10-Q 1 q103_6114.txt THIRD QUARTER ENDED APRIL 28, 2001 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act in 1934 For Quarter Ended April 28, 2001 Commission File #1-9065 ECOLOGY AND ENVIRONMENT, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) New York 16-0971022 ---------------------------- ------------------------------------ (State or other jurisdiction (I.R.S. Employer Identification No.) organization) 368 Pleasant View Drive Lancaster, New York 14086 ---------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: 716-684-8060 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- At June 2, 2001, 2,356,903 shares of Registrant's Class A Common Stock (par value $.01) and 1,742,371 shares of Class B Common Stock (par value $.01 were outstanding.
Ecology and Environment, Inc. Consolidated Balance Sheet April 28, July 31, 2001 2000 (Unaudited) ------------ ------------ Assets ------ Current assets: Cash and cash equivalents $ 5,908,730 $ 4,997,771 Investment securities available for sale 3,548,373 3,436,207 Contract receivables, net 21,520,544 24,178,191 Deferred income taxes 1,755,454 1,932,774 Income taxes receivable 545,089 26,081 Other current assets 976,370 1,185,086 ------------ ----------- Total current assets 34,254,560 35,756,110 Property, building and equipment, net 16,748,095 15,983,806 Deferred income taxes 152,247 152,247 Other assets 1,608,586 1,556,702 ------------- ------------ Total assets $52,763,488 $53,448,865 ============= ============ Liabilities and Shareholders' Equity ------------------------------------ Current liabilities: Accounts payable $ 3,313,156 $ 4,374,040 Accrued payroll costs 3,484,602 3,570,026 Other accrued liabilities 2,106,149 3,098,321 ------------ ------------ Total current liabilities 8,903,907 11,042,387 Income tax payable 378,402 --- Long-term debt 50,310 58,217 Minority interest 355,392 12,666 Shareholders' equity: Preferred stock, par value $.01 per share authorized - 2,000,000 shares; no shares issued --- --- Class A common stock, par value $.01 per share; authorized - 6,000,000 shares; issued - 2,401,659 and 2,392,709 shares 24,016 23,926 Class B common stock, par value $.01 per share; authorized - 10,000,000 shares issued - 1,768,630 and 1,777,580 shares 17,682 17,772 Capital in excess of par value 17,253,828 17,466,436 Retained earnings 26,540,588 25,906,540 Unearned compensation (428,499) --- Treasury stock - Class A Common, 41,773 and 129,410 shares; Class B common, 26,259 and 26,259 shares, at cost (332,138) (1,079,079) ------------ ------------ Total shareholders' equity 43,075,477 42,335,595 ------------ ------------ Total liabilities and shareholders' equity $52,763,488 $53,448,865 ============ ============ The accompanying notes are an integral part of these financial statements.
Ecology and Environment, Inc. Consolidate Statement of Income (Unaudited) Three months ended Nine months ended -------------------------- --------------------------- April 28, April 29, April 28, April 29, 2001 2000 2001 2000 ------------ ------------- ------------ ------------ Gross revenues $19,884,185 $21,066,282 $66,093,102 $61,763,014 Less: direct subcontract costs 2,876,606 3,730,578 10,715,410 11,166,433 ------------ ------------ ------------ ------------ Net revenues 17,007,579 17,335,704 55,377,692 50,596,581 Operating costs and expenses: Cost of professional services and other direct operating expenses 8,322,903 10,318,230 29,444,258 29,773,208 Administrative and indirect operating expenses 5,898,934 4,538,847 16,897,218 12,839,457 Marketing and related costs 1,848,314 1,941,612 5,581,193 6,175,820 Depreciation 283,288 294,472 925,753 994,141 ------------ ------------ ------------ ------------ Total operating costs & expenses 16,353,439 17,093,161 52,848,422 49,782,626 ------------ ------------ ------------ ------------ Income from operations 654,140 242,543 2,529,270 813,955 Interest expense (24,378) (12,734) (108,394) (51,227) Interest income 97,576 81,612 388,826 344,186 Net foreign currency exchange loss (5,007) (7,576) (8,944) (15,423) ------------ ------------ ------------ ------------ Income before income taxes and minority interest 722,331 303,845 2,800,758 1,091,491 Total income tax provision 361,895 128,575 1,166,872 495,839 ------------ ------------ ------------ ------------ Net income before minority interest 360,436 175,270 1,633,886 595,652 Minority interest (115,720) 3,745 (342,726) (19,947) ============ ============ ============ ============ Net income $ 244,716 $ 179,015 $ 1,291,160 $ 575,705 ============ ============ ============ ============ Net income per common share: Basic and Diluted $ 0.06 $ 0.05 $ $0.31 $0.15 ============ ============ ============ ============ Weighted average common shares outstanding: Basic 4,103,673 3,966,282 4,105,634 3,966,282 ============ ============ ============ ============ Diluted 4,103,673 3,966,282 4,105,634 3,966,282 ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements.
