Board of Directors Approves a Stock Repurchase Program
Company Optimistic About Fiscal Year 2000 Outlook
BALTIMORE, Nov. 2 /PRNewswire/ -- EA Engineering, Science, and Technology,
Inc. (Nasdaq: EACO), an international consulting firm specializing in energy,
the environment, and health and safety, today reported financial results for
the fourth fiscal quarter and fiscal year ended August 31, 1999. In addition,
the Company announced that the Board of Directors has adopted a stock
repurchase program to purchase up to 500,000 shares of the Company's
outstanding common stock.
Fourth Quarter Highlights:
-- EPS grew to $0.05 versus a $0.02 loss in fourth quarter of fiscal 1998
-- Net income from continuing operations increased 24% from the fiscal
third quarter of 1999
-- Net revenues grew 10% to $9.4 million from $8.5 million in the fourth
quarter of fiscal 1998
-- New orders remained strong at $11.4 million
Fourth Quarter Results
EA Engineering, Science, and Technology, Inc. today reported net income
for the fiscal quarter ended August 31, 1999 of $315 thousand, or $0.05 per
share on a diluted share basis. This compares to a net loss of $113 thousand,
or $0.02 per share for the 1998 comparable period. During the quarter, net
revenues grew to $9.4 million, or 10%, from $8.5 million for the 1998 fourth
quarter.
Fiscal Year Results
For the fiscal year ended August 31, 1999, the Company reported a net loss
of $1.5 million, or $0.23 per diluted share. This compares to net income of
$605 thousand, or $0.10 per diluted share for the 1998 fiscal year. The
fiscal year 1999 earnings per share include a one-time restructuring charge of
$0.20 per diluted share, taken during the second quarter, to restructure and
downsize certain functions of the Corporate staff, and a $0.05 per diluted
share write-off of certain non-collectible prior period revenue. Excluding
the impact of the restructuring charge and the write-off of prior period
assets, the Company's EPS for fiscal 1999 is $0.02 per diluted share. Net
revenues for fiscal 1999 were $34.2 million, compared to $36.7 million for
fiscal 1998. The $2.5 million net revenue decline in fiscal 1999 reflects the
Company's continued completion of several large contracts with the federal
government, only partially offset by originally planned new awards in the
industrial and municipal sectors.
Stock Repurchase Program
The Board of Directors of the Company announced that they had authorized
the repurchase of up to 500,000 shares of the Company's outstanding common
stock. The stock repurchases will be made in open market transactions, in
compliance with the SEC's Rule 10b-18, and will be dependent upon market
conditions and the availability of common stock. There is no assurance as to
the actual number of shares that will be repurchased under the program and, in
fact, the program can be suspended by the Board at any time. As of
September 30, 1999, EA had 6.3 million shares of common stock outstanding.
Management Comments
Loren D. Jensen, EA's founder and Chief Executive Officer said, "I am
extremely pleased and encouraged by our solid operating results, reflecting
both improved profitability and growth of our top line as a result of our
restructuring efforts. Our growth during the fiscal fourth quarter reflects
an increase in international assignments for the Company, as well as an
increase in federal projects that the Company is working on in the Mid-
Atlantic region."
Dr. Jensen continued, "We are quite pleased with the overall results of
our business strategy aimed at increasing EA's top and bottom lines. First
and foremost, the decentralization and empowerment of personnel at the branch
office level is working. Under the new, streamlined organizational structure,
branch management has direct access to senior management for guidance and
support, which has helped to improve branch-level profitability.
Additionally, we are strategically opening new market access offices to better
serve local markets, most notably Pittsburgh and Portland. We are also
looking to expand even more in Latin America and Mexico, where general
economic expansion and development, as well as infrastructure projects such as
water and wastewater, create market opportunities."
Barbara Posner, the Company's Chief Operating Officer and Chief Financial
Officer added, "During the 1999 fiscal fourth quarter the Company benefited
from an increase in higher margin consulting assignments and our efforts to
right-size the Company's cost structure. In fact, these results represent the
second consecutive quarter with positive earnings since our restructuring."
Ms. Posner continued, "In an effort to strengthen our branch operations,
we have been strengthening key personnel where necessary. Having the right
people in the local market representing the Company is key to our success.
For example, in our profitable, but underperforming western region, we have
hired a new regional manager to strengthen that operation. We expect that
with this leadership and guidance, this region will meet the profitability
targets that we have developed."
Dr. Jensen went on to say, "We are now placing our emphasis on the more
profitable projects involving our consulting expertise, and less of an
emphasis on commodity type work. As a result, we are benefiting from higher
margin contracts that are being generated from outside of the traditional
hazardous waste area. Both the government and the private sectors are under
constant pressure to address interrelated energy, environment and health
issues, leading to an increased worldwide demand for these consulting
services. This is one of the key factors that has resulted in the success
that we are reporting today."
