Ecology and Environment, Inc. Reports Earnings for the Second Quarter of Fiscal Year 2008

BUFFALO, N.Y., March 12  /PRNewswire-FirstCall/ -- HIGHLIGHTS - Revenues for Ecology and Environment, Inc. (AMEX:EEI) for the second quarter of fiscal year 2008 and fiscal year 2007 were $24.1 million.  The Company reported net income for the second quarter of fiscal year 2008 of $131,000, compared to net income of $1.2 million or $.29 per share in the second quarter of the prior year.

DETAILS - Revenues for the second quarter of fiscal year 2008 were consistent with the revenues reported for the prior year.  Revenues from the Company's majority owned subsidiary Walsh Environmental were $6.5 million for the second quarter of fiscal year 2008, an increase of $1.0 million from the $5.5 million reported in the second quarter of fiscal year 2007.  The increase in Walsh Environmental revenues was mainly attributable to increased activity in the environmental remediation and asbestos markets.  Revenues from state clients of the parent company E&E, Inc were $6.2 million, up $800,000 from the $5.4 million reported in the prior year.  The increase in state revenue was mainly attributable to an increase in work levels on contracts in Florida and Washington.  Offsetting these increases were decreases in work at the parent company in the commercial and federal government sectors.

The second quarter earnings are down as anticipated by management.  A decision was made to bid considerable new work and to begin staffing for work expected to start in the third quarter of this fiscal year.  This has had a short term negative effect on our income that we believe will be negated in future quarters.  Contract bookings for the first six months of fiscal year 2008 have increased 14% over the prior year.  Staff levels companywide have increased 7% during the six months as a result of anticipated manpower needs for the remainder of the fiscal year.  The volume of proposals has increased 51% while the value of the proposals submitted increased 83% to $172 million, compared to $94 million in the prior year.

Net income for the second quarter of fiscal year 2008 decreased $1.1 million compared with the second quarter of the prior year.  Gross profits increased $446,000 during the second quarter of fiscal year 2008 as a result of the increased revenue reported at Walsh Environmental and a decrease in corporate wide subcontractor costs.  The increased gross profits were offset by higher indirect costs at the Company's subsidiaries Walsh Environmental and E&E do Brasil as well as increased staffing levels and business development and proposal costs worldwide within the parent company.  Walsh Environmental reported indirect costs of $2.6 million for the second quarter of fiscal year 2008, an increase of $800,000 from the $1.8 million reported in the prior year.  The increase in indirect costs was attributable to increased staffing levels and increased operational expenses related to their overall business growth.  For the three months ended January 26, 2008, E&E accrued additional interest and penalties of approximately $146,000 ($.03 per share) related to the FIN 48 tax accrual.  The majority of this expense is related to the contested Kuwait taxes.  The Company has continued its assertion of a contractual obligation for reimbursement from the Public Authority for Assessment of Compensation for Damages Resulting from Iraqi Aggression (PAAC) should any tax liability be agreed to with the Kuwait Ministry of Finance, however the assessment of this reimbursement in not permitted under FIN 48. In the second quarter of fiscal year 2007, the Company sold its interest in the shrimp farm located in Costa Rica.  After deducting costs of the sale, there was an after tax gain recorded on the sale of the farm of approximately $553,000 or $.13 per share which was included in discontinued operations.

This document contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").  All statements other than statements of historical facts are statements that could be deemed forward-looking statements.  These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management.  Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "may," variations of such words and similar expressions are intended to identify such forward-looking statements.  In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements.  Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update any forward-looking statements for any reason.  Further, information on risks and uncertainties is available in our filings with the Securities and Exchange Commission, which are incorporated by reference.

Ecology and Environment, Inc. is headquartered in Lancaster, New York, a suburb of Buffalo.  Its common stock is listed on the American Stock Exchange under the symbol EEI.  E & E can be located on the World Wide Web at http://www.ene.com/.

  Financial Report -

  (In thousands, except per share information)
                                                 Three Months Ending
                                        January 26, 2008    January 27, 2007

  Revenue                                     $24,142           $24,131

  Net Income From Continuing Operations           131               619
  Net Gain From Discontinued Operations             -               603
  Net Income                                      131             1,222

  Net Income Per Common Share: Basic
     Continuing Operations                      $0.03             $0.15
     Discontinued Operations                        -              0.14
     Net Income Per Common Share: Basic         $0.03             $0.29

  Net Income Per Common Share: Diluted
     Continuing Operations                      $0.03             $0.15
     Discontinued Operations                        -              0.14
     Net Income Per Common Share: Diluted       $0.03             $0.29



                                                 Fiscal Year Ending
                                        January 26, 2008    January 27, 2007

  Revenue                                     $49,848           $48,325

  Net Income From Continuing Operations           631             1,374
  Net Income From Discontinued Operations           -               569
  Net Income                                      631             1,943

  Net Income Per Common Share: Basic
     Continuing Operations                      $0.15             $0.33
     Discontinued Operations                        -              0.13
     Net Income Per Common Share: Basic         $0.15             $0.46

  Net Income Per Common Share: Diluted
     Continuing Operations                      $0.15             $0.32
     Discontinued Operations                        -              0.13
     Net Income Per Common Share: Diluted       $0.15             $0.45


DATASOURCE: Ecology and Environment, Inc.



CONTACT:  John Mye, [phone], for Ecology and Environment, Inc.



Web site:  http://www.ene.com/ 

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