-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IyyMSlzcsVg+25/L50CXVvbNxGQRxYaGsviISmiW0bXv6d12bu9GJnWvzUnIVwTz Wx0AMVb57dr2fqvPojIf8A== 0001050502-07-000157.txt : 20070509 0001050502-07-000157.hdr.sgml : 20070509 20070509132401 ACCESSION NUMBER: 0001050502-07-000157 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070508 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070509 DATE AS OF CHANGE: 20070509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENGLOBAL CORP CENTRAL INDEX KEY: 0000933738 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 880322261 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14217 FILM NUMBER: 07831488 BUSINESS ADDRESS: STREET 1: 654 N. SAM HOUSTON PKWY E STREET 2: SUITE 400 CITY: HOUSTON STATE: TX ZIP: 77060-5914 BUSINESS PHONE: 281-878-1000 MAIL ADDRESS: STREET 1: 654 N. SAM HOUSTON PKWY E STREET 2: SUITE 400 CITY: HOUSTON STATE: TX ZIP: 77060-5914 FORMER COMPANY: FORMER CONFORMED NAME: INDUSTRIAL DATA SYSTEMS CORP DATE OF NAME CHANGE: 19970123 8-K 1 englobal8k5-8.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 8, 2007 ENGLOBAL CORPORATION -------------------- (Exact name of registrant as specified in its chapter) Nevada 001-14217 88-0322261 ------ --------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 654 N. Sam Houston Parkway E., Suite 400, Houston, Texas 77060-5914 - -------------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 281-878-1000 ---------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operation and Financial Condition On May 8, 2007, the Company issued a press release with respect to the Company's performance during the quarter ended March 31, 2007. The original press release contained typographical errors in the first table, in the section labeled "Three Months Ended March 31, 2006." The following numbers were changed: In the Revenue column: In the % of Total Revenue column: ---------------------- --------------------------------- 1. 27.6 (instead of 34.3) 42% (instead of 51%) 2. 19.6 (instead of 5.2) 29% (instead of 8%) 3. 10.7 (instead of 6.6) 16% (instead of 10%) 4. 4.7 (instead of 16.5) 7% (instead of 25%) The amounts have been corrected in Exhibit 99.1 below. The error was a clerical oversight by the Company and does not materially affects its results of operations and financial condition for the quarter ended March 31, 2007, as reported in the Company's press release issued on May 8, 2007 and included in this current report on Form 8-K. A copy of the corrected press release is filed as Exhibit 99.1 to this Current Report on Form 8-K. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. Number Exhibit - ------ ------- 99.1 Press Release, dated May 8, 2007, of ENGlobal Corporation SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENGlobal Corporation Date: May 9, 2007 /s/ Natalie S. Hairston ----------------------- ----------------------- Natalie S. Hairston, Investor Relations Officer, Chief Governance Officer and Corporate Secretary EX-99.1 2 englobal5-8991.txt PRESS RELEASE EXHIBIT 99.1 - -------------------------------------------------------------------------------- NEWS RELEASE - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE ENGlobal Corporation CONTACT: Natalie S. Hairston (281) 878-1000 ir@ENGlobal.com --------------- ENGLOBAL CORPORATION ANNOUNCES RECORD FIRST QUARTER RESULTS HOUSTON, TX, MAY 8, 2007 - ENGlobal Corporation (AMEX: ENG), a leading provider of engineering and systems services, today reported net income of $3.2 million, or $0.12 per diluted share, for the quarter ended March 31, 2007. First Quarter 2007 Highlights Compared to First Quarter 2006: o Revenue increased 23% to a record $81.7 million o Gross profit increased 62% o Gross profit margin increased 33% from 12.3% to 16.3% o Operating profit margin increased from 3.2% to 6.8% o Net income increased 156%, to a record $3.2 million o Bi-weekly billable hours averaged 174,000 hours, up 41% The following table illustrates the composition of the Company's revenue for the quarters ended March 31, 2007 and 2006, respectively: Three Months Ended Three Months Ended (Dollars in millions)* March 31, 2007 March 31, 2006 ------------------ ----------------- % of Total % of Total Revenue Revenue Revenue Revenue ------- ------- ------- ------- 1. Detail-design $ 35.8 44% 27.6 42% 2. Field services and inspection 35.2 43% 19.6 29% 3. Procurement and construction 1.4 2% 10.7 16% 4. Design-build fixed price 