ENGlobal Reports Second Quarter 2016 Results
August 04 2016 - 6:55AM
Marketwired
ENGlobal Reports Second Quarter 2016 Results
HOUSTON, TX-(Marketwired - Aug 4, 2016) - ENGlobal (NASDAQ:
ENG), a leading provider of engineering and automation services,
today announced results for the second quarter which ended June 25,
2016.
Revenue decreased $7.3 million to $13.8 million from $21.1
million, or a 34.7% decrease, for the three months ended June 25,
2016, as compared to the three months ended June 27, 2015. ENGlobal
reported a net loss of $1.6 million for the second quarter of 2016,
a decrease of $2.5 million compared to net income of $1.0 million
reported for the prior year period. The net loss per diluted share
was $0.06 for the second quarter just ended, compared to net income
per diluted share of $0.03 for the second quarter of 2015.
Revenue decreased $26.5 million to $28.7 million from $44.2
million, or a 60.0% decrease, for the six months ended June 25,
2016, as compared to the six months ended June 27, 2015. ENGlobal
reported a net loss of $2.4 million for the second quarter of 2016,
a decrease of $4.0 million compared to net income of $1.6 million
reported for the prior year period. The net loss per diluted share
was $0.08 for the six months ended June 27, 2015 compared to net
income per diluted share of $0.06 for the six months ended June 27,
2015.
In April 2015, the Company's Board of Directors authorized the
repurchase of up to $2.0 million of the Company's common stock from
time to time, based on prevailing market conditions. Through June
25, 2016, ENGlobal had repurchased approximately 499,344 shares of
common stock for $0.5 million under this program. As of June 25,
2016, the remaining amount authorized for repurchase under this
program was $1.5 million.
Management's AssessmentMark Hess, ENGlobal's Chief Financial
Officer stated: "We have been challenged by the significant decline
in oil and gas prices and the resulting drop in our clients'
activities. However, during the second and third quarters, the
Company has taken significant specific steps to improve revenue
generating opportunities, improve gross profit margins, and reduce
administrative expenses. Benefits from these recently initiated
measures should be realized in the quarters to come as we expect to
move towards profitability."
Mr. Hess continued: "Although projects have been taking longer
to be awarded, our backlog has increased from last year end and our
pipeline is robust. Importantly, ENGlobal continues to generate
positive cash flow. The Company's cash position increased from $7.8
million at the end of last year to $14.7 million as of June 25,
2016. We expect that our working capital will be adequate for
ongoing operations."
William A. Coskey, P.E., Chairman and CEO of ENGlobal added:
"Given our debt free balance sheet and diverse mix of business,
ENGlobal remains well positioned to successfully navigate through
the current industry environment. As stated before, ENGlobal has
been using the current downturn to invest in our business through
the addition of highly experienced project and business development
professionals. As a direct result of these actions, the
differentiated offerings under development have the potential to
positively transform our business over time. We remain committed to
realizing ENGlobal's full potential, and increasing shareholder
value over the long term."
