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Englobal Corp (ENG) SEC Filing 10-K Annual report for the fiscal year ending Saturday, December 26, 2020

Englobal Corp

CIK: 933738 Ticker: ENG
 
Exhibit 99.1
 
ENGlobal Announces 2020 Financial Results
 
Investor Conference Call Scheduled Today at 9:00 am Eastern
 
HOUSTON, TX, March 11, 2021 -- ENGlobal Corporation (NASDAQ:ENG)
, a leading provider of complete project solutions for renewable and traditional energy, today announced that, for the year ended December 26, 2020, the company posted a net loss of $625,000, or $(.02) per share, on revenue of $64,449,000, compared with a net loss of $1,466,000, or $(.05) per share, on revenue of $56,446,000 for the year ended December 28, 2019.
 
The company’s $8.0 million, or 14.2 percent, improvement in revenue compared to the prior year was primarily the result of an increase in revenue from the Engineering, Procurement, Construction Management (EPCM) segment of $6.5 million, or 33.5 percent, to $25.9 million for 2020 as compared with $19.4 million in 2019. ENGlobal’s continued performance on designing and delivering a complete modular hydrogen plant was largely responsible for this growth in revenue when compared to the prior year.
 
The company’s reduced annual loss – an improvement of 57 percent over 2019 – was primarily the result of the increase in revenue and higher margin projects from the company’s EPCM segment as well as a decrease of $0.5 million in SG&A expense year-over-year. However, COVID-related project delays and resulting inefficiencies experienced by the Company during the latter half of 2020 served to partially offset these improvements.
 
"I believe that ENGlobal is in a strong market position as we enter 2021”, said newly appointed CEO Mark Hess. “First, we have extensive expertise in building renewable fuel process plants and facilities as well as over 35 years’ experience in project execution in all sectors of the traditional oil and gas industry. Second, the company has successfully transitioned to vertically integrated project execution and delivery – including engineering and design to modular fabrication and automation integration. Third, despite the challenges posed by COVID in 2020, we made excellent progress in adding to our list of established technology and construction partners during the year. This accomplishment, in turn, has added to our differentiated capabilities - all of which we believe makes ENGlobal a more attractive, single source option for our clients’ changing needs.”
 
Mr. Hess continued: “Overall, we expect to have an increased ability to attract and perform the higher-value contracts that we are targeting, including the many attractive green and renewable energy projects in the $10 to $250 million range. As one metric of how our newly organized business model is just beginning to perform, the Company is now seeing a significant uptick in proposal activity with improving market conditions, with $278 million in proposals in process or issued to our clients already this year.”
 
“During the latter half of 2020, many businesses were shut down, airlines were not flying and demand for many of our clients’ products dwindled. Consequently, our business development efforts in many of our markets were severely hampered. Our backlog suffered as a result and we ended the year at about $24 million. Our focus the first part of this year is to rebuild our backlog as quickly as possible and we are investing heavily in our business development efforts to accomplish this goal.”
 
 
 
At December 26, 2020, ENGlobal had cash on hand of $13.7 million compared to $8.3 million at December 28, 2019.  The company’s December 26, 2020 cash on hand included the proceeds from its previously disclosed $4.9 million PPP loan and borrowings of $1.5 million from its $6.0 million Revolving Credit Facility. The company expects the PPP loan to be entirely forgiven, and if so, only the Revolving Credit Facility would remain as debt.
 
The following table illustrates the composition of the Company's revenue and profitability for its operations for the fiscal years ended December 26, 2020 and December 28, 2019:
 
 
 
Year Ended
 
 
Year Ended
 
(amounts in thousands)
 
December 26, 2020
 
 
December 28, 2019
 
Segment
 
Total Revenue
 
 
% of Total Revenue
 
 
Gross Profit Margin
 
 
Operating Profit (Loss) Margin
 
 
Total Revenue
 
 
% of Total Revenue
 
 
Gross Profit Margin
 
 
Operating Profit (Loss)
Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineering & Construction
 $25,929 
  40.2%
  9.1%
  (0.3)%
 $19,436 
  34.4%
  8.4%
  (4.3)%
Automation
  38,520 
  59.8%
  15.8%
  11.7%
  37,010 
  65.6%
  17.0%
  12.4%
Consolidated
 $64,449 
  100.0%
  13.1%
  (0.6)%
 $56,446 
  100.0%
  14.0%
  (2.5)%
 
