ENGlobal Reports Second Quarter 2013 Results

ENGlobal Reports Second Quarter 2013 Results

HOUSTON, Aug. 9, 2013 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading
provider of energy-related engineering and automation services, announced
today its financial results for the second quarter ended June 29, 2013.

Second Quarter 2013 Highlights Compared to Second Quarter 2012:

  *$0.06 loss per share, an improvement from a loss per share of $0.37
  *Revenue of $50.6 million, a decrease of 14.5%
  *Gross profit margin as a percentage of revenue of 10.9%, an increase from
    8.8%
  *Overall SG&A decreased from $7.9 million to $6.4 million

ENGlobal reported a net loss of approximately $1.7 million, or $(0.06) per
share, from both continuing and discontinued operations for the quarter ended
June 29, 2013. This compares to a net loss of approximately $9.8 million, or
$(0.37) per share, and a net loss from continuing operations of approximately
$8.3 million, or $(0.31) per share, for the quarter ended June 30, 2012.
Second quarter 2013 revenues decreased to $50.6 million, 14.5% lower than the
$59.2 million for the second quarter of 2012, primarily due to lower
engineering, procurement and construction (EPC) project revenues in the
Engineering and Construction segment and the conclusion of several projects in
the fabrication division of the Automation segment in 2012.

"The impending divestiture of our Gulf Coast engineering and in-plant
operations to Furmanite will result in a major transformation of our
business," said William A. Coskey, P.E., Founder and Chief Executive Officer
of ENGlobal."The transaction is expected to close by the end of August, and
the corporate services transition is expected to be substantially complete by
the end of 2013."

Mr. Coskey continued. "In effect, this transaction serves as a directional
change for ENGlobal.We will have a fresh start and our management team will
now have the freedom to pursue strategic opportunities that we believe will
ultimately grow the Company.Through the balance of this year, we will firm up
the new goals for our Company's future – and look forward to communicating our
short- and long-term plans during that time."

The Company's gross profit margin as a percentage of revenue increased to
10.9% in the three months ended June 29, 2013 as compared to 8.8% for the
three months ended June 30, 2012. The primary reason for this increase is
reduced variable costs and improved efficiencies in the Automation segment.

The following table illustrates the composition of the Company's revenue and
profitability for the three months ended June 29, 2013 and June 30, 2012,
respectively:

            Quarter Ended                    Quarter Ended
(dollars in  June 29, 2013                    June 30, 2012
millions)
             Total   % of    Gross  Operating Total   % of    Gross  Operating
Segment      Revenue Total   Profit Profit    Revenue Total   Profit Profit
                     Revenue Margin Margin            Revenue Margin Margin
                                                             
Engineering
&            $40,341 79.6%   9.8%   4.5%      44,816  56.4%   8.0%   2.2%
Construction
Automation   10,307  20.4%   15.2%  7.3%      14,335  18.0%   11.2%  4.1%
Discontinued —       —%      —%     —%        20,354  25.6%   5.2%   0.5%
Operations
Consolidated $50,648 100.0%  10.9%  5.1%      $79,505 100.0%  7.9%   2.1%

Overall, selling, general and administrative ("SG&A") expenses decreased $1.5
million, or 19%, from $7.9 million in the three months ended June 30, 2012 to
$6.4 million for the three months ended June 29, 2013.As a percentage of
revenue, SG&A decreased to 12.6% for the three months ended June 29, 2013,
from 13.3% for the comparable period in 2012.

The amount outstanding under the Company's credit facility was $26.8 million
at December29, 2012, $14.7 million at June 29, 2013 and $12.5 million at
August 7, 2013.These decreases were primarily due to the release of
restricted cash related to the expiration of the Company's Ex-Im Letter of
Credit Facility and the liquidation of the working capital of its divested
business units.

On July 5, 2013, the Company entered into a definitive agreement under which
its Gulf Coast engineering and in-plant operations will be sold to Furmanite
America, Inc., a subsidiary of Furmanite Corporation (NYSE:FRM). The total
value of the transaction to ENGlobal is expected to be approximately $21.5
million, consisting primarily of cash at closing and a $3.5 million promissory
note issued with a Furmanite Corporation guarantee.ENGlobal intends to use
the net proceeds from this transaction to repay its outstanding debt and for
working capital purposes.The transaction has been approved by the boards of
directors for both companies, and is expected to close on or around August 30,
2013, subject to lender approval and the completion of customary conditions.

The Company's Quarterly Report on Form 10-Q for the quarter ended June 29,
2013 will be filed with the Securities and Exchange Commission later today
reflecting these results.