In announcing the stock repurchase program, Dr. Jensen said, "The Board
wishes to have the Company positioned to take advantage of market
opportunities that may arise during uncertain economic times. We believe that
stock repurchases under these current favorable conditions are consistent with
the goal of enhancing shareholder value, which continues to be a major
objective of the Company."
Outlook for Fiscal 2000
Dr. Jensen commented, "We are excited about the progress we made during
fiscal 1999. These have been times of transformation for our Company; we have
expanded our international assignments, added new capabilities, moved toward
higher margin consulting contracts and have decentralized our marketing
capabilities. In addition, the dedication of our employees and their
willingness to make changes were instrumental in getting EA to the point it is
at today. These changes have left EA Engineering a stronger, more efficient
Company as we move into fiscal 2000. We believe the earnings momentum that
began in the second half of fiscal 1999 will carry through to fiscal 2000.
Accordingly, we are estimating that fully diluted earnings per share should
reach between $0.15 and $0.17 for fiscal year 2000."
EA Engineering, Science, and Technology, Inc. is a publicly held
international management consulting firm specializing in energy, the
environment, and health and safety. Through its network of more than 20
offices, EA provides scientific, engineering, economic, analytical, and
management solutions to corporate, utility, municipal, and federal government
clients.
Certain of the statements contained in this news release are forward-
looking statements that involve risks and uncertainties, such as those related
to the Company's contracts and other business risks, including general
economic conditions, the effects of the Company's restructuring, and industry-
wide market factors, as detailed from time to time in the Company's filings
with the Securities and Exchange Commission.
The Company's results of operations are also affected by significant
competition in the industry, including a very competitive requirement for
successful bidding and solicitation of contracts. As such, operating results
for the reporting period are not necessarily indicative of the results that
may be expected for any subsequent periods.
For more information on EA Engineering, Science, and Technology via fax at
no charge, please call 1-800-PRO-INFO and enter ticker symbol "EACO."
EA Engineering, Science, and Technology, Inc. and Subsidiaries
Consolidated Operating Results
Adjusted for Discontinued Operations
Fourth Quarter Ended Twelve Months Ended
August 31, August 31,
1999 1998 1999 1998
Total revenue $13,856,400 $13,310,200 $48,820,100 $53,613,900
Less:
Subcontractor costs 2,852,600 3,024,800 8,904,300 11,003,000
Less: Other direct
project costs 1,637,900 1,791,600 5,676,400 5,914,500
Net revenue 9,365,900 8,493,800 34,239,400 36,696,400
Costs and operating
expenses:
Direct salaries and
other operating 6,891,500 6,567,700 26,199,400 26,393,600
Sales, general and
administrative 1,906,200 2,258,600 8,042,500 9,374,400
Gain on "key employee"
life insurance -- -- -- (261,100)
Restructuring charge -- -- 2,132,600 --
Total costs and
operating expenses 8,797,700 8,826,300 36,374,500 35,506,900
Income (loss) from
operations 568,200 (332,500) (2,135,100) 1,189,500
Other income and
expense, net (40,900) (28,500) (180,500) (121,700)
Income (loss) before
income taxes 527,300 (361,000) (2,315,600) 1,067,800
Provision (benefit from)
for income taxes 211,900 (173,500) (925,700) 400,700
Net income (loss) from
Continued Operations 315,400 (187,500) (1,389,900) 667,100
Discontinued Operations:
Net Income (loss) from
Discontinued Operations -- 74,200 (119,000) (62,300)
Net Gain on Sale of Labs -- -- 35,300 --
Income (loss) from EA
Labs -- 74,200 (83,700) (62,300)
Net Income (Loss) 315,400 (113,300) (1,473,600) 604,800
Basic EPS - Continued
Operations $0.05 $(0.03) $(0.22) $0.11
Diluted EPS - Continued
Operations 0.05 (0.03) (0.22) 0.11
Basic EPS - Discontinued
Operations -- 0.01 (0.01) (0.01)
Diluted EPS -
Discontinued Operations -- 0.01 (0.01) (0.01)
Basic EPS - Gain on
Disposal of Labs -- -- -- --
Diluted EPS - Gain on
Disposal of Labs -- -- -- --
Basic EPS - Net $0.05 $(0.02) $(0.23) $0.10
Diluted EPS - Net 0.05 (0.02) (0.23) 0.10
Weighted average
shares O/S 6,331,200 6,281,700 6,312,300 6,255,500
Diluted weighted
shares O/S 6,331,500 6,329,400 6,312,900 6,346,600
SOURCE EA Engineering, Science, and Technology, Inc.
 back to top
CONTACT:
Melissa L. Kunkel, Director of Marketing and
Communications of EA Engineering, Science, and Technology, Inc.,
410-527-2442, or fax, 410-771-9148, or General, Ted Ayvas, or
Analysts, Nicole Innarella, 212-661-8030, or fax, 212-867-7970,
both of The Financial Relations Board for EA Engineering,
Science, and Technology, Inc.
|
