

 
2

 

 

ENGLOBAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share amounts)

 

 

 

Year Ended December 25,

 

 

Year Ended December 26,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Operating revenues

 

$ 36,410

 

 

$ 64,449

 

Operating costs

 

 

37,053

 

 

 

55,998

 

Gross profit

 

 

(643 )

 

 

8,451

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

12,833

 

 

 

8,834

 

Operating loss

 

 

(13,476 )

 

 

(383 )

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(212 )

 

 

(153 )

Other income, net

 

 

8,063

 

 

 

14

 

Loss before income taxes

 

 

(5,625 )

 

 

(522 )

 

 

 

 

 

 

 

 

 

Provision for federal and state income taxes

 

 

(60 )

 

 

(103 )

 

 

 

 

 

 

 

 

 

Net loss

 

$ (5,685 )

 

$ (625 )

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$ (0.18 )

 

$ (0.02 )

 

 

 

 

 

 

 

 

 

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

 

 

31,888

 

 

 

27,474

 

 

 
3

 

 

ENGLOBAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share amounts)

 

 

 

December 25, 2021

 

 

December 26, 2020

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$ 19,202

 

 

$ 13,706

 

Trade receivables, net of allowances of $1,673 and $386

 

 

7,692

 

 

 

7,789

 

Prepaid expenses and other current assets

 

 

958

 

 

 

891

 

Payroll tax receivable

 

 

3,065

 

 

 

 

Contract assets

 

 

4,177

 

 

 

4,090

 

Total Current Assets

 

 

35,094

 

 

 

26,476

 

Property and equipment, net

 

 

1,698

 

 

 

1,263

 

Goodwill

 

 

720

 

 

 

720

 

Other assets

 

 

 

 

 

 

 

 

Right of use asset

 

 

4,251

 

 

 

1,628

 

Deposits and other assets

 

 

306

 

 

 

351

 

Total Other Assets

 

 

4,557

 

 

 

1,979

 

Total Assets

 

$ 42,069

 

 

$ 30,438

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 2,001

 

 

$ 2,138

 

Accrued compensation and benefits

 

 

2,183

 

 

 

3,048

 

Current portion of leases

 

 

1,389

 

 

 

1,541

 

Contract liabilities

 

 

2,054

 

 

 

1,258

 

Current portion of note

 

 

 

 

 

3,707

 

Current portion of deferred payroll tax

 

 

537

 

 

 

 

Other current liabilities

 

 

667

 

 

 

745

 

Total Current Liabilities

 

 

8,831

 

 

 

12,437

 

Deferred payroll tax

 

 

 

 

 

1,037

 

Long-term debt

 

 

1,035

 

 

 

2,733

 

Long-term leases

 

 

4,012

 

 

 

608

 

Total Liabilities

 

 

13,878

 

 

 

16,815

 

Commitments and Contingencies (Note 16)

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock - $0.001 par value; 75,000,000 shares authorized; 35,230,675 and 27,560,686 shares issued and outstanding at December 25, 2021 and December 26, 2020, respectively

 

 

35

 

 

 

28

 

Additional paid-in capital

 

 

57,403

 

 

 

37,157

 

Accumulated deficit

 

 

(29,247 )

 

 

(23,562 )

Total Stockholders’ Equity

 

 

28,191

 

 

 

13,623

 

Total Liabilities and Stockholders’ Equity

 

$ 42,069

 

 

$ 30,438

 

 

 
4

 

 

ENGLOBAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

 

 

 

Year Ended December 25, 2021

 

 

Year Ended December 26, 2020

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net loss

 

$ (5,685 )

 

$ (625 )

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

561

 

 

 

449

 

Share-based compensation expense

 

 

270

 

 

 

223

 

Forgiveness of PPP Loan

 

 

(4,949 )

 

 

 

Changes in current assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

97

 

 

 

3,646

 

Contract assets

 

 

(87 )

 

 

(228 )

Other current assets

 

 

(3,087 )

 

 

(46 )

Accounts payable

 

 

(137 )

 

 

(1,123 )

Accrued compensation and benefits

 

 

(1,365 )

 

 

1,301

 

Contract liabilities

 

 

796

 

 

 

(4,180 )

Income taxes payable

 

 

(38 )

 

 

(57 )

Other current liabilities, net

 

 

(40 )

 

 

121

 

Net cash provided by (used in) operating activities

 

$ (13,664 )

 

$ (519 )

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Proceeds from notes receivable

 

 

 

 

 

 

Property and equipment acquired

 

 

(240 )

 

 

(428 )

Net cash used in investing activities

 

$ (240 )

 

$ (428 )

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Issuance of common stock, net

 

 

19,984

 

 

 

 

Payments on finance leases

 

 

(129 )

 

 

(93 )

Proceeds from PPP loan

 

 

 

 

 

4,949

 

Proceeds (payments) from revolving credit facility

 

 

(455 )

 

 

1,490

 

Net cash provided by (used in) financing activities

 