About ENGlobal

ENGlobal (Nasdaq:ENG) is a provider of engineering and related project
services principally to the energy sector throughout the United States and
internationally.ENGlobal operates through two business segments: Automation
and Engineering & Construction.ENGlobal's Automation segment provides
services related to the design, fabrication and implementation of process
distributed control and analyzer systems, advanced automation, and related
information technology.The Engineering & Construction segment provides
consulting services relating to the development, management and execution of
projects requiring professional engineering as well as inspection,
construction management, mechanical integrity, field support, quality
assurance and plant asset management.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 regarding its
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 including, but not
limited to: (1) our ability to comply with the terms of the forbearances under
the PNC Credit Facility; (2) our ability to obtain an extension of the
forbearance periods under the PNC Credit Facility or otherwise obtain the cure
or waiver of defaults under the PNC Credit Facility; (3) our ability to
consummate the proposed divestiture of our Gulf Coast engineering and in-plant
operations and receive the anticipated benefit from the contemplated
transactions; (4)whether the exploration and consideration of strategic
alternatives will result in any transaction and such transaction's effects on
the Company and its stockholders; (5) our ability to achieve profitability and
sustainable positive cash flow from our operations; (6) the effect of changes
in accounting policies and practices as may be adopted by regulatory agencies,
as well as by the Financial Accounting Standards Board; (7) the effect of
changes in the business cycle and downturns in local, regional and national
economy and our ability to respond appropriately to the current worldwide
economic financial situation;(8) the effect on the Company's competitive
position within its market area in view of, among other things, the increasing
consolidation within its services industries, including the increased
competition from larger regional and out-of-state engineering and professional
service organizations; (9) the effect of increases and decreases in oil
prices; (10) the availability of parts from vendors; (11) our ability to
collect accounts receivable in a timely manner; (12) our ability to accurately
estimate costs and fees on fixed-price contracts; (13) our ability to hire and
retain qualified personnel; (14) our ability to retain existing customers and
get new customers; (15) our ability to mitigate losses; (16) our ability to
achieve our business strategy while effectively managing costs and expenses;
(17) our ability to estimate exact project completion dates; (18)our ability
to effectively monitor business done outside of the United States; (19) our
ability to realize the benefits of the sale of our Field Solutions segment,
including our ability to collect accounts receivables; (20) the performance of
the energy sector; and (21) the effect of changes in laws and regulations with
which the Company must comply, and the associated costs of compliance with
such laws and regulations, either currently or in the future, as applicable.
The Company cautions that the foregoing list of important factors is not
exclusive. Actual results and the timing of certain events could differ
materially from those projected in or contemplated by the forward-looking
statements due to a number of factors detailed from time to time in ENGlobal's
filings with the Securities and Exchange Commission.In addition, reference is
hereby made to cautionary statements set forth in the Company's most recent
reports on Form 10-K and 10-Q, and other SEC filings.Also, the information
contained in this press release is subject to the risk factors identified in
the Company's most recent Form 10-K.

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Statement of Operations
(dollars in thousands, except losses per share)
                                                           
                                              Quarter Ended
                                              June 29, 2013 June 30, 2012
                                                           
Operating revenues                             $50,648     $59,151
Operating costs                                45,136        53,953
Gross profit                                   5,512         5,198
                                                           
Selling, general and administrative expenses   6,367         7,880
Operating loss                                 (855)        (2,682)
                                                           
Other income (expense):                                     
Other income (expense), net                    (211)        (4)
Interest expense, net                          (422)        (375)
                                                           
Loss from continuing operations before income  (1,488)      (3,061)
taxes
                                                           
Provision for federal and state income taxes   99            5,195
Loss from continuing operations                $(1,587)    $(8,256)
                                                           
Income from discontinued operations, net of    —             (1,571)
taxes
                                                           
Net income (loss)                              $(1,587)    $(9,827)
                                                           
Income (Loss) per common share - basic and                  
diluted:
Loss from continuing operations                $(0.06)     $(0.31)
Income from discontinued operations            —             (0.06)
Net income (loss)                              $(0.06)     $(0.37)
                                                           
                                                           
Weighted average shares used in computing      27,041        26,806
losses per share --basic (in thousands):
Weighted average shares used in computing      27,200        26,806
losses per share - diluted (in thousands):
                                                           
Selected Balance Sheet Information (in                      
thousands):
                                              As of
                                              June 29, 2013 December29, 2012
                                                           
Cash (1)                                       $ 784         $ 738
Working capital                                13,255        13,303
Property and equipment, net                    2,233         2,997
Total assets                                   59,374        78,687
Long-term debt, net of current portion         14,688        26,829
Stockholders' Equity                           25,737        25,299
                                                           
(1) ENGlobal uses its cash position to pay down its credit facility.

CONTACT: Natalie S. Hairston
         (281) 878-1000
         ir@ENGlobal.com

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