UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549
                                  ------------

                                    Form 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
      ACT OF 1934.

                    For the fiscal year ended August 31, 2000

[    ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934.

        For the transition period from _______________ to _______________

                         Commission File Number 0-15587

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
                  ---------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

               Delaware                           52-0991911
             ------------                        ------------
      (State or Other Jurisdiction              (I.R.S. Employer
     of Incorporation or Organization)          Identification No.)

                11019 McCormick Road, Hunt Valley, Maryland 21031
                -------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number Including Area Code: (410) 584-7000

        Securities registered pursuant to Section 12(b) of the Act: NONE

    Securities registered pursuant to Section 12(g) of the Act: Common Stock

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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  of the  Registrant  as of November  13,  2000 was  approximately
$3,670,000.

The number of shares outstanding of the Registrant's Common Stock as of November
13, 2000 was 5,990,148.

                       DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the 2000 Annual  Report to  Stockholders  are  incorporated  by
   reference in Part II of this Report.


<PAGE>

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.

                                    FORM 10-K

                                TABLE OF CONTENTS

  Item                                                                     Page
  ----                                                                     ----

                                     PART I

   1     Business                                                            1
   2     Properties                                                          8
   3     Legal Proceedings                                                   8
   4     Submission of Matters to a Vote of Security Holders                 8

                                     PART II

   5     Market for the Registrant's Common Stock and Related Shareholder

            Matters                                                          9
   6     Selected Financial Data                                            10
   7     Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                           11
   8     Financial Statements and Supplementary Data                        15
   9     Disagreements on Accounting and Financial Disclosure               30

                                    PART III

 10      Directors and Executive Officers of the Registrant                 31
 11      Executive Compensation                                             32
 12      Security Ownership of Certain Beneficial Owners and Management     36
 13      Certain Relationships and Related Transactions                     37

                                     PART IV

 14      Exhibits, Financial Statement Schedules, and Reports on Form 8-K   38
         Signatures                                                         42
         Exhibit Index                                                      43



<PAGE>

                                     PART I

ITEM 1.       BUSINESS

General

EA Engineering,  Science,  and Technology,  Inc., together with its wholly owned
subsidiaries  ("EA" or the "Company") is a global  consulting firm that provides
integrated  solutions to environmental,  safety, and health issues.  Through its
network of more than 20 regional and satellite offices, EA provides  scientific,
engineering,  technology,  and management solutions to federal, state, and local
government, industrial and other private sector utility clients. The goal of the
Company  is  to  help  management  in  industry  and  government  improve  their
performance and achieve their business and organizational objectives.

EA's  organizational  structure consists of the parent company,  EA Engineering,
Science, and Technology, Inc.; its wholly-owned subsidiaries,  EA International,
Inc. and EA Financial,  Inc.; and EA Financial's wholly-owned  subsidiaries,  EA
Global, Inc. and EA de Mexico, S.A. de C.V.

The Company was founded and initially  incorporated in Maryland in 1973; after a
name change, the Company was subsequently  incorporated in Delaware in 1986. The
Company was initially engaged in environmental assessment and permitting related
to power plant siting and expansion.  Since that time, the Company has responded
to market  conditions and  opportunities  by expanding its technical  expertise,
service  groups and client base.  EA provides its services  through a network of
offices located throughout the United States, Mexico and Guam.

Historically,  the demand for EA's services was driven largely by federal, state
and local environmental laws and regulations  impacting the Company's clients. A
great deal of cleanup  activity and  progress has been  generated as a result of
those laws and regulations.

