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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ecology and Environment Inc | NASDAQ:EEI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.45 | 0.01 | 199,999.99 | 0 | 01:00:00 |
New York
|
|
16-0971022
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification Number)
|
368 Pleasant View Drive
|
|
|
Lancaster, New York
|
|
14086
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
☐
|
|
Smaller reporting company
|
☑
|
|
|
Emerging growth company
|
☐
|
Item 1. |
Financial Statements
|
Balance at
|
||||||||
April 28, 2018
|
July 31, 2017
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash, cash equivalents and restricted cash
|
$
|
15,407
|
$
|
13,343
|
||||
Investment securities available for sale
|
1,478
|
1,498
|
||||||
Contract receivables, net of allowance for doubtful accounts and contract adjustments of $1,693 and $2,125, respectively
|
27,303
|
35,107
|
||||||
Income tax receivable
|
1,018
|
1,293
|
||||||
Other current assets
|
2,148
|
2,119
|
||||||
Total current assets
|
47,354
|
53,360
|
||||||
Property, buildings and equipment, net of accumulated depreciation of $17,410 and $16,994, respectively
|
4,313
|
4,428
|
||||||
Deferred income taxes
|
789
|
1,203
|
||||||
Other assets
|
1,843
|
1,786
|
||||||
Total assets
|
$
|
54,299
|
$
|
60,777
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
4,396
|
$
|
8,073
|
||||
Lines of credit
|
-
|
581
|
||||||
Accrued payroll costs
|
4,895
|
6,338
|
||||||
Current portion of long-term debt and capital lease obligations
|
60
|
382
|
||||||
Billings in excess of revenue
|
3,227
|
2,850
|
||||||
Other accrued liabilities
|
2,072
|
2,645
|
||||||
Total current liabilities
|
14,650
|
20,869
|
||||||
Income taxes payable
|
329
|
31
|
||||||
Deferred income taxes
|
-
|
3
|
||||||
Long-term debt and capital lease obligations
|
67
|
66
|
||||||
Commitments and contingencies (Note 15)
|
-
|
-
|
||||||
Shareholders' equity:
|
||||||||
Preferred stock, par value $.01 per share (2,000,000 shares authorized; no shares issued)
|
-
|
-
|
||||||
Class A common stock, par value $.01 per share (6,000,000 shares authorized; 3,037,915 and 3,035,778 shares issued)
|
30
|
30
|
||||||
Class B common stock, par value $.01 per share; (10,000,000 shares authorized; 1,355,810 and 1,357,947 shares issued)
|
14
|
14
|
||||||
Capital in excess of par value
|
17,608
|
17,608
|
||||||
Retained earnings
|
22,578
|
23,509
|
||||||
Accumulated other comprehensive loss
|
(1,923
|
)
|
(2,018
|
)
|
||||
Treasury stock, at cost (Class A common: 27,320 shares; Class B common: 64,801 shares)
|
(1,037
|
)
|
(1,037
|
)
|
||||
Total Ecology and Environment, Inc. shareholders' equity
|
37,270
|
38,106
|
||||||
Noncontrolling interests
|
1,983
|
1,702
|
||||||
Total shareholders' equity
|
39,253
|
39,808
|
||||||
Total liabilities and shareholders' equity
|
$
|
54,299
|
$
|
60,777
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28, 2018
|
April 29, 2017
|
April 28, 2018
|
April 29, 2017
|
|||||||||||||
Revenue, net
|
$
|
23,728
|
$
|
24,052
|
$
|
75,892
|
$
|
74,094
|
||||||||
Cost of professional services and other direct operating expenses
|
8,793
|
9,346
|
27,352
|
27,787
|
||||||||||||
Subcontract costs
|
3,585
|
3,258
|
15,082
|
12,616
|
||||||||||||
Administrative and indirect operating expenses
|
7,657
|
7,588
|
22,405
|
22,447
|
||||||||||||
Marketing and related costs
|
3,043
|
2,465
|
9,033
|
7,674
|
||||||||||||
Depreciation and amortization
|
291
|
265
|
827
|
782
|
||||||||||||
Income from operations
|
359
|
1,130
|
1,193
|
2,788
|
||||||||||||
Net interest (expense) income
|
52
|
9
|
39
|
(3
|
)
|
|||||||||||
Proxy contest costs, net
|
-
|
(550
|
)
|
-
|
(550
|
)
|
||||||||||
Net foreign exchange gain (loss)
|
15
|
(9
|
)
|
(12
|
)
|
(81
|
)
|
|||||||||
Other income (expense)
|
24
|
(70
|
)
|
36
|
(60
|
)
|
||||||||||
Income before income tax provision
|
450
|
510
|
1,256
|
2,094
|
||||||||||||
Income tax provision
|
43
|
246
|
797
|
1,319
|
||||||||||||
Net income
|
407
|
264
|
459
|
775
|
||||||||||||
Net (income) loss attributable to noncontrolling interests
|
(243
|
)
|
(12
|
)
|
(530
|
)
|
47
|
|||||||||
Net income (loss) attributable to Ecology and Environment, Inc.
