Englobal Corporation
We derive revenues primarily from three sources: (1) business development efforts,
(2) preferred provider or alliance agreements with strategic clients, and (3)
referrals from existing customers and industry members. Our Senior Vice President
of Business Development collaborates with our operations managers and in-house
business development professionals assigned to clients and territories within
the United States. Client relationships are nurtured by our geographic advantage
of having office locations near our larger customers. By having clients in close
proximity, we are able to provide single, dedicated points of contact. Our growth
depends in large measure on our ability to attract and retain qualified business
development personnel with a respected reputation in the energy industry. Management
believes that in-house marketing allows for more accountability and control,
thus increasing profitability.
Our segments are strategic business units that offer different services and
products and therefore require different marketing and management strategies.
During 2017, ENGlobal changed the reporting structure within the Company by
placing an operational leader in charge of its engineering offices and a separate
operational leader in charge of its automation offices, including the office
that contracts with government agencies. The operating performance is regularly
reviewed with these two operational leaders, the chief executive officer (“CEO”),
the chief financial officer (“CFO”) and others. This group represents
the chief operating decision maker (“CODM”) for ENGlobal.
We have revised our segment reporting to reflect our current management approach
and recast prior periods to conform to the current segment presentation. Our
corporate and other expenses that do not individually meet the criteria for
segment reporting continue to be reported separately as Corporate expenses.
Products and services are also promoted through trade advertising, participation
in industry conferences and on-line Internet communication via our corporate
home page at www.englobal.com. The ENGlobal website provides information about
our operating segments and illustrates our Company’s full range of services
and capabilities. We use internal and external resources to maintain and update
our website on an ongoing basis. Through the ENGlobal website, we seek to provide
visitors and investors with a single point of contact for obtaining information
about our company. We develop preferred provider and alliance agreements with
clients in order to facilitate repeat business. These preferred provider agreements,
also known as master services or umbrella agreements (“MSA”) typically
have a duration of multiple years. This allows our clients to release work to
us without having to negotiate contract terms for each project released. Although
the MSA is not a guarantee for work under a certain project, ENGlobal generally
offers a slightly reduced billing structure to clients willing to commit to
arrangements that are expected to provide a steady stream of work. With the
terms of the contract settled, add-on projects with these customers are easier
to negotiate and can be accepted quickly, without the necessity of a bidding
process. Management believes that these agreements can serve to stabilize project-centered
operations.