In recent years,  as the regulatory  environment  and economic  conditions  have
changed,  the demand for the Company's services has been stimulated by new, more
business-oriented   factors,   including  the   recognition   that  it  is  more
cost-effective  to  prevent  pollution  than to  remediate  it after  discharge.
Further, market-based incentive programs have spawned a new approach to business
operations.  Within these  incentive  systems are a series of programs,  such as
emissions trading, Brownfields redevelopment, and wetlands banking, that provide
a benefit to clients and contribute to the overall  enhancement of environmental
quality. Additionally, many clients are implementing environmental strategy as a
method of increasing  global  competitiveness  and enhancing  profitability.  EA
believes  that  this  strategic   shift  will  stimulate   opportunity  for  its
business-oriented  consulting  services in both the domestic  and  international
markets.

In our role as an advocate and  strategic  resource to our clients,  EA provides
the management perspective and technical skills to anticipate, identify, address
and  resolve   environmental,   safety  and  health  issues  affecting  business
performance and profitability.

Accounting Irregularities

On February 4, 2000, the Company announced that during its normal review of aged
unbilled revenue, it had discovered accounting irregularities.  As a result, the
Audit Committee of the Board of Directors (the "Audit Committee") authorized its
Associate General Counsel to perform an independent  investigation (the "Company
Investigation")  into these  accounting  irregularities.  The Company's  counsel
immediately engaged a forensic audit team from  PricewaterhouseCoopers  LLP, the
Company's current auditors,  to assist in the Company  Investigation  into these
accounting irregularities.

On April 10, 2000,  the Company  announced  that the Company  Investigation  was
complete;  the results of which isolated the  restatements  to fiscal years 1999
and 1998 and the quarterly  periods in fiscal year 1998 through  February  2000.
The cumulative effect of the restatements reduced earnings on a pre-tax basis by
$1.4 million. In the same announcement, the Company advised that Arthur Andersen
LLP, who had served as the  Company's  auditors  through  August 31,  1999,  had
notified  the  Company  by  letter  that its  previously  filed  reports  on the
financial statements of the Company for the years ended August 31, 1999 and 1998
should   no   longer   be   relied    upon.    The   Company    then    retained
PricewaterhouseCoopers  LLP to conduct the financial  audit and to assist in the
restatement of earnings for the affected  accounting  periods.  The Company made
adjustments  to correct the  misapplication  of  generally  accepted  accounting
principles  resulting  in  improper  revenue  recognition.  This error  involved
recording fictitious revenue resulting from the actions of individual(s) who are
no longer employed by or associated  with the Company.  The Company has restated
its previously reported financial results for fiscal years ended August 31, 1999
and 1998 and the quarterly  financial  results for 1998,  1999 and the first two
quarters of Fiscal 2000.

The  restated  net loss for fiscal  year 1999  totaled  $1,530,400  or $0.24 per
diluted share. Additionally,  the restated net loss for fiscal year 1998 totaled
$240,100 or $0.04 per diluted share.  The Company had originally  reported a net
loss of  $1,473,600  or $0.23 per  diluted  share and net income of  $604,800 or
$0.10  per  diluted  share in fiscal  years  1999 and  1998,  respectively.  The
cumulative  after tax effect of the  restatement for the two affected years is a
total reduction in earnings of $901,700.

Services

EA integrates  science,  engineering,  and technology to provide solutions to it
clients' complex  environmental and health and safety issues affecting  business
performance  and  profitability.  EA's primary  areas of service  include  Water
Quality and Water Resources  Management,  Natural Resources and Risk Management,
Site Characterization and Remediation, In-Plant and Industrial Hygiene Services,
Solid Waste Management,  Information Technology and Data Management, Air Quality
and Energy Management, and Strategic Planning of Environmental Issues.

The multi-faceted nature of environmental problems requires an interdisciplinary
team  of  professionals  to  provide  integrated  solutions.   As  such,  strict
classification  by  service  type is not  practical  for  most of the  Company's
projects.  In providing its  services,  EA has  developed  certain  remedial and
analytical technologies,  planning and management services and processes for the
mitigation and control of environmental damage and risks. In addition, we assist
clients in responding to issues raised by regulatory agencies, community groups,
and "interested" organizations.  All of its service areas are part of vertically
integrated capabilities that the Company may offer its clients.

