-----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, S7UG5LdfixA5M8++QkfAh4IoU5KfxZml0uSIWOJsV8OeLIEhH2gQjgWVWtA6YkId Izi98MXzLZUUtBCQMLgWJg== 0001050502-09-000132.txt : 20090512 0001050502-09-000132.hdr.sgml : 20090512 20090512094049 ACCESSION NUMBER: 0001050502-09-000132 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090511 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090512 DATE AS OF CHANGE: 20090512 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: 09817295 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 englobal8k511.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 11, 2009 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 11, 2009, the Company issued a press release with respect to the Company's performance during the quarter ended March 31, 2009. A copy of the 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 11, 2009, 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 12, 2009 /s/ Natalie S. Hairston ------------------ ----------------------- Natalie S. Hairston Vice President - Investor Relations, Chief Governance Officer and Corporate Secretary EX-99.1 2 englobal8k51199-1.txt PRESS RELEASE EXHIBIT 99.1 - -------------------------------------------------------------------------------- NEWS RELEASE - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE ENGlobal (R) CONTACT: Natalie S. Hairston (281) 878-1000 ir@ENGlobal.com --------------- ENGLOBAL REPORTS FIRST QUARTER RESULTS HOUSTON, TX, May 11, 2009 - ENGlobal (NASDAQ: ENG), a leading provider of engineering and related project services, announced today its financial results for the first quarter ended March 31, 2009. First Quarter 2009 Highlights Compared to First Quarter 2008: - ------------------------------------------------------------- o $0.07 earnings per diluted share, a decrease of 53% o Revenue of $93.5 million, a decrease of 5% o Positive cash flow from operations of $8.2 million for the quarter o Consolidated gross profit margin of 11.2%, a decrease from 14.6% ENGlobal reported first quarter net income of $2.0 million, or $0.07 earnings per diluted share, for the quarter ended March 31, 2009. This represents a decrease of 53% from earnings per diluted share of $0.15 for the same period last year. First-quarter revenue decreased to $93.5 million, 5% lower than the $98.2 million for the first quarter of fiscal year 2008. The following table illustrates the composition of the Company's revenue and profitability for the three months ended March 31, 2009 and 2008, respectively:
Quarter Ended Quarter Ended March 31, 2009 March 31, 2008 ----------------------------------------------- ---------------------------------------------- (Dollars in millions) Gross Operating Gross Operating Total % of Total Profit Profit Total % of Total Profit Profit Segment Revenue Revenue Margin Margin Revenue Revenue Margin Margin --------- ---------- ------------ ---------- ---------- --------- ---------- -------- ---------- Engineering $ 42.6 45.6% 10.8% 7.7% $ 52.0 53.0% 19.0% 16.5% Construction 21.2 22.7% 7.7% 5.5% 26.9 27.4% 7.5% 4.9% Automation 20.6 22.0% 13.9% 7.9% 10.4 10.6% 10.0% 4.0% Land 9.1 9.7% 15.1% 8.1% 8.9 9.0% 15.8% 8.1% ---------- ------------ --------- ----------- $ 93.5 100.0% $ 98.2 100.0% ========== ============ ========= =========== The Company's consolidated gross profit margin decreased to 11.2% in the three months ended March 31, 2009 from 14.6% in the prior year period. The primary reason for this decrease was a reduced level of performance in the Company's Engineering segment. Specifically, during the first quarter 2009 the Engineering ~ more ~ - -------------------------------------------------------------------------------- 654 N. Sam Houston Parkway E. * Suite 400 * Houston, Texas 77060 www.ENGlobal.com
ENGlobal Press Release May 11, 2009 Page 2 segment experienced: (1) lower billable hours and revenue resulting from a reduced level of client spending on capital projects, (2) a lower margin mix of business, and (3) lower utilization of billable resources. Lower revenue in the Company's Construction segment was due to a lower amount of pipeline inspection activity, while the Automation segment's increase in revenue and profitability related to its performance on a higher level of backlog awarded late last year as well as Hurricane Ike recovery work. The Company's Land group was roughly in line with prior year results. Management's Assessment: Commenting on the results, ENGlobal's Chairman and Chief Executive Officer, William A. Coskey, P.E., said, "ENGlobal has not been immune to the reduced level of project activity in our industry, which impacted our first quarter results. However, we are beginning to see a recovery in our proposal activity, and continue to be optimistic about the potential larger impact from a number of specific opportunities." Mr. Coskey, continued. "Our future plans include: (1) pursuing a variety of international projects, (2) expanding an internal initiative to serve the "transmission and distribution" power-related sector, (3) strengthening our renewable fuels activities, (4) forming alliances with technology providers, and (5) completing small strategic acquisitions. We look forward to outlining our detailed plans to expand ENGlobal's business offerings during the conference call later this morning." Overall SG&A expenses decreased 2%, from $7.2 million for the three months ended March 31, 2008 to $7.1 million for the same period in 2009. The first quarter 2009 SG&A represents a decrease of 20% compared to $8.8 million in the fourth quarter 2008. As a percentage of revenue, SG&A