ENG Reports Q3 2022 Results
ENG (NASDAQ:ENG) reported third quarter 2022 revenues of $13.1 million, marking a 121% increase from $5.9 million in Q3 2021, attributed to growth in the Government Services and Commercial segments. However, the company faced a net loss of $2.3 million or $(0.07) per share, reversing from a net income of $2.4 million in the same period last year. Despite challenges, ENG improved its gross profit margin by 19 percentage points and saw increased backlog of $15.7 million.
With cash reserves at $9.7 million, management expresses confidence in future growth initiatives.
- 121% increase in revenue from $5.9 million to $13.1 million year-over-year.
- Improved backlog from $8.4 million to $15.7 million.
- Gross profit margin improved by 19 percentage points.
- Reduced SG&A expenses by $0.2 million.
- Net loss of $2.3 million compared to a net income of $2.4 million year-over-year.
- For the nine months, net loss increased to $7.5 million from $1.8 million.
HOUSTON, TX / ACCESSWIRE / November 8, 2022 / ENG (NASDAQ:ENG), a leading provider of innovative project delivery solutions for the energy industry, today reported revenue of
The company's
The company reported a net loss of
On a comparable basis, the company's bottom line performance improved by
Cash on hand at September 24, 2022 was
"Once again we have seen impressive quarterly revenue growth," said CEO Mark A. Hess, "and our backlog has improved to
"The third quarter of 2022 also saw us improve gross profit margin by 19 percentage points, while also reducing our SG&A expenses by
Mr. Hess stressed that these latest results do not yet include any significant contribution from ENG's new field service operations in the Permian Basin, construction services or the company's gas-to-liquids technology acquired earlier this year.
"We are confident that the steps we've taken to broaden the range of services offered to our clients will continue to fuel our growth and provide a steady pipeline of future work."
For the nine months ended September 24, 2022, the company had a net loss of
Last year's reported net loss of
ENG's
The following is a summary of the income statements for the three- and nine-month periods ended September 24, 2022 and September 25, 2021:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 24, 2022 | September 25, 2021 | September 24, 2022 | September 25, 2021 | |||||||||||||
Revenue | $ | 13,056 | $ | 5,921 | $ | 31,777 | $ | 29,449 | ||||||||
Gross profit (loss) | 664 | (814 | ) | 1,338 | 272 | |||||||||||
Selling, general and administrative expenses | 2,920 | 3,089 | 8,653 | 9,914 | ||||||||||||
Operating loss | (2,256 | ) | (3,903 | ) | (7,315 | ) | (9,642 | ) | ||||||||
Net income (loss) | (2,335 | ) | 2,401 | (7,488 | ) | (1,809 | ) | |||||||||
The following table illustrates the composition of the company's revenue and profitability for its operations for the three- and nine-month periods ended September 24, 2022 and September 25, 2021:
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
(amounts in thousands) | September 24, 2022 | September 25, 2021 | ||||||||||||||||||||||||||||||
Segment | Total Revenue | % of Total Revenue | Gross Profit (Loss) Margin | Operating Profit (Loss) Margin | Total Revenue | % of Total Revenue | Gross Profit (Loss) Margin | Operating Profit (Loss) Margin | ||||||||||||||||||||||||
Commercial | $ | 10,229 | 78.3 | % | (3.6 | )% | (19.0 | )% | $ | 3,935 | 66.5 | % | (27.7 | )% | (66.7 | )% | ||||||||||||||||
Government Services | 2,827 | 21.7 | % | 36.5 | % | 30.7 | % | 1,986 | 33.5 | % | 13.8 | % | 0.3 | % | ||||||||||||||||||
Consolidated | 13,056 | 100.0 | % | 5.1 | % | (17.3 | )% | 5,921 | 100.0 | % | (13.7 | )% | (65.9 | )% | ||||||||||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
(amounts in thousands) | September 24, 2022 | September 25, 2021 | ||||||||||||||||||||||||||||||
Segment | Total Revenue | % of Total Revenue | Gross Profit (Loss) Margin | Operating Profit (Loss) Margin | Total Revenue | % of Total Revenue | Gross Profit (Loss) Margin | Operating Loss Margin | ||||||||||||||||||||||||
Commercial | $ | 24,835 | 78.2 | % | (2.4 | )% | (21.2 | )% | $ | 23,141 | 78.6 | % | (1.6 | )% | (26.0 | )% | ||||||||||||||||
Government Services | 6,942 | 21.8 | % | 27.8 | % | 19.8 | % | 6,308 | 21.4 | % | 10.3 | % | (0.5 | )% | ||||||||||||||||||
