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Englobal Corp (ENG) SEC Filing 10-Q Quarterly Report for the period ending Saturday, March 26, 2022

SEC Filings

ENG Quarterly Reports

Englobal Corp

CIK: 933738 Ticker: ENG

EXHIBIT 99.1

 

ENG Reports Q1 2022 Results

 

Investor Conference Call Scheduled Today at 9:00 am Eastern

 

HOUSTON, TX, May 5, 2022 – ENG (NASDAQ:ENG)

, a leading provider of innovative project delivery solutions for the energy industry, today announced that, for the first quarter ended March 26, 2022, it reported a net loss of $3,620,000, or $(.10) per share, on revenue of $7,366,000, compared to net income of $46,000, or $.00 per share, on revenue of $12,449,000 for the first quarter ended March 27, 2021.

 

“While our first quarter 2022 financial performance was still adversely affected by the lingering disruptions to our business caused by COVID-19," said chief executive Mark Hess, "we see solid signs that these disruptions are fading and that we are well-positioned to make a turnaround this year.

 

"Thus far in the second quarter,” he explained, “many more of our customers are back in the office, we are meeting with them regularly, and more projects are being planned and funded. As a result, our backlog has increased sharply over the first quarter and our new on-site construction service is poised to make a meaningful contribution to our revenue in Q2.  April bookings exceeded bookings for the entire first quarter, and it was the single highest month of bookings since 2019. Our backlog has increased two consecutive quarters from $8.4M, as of the third quarter of 2021, to $13.3M as of the end of first quarter of 2022.”

 

“Also, as we announced last week, our engagement to design, engineer and fabricate a major renewable aviation fuels and renewable diesel plant is awaiting a final investment decision by our client, and we expect our scope to be around $100 million if this project is approved.

 

“We’re also proud of our recent contracts from the Defense Logistics Agency as well as our new contract to implement a Supervisory Control and Data Acquisition (SCADA) system for a midwestern public school district, and we believe both of these represent fertile areas for similar contracts going forward.

 

“Lastly, we’re very excited about the improving energy backdrop in both the carbon-based and renewable markets, and are confident that these improving conditions will help ENG capitalize on an assortment of new and lucrative opportunities as 2022 unfolds."

 

The company’s $5.1 million decrease in quarterly revenue was primarily attributable to the completion of two large commercial projects in 2021. ENG’s $3.7 million decrease in bottom line performance was mainly the result of the decrease in quarterly revenue, a $0.3 million increase in SG&A expenses, and a $1.7 employee retention credit recorded in the first quarter of 2021 with no comparable occurrence in Q1 of 2022.

 

Cash on hand at March 26, 2022 was $17.7 million with long-term debt of $1.1 million.

 

 

 

 

Basic and diluted weighted average shares at March 26, 2022 was 35,231,000 and 27,557,000 at March 27, 2021.

 

The following is a summary of the income statement for the three months ended March 26, 2022 and March 27, 2021:

 

(amounts in thousands)

 

Three months ended

March 26, 2022

 

 

Three months ended

March 27, 2021

 

Revenue

 

$ 7,366

 

 

$ 12,449

 

Gross Profit (Loss)

 

 

(658 )

 

 

1,004

 

Selling, General and Administrative Expenses

 

 

2,843

 

 

 

2,561

 

Operating Loss

 

 

(3,501 )

 

 

(1,557 )

Net Income (Loss)

 

 

(3,620 )

 

 

46

 

 

The following table illustrates the composition of the company's revenue and profitability for its operations for the three months ended March 26, 2022 and March 27, 2021:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

(amounts in thousands)

 

March 26, 2022

 

 

March 27, 2021

 

Segment

 

Total

Revenue

 

 

% of Total Revenue

 

 

Gross Profit (Loss) Margin

 

 

Operating Profit (Loss) Margin

 

 

Total

Revenue

 

 

% of Total Revenue

 

 

Gross Profit Margin

 

 

Operating

Loss

Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$ 5,403

 

 

 

73.4 %

 

 

(17.1 )%

 

 

(44.7 )%

 

$ 10,048

 

 

 

80.7 %

 

 

9.1 %

 

 

(3.8 )%

Government Services

 

 

1,963

 

 

 

26.6 %

 

 

13.6 %

 

 

2.4 %

 

 

2,401

 

 

 

19.3 %

 

 

3.7 %

 

 

(5.0 )%

Consolidated

 

 

7,366

 

 

 

100.0 %

 

 

(8.9 )%

 

 

(47.5 )%

 

 

12,449

 

 

 

100.0 %

 

 

8.1 %

 

 

(12.5 )%

 

The following table presents certain balance sheet items as of March 26, 2022 and December 25, 2021:

 

(amounts in thousands)

 

As of

March 26,

2022

 

 

As of

December 25,

2021

 

Cash

 

$ 17,698

 

 

$ 19,202

 

Working capital

 

 

22,781

 

 

 

26,263

 

 

 
2

 

 

ENGlobal Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

 

 

March 26,

2022

 

 

March 27,

2021

 

Operating revenues

 

$ 7,366

 

 

$ 12,449

 

Operating costs

 

 

8,024

 

 

 

11,445

 

Gross profit (loss)

 

 

(658 )

 

 

1,004

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

2,843

 

 

 

2,561

 

Operating loss

 

 

(3,501 )

 

 

(1,557 )

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Other income, net

 

 

10

 

 

 

1,684

 

Interest expense, net

 

 

(51 )

 

 

(58 )

Income (loss) from operations before income taxes

 

