Ecology And Environment, Inc., Fourth Quarter And Year-to-Date Earnings Down Vs. Last Year

LANCASTER, N.Y., Nov. 14, 2013 (GLOBE NEWSWIRE) -- Ecology and Environment, Inc., ("E&E" or the "Company") (Nasdaq:EEI) reported a consolidated net loss of $3.8 million or $.90 per share for the fourth quarter of fiscal year 2013, an increase of $2.9 million from the net loss of $0.9 million or $.23 per share reported in the fourth quarter of the prior year. The net loss for the fourth quarter increased $3.4 million from the loss of $0.4 million reported for the third quarter of fiscal year 2013. Consolidated revenues of $29.7 million for the fourth quarter of fiscal year 2013 decreased $7.2 million or 19% from the $36.9 million reported in the fourth quarter of the prior year.

For the full fiscal year ended July 31, 2013, the Company reported a net loss of $2.1 million or $.50 per share, which was down $2.9 million from net income of $0.8 million reported for the prior fiscal year. Consolidated revenues for fiscal year 2013 were $134.9 million, a decrease of $20.5 million or 13% from the $155.4 million reported in fiscal year 2012.

Domestic revenue for fiscal year 2013 decreased 7% from the prior year. During fiscal years 2013 and 2012, a stagnant U.S. economy significantly inhibited the Company's ability to grow or to replace expiring projects in certain market sectors which historically have been integral to our business, such as energy transmission, mining and governments.

Foreign revenue for fiscal year 2013 decreased 24% from the prior year. During fiscal years prior to 2013, the Company identified opportunities to expand in Asia, the Middle East and Africa. Over that same period however, we experienced significant collection risks and incremental related operating costs that may have outweighed the benefits of operating within these markets. As a result, the Company experienced significant volatility in its earnings during fiscal years 2013, 2012 and 2011, primarily resulting from contract adjustments that are recorded as adjustments to revenue. 

In particular, we expanded significantly in China where the Company experienced increased collection risks and expended resources that ultimately may not be recovered. During fiscal year 2013, upon considering several factors regarding revenue and contract receivables related to projects in China, the Company recorded $6.3 million of contract adjustments as a reduction of revenue, of which $4.8 million was recorded in the fourth quarter of the year. 

During fourth quarter of 2013, the Company also recorded a software impairment charge of $0.8 million related to software that is not effectively used today or expected to be useful in the long-term. Excluding the software impairment charge, total operating expenses (excluding depreciation and amortization expenses) decreased $15.9 million (11%) during fiscal year 2013, as compared with the prior year. A significant portion of the decrease was a direct result of lower volumes of project activity and operating revenues. Additionally, during fiscal year 2013, management critically reviewed technical and indirect staffing levels, other expenses necessary to support current project work levels and key administrative processes. As a result of this review, the Company reduced staff counts in various technical and indirect departments and reduced utilization of contracted services. These reductions resulted in significant cost savings during fiscal year 2013, and are expected to result in reductions in direct and indirect operating expenses in fiscal year 2014. 

More about E & E and its activities worldwide can be found on the Company's website at www.ene.com.
Financial Report --
       
(In thousands, except per share information)
  Three Months Ending
  July 31, 2013 July 31, 2012 % Increase
       
Revenue  $ 29,745  $ 36,914 -19%
       
Revenue less Subcontract Costs  $ 23,291  $ 29,270 -20%
       
Total Operating Expenses (excluding depreciation and amortization)  $ 34,305  $ 35,954 -5%
       
Net Loss  $ (3,843)  $ (945) 307%
       
Net Loss Per Common Share: Basic and Diluted  $ (0.90)  $ (0.23) 291%
 
       
  Fiscal Year Ending
  July 31, 2013 July 31, 2012 % Increase
       
Revenue  $ 134,937  $ 155,410 -13%
       
Revenue less Subcontract Costs  $ 109,895  $ 123,095 -11%
       
Total Operating Expenses (excluding depreciation and amortization)  $ 133,406  $ 148,466 -10%
       
Net (Loss) Income  $ (2,130)  $ 774 -375%
       
Net (Loss) Income Per Common Share: Basic and Diluted  $ (0.50)  $ 0.18 -378%
 
CONTACT: Mr. Ronald L. Frank         Executive Vice President         (716) 684-8060         rfrank@ene.com