ENGlobal Corporation

Good morning and welcome to the ENG's 2021 Annual Financial Results Conference Call. Your host for this morning is Chief Executive Officer Mark Hess. 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- or 919-882-2331 internationally and referencing conference ID 44765. This replay will be available shortly after the completion of this event through 9 a.m. Eastern Time on March 17, 2022. I would like to inform all parties that your lines have now been placed in a listen-only mode until the question and answer segment of the call begins. To ask a question in that segment, you will receive instructions from the operator. At this point, I would like to turn the call over to Rick Eisenberg, Media Relations Director with Eisenberg Communications.

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 10K. Presenting on the call today will be Darren Spriggs, ENG's CFO, and Mark Hess, ENG's CEO. Following the presentations, Darren, Mark, and Roger Westerlund, ENG's president, will be available for questions. And now I'll turn it over to Darren Spriggs. Darren?

Thank you, Rick. I would also like to extend my welcome and appreciation for those on the call today. For the year, we reported approximately $36.4 billion in operating revenue and $37.1 million in direct operating costs. Included in the direct operating costs is $5.6 million related to underutilized staff and proposal costs, which has significantly increased over prior periods. During the year, we recorded an employee retention tax credit of $3.1 million for retaining our staff. In addition, our PPE loan, also intended to retain our people, was completely forgiven during the year. These credits and the loan forgiveness totaling approximately $8 million are recorded in other income in accordance with GAAP. Our SG&A was $12.8 million for 2021. which included non-recurring legal and advisory fees of $300,000 and an uncollectible account receivable of $1.4 million, compared to $8.8 million for last year. The remaining increase of $2.3 million is primarily related to the investment in our business leaders and staff that Mark will discuss later in his comments. As a result, our net operating loss for 2021 was $5.6 million, compared to $500,000 last year. Our income tax expense consists of state income taxes, primarily in states that do not use net income to calculate tax, like Texas. Our federal income tax expense is offset by an adjustment to the valuation allowance recorded against it. As a result, we recorded a net loss of $5.7 million, or 18 cents per share, for the year compared to a loss of $600,000, or .2 cents per share last year. We ended the year with 12.8 million in backlog compared to 24.3 million last year. However, we saw an increase in our backlog in the fourth quarter of 4.4 million. Our cash balance was 19.2 million as of the end of the year, an increase of 5.5 million over last year. Last year's balance of 13.7 million. Our working capital increased 12.2 million over last year to 26.2 million as of the end of 2021. Significant changes in our working capital include the forgiveness of the PPE loan, of which 3.7 million was included in working capital, and the issuance of approximately 20 million of equity during the year. We believe this cash on hand, along with internally generated funds, availability under the company's revolving credit facility, and other sources of working capital will be sufficient to fund Englobal's current operations and expected near-term growth. And now to you, Mark.