|
$
|
164
|
$
|
252
|
$
|
(71
|
)
|
$
|
822
|
|||||||
Net income (loss) per common share: basic and diluted
|
$
|
0.04
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
0.19
|
|||||||
Weighted average common shares outstanding: basic and diluted
|
4,301,604
|
4,294,102
|
4,301,604
|
4,293,646
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28, 2018
|
April 29, 2017
|
April 28, 2018
|
April 29, 2017
|
|||||||||||||
Net income including noncontrolling interests
|
$
|
407
|
$
|
264
|
$
|
459
|
$
|
775
|
||||||||
Foreign currency translation adjustments
|
(1
|
)
|
(36
|
)
|
194
|
88
|
||||||||||
Unrealized investment (losses) gains, net
|
(10
|
)
|
7
|
(26
|
)
|
(24
|
)
|
|||||||||
Comprehensive income
|
396
|
235
|
627
|
839
|
||||||||||||
Comprehensive (income) attributable to noncontrolling interests
|
(209
|
)
|
(32
|
)
|
(603
|
)
|
(37
|
)
|
||||||||
Comprehensive income attributable to Ecology and Environment, Inc.
|
$
|
187
|
$
|
203
|
$
|
24
|
$
|
802
|
Nine Months Ended
|
||||||||
April 28, 2018
|
April 29, 2017
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
459
|
$
|
775
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
827
|
782
|
||||||
Deferred income tax benefit
|
380
|
2,356
|
||||||
Tax impact of share-based compensation
|
-
|
(6
|
)
|
|||||
Gain on sale of assets and investment securities
|
(19
|
)
|
(90
|
)
|
||||
Net recovery of contract adjustments
|
(60
|
)
|
(1,178
|
)
|
||||
Net bad debt (recovery) expense
|
(96
|
)
|
399
|
|||||
Changes in:
|
||||||||
- contract receivables
|
8,063
|
2,953
|
||||||
- other current assets
|
(46
|
)
|
(607
|
)
|
||||
- income tax receivable
|
275
|
(1,906
|
)
|
|||||
- other non-current assets
|
(54
|
)
|
(18
|
)
|
||||
- accounts payable
|
(2,784
|
)
|
49
|
|||||
- accrued payroll costs
|
(1,409
|
)
|
(1,724
|
)
|
||||
- income taxes payable
|
285
|
(6
|
)
|
|||||
- billings in excess of revenue
|
505
|
196
|
||||||
- other accrued liabilities
|
(601
|
)
|
700
|
|||||
Net cash provided by operating activities
|
5,725
|
2,675
|
||||||
Cash flows from investing activities:
|
||||||||
Proceeds from sale of subsidiaries
|
-
|
75
|
||||||
Purchase of property, buildings and equipment
|
(702
|
)
|
(479
|
)
|
||||
Proceeds from sale of property, buildings and equipment
|
19
|
1,483
|
||||||
Purchase of investment securities
|
(23
|
)
|
(22
|
)
|
||||
Net cash (used in) provided by investing activities
|
(706
|
)
|
1,057
|
|||||
Cash flows from financing activities:
|
||||||||
Dividends paid
|
(1,721
|
)
|
(1,720
|
)
|
||||
Repayment of long-term debt and capital lease obligations
|
(373
|
)
|
(196
|
)
|
||||
Net (repayments) borrowings under lines of credit
|
(577
|
)
|
370
|
|||||
Distributions to noncontrolling interests
|
(322
|
)
|
(681
|
)
|
||||
Net cash used in financing activities
|
(2,993
|
)
|
(2,227
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
38
|
9
|
||||||
Net increase in cash, cash equivalents and restricted cash
|
2,064
|
1,514
|
||||||
Cash, cash equivalents and restricted cash at beginning of period
|
13,343
|
10,161
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
15,407
|
$
|
11,675
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
52
|
$
|
90
|
||||
Income taxes
|
175
|
987
|
||||||
Supplemental disclosure of non-cash items:
|
||||||||
Capital lease obligations incurred
|
59
|
-
|
Class A
Common
Stock
Shares
|
Class A
Common
Stock
Amount
|
Class B
Common
Stock
Shares
|
Class B
Common
Stock
Amount
|
Capital in
Excess of
Par Value
|
Retained
Earnings
|
Accumulat
ed Other
Comprehe
nsive
Income
(Loss)
|
Treasury
Stock
Shares
|
Treasury
Stock
Amount
|
Noncontrol
ling
Interest
|
|||||||||||||||||||||||||||||||
Balance at July 31, 2016 (audited)
|
3,035,778
|
$
|
30
|
1,357,947
|
$
|
14
|
$
|
16,606
|
$
|
22,237
|
$
|
(2,143
|
)
|
