Looking at ENG this morning.
ENGlobal Corporation is a provider of engineering services and systems principally to the petroleum refining, petrochemical, pipeline, production and process industries throughout the United States and internationally. The services provided by the Company span the life cycle of a project, and include feasibility studies, design, procurement and construction management. ENGlobal also supplies automation, control and uninterruptible electrical power systems to its clients worldwide. The Company's business consists of two segments, engineering and systems. The engineering segment offers engineering consulting services to clients for the development, management and turnkey execution of engineering projects and inspection services. The systems segment designs, assembles, programs, installs, integrates and services control and instrumentation systems for specific applications in the energy and processing related industries.
For the six months ended 6/04, revenues increased 25% to $65.3M. Net income from continuing operations and applicable to Common fell 8% to $892 thousand. Results reflect the continuation of a large EPC project, offset by higher S/G/A expenses.
Noticed the director have options to exercise at $1.81 starting Jun 05. this is about 40% higher than current price.
Going through the 10-Q, noticed about 1mil share dilution, but reading further down, this was due to conversion of preffered shares to common. Also, the company cancel 50% of the preffered when this happened. I like that.
A couple concerns:
Expenses are outwighing revenue growth.
LT Debt has grown from 7mil to 9 mil (although short term is down 3mil)
Stock equity is down 2mil (due to accounts receivable)
Cash is down a bit, they may have to dilute.
possible plus- look like they rolled all their debt into one source.
On July 27, 2004, the Company entered into a new Credit Facility (the "Comerica Credit Facility") with Comerica Bank ("Comerica"). The loan agreement positions Comerica as senior to all other debt. The line of credit is limited to $22,000,000, subject to loan covenant restrictions. The Comerica Credit Facility is collateralized by substantially all the assets of the Company. The initial funding on the line of credit totaled $8,612,000. The Comerica Credit Facility matures July 27, 2007. At the election of the Company, the interest rate will be the lesser of prime or a three tiered Eurodollar rate, plus 150, 175, or 200 basis points, based on the ratio of total funded debt to EBITDA for the trailing 12 months of less than 2.00, between 2.00 and 2.50, and greater than 2.50, respectively. The commitment fee on the unused line of credit is 0.250%. The remaining borrowings available under the line of credit as of July 28, 2004 were approximately $7,500,000.
The Fleet Credit Facility line of credit was paid off on July 28, 2004 as part of the initial funding from Comerica. The Company was in compliance with all covenants under the Fleet Credit Facility as of the last reporting period on June 30, 2004.
The Comerica Credit Facility contains covenants requiring the Company, as of the end of each calendar month then ended, to maintain certain ratios, including total funded debt to EBITDA; total funded debt to total liabilities, plus net worth; and total funded debt to accounts/unbilled receivables. The Company is also required, as of the end of the most recent quarters then ended, to maintain minimum levels of net worth, plus the Company must comply with an annual limitation on capital expenditures. The Company expects to realize savings in interest charges on the revolving line-of-credit over the term of the Comerica Credit Facility. The Company also gained additional availability under the Comerica Credit Facility which allowed it to retire the Equus II term loan and to realize additional interest savings. The additional availability will also be used to support cash requirements of the Company's acquisition strategy.
This could be a wild card pushing the pps up or down:
During 2003, the Company, its subsidiaries, and more than 40 other parties were named defendants in several petitions for damages filed in various district courts in Louisiana (East Baton Rouge, Calcasieu, Iberville, Ascension, and Orleans Parishes) on behalf of former employees of Barnard and Burk, Inc. The plaintiffs, who allege exposure to asbestos during the course of their employment, were employees of Barnard and Burk, Inc. during a period covering the late 1950's through the early 1980's at facilities located within the State of Louisiana. In 1994, AMEC Engineering, Inc. assigned the trade name "Barnard and Burk" to RPM Engineering, Inc. along with selected assets. No liabilities were acquired by RPM. The Company's wholly-owned subsidiary, ENGlobal Engineering, Inc., formerly known as Petrocon Engineering, Inc., acquired RPM (along with the "Barnard and Burk" trade name) in 1996 pursuant to a stock purchase agreement. Because Petrocon acquired only the "Barnard and Burk" trade name, and none of its liabilities, the Company is seeking to be extricated from the suits via summary judgment. The Company believes the lawsuits are without merit and intends to defend them vigorously.
Shares Outstanding: 24.08M
Float: 9.60M
% Held by Insiders: 60.13%
% Held by Institutions: 1.87%
Price/Book (mrq): 1.64
Total Cash Per Share (mrq): 0
Book Value Per Share (mrq): 0.794
T/A wise, looks like a bottom forming off the 52-week low of 1.26.
moneyflow is static, williams at a bottom, MACD improving, stochastic crossed over a couple days ago from the bottom, and a faint heartbeat on RSI and OBV. a little volume and this one should pop 20%, imo.
Anyone got anything on it? Thoughts?
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