Englobal (ENGC) 6 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to the ENG 2022 Second Quarter Financial Results Conference Call. At the request of ENG, today's call is being recorded and will be available for replay on the Investor Relations section of the company's corporate website, www.englobal.com.

You may access the replay by dialing toll-free (877) 481-4010 domestically or (919) 882-2331 internationally and referencing conference ID 46147. This replay will be available shortly after the completion of this event through to 9:00 a.m. Eastern on August 11, 2022. point, Rick like with Eisenberg, this call turn Eisenberg At to over Media Instructions] I to would the Communications. [Operator Relations Director to over you. Rick,

Thank us for you, thanks, call. this joining operator, and on everyone,

I'd begin, our provision. to Before we like forward-looking review statements

XXXX. ENG's from company future may of differ Reform During appears about under and forward-looking President; forward-looking statements. this results company section of be the Presenting the ENG's note CFO; forward-looking the statements discussion Hess, Risk or Litigation other Please call safe may Any Mark today's representatives Spriggs, of factors results make the could provisions materially of made Roger Private actual differences such such Westerlind, statements Securities the achieved statements. XX-K. company's will Act on conference in are cause harbor call, ENG's A operating CEO. the Factors presentation that future events that today in Darren by

and will available Spriggs. Following the over turn Mark Darren be And presentations, for now Darren? to it I'll Roger Darren, questions.

Thank also extend appreciation and welcome the like those you, on would my for call to today. I Rick.

same in last the to we compared income year. the For statement quarter, metrics our all improvements showed period

seeing past with line trend Our are XQ results in X we for have the been the quarters.

to our to on compared by increased utilization $XXX,XXX the by to to same We reduced gross half staff of year the the quarter revenue million, year. and expenditures million; progress in increased $X.X expect the this due next profit second period continue for of year and proposals. primarily Highlights into $XX.X include: increased last

investments for to Net a per these quarter. year made All improved signs comparable Backlog indication write-off a loss by million $XX the increased last net starting pay $X.X positive share. off. are that we $X.X to an by loss last with bad $X.X million last the million our $X.XX are year, $X.X to debt SG&A the negative -- or million million remained loss year. Excluding

to base, a corporate last our strong client development and our clients industry. website campaign, As a in the with be relocated completed business year, our we redesigned personnel reminder, to relationships key rebranding closer office to hired

completed also Permian QX, and which on business later. in field Calvert services Mark the Energy We acquisition the and Basin will our Roger in began elaborate of

Our year's a of cash balance million of balance was as end the the $XX.X million. $XX.X over million of last of quarter, $X.X decrease

company's ENG's on cash the funds, with this working $X.X Our and capital operations under hand, from sources sufficient net and growth. near-term you, internally-generated availability capital cash million. believe $XX.X decreased And primarily to loss was year. Roger. working to in We The now for to our million million $X.X current expected million along to $XX.X be the related will change fund other revolving working of of and credit capital facility

Darren, you, morning, everybody. and Thank good

who we is that us, an southern in issue. heat For lives know the part of U.S.

For I'll all and our all operations. oil a start our across heat initiative hydration a with and multiple focused unit, on focus has across with stress been people sites gas management. business

going high project team. to building the engineering, project high, utilization of [in-house] procurement. is Houston Our of A people the on. projects morale multiple lot is additional adding office's manager, and a We're

works schedules. and extending fabrication part on sign fabrication. the our been Space becomes issue. in our Tulsa several for have lease and intend increase that adding have year. to the purchased goal We new stainless from Denver backlog done Several fabrication additional West [steel] been for port like the through of facility daily office additional of a scanners, clients. continuously are up Houston. clients, We're more We our a in setting equipment new a working with module to We're inquiries, of received more bid end to both