Consolidated | 31,777 | 100.0 | % | 4.2 | % | (23.0 | )% | 29,449 | 100.0 | % | 0.9 | % | (32.7 | )% | ||||||||||||||||||
The following table presents certain balance sheet items as of September 24, 2022 and December 25, 2021:
(amounts in thousands) | As of September 24, 2022 | As of December 25, 2021 | ||||||
Cash and cash equivalents | $ | 9,664 | $ | 19,202 | ||||
Working capital | 16,724 | 26,263 | ||||||
ENGlobal Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(amounts in thousands, except per share data)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 24, 2022 | September 25, 2021 | September 24, 2022 | September 25, 2021 | |||||||||||||
Operating revenues | $ | 13,056 | $ | 5,921 | $ | 31,777 | $ | 29,449 | ||||||||
Operating costs | 12,392 | 6,735 | 30,439 | 29,177 | ||||||||||||
Gross profit (loss) | 664 | (814 | ) | 1,338 | 272 | |||||||||||
Selling, general and administrative expenses | 2,920 | 3,089 | 8,653 | 9,914 | ||||||||||||
Operating loss | (2,256 | ) | (3,903 | ) | (7,315 | ) | (9,642 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income, net | 5 | 6,371 | 36 | 8,061 | ||||||||||||
Interest expense, net | (63 | ) | (46 | ) | (166 | ) | (161 | ) | ||||||||
Income (loss) from operations before income taxes | (2,314 | ) | 2,422 | (7,445 | ) | (1,742 | ) | |||||||||
Provision for federal and state income taxes | 21 | 21 | 43 | 67 | ||||||||||||
Net income (loss) | (2,335 | ) | 2,401 | (7,488 | ) | (1,809 | ) | |||||||||
Basic and diluted income (loss) per common share: | $ | (0.07 | ) | $ | 0.07 | $ | (0.21 | ) | $ | (0.06 | ) | |||||
Basic and diluted weighted average shares used in computing income (loss) per share: | 35,802 | 35,139 | 35,492 | 30,776 | ||||||||||||
ENGlobal Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands, except share and per share amounts)
| September 24, 2022 | December 25, 2021 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 9,664 | $ | 19,202 | ||||
Trade receivables, net of allowances of | 10,067 | 7,692 | ||||||
Prepaid expenses and other current assets | 659 | 958 | ||||||
Payroll taxes receivable | 1,988 | 3,065 | ||||||
Contract assets | 5,820 | 4,177 | ||||||
Total Current Assets | 28,198 | 35,094 | ||||||
Property and equipment, net | 1,532 | 1,698 | ||||||
Goodwill | 720 | 720 | ||||||
Intangible assets, net of accumulated amortization | 2,674 | - | ||||||
Other assets | ||||||||
Right of use asset | 8,138 | 4,251 | ||||||
Deposits and other assets | 313 | 306 | ||||||
Total Other Assets | 8,451 | 4,557 | ||||||
Total Assets | $ | 41,575 | $ | 42,069 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 3,565 | $ | 2,001 | ||||
Accrued compensation and benefits | 2,196 | 2,183 | ||||||
Current portion of leases | 1,560 | 1,389 | ||||||
Contract liabilities | 1,220 | 2,054 | ||||||
Current portion of deferred payroll tax | 537 | 537 | ||||||
Other current liabilities | 723 | 667 | ||||||
Short-term contingent consideration | 101 | - | ||||||
Short-term debt | 1,572 | - | ||||||
Total Current Liabilities | 11,474 | 8,831 | ||||||
Long-term contingent consideration | 1,279 | - | ||||||
Long-term debt | - | 1,035 | ||||||
Long-term leases | 7,525 | 4,012 | ||||||
Total Liabilities | 20,278 | 13,878 | ||||||
Commitments and Contingencies (Note 8) | ||||||||
Stockholders' Equity: | ||||||||
Common stock - | 36 | 35 | ||||||
Additional paid-in capital | 57,996 | 57,403 | ||||||
Accumulated deficit | (36,735 | ) | (29,247 | ) | ||||
Total Stockholders' Equity | 21,297 | 28,191 | ||||||
Total Liabilities and Stockholders' Equity | $ | 41,575 | $ | 42,069 | ||||
ENGlobal Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)
| For the Nine Months Ended | ||||||||
| September 24, 2022 | September 25, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (7,488 | ) | $ | (1,809 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 691 | 355 | ||||||
Share-based compensation expense | 165 | 166 | ||||||
Forgiveness of PPP Loan | - | (4,974 | ) | |||||
Changes in current assets and liabilities | ||||||||
Trade accounts receivable | (2,375 | ) | 2,479 | |||||
Contract assets | (1,643 | ) | 435 | |||||
Other current assets | 1,369 | (2,415 | ) | |||||
Accounts payable | 1,564 | (699 | ) | |||||
Accrued compensation and benefits | 13 | (1,085 | ) | |||||
Contract liabilities | (834 | ) | (594 | ) | ||||
