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EA eyes possible sale of firm

THE BALTIMORE SUN

EA Engineering, Science and Technology Inc. said yesterday that it is exploring "strategic alternatives" - including a sale of the company - to boost its stock price.

The troubled Hunt Valley-based environmental consulting company hired Legg Mason Wood Walker Inc. and Colorado-based Techknowledgey Strategic Group to help explore its options. Neither firm returned calls seeking comment yesterday.

EA Engineering has had its share of setbacks this year. In June, it was forced to restate earnings for 1998 and 1999 after its auditors discovered an employee had booked revenue for which the company hadn't yet billed. That employee no longer works there.

The restatement added up to a loss of $1.53 million for fiscal year 1999, vs. the originally reported loss of $1.47 million. EA's third-quarter earnings, for the three months that ended May 31, also painted a grim picture: It posted $37,900 in net profit, compared with $263,000 for the comparable period last year. At the time, the company blamed its financial woes on the restatement.

But yesterday, company spokeswoman Melissa Kunkel said the restatements have nothing to do with the latest announcement. "The board and management's decision is related to the fact that the stock is trading at below book value," she said.

Shares of EA Engineering gained 25 cents yesterday to close at $1.2188.

EA Engineering, one of the few publicly traded environmental consulting firms, helps its customers comply with federal environmental regulations and manage natural resources.

It recently won a contract from Baltimore worth up to $500,000 to assist the city in upgrading water treatment plants and addressing air quality issues.

Kunkel said the company's regional businesses are "operating well" and a sale is just one of the options under consideration.

James Janesky, a senior research analyst at Banc of America Securities in San Francisco, said there's no mystery in the "strategic alternatives" announcement. "That means they're up for sale," he said.

EA Engineering - with a market capitalization of $7.5 million - is a bit player compared with the likes of Tetra Tech Inc., an EA Engineering competitor with a market capitalization of $1.069 billion.

Shares of Tetra Tech, which Janesky follows, closed yesterday at $26.9375. EA Engineering's shares, in contrast, have hovered around $1 for most of the year after hitting a 52-week high of $2.25 in February.

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