The  Company's  services  normally  are  performed  by  a  team  of  scientists,
engineers, and planners, and include a combination of the following:

 o    Consultation to determine the nature and scope of potential environmental,
      energy, or health and safety problems.

 o Development and implementation of solutions to identified issues.

 o    Economic analyses,  database development,  strategic and tactical planning
      of environmental and/or and health and safety programs.

 o    On-site sampling, monitoring, and measurement of discharges and emissions.
      o Evaluation  of  environmental  or human health risks.  o Preparation  of
      reports for regulatory agencies.

 o    Participation  and  representation  of clients  in public  and  regulatory
      hearings.

 o Engineering certification of design specifications.

 o    Design and  implementation  of remedial  action.  o Environmental  program
      management and outsourced support.

The  Company's  contracts  are  generally  undertaken  on a  time-and-materials,
fixed-price,  or  cost-plus-fixed-fee  basis.  Fixed-price contracts and certain
time-and-materials  and cost-plus contracts with upset limits require EA to bear
the risk of cost  overruns.  Most of the  Company's  contracts  provide that the
client may at any time cancel any portion of the work not yet performed.

<PAGE>

The following  table reflects the  approximate  percentage of  consolidated  net
revenue  derived by contract  type in each of the last three years ended  August
31, 2000:

<TABLE>
<CAPTION>

                                           Year Ended August 31,
  ------------------------ ---------------------------------------------------
                                 2000              1999             1998
  ------------------------ ------------------ ---------------- ---------------
<S>                        <C>                <C>              <C>
  Time-and-materials               37%               37%             33%
  Fixed-price                      47                41               48
  Cost-plus-fixed-fee              16                22               19
  ------------------------ ------------------ ---------------- ---------------
                                  100%              100%            100%
  ======================== ================== ================ ===============
</TABLE>

During  fiscal 2000,  the majority of the  Company's  work  continued to be from
fixed-price  and  time-and-materials  contracts.  The Company  believes that the
increasing  number of such contracts are in line with an industry trend in which
clients transfer cost overrun risk to the prime contractor who in turn transfers
the risk to its subcontractors, where applicable.

In general,  the Company's  contracts vary in length from one month to ten years
and require performance within the contractually  specified timeframe.  Although
the Company holds certain federal  contracts with options for longer  durations,
most of these contracts require annual renewals by the client.

Clients

EA provides services directly to government, industrial, and utility clients and
indirectly through work performed for architect/engineers, engineer/contractors,
law  firms and  financial  institutions.  The  Company's  goal is to assist  its
clients in achieving  their business and growth  objectives as  cost-effectively
and dependably as possible.

During fiscal 2000, the Company  provided  services to more than 475 industrial,
utility and government  clients  through more than 1,500 projects in the private
sector and 400 projects in the federal,  state,  and local  government  sectors.
Although more private sector projects were performed, the portion of net revenue
provided by the federal  government  was 52%, 54%, and 50% in fiscal years 2000,
1999, and 1998,  respectively.  The Company believes that the diversified mix of
business  revenue derived from each of its client sectors  (federal  government,
state and local  governments,  industry  and  utilities)  will help  ensure  its
continuing financial success.

Although a  significant  portion of net revenue was derived from agencies of the
federal  government,  the Company's  services are  performed for many  different
departments and in many different  regions of the country,  thereby reducing the
financial  risks  associated  with  delays  or  cancellation  of any  particular
contract. In management's opinion, the loss of any one of the Company's clients,
other  than a  major  government  client  within  its  major  revenue-generating
sectors, would not have a material effect on operations or profitability.