    
    
    
    
    
    
    
    
 
The following table illustrates the composition of the Company's revenue and profitability for its operations for the three months ended December 26, 2020 and December 28, 2019:
 
 
 
Three Months Ended
 
 
Three Months Ended
 
(amounts in thousands)
 
December 26, 2020
 
 
December 28, 2019
 
Segment
 
Total Revenue
 
 
% of Total Revenue
 
 
Gross Profit Margin
 
 
Operating Profit Margin
 
 
Total Revenue
 
 
% of Total Revenue
 
 
Gross Profit Margin
 
 
Operating Profit Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineering & Construction
 $6,158 
  53.2%
  17.5%
  1.7%
 $3,888 
  23.3%
  1.5%
  (14.9)%
Automation
  5,419 
  46.8%
  23.3%
  8.6%
  12,800 
  76.7%
  22.7%
  19.2%
Consolidated
  11,577 
  100.0%
  20.2%
  (5.3)%
  16,688 
  100.0%
  17.7%
  4.6%
 
    
    
    
    
    
    
    
    
 
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)
 
2020
 
 
Fiscal Year
 
 
  Q1 
  Q2 
  Q3 
  Q4 
  2020 
Revenue
 $19,260 
 $17,882 
 $15,729 
 $11,578 
 $64,449 
Gross Profit
  3,260 
  2,453 
  1,144 
  1,594 
  8,451 
Gross Profit Margin
  16.9%
  13.7%
  7.3%
  13.8%
  13.1%
General & Administrative Expenses
  2,133 
  2,314 
  2,174 
  2,213 
  8,834 
Operating Income (Loss)
  1,127 
  139 
  (1,030)
  (619)
  (383)
Net Income (Loss)
  1,101 
  68 
  (1,110)
  (684)
  (625)
 
The following table presents certain balance sheet items as of December 26, 2020 and December 28, 2019:
 
 
(amounts in thousands)
 
As of
December 26, 2020
 
 
As of
December 28, 2019
 
Cash and restricted cash
 $13,706 
 $8,307 
Working capital
  14,039 
  11,289 
 
    
    
 

 
 
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
 
 
 
Year Ended
December 26,
 
 
Year Ended
December 28,
 
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
Operating revenues
 $64,449 
 $56,446 
Operating costs
  55,998 
  48,530 
Gross profit
  8,451 
  7,916 
Operating costs and expenses:
    
    
Selling, general, and administrative expenses
  8,834 
  9,317 
Operating loss
  (383)
  (1,401)
Other income (expense)
    
    
Interest expense, net
  (153)
  (31)
Other income, net
  14 
  49 
Loss before income taxes
  (522)
  (1,383)
 
    
    
Provision for federal and state income taxes
  (103)
  (83)
 
    
    
Net loss
 $(625)
 $(1,466)
 
    
    
Basic and diluted loss per common share
 $(0.02)
 $(0.05)
 
    
    
Basic and diluted weighted average shares used in computing loss per share:
  27,474 
  27,414 
 
 
 
 
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share amounts)
 
 
 
December 26,
2020
 
 
December 28,
2019
 
ASSETS
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash
 $13,706 
 $8,307 
Trade receivables, net of allowances of $386 and $236
  7,789 
  11,435 
Prepaid expenses and other current assets
  891 
  889 
Contract assets
  4,090 
  3,862 
Total Current Assets
  26,476 
  24,493 
Property and equipment, net
  1,263 
  1,033 
Goodwill
  720 
  720 
Other assets
    
    
Right of use asset
  1,628 
  2,133 
Deposits and other assets
  351 
  307 
Total Other Assets
  1,979 
  2,440 
Total Assets
 $30,438 
 $28,686 
 
    
    
LIABILITIES AND STOCKHOLDERS’ EQUITY
    
    
 
    
    
Current Liabilities:
    
    
Accounts payable
 $2,138 
 $3,261 
Accrued compensation and benefits
  3,048 
  2,783 
Current portion of leases
  1,541 
  1,041 
Contract liabilities
  1,258 
  5,438 
Current portion of note
  3,707 
   
Other current liabilities
  745 
  681 
Total Current Liabilities
  12,437 
  13,204 
Deferred payroll tax
  1,037 
   