104,073
|
$
|
(1,172
|
)
|
$
|
2,333
|
|||||||||||||||||||||
Net income (loss)
|
-
|
-
|
-
|
-
|
-
|
3,015
|
-
|
-
|
-
|
(62
|
)
|
|||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
143
|
-
|
-
|
87
|
||||||||||||||||||||||||||||||
Cash dividends declared ($0.40 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,719
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Unrealized investment losses, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(18
|
)
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Issuance of stock under stock award plan
|
-
|
-
|
-
|
-
|
4
|
-
|
-
|
(11,952
|
)
|
135
|
-
|
|||||||||||||||||||||||||||||
Tax impact of share based compensation
|
-
|
-
|
-
|
-
|
(6
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Tax impact of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
(24
|
)
|
-
|
-
|
-
|
24
|
|||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(680
|
)
|
|||||||||||||||||||||||||||||
Adjustment to deferred income taxes related to acquisition of noncontrolling interests in prior years
|
-
|
-
|
-
|
-
|
1,004
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Balance at July 31, 2017 (audited)
|
3,035,778
|
$
|
30
|
1,357,947
|
$
|
14
|
$
|
17,608
|
$
|
23,509
|
$
|
(2,018
|
)
|
92,121
|
$
|
(1,037
|
)
|
$
|
1,702
|
|||||||||||||||||||||
Net (loss) income
|
-
|
-
|
-
|
-
|
-
|
(71
|
)
|
-
|
-
|
-
|
530
|
|||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
121
|
-
|
-
|
73
|
||||||||||||||||||||||||||||||
Cash dividends declared ($0.20 per share)
|
-
|
-
|
-
|
-
|
-
|
(860
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Unrealized investment losses, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(26
|
)
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock
|
2,137
|
-
|
(2,137
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(322
|
)
|
|||||||||||||||||||||||||||||
Balance at April 28, 2018 (unaudited)
|
3,037,915
|
$
|
30
|
1,355,810
|
$
|
14
|
$
|
17,608
|
$
|
22,578
|
$
|
(1,923
|
)
|
92,121
|
$
|
(1,037
|
)
|
$
|
1,983
|
1. |
Organization and Basis of Presentation
|
2. |
Recent Accounting Pronouncements
|
3.
|
U.S. Tax Reform
|
4.
|
Cash, Cash Equivalents and Restricted Cash
|
Balance at
|
||||||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
Cash and cash equivalents
|
$
|
15,121
|
$
|
13,029
|
||||
Restricted cash
|
286
|
314
|
||||||
Total cash, cash equivalents and restricted cash
|
$
|
15,407
|
$
|
13,343
|
5. |
Fair Value of Financial Instruments
|
6.
|
Revenue and Contract Receivables, net
|
Contract Type
|
Work Type
|
Revenue Recognition Policy
|
|
|
|
Time and materials
|
Consulting
|
As incurred at contract rates.
|
Fixed price
|
Consulting
|
Percentage of completion, approximating the ratio of either total costs or Level of Effort (LOE) hours incurred to date to total estimated costs or LOE hours.
|
Cost-plus
|
Consulting
|
Costs as incurred plus fees.
Fees are recognized as revenue using percentage of completion determined by the percentage of LOE hours incurred to total LOE hours in the respective contracts.
|
Balance at
|
||||||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
Contract Receivables:
|
|
|
||||||
Billed
|
$
|
13,404
|
$
|
16,033
|
||||
Unbilled
|
15,592
|
21,199
|
||||||
28,996
|
37,232
|
|||||||
Allowance for doubtful accounts and contract adjustments
|
(1,693
|
)
|
(2,125
|
)
|
||||
Contract receivables, net
|
$
|
27,303
|
$
|
35,107
|
Balance at April 28, 2018
|
Balance at July 31, 2017
|
|||||||||||||||
Total Billed and Unbilled
Contract Receivables
|
Allowance for Doubtful
Accounts and Contract
Adjustments
|
Total Billed and
Unbilled Contract
Receivables
|
Allowance for
Doubtful Accounts and
Contract Adjustments
|
|||||||||||||
(in thousands)
|
||||||||||||||||
EEI and its subsidiaries located in the U.S.