3.8 4% 4.7 7% 5. Systems 5.5 7% 4.0 6% ------- ------- ------- ------- $ 81.7 100% $ 66.6 100% ======= ======= ======= ======= - ---------- *Some numbers may vary slightly from other reports due to rounding. Gross profit increased $5.1 million, or 62.0%, to $13.3 million for the three months ended March 31, 2007 from $8.2 million for the comparable prior year period. As a percentage of revenue, gross profit increased 4.0% from 12.3% for the three months ended March 31, 2006 to 16.3% for the quarter ended March 31, 2007. Of the overall $5.1 million increase in gross profit, approximately $1.9 million was primarily due to the $15.0 million increase in revenue plus approximately $3.2 million in equivalent lower costs on increased revenue. ~ more ~ - -------------------------------------------------------------------------------- 654 N. Sam Houston Parkway E. o Suite 400 o Houston, Texas 77060 www.ENGlobal.com ENGlobal Corporation Press Release May 8, 2007 Page 2 ENGlobal averaged 174,400 billable hours per two-week period during the first quarter 2007, a 41% increase, compared to 123,600 billable hours in the same period in 2006. The Company has calculated its overall utilization percentage, inclusive of overhead personnel, at approximately 90% for the first quarter 2007 compared to 88% for the comparable period of 2006. Selling, general and administrative ("SG&A") expenses stayed approximately level as a percent of revenue during the first quarter 2007 as compared to the same period in 2006. As a percentage of revenue, SG&A expense increased 0.3% to 9.5% for the three months ended March 31, 2007 from 9.2% for the comparable period in 2006. "ENGlobal is extremely pleased to report these positive first quarter results - a record in almost every category - driven by strong energy-related project activity and better execution on the part of our entire management team," said William A. Coskey, P.E., ENGlobal's Chairman and Chief Executive Officer. "One important metric that indicates our improved performance is consolidated operating margins, which more than doubled to 6.8% when compared to the first quarter of 2006. Judging by our revenue mix, part of ENGlobal's success this quarter can be attributed to replacing historically low margin revenue, with higher margin revenue in the areas of field services and inspection." "We are relying on a `back to basics' plan, which includes managing costs, promoting higher value services, and limiting the acceptance of risk. Currently, the strongest project activity where ENGlobal believes it is best positioned is occurring in the refining, pipeline, automation and renewable energy areas. We also believe there is potential upside to our business both in terms of new project opportunities as well as the uplift that could be realized once our underperforming operations begin to meet their financial goals." Long-term debt, net of current portion, increased 19.6%, or $5.3 million, from $27.2 million at December 31, 2006 to $32.5 million at March 31, 2007. The primary reasons for the increase in long-term debt are the payout for subcontractor charges to complete two fixed-price EPC projects, the timing difference related to meeting short-term bi-weekly payroll obligations from the Company's growth, and longer collection periods on receipts from its clients. On average, ENGlobal's accounts receivable days outstanding has increased to 71 days for the three month period ended March 31, 2007, from 66 days for the comparable period in 2006. One of the primary reasons for the increase in days outstanding has been finalizing the conversion of WRC Corporation to the Company's billing system. Excluding both the revenue and accounts receivable balances attributable to this acquisition, ENGlobal's average days outstanding would have been reduced to 69 days for the three month period ended March 31, 2007. The Company continues to work toward improving billing and collection processes. Effective March 30, 2007, the Company and Comerica Bank entered into an amendment to the Company's existing Credit Facility (the "Comerica Credit Facility") whereby the limit of the revolving credit note was increased from $30 million to $35 million, subject to loan covenant restrictions. The maturity date of the Comerica Credit Facility will remain at July 26, 2009. The outstanding balance on the line of credit as of March 31, 2007 was $29.6 million, with remaining borrowings