$ 19,400

 

 

$ 6,346

 

Net change in cash

 

 

5,496

 

 

 

5,399

 

Cash at beginning of year

 

 

13,706

 

 

 

8,307

 

Cash at end of year

 

$ 19,202

 

 

$ 13,706

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$ 212

 

 

$ 153

 

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

 

$ 4,014

 

 

$ 963

 

Leased assets obtained in exchange for new finance lease liabilities

 

$ 665

 

 

$ 219

 

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

 

$ 151

 

 

$ 86

 

Non-cash transaction: PPP loan forgiveness

 

$ 4,974

 

 

$

 

 

 
5

 

 

Management will host a conference call today at 9:00am EST to further discuss the company's 2021 financial results and outlook for 2022. To participate in the conference call, please dial in five to ten minutes before the call: (Toll Free) 877-545-0523 domestically, or 973-528-0016 internationally. Entry code: 624599.

 

The conference call will also be broadcast live over the Internet and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/44765

 

The teleconference replay will be available shortly after the completion of the live event through 9:00 am Eastern time on March 17, 2022. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 44765.

 

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

https://www.englobal.com/about-eng/events-and-presentations/

 

For further information on ENG’s 2021 financial results, please refer to its Annual Report on Form 10-K to be filed with the SEC and included on the company's website at www.englobal.com, or on the SEC's website at www.sec.gov.

 

About ENG

 

ENG (NASDAQ:ENG) is a leading provider of complete project solutions for renewable and traditional energy throughout the United States and internationally. ENG operates through two business segments: Commercial and Government Services. The Commercial segment provides engineering, design, fabrication, construction and integration of automated control systems as a complete packaged solution for its clients. The Government Services segment provides engineering, design, installation, operations, and maintenance of various government, public sector, and international facilities, specializing in turnkey automation and instrumentation systems for the U.S. Defense industry worldwide. 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, including those relating to its future results, 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. For a discussion of risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ENG'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.

 

 
6

 

 

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

 

CONTACT:

Market Makers - Investor Relations

Jimmy Caplan

512-329-9505

Email: jimmycaplan@me.com

 

Market Makers - Media Relations

Rick Eisenberg

212-496-6828

Email: 

 

 

 
7

 


The following information was filed by Englobal Corp (ENG) on Thursday, March 10, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Englobal Corp's 10-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Cover
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Operations
Consolidated Statements Of Stockholders Equity
Accounting Policies And New Accounting Pronouncements
Accounting Policies And New Accounting Pronouncements (Details Narrative)
Accounting Policies And New Accounting Pronouncements (Details)
Accounting Policies And New Accounting Pronouncements (Policies)
Accounting Policies And New Accounting Pronouncements (Tables)
Commitments And Contingencies
Contracts
Contracts (Details Narrative)
Contracts (Details)
Contracts (Tables)
Debt
Debt (Details 1)
Debt (Details Narrative)
Debt (Details)
Debt (Tables)
Detail Of Certain Balance Sheet Accounts
Detail Of Certain Balance Sheet Accounts (Details 1)
Detail Of Certain Balance Sheet Accounts (Details 2)
Detail Of Certain Balance Sheet Accounts (Details)
Detail Of Certain Balance Sheet Accounts (Tables)
Employee Benefit Plans
Employee Benefit Plans (Details Narrative)
Employee Retention Credit
Employee Retention Credit (Details Narrative)
Federal And State Income Taxes
Federal And State Income Taxes (Details 1)
Federal And State Income Taxes (Details 2)
Federal And State Income Taxes (Details Narrative)
Federal And State Income Taxes (Details)
Federal And State Income Taxes (Tables)
Leases
Leases (Details 1)
Leases (Details 2)
Leases (Details 3)
Leases (Details)
Leases (Tables)
Liquidity
Liquidity (Details Narrative)
Organization And Basis Of Presentation
Property And Equipment
Property And Equipment (Details Narrative)
Property And Equipment (Details)
Property And Equipment (Tables)
Redeemable Preferred Stock
Redeemable Preferred Stock (Details Narrative)
Revenue Recognition
Revenue Recognition (Details)
Revenue Recognition (Tables)
Segment Information
Segment Information (Details)
Segment Information (Tables)
Stock Compensation Plans
Stock Compensation Plans (Details 1)
Stock Compensation Plans (Details Narrative)
Stock Compensation Plans (Details)
Stock Compensation Plans (Tables)
Stockholders Equity
Stockholders Equity (Details Narrative)
Subsequent Events
Subsequent Events (Details Narrative)
Treasury Stock
Treasury Stock (Details Narrative)
Ticker: ENG
CIK: 933738
Form Type: 10-K Annual Report
Accession Number: 0001654954-22-002983
Submitted to the SEC: Fri Mar 11 2022 3:31:47 PM EST
Accepted by the SEC: Fri Mar 11 2022
Period: Saturday, December 25, 2021
Industry: Engineering Services

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