EA Engineering loses $1.38 million

April 14, 1992|By Liz Atwood | Liz Atwood,Staff Writer

EA Engineering, Science and Technology Inc., reporting a loss of $1.38 million in the second quarter, also announced a major reorganization yesterday that will change the way the company presents itself to the marketplace.

The Hunt Valley-based company said the restructuring accounted for about 40 percent of the loss it posted in the quarter, which ended Feb. 28. The company's main problem, however, has been the recession, which has reduced demand (( for its environmental consulting and clean-up services.

"They need more help than the economy has been able to give them," said Hugh F. Holman, an analyst with Alex. Brown & Sons.

He said EA Engineering has been hurt because its clients are delaying environmental clean-up projects. Further, short-staffed enforcement agencies are not pushing for polluted sites to be corrected, he said. "There is a laxer regulatory climate now," he said.

EA Engineering lost 56 cents a share, in contrast to a profit of $127,000, or 5 cents a share, in the comparable 1991 period. The company's revenue for the quarter was $10.8 million, down 3 percent from last year's level of $11.1 million.

Contributing to the loss were sharply higher expenses stemming from recently expanded and upgraded laboratory facilities and higher interest costs, said Edward V. Lower, president and chief executive.

In an effort to halt losses, the company announced a restructuring that includes the sale of one of its Baltimore divisions.

EA Engineering said it sold its Building Systems Group, formerly associated with the EA Mueller Division, to a group of employees and investors for an undisclosed price. The division, which makes building systems, employs about 40 people and has not been profitable because of slumps in the real estate market.

Company spokesman Joseph A. Spadaro said the division was sold because it was unprofitable and did not fit the corporation's strategy.

The company also said it has restructured its operations into national businesses represented by major service categories and has downsized its corporate offices. In recent months, it has jTC laid off about 30 people, including 10 in Baltimore. EA Engineering employs about 700 people in 15 states. Mr. Spadaro said no more layoffs are expected.

&Three months ended 02/28/92

.. .. .. .. Revenue .. .. .. Net .. .. .. Share

'92 . .. .10,800,000. ..(1,380,000). ..(0.56)

'91 . .. .11,100,000. .. ..127,000.. ...0.05

% change .. .. .. 3.0. .. .. .. . NA.. .. .. NA

Six months ended 02/28/92

.. .. .. .. Revenue .. .. .. Net .. .. .. Share

'92 . .. .22,800,000. ..(1,340,000). ..(0.54)

'91 . .. . 22,000,000. .. ..219,000.. ...0.09

change .. .. . +3.6. .. .. .. . NA.. .. .. NA

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