|
$
|
18,258
|
$
|
555
|
$
|
25,528
|
$
|
797
|
||||||||
Subsidiaries located in South America
|
10,738
|
1,138
|
11,704
|
1,328
|
||||||||||||
Totals
|
$
|
28,996
|
$
|
1,693
|
$
|
37,232
|
$
|
2,125
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28, 2018
|
April 29, 2017
|
April 28, 2018
|
April 29, 2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
1,957
|
$
|
2,047
|
$
|
2,125
|
$
|
6,792
|
||||||||
Net increase (decrease) due to adjustments in the allowance for:
|
||||||||||||||||
Contract adjustments
(1)
|
(25
|
)
|
---
|
(60
|
)
|
(4,941
|
)
|
|||||||||
Doubtful accounts
(2)
|
(239
|
)
|
213
|
(372
|
)
|
409
|
||||||||||
Balance at end of period
|
$
|
1,693
|
$
|
2,260
|
$
|
1,693
|
$
|
2,260
|
(1) |
Increases (decreases) to the allowance for contract adjustments on the condensed consolidated balance sheets are recorded as (decreases) increases to revenue, net on the condensed consolidated statements of operations.
|
(2) |
Increases (decreases) to the allowance for doubtful accounts on the condensed consolidated balance sheets are recorded as increases (decreases) to administrative and other indirect operating expenses on the condensed consolidated statements of operations.
|
7. |
Lines of Credit
|
Balance at
|
||||||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
Outstanding cash draws, recorded as lines of credit on the accompanying condensed consolidated balance sheets
|
$
|
---
|
$
|
581
|
||||
Short-term loans issued under lines of credit included in current portion of long-term debt
|
---
|
200
|
||||||
Outstanding letters of credit to support operations
|
2,337
|
2,511
|
||||||
Total amounts used under lines of credit
|
2,337
|
3,292
|
||||||
Remaining amounts available under lines of credit
|
37,792
|
36,529
|
||||||
Total approved unsecured lines of credit
|
$
|
40,129
|
$
|
39,821
|
8. |
Debt and Capital Lease Obligations
|
|
|
Balance at
|
|
|||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
Bank loans (interest rate 2.94% at April 28, 2018)
|
$
|
33
|
$
|
328
|
||||
Capital lease obligations (interest rates ranging from 7.36% to 17.07% at April 28, 2018)
|
94
|
120
|
||||||
127
|
448
|
|||||||
Current portion of long-term debt and capital lease obligations
|
(60
|
)
|
(382
|
)
|
||||
Long-term debt and capital lease obligations
|
$
|
67
|
$
|
66
|
Twelve Months Ended
April 28,
|
Amount
|
|||
(in thousands) | ||||
2019
|
$
|
60
|
||
2020
|
46
|
|||
2021
|
21
|
|||
Total
|
$
|
127
|
9. |
Income Taxes
|
· |
imposes a U.S. federal tax on historical cumulative earnings of foreign subsidiaries, replacing the previous system of taxing the earnings of foreign subsidiaries only as they were repatriated to the U.S. in the form of dividends;
|
· |
eliminates or reduces the ability to utilize certain foreign tax credits that existed prior to enactment of the Tax Act; and
|
· |
provides for a deduction for dividends received from foreign subsidiaries.
|
10. |
Other Accrued Liabilities
|
|
Balance at
|
|||||||
|
April 28,
2018
|
July 31,
2017
|
||||||
|
(in thousands)
|
|||||||
Allowance for project disallowances
|
$
|
687
|
$
|
687
|
||||
Dividends payable to noncontrolling shareholders of majority-owned subsidiaries
|
410
|
517
|
||||||
Other accrued expenses
|
975
|
1,441
|
||||||
Total other accrued liabilities
|
$
|
2,072
|
$
|
2,645
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28,
2018
|
April 29,
2017
|
April 28,
2018
|
April 29,
2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
687
|
$
|
711
|
$
|
687
|
$
|
1,819
|
||||||||
Reduction of settlement estimate recorded in prior periods
|
---
|
(24
|
)
|
---
|
(1,132
|
)
|
||||||||||
Balance at end of period
|
$
|
687
|
$
|
687
|
$
|
687
|
$
|
687
|
11 . |
Stock Award Plan
|
12. |
Shareholders' Equity
|
Balance at
|
||||||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
Unrealized net foreign currency translation losses
|
$
|
(1,912
|
)
|
$
|
(2,033
|
)
|
||
Unrealized net investment (losses) gains on available for sale investments
|
(11
|
)
|
15
|
|||||
Total accumulated other comprehensive loss
|
$
|
(1,923
|
)
|
$
|
(2,018
|
)
|
13. |
Earnings Per Share
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28,
2018
|
April 29,
2017
|
April 28,
2018
|
April 29,
2017
|
|||||||||||||
(in thousands, except share and per share amounts)
|
||||||||||||||||
Net income (loss) attributable to Ecology and Environment, Inc.
