ENGlobal Reports Fourth Quarter and Fiscal Year 2015 Results
March 09 2016 - 7:46PM
ENGlobal (Nasdaq:ENG), a leading provider of
engineering and automation services, today announced earnings of
$10.5 million and diluted earnings per share of $0.38 for the
fiscal year ended December 26, 2015.
2015 Fiscal Year Highlights as compared to 2014 Fiscal
Year results:
- Revenue of $79.6 million, a 26.2%
decrease
- Gross profit margin of 20.4%, a
decrease of 130 basis points
- Net income of $10.5 million, an
increase from a net income of $6.0 million
- Earnings of $0.38 per diluted share,
an increase from $0.22 per diluted share
Revenue decreased to $79.6 million for the fiscal year ended
December 26, 2015, or a 26.2% decrease from $107.9 million for the
fiscal year ended December 27, 2014. ENGlobal reported net income
of $10.5 million, or $0.38 per diluted share, for the fiscal year
ended December 26, 2015, compared to net income of $6.0 million, or
$0.22 per diluted share, for the prior year period. During the
fiscal year ended December 26, 2015, the company incurred non-cash
expenses for depreciation, amortization and stock compensation of
$2.1 million as compared to $2.7 million for the comparable period
in 2014.
In April 2015, the Company’s Board of Directors authorized the
repurchase of up to $2 million of the Company’s common stock from
time to time, based on prevailing market conditions. Through
February 23, 2016, ENGlobal had repurchased 250,000 shares of
common stock for $232 thousand under this program. As of
February 23, 2016, the remaining amount authorized for repurchase
under this program was $1.8 million.
Management's Assessment
Mark Hess, ENGlobal's Chief Financial Officer, said: “While 2015
was a challenging year due to the severe decline in oil prices and
spending cuts in the energy industry, through our service
agreements and aggressive project bidding we were able to maintain
profitability and a positive future outlook. It is notable
that the Company’s recent positive performance has enabled us to
release the valuation allowance on our deferred tax asset that has
been in place since 2012.”
Mr. Hess continued, “We maintained solid relationships with our
financial partners, had a substantial cash balance throughout the
year, and had no borrowings from our working capital lines during
2015. We enter this year well positioned to seek out both
internal and external opportunities to grow our business.”
William Coskey, P.E., Chairman and Chief Executive Officer of
ENGlobal, added: “I would like to thank the outstanding men and
women of ENGlobal for their hard work and dedication toward a
successful 2015. We are fortunate as a company to primarily
serve midstream and downstream clientele, who have ongoing areas of
project activity. Thus far this year we have gotten off to a slow
start utilizing our resources; however, awards of new business have
been extremely strong. We are well positioned for the challenges
ahead, and remain enthusiastic about the opportunities for our
Company.”
The following table illustrates the composition of the Company's
revenue and profitability for its operations for the fiscal years
ended December 26, 2015 and December 27, 2014:
|
Year Ended |
Year Ended |
(in
thousands) |
December 26, 2015 |
December 27, 2014 |
|
|
%
of |
Gross |
Operating |
|
%
of |
Gross |
Operating |
|
Total |
Total |
Profit |
Profit |
Total |
Total |
Profit |
Profit |
Segment |
Revenue |
Revenue |
Margin |
Margin |
Revenue |
Revenue |
Margin |
Margin |
|
|
|
|
|
|
|
|
|
Engineering &
Construction |
$ |
49,277 |
|
|
61.9 |
% |
|
14.1 |
% |
|
8.6 |
% |
$ |
50,437 |
|
|
46.7 |
% |
|
16.3 |
% |
|
8.7 |
% |
Automation |
|
30,328 |
|