available of $5.4 million as loan covenant restrictions did not limit the available borrowings. As of May 7, 2007, the outstanding balance on the line of credit was $27.0, with remaining borrowings available of $8.0 million. ENGlobal Corporation Press Release May 8, 2007 Page 3 The Company will host a conference call to discuss its fiscal year end results at 11:00 a.m. EDT (10:00 a.m. CDT). To participate in the conference call, please dial (877) 407-0782 (Domestic) or (201) 689-8567 (International) approximately 10 minutes before the scheduled start time and request the "ENGlobal First Quarter 2007 Earnings Conference Call". If you are unable to join the call, a replay will be available approximately three hours after the conclusion of the call until Tuesday, May 22, 2007. The replay can be accessed by dialing (877) 660-6853 (Domestic) or (201) 612-7415 (International), Account #286, Conference ID #240940. The call will be webcast live at www.englobal.com in the Investor Relations section, and an audio archive will be available on the Company's website shortly after the call concludes. The Company's Quarterly Report on Form 10-Q for the quarter year ended March 31, 2007 will be filed with the Securities and Exchange Commission on or before May 10, 2007 reflecting these results. About ENGlobal Corporation - -------------------------- ENGlobal Corporation provides engineering, automation systems, field inspection, and land management and regulatory services principally to the petroleum refining, petrochemical, pipeline, production, and process industries throughout the United States and internationally. The Company, with its subsidiaries, now employs over 2,200 employees in 18 offices and occupies over 400,000 square feet of office and manufacturing space. In 2004 and 2005, the Company was named the #1 fastest growing engineering firm in the United States and Canada by ZweigWhite and was ranked #2 in 2006 and 2003. Further information about the Company and its subsidiaries is available at www.ENGlobal.com. Safe Harbor for Forward-Looking Statements - ------------------------------------------ Certain 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 Company's ability to shift its contracting strategy in a manner that will prevent future charges; (2) the Company's ability to mitigate its losses; (3) general economic conditions that impact the cost of labor and materials; (4) the Company's ability to achieve its business strategy while effectively managing costs and expenses; (5) the Company's ability to estimate exact project completion dates; (6) the Company's ability to successfully and profitably integrate acquisitions; and (7) the continued strong performance of the energy sector. 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. Also, the information contained in this press release is subject to the risk factors identified in the Company's most recent Form 10-K. Click here to join our email list: http://www.b2i.us/irpass.asp?BzID=702&to=ea&s=0. ~more~
ENGlobal Corporation Press Release May 8, 2007 Page 4 FINANCIAL HIGHLIGHTS -------------------- Consolidated Statements of Income (in thousands, except per share data): For the Three Months Ended March 31, ---------------------------- 2007 2006 ------------ ------------ Operating Revenue $ 81,659 $ 66,627 ------------ ------------ Operating Expenses: Direct cost 68,381 58,405 Selling, general and administrative 7,744 6,101 ------------ ------------ Total operating expenses 76,125 64,506 ------------ ------------ Operating income 5,534 2,121 Other Income (Expense): Other income -- 22 Interest income (expense), net (560) (162) ------------ ------------ Income before Provision for Income Taxes 4,974 1,981 Provision for Income Taxes 1,820 747 ------------ ------------ Net Income $ 3,154 $ 1,234 ============ ============ Net Income Per Common Share: Basic $ 0.12 $ 0.05 Diluted $ 0.12 $ 0.05 Weighted Average Shares Used in Computing Net Income Per Share: Basic 26,809,006 26,332,602 Diluted 27,259,948 27,246,347 Selected Balance Sheet Information (in thousands): At ----------------------------- Mar. 31, 2007 Dec. 31, 2006 ------------- ------------- Cash 950 1,403 Working capital 44,215 35,187 Property and equipment, net 8,474 8,725 Total assets 111,201 106,227 Long-term debt, net of current portion 32,474 27,162 Stockholders' equity 44,321 40,862 --------- --------- ###
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