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) June 15,2000
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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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Item 5. Other Events.
On June 15, 2000, EA Engineering, Science, and Technology, Inc. (the "Company")
issued the following press release:
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. RESTATES EARNINGS
1999 and 1998 Net Income Revised by $0.01 and $0.14 Per Share
Contacts: Melissa L. Kunkel, Director of Marketing and Communications
Tel. (410) 527-2442 FAX: (410) 771-9148
World Wide Web Site: http://www.eaest.com
For Release: Immediately Upon Receipt
BALTIMORE, MARYLAND, June 15, 2000... EA Engineering, Science, and Technology,
Inc. (NASDAQ: EACEC), announced today that the Company has restated its
previously reported financial results for fiscal years ended August 31, 1999 and
1998 and the quarterly financial results for fiscal years 1999 and 1998. Full
restated audited financial statements for fiscal years 1999 and 1998 were filed
late today with the Securities and Exchange Commission (SEC) on Form 10-K/A for
the fiscal year ended August 31, 1999. The Company's restated quarterly
financial reports for fiscal years 1999 and 1998 and the first two quarters of
fiscal year 2000 were filed with the SEC on Forms 10-Q/A. The record date of the
restatements is June 16, 2000.
Restated net loss for fiscal year 1999 totaled $1,530,400 or $0.24 per diluted
share versus a net loss of $1,473,600 or $0.23 per diluted share previously
reported. Restated net loss for fiscal 1998 totaled $240,100 or $0.04 per
diluted share versus net income of $604,800 or $0.10 per diluted share
previously reported. The reported results confirm the Company's original
estimate of the cumulative pre-tax effect of the restatements of $1.4 million.
The cumulative after-tax effect of the restatements is a reduction in earnings
of $901,700 for the two affected years.
Barbara L. Posner, EA's Chief Operating Officer and Chief Financial Officer,
reported, "The restatements and audits of the Company's financial statements
were a substantial and time-consuming undertaking. As we previously reported,
the restatements were necessary due to the Company's discovery of accounting
irregularities related to unbilled revenue. We now know that they were primarily
attributable to our fiscal 1998 period and the actions of individual(s) who are
no longer employed by, or associated with, the Company. With the restatements
complete, we look forward to putting this matter behind us and concentrating on
the Company's current and future operations."
Loren D. Jensen, Chairman and Chief Executive Officer, commented, "The past few
months have been frustrating for us and our shareholders. The reaudits of the
Company's financial records for fiscal years 1997, 1998 and 1998 conducted over
the past two months by the Company's accountants, PricewaterhouseCoopers LLP,
has confirmed our original findings, and with our recent refiling of the
financial statements for 1998 and 1999, we can turn our management direction to
continuing improvements in the Company's financial performance."
EA Engineering, Science, and Technology, Inc. is a global consulting firm
specializing in the areas of energy, the environment, and health and safety.
Through a network of more than 20 offices, EA provides scientific, engineering,
economic, analytical, and management solutions for its corporate, utility,
municipal, and Federal government clients.
Certain of the information contained in this news release contain
forward-looking statements under the Private Securities Litigation Reform Act of
1995 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. IN EACH CASE, ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM SUCH FORWARD-LOOKING STATEMENTS. Important assumptions and other
important factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not limited to, the
accounting irregularities discussed in this news release and their further
impact, if any, on the Company's operations and/or the Company's future
profitability.
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.
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EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended August 31,
1999 1998 1997
(As Restated) (As Restated)
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<S> <C> <C> <C>
Total revenue $ 48,727,600 $ 52,237,400 $ 68,189,000
Less: Subcontractor costs (8,904,300) (11,003,000) (20,488,600)
Less: Other direct project costs (5,676,400) (5,914,500) (10,257,600)
Net revenue $ 34,146,900 $ 35,319,900 $ 37,442,800
Costs and operating expenses:
Direct salaries and other operating 26,199,400 26,935,300 33,344,200
Sales, general and administrative 8,042,500 8,832,700 7,961,100
Gain on "key employee" life insurance -- (261,100) --
Restructuring charge 2,132,600 -- 3,000,100
Total costs and operating expenses 36,374,500 35,506,900 44,305,400
Loss from continuing operations (2,227,600) (187,000) (6,862,600)
Interest expense (268,600) (220,500) (378,700)
Interest income 88,100 98,800 91,600
Loss from continuing operations before income taxes (2,408,100) (308,700) (7,149,700)
Benefit from income taxes (961,400) (130,900) (2,534,400)
Net loss from Continuing Operations $ (1,446,700) $ (177,800) $ (4,615,300)
Discontinued Operations
Loss from operations of discontinued segment (net of
tax) (119,000) (62,300) (792,300)
Gain on disposal of discontinued segment, including
operating losses during phase-out period (net of 35,300 -- --
tax)
Net loss from discontinued operations (83,700) (62,300) (792,300)
Net Loss $ (1,530,400) $ (240,100) $ (5,407,600)
Basic EPS - Continued Operations $ (0.23) $ (0.03) $ (0.74)
Diluted EPS - Continued Operations $ (0.23) $ (0.03) $ (0.74)
Basic EPS - Discontinued Operations $ (0.01) $ (0.01) $ (0.13)
Diluted EPS - Discontinued Operations $ (0.01) $ (0.01) $ (0.13)
Basic EPS - Net $ (0.24) $ (0.04) $ (0.87)
Diluted EPS - Net $ (0.24) $ (0.04) $ (0.87)
Weighted average shares outstanding 6,312,300 6,255,500 6,205,700
Diluted weighted shares outstanding 6,312,300 6,255,500 6,205,700
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EA Engineering, Science, and Technology, Inc.
Registrant
Date: June 16, 2000 By: /s/ Barbara L. Posner
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Barbara L. Posner
Chief Financial Officer
Chief Operating Officer
