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Englobal Corp (ENG) SEC Filing 10-Q Quarterly Report for the period ending Saturday, March 27, 2021

Englobal Corp

CIK: 933738 Ticker: ENG
 
Exhibit 99.1
 
ENGlobal Announces 1Q 2021 Financial Results
 
Investor Conference Call Scheduled Today at 9:00 am Eastern
 
HOUSTON, TX, 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
 
 
 
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 9:00am 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 produce renewed 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
 
 

The following information was filed by Englobal Corp (ENG) on Thursday, May 6, 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-Q Quarterly 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-Q Quarterly Report:
Ticker: ENG
CIK: 933738
Form Type: 10-Q Quarterly Report
Accession Number: 0001654954-21-005201
Submitted to the SEC: Thu May 06 2021 1:09:51 PM EST
Accepted by the SEC: Thu May 06 2021
Period: Saturday, March 27, 2021
Industry: Engineering Services

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