LANCASTER, N.Y., November 15, 2017 – Ecology and Environment, Inc., (“E & E” or the “Company”) (NASDAQ: EEI) reported net earnings of $0.70 per share for the fiscal year ended July 31, 2017, more than three times earnings of $0.21 per share reported for the prior year. A significantly lower effective tax rate associated with South American operations and lower operating expenses companywide more than offset slight reductions in domestic and foreign revenues during fiscal year 2017. Favorable resolution of long-standing contract settlement liabilities and adjustments to close out the activities of dormant subsidiaries also contributed to improved results for 2017.
Fourth quarter earnings of $0.51 per share were approximately four times earnings of $0.13 per share reported in the prior year. Revenues from U.S. operations increased 13% during the fourth quarter of 2017, due partly to an increased volume of work, and partly to favorable adjustments to close out the activities of dormant subsidiaries. Higher revenues from operations in Brazil, Peru, and Chile combined for a 19% increase in revenues from South American operations during the current quarter.
The economic downturn that adversely affected Brazilian operations during previous fiscal years stabilized during fiscal year 2017, resulting in additional business development opportunities and revenues in Brazil. The increase in revenue coupled with reorganization initiatives has had a meaningful impact on improved results for the Company’s operations in Brazil. Despite being down for the full fiscal year, revenues from operations in Chile and Peru also improved during the fourth quarter due to a higher volume of work.
Competitive pricing pressure, a slowdown in the energy and mining sectors, and a changing client mix in the U.S. continued to have a negative effect on our average selling rate per hour of service. To a lesser degree, a reduction in the volume of hours charged to clients, also contributed to the overall decrease in revenues from U.S. operations.
Management has continued to improve efficiency and reduce costs within all of the Company’s domestic and foreign operations. These ongoing initiatives have offset the negative impact of global economic trends affecting oil, natural gas, and other commodity prices in E & E’s major markets, trends that continue to affect project activity and revenues within the Company’s U.S. and South American operations.
“E & E’s dramatically improved results in 2017 demonstrated the importance of a disciplined approach to managing costs and focusing on providing the highest level of service to our clients,” said E & E Board Chairman Marshall A. Heinberg. “We are continuously working towards developing new areas of growth and adding to our capabilities as we face competitive pricing pressure.”
“In fiscal year 2017, we experienced the positive results of our deliberate course of actions for stabilizing and strengthening operations in Brazil,” said E & E president and CEO Gerard A. Gallagher III. “We began fiscal year 2018 on firm footing, with positive fourth quarter earnings in both U.S. and South American operations and an increased backlog. E & E continues to implement strategies to better align our business with active and emerging markets, and to pursue growth opportunities that will enhance our ability to serve clients in addressing complex environmental challenges in a changing world.”
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 EEI and the information in this release can be found online at www.ene.com.
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