10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

FORM 10-Q/A-1

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____________to _____________

Commission File No. 001-14217

ENGlobal Corporation

(Exact name of small business issuer in its charter)

Nevada (State or other jurisdiction of incorporation or organization) 88-0322261 (I.R.S. Employer Identification No.)

654 N. Sam Houston Parkway E., Suite 400, Houston, TX (Address of principal executive offices) 77060-5914 (Zip code)

 (281) 878-1000

(Issuer’s telephone number) 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required file such reports), and (2) has been subject to such filing requirements for the past 90 days.                        

Yes  x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   o	Accelerated filer   o
Non-accelerated filer   o (Do not check if smaller reporting company)	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        

Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the close of business on August 17, 2012.

$0.001 Par Value Common Stock 26,964,339 shares

EXPLANATORY NOTE - AMENDMENT

The sole purpose of this Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 of ENGlobal Corporation (the “Company”) filed with the Securities and Exchange Commission on August 20, 2012 (the “Form 10-Q”) is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report:

31.1	Certifications Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934 for the Second Quarter 2012*
31.2	Certifications Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934 for the Second Quarter 2012*
32.0	Certification Pursuant to Rule 13a – 14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Second Quarter 2012*
101.INS	XBRL Instance Document **
101.SCH	XBRL Taxonomy Extension Schema Document **
101.CAL	XBRL Taxonomy Extension Calculation Linkbase **
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document **

* These exhibits were previously included or incorporated by reference in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 20, 2012.

** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, in the capacities and the dates indicated, thereunto duly authorized.

	ENGlobal Corporation
Date:  August 30, 2012	By:	/s/ Mark A. Hess
		Mark A. Hess Interim Chief Financial Officer

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NOTE 10 - COMMITMENTS AND CONTINGENCIES (Detail) (USD $)	12 Months Ended		6 Months Ended
	Dec. 31, 2011	Jun. 30, 2012	Jun. 30, 2012 Insurance [Member]	Dec. 31, 2011 Insurance [Member]
Loss Contingency, Damages Sought, Value	$ 15,800,000
Loss Contingency, Settlement Agreement, Terms	Pursuant to the bankruptcy, the plant assets were sold for $6,802,000. On December 6, 2011, the court issued an order allocating proceeds from the sale and authorizing their distribution. Of the total amount, $1,054,418 was allocated to ENGlobal. Of that amount, $845,529 is still being held by the court pending the outcome of continuing litigation regarding the claims of one subcontractor. We estimate the court will render a final decision regarding this matter in the third quarter of 2012.
Loss Contingency, Damages Awarded, Value	1,054,418
Insurance Stop Loss, Per Occurrence			200,000
Employee-related Liabilities, Current	$ 11,210,000	$ 12,319,000	$ 1,500,000	$ 1,200,000

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NOTE 7 - SEGMENT INFORMATION (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Assets of Disposal Group, Including Discontinued Operation, Current	$ 1,565	$ 3,757

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NOTE 3 - DISCONTINUED OPERATIONS (Detail) - Schedule of Discountinued Operations (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Assets:
Trade receivables	$ 500	$ 2,391
Prepaid expenses and other current assets		4
Cost and estimated earnings in excess of billings on uncompleted contracts	1,063	138
Deferred tax asset		971
Property and equipment, net	2	248
Other assets		5
Total assets held for sale	1,565	3,757
Liabilities:
Accounts payable	884	430
Accrued compensation and benefits	265	(50)
Deferred rent		17
Billings in excess of costs and estimated earnings on uncompleted contracts		158
Other current liabilities	1,111	785
Total liabilities held for sale	$ 2,260	$ 1,340

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NOTE 9 - EARNINGS PER SHARE (Detail)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	593,000	443,000	443,000

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NOTE 4 - STOCK COMPENSATION PLANS

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 4 – STOCK COMPENSATION PLANS

The Company's 1998 Incentive Plan (“Option Plan”) that provided for the issuance of up to 3,250,000 shares of common stock expired in June 2008. The Option Plan provided for grants of non-statutory options, incentive stock options, restricted stock awards and stock appreciation rights. All stock option grants had a ten-year term. Stock options issued to executives and management generally vested over a four-year period, one-fifth at grant date and one-fifth at December 31 of each year thereafter until they were fully vested. Stock options issued to directors under the Option Plan vested quarterly over a one-year period. As of August 17, 2012, 775,000 shares of common stock remained subject to outstanding awards previously granted under the Option Plan.

In June 2009, the Company's stockholders approved the 2009 Equity Incentive Plan (“Equity Plan”) that provides for the issuance of up to 480,000 shares of common stock. The Equity Plan provides for grants of non-statutory options, incentive stock options, restricted stock awards, performance shares, performance units, restricted stock units and other stock-based awards. Grants to employees generally vest over a four-year period, one-fourth at December 31 of each year until they are fully vested. Grants to non-employee directors vest quarterly over a one-year period coinciding with their service term. In April 2012, the Compensation Committee of the Board of Directors approved an increase of 500,000 shares, which was subsequently approved by our shareholders. As of August 17, 2012, 470,773 shares of restricted stock have been granted under the Equity Plan, of which 133,115 remain subject to outstanding awards. Unvested restricted stock awards and restricted stock units are included in diluted earnings per share until the shares have been vested. The vested shares are then included in basic earnings per share.

Total share-based compensation expense of approximately $73,000 and $100,000 was recognized during the three-months ended June 30, 2012 and 2011, respectively. Total share-based compensation expense in the amount of $159,000 and $198,000 was recognized during the six months ended June 30, 2012 and 2011, respectively. Share-based compensation expense is reported in selling, general and administrative expense.

Stock Options

No compensation expense related to outstanding non-vested stock option awards under the Option Plan was recognized during the three month period ending June 30, 2012.

The following table summarizes stock option activity through the six month period ended June 30, 2012:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (000's)*
Balance at December 31, 2011	775,000	$	6.84	4.1	$	264
Granted	—	—		—	—
Exercised	—	—		—	—
Canceled or expired	—	—		—	—
Balance at June 30, 2012	775,000	$	6.84	3.6	$	8
Exercisable at June 30, 2012	755,000	$	6.67	4.4	$	8

*Based on average stock price through the second quarter of 2012 of $2.05 per share. The average stock price for the same period in 2011 was $4.18 per share. The total fair value of vested options outstanding as of June 30, 2012 and 2011 was $8.0 thousand and $153.0 thousand, respectively.

There were no options exercised during the six months ended June 30, 2012 or the six months ended June 30, 2011.

Restricted Stock Awards

Restricted stock awards granted to directors are intended to compensate and retain the directors over the one-year service period commencing July 1 of the year of service. These awards vest in quarterly installments beginning September 30 of the year of service, so long as the grantee continues to serve as a director of the Company. Restricted stock awards granted to employees vest in four equal annual installments beginning December 31 in the year granted, so long as the grantee remains employed full-time with the Company as of each vesting date. During 2012, the Company granted restricted stock awards per the following table.

Date Issued	Issued to	Number of Individuals	Number of Shares	Market Price		Fair Value		Grants Forfeited
June 14, 2012	Employee	1	50,336	$	1.49	$	75,000	—
June 14, 2012	Director	3	100,671	$	1.49	$	150,000	—

The amount of compensation expense related to all restricted stock awards that had not been recognized at June 30, 2012, totaled $441,000. This compensation expense is expected to be recognized over a weighted-average period of approximately 19 months.

