LANCASTER, N.Y., Oct. 29, 2014 (GLOBE NEWSWIRE) -- Ecology and Environment, Inc., ("E & E" or the "Company") (Nasdaq:EEI) reported a consolidated net loss of $1.4 million or $0.32 per share for the fiscal year ended July 31, 2014, an improvement of 35% from the net loss of $2.1 million reported for the prior fiscal year. Lower revenues and higher depreciation and amortization expense during fiscal year 2014 were more than offset by lower contract adjustments recorded as reductions of revenue and lower total operating expenses during the current year.
Net contract adjustments recorded as reductions of revenue decreased $6.1 million (97%) during fiscal year 2014, as compared with the prior year. During fiscal year 2013, in response to significant operational project issues and difficulties in collecting required contractual advance payments, the Company recorded $6.3 million of contract adjustments related to projects in China, most of which was recorded during the last quarter of the year. During the fourth quarter of fiscal year 2013, management suspended all project activity related to these contracts, and no revenue or contract adjustments were recorded during fiscal year 2014.
During the first quarter of fiscal year 2014, the Company decided to abandon its existing operating software system and install a new operating system for its U.S. operations. The Company successfully launched its new operating system effective August 1, 2014. As a result of the decision to abandon its previous operating system, the Company recorded $0.6 million and $2.2 million of incremental depreciation and amortization expense during the fourth quarter and full fiscal year 2014, respectively, as compared with the same periods in the prior year. This incremental expense did not require the outlay of cash or capital, and will not impact reporting periods beyond fiscal year 2014.
Excluding depreciation and amortization expenses, total operating expenses decreased 6% during the fourth quarter and the full year ended July 31, 2014, as compared with the same periods of the prior year. In addition to lower direct expenses associated with lower project work volumes, the Company incurred lower administrative, marketing and other indirect operating expenses as a result of managed workforce reductions and other cost management initiatives undertaken during the second half of fiscal year 2013 and the first half of fiscal year 2014. As a result of this review, the number of full time employees in various technical and indirect departments at E & E and its U.S. subsidiaries decreased by a combined 16% and 9% during fiscal years 2014 and 2013, respectively. Utilization of contracted services was also reviewed and reduced at E & E. Management continues to evaluate its organizational and cost structure to identify ways to operate more efficiently and cost effectively for fiscal year 2015 and future reporting periods.
The Company incurred a consolidated net loss of $0.6 million or $0.15 per share for the fourth quarter of fiscal year 2014, an improvement of 83% from the net loss of $3.8 million or $0.90 per share reported in the fourth quarter of the prior year. Higher revenues, lower net contract adjustments recorded as reductions of revenue, and lower total operating expenses were partially offset by higher depreciation and amortization expense during the current quarter.
Revenue less subcontract costs decreased $2.6 million (9%) during the fourth quarter and $12.7 million (11%) during the full year ended July 31, 2014, as compared with the same periods in the prior fiscal year. Lower project work volumes in domestic government, energy, mining and asbestos inspection market sectors, and lower revenue from certain projects in the Middle East and China, were partially offset by growth in mining and energy sectors in the Company's South American operations.
E & E is listed on the NASDAQ under the symbol EEI and the information contained in this press release is available on the Company's website at www.ene.com.
| Financial Report -- | |||
| (In thousands, except per share information) | |||
| Three Months Ending | |||
| July 31, 2014 | July 31, 2013 | % Change | |
| Revenue, net | $ 33,096 | $ 29,745 | 11% |
| Revenue less Subcontract Costs | $ 26,282 | $ 28,903 | -9% |
| Total Operating Expenses (excluding depreciation and amortization) | $ 32,287 | $ 34,306 | -6% |
| Net Loss Attributable to Ecology and Environment, Inc. | $ (656) | $ (3,843) | -83% |
| Net Loss Per Common Share (Basic and Diluted) | $ (0.15) | $ (0.90) | -83% |
| Fiscal Year Ending | |||
| July 31, 2014 | July 31, 2013 | % Change | |
| Revenue, net | $ 128,427 | $ 134,937 | -5% |
| Revenue less Subcontract Costs | $ 103,488 | $ 116,215 | -11% |
| Total Operating Expenses (excluding depreciation and amortization) | $ 124,758 | $ 133,407 | -6% |
| Net Loss Attributable to Ecology and Environment, Inc. | $ (1,383) | $ (2,130) | -35% |
| Net Loss Per Common Share (Basic and Diluted) | $ (0.32) | $ (0.50) | -36% |