expense increased to 7.6% for the three months ended March 31, 2009 from 7.4% for the comparable prior year period. The Company's collections on past due Accounts Receivable balances continue to improve although the days of sales outstanding increased to 72 days at March 31, 2009, from 62 days at March 31, 2008. The primary reasons for the increase in days sales outstanding were several past due client accounts, which added 11 days to the three-month period. Bad debt expense was approximately .1% of revenue for both the quarters ended March 31, 2009 and 2008. Long-term debt and capital leases, net of current portion, decreased 11.7%, or $2.8 million, to $21.1 million at March 31, 2009 from $23.9 million at December 31, 2008. As a percentage of stockholders' equity, long-term debt decreased to 26.8% from 31.1% at these dates. The decrease in long-term debt primarily relates to a $2.5 million pay down on our line of credit. Cash on hand at March 31, 2009 totaled $4.2 million and availability under the credit facility totaled $29.1 million, resulting in cash and previously arranged borrowing capacity to meet additional liquidity needs of $33.3 million. At March 31, 2009, the amount outstanding on the Company's line of credit was $20.0 million compared to $29.7 million at March 31, 2008. ENGlobal's employee count decreased to approximately 2,200 for the quarter ended March 31, 2009. ENGlobal averaged 171,000 billable hours per two-week period during the first quarter 2009, a 15% decrease when compared to 200,000 billable hours in the same period in 2008. The first quarter 2009 average represents a 30% decrease over 221,000 billable hours in the fourth quarter 2008. The Company's overall utilization percentage, inclusive of overhead personnel, was approximately 87% for the first quarter 2009, compared with approximately 91% for the comparable period of 2008. ENGlobal Press Release May 11, 2009 Page 3 The Company will host a conference call to discuss its quarterly results at 11:00 a.m. EDT (10:00 a.m. CDT). To participate in the conference call, please dial (877) 407-8031 (Domestic) or (201) 689-8031 (International) approximately 10 minutes before the scheduled start time and request the "ENGlobal First Quarter 2009 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 Monday, May 25, 2009. The replay can be accessed by dialing (877) 660-6853 (Domestic) or (201) 612-7415 (International), Account #286, Conference ID #322601. 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 period ended March 31, 2009 will be filed with the Securities and Exchange Commission on or before May 11, 2009 reflecting these results. About ENGlobal - -------------- ENGlobal provides engineering, construction, automation, land and regulatory services principally to the energy sector throughout the United States and internationally. The Company has over 2,200 employees in 20 offices and occupies about 500,000 square feet of office and fabrication space. ENGlobal has been named one of the fastest growing engineering firms in the United States and Canada by ZweigWhite in each of the last five years. 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 first quarter financial results 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 respond appropriately to the current worldwide economic situation; (2) our ability to achieve its business strategy while effectively managing costs and expenses; (3) our ability to collect accounts receivable in a timely manner; (4) our ability to accurately estimate costs and fees on fixed-price contracts; (5) the effect of changes in laws and regulations with which the Company must comply and the associated costs of compliance with such laws and regulations, either currently or in the future, as applicable; (6) the effect of increases and decreases in the price of oil; (7) the effect of changes in accounting policies and practices as may be adopted by regulatory agencies, as well as by the FASB; (8) the effect on our competitive position within its market area in view of, among other things, the increasing consolidation with its services industries; and (9) our ability to increase or renew our line of credit. 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. - ----------------------------------------------- ENGlobal Press Release May 11, 2009 Page 4 FINANCIAL HIGHLIGHTS -------------------- (in thousands, except per basic data) For the Three Months Ended March 31, ------------------------------ 2009 2008 ------------- ------------- Operating Revenue $ 93,489 $ 98,166 Direct cost 83,005 83,820 ------------- ------------- Gross Profit 10,484 14,346 Selling, general and administrative 7,062 7,226 ------------- ------------- Operating income 3,422 7,120 Other Income (Expense): Other income 219 26 Interest income (expense), net (211) (483) ------------- ------------- Income before Provision for Income Taxes 3,430 6,663 Provision for Federal and State Income Taxes 1,417 2,660 ------------- ------------- Net Income $ 2,013 $ 4,003 ============= ============= Net Income Per Common Share: Basic $ 0.07 $ 0.15 Diluted $ 0.07 $ 0.15 Weighted Average Shares Used in Computing Net Income Per Share: Basic 27,295 27,060 Diluted 27,498 27,527 Selected Balance Sheet Information (in thousands): As of ----------------------------- Mar. 31, 2009 Dec. 31, 2008 ------------- ------------- Cash $ 4,187 $ 1,000 Working capital 57,644 58,586 Property and equipment, net 6,664 5,744 Total assets 135,595 152,705 Long-term debt and lease, net of current portion 21,141 23,857 Stockholders' equity 78,887 76,766 ### -----END PRIVACY-ENHANCED MESSAGE-----