Ecology and Environment, Inc. Consolidated Statement of Cash Flows (Unaudited) Nine months ended ------------------------------ April 28, April 29, 2001 2000 ------------ ------------ Cash flows from operating activities: Net income $ 1,291,160 $ 575,705 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 925,753 994,141 Amortization 105,834 --- Gain on disposition of property and equipment 4,600 12,702 Minority interest 342,726 (191,704) Provision for contract adjustments 381,530 529,657 (Increase) decrease in: - contracts receivable, net 2,276,117 2,806,807 - other current assets 208,716 (868,556) - income taxes receivable (341,688) 81,247 - other non-current assets (51,884) (228,166) Increase (decrease) in: - accounts payable (1,060,884) (1,103,219) - accrued payroll costs (85,424) 1,479,100 - other accrued liabilities (992,172) (1,367,834) - income taxes payable 378,402 --- ----------- ----------- Net cash provided by operating activities 3,382,786 2,719,880 ----------- ----------- Cash flows used in investing activities: Purchase of property, building and equipment, net (821,230) (1,479,909) Proceeds from sale of assets (873,414) (498,309) Payment for the purchase of bond (112,165) (120,455) Proceeds from maturity of notes --- 500,658 Proceeds from sale of investment securities --- 1,675,000 ----------- ----------- Net cash provided by (used in)investing activities (1,806,809) 76,985 ----------- ----------- Cash flows used in financing activities: Dividends paid (657,111) (634,539) Repayment of long-term debt (7,907) (515,625) ----------- ----------- Net decrease in cash and cash equivalents (665,018) (1,150,164) ----------- ----------- Net increase in cash and cash equivalents 910,959 1,646,701 Cash and cash equivalents at beginning of period 4,997,771 5,209,882 ----------- ----------- Cash and cash equivalents at end of period $5,908,730 $6,856,583 =========== =========== The accompanying notes are an integral part of these financial statements.
Ecology and Environment, Inc. Consolidated Statement of Changes in Shareholders' Equity Class A Class B Capital in Common Stock Common Stock excess of Retained Treasury stock Shares Amount Shares Amount par value earnings Shares Amount ------------------ ------------------- ------------ ------------ -------- ------------ Balance at July 31, 1998 2,364,302 $23,642 1,805,987 $18,056 $17,591,436 $27,424,660 209,569 $(1,557,906) ========= ======= ========== ======== ============ ============ ======== ============ Net income --- $ --- --- $ --- --- $ 299,470 --- $ --- Cash dividends paid ($.32 per share) --- --- --- --- --- (1,268,598) --- --- Conversion of Class B common stock to Class A common stock 11,000 110 (11,000) (110) --- --- --- --- Unrealized investment loss, net --- --- --- --- --- (43,024) --- --- Repurchase of Class A common stock --- --- --- --- --- --- 2,500 (13,458) Issuance of stock under stock award plan --- --- --- --- --- --- (8,750) 67,285 --------- ------- ---------- -------- ------------ ------------ -------- ------------ Balance at July 31, 1999 2,375,302 $23,752 1,794,987 $17,946 $17,591,436 $26,412,508 203,319 $(1,504,079) Net income --- $ --- --- $ --- $ --- $ 779,016 --- $ --- Cash dividends paid ($.32 per share) --- --- --- --- --- (1,276,958) --- --- Conversion of Class B common stock to Class A common stock 17,407 174 (17,407) (174) --- --- --- --- Unrealized investment loss, net --- --- --- --- --- (8,026) --- --- Repurchase of Class A common stock --- --- --- --- --- --- 2,350 --- Issuance of stock under stock award plan --- --- --- --- --- --- --- --- Purchase of Walsh Environmental --- --- --- --- (125,000) --- (50,000) 425,000 --------- ------- ---------- -------- ------------ ------------ -------- ------------ Balance at July 31, 2000 2,392,709 $23,926 1,777,580 $17,772 $17,466,436 $25,906,540 155,669 $(1,079,079) ========= ======= ========== ======== ============ ============ ======== ============ Net income --- $ --- --- $ --- $ --- $ 1,291,160 --- --- Cash dividends paid ($.32 per share) --- --- --- --- --- (657,112) --- --- Conversion of Class B common stock to Class A common stock 8,950 90 (8,950) (90) --- --- --- --- Repurchase of Class A common stock --- --- --- --- --- --- 4,702 --- Issuance of stock under stock award plan --- --- --- --- (212,608) --- (92,339) $ 746,941 --------- ------- ---------- -------- ------------ ------------ -------- ------------ Balance at April 28, 2001 (Unaudited) 2,401,659 $24,016 1,768,630 $17,682 $17,253,828 $26,540,588 68,032 $ (332,138) ========= ======= ========== ======== ============ ============ ======== ============ The accompanying notes are an integral part of these financial statements.