MSAs. We continue our refining

MSAs. active XXX over have We

The October mentioned, Darren XX. -- West for for bus which ceremony is we're booster are operation additional bidding ribbon crews we scheduled stations. cutting mentioned, And we office, bids our have pump rest Texas is and starting modern active. of Darren As the

project additional other racks, the expansion side, booster stations, studies among services, engineering flare pipe of projects. we're On building many separators,

For in and this for opportunities EPC received infrastructure. stations, week we gas, the have for bids work EPC, compressor studies process oil

For and our of our as airplane remains energy fuels on core diesel and renewables, sustainable forward. pillar the focus activity renewable a

airplanes. strategy The several among players America engineering, these procurement regarding ongoing for with and diesel and the be leading to new talks in Our is North fabrication renewable are projects. sustainable

plant North Our grassroot sustainable main in is new project, as reported to build Dakota. airplane a earlier, fuel

an get Houston. expect of West We're fabrication that built waste in this portion in energy will active be plant in EPC year. and new QX agreement in also shop We to engaged in hydrogen methanol. in to A large our

We great a this. in expect result

service, our Public the system. For government a we SCADA awarded been from have Tulsa School,

on bids other area. working are We several in this

our Our this with trailer fabrication of later activities people and The the integration, and continuing this. continue the automation people very year key hiring program. really group for XXXX. And clients. generally, is you. of also part to We're looks we in training for several active good main Over

Roger. Thanks,

quarters million XXX% $X.X last QX increase end last of million million we've At increased QX are last you've in that XX steadily in months in year of $X.X year $X.X $XX.X to we QX, made this so. million of over from over The to quarter. from our over this business quarter. backlog As Through over QX improvement increased backlog. there QX like we represents the the our same million I'd million many team, we in -- some at the million increase. have $XX $XX the our time, highlight excited a about. That our and end in the steadily the of opportunities progress revenue at or over $X.X XX% have the year QX this to sequential X heard, are our efforts just represents very that last of

and proposals, rebuilding as is the achieved Darren not quarter, retained to This utilize employees. people attracted mentioned. as this increased our reduce profit people, of more more to on We have during mentioned, ability not a people these be quality proud testament could and process. our our gross of expenditures could our results COVID due I he to the and Our without efficiently that have we and our throughout

you've from Roger, awards As and very QX of heard our prospects look for year in this QX good.

the So outlook of the our remainder for positive. very also year is

acquisition capabilities In small-scale which This our a touched solution. businesses well and of Group for our addition in offerings gliding gas modified we technology, importantly, but on, fabrication, Belgium, Roger broadens core the a to has utilizing Calvert in fits process. design, acquisition now more include a that May plasma automation a arc proprietary [indiscernible] to license announced commissioning, liquids of to engineering, ENGlobal's within core technology that

to incorporating designed barrels feet into are XXX,XXX GTL to various process trains per of per of million per currently this standard We to standard XXX XX cubic day sizes, gas ranging technology from day X barrels day.

next XX- per designs and working major day times and expect one day to complete and mid weeks. soon in design due year to on lead XXX-barrel on We XX-barrel coming begin deliver larger per the the components, we'll

that of to $X gas cubic we million as year, X We sell production. Last and per for expect train million when $X we much produce and per are expect believe was over could Flaring that we reduce or Partnership each solution gas diesel XXX meters to One World between synthetic in week as billion economical flared we we the our could fuel, to trains build plants -- full accomplish in an convert of Global this. Reduction year and Gas amount naphtha, the will in worldwide, flared Bank. according is to it to way GTL these

initial flaring. signed service and with exclusive per of to To is or July, date, cubic we've annually. in Libya Algeria, levels alone the Our covering meters gas an markets feet marketing represent partnerships countries billion agreement announced roughly trillion These through gas of the of of gas companies flared the which GTL cubic with countries and UAE. highest of approach OiLSERV, X.X flared Iraq, year distribution we trains standard XX with

are years. pleased with and are our where for near we the very As can this is solution imagine, for the what large. and you market today coming future I'm the outlooks

we think of lot from, a I to a have base and we in pipeline. very our build opportunities strong have

point, to questions. turn Operator? to I'd like over this the at call So

[Operator Jeffrey Alliance Your from of Global first question Campbell is coming Partners. Instructions]

Congratulations for the upward trend in the business.

