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ENGlobal Corp. (ENG) Posts Disappointing Q4 Results, Positive Expectations for Future

ENGLobal Corp., a leading provider of engineering and related project services, announced its financial results for the fourth quarter and fiscal year ended December 31, 2010.

The company reported a fourth-quarter net loss of $0.5 million, or $(0.02) per diluted earnings per share, for the quarter ended December 31, 2010, 38 percent increase over a net loss of $0.8 million and an increase of 33 percent over diluted earnings per share of $(0.03) for the same period last year. Fourth-quarter revenue increased to $93.2 million, 13 percent higher than the $82.8 million for the fourth quarter of fiscal year 2009.

For fiscal year 2010, ENGlobal reported a net loss of $11.8 million and earnings per diluted share from continuing operations of $(0.43), a decrease of 1,083 percent over net income of $1.2 million and a decrease of 1,175 percent over earnings per diluted share of $0.04 as compared to fiscal year 2009. Revenue for fiscal year 2010 was $320.6 million – 7 percent lower than fiscal year 2009.

As of December 31, 2010, the company’s current backlog was $244.2 million, approximately 8 percent higher than the $227.0 million reported for the same prior year period.

The company decreased its long-term debt, net of current portion, by 95 percent, or $5.8 million, from $6.1 million at December 31, 2009, to $0.3 million at December 31, 2010. Cash on hand at December 31, 2010, was $49,000.

ENGlobal’s CEO Edward L. Pagano noted the unfavorable results and said the company is taking measures to get back on track.

“We continue to be disappointed in our financial performance. We are looking closely at our under-performing operations as well as those divisions that are not performing up to their current budget. As previously reported, we are now recognizing $2.0 million in adjustments made during 2010, including capital lease reductions in several of our offices. This process is ongoing and we expect to find additional areas for reducing costs over time,” Pagano stated. “On a positive note, we were awarded approximately $28 million worth of business in January 2011. This compares to $25 million and $21 million worth of awards in all of the fourth and third quarters, respectively. We believe that our performance will improve over the course of the year as we begin the project work from these awards, gain additional backlog, and continue to provide quality execution to our clients. In addition, we have recently seen an increase in proposal activity for larger projects and have identified several large, sole-sourced opportunities.”

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