The following table reflects the  approximate  percentage of net revenue derived
from the  Company's  major  client  sectors  for each of the three  years in the
period ended August 31, 2000:

<TABLE>
<CAPTION>

                                                      Year Ended August 31,
 ------------------------------------- ----------------------------------------------------
                                             2000              1999             1998
 ------------------------------------- ----------------- ----------------- ----------------
<S>                                    <C>               <C>               <C>
 Federal government                            52%               54%               50%
 Industrial and other private sector           33                36                37
 Utilities                                      5                 2                 6
 State and local government                    10                 8                 7
 ------------------------------------- ----------------- ----------------- ----------------
                                              100%              100%             100%
 ===================================== ================= ================= ================
</TABLE>

<PAGE>

Sales and Marketing

The Company utilizes both a centralized corporate marketing department and local
marketing  groups  within  each of our  regional  operations  whose  offices are
located in and around major  metropolitan  cities across the United  States.  As
EA's mix of business varies by geographic  location,  the Company  implemented a
regional  organization  structure in fiscal 1999 to support the decentralization
of its marketing and business  development  program. A regional structure places
business  development  and  marketing  resources  directly  within  proximity to
regional  clients where they are needed and further  increases  concentration on
operations. Under the regional structure, EA's operations include the Northeast,
Mid-Atlantic,  Southeast,  North Central,  South Central and West. The Company's
corporate  marketing  staff are involved  with the tracking and  development  of
large Federal  opportunities and support the regional operations,  as necessary,
with the pursuits of local contract opportunities. The Company employs a variety
of business  development and marketing  techniques,  including one-on-one client
meetings and  presentations,  hosting and  participating  in industry  seminars,
responding to formal requests for proposals,  initiating  direct-mail  programs,
and  establishing an ongoing public  relations/technical  article program within
industry trade journals.

A  significant  portion of new business  arises from prior  client  engagements.
Clients  frequently expand the scope of work to include follow-on  complementary
and new activities and often refer EA to their colleagues at other locations. It
is  estimated  that 82% of new awards in fiscal 2000 were due to  expanding  the
scope of work at existing  client  locations.  Additionally,  the Company has an
active  business  development  program  focused on identifying  new clients.  In
fiscal 2000, the Company was awarded approximately $10.5 million, or 18%, of new
awards from new clients.  The Company often teams with other consulting firms or
provides  its  services  as a  subcontractor  to  larger  architect/engineer  or
engineer/contractor firms.

Backlog

At August 31, 2000, the Company's total contract backlog was approximately $32.4
million  compared to contract  backlog of $35.9 million at August 31, 1999.  The
decrease in total  contract  backlog was largely  attributable  to the unusually
high gross  revenue in the fiscal  year,  which was greater  than new  contracts
awarded.  Because  subcontractor  and other  direct  project  costs  can  change
significantly  from project to project,  the change in total contract backlog is
not necessarily a true indication of business trends.  Accordingly,  the Company
considers net backlog  (total  backlog less  estimated  subcontractor  and other
project  costs) as its primary  measure of backlog.  The  Company's net contract
backlog was  approximately  $22.7 million at the end of fiscal 2000,  relatively
flat in comparison to approximately $24.0 million at the end of fiscal 1999. The
Company expects that  approximately 80% of the contract "fiscal" backlog will be
completed   during  the  fiscal  year.  The  Company's  total  contract  backlog
attributable  to federal  government  contracts  as of August 31, 2000 was $16.0
million ($11.2 million, net), compared to $21.8 million ($14.2 million, net) the
prior year.

In addition to this  contract  backlog,  at August 31,  2000,  the Company  held
indefinite  delivery/indefinite  quantity  (ID/IQ) type  contracts  from various
clients,  principally  government  agencies for up to $80.3 million  compared to
$79.0 million at August 31, 1999. To achieve growth into fiscal 2001 and beyond,
the Company has made several  investments in domestic markets opening offices in
Miami and New York City.