North First the question wanted is Roger Dakota for I chosen the described was plant that location remarks? how ask to his opening in

that? you Sorry. repeat Can

for Yes. I maybe became you how one said, you online in said, the how, described that fourth come to going just remarks, think say plant or I'm the North the why. wondering in quarter. it's opening why location your the that I I Dakota should

the owns feedstock that think I operator combination of and a land. the

from manufacturing progressing Just or Okay. that the X year. What's fairly you current happening And plant as the GTL you've next for rollout. of of forecast guidance? you to for identified that sense what's sometime per unit if first range, week what see a scale time kind get early prefer, the trying your

Yes. I pace. we be that would XX within XX say on months, could to

announced was certainly My was sales. of Sticking marketing new OiLSERV the wondering, going rapid expectation? recently I with impression expands Or Oman GTL. with center modules. to helpful. their a That's this just was of deal the that an expansion the Okay. initial seemingly for potential surprise? -- impression footprint interest But the be activity was these was for this

these expectation. players. an was our diligence, We in of it met many we No, --

over of Okay. we eye area saw the eye to potential intensifying I that Permian Permian supposedly recently have manning presence Middle I just finally, in an high your particularly any you East with for penalties any methane the future with the level the interest infractions. scrutiny due logic then time, And in an area? on an the imposing now contact was is EPA enforcement in lease the the Is had of customers? that understand in of you're focusing first for of commissions wondering, that area. with

Yes.

philosophy the in customers have just here United due in is more flaring mentioned, the the have -- to annually. of country Permian, the regulations life. not than But more are their produced different States, and think come contact clients flaring but with the life in marketing in States economics The on and solution scrutiny more on different comes We it well of other a for in the this United attractive. with promulgated the going had solution to will wells to Obviously, when places. gas the as I wells wells we're only and the the States you economics to #X U.S. United the the overseas. the that up and over get make

is we're can we think So satisfy at that -- I have it. But there think a significant and market a big that. the of I going here, look do to to market portion

when but it, the opposed follow on talking if different live to this up lives, about the you're as wells hard longer have building. mobile East But there schematically and you least to solution think we in just just on at unconventional die I maybe I talking wells conventional And was correctly, you're remember about that, the touched a economics, that for mobile young you're or a that GTL Middle here.

what you're stay going to you need something different that you Middle you for in time develop is say place opposed with when mobility stick to East? and a one you maybe So have in as a mean longer the solution, to

the wouldn't call for transportable. many I a -- they're train. that They're units but I small XX-barrel skid-mounted these They're Well, how designing mobile, trains. skids way -- remember we're don't on is them

skids. XX or XX there's think I

they are so placed well site. And the at

be mobile on the can flare. an you but up mount from drive they XX-wheeler it can so it of and And to that back not picked it's in flare moved,

the So into rate, more is the know exactly Whether don't I'm would about of sale but it's what lease sold economics that -- how is or a be. day how a done that product as marketplace. or a I talking

We to that. have explore

Okay.

hardware to the do less more Got the on it's on side? marketing So it. side, with something

Correct.