ECOLOGY AND ENVIRONMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of significant accounting principles a. Consolidation ------------- The consolidated financial statements include the accounts of the Company and its wholly-owned and majority owned subsidiaries. Also reflected in the financial statements are the Company's 66-2/3% ownership in the assets of a nonoperating subsidiary, Ecology and Environment of Saudi Arabia Ltd. (EESAL), and a 50% ownership in two Chinese operating joint ventures, Beijing Yi Yi Ecology and Engineering Co. Ltd. and The Tianjin Green Engineering Company. These joint ventures are accounted for under the equity method. All significant intercompany transactions and balances have been eliminated. Certain amounts in the prior years' consolidated financial statements and notes have been reclassified to conform with the current year presentation. The consolidated balance sheet at April 28, 2001 and the accompanying consolidated statements of income, cash flows, and of changes in shareholders' equity are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. The accompanying financial statements should be reviewed in conjunction with the Company's fiscal year ended July 31, 2000 audited financial statements. b. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. c. Revenue Recognition ------------------- Substantial amounts of the Company's revenues are derived from cost-plus-fixed fee contracts using the percentage of completion method based on costs incurred plus the fee earned. The fees under certain government contracts are determined in accordance with performance. Such awards are recognized at the time the amounts can be reasonably determined. Provisions for estimated contract adjustments relating to cost based contracts have been deducted from gross revenues in the accompanying consolidated statement of income. These provisions are estimated and accrued annually based on goverment sales volume. Such adjustments typically arise as a result of interpretations of cost allowability under cost based contracts. Revenues related to long-term government contracts are subject to audit by an agency of the United States government. Government audits have been completed through fiscal year 1993 and are currently in process for fiscal years 1994 through 1995. The majority of the balance in the allowance for contract adjustments accounts represents a reserve against possible adjustments for fiscal years 1992 through 2000. d. Income Taxes ------------ The Company follows the asset and liability approach to account for income taxes. This approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Although realization is not assured, management believes it is more likely than not that the recorded net deferred tax assets will be realized. Since in some cases management has utilized estimates, the amount of the net deferred tax asset considered realizable could be reduced in the near term. No provision has been made for United States income taxes applicable to undistributed earnings of foreign subsidiaries as it is the intention of the Company to indefinitely reinvest those earnings in the operations of those entities. 2. Contract Receivables, Net ------------------------- Contract receivables are comprised of: April 28, July 31, 2001 2000 ------------ ------------ United States government Billed $ 5,154,924 $ 6,404,394 Unbilled 2,964,296 4,086,931 ------------ ------------ 8,119,220 10,491,325 ------------ ------------ Industrial customers and state and municipal governments Billed 11,957,529 11,179,092 Unbilled 3,379,422 4,166,371 ------------ ------------ 15,336,951 15,345,463 ------------ ------------ Less allowance for contract adjustments (1,935,627) (1,658,597) ------------ ------------ $21,520,544 $24,178,191 ============ ============ United States government receivables arise from long-term U.S. government prime contracts and subcontracts. Unbilled receivables result from revenues which have been earned, but are not billed as of period-end. The above unbilled balances are comprised of incurred costs plus fees not yet processed and billed; and differences between year-to-date provisional billings and year-to-date actual contract costs incurred and fees earned of approximately ($64,000) at