In a struggle with the founder over the laying off of senior executives, Edward V. Lower has been removed as president and chief operating officer of the EA Engineering, Science and Technology Inc.
Mr. Lower, a former Union Carbide Corp. executive who helped redirect the company's efforts for four years, left the Hunt Valley environmental reclamation company Monday because of a clash with Loren D. Jensen over the need for substantial personnel cuts that included top executives.
Mr. Jensen is chairman, chief executive officer and the founder.
"Ted and I developed some strong differences of opinion," Mr. Jensen said yesterday.
"Some of the people that he felt he didn't want to let go, I was pretty adamant that they had to go, because of their cost in salary," he said. "We decided that a parting of the ways was better than the stress."
Efforts to contact Mr. Lower were unsuccessful.
The company's stock yesterday dropped 62.5 cents, to close at $4.50 a share.
Since late August, the 22-year-old company has been reorganized into three main operating groups and 35 people have been laid off, reducing its work force to 815 at the Hunt Valley operation and several offices nationwide.
The cuts, which are expected to save the company $2.5 million a year, included Richard J. Shearer, senior vice president for remediation, and Charles Roberts, vice president for business development, whose jobs were made redundant by the organizational shift, Mr. Jensen said.
"We have not had reductions involving two vice presidents ever before," he said. "We just accumulated an awful lot of people that we decided we could make do without to improve our competitive posture."
The personnel actions were taken because of the increased competition in the environmental services business and the Republican takeover of Congress, which has led to relaxed enforcement of environmental regulations.
"Our industry is really under attack," Mr. Jensen explained. "We have a sharpened and intense competitiveness these days that is really eroding the hell out of prices."
These problems were driven home when the company recently reported that earnings for its fiscal fourth quarter, which ended Aug. 31, had dropped 50.5 percent to $350,000, or 6 cents a share, compared with $616,000, or 10 cents a share, for the same period a year ago.
However, for the 12 months ended Aug. 31, net income was up 22.2 percent, to $2.2 million, or 36 cents per share, compared with $1.8 million, or 30 cents a share, for the previous fiscal year. Sales for the year rose 13.7 percent, to $72.5 million from $63.7 million.
Despite its problems, the company's backlog of work remains strong at $461 million.
"The challenge is converting that backlog into revenue in a profitable manner," said Frank A. Latuda, a research analyst for Burns Pauli Mahoney Co., a St. Louis investment banking firm.