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ENGlobal Reports Second Quarter Results

HOUSTON, Aug. 5, 2010 (GLOBE NEWSWIRE) -- ENGlobal (Nasdaq:ENG), a leading provider of energy-related project delivery solutions, announced today its financial results for the second quarter ended June 30, 2010.

Second Quarter 2010 Highlights Compared to Second Quarter 2009:
  • $(0.16) earnings per diluted share, a decrease from $0.00
  • Revenue of $73.7 million, a decrease of 7.7%
  • Consolidated gross profit margin as a percentage of revenue of 5.5%, a decrease from 8.8%
  • Continued strong liquidity, with positive cash flow from operations of $2.4 million and $8.9 million for the three and six months ended June 30, 2010, respectively
  • 88.7% reduction in long-term debt

ENGlobal reported second quarter net loss of $(4.5) million, or $(0.16) earnings per diluted share, for the quarter ended June 30, 2010, a decrease from breakeven results for the quarter ended June 30, 2009. As previously reported, second quarter operating results include a non-routine pre-tax charge of $3.0 million related to an uncollectable accounts receivable from a bankrupt client, Bigler LP.

Management's Assessment:

Commenting on the results, ENGlobal's Chief Executive Officer, Edward L. Pagano, said, "Including the previously reported Bigler charge, ENGlobal's second quarter results reflect several non-routine charges. Strictly from an operational perspective, ENGlobal's second quarter financial results show slight improvements over the first quarter of 2010. Excluding the non-routine charges, our revenue, gross profit, net operating income, and billable hours increased, and our SG&A expenses decreased, when compared to the first quarter 2010."

The following table illustrates the composition of the Company's revenue and results of operations for the three months ended June 30, 2010 and 2009, respectively:
  Quarter Ended Quarter Ended
  June 30, 2010 June 30, 2009
(Dollars in millions)        
Segment Total Revenue % of Total Revenue Gross Profit Margin Operating Profit Margin Total Revenue % of Total Revenue Gross Profit Margin Operating Profit Margin
Engineering $31.9 43.3% 4.0% (10.2%) $33.5 41.9% 8.2% 3.3%
Construction 20.2 27.4% 6.9% 4.3% 22.4 28.1% 8.0% 6.1%
Automation 15.8 21.4% 4.7% (3.5%) 15.6 19.5% 7.8% 1.8%
Land 5.8 7.9% 10.9% 2.7% 8.4 10.5% 15.3% 11.0%
  $73.7 100.0%     $79.9 100.0%    

The Company's consolidated gross profit margin as a percent of revenue decreased to 5.5% in the three months ended June 30, 2010 from 8.8% in the prior year period. The primary reasons for this decrease were competitive pressures to reduce margins, maintaining core employees in a down market and a declining backlog.

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