April 28, 2001 and ($403,000) at July 31, 2000. Unbilled contracts receivable are reduced by billings in excess of costs incurred of $409,000 at April 28, 2001 and $920,000 at July 31, 2000. Within the above billed balances are contractual retainages in the amount of approximately $844,000 at April 28, 2001 and $1,148,000 at July 31, 2000. Included in other accrued liabilities is an additional allowance for contract adjust- ments relating to potential cost disallowances on amounts billed and collected in current and prior years' projects of aproximately $2,031,000 at April 28, 2001 and $2,031,000 at July 31, 2000. An allowance for contract adjustments is recorded for contract disputes and government audits when the amounts are determinable. 3. Earnings Per Share ------------------- Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. 4. Segment Reporting ----------------- Ecology and Environment, Inc. has three reportable segments: consulting services, analytical laboratory services, and aquaculture. The consulting services segment provides broad based environmental services encompassing audits and impact assessments, surveys, air and water quality management, environmental engineering, environmental infrastruc- ture planning, and industrial hygiene and occupational health studies to a world wide base of customers. The analytical laboratory provides analytical testing services to industrial and governmental clients for the analysis of waste, soil and sediment samples. The shrimp aquaculture facility, located in Costa Rica, was purchased on July 30, 1999. This facility produces shrimp grown in a controlled environment for markets worldwide. The Company evaluates segment performance and allocates resources based on operating profit before interest income/expense and income taxes. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intercompany sales from the analytical services segment to the consulting segment are recorded at market selling price, intercompany profits are eliminated. The Company's reportable segments are separate and distinct business units that offer different products. Consulting services are sold on the basis of time charges while analytical services and aquaculture products are sold on the basis of product unit prices. Reportable segments for the nine months ended April 28, 2001 are as follows:
Consulting Analytical Aquaculture Elimination Total ----------- ----------- ----------- ------------ ------------ Net revenues from external customers $52,528,453 $ 2,832,760 $ 16,479 $ $55,377,692 Intersegment net revenues 1,507,068 --- --- (1,507,068) --- ----------- ----------- ----------- ------------ ------------ Total consolidated net revenues $54,035,521 $2,832,760 $ 16,479 $(1,507,068) $55,377,692 =========== ========== =========== ============ ============ Depreciation expense $ 616,431 $ 267,803 $ 41,519 $ --- $ 925,753 Segment profit (loss) 4,221,012 (626,880) (793,374) --- 2,800,758 Segment Assets 39,977,488 6,660,000 6,126,000 --- 52,763,488 Expenditures for long-lived assets 521,821 192,653 1,074,159 --- 1,788,633 Geographic Information:
Net Long-lived Revenues (1) Assets ------------- ------------ United States $48,988,692 $35,716,023 Foreign countries 6,389,000 5,355,000 (1) Net revenues are attributed to countries based on the location of the customers. Reportable segment data for the nine months ended April 29, 2000 are as follows:
Consulting Analytical Aquaculture Elimination Total ----------- ----------- ----------- ------------ ----------- Net revenues from external customers $46,936,782 $3,267,837 $ 391,962 $ --- $50,596,581 Intersegment revenues 1,195,217 --- --- (1,195,217) --- ----------- ---------- ----------- ------------ ----------- Total consolidated net revenues $48,131,999 $3,267,837 $ 391,962 $(1,195,217) $50,596,581 =========== =========== =========== ============ =========== Depreciation expense $ 671,078 $ 267,196 $ 55,867 $ --- $ 994,141 Segment profit (loss) 1,491,303 (563,947) (113,401) --- 813,955 Segment Assets 40,003,155 6,745,000 4,188,464 --- 50,936,619 Expenditures for long-lived assets 419,815 174,714 1,438,469 --- 2,032,998
