EA Engineering, Science and Technology Inc., a Hunt Valley environmental services company, said yesterday that its earnings jumped 48.2 percent in its fiscal first quarter as the company continued its strategy of courting Pentagon work and cutting costs.
For the quarter ended Nov. 30, EA Engineering had net income of $720,000, or 12 cents a share, compared with earnings of $485,900, or 8 cents a share, a year earlier. Sales increased to $18 million in the recent period compared with $16.1 million last year.
The company's success is also reflected in its backlog of work, which has ballooned to a record $496 million, more than double the $233 million of backlog reported a year ago. About 60 percent of that work is federal contracts, primarily stemming from the Defense Department's base-closing efforts.
"It's a very strong quarter," said James D. McDonald, senior vice president of the Chicago Corp., a regional stock brokerage firm. "It's evidence of the company's strong management and good position in the environmental market."
The company's stock closed yesterday unchanged at $8.75 a share. EA Engineering's stock had risen to a high of $12.50 on July 14, adjusted for a 3-for-2 stock split earlier this year, from less than $2 a share in August 1992.
EA Engineering, which specializes in environmental assessments and cleanup efforts, has heavily targeted federal contracts since the mid-1980s.
Those efforts are beginning to pay off, said Joseph A. Spadaro, EA's executive vice president and chief financial officer.
"It's a matter of getting into the government work and gaining their confidence," he said.
But private work continues to be "sluggish," he said, "primarily due to the lack of enforcement of federal and state [environmental] legislation."
Mr. McDonald particularly credited the company for its pursuit of Defense Department contracts and its ability to hold down expenses. "Basically, they are running the ship tighter and tighter every quarter," he said.
In the past few years, EA Engineering has laid off 100 workers, switched to less expensive offices in its 22 locations and cut travel costs by negotiating rates with hotels and having company travelers stay over on Saturday nights, Mr. Spadaro said.
Although the company's workforce has grown by 300 people to 800 since the layoff, a higher percentage of these employees are professionals whose work is directly billed to customers as opposed to administrative personnel, he said.
Workers also are rewarded with quarterly bonuses if they meet profit targets, Mr. Spadaro said.