ENGlobal Reports Third Quarter 2013 Results

ENGlobal Reports Third Quarter 2013 Results

HOUSTON, Nov. 8, 2013 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading
provider of energy-related engineering and automation services, announced
today its financial results for the third quarter ended September 28, 2013.

Third Quarter 2013 Highlights Compared to Third Quarter 2012:

  *Breakeven earnings per share, an improvement from a loss per share of
    $0.83
  *Revenue of $43.3 million, a decrease of 24.7%
  *Gross profit margin of 12.0%, an increase from 5.7%
  *Overall SG&A decreased from $7.1 million to $5.2 million
  *Reduced bank debt from $29.4 million to $1.1 million

ENGlobal reported a net loss of approximately $50 thousand, or $(0.00) per
share, from both continuing and discontinued operations for the quarter ended
September 28, 2013. This compares to a net loss of approximately $22.3
million, or $(0.83) per share, and a net loss from continuing operations of
approximately $18.7 million, or $(0.67) per share, for the quarter ended
September 29, 2012. Third quarter 2013 revenues decreased to $43.3 million,
24.7% lower than the $57.5 million for the third quarter of 2012, primarily
due to the sale of the Gulf Coast Engineering and In-Plant operations on
August 30, 2013.

"ENGlobal has come a long way in fundamentally reshaping its Business over a
relatively short period of time," said William A. Coskey, P.E., Founder and
Chief Executive Officer of ENGlobal. "ENGlobal's management team has been
almost completely reorganized, a move which has proven to be effective in
terms of improving margins and reducing expenses. In addition, the Company has
sold or discontinued four non-strategic businesses since my return as CEO."

Mr. Coskey, continued. "Through these and other measures, we've been able to
significantly reduce dependence on our working capital credit facility and
have now returned to being in full compliance with its covenants required by
our facility. These actions of divesting certain assets have been important to
ENGlobal – both in terms of financial liquidity and for our higher value
engineering and automation focus going forward."

The Company's gross profit margin as a percentage of revenue increased to
12.0% in the three months ended September 28, 2013 as compared to 7.1% for the
prior year period. The primary reason for this increase is the implementation
of our profit improvement plan, which reduced the risk profile of our project
mix, reduced variable costs, and improved efficiencies in the Automation
segment.

The amount outstanding under the Company's credit facility was $26.8 million
at December 29, 2012, $1.1 million at September 28, 2013 and $567 thousand at
November 8, 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.

The following table illustrates the composition of the Company's revenue and
profitability, inclusive of discontinued operations, for the three months
ended September 28, 2013 and September 29, 2012, respectively:

            Quarter Ended                      Quarter Ended
(dollars in  September 28, 2013                 September 29, 2012
millions)
                     % of    Gross  Operating          % of    Gross  Operating
            Total     Total   Profit Profit    Total     Total   Profit Profit
Segment      Revenue   Revenue Margin Margin    Revenue   Revenue Margin Margin
                                                                 
Engineering
&            $31,901 73.7%   7.0%   4.1%      $ 40,779  56.6%   4.6%   (18.5)%
Construction
Automation   11,397    26.3%   5.0%   3.4%      16,321    22.7%   3.0%   1.5%
Discontinued —         —%      —%     —%        14,941    20.7%   1.6%   (4.0)%
Operations
Consolidated $43,298 100.0%  12.0%  —%        $72,041 100.0%  6.3%   (29.4)%

Overall, selling, general and administrative ("SG&A") expenses decreased $3.5
million, or 40.2%, from $8.7 million in the three months in 2012 to $5.2
million for the current quarter.As a percentage of revenue, SG&A remained
steady at 12.0% for the three months ended September 28, 2013 when compared to
the prior period.

In the three months ended September 29, 2012, the Company recorded goodwill
impairment in the amount of $17.0 million of which $14.6 million was
attributable to continuing operations.

The Company's Quarterly Report on Form 10-Q for the quarter ended September
28, 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 under the new credit
facility; (2)our ability to receive the anticipated benefit from the
divestiture of our Gulf Coast engineering and in-plant operations; (3)our
ability to achieve profitability and sustainable positive cash flow from our
operations; (4)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; (5)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; (6)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; (7)the
effect of increases and decreases in oil prices; (8)the availability of parts
from vendors; (9)our ability to collect accounts receivable in a timely
manner; (10)our ability to accurately estimate costs and fees on fixed-price
contracts; (11)our ability to hire and retain qualified personnel; (12)our
ability to retain existing customers and get new customers; (13)our ability
to mitigate losses; (14)our ability to achieve our business strategy while
effectively managing costs and expenses; (15)our ability to estimate exact
project completion dates; (16)our ability to effectively monitor business
done outside of the United States; (17)our ability to realize the benefits of
the sale of our Field Solutions segment, including our ability to collect
accounts receivables; (18)the performance of the energy sector; and (19) 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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Comparative Statement of Operations
(dollars in thousands, except losses per share)
(net of discontinued operations)
                                        Quarter Ended
                                        September 28, 2013 September 29, 2012
                                                          
Operating revenues                       $43,298          $57,482
Operating costs                          38,094             53,383
Gross profit                             5,204              4,099
                                                          
                                                          
Selling, general and administrative      5,203              7,085
expenses
Goodwill Impairment                      0                  14,568
Operating loss                           1                  (17,554)
                                                          
                                                          
Other income (expense):                                    
Other income (expense), net              494                (98)
Interest expense, net                    (510)              (643)
                                                          
Loss from continuing operations before   (15)               (18,295)
income taxes
                                                          
Provision for federal and state income   35                 (412)
taxes
                                                          
Loss from continuing operations          (50)               (18,707)
                                                          
Income from discontinued operations, net —                  (3,623)
of taxes
                                                          
Net income (loss)                        $(50)            $(22,330)
                                                          
Income (Loss) per common share - basic                     
and diluted:
Loss from continuing operations          $ (0.00)           $(0.70)
Income from discontinued operations      —                  (0.13)
Net income (loss)                        $ (0.00)           $(0.83)
                                                          
                                                          
Weighted average shares used in
computing losses per share -basic (in   27,041             26,964
thousands):
Weighted average shares used in
computing losses per share - diluted (in 27,200             26,806
thousands):
                                                          
Selected Balance Sheet Information (in                     
thousands):
                                        As of
                                        September 28, 2013 December29, 2012
                                                          
Cash (1)                                 $1,309           $738
Working capital                          12,393             13,303
Property and equipment, net              3,094              2,997
Total assets                             46,083             78,687
Outstanding balance of credit facility   1,115              26,829
Stockholders' Equity                     25,693             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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