Geographic Information: Net Long-lived Revenues (1) Assets ------------ ------------ United States $46,555,581 $33,840,216 Foreign countries $4,041,000 $3,708,751 (1) Net revenues are attributed to countries based on the location of the customers. 5. Acquisitions ------------ In September 1999 the Company, through it's Chilean subsidiary, acquired a 50.1% stake in Gestion Ambiental Consultores, (GAC), a Chilean environ- mental consulting firm for a cash payment of $400,000. GAC has expertise in mining, steel manufacturing and energy resources. In February 2000, the Company purchased the remaining 10% interest in its shrimp aquaculture facility for a purchase price of $263,000. In June 2000, the Company purchased a 60% share of the assets of Walsh Environmental Scientists and Engineers LLC, Walsh of Boulder, Colorado for a purchase price of $700,000 cash and $300,000 in Class A common stock. An additional $500,000 in cash was contributed by the Company for working capital. The working capital contribution was used to pay down short and long term debt and will provide capital for future growth. Walsh of Boulder provides environmental services to clients in the Rocky Mountain region as well as Peru, through it's Peruvian subsidiary. These acquisitions have been accounted for under the purchase method with the results of operations from the respective acquisition dates. The aggregate excess of the purchase prices of these acquisitions over the fair market values of the net assets of the acquired companies is being amortized over a range of 15-20 years from the acquisition dates using the straight-line method. The following information presents the pro forma consolidated results of operations as if the acquisitions had occurred on August 1, 1999. The proforma amounts may not be indicative of the results that actually would have been achieved had the acquisitions occurred as of August 1, 1999 and are not necessarily indicative of future results. Nine months ended April 29, 2000 (000's of $) (Unaudited) ------------------- Net sales $53,987 Income before taxes 1,197 Net income 660 Net income per share $.17 6. Stock Award Plan ---------------- Effective March 16, 1998, the Company adopted the Ecology and Environment, Inc. 1998 Stock Award Plan (the "Award Plan") under which key employees (including officers) of the Company or any of its present or future subsidiaries may be designated to receive awards of Class A common stock of the Company as a bonus for services rendered to the Company or its subsidiaries, without payment therefore, based upon the fair market value of the common stock at the time of the award. The Company originally reserved for issuance as awards under the Award Plan aggregate of 12,000 shares of Class A Common stock of the Company, which shall be solely treasury shares. Since then, the Company has increased the number of reserved shares to 112,000. In the first quarter of fiscal year 2001, the Company issued 92,339 shares at an average fair value of $6.19 per share. In Fiscal Year 2000 no shares were issued. In Fiscal Year 1999, 8,750 shares were issued at a weighted average fair value of $7.69 per share. In Fiscal Year 1998, awards for 11,090 shares of Class A common stock had been granted at a weighted average fair value of $9.81 per share. The Company estimates that if they elected to measure compensation cost for employee stock based compensation arrangements under SFAS No. 123 it would not have caused net income and earnings per share for the first quarters of fiscal years 2001 and 2000 to be materially different from their reported amounts. PART 1 - ITEM 2 ---------------------- Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition ------------------- At April 28, 2001 the Company had a working capital balance of $25.4 million, a $.6 million increase from the balance at July 31, 2000. Cash and cash equivalents increased $1 million primarily as a result of a $2.7 million decrease in contracts receivable. The decrease in contracts receivables was primarily a result of increased efforts to speed collections of outstanding invoices along with increased billing efforts. The Company maintains an unsecured line of credit of $10.0 million with a bank at 1/2% below the prevailing prime rate. There are no borrowings outstanding under this line of credit at April 28, 2001 and none were required during the third quarter of fiscal year 2001. The Company has historically financed its activities through cash flows from operations. Internally generated funds have been adequate to support the demands for working capital, the purchase of new fixed assets and investment securities and the payment of dividends. There are no significant working capital requirements pending at April 28, 2001. The Company's existing cash along with that generated by future