ENGlobal Corporation reported significant financial changes in its 10-Q filing for the three and nine months ended September 28, 2024, compared to the same periods in 2023. For the third quarter, operating revenues decreased to $5.7 million, down 39.9% from $9.5 million in Q3 2023. The nine-month revenue also saw a decline of 43.3%, falling to $18.4 million from $32.4 million. The decrease in revenue was attributed to lower contributions from both the Commercial and Government Services segments.
Despite the revenue drop, ENGlobal achieved a gross profit of $475,000 for Q3 2024, a decrease from $1.8 million in Q3 2023. However, for the nine-month period, the company reported a gross profit of $1.7 million, a notable improvement from a gross loss of $367,000 in the prior year. Operating losses improved to $(419,000) in Q3 2024 from $(675,000) in Q3 2023, and for the nine months, the operating loss was $(3.1 million), significantly better than the $(11.2 million) loss reported in the same period last year. The net loss for Q3 2024 was $(500,000), an improvement from $(721,000) in Q3 2023, while the nine-month net loss decreased to $(3.1 million) from $(11.4 million).
ENGlobal's total current assets decreased to $9.6 million as of September 28, 2024, from $11.4 million at the end of 2023, while total assets fell to $13.2 million from $18.8 million. Current liabilities increased to $15.8 million, leading to a widened stockholders’ deficit of $(4.4 million) compared to $(1.6 million) at the end of 2023.
The company has been actively managing its costs, with significant reductions in SG&A expenses, which decreased by $1.6 million in Q3 2024 and $6.1 million for the nine-month period compared to the previous year. ENGlobal also amended its Credit Agreement in April 2024, extending the maturity date and reducing the interest rate, although a subsequent amendment in November 2024 increased the interest rate to 12.0%.
ENGlobal is currently facing challenges, including ongoing litigation and a substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows. The company has limited cash on hand and is exploring additional financing options. As of September 28, 2024, ENGlobal's backlog stood at approximately $6.9 million, with expectations to complete most projects within the next year.
About ENGLOBAL CORP
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