ENGlobal (NASDAQ:ENG), a leading provider of engineering and automation services, today announced results for the third quarter ended September 24, 2016.
ENGlobal reported net income of $0.5 million for the third quarter of 2016 which was an increase of $0.2 million as compared to the net income reported for the prior year period. The net income per diluted share was $0.02 for the third quarter just ended and $0.01 for the third quarter of 2015. Revenue decreased $2.2 million to $16.0 million from $18.2 million, or a 12% decrease, for the three months ended September 24, 2016, as compared to the three months ended September 26, 2015.
ENGlobal reported a net loss of $1.9 million for the nine months ended September 24, 2016, a decrease of $3.8 million compared to net income of $1.9 million reported for the prior year period. The net loss per diluted share was $0.07 for the nine months ended September 24, 2016 compared to net income per diluted share of $0.07 for the nine months ended September 26, 2015. Revenue decreased $17.7 million to $44.6 million from $62.4 million, or a 29% decrease, for the nine months ended September 24, 2016, as compared to the nine months ended September 26, 2015.
In April 2015, the Company’s Board of Directors authorized the repurchase of up to $2.0 million of the Company’s common stock from time to time, based on prevailing market conditions. Through September 24, 2016, ENGlobal has repurchased and retired approximately 950,911 shares of common stock at a cost of $1.2 million under this program. As of September 24, 2016, the remaining amount authorized for repurchase under this program was $0.8 million.
Management’s Assessment
Mark Hess, ENGlobal’s Chief Financial Officer stated: “Although our recent backlog has been relatively stable, we have experienced a large upturn in project awards thus far in the fourth quarter. Similarly, we are seeing a significant increase in our proposal pipeline; however, projects are continuing to be awarded more slowly than in the past. ENGlobal has been striving to reduce both direct and variable expenses while our end markets have been in a downturn. These efforts, combined with an increase in project work, have allowed the Company to achieve profitability in the third quarter.”
Mr. Hess continued: “Our balance sheet remains very strong. Cash increased by $1.4 million during the quarter to $16.1 million at the end of September, primarily as a result of the collection of retention receivables, and we continue to have no borrowings under our working capital facility. In total, we have $22.3 million in net working capital which we believe is sufficient for us to weather the current market cycle and for future expansion.”
William A. Coskey, P.E., Chairman and CEO of ENGlobal added: “The Company continues to be opportunistic in making investments during this time in order to position our business for improving conditions. We continue to add highly experienced personnel in key positions; an effort which is just now producing results based on our significant upturn in both proposal activity and bookings.”
Mr. Coskey continued: “In addition, we have increased our project execution capabilities as a result of opening our 31 acre fabrication facility in Henderson, Texas. In the near term, this latest investment should allow us to perform more project scope by fabricating certain mechanical components. We also expect this new service to have many cross selling opportunities with our existing engineering, automation and integration businesses. However, the important long term strategy will be to facilitate ENGlobal as a provider of highly engineered and modularized process systems. We expect to provide our clients with a great amount of value that can be achieved through standardized and modular construction, and single point of project execution. “
The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2016 is expected to be filed with the Securities and Exchange Commission reflecting these results by the end of the day on Friday, November 4th.
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.