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NOTE 5 - CONTRACTS (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Deferred Revenue, Current	$ 1.7	$ 0.3

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NOTE 4 - STOCK COMPENSATION PLANS (Detail) - Schedule of Restricted Stock Awards (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
June 14, 2012 to Employee [Member]
Issued To	Employee
Number of Individuals	1
Number of Shares	50,336
Market Price (in Dollars per share)	$ 1.49
Fair Value (in Dollars)	$ 75,000
Grants Forfeited	0
June 14, 2012 to Director [Member]
Issued To	Director
Number of Individuals	3
Number of Shares	100,671
Market Price (in Dollars per share)	$ 1.49
Fair Value (in Dollars)	$ 150,000
Grants Forfeited	0

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NOTE 5 - CONTRACTS (Detail) - Schedule of Costs, Estimated Earnings and Billings on Uncompleted Contracts (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Costs incurred on uncompleted contracts	$ 42,845	$ 43,455
Estimated earnings on uncompleted contracts	6,415	5,591
Earned revenues	49,260	49,046
Less: billings to date	39,256	46,677
Net costs and estimated earnings in excess of billings on uncompleted contracts	10,004	2,369
Costs and estimated earnings in excess of billings on uncompleted contracts	10,585	6,790
Billings in excess of costs and estimated earnings on uncompleted contracts	(581)	(4,421)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$ 10,004	$ 2,369

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NOTE 6 - LINE OF CREDIT AND DEBT (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended			6 Months Ended		12 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 PNC Credit Facility [Member]	Jun. 30, 2011 PNC Credit Facility [Member]	Dec. 31, 2009 Wells Fargo Credit Facility [Member]	Aug. 01, 2011 Wells Fargo Credit Facility [Member]	Jun. 30, 2012 Ex-Im Bank Facility [Member]
Line of Credit Facility, Interest Rate at Period End	5.00%		5.00%		4.125%
Interest Expense (in Dollars)	$ 0.4	$ 0.2	$ 0.7	$ 0.4
Line of Credit, Term							3 years	28 months
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)						35.0		25.0	35.0	9.5
Line of Credit Facility, Description						Lender's Commitment Percentage of the lesser of (a) $35.0 million less the maximum undrawn amount on all outstanding letters of credit, or (b) an amount equal to the sum of: (i) up to 85% of Eligible Receivables, plus (ii) up to the lesser of (x) up to 85% of Eligible Extended Term Receivables or (y) $3.0 million, plus (iii) up to the lesser of (x) up to 85% of Eligible Government Receivables or (y) $800,000, plus (iv) up to the lesser of (x) 75% of Eligible Unbilled Receivables or (y) $8.5 million; provided, however, that no more than $800,000 of the amount resulting from the calculation of this part (iv) may be attributable to Eligible Unbilled Receivables owed by Government Customers, plus (v) up to the lesser of (x) up to 50% of Eligible Costs in Excess of Billings or (y) $4.0 million, minus (vi) the Maximum Undrawn Amount of all outstanding letters of credit, minus (vii) such reserves as Agent may deem proper and necessary in the exercise of its discretion.
Line of Credit Facility, Interest Rate Description						Loans will bear interest at (a) the sum of the Alternate Base Rate (defined as a fluctuating rate equal to the highest of (x) the commercial lending rate of Agent as publicly announced and in effect on such day, (y) the daily federal funds open rate as quoted by ICAP North America, Inc. in effect on such day plus 1/2 of 1%, and (z) the Daily Libor Rate plus 1% (with the Daily LIBOR Rate determined by taking the LIBOR rate published in the Wall Street Journal and dividing it by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus the Applicable Margin (defined below) for Domestic Rate Loans or (b) the sum of the Eurodollar Rate (defined as a fluctuating rate determined by Agent by dividing the quoted LIBOR rate (as selected from a variety of sources) by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus the Applicable Margin with respect to Eurodollar Rate Loans.
Line of Credit Facility, Collateral						Loan Agreement are secured by a first priority perfected lien against any and all personal property assets of each of the Borrowers (other than certain excluded property, including certain accounts receivable related to the Caspian Pipeline Consortium pledged under the Ex-Im Transaction Specific Credit Agreement dated as of July 13, 2011 between ENGlobal US and Wells Fargo Bank, National Association).				$2.3 million in cash
Debt Instrument, Maturity Date						May 29, 2015
Line of Credit Facility, Covenant Terms						Maintain as of the last day of each applicable period a Tangible Net Worth at least equal to the amount set forth for such period: (a) for each of the fiscal quarters ending June 30, 2012, September 30, 2012 and December 31, 2012, a minimum Tangible Net Worth of 90% of the Tangible Net Worth of the Borrowers on a consolidated basis on the Closing Date, and (b) for the fiscal quarter ending March 31, 2013, and as of the last day of each fiscal quarter thereafter, a minimum Tangible Net Worth equal to that required on December 31 of the immediately preceding fiscal year plus (i) 75% of Borrowers' after tax net income for such year if such after tax net income is greater than $0, or (ii) $0, if Borrowers' after tax net income for such year is less than or equal to $0. Maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, measured as of (a) June 30, 2012, for the fiscal quarter then most recently ended, (b) September 30, 2012, for the two fiscal quarter period then most recently ended, (c) December 31, 2012, for the three fiscal quarter then most recently ended, (d) March 31, 2013 and as of the last day of each fiscal quarter thereafter, for the four fiscal quarter period then most recently ended. Maintain at all times Average Excess Availability of not less than $3.5 million measured monthly as of the last day of the month. Not permit the aggregate amount of all costs and expenses incurred in connection with Borrower's performance of its Caspian project obligations to exceed the aggregate amount of cash receipts attributable to the Caspian Contracts by more than the following amounts: (a) for the month ending June 30, 2012, $6.5 million, (b) for the month ending September 30, 2012, $1.0 million, and (c) for the month ending December 31, 2012, $0. The Borrowers will not be party to mergers, acquisitions, consolidations, reorganizations or similar transactions. The Borrowers will not sell, lease, transfer or otherwise dispose of any of their properties or assets (subject to certain exceptions set forth in the Loan Agreement). The Borrowers will not contract for, purchase or make any expenditure or commitment for capital expenditures in the fiscal year ending December 31, 2012 and in any fiscal year thereafter, in an aggregate amount in excess of $3.5 million. The Borrowers will not declare, pay or make any dividend or distribution on any shares of common or preferred stock or use any funds, property or assets to repurchase or otherwise retire any common or preferred stock.				ENGlobal will not be a party to mergers, acquisitions, consolidations, reorganizations or similar transactions. ENGlobal will not contract for, purchase or make any expenditure or commitment for capital expenditures in any fiscal year, in an aggregate amount in excess of $3.5 million. ENGlobal will not incur any indebtedness except for (a) ENGlobal's liabilities under the PNC Credit Facility, and (b) any other liabilities of ENGlobal not to exceed $1 million in indebtedness in any 12 month period for the unsecured financing of insurance premiums. ENGlobal will not declare, pay or make any dividend or distribution on any shares of common or preferred stock or use any funds, property or assets to repurchase or otherwise retire any common or preferred stock. Maintain as of the last day of each applicable period a Tangible Net Worth ratio not greater than 2.25 to 1.0. Maintain a Fixed Charge Coverage Ratio of not less than 1.75 to 1.00, measured as of each fiscal quarter end commencing September 30, 2011, determined on a rolling 4-quarter basis.
Line of Credit Facility, Covenant Compliance						ENGlobal did not provide a foreign good standing certificate for ENGlobal US issued by the Secretary of State or other appropriate official of the State Illinois within 14 days of the closing of the PNC Credit Facility. Status - Borrowers filed the amended and restated franchise tax filings with the Illinois Secretary of State on July 20, 2012. Barring any further delays, Borrowers expect to receive the foreign good standing certificate in the near future. ENGlobal did not deliver to Agent a landlord waiver requested to be provided within 30 days of the closing of the PNC Credit Facility. Status - The requested landlord waiver is still outstanding, although the form of the waiver has been approved by both the landlord and the Borrowers' counsel. Borrowers remitted payment to the landlord's legal counsel for the waiver preparation fee during the week ended August 17, 2012 and expect to receive this waiver in the near future. Tangible Net Worth - Borrowers did not maintain Tangible Net Worth, as of June 30, 2012, of at least 90% of the Borrowers' Tangible Net Worth as of the closing date of the PNC Credit Facility. Fixed Charge Coverage Ratio - Borrowers did not maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00 measured as of the quarterly period ended June 30, 2012. Schedules - Borrowers did not deliver the May 2012 Borrowing Base Certificate (along with updated ineligibles and supporting schedules) to the Agent within twenty (20) days after the end of the month. Borrowers delivered the May 2012 Borrowing Base Certificate to the Agent on August 7, 2012. Borrowers did not deliver the June 2012 Borrowing Base Certificate (along with updated ineligibles and supporting schedules) to the Agent within twenty (20) days after the end of the month. Borrowers delivered the June 2012 Borrowing Base Certificate to the Agent on July 30, 2012. Monthly Financial Statements - Borrowers did not furnish the Agent the monthly financial statements for June 2012 within thirty (30) days after the end of the month. The June 2012 monthly financial statements were delivered to the Agent on August 1, 2012. As of the result of the covenant violations described above, the Company is currently in default under the terms of the PNC Credit Facility. As of the date of this filing, the Agent has not taken any action with respect to the Company's defaults and the Company was actively discussing with the Agent the terms under which such defaults may be cured or waived. Although the Company is in active discussions with the Agent, the Company cannot assure you that it will be successful in obtaining the cure or waiver of such defaults, and in such event, the Agent may exercise any and all rights and remedies available to it, including demanding immediate repayment of all amounts then outstanding or initiating foreclosure or insolvency proceedings. In such event and if we are unable to obtain alternative financing, our business will be materially and adversely affected, and we may be forced to sharply curtail or cease operations.				Tangible Net Worth Ratio - As of June 30, 2012, ENGlobal did not maintain a Tangible Net Worth ratio not greater than 2.25 to 1.0. Fixed Charge Coverage Ratio - ENGlobal did not maintain a Fixed Charge Coverage Ratio of not less than 1.75 to 1.00 measured for the rolling four quarter period ended June 30, 2012. As of the result of the covenant violations described above, the Company is currently in default under the terms of the Ex-Im Bank Facility. As of the date of this filing, Wells Fargo had not taken any action with respect to the Company's defaults and the Company was actively discussing with Wells Fargo the terms under which such defaults may be cured or waived. Although the Company is in active discussions with Wells Fargo, the Company cannot assure you that it will be successful in obtaining the cure or waiver of such defaults, and in such event, Wells Fargo may exercise any and all rights and remedies available to it, up to and including terminating the Ex-Im Bank Facility. In such event and if we are unable to obtain an alternative facility, our business will be materially and adversely affected, and we may be forced to sharply curtail or cease operations.
Line of Credit Facility, Amount Outstanding (in Dollars)										$ 9.1