|
$
|
164
|
$
|
252
|
$
|
(71
|
)
|
$
|
822
|
|||||||
Dividends declared
|
(860
|
)
|
---
|
(860
|
)
|
(859
|
)
|
|||||||||
Undistributed earnings (distributions in excess of earnings)
|
$
|
(696
|
)
|
$
|
252
|
$
|
(931
|
)
|
$
|
(37
|
)
|
|||||
Weighted-average common shares outstanding - basic and diluted
|
4,301,604
|
4,294,102
|
4,301,604
|
4,293,646
|
||||||||||||
Distributed earnings per share - basic and diluted
|
$
|
0.20
|
$
|
---
|
$
|
0.20
|
$
|
0.20
|
||||||||
Undistributed earnings (distributions in excess of earnings) per share - basic and diluted
|
(0.16
|
)
|
0.06
|
(0.22
|
)
|
(0.01
|
)
|
|||||||||
Net income (loss) per common share - basic and diluted
|
$
|
0.04
|
$
|
0.06
|
$
|
(0.02
|
)
|
$
|
0.19
|
14. |
Segment Reporting
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28, 2018
|
April 29, 2017
|
April 28, 2018
|
April 29, 2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
EEI and its subsidiaries located in the U.S.
|
$
|
16,789
|
$
|
18,394
|
$
|
53,535
|
$
|
57,660
|
||||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
1,655
|
1,704
|
7,344
|
4,441
|
||||||||||||
Chile
|
2,828
|
1,642
|
8,070
|
5,699
|
||||||||||||
Brazil
|
2,317
|
2,231
|
6,713
|
6,069
|
||||||||||||
Other
|
139
|
81
|
230
|
225
|
||||||||||||
6,939
|
5,658
|
22,357
|
16,434
|
|||||||||||||
Total revenue, net
|
$
|
23,728
|
$
|
24,052
|
$
|
75,892
|
$
|
74,094
|
Balance at
|
||||||||
April 28,
2018
|
July 31,
2017
|
|||||||
(in thousands)
|
||||||||
EEI and its subsidiaries located in the United States
|
$
|
2,929
|
$
|
3,293
|
||||
Subsidiaries located in South America
|
1,384
|
1,135
|
15. |
Commitments and Contingencies
|
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
Three Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the United States:
|
||||||||||||||||
Revenue, net
|
$
|
16,789
|
$
|
18,394
|
$
|
(1,605
|
)
|
(9
|
)%
|
|||||||
Revenue, net less subcontract costs (1)
|
14,736
|
16,190
|
(1,454
|
)
|
(9
|
)%
|
||||||||||
Direct operating expenses (2)
|
6,438
|
7,054
|
(616
|
)
|
(9
|
)%
|
||||||||||
Indirect operating expenses (3)
|
8,439
|
7,836
|
603
|
8
|
%
|
|||||||||||
(Loss) income before income tax provision
|
(324
|
) |
486
|
(810
|
)
|
(167
|
)%
|
|||||||||
Net (loss) income attributable to EEI
|
(272
|
) |
260
|
(532
|
)
|
(205
|
)%
|
|||||||||
Subsidiaries located in South America:
|
||||||||||||||||
Revenue, net
|
$
|
6,939
|
$
|
5,658
|
$
|
1,281
|
23
|
%
|
||||||||
Revenue, net less subcontract costs (1)
|
5,407
|
4,604
|
803
|
17
|
%
|
|||||||||||
Direct operating expenses (2)
|
2,355
|
2,292
|
63
|
3
|
%
|
|||||||||||
Indirect operating expenses (3)
|
2,261
|
2,217
|
44
|
2
|
%
|
|||||||||||
Income before income tax provision
|
774
|
24
|
750
|
---
|
(4)
|
|||||||||||
Net income (loss) attributable to EEI
|
436
|
(8
|
)
|
444
|
---
|
(4)
|
||||||||||
Consolidated totals:
|
||||||||||||||||
Revenue, net
|
$
|
23,728
|
$
|
24,052
|
$
|
(324
|
)
|
(1
|
)%
|
|||||||
Revenue, net less subcontract costs (1)
|
20,143
|
20,794
|
(651
|
)
|
(3
|
)%
|
||||||||||
Direct operating expenses (2)
|
8,793
|
9,346
|
(553
|
)
|
(6
|
)%
|
||||||||||
Indirect operating expenses (3)
|
10,700
|
10,053
|
647
|
6
|
%
|
|||||||||||
Income before income tax provision
|
450
|
510
|
(60
|
)
|
(12
|
)%
|
||||||||||
Net income attributable to EEI
|
164
|
252
|
(88
|
)
|
(35
|
)%
|
(1) |
Revenue, net less subcontract costs, which is a key operating metric for our company, represents revenue, net less subcontract costs from the condensed consolidated statements of operations.
|
(2) |
Direct operating expenses consist of cost of professional services and other direct operating expenses from the condensed consolidated statements of operations.
|
(3) |
Indirect operating expenses consist of administrative and indirect operating expenses and marketing and related costs from the condensed consolidated statements of operations.
|
(4) |
Percent change is not relevant because the prior year amount is insignificant or negative.
