Ecology and Environment, Inc. Reports Increased Quarter Earnings and Fiscal Year 2005 Results

BUFFALO, N.Y., Oct. 31  /PRNewswire/ -- HIGHLIGHTS - After closing its analytical laboratory and the phase-out of certain contracts in the Middle East, net revenues for Ecology & Environment, Inc. for fiscal year 2005 were down 17% from the prior year.  The Company experienced a net loss from all operations of $1.6 million or $.40 per share compared to net income of $.60 per share in the prior year.  The net loss included $.04 per share attributed to the discontinued shrimp farm operation in Costa Rica.

During the fourth quarter, however net income increased to $.14 per share up from a loss of $.02 per share in the prior year that included $.02 per share for discontinued operations and an impairment charge of $.03 per share.

DETAILS - Ronald L. Frank, Executive Vice President and Chief Financial Officer, reported the Company closed its Analytical Services Center (ASC) in Lancaster, N.Y. at the end of the second quarter of the fiscal year.  As a result, net revenues from that enterprise decreased $3.0 million during fiscal year 2005 and the Company recognized as continuing operations a cumulative pre-tax impairment loss of $2.8 million.  Net revenues from contracts in the Middle East declined $20.4 million.  The Company received increased net revenues from Walsh Environmental and E&E do Brasil in the amount of $2.9 million and $1.5 million, respectively, for fiscal year 2005.

The decrease in net income from continuing operations for the fiscal year was attributable to a combination of the Company's recognized ASC impairment loss, reduced net revenues and increased indirect costs.  Offsetting these decreases was a tax benefit of $660,000 recorded during fiscal year 2005 due to the favorable resolution of Internal Revenue Service audits. Administrative and indirect costs increased $1.6 million attributable to the consolidation of Gustavson Associates to Walsh Environmental, increases in overhead of E&E do Brasil, and approximately $300,000 in costs associated with the compliance work as a result of the Sarbanes-Oxley Act during fiscal year 2005.

Net income from continuing operations for the fourth quarter of fiscal year 2005 increased due to the Company's efforts to control costs and maximize employee utilization.  E&E, Inc.'s employee utilization increased 6% during the fourth quarter of fiscal year 2005, compared to the fourth quarter of the prior year.  Marketing and related costs decreased $435,000 during the fourth quarter of fiscal year 2005 as a result of the closing of the ASC and efforts to control internal costs.

The Company continues to offer for sale the discontinued shrimp farm in Costa Rica and its Analytical Services Center in Lancaster, New York.  Several prospects for both entities are being explored but no offers have been received.  In early fiscal year 2006, as a result of the Company's long service reputation with the United States Environmental Protection Agency's Office of Hazardous Waste and Remediation, the Company has contracted with the Tulsa Corps of Engineers to help in the safeguard clean-up of the residue aftermath left by hurricanes Katrina and Rita.  The Company expects this effort to continue over the next several months.

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
                                               July 31, 2005   July 31, 2004

  Gross Revenues                                     $23,746         $26,668
  Net Revenues                                        18,852          21,597

  Net Income (Loss) From Continuing
   Operations                                            572             (8)
  Net Loss From Discontinued Operations                  (54)           (61)
  Net Income (Loss)                                      518            (69)

  Net Income (Loss) Per Common Share: Basic
    Total Continuing Operations                     $   0.15         $    -
    Discontinued Operations                            (0.01)         (0.02)
    Net Income (Loss) Per Common Share: Basic       $   0.14         $(0.02)

  Net Income (Loss) Per Common Share: Diluted
    Continuing Operations                           $   0.15         $    -
    Discontinued Operations                            (0.01)         (0.02)
    Net Income (Loss) Per Common Share:
     Diluted                                        $   0.14         $(0.02)

                                                     Fiscal Year Ending
                                              July 31, 2005   July 31, 2004

  Gross Revenues                                    $91,351        $110,623
  Net Revenues                                       74,461          89,501

  Net Income (Loss) From Continuing
   Operations                                        (1,424)          2,633
  Net Loss From Discontinued Operations                (162)           (231)
  Net Income (Loss)                                  (1,587)          2,401

  Net Income (Loss) Per Common Share: Basic
    Continuing Operations                           $ (0.36)       $   0.66
    Discontinued Operations                           (0.04)          (0.06)
    Net Income (Loss) Per Common Share: Basic       $ (0.40)       $   0.60

  Net Income (Loss) Per Common Share: Diluted
    Continuing Operations                           $ (0.36)       $   0.65
    Discontinued Operations                           (0.04)          (0.06)
    Net Income (Loss) Per Common Share:
     Diluted                                        $ (0.40)       $   0.59


DATASOURCE: Ecology and Environment, Inc.



CONTACT:  Ronald Frank, [phone], for Ecology and Environment,

Inc.



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

Copyright