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) July 13, 2000
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EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
(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 July 13, 2000, EA Engineering, Science, and Technology, Inc. (the "Company")
issued the following press release:
EA REPORTS POSITIVE FY00 THIRD QUARTER EARNINGS
Year-to-Date Net Revenue $26.5 Million
New Orders Strongest in Twelve Quarters
Contact: 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, July 13, 2000...EA Engineering, Science, and Technology,
Inc. (NASDAQ: EACOC), today reported positive earnings for the third fiscal
quarter ended May 31, 2000.
Third Quarter Highlights
o EPS of $0.01 per share, fifth consecutive quarter of positive earnings
o Net revenue of $9 million
o New orders increased 15 percent to $16.9 million from $14.7 million in
the third quarter of fiscal 1999
Net revenue for the period was $9,038,700 compared to $9,145,400 for the prior
year period. This slight decrease of 1.2% in net revenue reflects higher
subcontractor and other direct project costs during the quarter compared to the
prior year period. Net income for the period was $37,900, or $0.01 per diluted
share, compared to a net income of $263,000, or $0.04 per diluted share in the
same period the prior fiscal year. The Company attributed the decrease in net
income to additional operating costs incurred related to the restatement of the
Company's financial results for fiscal years 1999 and 1998 and an increase in
bid and proposals costs at the regional level, which helped bolster contract
bookings for the quarter. New orders increased 15% to $16.9 million compared to
$14.7 million in the third quarter of fiscal 1999.
Net revenue for the nine months ended May 31, 2000 increased 6.8% to $26,519,700
compared to $24,841,200 in the prior year period. Net income for the nine-month
period was $323,700, or $0.05 per diluted share, compared to a loss of
$1,808,100, or $0.29 per diluted share, for the same period the prior year.
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Commenting on the results, Loren D. Jensen, Chairman and Chief Executive Officer
noted, "We are pleased to report profitable financial results for the third
quarter of fiscal 2000. We continue to increase our new orders quarter to
quarter, with year to date contract awards up 12 percent compared to the first
nine months of fiscal 1999. Our clients increasing need for compliance, waste
management, and water and wastewater consulting services was evident during the
quarter as we experienced increased awards in these service areas."
Barbara Posner, the Company's Chief Operating Officer and Chief Financial
Officer added, "During the quarter, several large, targeted contract
opportunities with the government sector emerged from the pipeline, which
directly impacted our operating costs as regional bid and proposal costs
increased. This, in conjunction with costs related to the restatement of
earnings for fiscal years 1998 and 1999, increased our operating expenses for
the quarter, constraining our quarterly profitability. The Company continues its
financial recovery, has maintained profitability, and is on target with our
internal revenue projections. However, despite being profitable, our
income-to-date is below expectations. Given our year-to-date earnings and our
outlook for the fourth quarter, we estimate that fully diluted earnings for
fiscal 2000 should reach between $0.07 and $0.09 per share."
Jensen commented, " The success we are having in new orders is building a strong
backlog for fiscal 2001. In recent prior years, the Company's focus was on
corporate sales and marketing, which was costly and did not provide the
anticipated return. By decentralizing these efforts we have been able to better
focus on building backlog in the regional operations, at a lower overall cost
which is absorbed at the regional level. More importantly, the regions are
seeing a return on their investment as new orders in fiscal 2000 are expected to
increase 15% and 5% compared to fiscal 1999 and 1998, respectively. Going
forward, we will continue to concentrate our efforts on revenue growth and
improved profitability."
EA Engineering, Science, and Technology, Inc. is a global 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 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
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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.
# # #
[Financial Table Follows]
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<TABLE>
<CAPTION>
EA Engineering, Science, and Technology, Inc. and Subsidiaries
Consolidated Operating Results
Three Months Ended Nine Months Ended
May 31, May 31,
2000 1999 2000 1999
(As Restated) (As Restated)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total revenue $ 14,349,700 $ 12,307,000 $ 42,988,500 $ 34,931,400
Less subcontractor costs .................. (3,817,900) (2,043,300) (12,199,700) (6,051,700)
Less other direct project costs ........... (1,493,100) (1,118,300) (4,269,100) (4,038,500)
------------ ------------ ------------ ------------
Net revenue .................................... $ 9,038,700 $ 9,145,400 $ 26,519,700 $ 24,841,200
Costs and operating expense:
Direct Salaries and Other Operating ....... 7,122,800 6,746,400 20,575,600 19,307,900
Sales, general, and administrative ........ 1,786,400 1,941,900 5,237,400 6,136,300
Restructuring ............................. -- -- -- 2,132,600
------------ ------------ ------------ ------------
Total costs and operating expense .............. 8,909,200 8,688,300 25,813,000 27,576,800
Income from operations ......................... 129,500 457,100 706,700 (2,735,600)
Interest expense, net .......................... (66,600) (64,400) (167,000) (139,600)
Income (loss) from continuing operations before
income taxes .............................. 62,900 392,700 539,700 (2,875,200)
Provision for income taxes ..................... 25,000 165,000 216,000 (1,150,100)
Net income (loss) from continuing operations ... $ 37,900 $ 227,700 $ 323,700 $ (1,725,100)
Discontinued operations
Income (loss) from operations of discontinued
segment (net of tax) ...................... -- -- -- (119,000)
Gain on disposal of discontinued segment,
including operating losses during phase-out
period (net of tax) ....................... -- 35,300 -- 35,300
------------ ------------ ------------ ------------
Net income (loss) from discontinued ............ -- 35,300 -- (83,700)
Net income (loss) .............................. $ 37,900 $ 263,000 $ 323,700 $ (1,808,800)
Basic EPS -- Continuing operations ............. 0.01 0.04 0.05 (0.27)
Basic EPS -- Discontinued operations ........... -- -- -- (0.02)
Net income ................................ $ 0.01 $ 0.04 $ 0.05 $ (0.29)
Diluted EPS -- Continuing operations ........... 0.01 0.04 0.05 (0.27)
Diluted EPS -- Discontinued operations ......... -- -- -- (0.02)
Net Income ................................ $ 0.01 $ 0.04 $ 0.05 $ (0.29)
Weighted average shares outstanding ............ 6,093,431 6,319,000 6,192,543 6,305,900
Diluted weighted average shares outstanding .... 6,093,611 6,319,600 6,194,203 6,306,600
</TABLE>
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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: July 18, 2000 By: /s/ Barbara L. Posner
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Barbara L. Posner
Chief Financial Officer
Chief Operating Officer
