UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) March 12, 2015
ENGlobal Corporation
(Exact name of registrant as specified in its charter)
| Nevada | 001-14217 | 88-0322261 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer 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:
| [ ] | 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 Operations and Financial Condition.
On March 12, 2015, ENGlobal Corporation (the "Company") issued a press release reporting fourth quarter and fiscal year ended December 27, 2014 results. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information and Exhibit 99.1 be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated March 12, 2015
SIGNATURE
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
(Registrant) |
||
| March 12, 2015
(Date) |
/s/ TAMI L. WALKER
Tami L. Walker General Counsel, Vice President and Corporate Secretary |
EXHIBIT 99.1
HOUSTON, March 12, 2015 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading provider of engineering and automation services, today announced its financial results for the fourth quarter and fiscal year ended December 27, 2014.
2014 Fourth Quarter Highlights for Continuing Operations as compared to 2013 Fourth Quarter results:
On a comparable basis, revenue from the continuing businesses increased to $26.9 million or a 6.3% increase from $25.3 million in the fourth quarter of 2013. ENGlobal reported net income from continuing operations of $0.8 million, or $0.03 per diluted share, for the quarter ended December 27, 2014, compared to income of $0.4 million, or $0.02 per diluted share, for the quarter ended December 28, 2013. During the quarter ended December 27, 2014, the company incurred non-cash expenses for depreciation, amortization and stock compensation of $0.6 million as compared to $0.7 million for the comparable period in 2013.
2014 Fiscal Year Highlights for Continuing Operations as compared to 2013 Fiscal Year results:
On a comparable basis, revenue from the continuing businesses increased to $107.9 million for the fiscal year ended December 27, 2014, or a 21.1% increase from $89.1 million for the fiscal year ended December 28, 2013. The sale of the Gulf Coast EPCM business in August of 2013 had contributed $79.8 million of revenues for the year ended December 28, 2013. ENGlobal reported net income from continuing operations of $6.0 million, or $0.22 per diluted share, for the fiscal year ended December 27, 2014, compared to a loss of $2.3 million from continuing operations, or a loss of $0.08 per diluted share, for the fiscal year ended December 28, 2013. During the fiscal year ended December 27, 2014, the company incurred non-cash expenses for depreciation, amortization and stock compensation of $2.7 million as compared to $2.2 million for the comparable period in 2013.
Management's Assessment
Mark Hess, ENGlobal's Chief Financial Officer, said: "We are proud to have exceeded our financial targets for 2014, which was driven by an increase in margins, consistent project execution, as well as internal growth. We maintained a substantial cash balance and had no borrowings from our working capital lines during 2014. We also successfully replaced our credit facility with a similar three-year facility that will help provide the working capital needed to further our growth."
William Coskey, P.E., Chairman and Chief Executive Officer of ENGlobal added: "I would like to sincerely congratulate the outstanding men and women of ENGlobal for their contributions toward a successful 2014. We will not be immune to some industry headwinds during 2015, but are currently encouraged by the continued level of spending by our largely midstream and downstream clientele. Having regained our footing once again, we now expect to explore acquisition opportunities for external growth."
The following table illustrates the composition of the company's revenue and profitability for its operations for the fiscal years ended December 27, 2014 and December 28, 2013:
| Year Ended | Year Ended | |||||||
| (in thousands) | December 27, 2014 | December 28, 2013 | ||||||
| % 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 | $ 50,437 | 46.7% | 16.3% | 8.7% | $ 43,901 | 26.0% | 13.9% | 3.3% |
| Automation | 57,463 | 53.3% | 26.6% | 21.6% | 45,223 | 26.8% | 19.4% | 12.9% |
| Operations sold | — | — | — | — | 79,839 | 47.2% | 8.3% | 4.8% |
| Consolidated | $ 107,900 | 100.0% | 21.7% | 6.4% | $ 168,963 | 100.0% | 12.6% | (0.5)% |
The following table illustrates the composition of the company's revenue and profitability for its operations for the quarters ended December 27, 2014 and December 28, 2013:
| Quarter Ended | Quarter Ended | |||||||
| (in thousands) | December 27, 2014 | December 28, 2013 | ||||||
| % 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 | $ 12,695 | 47.2% | 15.2% | 7.7% | $ 11,441 | 45.3% | 15.1% | 2.7% |
| Automation | 14,211 | 52.8% | 25.1% | 20.2% | 13,813 | 54.7% | 23.3% | 18.8% |
| Consolidated | $ 26,906 | 100.0% | 20.4% | 4.8% | $ 25,254 | 100.0% | 19.0% | 1.4% |
The following are certain key operating statistics for the last four quarters. Because the company has undergone significant change, this information may be helpful in analyzing our ongoing business (in thousands):
| 2014 | Fiscal Year | ||||
| Q1 | Q2 | Q3 | Q4 | 2014 | |
| Revenue | $ 26,898 | $ 27,170 | $ 26,927 | $ 26,905 | $ 107,900 |
| Gross Profit | 6,084 | 5,790 | 6,083 | 5,491 | 23,448 |
| Gross Profit Percentage | 22.6% | 21.3% | 22.6% | 20.4% | 21.7% |
| General & Administrative Expenses | 4,119 | 4,246 | 4,000 | 4,203 | 16,568 |
| Operating Income | 1,965 | 1,544 | 2,083 | 1,288 | 6,880 |
The following table presents certain balance sheet items as of December 27, 2014 and December 28, 2013:
| (in thousands) | As of December 27, 2014 | As of December 28, 2013 |
| Cash | $ 6,213 | $ 3,955 |
| Working capital | 19,440 | 13,575 |
| Credit facility balance | — | — |
The Company's Annual Report on Form 10-K for the year ended December 27, 2014 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) the effect of economic downturns and depressed oil prices; (2) our ability to execute to our internal performance plans such as our post-divestiture outlook, productivity improvement and cost containment initiatives; (3) our ability to attract and retain key professional personnel; (4) our ability to retain existing customers and attract new customers; (5) our ability to realize revenue projected in our backlog and our ability to collect accounts receivable and process accounts payable in a timely manner; (6) our ability to identify, consummate and integrate potential acquisitions; (7) our reliance on third-party subcontractors and equipment manufacturers; (8) our ability to sustain profitability and positive cash flow from operations; (9) our ability to comply with the terms under our new credit facility; (10) operational and political risks in Russia and Kazakhstan along the Caspian Sea; (11) the effect of changes in the prices of oil and natural gas; (12) 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; and (13) the effect of changes in accounting policies and practices as may be adopted by regulatory agencies. 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