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ENGlobal Corp. (ENG) on the Upside: A Season of Growth Outpacing the S&P 500
ENGlobal operates through two strategic business segments to provide energy-related automation and engineering services for clients in the energy, pulp and paper, and government sectors throughout the United States and internationally. Quality, safety and innovation are staples of the company’s progress through nearly three decades of operations, though strategic management takes the crown for the company’s current financial performance.
ENGlobal overcame challenges, difficulties and rough spots through the last few years, benefiting from a turnaround strategy that included the divesture of its Field Solutions Segment in September 2012. The company is now in a season of financial strength as it pursues growth in its remaining Engineering, Procurement and Construction Management (EPCM) and Automation operating segments.
In the third quarter of 2014, ENGlobal increased revenues from continuing operations by 17.0% to $26.9 million, compared to revenues of comparable operations of $23.0 million in the third quarter of 2013. The company recorded third quarter 2014 net income of $1.8 million, or $0.07 per diluted share, compared to a loss of $0.1 million, or $0.00 per diluted share, for the year-ago period.
For the nine months ended September 27, 2014, ENGlobal reported revenue of $81.0 million, an increase of 26.8% compared to the comparable period of 2013. Nine-month 2014 net income of 2014 of $5.2 million, or $0.19 per diluted share, was an increase from a net loss of $2.6 million, or a loss of $0.10 per diluted share
Reporting the three-month and nine-month results and referencing the struggles of 2012-2013, ENGlobal CFO Mark Hess in a news release stated that the company is “continuing to see positive results from initiatives that have been undertaken at ENGlobal over the last two years. Our improved performance is best demonstrated by a significant increase in margins, consistent project execution, as well as substantial internal growth in our continuing operations. We maintained a substantial cash balance and had no borrowings during the quarter …”
William Coskey, P.E., who was appointed president and CEO of ENGlobal in August 2012 and has served as chairman of the board since 2005, steered the company through its significant changes and into its current state of profitability and growth.
In the third-quarter news release, Coskey echoed Hess’ praise for the stronger performance, stating that, “ENGlobal is continuing to perform well, both operationally and financially, as evidenced by this fourth consecutive quarter of profitability. All stakeholders in our company can and should take pride in the significant turnaround that we together have accomplished over the last two years. Our solid financial footing now gives us an excellent base from which to extend our company’s growth.”
The market has taken notice of this financial solidification. Four straight quarters of profitability has boosted the company’s stock performance. Year-to-date ENGlobal is trading 35.7% higher with shares up 5.6% at $1.90 in today’s trade.
For more information visit www.englobal.com