Long term debt
  2,733 
   
Long term leases
  608 
  1,458 
Total Liabilities
  16,815 
  14,662 
Commitments and Contingencies (Note 15)
    
    
Stockholders’ Equity:
    
    
Common stock - $0.001 par value; 75,000,000 shares authorized;
27,560,686 and 27,413,626 shares issued and outstanding at
December 26, 2020 and December 28, 2019, respectively
  28 
  27 
Additional paid-in capital
  37,157 
  36,934 
Accumulated deficit
  (23,562)
  (22,937)
Total Stockholders’ Equity
  13,623 
  14,024 
Total Liabilities and Stockholders’ Equity
 $30,438 
 $28,686 
 
 
 

 
 
ENGLOBAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
 
 
 
Year Ended
December 26, 2020
 
 
Year Ended
December 28, 2019
 
Cash Flows from Operating Activities:
 
 
 
 
 
 
Net loss
 $(625)
 $(1,466)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
    
    
Depreciation and amortization
  449 
  389 
Share-based compensation expense
  223 
  61 
Changes in current assets and liabilities:
    
    
Trade accounts receivable
  3,646 
  (1,224)
Contract assets
  (228)
  (689)
Other current assets
  (46)
  245 
Accounts payable
  (1,123)
  89 
Accrued compensation and benefits
  1,301 
  482 
Contract liabilities
  (4,180)
  4,834 
Income taxes payable
  (57)
  84 
Other current liabilities, net
  121 
  (140)
Net cash provided by (used in) operating activities
 $(519)
 $2,665 
 
    
    
Cash Flows from Investing Activities:          
    
    
Proceeds from notes receivable
   
  24 
Property and equipment acquired
  (428)
  (345)
Net cash used in investing activities
 $(428)
 $(321)
 
    
    
Cash Flows from Financing Activities:
    
    
Purchase of stock
   
  (61)
Payments on finance leases
  (93)
  (36)
Proceeds from PPP loan
  4,949 
   
Proceeds from revolving credit facility
  1,490 
   
Net cash provided by (used in) financing activities
 $6,346 
 $(97)
Net change in cash
  5,399 
  2,247 
Cash at beginning of year
  8,307 
  6,060 
Cash at end of year
 $13,706 
 $8,307 
 
    
    
Supplemental disclosure of cash flow information:
    
    
Cash paid during the period for interest
 $153 
 $33 
Right of use assets obtained in exchange for new operating lease liability
 $963 
 $2,854 
Leased assets obtained in exchange for new finance lease liabilities
 $219 
 $351 
Cash paid during the period for income taxes (net of refunds)
  $86 
 $26 
 
 

 
 
For further information on ENGlobal’s 2020 financial results, please refer to its Annual Report on Form 10-K 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 9:00am EST to discuss the company’s 2020 financial results and outlook for 2021. To participate in the conference call, please dial in 5 to 10 minutes before the call:
 
(Toll Free) 888-506-0062 domestically, or 973-528-0011 internationally
 
Entry code: 441526
 
The conference call will also be broadcast live over the Internet and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/40284
 
The teleconference replay will be available shortly after the completion of the live event through 9:00am EST on March 18, 2021. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 40284.
 
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 provider of engineering and automation services primarily to the energy sector throughout the United States and internationally. ENGlobal operates through two business segments: Automation and Engineering. ENGlobal's Automation segment provides services related to the design, fabrication and implementation of distributed control, instrumentation and process analytical systems. The Engineering segment provides consulting services for the development, management and execution of projects requiring professional engineering, construction management, and related support services. Within ENGlobal's Automation segment, ENGlobal Government Services, Inc. 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, 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, the Company’s ability to attract and perform the higher-value contracts that it is targeting, the Company’s ability to realize project awards or contracts on its pending proposals, and the anticipated forgiveness of the Company’s PPP loan, 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


The following information was filed by Englobal Corp (ENG) on Thursday, March 11, 2021 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

Document And Entity Information
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)
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)
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)
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 Narrative)
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)
Subsequent Events
Treasury Stock
Treasury Stock (Details Narrative)
Ticker: ENG
CIK: 933738
Form Type: 10-K Annual Report
Accession Number: 0001654954-21-002654
Submitted to the SEC: Thu Mar 11 2021 4:56:56 PM EST
Accepted by the SEC: Thu Mar 11 2021
Period: Saturday, December 26, 2020
Industry: Engineering Services

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