EEI 2017 Form 10-K

Table of Contents PARTI Item 1. Business References in this Annual Report on Form 10-K (the “Annual Report”) to “EEI” refer to Ecology and Environment, Inc., a New York corporation. References to “the Company,” “we,” “us,” “our,” or similar terms refer to EEI together with its consolidated subsidiaries. Organization and Background EEI was incorporated in February 1970 as a global broad-based environmental consulting firm with an underlying philosophy to provide professional services worldwide so that sustainable economic and human development may proceed with acceptable impact on the environment. Together with its subsidiaries, EEI has direct and indirect ownership in 8 active wholly-owned and majority-owned operating subsidiaries in 5 countries. Our staff is comprised of individuals representing numerous scientific, engineering, health, and social disciplines working together in multidisciplinary teams to provide innovative environmental solutions. Our consolidated group of companies have completed thousands of projects for a wide variety of clients including some of the most iconic, high-profile projects in the world. Our revenues originate from federal, state and local governments in the United States, domestic private clients in the United States, and private and governmental international clients. Fiscal Year 2017 Operations Overview Consolidated net income attributable to EEI (“net income”) was $3.0 million for the fiscal year ended July 31, 2017, a more than threefold increase from $0.9 million in the prior fiscal year. Earnings per share increased to $0.70 for fiscal year 2017, from $0.21 for the prior year. Selected financial information by business segment is summarized in the following table. Fiscal Year Ended July 31, 2017 2016 2015 (in thousands) EEI and its subsidiaries located in the United States: Revenue, net $ 82,094 $ 83,095 $ 88,715 Net revenue less subcontract costs (1) 69,104 69,724 73,264 Direct operating expenses (2) 29,579 30,363 32,278 Indirect operating expenses (3) 32,021 34,130 35,602 Income before income tax provision 5,831 4,652 4,592 Net income attributable to EEI 3,803 2,026 1,039 Subsidiaries located in South America: Revenue, net 22,408 22,722 38,220 Net revenue less subcontract costs 17,019 17,543 30,344 Direct operating expenses 8,755 8,549 15,214 Indirect operating expenses 8,785 8,845 10,288 Income (loss) before income tax provision (391) (189) 4,444 Net income (loss) attributable to EEI (773) (1,081) 2,988 Other foreign subsidiaries: Revenue, net --- --- --- Net revenue less subcontract costs --- --- --- Direct operating expenses --- --- 8 Indirect operating expenses 15 95 1,147 Income (loss) before income tax provision (15) (96) (1,067) Net income (loss) attributable to EEI (15) (59) (631) (1) Net revenue less subcontract costs represents the net of revenue, net, and subcontract costs from the consolidated statements of operations. (2) Direct operating expenses consist of cost of professional services and other direct operating expenses from the consolidated statements of operations. (3) Indirect operating expenses consist of administrative and indirect operating expenses and marketing and related costs from the consolidated statements of operations. 4