|
Nine Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the United States:
|
||||||||||||||||
Revenue, net
|
$
|
53,535
|
$
|
57,660
|
$
|
(4,125
|
)
|
(7
|
)%
|
|||||||
Revenue, net less subcontract costs (1)
|
44,502
|
49,107
|
(4,605
|
)
|
(9
|
)%
|
||||||||||
Direct operating expenses (2)
|
19,851
|
21,399
|
(1,548
|
)
|
(7
|
)%
|
||||||||||
Indirect operating expenses (3)
|
24,497
|
23,845
|
652
|
3
|
%
|
|||||||||||
(Loss) income before income tax provision
|
(599
|
)
|
2,377
|
(2,976
|
)
|
(125
|
)%
|
|||||||||
Net (loss) income attributable to EEI
|
(990
|
)
|
1,359
|
(2,349
|
)
|
(173
|
)%
|
|||||||||
Subsidiaries located in South America:
|
||||||||||||||||
Revenue, net
|
$
|
22,357
|
$
|
16,434
|
$
|
5,923
|
36
|
%
|
||||||||
Revenue, net less subcontract costs (1)
|
16,308
|
12,371
|
3,937
|
32
|
%
|
|||||||||||
Direct operating expenses (2)
|
7,501
|
6,388
|
1,113
|
17
|
%
|
|||||||||||
Indirect operating expenses (3)
|
6,941
|
6,276
|
665
|
11
|
%
|
|||||||||||
Income (loss) before income tax provision
|
1,855
|
(283
|
)
|
2,138
|
---
|
(4)
|
||||||||||
Net income (loss) attributable to EEI
|
919
|
(537
|
)
|
1,456
|
---
|
(4)
|
||||||||||
Consolidated totals:
|
||||||||||||||||
Revenue, net
|
$
|
75,892
|
$
|
74,094
|
$
|
1,798
|
2
|
%
|
||||||||
Revenue, net less subcontract costs (1)
|
60,810
|
61,478
|
(668
|
)
|
(1
|
)%
|
||||||||||
Direct operating expenses (2)
|
27,352
|
27,787
|
(435
|
)
|
(2
|
)%
|
||||||||||
Indirect operating expenses (3)
|
31,438
|
30,121
|
1,317
|
4
|
%
|
|||||||||||
Income before income tax provision
|
1,256
|
2,094
|
(838
|
)
|
(40
|
)%
|
||||||||||
Net income attributable to EEI
|
(71
|
)
|
822
|
(893
|
)
|
(109
|
)%
|
(1) |
Revenue, net less subcontract costs, which is a key operating metric for our company, represents revenue, net less subcontract costs from the condensed consolidated statements of operations.
|
(2) |
Direct operating expenses consist of cost of professional services and other direct operating expenses from the condensed consolidated statements of operations.
|
(3) |
Indirect operating expenses consist of administrative and indirect operating expenses and marketing and related costs from the condensed consolidated statements of operations.
|
(4) |
Percent change is not relevant because the prior year amount is negative.
|
Balance at April 28, 2018
|
Balance at July 31, 2017
|
|||||||||||||||
Total Billed and
Unbilled Contract
Receivables
|
Allowance for
Doubtful Accounts and
Contract Adjustments
|
Total Billed and
Unbilled Contract
Receivables
|
Allowance for
Doubtful Accounts and
Contract Adjustments
|
|||||||||||||
(in thousands)
|
||||||||||||||||
EEI and its subsidiaries located in the U.S.
|
$
|
18,258
|
$
|
555
|
$
|
25,528
|
$
|
797
|
||||||||
Subsidiaries located in South America
|
10,738
|
1,138
|
11,704
|
1,328
|
||||||||||||
Totals
|
$
|
28,996
|
$
|
1,693
|
$
|
37,232
|
$
|
2,125
|
Amount as of
|
||||||||||||
April 28,
2018
|
July 31,
2017
|
April 29,
2017
|
||||||||||
(in thousands)
|
||||||||||||
Total firm backlog of uncompleted contracts:
|
||||||||||||
EEI and its subsidiaries located in the United States
|
$
|
63,725
|
$
|
71,642
|
$
|
64,624
|
||||||
Subsidiaries located in South America
|
16,790
|
20,744
|
21,393
|
|||||||||
Consolidated totals
|
$
|
80,515
|
$
|
92,386
|
$
|
86,017
|
||||||
Anticipated completion of firm backlog in next twelve months:
|
||||||||||||
EEI and its subsidiaries located in the United States
|
$
|
40,315
|
$
|
38,814
|
$
|
34,294
|
||||||
Subsidiaries located in South America
|
12,713
|
14,660
|
15,626
|
|||||||||
Consolidated totals
|
$
|
53,028
|
$
|
53,474
|
$
|
49,920
|
Contract Type
|
Work Type
|
Revenue Recognition Policy
|
Time and materials
|
Consulting
|
As incurred at contract rates.