There can be no assurance, however, that work under any of these ID/IQ contracts
will  be  authorized  or  that  work  once  authorized  will  not be  cancelled.
Generally,  these  contracts  provide for a fixed  percentage of profit based on
estimated  costs.  In the event of  cancellation,  the  Company is  entitled  to
recover its incurred costs and associated profit. Terminations and cancellations
of government contracts have not been material in the past. The level of backlog
may fluctuate  during each year,  and  accordingly,  the backlog at any point in
time does not  necessarily  reflect  near-term  anticipated  operating  results.
Reliance on major government  contracts subjects the Company to risks associated
with public budgetary  restrictions  and  uncertainties,  discrepancies  between
awarded contract amounts and actual revenues,  and cancellation at the option of
the government. The Company attempts to mitigate these risks by staffing only to
meet reasonably anticipated average workloads, by using subcontractors to handle
peak  workloads,  and by  obtaining  termination  benefit  contract  provisions.
Cancellation of any of the Company's major government contracts,  however, could
have a material adverse effect on the Company.*

The Company also provides  services on major long-term  private sector contracts
under basic ordering agreements that provide for work on a task basis during any
particular  year.  For  example,  the  Company  was  awarded a $3 million  basic
ordering agreement with Exxon for sites near Houston,  Texas, and was awarded an
open-ended national basic ordering agreement with Hertz. Upon receipt of related
authorizations,  the work is included in contract backlog. Because such specific
authorizations are generally for periods  considerably shorter than the duration
of the period the Company expects to perform  services for a particular  client,
management  believes that its backlog figures are not necessarily  indicative of
its future revenue.

<PAGE>

Employees

As of August 31,  2000,  the Company  had  approximately  363 regular  full-time
employees  compared to 369 regular full-time  employees at August 31, 1999. Most
of the Company's  employees are engaged in performing  scientific,  engineering,
remediation  and  consulting   services;   the  remainder   provide   executive,
administrative  and other support services.  The Company also hires part-time or
temporary  personnel to meet the  requirements  of a particular  contract.  EA's
staff  includes  professional  engineers,   biologists,   chemists,  geologists,
industrial  hygienists,   public  health  scientists,   regulatory  specialists,
toxicologists, industrial planners, computer scientists, and business managers.

The Company has invested in training and mentoring programs to promote continued
learning  within the  Company.  The  Company  has  instituted  several  programs
including  project manager  training,  sales  management  seminars and technical
development   programs,   and  has  an  established   professional  career  path
development program. Additionally, EA offers a tuition reimbursement program for
all employees.

None of the Company's employees is represented by a union. The Company considers
its relationship with employees to be good.

Competition

The  environmental  engineering  and  consulting  market  continues to be highly
competitive and requires skilled and experienced  professional,  technical,  and
management personnel.  Over the past several years, in an effort to reduce costs
and increase  volume,  the  environmental  industry  experienced  an increase in
merger and acquisition activity,  resulting in several  mega-environmental firms
with revenues greater than $500 million.

Typical  projects,  especially those in excess of $100,000,  are bid by numerous
firms. The number of competitors for any one procurement varies and is dependent
upon the value of the  projects,  restrictions,  and financial and risk factors.
The principal competitive factors are client relationships, pricing, reputation,
and quality of services, expertise, and local presence.  Increasingly,  multiple
firms  are  deemed  "technically   qualified,"  leaving  price  and  established
relationships to determine the winning bid.

EA believes that its  favorable  competitive  factors are its  multidisciplinary
capabilities,  its  reputation  for quality of  services,  and its  geographical
dispersion. In each market sector, EA competes with engineering, consulting, and
program  management  firms ranging from small firms  offering  niche services to
large multinational firms having substantially greater marketing, management and
financial resources than the Company.  Management believes no one firm currently
dominates a significant portion of any of the service areas either regionally or
nationally.

