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Englobal Corp (ENG) SEC Filing 8-K Material Event for the period ending Thursday, August 4, 2022

Englobal Corp

CIK: 933738 Ticker: ENG

  EXHIBIT 99.1

 

ENG Reports Q2 2022 Results

 

HOUSTON, TX, August 4, 2022 -- ENG (NASDAQ:ENG),

a leading provider of innovative project delivery solutions for the energy industry, announced today that for the second quarter ended June 25, 2022 it reported a net loss of $1.5 million, or $(.04) per share, on revenue of $11.4 million, compared with a net loss of $4.3 million, or $(.14) per share, on revenue of $11.1 million for the second quarter ended June 26, 2021.

 

"We have seen steady growth in our bookings, revenue and backlog over the last four quarters, said chief executive Mark A. Hess. Our revenue was $5.9 million in Q3 last year, $7.0 million in Q4 last year, $7.4 million in Q1 this year and $11.4 million this quarter, for example. In addition, our backlog has more than doubled from $8.4 million at the end of Q3 last year to over $19 million at the end of this quarter.”

 

“These increases are very encouraging and show that the plans we put in place are producing the desired results, continued Mr. Hess. These increases have also allowed us to utilize our people more fully, which, in turn, contributed to the increased gross margin.”

 

“These results do not include revenues we expect to generate from our field service operations recently started in the Permian basin and the GTL technology that we recently acquired. We expect to deploy our first field service crew this month and expect crews and resulting revenue to increase over time. We signed an agreement in July granting the Dubai-based oilfield services company OiLSERV the rights to license our GTL technology in Iraq, Libya, Algeria, and the UAE and we are seeing a lot of interest for this solution from the region. We are completing the designs for our small-scale GTL plants and expect to deploy the first commercial unit early to mid next year.”

 

“I am satisfied with the many emerging developments here at ENG, as well as with the improved outlook in both the traditional and renewable energy markets,” said Mr. Hess. “These events, we believe, will directly facilitate our continuing recovery and propel ENG to steadily improving performance going forward.”

 

For the six months ended June 25, 2022, the company had a net loss of $5.1 million, or $(.15) per share, on revenue of $18.7 million, compared with a net loss of $4.2 million, or $(.15) per share, on revenue of $23.5 for the six months ended June 26, 2021.

 

ENG's $0.9 million decrease in six-month bottom line performance compared with the same period in 2021 was primarily due to a $4.8 million decrease in revenue and the related decrease in gross profit of $0.4 million, an increase in commercial segment costs and increased proposal activity expenses. The company’s decrease in six-month revenue compared to the first six months of 2021 was primarily due to the completion of several large commercial segment projects that were not renewed due to COVID-19 related restrictions. This decrease was partially offset by revenue from project awards with new customers.

 

Cash on hand at June 25, 2022 was $14.1 million with no long-term debt.                                  

 

Basic and diluted weighted average shares at June 25, 2022 was 35,444,000 and 29,599,000 at June 26, 2021.

 

 
1

 

 

The following is a summary of the income statements for the three- and six-month periods ended June 25, 2022 and June 26, 2021:

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 25, 2022

 

 

June 26, 2021

 

 

June 25, 2022

 

 

June 26, 2021

 

Revenue

 

$ 11,355

 

 

$ 11,079

 

 

$ 18,721

 

 

$ 23,528

 

Gross profit

 

 

1,332

 

 

 

82

 

 

 

674

 

 

 

1,086

 

Selling, general and administrative expenses

 

 

2,890

 

 

 

4,264

 

 

 

5,733

 

 

 

6,825

 

Operating loss

 

 

(1,558 )

 

 

(4,182 )

 

 

(5,059 )

 

 

(5,739 )

Net loss

 

 

(1,533 )

 

 

(4,256 )

 

 

(5,153 )

 

 

(4,210 )

 

The following table illustrates the composition of the company's revenue and profitability for its operations for the three- and six-month periods ended June 25, 2022 and June 26, 2021:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

(amounts in thousands)

 

June 25, 2022

 

 

June 26, 2021

 

Segment

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit Margin

 

 

Operating Profit (Loss) Margin

 

 

Total Revenue

 

 

% of Total Revenue

 

 

Gross Profit (Loss) Margin

 

 

Operating Profit (Loss) Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$ 9,203

 

 

 

81.0 %

 

 

7.6 %

 