|
Fixed price
|
Consulting
|
Percentage of completion, approximating the ratio of either total costs or Level of Effort (LOE) hours incurred to date to total estimated costs or LOE hours.
|
Cost-plus
|
Consulting
|
Costs as incurred plus fees. Fees are recognized as revenue using percentage of completion determined by the percentage of LOE hours incurred to total LOE hours in the respective contracts.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
April 28,
2018
|
April 29,
2017
|
April 28,
2018
|
April 29,
2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Time and materials
|
$
|
10,162
|
$
|
12,288
|
$
|
29,356
|
$
|
34,935
|
||||||||
Fixed price
|
10,151
|
8,969
|
31,960
|
28,277
|
||||||||||||
Cost-plus
|
3,415
|
2,795
|
14,576
|
10,882
|
||||||||||||
Total revenue, net
|
$
|
23,728
|
$
|
24,052
|
$
|
75,892
|
$
|
74,094
|
Three Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Revenue, net by reporting segment:
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
16,789
|
$
|
18,394
|
$
|
(1,605
|
)
|
(9
|
)%
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
1,655
|
1,704
|
(49
|
)
|
(3
|
)%
|
||||||||||
Chile
|
2,828
|
1,642
|
1,186
|
72
|
%
|
|||||||||||
Brazil
|
2,317
|
2,231
|
86
|
4
|
%
|
|||||||||||
Other
|
139
|
81
|
58
|
---
|
(1)
|
|||||||||||
6,939
|
5,658
|
1,281
|
23
|
%
|
||||||||||||
Total revenue, net
|
$
|
23,728
|
$
|
24,052
|
$
|
(324
|
)
|
(1
|
)%
|
Revenue, net less subcontract costs, by reporting segment:
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
14,736
|
$
|
16,190
|
$
|
(1,454
|
)
|
(9
|
)%
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
1,218
|
1,250
|
(32
|
)
|
(3
|
)%
|
||||||||||
Chile
|
2,095
|
1,447
|
648
|
45
|
%
|
|||||||||||
Brazil
|
2,062
|
1,834
|
228
|
12
|
%
|
|||||||||||
Other
|
32
|
73
|
(41
|
)
|
---
|
(1)
|
||||||||||
5,407
|
4,604
|
803
|
17
|
%
|
||||||||||||
Total revenue, net less subcontract costs
|
$
|
20,143
|
$
|
20,794
|
$
|
(651
|
)
|
(3
|
)%
|
|
Nine Months Ended
|
|||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Revenue, net by reporting segment:
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
53,535
|
$
|
57,660
|
$
|
(4,125
|
)
|
(7
|
)%
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
7,344
|
4,441
|
2,903
|
65
|
%
|
|||||||||||
Chile
|
8,070
|
5,699
|
2,371
|
42
|
%
|
|||||||||||
Brazil
|
6,713
|
6,069
|
644
|
11
|
%
|
|||||||||||
Other
|
230
|
225
|
5
|
---
|
(1)
|
|||||||||||
22,357
|
16,434
|
5,923
|
36
|
%
|
||||||||||||
Total revenue, net
|
$
|
75,892
|
$
|
74,094
|
$
|
1,798
|
2
|
%
|
Revenue, net less subcontract costs, by reporting segment:
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
44,502
|
$
|
49,107
|
$
|
(4,605
|
)
|
(9
|
)%
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
4,472
|
2,901
|
1,571
|
54
|
%
|
|||||||||||
Chile
|
6,146
|
4,463
|
1,683
|
38
|
%
|
|||||||||||
Brazil
|
5,615
|
4,808
|
807
|
17
|
%
|
|||||||||||
Other
|
75
|
199
|
(124
|
)
|
---
|
(1)
|
||||||||||
16,308
|
12,371
|
3,937
|
32
|
%
|
||||||||||||
Total revenue, net less subcontract costs
|
$
|
60,810
|
$
|
61,478
|
$
|
(668
|
)
|
(1
|
)%
|
(1) |
Percent change is not relevant because of the relatively immaterial amounts for all periods presented.