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NOTE 3 - DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2012

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 3 - DISCONTINUED OPERATIONS

During the third quarter of 2011, as part of its strategic evaluation of operations, the Company determined that the expected future profitability of the Electrical Services group was not sufficient to support maintaining it as a viable business and it did not fit within the future strategic plan due to its operational differences. As a result, effective July 1, 2011, the Company initiated a plan to sell the operations of its Electrical Services group. These assets and their related operations have been classified as discontinued operations and accordingly, are presented as discontinued operations in the Company's re-casted consolidated financial statements. The net assets and liabilities related to the discontinued operations are shown on the Condensed Consolidated Balance Sheet as "Assets held for sale" and "Liabilities held for sale," respectively. The results of the discontinued operations are shown on the Condensed Consolidated Statements of Operations as "Income (loss) from discontinued operations, net of taxes".

The Company has been unable to sell the business as planned and has decided to sell substantially all of the assets of this business. The Company expects to complete the disposal of its discontinued operations concurrent with the completion of the last remaining lump sum project, which is expected to occur in the third quarter of 2012. During the second quarter, the Company accrued approximately $0.5 million of additional costs expected to be incurred to complete the remaining lump sum project. The Company will have no continuing involvement with these operations after the sale or disposal.

Summarized financial information for the discontinued operations is shown below.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
	(dollars in thousands)
Revenues	$	2,561		$	6,511		$	3,823		$	14,671
Costs	2,907			7,036			4,359			14,769
Operating income (loss)	$	(346	)	$	(525	)	$	(536	)	$	(98	)
SG&A	63			131			93			131
Other income (expense)	1			(1		)	1			1
Total income (loss) before taxes	(408		)	(657		)	(628		)	(228		)
Tax expense (benefit)	1,665			(227		)	1,558			(60		)
Net loss	$	(2,073	)	$	(430	)	$	(2,186	)	$	(168	)

	June 30, 2012		December 31, 2011
	(dollars in thousands)
Assets:
Trade receivables	$	500	$	2,391
Prepaid expenses and other current assets	—		4
Cost and estimated earnings in excess of billings on uncompleted contracts	1,063		$	138
Deferred tax asset	—		$	971
Property and equipment, net	2		$	248
Other assets	—		$	5
Total assets held for sale	$	1,565	$	3,757
Liabilities:
Accounts payable	$	884	430
Accrued compensation and benefits	265		(50		)
Deferred rent			17
Billings in excess of costs and estimated earnings on uncompleted contracts	—		158
Other current liabilities	1,111		785
Total liabilities held for sale	$	2,260	$	1,340

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NOTE 6 - LINE OF CREDIT AND DEBT (Detail) - Schedule of Lines of Credit and Debt (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
The following notes are subordinate to the credit facility and are unsecured:
Control Dynamics International, L.P.	$ 85	$ 250
Total debt	31,393	16,602
Wells Fargo Credit Facility [Member]
Description:
Credit Facility		16,352
PNC Credit Facility [Member]
Description:
Credit Facility	$ 31,308

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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Operating revenues	$ 76,944	$ 73,102	$ 152,384	$ 142,191
Operating costs	71,303	65,109	139,243	128,906
Gross profit	5,641	7,993	13,141	13,285
Selling, general and administrative expenses	7,821	6,759	15,073	15,079
Operating income (loss)	(2,180)	1,234	(1,932)	(1,794)
Other income (expense):
Other income (expense), net	(4)	(17)	(4)	(59)
Interest expense, net	(375)	(191)	(677)	(408)
Income (loss) from continuing operations before income taxes	(2,559)	1,026	(2,613)	(2,261)
Provision (benefit) for federal and state income taxes	5,195	454	5,195	(598)
Income (loss) from continuing operations	(7,754)	572	(7,808)	(1,663)
Loss from discontinued operations, net of taxes	(2,073)	(430)	(2,186)	(168)
Net income (loss)	(9,827)	142	(9,994)	(1,831)
Other comprehensive income
Foreign currency translation adjustment			(1)	(23)
Total other comprehensive expense			(1)	(23)
Comprehensive income (loss)	$ (9,827)	$ 142	$ (9,995)	$ (1,854)
Income (loss) per common share - basic:
Net income (loss) from continuing operations (in Dollars per share)	$ (0.29)	$ 0.02	$ (0.29)	$ (0.06)
Net income (loss) from discontinued operations (in Dollars per share)	$ (0.08)	$ (0.01)	$ (0.08)	$ (0.01)
Net income (loss) (in Dollars per share)	$ (0.37)	$ 0.01	$ (0.37)	$ (0.07)
Income (loss) per common share - diluted:
Net income (loss) from continuing operations (in Dollars per share)	$ (0.29)	$ 0.02	$ (0.29)	$ (0.06)
Net income (loss) from discontinued operations (in Dollars per share)	$ (0.08)	$ (0.01)	$ (0.08)	$ (0.01)
Net income (loss) (in Dollars per share)	$ (0.37)	$ 0.01	$ (0.37)	$ (0.07)
Weighted average shares used in computing income (loss) per share - basic (in Shares)	26,804	26,578	26,806	26,566
Weighted average shares used in computing income (loss) per share - diluted (in Shares)	26,804	26,958	26,806	26,566

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NOTE 1 - BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – BASIS OF PRESENTATION

The condensed consolidated financial statements of ENGlobal Corporation (which may be referred to as "ENGlobal, "the Company," "we," "us," or "our") are prepared in accordance with accounting principles generally accepted in the United States of America. The Company consolidates all of its subsidiaries' financial results, and significant inter-company accounts and transactions have been eliminated in the consolidation.

The condensed consolidated financial statements of the Company included herein are unaudited for the three and six-month periods ended June 30, 2012 and 2011, have been prepared from the books and records of the Company pursuant to the rules and regulations of the Securities and Exchange Commission, and in the case of the condensed balance sheet as of December 31, 2011, have been derived from the audited financial statements of the Company. These financial statements reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary to fairly present the results for the periods presented. Certain information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements for the year ended December 31, 2011, included in the Company's Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission. The Company has assessed subsequent events through the date of filing of these condensed consolidated financial statements with the Securities and Exchange Commission and believes that the disclosures made herein are adequate to make the information presented herein not misleading.

Certain reclassifications have been made to the 2011 condensed consolidated financial statements to conform the presentation to report discontinued operations. Refer to Note 3.

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NOTE 7 - SEGMENT INFORMATION (Detail) - Schedule of Asset Reconciliation from Segment to Consolidated (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Assets	$ 108,808		$ 104,179
Engineering and construction [Member]
Assets	54,259		54,464
Automation [Member]
Assets	26,278	[1]	23,247	[1]
Field Solutions [Member]
Assets	18,167		15,359
Corporate [Member]
Assets	$ 10,104		$ 11,109

[1] Includes $1.6 million and $3.8 million of assets held for sale from discontinued operations for June 30, 2012 and December 31, 2011, respectively.