Income taxes payable | (8 | ) | (32 | ) | ||||
Other current liabilities, net | 64 | (458 | ) | |||||
Net cash used in operating activities | $ | (8,482 | ) | $ | (8,631 | ) | ||
Cash Flows from Investing Activities: | ||||||||
Asset acquisition, net of cash acquired | (971 | ) | - | |||||
Property and equipment acquired | (291 | ) | (187 | ) | ||||
Net cash used in investing activities | $ | (1,262 | ) | $ | (187 | ) | ||
Cash Flows from Financing Activities: | ||||||||
Issuance of common stock, net | - | 19,993 | ||||||
At-the-market offering costs | (97 | ) | - | |||||
Payments on finance leases | (233 | ) | (94 | ) | ||||
Interest on PPP loan | - | 25 | ||||||
Proceeds from revolving credit facility, net | 536 | (113 | ) | |||||
Net cash provided by financing activities | $ | 206 | $ | 19,811 | ||||
Net change in cash | (9,538 | ) | 10,993 | |||||
Cash at beginning of period | 19,202 | 13,706 | ||||||
Cash at end of period | $ | 9,664 | $ | 24,699 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 167 | $ | 155 | ||||
Right of use assets obtained in exchange for new operating lease liability | $ | 4,864 | $ | 2,613 | ||||
Cash paid during the period for income taxes (net of refunds) | $ | 51 | $ | 151 | ||||
Asset acquisition, common stock issued | $ | 525 | - | |||||
Asset acquisition, contingent consideration | $ | 1,380 | - | |||||
Non-cash transaction: PPP Loan forgiveness | - | 4,974 | ||||||
For further information on ENG's third quarter 2022 financial results, please refer to its Form 10-Q filing on the company's website at www.englobal.com , or on the SEC's website at www.sec.gov .
Conference Call
Management will host a conference call at 9:00 am Eastern time today to discuss ENG's third quarter 2022 financial results, provide updates on potential contract awards, and discuss the company's growth outlook for the remainder of the year.
To participate in the conference call, please dial in five to ten minutes before the call: (Toll Free) 877-545-0523 domestically, or 973-528-0016 internationally.Entry code: 705296
The conference call will also be broadcast live over the Internet and can be accessed at:
https://www.webcaster4.com/Webcast/Page/2272/46868
The teleconference replay will be available shortly after the completion of the live event through 9:00 am Eastern time on November 15, 2022. You may access the replay by dialing (Toll Free) 877-481-4010 domestically, or 919-882-2331 internationally, and referencing conference ID 46868.
You may also access the replay by visiting the company's web site:
https://www.englobal.com/events-and-presentations/
About ENG
ENG (NASDAQ:ENG) is a leading provider of complete project solutions for renewable and traditional energy throughout the United States and internationally. ENG operates through two business segments: Commercial and Government Services. The Commercial segment provides engineering, design, fabrication, construction and integration of automated control systems as a complete packaged solution for its clients. The Government Services segment provides engineering, design, installation, operations, and maintenance of various government, public sector, and international facilities, specializing in turnkey automation and instrumentation systems for the U.S. Defense industry worldwide. Further information about the Company and its businesses is available at www.englobal.com.
Safe Harbor for Forward-Looking Statements
The statements above regarding the Company's expectations, including those relating to its future results, its future operations and certain other matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws and are subject to risks and uncertainties. For a discussion of risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ENG's filings with the Securities and Exchange Commission, including the Company's most recent reports on Form 10-K and 10-Q, and other SEC filings.
Click here to join our email list: https://www.englobal.com/investors/
CONTACT:
Market Makers - Investor Relations
Jimmy Caplan
512-329-9505
Email: jimmycaplan@me.com
Market Makers - Media Relations
Rick Eisenberg
212-496-6828
Email: eiscom@msn.com
SOURCE: ENGlobal
View source version on accesswire.com:
https://www.accesswire.com/724466/ENG-Reports-Q3-2022-Results
FAQ
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