Your next Capital. Rob from question coming of is Lake Street Brown

some into Is of said First consists characterization how year. doing you Maybe the are it's bit. the across what markets just quite of give it Or question the certain it just I know that for of the you Could opportunities improving that you are there sort the on the pipeline about next see? a sense pipeline is board? and us just up of. shaping is better? a kind year of back half and

future if invested we and the The price. petrochemical as of on you we gas, very was the oil when opportunity of year to It mid-next to kind strategy, maybe back in seeing back and remember, oil go we low, invest. was, took the

that to but XTO serving not So Proof also clients, the simply we is talked investing off see about, of that heavily. forgotten just what that Oxy, not have our then paying obviously mention, renewable supply the to West up the EPC Texas for Africa West the coming to the Oxys, we Chevrons. can strong. sorry, -- solution an to operation so But is example, our setting XTOs, also, we

my year humble is think selected we all the in So segment firing. I view, mid-last

projects Great. incremental the then the maybe renewable of projects And could of bill? business, accelerate What's Will new opportunity the about energy there Are you on go bill? -- -- on number there? that see projects? said. just And Okay. you got your a sense you sort is that there you've from these

Absolutely. you as USDA billion. allocated, know, have probably $X

has for $XXX is which financing, applied million. project USDA Dakota North capped the the to So

that well fuel, field of take SAF, competitive talking The I think jet roughly just in solar if know, the the to we're comes not if by translate it when number over plants. to and to is jet overall like We're to sustainable fuel. XX% we being XXXX, airplane plants the many. going from here, that built, shift many, is as we SAF is XX compare with beginning, the issue was that you

I lot really try really many in -- do of But those Dakota to and it. somebody of gauge of what see great believe hard developers to we contract. think would is a a operators award is we're an be think really others. So And and working I North I on EPC able done will has there interest, the think who example we

to. opportunities they Services, which you in the Topsoe connected are talk have of we Haldor close If technology to pipeline, their one XXX provider,

[bottom government to If was about. expensive the quite the small don't These answers that happen. refineries, line they question. I that your quick are plants are will as going voice] as things be it think maybe to build. quite and think complex, I are

It over. did, absolutely. I'll turn it

coming investor. question Oakley, from next is Alan who a Your is private

and employees trends and the the on Great you on and if see today tell billable overhead it. then Congrats to of me utilization the the on margins could Great. backlog. revenue Number versus billable?

well, think hiring -- I So day. every we're

So we going utilization at centers and billable -- think work around I XXX of I'm rate have would we're engineering currently, But we are that I low-cost we XXX with. guess. high-value, work about which also employees, guess to is somewhere XX%, our

which from fixed So not can work lot on And case and all can price work, right? T&M of employees, generated of revenue our [indiscernible] employees and revenue greater we just work we more between more A is price leverage fixed is our work, with also our we employees. of in work. our than

And $XX that on are on XX% looks over a the quarter, backlog what targeting this at $XX margin backlog? million, -- like you for what's million the target little you're that

about on probably at XX% the XX% backlog. or We're

from be back Okay. you or construction Has quarter, -- indicated And quarter there third think then that quarter, I this in number this on-site meaningful any would fourth kind revenue Last that of numbers? was services a the pushed been quarter? you these that quarter. to

Yes.

services services included have field or seen haven't this our -- construction in quarter, We didn't we any in any numbers.

both those and in the expect do we fourth quarter. so third And of

the that renewables mentioned the was signed that hear that, plant Okay. in I that be previously, $XXX contract million did correctly will quarter? fourth And then

That yes. million, -- it's $XXX and well above

Okay.

that So fourth you feel still investment by will be the Is in client? to quarter. signed certain that decision subject the

Absolutely.

Correct.

Okay. scale you bought $XXX,XXX. And looks it gas, gas, then the it like for small

with OiLSERV, able some of the contract talk the of about that of a cash, impact that stock you issuance. to Some contract? Are was financial

would focus with they on opportunity amount the that -- Well, I what the represent. is OiLSERV of

-- wells are because getting have of those because reduce mentioned. the the to their they're penalized So countries And very within choked their in OiLSERV for initiatives flaring interested they and many And services of those countries in are that flaring. being their they're currently being in X -- flaring. and have clients I that place

have in to solution. for So to order them have for in reduce them produce they their order more, penalties, a flaring to

So to with market represents marketing OiLSERV is agreement me, total what the the availability.