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NOTE 9 - EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Weighted Average Number of Shares [Table Text Block]

The following table reconciles the number of shares used to compute basic earnings per share to the number of shares used to compute diluted earnings per share (“EPS”).

	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
	(shares in thousands)
Weighted average shares outstanding used to compute basic EPS	26,804	26,578	26,806	26,566
Effect of share-based compensation plans	—	380	—	—
Shares used to compute diluted EPS	26,804	26,958	26,806	26,566

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NOTE 8 - FEDERAL AND STATE INCOME TAXES (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Effective Income Tax Rate Description, Continuing Operations	not meaningful		not meaningful
Effective Income Tax Rate, Continuing Operations		61.60%		31.80%
Valuation Allowance, Deferred Tax Asset, Change in Amount (in Dollars)	$ 6.2		$ 6.2

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NOTE 3 - DISCONTINUED OPERATIONS (Detail) - Schedule of Discountinued Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues	$ 2,561	$ 6,511	$ 3,823	$ 14,671
Costs	2,907	7,036	4,359	14,769
Operating income (loss)	(346)	(525)	(536)	(98)
SG&A	63	131	93	131
Other income (expense)	1	(1)	1	1
Total income (loss) before taxes	(408)	(657)	(628)	(228)
Tax expense (benefit)	1,665	(227)	1,558	(60)
Net loss	$ (2,073)	$ (430)	$ (2,186)	$ (168)

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NOTE 2 - CRITICAL ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2012

Significant Accounting Policies [Text Block]

NOTE 2 – CRITICAL ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

A summary of critical accounting policies is disclosed in Note 2 to the consolidated financial statements included in our 2011 Annual Report on Form 10-K. Our critical accounting policies are further described under the caption “Critical Accounting Policies” in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2011 Annual Report on Form 10-K.

On January 1, 2012, we changed from a traditional month-end calendar close cycle to a 4-4-5 calendar close methodology. Under this new methodology, each quarter (formerly comprised of 3 calendar months) is comprised of 13 weeks, which includes two 4-week months and one 5-week month.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash and cash equivalents	$ 1,553	$ 26
Restricted cash	6,471	2,275
Trade receivables, net of allowances of $1,533 and $1,792	56,067	54,020
Prepaid expenses and other current assets	1,123	880
Notes receivable	514	514
Costs and estimated earnings in excess of billings on uncompleted contracts	10,585	6,790
Assets held for sale	1,565	3,757
Federal and state income taxes receivable	190	103
Deferred tax asset		3,989
Total Current Assets	78,068	72,354
Property and equipment, net	3,279	3,384
Goodwill	22,614	22,614
Other intangible assets, net	2,343	2,835
Long-term trade and notes receivable, net of current portion and allowances	899	899
Deferred tax asset, non-current		1,206
Other assets	1,605	887
Total Assets	108,808	104,179
Current Liabilities:
Accounts payable	11,487	8,363
Accrued compensation and benefits	12,319	11,210
Current portion of debt	31,393	16,602
Deferred rent	677	671
Billings in excess of costs and estimated earnings on uncompleted contracts	581	4,421
Liabilities held for sale	2,260	1,340
Other current liabilities	1,426	3,072
Total Current Liabilities	60,143	45,679
Commitments and Contingencies (Note 10)	0	0
Stockholders' Equity:
Common stock - $0.001 par value; 75,000,000 shares authorized; 26,964,339 and 26,822,518 shares outstanding and 27,945,438 and 27,803,617 shares issued at June 30, 2012 and December 31, 2011, respectively	28	28
Additional paid-in capital	38,241	38,081
Retained earnings	12,828	22,822
Treasury stock at cost - 981,099 shares at June 30, 2012 and December 31, 2011	(2,362)	(2,362)
Accumulated other comprehensive loss	(70)	(69)
Total Stockholders' Equity	48,665	58,500
Total Liabilities and Stockholders' Equity	$ 108,808	$ 104,179

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NOTE 3 - DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2012

Discountinued operations, Income statement items [Member]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

Summarized financial information for the discontinued operations is shown below.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
	(dollars in thousands)
Revenues	$	2,561		$	6,511		$	3,823		$	14,671
Costs	2,907			7,036			4,359			14,769
Operating income (loss)	$	(346	)	$	(525	)	$	(536	)	$	(98	)
SG&A	63			131			93			131
Other income (expense)	1			(1		)	1			1
Total income (loss) before taxes	(408		)	(657		)	(628		)	(228		)
Tax expense (benefit)	1,665			(227		)	1,558			(60		)
Net loss	$	(2,073	)	$	(430	)	$	(2,186	)	$	(168	)

Discountinued operations, balance sheet items [Member]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

Summarized financial information for the discontinued operations is shown below.

	June 30, 2012		December 31, 2011
	(dollars in thousands)
Assets:
Trade receivables	$	500	$	2,391
Prepaid expenses and other current assets	—		4
Cost and estimated earnings in excess of billings on uncompleted contracts	1,063		$	138
Deferred tax asset	—		$	971
Property and equipment, net	2		$	248
Other assets	—		$	5
Total assets held for sale	$	1,565	$	3,757
Liabilities:
Accounts payable	$	884	430
Accrued compensation and benefits	265		(50		)
Deferred rent			17
Billings in excess of costs and estimated earnings on uncompleted contracts	—		158
Other current liabilities	1,111		785
Total liabilities held for sale	$	2,260	$	1,340

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 17, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	ENGlobal Corporation
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		26,964,339
Amendment Flag	false
Entity Central Index Key	0000933738
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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NOTE 4 - STOCK COMPENSATION PLANS (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Stock Options Roll Forward [Table Text Block]

The following table summarizes stock option activity through the six month period ended June 30, 2012:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (000's)*
Balance at December 31, 2011	775,000	$	6.84	4.1	$	264
Granted	—	—		—	—
Exercised	—	—		—	—
Canceled or expired	—	—		—	—
Balance at June 30, 2012	775,000	$	6.84	3.6	$	8
Exercisable at June 30, 2012	755,000	$	6.67	4.4	$	8

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block]

During 2012, the Company granted restricted stock awards per the following table.

Date Issued	Issued to	Number of Individuals	Number of Shares	Market Price		Fair Value		Grants Forfeited
June 14, 2012	Employee	1	50,336	$	1.49	$	75,000	—
June 14, 2012	Director	3	100,671	$	1.49	$	150,000	—

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Allowance for doubtful accounts (in Dollars)	$ 1,533	$ 1,792
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares outstanding	26,964,339	26,822,518
Common stock, shares issued	27,945,438	27,803,617
Treasury stock, shares	981,099	981,099

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NOTE 7 - SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

Segment Reporting Disclosure [Text Block]

NOTE 7 – SEGMENT INFORMATION

The Engineering and Construction segment provides services relating to the development, management and execution of projects requiring professional engineering and related project services primarily to the midstream and downstream sectors throughout the United States. Services provided by the Engineering and Construction segment include feasibility studies, engineering, design, procurement and construction management. The Engineering and Construction segment includes the government services group, which provides engineering, design, installation and operation and maintenance of various government, public sector and international facilities. The Automation segment provides services related to the design, fabrication and implementation of process distributed control and analyzer systems, advanced automation, information technology, electrical and heat tracing projects primarily to the upstream and downstream sectors throughout the United States as well as specific projects in the Middle East and Central Asia. The Field Solutions segment provides land management, right-of-way, inspection, environmental compliance, legislative affairs support and governmental regulatory compliance services primarily to the midstream sector, including pipeline, utility and telecommunications companies and other owner/operators of infrastructure facilities throughout the United States.

Sales, operating income, identifiable assets, capital expenditures and depreciation for each segment are set forth in the following table. The amount identified as corporate includes those activities that are not allocated to the operating segments and include costs related to business development, executive functions, finance, accounting, health, safety,

and environmental, human resources and information technology that are not specifically identifiable with the segments. The Corporate function supports all business segments and therefore cannot be specifically assigned to any specific segment. A significant portion of corporate costs are allocated to each segment based on each segment's revenue.

Financial information about geographic areas

Revenue from the Company's non-U.S. operations is currently not material. However, we expect them to become material as the CPC project’s schedule progresses.