 

(9.8 )%

 

$ 9,157

 

 

 

82.7 %

 

 

(2.2 )%

 

 

(32.9 )%

Government Services

 

 

2,152

 

 

 

19.0 %

 

 

29.3 %

 

 

21.3 %

 

 

1,922

 

 

 

17.3 %

 

 

14.7 %

 

 

4.9 %

Consolidated

 

 

11,355

 

 

 

100.0 %

 

 

11.7 %

 

 

(13.7 )%

 

 

11,079

 

 

 

100.0 %

 

 

0.7 %

 

 

(37.7 )%

 

 

 

Six Months Ended

 

 

Six Months Ended

 

(amounts in thousands)

 

June 25, 2022

 

 

June 26, 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

 

$ 14,606

 

 

 

78.0 %

 

 

(1.5 )%

 

 

(22.7 )%

 

$ 19,206

 

 

 

81.6 %

 

 

3.7 %

 

 

(17.7 )%

Government Services

 

 

4,115

 

 

 

22.0 %

 

 

21.8 %

 

 

12.3 %

 

 

4,322

 

 

 

18.4 %

 

 

8.6 %

 

 

(0.6 )%

Consolidated

 

 

18,721

 

 

 

100.0 %

 

 

3.6 %

 

 

(27.0 )%

 

 

23,528

 

 

 

100.0 %

 

 

4.6 %

 

 

(24.4 )%

 

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

 

(amounts in thousands)

 

As of

June 25, 2022

 

 

As of

December 25, 2021

 

Cash and cash equivalents

 

$ 14,139

 

 

$ 19,202

 

Working capital

 

 

19,350

 

 

 

26,263

 

 

 
2

 

 

ENGlobal Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 25, 2022

 

 

June 26, 2021

 

 

June 25, 2022

 

 

June 26, 2021

 

Operating revenues

 

$ 11,355

 

 

$ 11,079

 

 

$ 18,721

 

 

$ 23,528

 

Operating costs

 

 

10,023

 

 

 

10,997

 

 

 

18,047

 

 

 

22,442

 

Gross profit

 

 

1,332

 

 

 

82

 

 

 

674

 

 

 

1,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

2,890

 

 

 

4,264

 

 

 

5,733

 

 

 

6,825

 

Operating loss

 

 

(1,558 )

 

 

(4,182 )

 

 

(5,059 )

 

 

(5,739 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

21

 

 

 

6

 

 

 

31

 

 

 

1,690

 

Interest expense, net

 

 

(52 )

 

 

(57 )

 

 

(103 )

 

 

(115 )

Loss from operations before income taxes

 

 

(1,589 )

 

 

(4,233 )

 

 

(5,131 )

 

 

(4,164 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for federal and state income taxes

 

 

(56 )

 

 

23

 

 

 

22

 

 

 

46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,533 )

 

 

(4,256 )

 

 

(5,153 )

 

 

(4,210 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share:

 

$ (0.04 )

 

$ (0.14 )

 

$ (0.15 )

 

$ (0.15 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

35,444

 

 

 

29,599

 

 

 

35,337

 

 

 

28,573

 

 

 
3

 

 

ENGlobal Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

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

 

 

 

June 25, 2022

 

 

December 25, 2021

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$ 14,139

 

 

$ 19,202

 

Trade receivables, net of allowances of $273 and $1,673

 

 

7,310

 

 

 

7,692

 

Prepaid expenses and other current assets

 

 

436

 

 

 

958

 

Payroll taxes receivable

 

 

2,003

 

 

 

3,065

 

Contract assets

 

 

5,645

 

 

 

4,177

 

Total Current Assets

 

 

29,533

 

 

 

35,094

 

Property and equipment, net

 

 

1,500

 

 

 

1,698

 

Goodwill

 

 

720

 

 

 

720

 

Intangible assets, net of accumulated amortization

 

 

2,746

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Right of use asset

 

 

4,001

 

 

 

4,251

 

Deposits and other assets

 

 

282

 

 

 

306

 

Total Other Assets

 

 

4,283

 

 

 

4,557

 

Total Assets

 

$ 38,782

 

 

$ 42,069

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 2,298

 

 

$ 2,001

 

Accrued compensation and benefits

 

 

2,252

 

 

 

2,183

 

Current portion of leases

 

 

1,293

 

 

 

1,389

 

Contract liabilities

 

