Friday, March 20, 2015

ENGlobal Corp. (ENG) Enjoys Charted Course to Higher Sales, Profitability

In its 29 years of operations, Houston-based ENGlobal has emerged a leading provider of energy-related automation and engineering services that serve the world’s energy and government sectors. Reflecting successful strategic initiatives to move ENGlobal toward profitability, the company demonstrated particular strength in fiscal 2014 with a better-than-expected sprint toward higher revenues and turn to annual profit.

“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,” ENGlobal CFO Mark Hess stated in the company’s earnings statement earlier this month. “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.”

Fiscal 2014 revenues increased 21.1% to $107.9 million compared to revenues of $89.1 million in fiscal 2013, which included $79.8 million of revenues from the 2013 sale of the Gulf Coast EPCM business. The company turned to profit for 2014 with net income of $6.0 million, or $0.22 per diluted share, compared to a net loss of $2.3 million, or a loss of $0.08 per share, for the year prior. In response, ENGlobal shares have gained 17% year-over-year, trading in a 52-week range of $1.28-$4.22.

As noted by Hess, several factors contribute to the company’s annual growth, including a steady pace of project completion. In addition to its Houston, Texas headquarters, ENGlobal maintains offices in Illinois, Oklahoma, Colorado and Alabama which employ a skilled workforce of more than 400 professionals who operate within two primary divisions.

ENGlobal’s Automation segment, which includes integration and engineering, provides fully integrated process, power and control solutions as well as fabrication, programming, assembly, testing and documentation, all of which are conducted in-house. General services specific to the engineering side include the project management, construction management and construction coordination of automation projects such as DCS migrations, plant re-instrumentations and expansions, and grass roots instrument, electrical and control system installation. The segment also provides loop check, commissioning and start-up support of process control, power distribution and generation, analytical and EPA- regulated systems.

The Engineering (EPCM) 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.

Complementary to its two chief operating segments, ENGlobal also operates a Subsea Controls and Integration (SCI) group which provides advanced process automation design, engineering service and equipment for the effective integration of communication protocols between topsides production facilities and subsea devices. The SCI team was initiated when a major global E&P company set out to standardize the subsea process control environment. In 2008, ENGlobal’s SCI group was commissioned to further develop the concept commencing with a detailed design. Working together, they defined a long-term vision and commercialization plan for a now patented Universal Master Control Station (UMCS) that could communicate to virtually any subsea equipment.

Moving forward, ENGlobal management expects the company to maintain the momentum of 2014 to rally through broader industry challenges in the coming year and pursue additional avenues of development.

“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,” stated company CEO William Coskey, P.E.

For more information, visit www.englobal.com


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