UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 2, 1999
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-15587 52-0991911
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(State or Other Jurisdiction (Commission I.R.S. Employer ID Number
of Incorporation or File Number)
Organization)
11019 McCormick Road, Hunt Valley, Maryland 21031
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 410/584-7000
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5. Other Events.
On November 2, 1999, EA Engineering, Science, and Technology, Inc. (the
"Company") issued the following press release:
EA Engineering, Science, and Technology Announces Solid Growth
in EPS and Revenues in Fiscal Fourth Quarter
Board of Directors Approves a Stock Repurchase Program
Company Optimistic about Fiscal Year 2000 Outlook
BALTIMORE, MD November 2, 1999 -- 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:
o EPS grew to $0.05 versus a $0.02 loss in fourth quarter of fiscal 1998
o Net income from continuing operations increased 24% from the fiscal third
quarter of 1999
o Net revenues grew 10% to $9.4 million from $8.5 million in the fourth
quarter of fiscal 1998
o 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 $315,000, or $0.05 per share on a
diluted share basis. This compares to a net loss of $113,000, 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
$605,000, 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 Financial Officer and Chief Operating
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.
# # #
[Financial Table Follows]
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."
<PAGE>
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
CONSOLIDATED OPERATING RESULTS
ADJUSTED FOR DISCONTINUED OPERATIONS
<TABLE>
Fourth Quarter Ended Twelve Months Ended
August 31, August 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
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 projects 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)
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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
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Net income (loss) from Continued
Operations 315,400 (187,500) (1,389,900) 667,100
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Discontinued Operations:
Net income (loss) from Discontinued
Operations - 74,200 (119,000) (62,300)
Net Gain on Sale of Labs - - 35,300 -
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Income (loss) from EA Labs - 74,200 (83,700) (62,300)
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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 outstanding 6,331,200 6,281,700 6,312,300 6,255,500
Diluted weighted shares outstanding 6,331,500 6,329,400 6,312,900 6,346,600
</TABLE>