Segment information for 2012 and 2011 is as follows:

For the three months ended June 30, 2012	Engineering and Construction		Automation			Field Solutions		Corporate			Consolidated
(dollars in thousands)
Revenue	$	44,816	$	14,335		$	17,793				$	76,944
Gross profit	2,879		1,462			1,300					5,641
SG&A	2,617		1,010			905		3,289			7,821
Operating income (loss)	262		452			395		(3,289		)	(2,180		)
Other income											(4		)
Interest expense, net											(375		)
Tax expense											(5,195		)
Discontinued operations - net of taxes											(2,073		)
Net loss											$	(9,827	)
For the three months ended June 30, 2011
(dollars in thousands)
Revenue before eliminations	$	43,699	$	11,419		$	18,020	$	—		$	73,138
Inter-segment eliminations	—		(36		)	—		—			(36		)
Revenue	43,699		11,383			18,020		—			73,102
Gross profit	4,399		2,385			1,209		—			7,993
SG&A	1,447		996			965		3,351			6,759
Operating income (loss)	2,952		1,389			244		(3,351		)	1,234
Other expense											(17		)
Interest expense, net											(191		)
Tax expense											(454		)
Discontinued operations - net of taxes											(430		)
Net income											$	142

For the six months ended June 30, 2012	Engineering and Construction			Automation			Field Solutions			Corporate			Consolidated
(dollars in thousands)
Revenue	$	90,383		$	27,941		$	34,060		$	—		$	152,384
Gross profit	7,236			2,843			3,062			—			13,141
SG&A	4,629			2,090			1,934			6,420			15,073
Operating income (loss)	2,607			753			1,128			(6,420		)	(1,932		)
Other income													(4		)
Interest expense, net													(677		)
Tax expense													(5,195		)
Discontinued operations - net of taxes													(2,186		)
Net loss													$(9,994)
For the six months ended June 30, 2011
(dollars in thousands)
Revenue before eliminations	$	81,545		$	21,162		$	39,712		$	—		$	142,419
Inter-segment eliminations	(1		)	(227		)	—			—			(228		)
Revenue	81,544			20,935			39,712			—			142,191
Gross profit	7,581			2,836			2,868			—			13,285
SG&A	3,693			1,934			3,046			6,406			15,079
Operating income (loss)	3,888			902			(178		)	(6,406		)	(1,794		)
Other expense													(59		)
Interest expense, net													(408		)
Tax benefit													598
Discontinued operations - net of taxes													(168		)
Net loss													$(1,831)

Total Assets by Segment	As of June 30, 2012	As of December 31, 2011
	(dollars in thousands)
Engineering and Construction	$54,259	$54,464
Automation*	26,278	23,247
Field Solutions	18,167	15,359
Corporate	10,104	11,109
Consolidated	$108,808	$104,179

*Includes $1.6 million and $3.8 million of assets held for sale from discontinued operations for June 30, 2012 and December 31, 2011, respectively.

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NOTE 6 - LINE OF CREDIT AND DEBT

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Text Block]

NOTE 6 – LINE OF CREDIT AND DEBT

The carrying value of debt is composed of the following:

	June 30, 2012		December 31, 2011
	(dollars in thousands)
Description:
Wells Fargo Credit Facility	$	—	$	16,352
PNC Credit Facility	31,308		—
The following notes are subordinate to the credit facility and are unsecured:
Control Dynamics International, L.P.	85		250
Total debt	31,393		16,602

The rates applicable to the PNC Credit Facility line of credit and the Wells Fargo Credit Facility line of credit outstanding at June 30, 2012 and December 31, 2011 were 5.0% and 4.125%, respectively. For the three-month periods ended June 30, 2012 and 2011, the Company recognized interest expense of $0.4 million and $0.2 million, respectively. For the six-month periods ended June 30, 2012 and 2011, the Company recognized interest expense of $0.7 million and $0.4 million, respectively.

Current Classification of Borrowings under the PNC Credit Facility

In addition to the terms of the PNC Credit Facility described below, the PNC Credit Facility also contains a subjective acceleration clause (in the form of a material adverse effect clause) and a provision requiring the establishment and utilization of a lock-box account into which all proceeds of collateral are deposited and applied to reduce borrowings outstanding under the PNC Credit Facility. Pursuant to generally accepted accounting principles, the combination of both a subjective acceleration clause and a lock-box arrangement required by the lender results in borrowings outstanding under the PNC Credit Facility being classified as short-term obligations despite the three year term of the agreement.

PNC Credit Facility

On May 29, 2012, the Company, ENGlobal U.S., Inc., a Texas corporation ("ENGlobal US "), ENGlobal International, Inc., a corporation organized under the BVI Business Companies Act of 2004 ("ENGlobal International"), ENGlobal Government Services, Inc., a Texas corporation ("ENGlobal Government" and, together with the Company, ENGlobal US and ENGlobal International, the "Borrowers"), and ENGlobal Emerging Markets, Inc., a Texas corporation (the "Guarantor" and, together with the Borrowers, the "Loan Parties"), entered into a new Revolving Credit and Security Agreement (the "Loan Agreement" or “PNC Credit Facility”) with PNC Bank, National Association, as administrative agent (the "Agent") for the lenders (the "Lenders") pursuant to which the Lenders agreed to extend credit to the Borrowers in the form of loans (each a "Loan" and collectively, the "Loans") on a revolving basis of up to $35.0 million (the "Commitment"). Capitalized terms used but not otherwise defined herein shall have the meaning given to them in the Loan Agreement.

Set forth below are certain of the material terms of the Loan Agreement:

Revolving Advances : Each Lender, severally and not jointly, will make revolving advances to the Borrowers in aggregate amounts outstanding at any time equal to such Lender's Commitment Percentage of the lesser of (a) $35.0 million less the maximum undrawn amount on all outstanding letters of credit, or (b) an amount equal to the sum of: (i) up to 85% of Eligible Receivables, plus (ii) up to the lesser of (x) up to 85% of Eligible Extended Term Receivables or (y) $3.0 million, plus (iii) up to the lesser of (x) up to 85% of Eligible Government Receivables or (y) $800,000, plus (iv) up to the lesser of (x) 75% of Eligible Unbilled Receivables or (y) $8.5 million; provided, however, that no more than $800,000 of the amount resulting from the calculation of this part (iv) may be attributable to Eligible Unbilled Receivables owed by Government Customers, plus (v) up to the lesser of (x) up to 50% of Eligible Costs in Excess of Billings or (y) $4.0 million, minus (vi) the Maximum Undrawn Amount of all outstanding letters of credit, minus (vii) such reserves as Agent may deem proper and necessary in the exercise of its discretion. Certain of the percentages and dollar amounts discussed above may be increased or decreased by Agent at any time, so long as such increase or decrease is done is reasonable and done in good faith.

Interest: Any Loans will bear interest at (a) the sum of the Alternate Base Rate (defined as a fluctuating rate equal to the highest of (x) the commercial lending rate of Agent as publicly announced and in effect on such day, (y) the daily federal funds open rate as quoted by ICAP North America, Inc. in effect on such day plus 1/2 of 1%, and (z) the Daily Libor Rate plus 1% (with the Daily LIBOR Rate determined by taking the LIBOR rate published in the Wall Street Journal and dividing it by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus the Applicable Margin (defined below) for Domestic Rate Loans or (b) the sum of the Eurodollar Rate (defined as a fluctuating rate determined by Agent by dividing the quoted LIBOR rate (as selected from a variety of sources) by a number equal to 1 minus the reserve percentage on that day as determined by the Board of Governors of the Federal Reserve), plus the Applicable Margin with respect to Eurodollar Rate Loans.

Collateral: All obligations of the Borrowers under the Loan Agreement are secured by a first priority perfected lien against any and all personal property assets of each of the Borrowers (other than certain excluded property, including certain accounts receivable related to the Caspian Pipeline Consortium pledged under the Ex-Im Transaction Specific Credit Agreement dated as of July 13, 2011 between ENGlobal US and Wells Fargo Bank, National Association).

Term: All Loans and all other obligations outstanding under the Loan Agreement shall be payable in full on May 29, 2015, unless otherwise terminated pursuant to the terms of the Loan Agreement.

Covenants: The Loan Agreement requires the Borrowers to comply with various financial, affirmative and negative covenants affecting their businesses and operations, including:

• Maintain as of the last day of each applicable period a Tangible Net Worth at least equal to the amount set forth for such period: (a) for each of the fiscal quarters ending June 30, 2012, September 30, 2012 and December 31, 2012, a minimum Tangible Net Worth of 90% of the Tangible Net Worth of the Borrowers on a consolidated basis on the Closing Date, and (b) for the fiscal quarter ending March 31, 2013, and as of the last day of each fiscal quarter thereafter, a minimum Tangible Net Worth equal to that required on December 31 of the immediately preceding fiscal year plus (i) 75% of Borrowers' after tax net income for such year if such after tax net income is greater than $0, or (ii) $0, if Borrowers' after tax net income for such year is less than or equal to $0.

• Maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, measured as of (a) June 30, 2012, for the fiscal quarter then most recently ended, (b) September 30, 2012, for the two fiscal quarter period then most recently ended, (c) December 31, 2012, for the three fiscal quarter then most recently ended, (d) March 31, 2013 and as of the last day of each fiscal quarter thereafter, for the four fiscal quarter period then most recently ended.

• Maintain at all times Average Excess Availability of not less than $3.5 million measured monthly as of the last day of the month.

• Not permit the aggregate amount of all costs and expenses incurred in connection with Borrower's performance of its Caspian project obligations to exceed the aggregate amount of cash receipts attributable to the Caspian Contracts by more than the following amounts: (a) for the month ending June 30, 2012, $6.5 million, (b) for the month ending September 30, 2012, $1.0 million, and (c) for the month ending December 31, 2012, $0.

• The Borrowers will not be party to mergers, acquisitions, consolidations, reorganizations or similar transactions.

• The Borrowers will not sell, lease, transfer or otherwise dispose of any of their properties or assets (subject to certain exceptions set forth in the Loan Agreement).

• The Borrowers will not contract for, purchase or make any expenditure or commitment for capital expenditures in the fiscal year ending December 31, 2012 and in any fiscal year thereafter, in an aggregate amount in excess of $3.5 million.

• The Borrowers will not declare, pay or make any dividend or distribution on any shares of common or preferred stock or use any funds, property or assets to repurchase or otherwise retire any common or preferred stock.

Compliance with Covenants and Fulfillment of Conditions: As of June 30, 2012, ENGlobal had performed, observed or fulfilled in all material respects the covenants and conditions of the PNC Credit Facility and no default or event of default had occurred, except for the following:

• ENGlobal did not provide a foreign good standing certificate for ENGlobal US issued by the Secretary of State or other appropriate official of the State Illinois within 14 days of the closing of the PNC Credit Facility.

Status - Borrowers filed the amended and restated franchise tax filings with the Illinois Secretary of State on July 20, 2012. Barring any further delays, Borrowers expect to receive the foreign good standing certificate in the near future.

• ENGlobal did not deliver to Agent a landlord waiver requested to be provided within 30 days of the closing of the PNC Credit Facility.

Status - The requested landlord waiver is still outstanding, although the form of the waiver has been approved by both the landlord and the Borrowers' counsel. Borrowers remitted payment to the landlord's legal counsel for the waiver preparation fee during the week ended August 17, 2012 and expect to receive this waiver in the near future.

Tangible Net Worth - Borrowers did not maintain Tangible Net Worth, as of June 30, 2012, of at least 90% of the Borrowers' Tangible Net Worth as of the closing date of the PNC Credit Facility.

Fixed Charge Coverage Ratio - Borrowers did not maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00 measured as of the quarterly period ended June 30, 2012.

Schedules - Borrowers did not deliver the May 2012 Borrowing Base Certificate (along with updated ineligibles and supporting schedules) to the Agent within twenty (20) days after the end of the month. Borrowers delivered the May 2012 Borrowing Base Certificate to the Agent on August 7, 2012.

Borrowers did not deliver the June 2012 Borrowing Base Certificate (along with updated ineligibles and supporting schedules) to the Agent within twenty (20) days after the end of the month. Borrowers delivered the June 2012 Borrowing Base Certificate to the Agent on July 30, 2012.

Monthly Financial Statements - Borrowers did not furnish the Agent the monthly financial statements for June 2012 within thirty (30) days after the end of the month. The June 2012 monthly financial statements were delivered to the Agent on August 1, 2012.

As of the result of the covenant violations described above, the Company is currently in default under the terms of the PNC Credit Facility. As of the date of this filing, the Agent has not taken any action with respect to the Company's defaults and the Company was actively discussing with the Agent the terms under which such defaults may be cured or waived. Although the Company is in active discussions with the Agent, the Company cannot assure you that it will be successful in obtaining the cure or waiver of such defaults, and in such event, the Agent may exercise any and all rights and remedies available to it, including demanding immediate repayment of all amounts then outstanding or initiating foreclosure or insolvency proceedings. In such event and if we are unable to obtain alternative financing, our business will be materially and adversely affected, and we may be forced to sharply curtail or cease operations.

Wells Fargo Credit Facility

In December 2009, the Company entered into a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) which provided a 28-month, $25 million senior secured revolving credit facility (“Wells Fargo Credit Facility”). On September 30, 2010, the Company entered into an amendment to the Wells Fargo Credit Facility with Wells Fargo which converted our borrowings from a revolving credit facility to an asset based lending agreement. On August 1, 2011, the Company entered into an Amended and Restated Credit Agreement with Wells Fargo that allowed a maximum available principal amount of $35 million under the Wells Fargo Credit Facility. The Wells Fargo Credit Facility, as amended and restated, terminated concurrent with the closing of the PNC Bank Facility on May 29, 2012.

Ex-Im Bank Facility

In July 2011, with the support of Wells Fargo's Global Banking Group, ENGlobal and the Export-Import Bank of the United States (“Ex-Im Bank”) entered into a separate $9.5 million letter of credit facility (the “Ex-Im Bank Facility”) to support the Company's Caspian Pipeline Consortium (CPC) project. Under the terms of this agreement, the Company may issue letters of credit to CPC for its performance under the CPC project. The Company is required to collateralize letters of credit outstanding under the Ex-Im Bank Facility with cash or eligible Russian receivables resulting from the CPC project. As of the date of this filing, there was one $9.1 million letter of credit outstanding under this facility. This letter of credit was collateralized by $2.3 million in cash. In the near term, the Company intends to keep the Ex-Im Bank Facility with Wells Fargo until the CPC project has receivables from the Russian portion of the project that are at a sufficient level for borrowing base collateral coverage and this facility is transferred to our new senior lender.

Covenants: The Ex-Im Bank Facility requires ENGlobal to comply with various, financial, affirmative and negative covenants affecting its businesses and operations, including:

• ENGlobal will not be a party to mergers, acquisitions, consolidations, reorganizations or similar

transactions.

• ENGlobal will not contract for, purchase or make any expenditure or commitment for capital expenditures in any fiscal year, in an aggregate amount in excess of $3.5 million.

• ENGlobal will not incur any indebtedness except for (a) ENGlobal's liabilities under the PNC Credit Facility, and (b) any other liabilities of ENGlobal not to exceed $1 million in indebtedness in any 12 month period for the unsecured financing of insurance premiums.

• ENGlobal will not declare, pay or make any dividend or distribution on any shares of common or preferred stock or use any funds, property or assets to repurchase or otherwise retire any common or preferred stock.

• Maintain as of the last day of each applicable period a Tangible Net Worth ratio not greater than 2.25 to 1.0.

• Maintain a Fixed Charge Coverage Ratio of not less than 1.75 to 1.00, measured as of each fiscal quarter end commencing September 30, 2011, determined on a rolling 4-quarter basis.

Compliance with Covenants: As of June 30, 2012, ENGlobal had performed, observed or fulfilled in all material respects the covenants and conditions of the Ex-Im Bank Facility and no default or event of default had occurred, except for the following:

Tangible Net Worth Ratio - As of June 30, 2012, ENGlobal did not maintain a Tangible Net Worth ratio not greater than 2.25 to 1.0.

Fixed Charge Coverage Ratio - ENGlobal did not maintain a Fixed Charge Coverage Ratio of not less than 1.75 to 1.00 measured for the rolling four quarter period ended June 30, 2012.

As of the result of the covenant violations described above, the Company is currently in default under the terms of the Ex-Im Bank Facility. As of the date of this filing, Wells Fargo had not taken any action with respect to the Company's defaults and the Company was actively discussing with Wells Fargo the terms under which such defaults may be cured or waived. Although the Company is in active discussions with Wells Fargo, the Company cannot assure you that it will be successful in obtaining the cure or waiver of such defaults, and in such event, Wells Fargo may exercise any and all rights and remedies available to it, up to and including terminating the Ex-Im Bank Facility. In such event and if we are unable to obtain an alternative facility, our business will be materially and adversely affected, and we may be forced to sharply curtail or cease operations.

