Ecology and Environment Inc. Reports Improved South American Results, Lower Overall Earnings for First Half of FY 2018
March 13 2018 - 4:30PM
Ecology and Environment Inc., (“E & E” or the “Company”)
(NASDAQ:EEI) reported a loss of $0.18 per share for the second
quarter of fiscal year 2018, an increase in the loss of $0.07 per
share reported for the same quarter of the prior year. For the
first half of 2018, E & E reported a loss of $0.05 per share,
compared with income of $0.13 reported for the prior year. Improved
results from subsidiaries in South America during the first half of
the current year partially offset one-time tax charges resulting
from new federal tax legislation and lower revenues and net income
from U.S. operations.
Favorable settlements of long-standing contract liabilities
resulted in $0.5 million and $1.1 million of additional revenue
during the first quarter and the first half of last year,
respectively. The Company did not record any similar adjustments
during the current year. Excluding the impact of these favorable
prior year adjustments, lower project activity and earnings in the
U.S. during the first half of 2018 resulted mainly from two client
trends: longer decision-making periods for new contract awards from
prospective clients, and extended timeframes to fund and schedule
ongoing project work for current clients. Weather delays also
affected service delivery schedules for certain projects.
Enactment in December 2017 of the U.S. government’s
comprehensive tax legislation, referred to as the Tax Cuts and Jobs
Act, resulted in net one-time adjustments that increased the
Company’s income tax provision by approximately $0.4 million, and
effectively reduced earnings by $0.10 per share during the current
quarter.
“Funding and project delays and general uncertainty in the
market have impacted our results in the second quarter,” said E
& E president and CEO Gerard A. Gallagher III. “But as we
continue to implement strategies to more closely align our business
with active and emerging markets, we see opportunities to build on
E & E’s strong foundation and enhance our ability to serve
clients in addressing complex environmental challenges."
During fiscal years 2016 and 2017, the Company’s South American
operations were adversely affected by unstable economic conditions
and depressed energy and mining sectors. Improvement in economic
conditions that began during fiscal year 2017 has continued in the
current year, particularly in Brazil and Peru, and results from the
Company’s Chilean operations have remained strong.
“Our management teams in South America and in the U.S. have
collaborated on improving business development and cost management
initiatives, resulting in a stronger operating platform for us in
South America,” said Gallagher. “During the first half of fiscal
year 2018, these initiatives resulted in additional business
opportunities, a growing backlog, and significant improvement in
revenue and earnings.”
E & E will host a conference call tomorrow, March 14, 2018
at 8:30 a.m. ET to discuss second quarter 2018 financial results
and provide a business update. Interested parties can participate
in the conference call by dialing 833-715-4322 and entering code
6790228. A webcast link is available on the E & E Investor page
at www.ene.com and an on-demand version of the webcast will be
available following the call.
About Ecology and Environment, Inc.E & E is
a global network of innovators and problem solvers, dedicated
professionals and industry leaders in scientific, engineering, and
planning disciplines working collaboratively with clients to
develop technically sound, science-based solutions to the leading
environmental challenges of our time. The company is listed on the
NASDAQ Stock Exchange under the ticker symbol EEI and the
information in this release can be found online at www.ene.com.
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Financial
Report - |
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(In
thousands, except per share information) |
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Three Months Ended |
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January 27, 2018 |
January 28, 2017 |
% Change |
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Revenue,
net |
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$ |
25,083 |
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$ |
24,726 |
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1 |
% |
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|
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Revenue,
net less subcontract costs |
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$ |
19,314 |
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$ |
19,379 |
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0 |
% |
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Total
operating expenses (excluding depreciation and amortization) |
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$ |
19,306 |
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$ |
18,852 |
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2 |
% |
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Income
before income tax provision |
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$ |
(286 |
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$ |
165 |
|
-273 |
% |
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Net income
attributable to Ecology and Environment, Inc. |
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$ |
(768 |
) |
$ |
(318 |
) |
-142 |
% |
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Net income
per common share - basic and diluted |
|
$ |
(0.18 |
) |
$ |
(0.07 |
) |
-157 |
% |
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Six Months Ended |
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January 27, 2018 |
January 28, 2017 |
% Change |
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Revenue,
net |
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$ |
52,165 |
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$ |
50,041 |
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4 |
% |
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Revenue,
net less subcontract costs |
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$ |
40,667 |
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$ |
40,683 |
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0 |
% |
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Total
operating expenses (excluding depreciation and amortization) |
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$ |
39,296 |
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$ |
38,509 |
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2 |
% |
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Income
before income tax provision |
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$ |
806 |
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$ |
1,584 |
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-49 |
% |
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Net income
attributable to Ecology and Environment, Inc. |
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$ |
(235 |
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$ |
570 |
|
-141 |
% |
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Net income
per common share - basic and diluted |
|
$ |
(0.05 |
) |
$ |
0.13 |
|
-138 |
% |
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Contact:Sara HerrmannCorporate Communications
Manager(716) 684-8060sherrmann@ene.com
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