 

(3,542 )

 

 

69

 

 

 

 

 

 

 

 

 

 

Provision for federal and state income taxes

 

 

78

 

 

 

23

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(3,620 )

 

 

46

 

 

 

 

 

 

 

 

 

 

Basic and diluted income (loss) per common share:

 

$ (0.10 )

 

$ 0.00

 

 

 

 

 

 

 

 

 

 

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

 

 

35,231

 

 

 

27,557

 

 

 
3

 

 

ENGlobal Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

(amounts in thousands, except share and per share amounts)

 

 

 

March 26,

2022

 

 

December 25,

2021

 

ASSETS

 

Current Assets:

 

 

 

 

 

 

Cash

 

$ 17,698

 

 

$ 19,202

 

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

 

 

6,688

 

 

 

7,692

 

Prepaid expenses and other current assets

 

 

619

 

 

 

958

 

Payroll taxes receivable

 

 

2,003

 

 

 

3,065

 

Contract assets

 

 

3,161

 

 

 

4,177

 

Total Current Assets

 

 

30,169

 

 

 

35,094

 

Property and equipment, net

 

 

1,571

 

 

 

1,698

 

Goodwill

 

 

720

 

 

 

720

 

Other assets

 

 

 

 

 

 

 

 

Right of use asset

 

 

4,290

 

 

 

4,251

 

Deposits and other assets

 

 

292

 

 

 

306

 

Total Other Assets

 

 

4,582

 

 

 

4,557

 

Total Assets

 

$ 37,042

 

 

$ 42,069

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 1,574

 

 

$ 2,001

 

Accrued compensation and benefits

 

 

1,700

 

 

 

2,183

 

Current portion of leases

 

 

1,413

 

 

 

1,389

 

Contract liabilities

 

 

1,631

 

 

 

2,054

 

Current portion of deferred payroll tax

 

 

537

 

 

 

537

 

Other current liabilities

 

 

533

 

 

 

667

 

Total Current Liabilities

 

 

7,388

 

 

 

8,831

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,136

 

 

 

1,035

 

Long-term leases

 

 

3,943

 

 

 

4,012

 

Total Liabilities

 

 

12,467

 

 

 

13,878

 

Commitments and Contingencies (Note 8)

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock - $0.001 par value; 75,000,000 shares authorized; 35,230,675 shares issued and outstanding at March 26, 2022 and at December 25, 2021

 

 

35

 

 

 

35

 

Additional paid-in capital

 

 

57,407

 

 

 

57,403

 

Accumulated deficit

 

 

(32,867 )

 

 

(29,247 )

Total Stockholders’ Equity

 

 

24,575

 

 

 

28,191

 

Total Liabilities and Stockholders’ Equity

 

$ 37,042

 

 

$ 42,069

 

 

 
4

 

 

ENGlobal Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(amounts in thousands)

 

 

 

For the Three Months Ended

 

 

 

March 26,

2022

 

 

March 27,

2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income (loss)

 

$ (3,620 )

 

$ 46

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

201

 

 

 

82

 

Share-based compensation expense

 

 

56

 

 

 

45

 

Changes in current assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

1,004

 

 

 

(1,322 )

Contract assets

 

 

1,016

 

 

 

2,768

 

Other current assets

 

 

1,415

 

 

 

(1,307 )

Accounts payable

 

 

(427 )

 

 

13

 

Accrued compensation and benefits

 

 

(483 )

 

 

(876 )

Contract liabilities

 

 

(423 )

 

 

976

 

Income taxes payable

 

 

77

 

 

 

19

 

Other current liabilities, net

 

 

(211 )

 

 

(167 )

Net cash provided by (used in) operating activities

 

$ (1,395 )

 

$ 277

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Property and equipment acquired

 

 

(23 )

 

 

(57 )

Net cash used in investing activities

 

$ (23 )

 

$ (57 )

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

At-the-market offering costs

 

 

(52 )

 

 

 

Payments on finance leases

 

 

(134 )

 

 

(36 )

Interest on PPP loan

 

 

 

 

 

12

 

Proceeds from revolving credit facility, net

 

 

100

 

 

 

25

 

Net cash provided by (used in) financing activities

 

$ (86 )

 

$ 1

 

Net change in cash

 

 

(1,504 )

 

 

221

 

Cash at beginning of period

 

 

19,202

 

 

 

13,706

 

Cash at end of period

 

$ 17,698

 

 

$ 13,927

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$ 51

 

 

$ 58

 

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

 

$ 354

 

 

$ 256

 

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

 

$

 

 

$ 1

 

 

 
5

 

 

Conference Call

Management will host a conference call today at 9:00 am Eastern time to discuss the company's first quarter 2022 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: 842446

 

The conference call will also be broadcast live over the Internet and can be accessed at: https://www.webcaster4.com/Webcast/Page/2272/45437

 

The teleconference replay will be available shortly after the completion of the live event through 9:00 am Eastern time on May 12, 2022. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 45437.

 

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

 

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

 

For additional information on ENG's first quarter 2022 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.

 

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, 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. 

 

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: eiscom@msn.com

 

 
6

 


The following information was filed by Englobal Corp (ENG) on Thursday, May 5, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Ticker: ENG
CIK: 933738
Form Type: 10-Q Quarterly Report
Accession Number: 0001654954-22-006123
Submitted to the SEC: Thu May 05 2022 4:38:09 PM EST
Accepted by the SEC: Thu May 05 2022
Period: Saturday, March 26, 2022
Industry: Engineering Services

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