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NOTE 3 - DISCONTINUED OPERATIONS (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Discontinued Operation, Amounts of Material Contingent Liabilities Remaining	$ 0.5

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NOTE 5 - CONTRACTS (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Costs and estimated earnings and billings on uncompleted contracts [Table Text Block]

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	42,845		$	43,455
Estimated earnings on uncompleted contracts	6,415			5,591
Earned revenues	49,260			49,046
Less: billings to date	39,256			46,677
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369
Costs and estimated earnings in excess of billings on uncompleted contracts	$	10,585		$	6,790
Billings in excess of costs and estimated earnings on uncompleted contracts	(581		)	(4,421		)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369

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NOTE 10 - COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Text Block]

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigation

In June 2008, ENGlobal filed an action in the United States District Court for the Eastern District of Louisiana; Case Number 08-3601, against South Louisiana Ethanol LLC (“SLE”) entitled ENGlobal Engineering, Inc. and ENGlobal Construction Resources, Inc. vs. South Louisiana Ethanol, LLC. The lawsuit seeks to enforce collection of $15.8 million owed to ENGlobal and its affiliates for services performed on an ethanol plant in Louisiana. In August 2009, SLE filed for Chapter 11 protection in the United States Bankruptcy Court for the Eastern District of Louisiana, Case Number 09-12676. Pursuant to the bankruptcy, the plant assets were sold for $6,802,000. On December 6, 2011, the court issued an order allocating proceeds from the sale and authorizing their distribution. Of the total amount, $1,054,418 was allocated to ENGlobal. Of that amount, $845,529 is still being held by the court pending the outcome of continuing litigation regarding the claims of one subcontractor. We estimate the court will render a final decision regarding this matter in the third quarter of 2012.

From time to time, ENGlobal or one or more of its subsidiaries is involved in various legal proceedings or are subject to claims that arise in the ordinary course of business alleging, among other things, claims of breach of

contract or negligence in connection with the performance or delivery of goods and/or services. The outcome of any such claims or proceedings cannot be predicted with certainty. We believe, as of the date of this filing, all such active proceedings and claims of substance that have been raised against any subsidiary business entity have been adequately allowed for, or are covered by insurance, such that, if determined adversely to the Company, individually or in the aggregate, they would not have a material adverse effect on our results of operations or financial position.

Insurance

The Company carries a broad range of insurance coverage, including general and business automobile liability, commercial property, professional errors and omissions, workers' compensation insurance, director's and officer's liability insurance and a general umbrella policy. The Company is not aware of any claims in excess of insurance recoveries. ENGlobal is partially self-funded for health insurance claims. Provisions for expected future payments are accrued based on the Company's experience. Specific stop loss levels provide protection for the Company with $200,000 per occurrence. The self-insurance liability, which is included in the Accrued Compensation and Benefits line of the balance sheet, was $1.5 million as of June 30, 2012 and $1.2 million as of December 31, 2011.

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NOTE 8 - FEDERAL AND STATE INCOME TAXES

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

NOTE 8 – FEDERAL AND STATE INCOME TAXES

As a result of the valuation allowance recorded against our deferred tax assets as of June 30, 2012, the effective income tax rates for the three and six month periods ended June 30, 2012 were not meaningful. The effective income tax rates for the three and six month periods ended June 30, 2011 were 61.6% and 31.8%, respectively. Our effective income tax rates in 2011 differ from the federal statutory rate primarily due to state income taxes.

ASC Topic 825, “Income Taxes” requires all available evidence, both positive and negative, be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. During the quarter, based upon the Company's recent performance, management determined the realization of deferred tax assets is uncertain as the Company is unable to consider tax planning strategies or projections of future taxable income in its evaluation of the realizability of its deferred tax assets as of June 30, 2012. Under these circumstances, deferred tax assets may only be realized through future reversals of taxable temporary differences and carryback of net operating losses to available carryback periods. We have performed such an analysis and a valuation allowance of approximately $6.2 million has been provided against deferred tax assets as of June 30, 2012.

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NOTE 9 - EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Text Block]

NOTE 9 – EARNINGS PER SHARE

The following table reconciles the number of shares used to compute basic earnings per share to the number of shares used to compute diluted earnings per share (“EPS”).

	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
	(shares in thousands)
Weighted average shares outstanding used to compute basic EPS	26,804	26,578	26,806	26,566
Effect of share-based compensation plans	—	380	—	—
Shares used to compute diluted EPS	26,804	26,958	26,806	26,566

The Company excluded potentially issuable shares of 593,000 and 443,000 from the computation of diluted EPS, as the effect of including the shares would have been anti-dilutive for the three month period ended June 30, 2012 and the six month periods ended June 30, 2012 and 2011, respectively.

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Accounting Policies, by Policy (Policies)	6 Months Ended
	Jun. 30, 2012
Basis of Accounting, Policy [Policy Text Block]	On January 1, 2012, we changed from a traditional month-end calendar close cycle to a 4-4-5 calendar close methodology. Under this new methodology, each quarter (formerly comprised of 3 calendar months) is comprised of 13 weeks, which includes two 4-week months and one 5-week month.

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NOTE 7 - SEGMENT INFORMATION (Detail) - Schedule of Segment Information (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue	$ 76,944	$ 73,102	$ 152,384	$ 142,191
Gross profit	5,641	7,993	13,141	13,285
SG&A	7,821	6,759	15,073	15,079
Operating income (loss)	(2,180)	1,234	(1,932)	(1,794)
Other income	(4)	(17)	(4)	(59)
Interest expense, net	(375)	(191)	(677)	(408)
Tax expense (benefit)	(5,195)	(454)	(5,195)	598
Discontinued operations - net of taxes	(2,073)	(430)	(2,186)	(168)
Net (income) loss	(9,827)	142	(9,994)	(1,831)
Revenue before eliminations		73,138		142,419
Inter-segment eliminations		(36)		(228)
Engineering and construction [Member]
Revenue	44,816	43,699	90,383	81,544
Gross profit	2,879	4,399	7,236	7,581
SG&A	2,617	1,447	4,629	3,693
Operating income (loss)	262	2,952	2,607	3,888
Other income	0	0	0	0
Interest expense, net	0	0	0	0
Tax expense (benefit)	0	0	0	0
Discontinued operations - net of taxes	0	0	0	0
Net (income) loss	0	0	0	0
Revenue before eliminations		43,699		81,545
Inter-segment eliminations		0		(1)
Automation [Member]
Revenue	14,335	11,383	27,941	20,935
Gross profit	1,462	2,385	2,843	2,836
SG&A	1,010	996	2,090	1,934
Operating income (loss)	452	1,389	753	902
Other income	0	0	0	0
Interest expense, net	0	0	0	0
Tax expense (benefit)	0	0	0	0
Discontinued operations - net of taxes	0	0	0	0
Net (income) loss	0	0	0	0
Revenue before eliminations		11,419		21,162
Inter-segment eliminations		(36)		(227)
Field Solutions [Member]
Revenue	17,793	18,020	34,060	39,712
Gross profit	1,300	1,209	3,062	2,868
SG&A	905	965	1,934	3,046
Operating income (loss)	395	244	1,128	(178)
Other income	0	0	0	0
Interest expense, net	0	0	0	0
Tax expense (benefit)	0	0	0	0
Discontinued operations - net of taxes	0	0	0	0
Net (income) loss	0	0	0	0
Revenue before eliminations		18,020		39,712
Inter-segment eliminations		0		0
Corporate [Member]
Revenue	0	0	0	0
Gross profit	0	0	0	0
SG&A	3,289	3,351	6,420	6,406
Operating income (loss)	(3,289)	(3,351)	(6,420)	(6,406)
Other income	0	0	0	0
Interest expense, net	0	0	0	0
Tax expense (benefit)	0	0	0	0
Discontinued operations - net of taxes	0	0	0	0
Net (income) loss	0	0	0	0
Revenue before eliminations		0		0
Inter-segment eliminations		$ 0		$ 0

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NOTE 7 - SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Segment information for 2012 and 2011 is as follows:

