ENGlobal Corporation
Q4 2020 Earnings Call Transcript

Published: 11 Mar 2021

[Operator:]

Good morning, and welcome to the ENGlobal 2020 Year-End Financial Results Conference Call. Your hosts for this morning are Chief Executive Officer, Mark Hess; President and Chief Operating Officer, Roger Westerlind; and Chief Financial Official, Darren Spriggs. At the request of ENGlobal, today's call is being recorded, and will be available for replay on the Investor Relations section of the company's corporate Web site englobal.com. You may also access the teleconference replay by dialing toll free 877-481-4010. Again, that's 877-481-4010 domestically or 919-882-2331 internationally, and referencing conference ID 40284. This replay will be available shortly after the completion of this event through 9 A.M. Eastern Time on March 18, 2021. I would now like to inform all parties that your lines have been placed in a listen-only-mode until the question-and-answer segment of this call begins.

[Rick Eisenberg:]

Thank you, Operator, and thanks everyone for joining us on this call. Before we begin, I'd like to review our forward-looking statements provision. During today's conference call, company representatives may make forward-looking statements. Any statements made in this presentation about future operating results or other future events are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please note that actual results achieved by the company may differ materially from such forward-looking statements. A discussion of factors that could cause such differences appears in the risk factors section of the company's 10-K. And now ENGlobal CEO, Mark Hess will present an analysis of the company's performance in the year 2020 and provide some outlook for 2021. Mark?

[Mark Hess:]

Thank you, Rick. Good morning, everyone. Thank you for joining the call. On March 1st, we announced the retirement of Bill Coskey from his executive positions at ENGlobal, while remaining as Chairman of the Board. The Board has appointed me as CEO. As you can imagine, I have had a close working relationship with Bill over the last eight years and a close personal relationship with Bill over the last eight years. So, it's with mixed emotion that I see Bill step away. I'll miss seeing him in the office. But I am happy to see that he is going to be able to spend more time with his growing family. The Board has also appointed Roger Westerlind as President. I have been acquainted with Roger now for a couple of years. And over that time, I have become familiar with Roger's background, his experiences and capabilities, but most of all his approach to servicing customers. And I am pleased that Roger has chosen to join our team. He has really made a positive impact on us internally that will become more visible in the coming months. Darren Spriggs will replace me as CFO, Secretary and Treasurer. Darren has been with us for several years as our VP Corporate Controller. And I have full confidence that he will be successful in his new role. Darren will be speaking you today about our 2020 results. And Roger will give you an overview of some of our initiatives and current trends. Afterwards, I'll have a few comments. And then, we will open up the call for questions. At this time, I'll turn it over to Darren.

[Darren Spriggs:]

[Roger Westerlind:]

Thanks, Darren. I'm very happy to be on board. I thank both Bill and Mark for the opportunity. ENGlobal kind of remain mindful about the early days of ABB, lot of skilled people and a lot of opportunities. As I was part of ABB for many years, worked across many segments, lived in Germany, South Africa, London, and here in Houston since '99. I have a long background in engineering and projects working across automation, power, renewables, and then in other industries. With especially successful working with the big IOCs, long background working with Chevron, Exxon, BP, as well as the major partners in South Korea, VSME, worked here in the U.S. with McDermott, Sacrion and many others. I also from 2004 was part of Dynamic Industries, which we grow from a local offshore/onshore construction company to over a $500 million company, which we sold to Carlyle/Riverstone back in 2004. What I see here at ENGlobal is a great delivery platform, which we will use as a delivery of innovation. What do you mean by that is simply we're going to have a delivery model, which go across many industry segments. So, what we have done in the first few months of my tenure here is to reorganize the very flat matrix organization, very similar to what we had in ABB early days. So, if you see a picture in front of yourself with a matrix of the horizontals, it's the delivery system which consists of project services that the engineering procurement scheduling, or fabrication facility, and our integration facility. That's the delivery system, and the work, the horizontals is upstream, renewables, government services, refinery and terminals, and obviously automation. I think this is a great platform to build on, and I'm really excited for the future. All this, our renewable segments has a lot of focus and we have a number of projects that is either in proposal stage or negotiation stage. When we talk about renewables, the focus so far has been hydrogen. Obviously around renewables, we have clean diesel, we have solar and we have many other processes. We are actively looking for more projects and more opportunities really in that. I guess the concern, as Darren and Mark touched on, is the COVID and the delay of projects. I think I'm cautiously optimistic about what we see. I think my personal view is that we are still not over the COVID and a setback. If we listened to the market this morning that mark has stopped some of the vaccines. I think it's a fragile time I think we need to be very careful. The backlog of 24 million obviously is concerning, but if we look at the pipeline forward as we see today, it looks quite promising.

[Mark Hess:]

Thank you, Roger. As Roger mentioned, the pipeline does look promising. I think at this point we've issued or had in process about $278 million in opportunities. A lot of those opportunities are in the renewable and green energy space. Many of these opportunities are fairly large. Darren talked about our working capital and our cash availability, which we believe is enough to manage these projects. But in addition to that recently we filed an S-3 with an ATM, where we can go to the market to get additional funds to manage these projects if necessary. So, with that, I will turn it over to the Operator for questions and answers.

[Operator:]

[Mark Hess:]

Yes. So, thank you very much for attending the call. And as the Operator mentioned, it will be on the Web site for replay. And thank you again.

[Operator:]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.