operations and the existing credit line is expected to be sufficient to meet the Company's needs for the foreseeable future. Results of Operations --------------------- Net Revenue ----------- Net revenues for the third quarter of fiscal year 2001 were $17.0 million, down 2% from the $17.3 million reported in fiscal year 2000. The decrease in net revenues was attributable to the completion of 5 major contracts with the U.S. Environmental Protection Agency (USEPA). These contracts were substantially complete by December 2000 with some phase down revenues extending into April 2001. The completion of these contracts resulted in a $3.4 million decrease in the related cost of professional services and other direct operating expenses during the quarter. Administrative and indirect operating expenses increased $1.4 million due to the transition of the staff retained by the Company onto other corporate projects and the subsequent closing or downsizing of several project offices. Offsetting this decrease in work from the USEPA was increased revenues from the Company's international clients and the United States Department of Defense (DOD). In particular, the Company experienced a 122% increase in net revenues from various international clients and a 41% increase from DOD clients. The increased net revenue from the DOD was due to continued aggressive marketing of new work under DOD task order contracts. The consolidation of Walsh Environmental also had a positive effect on the Company's net revenue. Acquired late in fiscal year 2000, Walsh Environmental added $4.3 million in net revenue through the first three quarters of fiscal year 2001. Net revenues for the third quarter of fiscal year 2000 were $17.3 million, up $.5 million or 3% from the $16.8 million reported for the third quarter of fiscal year 1999. The increase in net revenues was attributable to increases in revenues from the Company's contracts with the DOD as well as increased net revenues from private commercial clients in the telecommunications and energy sector. Income Before Income Taxes and Minority Interest ------------------------------------------------ The Company's income before income taxes and minority interest for the third quarter of fiscal year 2001 was $722,000, up 138% from the $304,000 reported in the third quarter of fiscal year 2000. Income before income taxes and minority interest was positively impacted by the company-wide cost reduction measures which increased both margins and efficiencies, and an increase in higher margin work from both commercial and international contracts. Walsh Environmental and E & E do Brasil, two of the Company's subsidiaries, also had a positive impact on income. For fiscal year 2001, their income before income taxes and minority interest was $492,000 and $396,000 respectively, compared to $0 and $41,000 for fiscal year 2000. The Company overall achieved significantly improved results for the first three quarters of the year despite a net loss of $524,000 from its Costa Rica based shrimp farm subsidiary. As of April 28, 2001 the Shrimp Farm operation remained in limited production as additional steps were needed to evaluate the clean up of the viral disease that had hit the farm in the fourth quarter of last year. The farm is continuing to restock and should have a limited harvest by the end of the fourth quarter. The Company's income before income taxes and minority interest for the third quarter of fiscal year 2000 was $304,000, up 747% from the $47,000 loss reported in the third quarter of fiscal year 1999. The increase was due to improved operating margins and significant improvements in the Company's Analytical Service Center operation. The Company's new laboratory information handling system installed in fiscal year 1999 as well as reduced operating costs in the ASC have resulted in efficiency gains throughout the ASC. Despite flat revenues, the ASC operating losses were reduced by more than 63% compared to the prior year. Interest income declined $153,000 as a result of the Company's investments in aquaculture and the purchase of a controlling interest in a Chilean company. PART II - OTHER INFORMATION --------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of l934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ECOLOGY AND ENVIRONMENT, INC. Date: June 12, 2001 By: RONALD L. FRANK ---------------------------- RONALD L. FRANK EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL ACCOUNTING OFFICER