For the three months ended June 30, 2012	Engineering and Construction		Automation			Field Solutions		Corporate			Consolidated
(dollars in thousands)
Revenue	$	44,816	$	14,335		$	17,793				$	76,944
Gross profit	2,879		1,462			1,300					5,641
SG&A	2,617		1,010			905		3,289			7,821
Operating income (loss)	262		452			395		(3,289		)	(2,180		)
Other income											(4		)
Interest expense, net											(375		)
Tax expense											(5,195		)
Discontinued operations - net of taxes											(2,073		)
Net loss											$	(9,827	)
For the three months ended June 30, 2011
(dollars in thousands)
Revenue before eliminations	$	43,699	$	11,419		$	18,020	$	—		$	73,138
Inter-segment eliminations	—		(36		)	—		—			(36		)
Revenue	43,699		11,383			18,020		—			73,102
Gross profit	4,399		2,385			1,209		—			7,993
SG&A	1,447		996			965		3,351			6,759
Operating income (loss)	2,952		1,389			244		(3,351		)	1,234
Other expense											(17		)
Interest expense, net											(191		)
Tax expense											(454		)
Discontinued operations - net of taxes											(430		)
Net income											$	142

For the six months ended June 30, 2012	Engineering and Construction			Automation			Field Solutions			Corporate			Consolidated
(dollars in thousands)
Revenue	$	90,383		$	27,941		$	34,060		$	—		$	152,384
Gross profit	7,236			2,843			3,062			—			13,141
SG&A	4,629			2,090			1,934			6,420			15,073
Operating income (loss)	2,607			753			1,128			(6,420		)	(1,932		)
Other income													(4		)
Interest expense, net													(677		)
Tax expense													(5,195		)
Discontinued operations - net of taxes													(2,186		)
Net loss													$(9,994)
For the six months ended June 30, 2011
(dollars in thousands)
Revenue before eliminations	$	81,545		$	21,162		$	39,712		$	—		$	142,419
Inter-segment eliminations	(1		)	(227		)	—			—			(228		)
Revenue	81,544			20,935			39,712			—			142,191
Gross profit	7,581			2,836			2,868			—			13,285
SG&A	3,693			1,934			3,046			6,406			15,079
Operating income (loss)	3,888			902			(178		)	(6,406		)	(1,794		)
Other expense													(59		)
Interest expense, net													(408		)
Tax benefit													598
Discontinued operations - net of taxes													(168		)
Net loss													$(1,831)

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

Total Assets by Segment	As of June 30, 2012	As of December 31, 2011
	(dollars in thousands)
Engineering and Construction	$54,259	$54,464
Automation*	26,278	23,247
Field Solutions	18,167	15,359
Corporate	10,104	11,109
Consolidated	$108,808	$104,179

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NOTE 4 - STOCK COMPENSATION PLANS (Detail) (USD $)	3 Months Ended		6 Months Ended		8 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Aug. 17, 2012
Share-based Compensation (in Dollars)			$ 159,000	$ 198,000
Average Stock Price During the Period (in Dollars per share)			$ 2.05	$ 4.18
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value (in Dollars)			8,000	153,000
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award			intended to compensate and retain the directors over the one-year service period commencing July 1 of the year of service
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			These awards vest in quarterly installments beginning September 30 of the year of service, so long as the grantee continues to serve as a director of the Company. Restricted stock awards granted to employees vest in four equal annual installments beginning December 31 in the year granted, so long as the grantee remains employed full-time with the Company as of each vesting date
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options (in Dollars)	441,000		441,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition			19 months
1998 Incentive plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	3,250,000		3,250,000
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award			ten-year term
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			Stock options issued to executives and management generally vested over a four-year period, one-fifth at grant date and one-fifth at December 31 of each year thereafter until they were fully vested. Stock options issued to directors under the Option Plan vested quarterly over a one-year period
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					775,000
2009 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					480,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			Grants to employees generally vest over a four-year period, one-fourth at December31 of each year until they are fully vested. Grants to non-employee directors vest quarterly over a one-year period coinciding with their service term
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	133,115		133,115		133,115
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			500,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross					470,773
Share-based Compensation (in Dollars)	$ 73,000	$ 100,000	$ 159,000	$ 198,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash Flows from Operating Activities:
Net loss	$ (9,994)	$ (1,831)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	986	1,880
Share-based compensation expense	159	198
Deferred income tax expense (benefit)	6,166	(1,047)
(Gain) loss on disposal of property, plant and equipment		(21)
Changes in current assets and liabilities, net of acquisitions:
Trade accounts and other receivables	(926)	909
Costs and estimated earnings in excess of billings on uncompleted contracts	(4,765)	(534)
Prepaid expenses and other assets	(361)	530
Accounts payable	2,586	(944)
Accrued compensation and benefits	794	5,340
Billings in excess of costs and estimated earnings on uncompleted contracts	(3,681)	882
Other liabilities	(65)	2,184
Income taxes receivable	(87)	(28)
Net cash provided by (used in) operating activities	(9,188)	7,518
Cash Flows from Investing Activities:
Property and equipment acquired	37	(203)
Restricted Cash	(4,196)
Proceeds from sale of other assets		65
Net cash used in investing activities	(4,159)	(138)
Cash Flows from Financing Activities:
Borrowings on line of credit	91,860	73,456
Payments on line of credit	(76,904)	(80,042)
Repayments under capital lease		(50)
Other long-term debt repayments	(82)	(759)
Net cash provided by (used in) financing activities	14,874	(7,395)
Net change in cash	1,527	(15)
Cash and cash equivalents, at beginning of period	26	49
Cash and cash equivalents, at end of period	$ 1,553	$ 34

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NOTE 5 - CONTRACTS

6 Months Ended

Jun. 30, 2012

Costs And Estimated Earnings And Billings On Uncompleted Contracts [Text Block]

NOTE 5 – CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	42,845		$	43,455
Estimated earnings on uncompleted contracts	6,415			5,591
Earned revenues	49,260			49,046
Less: billings to date	39,256			46,677
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369
Costs and estimated earnings in excess of billings on uncompleted contracts	$	10,585		$	6,790
Billings in excess of costs and estimated earnings on uncompleted contracts	(581		)	(4,421		)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. Under this method, revenue is recognized in the ratio that contract costs incurred bear to total estimated contract costs. Revenue and gross margin on fixed-price contracts are subject to revision throughout the lives of the contracts and any required adjustments are made in the period in which the revisions become known. To manage unknown risks, management may use contingency amounts to increase the estimated costs, therefore, lowering the earned revenues until the risks are better identified and quantified or have been mitigated. Losses on contracts are recorded in full as they are identified.

The Company recognizes service revenue as soon as the services are performed. For clients that we consider higher risk, due to past payment history or history of not providing written work authorizations, we defer revenue recognition until we receive either a written authorization or a payment. The current amount of revenue deferred for these reasons is approximately $1.7 million as of June 30, 2012, compared to $0.3 million as of December 31, 2011. We expect a majority of the deferred revenue amount to be realized by year end 2012.

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NOTE 4 - STOCK COMPENSATION PLANS (Detail) - Schedule of Stock Options (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Number of options [Member]
Balance at December 31, 2011	775,000
Balance at June 30, 2012	775,000
Exercisable at June 30, 2012	755,000
Granted	0
Exercised	0
Canceled or expired	0
Weighted average exercise price [Member]
Balance at December 31, 2011 (in Dollars per share)	6.84
Balance at June 30, 2012 (in Dollars per share)	6.84
Exercisable at June 30, 2012 (in Dollars per share)	6.67
Granted (in Dollars per share)	0
Exercised (in Dollars per share)	0
Canceled or expired (in Dollars per share)	0
Weighted average remaining contractual term [Member]
Balance at December 31, 2011	4 years 36 days
Balance at June 30, 2012	3 years 219 days
Exercisable at June 30, 2012	4 years 146 days
Average intrinsic value [Member]
Balance at December 31, 2011 (in Dollars)	264
Balance at June 30, 2012 (in Dollars)	8
Exercisable at June 30, 2012 (in Dollars)	8

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NOTE 9 - EARNINGS PER SHARE (Detail) - Schedule of Weighted Average Number of Shares In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted average shares outstanding used to compute basic EPS	26,804	26,578	26,806	26,566
Effect of share-based compensation plans	0	380	0	0
Shares used to compute diluted EPS	26,804	26,958	26,806	26,566

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NOTE 6 - LINE OF CREDIT AND DEBT (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Debt [Table Text Block]

The carrying value of debt is composed of the following:

	June 30, 2012		December 31, 2011
	(dollars in thousands)
Description:
Wells Fargo Credit Facility	$	—	$	16,352
PNC Credit Facility	31,308		—
The following notes are subordinate to the credit facility and are unsecured:
Control Dynamics International, L.P.	85		250
Total debt	31,393		16,602