The following is a summary of the income statement for the three
months and six months ended June 25, 2016 and June 27, 2015:
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(in thousands)
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|
Three months endedJune 25, 2016
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Three Months endedJune 27, 2015
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Six Months endedJune 25, 2015
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Six Months endedJune 27, 2015
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Revenue
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$
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13,842
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$
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21,053
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$
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28,654
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$
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44,155
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Gross Profit
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1,853
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4,609
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3,526
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8,731
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General & Administrative Expenses
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3,312
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3,555
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6,702
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7,559
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Operating Income (Loss)
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(1,459
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)
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1,054
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(3,176
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)
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1,172
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Net Income (Loss)
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(1,602
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)
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976
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(2,351
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)
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1,599
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The following table presents certain balance sheet items as of
June 25, 2016 and December 26, 2015:
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(in thousands)
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As of June 25, 2016
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As of December 26, 2015
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Cash
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$
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14,739
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$
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7,806
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Working capital
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22,438
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25,554
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Credit facility balance
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-
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-
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The following table illustrates the composition of the Company's
revenue and profitability for its operations for the three months
ended June 25, 2016 and June 27, 2015:
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(in thousands)
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Three months ended June 25, 2016
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Three Months ended June 27, 2015
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% of
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Gross
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Operating
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% of
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Gross
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Operating
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Total
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Total
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Profit
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Profit
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Total
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Total
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Profit
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Profit
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Segment
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Revenue
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Revenue
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Margin
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Margin
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Revenue
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Revenue
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Margin
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Margin
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Engineering & Construction
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$
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8,257
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59.7
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%
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9.6
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%
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0.4
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%
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$
|
12,931
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|
61.4
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%
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16.0
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%
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10.3
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%
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Automation
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|
5,585
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40.3
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%
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|
19.1
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%
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|
5.2
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%
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|
|
8,122
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|
38.6
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%
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31.2
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%
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24.1
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%
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Consolidated
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$
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13,842
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|
100.0
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%
|
|
13.4
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%
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(10.5
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)%
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$
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21,053
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|
100.0
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%
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21.9
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%
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5.0
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%
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The following table illustrates the composition of the Company's
revenue and profitability for its operations for the six months
ended June 25, 2016 and June 27, 2015:
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(in thousands)
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Six months ended June 25, 2016
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Six Months ended June 27, 2015
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% of
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Gross
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Operating
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% of
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Gross
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Operating
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Total
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Total
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|
Profit
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Profit
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|
|
Total
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Total
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Profit
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Profit
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Segment
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|
Revenue
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Revenue
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Margin
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|
Margin
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|
Revenue
|
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Revenue
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|
Margin
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|
Margin
|
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Engineering & Construction
|
|
$
|
16,784
|
|
58.6
|
%
|
|
8.5
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%
|
|
(0.6
|
)%
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$
|
26,229
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59.4
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%
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|
15.8
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%
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10.2
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%
|
Automation
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|
11,870
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|
41.4
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%
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17.7
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%
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|
4.9
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%
|
|
|
17,926
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|
40.6
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%
|
|
25.7
|
%
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|
18.5
|
%
|
Consolidated
|
|
$
|
28,654
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|
100.0
|
%
|
|
12.3
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%
|
|
(11.1
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)%
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|
$
|
44,155
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100.0
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%
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19.8
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%
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2.7
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%
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The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 25, 2016 is expected to be filed with the
Securities and Exchange Commission reflecting these results by the
end of the day today.
About ENGlobalENGlobal (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 the Engineering segment, ENGlobal's Government Services
group provides engineering, design, installation and operation and
maintenance of various government, public sector and international
facilities, and specializes in the turnkey installation and
maintenance of 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 StatementsThe statements above
regarding the Company's expectations regarding 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
including, but not limited to: (1) the effect of economic downturns
and the volatility and level of oil and natural gas prices; (2) our
ability to realize revenue projected in our backlog and our ability
to collect accounts receivable and process accounts payable in a
timely manner; (3) our ability to retain existing customers and
attract new customers; (4) our dependence on one or a few
customers; (5) the uncertainties related to the US Government's
budgetary process and their effects on our long-term US Government
contracts; (6) our ability to regain compliance with the terms of
our credit facility and to finance the Company's growth through
internal cash generation; (7) our ability to attract and retain key
professional personnel; (8) operational and political risks in
Russia and Kazakhstan along the Caspian Sea; (9) our ability to
execute to our internal performance plans to operate profitability
and generate positive cash flow from operations; (10) our ability
to identify, consummate and integrate potential acquisitions; and
(11) our ability to purchase shares under our stock repurchase
program due to changes in stock prices and other conditions. Actual
results and the timing of certain events could differ materially
from those projected in or contemplated by the forward-looking
statements due to a number of factors detailed from time to time in
ENGlobal's filings with the Securities and Exchange Commission. In
addition, reference is hereby made to cautionary statements set
forth in the Company's most recent reports on Form 10-K and 10-Q,
and other SEC filings. Actual results and the timing of certain
events could differ materially from those projected in or
contemplated by the forward-looking statements due to a number of
factors detailed from time to time in ENGlobal's filings with the
Securities and Exchange Commission. In addition, reference is
hereby made to cautionary statements set forth in the Company's
most recent reports on Form 10-K and 10-Q, and other SEC
filings.
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Contact:Mark HessPhone: 281-878-1040E-mail: IR@ENGlobal.com
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