|
38.1 |
% |
|
30.7 |
% |
|
22.5 |
% |
|
57,463 |
|
|
53.3 |
% |
|
26.6 |
% |
|
21.6 |
% |
Consolidated |
$ |
79,605 |
|
|
100.0 |
% |
|
20.4 |
% |
|
2.6 |
% |
$ |
107,900 |
|
|
100.0 |
% |
|
21.7 |
% |
|
6.4 |
% |
|
|
|
|
|
|
|
|
|
The following table illustrates the composition of the company's
revenue and profitability for its operations for the quarters ended
December 26, 2015 and December 27, 2014:
|
Quarter Ended |
Quarter Ended |
(in
thousands) |
December 26, 2015 |
December 27, 2014 |
|
|
%
of |
Gross |
Operating |
|
%
of |
Gross |
Operating |
Segment |
Total |
Total |
Profit |
Profit |
Total |
Total |
Profit |
Profit |
|
Revenue |
Revenue |
Margin |
Margin |
Revenue |
Revenue |
Margin |
Margin |
|
|
|
|
|
|
|
|
|
Engineering &
Construction |
$ |
11,103 |
|
|
64.4 |
% |
|
10.0 |
% |
|
4.4 |
% |
$ |
12,695 |
|
|
47.2 |
% |
|
15.2 |
% |
|
7.7 |
% |
Automation |
|
6,137 |
|
|
35.6 |
% |
|
43.2 |
% |
|
33.4 |
% |
|
14,211 |
|
|
52.8 |
% |
|
25.1 |
% |
|
20.2 |
% |
Consolidated |
$ |
17,240 |
|
|
100.0 |
% |
|
21.8 |
% |
|
2.9 |
% |
$ |
26,906 |
|
|
100.0 |
% |
|
20.4 |
% |
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
The following are certain key operating statistics for the last
four quarters, which may be helpful in analyzing our ongoing
business (in thousands):
|
2015 |
|
|
|
Fiscal
Year |
|
Q1 |
Q2 |
Q3 |
Q4 |
|
2015 |
|
|
Revenue |
$ |
23,102 |
|
$ |
21,053 |
|
$ |
18,210 |
|
$ |
17,240 |
|
|
$ |
79,605 |
|
Gross Profit |
|
4,122 |
|
|
4,609 |
|
|
3,773 |
|
|
3,764 |
|
|
|
16,268 |
|
Gross Profit Percentage |
|
17.84 |
% |
|
21.89 |
% |
|
20.72 |
% |
|
21.83 |
% |
|
|
20.44 |
% |
General &
Administrative Expenses |
|
4,004 |
|
|
3,555 |
|
|
3,350 |
|
|
3,259 |
|
|
|
14,168 |
|
Operating Income |
|
118 |
|
|
1,054 |
|
|
423 |
|
|
505 |
|
|
|
2,100 |
|
The following table presents certain balance sheet items as of
December 26, 2015 and December 27, 2014:
(in
thousands) |
As of December 26, 2015 |
As of December 27, 2014 |
Cash |
$ |
|
7,806 |
|
$ |
|
6,213 |
|
Working capital |
|
|
25,554 |
|
|
|
20,440 |
|
Credit facility
balance |
|
|
— |
|
|
|
— |
|
The Company's Annual Report on Form 10-K for the year ended
December 26, 2015 is expected to be filed with the Securities and
Exchange Commission today reflecting these results.
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 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 Statements
The 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) our ability to
satisfy the continued listing standards of the NASDAQ with respect
to our common stock or to cure any continued listing standard
deficiency with respect thereto; (2) the effect of economic
downturns and the volatility of oil and natural gas prices and
significantly depressed oil prices since the end of 2014; (3) our
ability to realize revenue projected in our backlog and our ability
to collect accounts receivable and process accounts payable in a
timely manner; (4) our ability to retain existing customers and
attract new customers; (5) our dependence on one or a few
customers; (6) the uncertainties related to the US Government’s
budgetary process and their effects on our long-term US Government
contracts; (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 sustain
profitability and positive cash flow from operations; (10) our
ability to identify, consummate and integrate potential
acquisitions; and (11) our ability to execute to our internal
performance plans such as our post-divestiture outlook,
productivity improvement and cost containment initiatives. 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 A. Hess
(281) 878-1040
ir@ENGlobal.com
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