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ENGlobal Reports Third Quarter Results

Overall SG&A expenses increased $7.5 million, or 108.2%, to $14.5 million for the three months ended September 30, 2010, from $7.0 million for the comparable prior-year period. The third quarter 2010 SG&A represents an increase of 96.8% compared to $7.4 million in the first quarter 2010. As a percentage of revenue, SG&A expense increased to 16.9% for the three months ended September 30, 2010, from 8.0% for the comparable period in 2009. The primary reason for this increase was $7.2 million in bad debt expense mainly attributable to the SLE charge.

The Company's days sales outstanding decreased to 55 days at September 30, 2010, from 65 days at September 30, 2009. Bad debt expense was approximately 8.6% and 0.5% of revenue for the quarters ended September 30, 2010 and 2009, respectively.

Long-term debt and capital leases, net of current portion, decreased 78.7%, or $4.8 million, from $6.1 million at December 31, 2009 to $1.3 million as of September 30, 2010. As a percentage of stockholders' equity, long-term debt decreased to 2.0% from 7.8% at these dates. The decrease in long-term debt primarily relates to a pay down on our December 31, 2009 line of credit and the credit balance being classified as current portion of long-term debt at September 30, 2010. Cash on hand at September 30, 2010 totaled $0.4 million and availability under the credit facility, after consideration of loan covenant restrictions, totaled $14.3 million, resulting in total liquidity of $14.7 million. At September 30, 2010, the amount outstanding on the Company's line of credit was $9.7 million compared to $6.0 million at December 31, 2009.

The Company will host a conference call to discuss its quarterly results at 11:00 a.m. EDT (10:00 a.m. CDT) today. To participate in the conference call, please dial (877) 711-4010 (Domestic) or (706) 643-4549 (International) approximately 10 minutes before the scheduled start time and request the "ENGlobal Third Quarter 2010 Earnings Conference Call." If you are unable to join the call, a replay will be available approximately three hours after the conclusion of the call until Thursday, November 18, 2010. The replay can be accessed by dialing (800) 642-1687 or (706) 645-9291 (International), Conference ID #21538562. The call will be webcast live at www.englobal.com in the Investor Relations section, and an audio archive will be available on the Company's website shortly after the call concludes.

The Company's Quarterly Report on Form 10-Q for the period ended September 30, 2010 will be filed with the Securities and Exchange Commission on or before November 9, 2010 reflecting these results.

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