Ecology and Environment Inc. Reports Improved South American Results, Lower Overall Earnings for First Half of FY 2018
LANCASTER, N.Y., March 13, 2018 (GLOBE NEWSWIRE) -- 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 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 and the information in this release can be found online at .
| Financial Report - | |||||||||||
| (In thousands, except per share information) | |||||||||||
| Three Months Ended | |||||||||||
| January 27, 2018 | January 28, 2017 | % Change | |||||||||
| Revenue, net | $ | 25,083 | $ | 24,726 | 1 | % | |||||
| Revenue, net less subcontract costs | $ | 19,314 | $ | 19,379 | 0 | % | |||||
| Total operating expenses (excluding depreciation and amortization) | $ | 19,306 | $ | 18,852 | 2 | % | |||||
| Income before income tax provision | $ | (286 | ) | $ | 165 | -273 | % | ||||
| Net income attributable to Ecology and Environment, Inc. | $ | (768 | ) | $ | (318 | ) | -142 | % | |||
| Net income per common share - basic and diluted | $ | (0.18 | ) | $ | (0.07 | ) | -157 | % | |||
| Six Months Ended | |||||||||||
| January 27, 2018 | January 28, 2017 | % Change | |||||||||
| Revenue, net | $ | 52,165 | $ | 50,041 | 4 | % | |||||
| Revenue, net less subcontract costs | $ | 40,667 | $ | 40,683 | 0 | % | |||||
| Total operating expenses (excluding depreciation and amortization) | $ | 39,296 | $ | 38,509 | 2 | % | |||||
| Income before income tax provision | $ | 806 | $ | 1,584 | -49 | % | |||||
| Net income attributable to Ecology and Environment, Inc. | $ | (235 | ) | $ | 570 | -141 | % | ||||
| Net income per common share - basic and diluted | $ | (0.05 | ) | $ | 0.13 | -138 | % | ||||
Contact:
Sara Herrmann
Corporate Communications Manager
(716) 684-8060