a cubic of a feet huge that, marketplace, just not we're capture to But granted, we're service going a that. year. of the market of able all to is to all that X.X already on opportunities going within not capture that is going number trillion -- and there's OiLSERV But I gas have of Now to table. we mean be

it supply way trains of at market. and we to the how look many me, to to many these can that plants, of how to is satisfy So build these OiLSERV

couple quarter, A fourth $X today, questions of a that in Okay. $XX tax third collect on cash to expect liquidity. the you million Is payroll when of do quarter? billion? receivable

from on in quarter. get collect -- the third the that that IRS to expecting We're

Okay. Great. And then...

get Let in quarter? we it And me first was -- we quarter. add just one this Alan, that the to received to expected the that, that

quarter. First

We quarter. received first one in the

second in up. come one expected so We didn't that and quarter,

extent, for some the that to payment. IRS we are beholden So to

Okay. liquidity. That certainly would help on

it's then current. and -- revolver, the now So on gone

restrictive. I think a 'XX read it I borrowing base. really matures somewhat as it, it's May It's

And to any million. cash do really with restrictions? what that? discussions $X the access on Is about bank renewal million got of -- I them increase Have have so in less $XX potential mean, you see maybe don't you've and there. the full you you that had

Yes.

So that. lender our we've about with preliminary increasing conversations had

those revolver. ongoing to looking obviously, but availability that's want are our And something increase we and conversations, So we're considering. that under into

me And into suggestions obviously, I Al, that. appreciate we're know observations, some looking that. that sent and And and I you've

business I number written have may last wrote But And that last it the margin I $XXX,XXX. your quarter, apologize. question, not down Great. I then was the think it new down, I was correctly. in

you this the what you that. last quarter? said number confirm is Could reduced from And $XXX,XXX quarter, quarter? then This the you the

what Alan. asking, you're familiar Not with

Seemed RFPs. a less think you number. you number, gross business you're quarter, an but last said guess lot margin, number $XXX,XXX that spending like to was this hear didn't but a I the replied where off proposals money $XXX,XXX in new your guess referenced making I it's I of I quarter,

Yes.

proposal the was of I So think approximately $XXX,XXX. quarter, was this it

Your next Global coming of from question is Alliance Partners. Jeffrey Campbell

length was XX see XX it the one the Is you're next over increasing different timing projects the you that months? standard just talking regarding that the First all Or the What's the on with time projects And backlog? backlog. a about? it? -- there months you do of is that potential

think off we head don't backlog in of in complete of wouldn't months. XX the know mean top -- anything that our I I I my

for That's so so answer we increase. year is this our ratio question every your want month. to push trying for backlog booking-to-burn absolutely, And focus far second or the we're X.X%, to and Bookings, up -- ratio big over our is a to booking that really us. and

So that's our big focus.

And Okay. to markets, put real just mouth, of be relationships, in don't they wheel a your and reinvent not to value already regarding those got OiLSERV in the you the discussion, that it there words sounds that time probably is country business one like and identified, of are have a the but you've which have on lot expensive a countries and they've that wondering, in distinguishment But later? than between tendency that there just consuming. really you another? sooner is not particular big -- think Or can and -- have units bit is one are that any the a move there would any little to

globe. greatest the Iraq think second company the in country the largest flaring they're opportunity. has -- I mean I

opportunity. So they have the biggest

OiLSERV in Iraq We don't now. we're have working right opportunities want to downplay on Oman. I some that And with

same in that doing in other we've OiLSERV Oman to a the working So mentioned with do is the thing as company you been earlier, countries.

we unit. a place that that may be the first actually put so And

appears we closing Instructions] questions remarks. over hand now for any further will no Okay. have in [Operator back the I It queue.

Thank operator. for Thank Thank ENG. from you, remarks closing you No time. your you.

Thank you.

conference you, Thank conclude This gentlemen. does today's and ladies call.

phone wonderful this your a participation. for have you at and day. disconnect Thank may You lines time, your