 

2,332

 

 

 

2,054

 

Current portion of deferred payroll tax

 

 

537

 

 

 

537

 

Other current liabilities

 

 

207

 

 

 

667

 

Short-term contingent consideration

 

 

46

 

 

 

 

Short-term debt

 

 

1,218

 

 

 

 

Total Current Liabilities

 

 

10,183

 

 

 

8,831

 

 

 

 

 

 

 

 

 

 

    Long-term contingent consideration

 

 

1,309

 

 

 

 

    Long-term debt

 

 

 

 

 

1,035

 

    Long-term leases

 

 

3,682

 

 

 

4,012

 

Total Liabilities

 

 

15,174

 

 

 

13,878

 

Commitments and Contingencies (Note 8)

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock - $0.001 par value; 75,000,000 shares authorized; 35,802,313 shares issued and outstanding at June 25, 2022 and 35,230,675 shares issued and outstanding at December 25, 2021

 

 

36

 

 

 

35

 

Additional paid-in capital

 

 

57,972

 

 

 

57,403

 

Accumulated deficit

 

 

(34,400 )

 

 

(29,247 )

Total Stockholders’ Equity

 

 

23,608

 

 

 

28,191

 

Total Liabilities and Stockholders’ Equity

 

$ 38,782

 

 

$ 42,069

 

 

 
4

 

 

ENGlobal Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(amounts in thousands)

 

 

 

For the Six Months Ended

 

 

 

June 25, 2022

 

 

June 26, 2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net loss

 

$ (5,153 )

 

$ (4,210 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

368

 

 

 

187

 

Share-based compensation expense

 

 

111

 

 

 

107

 

Changes in current assets and liabilities, net of acquisition:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

382

 

 

 

1,217

 

Contract assets

 

 

(1,468 )

 

 

1,190

 

Other current assets

 

 

1,608

 

 

 

(1,234 )

Accounts payable

 

 

297

 

 

 

(164 )

Accrued compensation and benefits

 

 

69

 

 

 

(569 )

Contract liabilities

 

 

278

 

 

 

(698 )

Income taxes payable

 

 

(27 )

 

 

(54 )

Other current liabilities, net

 

 

(433 )

 

 

(347 )

Net cash used in operating activities

 

$ (3,968 )

 

$ (4,575 )

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Asset acquisition, net of cash acquired

 

 

(937 )

 

 

 

Property and equipment acquired

 

 

(92 )

 

 

(88 )

Net cash used in investing activities

 

$ (1,029 )

 

$ (88 )

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Issuance of common stock, net

 

 

 

 

 

20,052

 

At-the-market offering costs

 

 

(67 )

 

 

 

Payments on finance leases

 

 

(182 )

 

 

(55 )

Interest on PPP loan

 

 

 

 

 

25

 

Proceeds from revolving credit facility, net

 

 

183

 

 

 

110

 

Net cash provided by (used in) financing activities

 

$ (66 )

 

$ 20,132

 

Net change in cash

 

 

(5,063 )

 

 

15,469

 

Cash at beginning of period

 

 

19,202

 

 

 

13,706

 

Cash at end of period

 

$ 14,139

 

 

$ 29,175

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$ 98

 

 

$ 115

 

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)

 

$ 48

 

 

$ 151

 

Asset acquistion, common stock issued

 

$ 525

 

 

 

 

 

 
5

 

 

For further information on ENG's second quarter 2022 financial results, please refer to its Form 10-Q filing 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 at 9:00 am Eastern time today to discuss ENG’s second quarter 2022 financial results, provide updates on potential contract awards, and discuss the company's growth 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: 712824.

 

The conference call will also be broadcast live over the Internet and can be accessed at:

https://www.webcaster4.com/Webcast/Page/2272/46147

 

The teleconference replay will be available shortly after the completion of the live event through 9:00 am Eastern time on August 11, 2022. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 46147.

 

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

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

 

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 future 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/

 

 
6

 

 

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

 

 
7

 

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Ticker: ENG
CIK: 933738
Form Type: 8-K Corporate News
Accession Number: 0001654954-22-010555
Submitted to the SEC: Thu Aug 04 2022 8:53:56 AM EST
Accepted by the SEC: Thu Aug 04 2022
Period: Thursday, August 4, 2022
Industry: Engineering Services
Events:
  1. Earnings Release
  2. Financial Exhibit

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