|
· |
We have experienced a trend of longer periods being required by various prospective commercial and federal clients to make contract award decisions;
|
· |
We have also experienced a trend of longer periods being required by certain current clients to fund projects, define project scopes and schedule project work; and
|
Three Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
6,438
|
$
|
7,054
|
$
|
(616
|
)
|
(9
|
) %
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
425
|
412
|
13
|
3
|
%
|
|||||||||||
Chile
|
883
|
716
|
167
|
23
|
%
|
|||||||||||
Brazil
|
1,025
|
1,106
|
(81
|
)
|
(7
|
)%
|
||||||||||
Other
|
22
|
58
|
(36
|
)
|
---
|
(1)
|
||||||||||
2,355
|
2,292
|
63
|
3
|
%
|
||||||||||||
Total direct operating expenses
|
$
|
8,793
|
$
|
9,346
|
$
|
(553
|
)
|
(6
|
)%
|
Nine Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
19,851
|
$
|
21,399
|
$
|
(1,548
|
)
|
(7
|
) %
|
|||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
1,513
|
936
|
577
|
62
|
%
|
|||||||||||
Chile
|
2,857
|
2,140
|
717
|
34
|
%
|
|||||||||||
Brazil
|
3,080
|
3,179
|
(99
|
)
|
(3
|
) %
|
||||||||||
Other
|
51
|
133
|
(82
|
)
|
---
|
(1)
|
||||||||||
7,501
|
6,388
|
1,113
|
17
|
%
|
||||||||||||
Total direct operating expenses
|
$
|
27,352
|
$
|
27,787
|
$
|
(435
|
)
|
(2
|
)%
|
(1) |
Percent change is not relevant because of the relatively immaterial amounts for all periods presented.
|
Three Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
8,439
|
$
|
7,836
|
$
|
603
|
8
|
%
|
||||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
713
|
757
|
(44
|
)
|
(6
|
)%
|
||||||||||
Chile
|
752
|
707
|
45
|
6
|
%
|
|||||||||||
Brazil
|
780
|
696
|
84
|
12
|
%
|
|||||||||||
Other
|
16
|
57
|
(41
|
)
|
---
|
(1)
|
||||||||||
2,261
|
2,217
|
44
|
2
|
%
|
||||||||||||
Total indirect operating expenses
|
$
|
10,700
|
$
|
10,053
|
$
|
647
|
6
|
%
|
Nine Months Ended
|
||||||||||||||||
April 28,
2018
|
April 29,
2017
|
$
Change
|
%
Change
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
EEI and subsidiaries located in the U.S.
|
$
|
24,497
|
$
|
23,845
|
$
|
652
|
3
|
%
|
||||||||
Subsidiaries located in South America:
|
||||||||||||||||
Peru
|
2,373
|
2,504
|
(131
|
)
|
(5
|
)%
|
||||||||||
Chile
|
2,224
|
1,822
|
402
|
22
|
%
|
|||||||||||
Brazil
|
2,287
|
1,814
|
473
|
26
|
%
|
|||||||||||
Other
|
57
|
136
|
(79
|
)
|
---
|
(1)
|
||||||||||
6,941
|
6,276
|
665
|
11
|
%
|
||||||||||||
Total indirect operating expenses
|
$
|
31,438
|
$
|
30,121
|
$
|
1,317
|
4
|
%
|
(1) |
Percent change is not relevant because of the relatively immaterial amounts for all periods presented.
|
· |
Lower bad debt expenses, primarily due to reversal of specific reserves that had been recorded during the prior fiscal year; and
|
· |
Lower cash bonus expense resulting from lower earnings during fiscal year 2018.
|
Item 4. |
Controls and Procedures
|
· |
Enhancing management review controls over the financial statement close process to ensure appropriate cutoff for purposes of recording revenues and expenses, and appropriate review of the consolidation process, including intercompany elimination entries;
|
· |
Expanding the roles of third-party tax experts for preparation and review of income tax provisions, and development of specific procedures for management to monitor and review the work of third-party tax experts; and
|
· |
Developing a process for periodic review of specific key factors and assumptions utilized in the goodwill impairment assessment model to identify changes that potentially could result in goodwill impairment.
|
Item 1. |
Legal Proceedings
|
Item 2. |
Changes in Securities and Use of Proceeds
|
Fiscal Year 2018
Reporting Month
|
Total Number
of Shares
Purchased
|
Average
Price Paid
Per Share
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs
|
Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs
|
||||
August 2017
|
---
|
---
|
---
|
77,082
|
||||
September 2017
|
---
|
---
|
---
|
77,082
|
||||
October 2017
|
---
|
---
|
---
|
77,082
|
||||
November 2017
|
---
|
---
|
---
|
77,082
|
||||
December 2017
|
---
|
---
|
---
|
77,082
|
||||
January 2018
|
---
|
---
|
---
|
77,082
|
||||
February 2018
|
---
|
---
|
---
|
77,082
|
||||
March 2018
|
---
|
---
|
---
|
77,082
|
||||
April 2018
|
---
|
---
|
---
|
77,082
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Submission of Matters to a Vote of Security Holders
|
Item 5. |
Other Information
|
Item 6. |
Exhibits and Reports on Form 8-K
|
(a)
|
31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32.1
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(b)
|
|
(c)
|
|
(d)
|
Ecology and Environment, Inc.
|
||
Date: June 12, 2018
|
By:
|
/s/ Peter F. Sorci
|
Peter F. Sorci
|
||
Acting Chief Financial Officer
|
||
Principal Financial and Accounting Officer
|
1 Year Ecology and Environment Chart |
1 Month Ecology and Environment Chart |
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