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News Release |
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2005 |
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#588574 |
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NEWS RELEASE
--------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
ENGlobal Corporation
CONTACT: Natalie S. Hairston
(281) 878-1000
ir@ENGlobal.com
---------------
ENGLOBAL REPORTS THIRD QUARTER NET EARNINGS OF $0.07 PER SHARE
HOUSTON, TX, NOVEMBER 3, 2005 - ENGlobal Corporation (AMEX: ENG):
THIRD QUARTER HIGHLIGHTS:
-- Revenues increase 59% from the third quarter of 2004 to $59 million.
-- Net income increases 115% to $1.6 million.
-- $0.07 EPS, basic and diluted.
ENGlobal Corporation, a leading provider of engineering services, today reported
revenues of $59 million for the third quarter ended September 30, 2005, up 59%
compared to $37 million in the prior year period. Net income for the quarter was
a record $1.6 million, or $0.07 per diluted share, compared to approximately
$755,000, or $0.03 per diluted share, in the prior year quarter. These results
mark the third consecutive increase in earnings per share, having reported
$0.04, $0.06, and $0.07 in the first three quarters of 2005, respectively.
The Company's third quarter 2005 results were negatively impacted by an
estimated loss amounting to approximately $217,000 on an after-tax basis, or
$0.01 per diluted share. The loss was related to decreased billing man-hours and
earnings in the Beaumont, Texas and Lake Charles, Louisiana area as a result of
Hurricane Rita. ENGlobal expects the loss attributable to Hurricane Rita in the
fourth quarter 2005 to be less than that estimated in the third quarter 2005.
REVENUE
Revenues for the quarter compared to the prior-year period increased by
approximately $22 million, due primarily to increased engineering segment
revenues and contributions from acquisitions. The increase in total engineering
revenue is attributable to approximately $10.1 million in additional labor
revenue and approximately $8.8 million in non-labor revenue, with non-labor
revenue representing lower margin activity on engineering, procurement, and
construction management (EPC) projects.
~ more ~
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654 N. Sam Houston Parkway E. o Suite 400 o Houston, Texas 77060
www.ENGlobal.com
{PAGE}
ENGlobal Corporation Press Release
November 3, 2005
Page 2
MARGIN ACTIVITY
ENGlobal's gross profit margin increased to 13.2% for the three months ended
September 30, 2005 from 12.6% for the quarter ended September 30, 2004. The
Company's third quarter 2005 operating margin increased to 4.7% from 3.3%
recorded in the third quarter of 2004, with non-labor revenue primarily
contributing a lower margin.
DEBT
The Company used the proceeds from the September 2005 $14 million private
placement of Common Stock to repay its revolving line of credit. ENGlobal's net
debt position at the end of the quarter was $1.8 million down from $15.6 million
at December 31, 2004. As a result, the Company expects a decrease in interest
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