Regulatory Matters

Environmental laws and regulations have been enacted by federal, state and local
governments in response to public pressure and scientific  evidence  identifying
adverse  effects of public and business  activity on the  environment  and human
health and safety. Historically,  compliance with these laws and regulations was
the primary driver in creating  demand for the Company's  services and continues
to be a prime  source of demand for EA's  services.  Among the dozens of federal
environmental  statutes and regulations under which EA provides services are the
following, broad-based statutes:

The Safe Drinking Water Act (SDWA) of 1974, reauthorized in 1996. In addition to
its primary mission of protecting the nation's  drinking water supplies  through
the regulation of public water systems,  the reauthorized Act expands  watershed
protection,  emphasizes the control of non-point sources of  contamination,  and
introduces a revolving  funding  program of nearly $9.6 billion through the year
2006. The reauthorized SDWA will have a strong impact on the Company's state and
local  government  clients,  who are  responsible  for  ensuring the quality and
quantity of their drinking water supplies.

The Federal Water Pollution Control Act of 1972 (known as the Clean Water Act or
CWA)  established a framework for controlling the discharge of pollutants to the
environment from public and private facilities.  The Act centers on the National
Permit Discharge  Elimination  System (NPDES),  which establishes  controls over
discharges  from  regulated  facilities,  and  includes  provisions  to  control
stormwater,  industrial runoff, and nonpoint sources of pollution.  In addition,
the CWA establishes  standards to manage ecological  habitats,  coastal regions,
watersheds and wetlands.

The  Resource   Conservation  and  Recovery  Act  of  1976  (RCRA)   establishes
"cradle-to-grave" regulations affecting the generation,  management and disposal
of hazardous  waste. In addition,  the Act regulates  non-hazardous  solid waste
generated  by  households,  commercial  and public  facilities,  and  industrial
sources.  Specific RCRA  provisions  focus on land disposal of hazardous  waste,
underground and  above-ground  storage tanks,  site  remediation and groundwater
decontamination.

The Clean Air Act (CAA)  Amendments of 1990,  which were  reauthorized  in 1990,
established a series of programs to control  airborne  emissions from mobile and
stationary sources. The Act confirmed the goal of attaining National Ambient Air
Quality Standards (NAAQS) throughout the U.S., requiring  "nonattainment"  areas
to establish  compliance  programs.  The CAA Amendments of 1990 also established
requirements  for the EPA to adopt Risk Management  Program (RMP)  requirements,
affecting an estimated 64,000 facilities nationwide,  handling toxic, flammable,
and/or reactive chemicals. These regulations which were adopted in June 1996 and
became effective June 1999, address programs and procedures  designed to prevent
or minimize the consequences of accidental  releases of hazardous materials that
could affect the public or environment.

The Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA, or Superfund) and its subsequent  reauthorizations  seek to address the
current  consequences  of  past  hazardous  waste  management   practices.   Any
organization that owns or owned a site on which hazardous materials are present,
or that  operates  or operated a facility  generating  or  containing  hazardous
materials, may be liable under CERCLA for cleanup responsibility.

The  Brownfields  Initiative  was  introduced by the Clinton  Administration  to
resolve the cleanup and liability  issues  associated with  contaminated,  often
abandoned,  industrial and commercial  facilities  known as  "brownfields."  The
Initiative  sought to  encourage  economic  development  and  property  reuse of
brownfields,  which typically are located in urban areas,  by resolving  cleanup
and liability  issues to owners,  operators and  prospective  developers of such
sites.  Most states and many local  governments  now have voluntary or mandatory
brownfields programs in place.

The  Intermodal   Surface   Transportation   Efficiency  Act  (ISTEA)  of  1991,
established  funding  for  mass  transportation  and  public  transit  programs;
introduced the  Congestion  Mitigation and Air Quality (CMAQ) program to provide
funding for non-attainment areas under the CAA to meet attainment deadlines; and
included  funding  for  alternative-fuel  transit  buses.  In  1998,  ISTEA  was
reauthorized  as the  Transportation  Equity Act for the 21st Century  (TEA-21).
TEA-21 earmarks $218 billion for highway and transit  projects over the next six
year period, streamlining the environmental review process, promoting the use of
market-based  incentives,  and giving  states the  flexibility  to use funds for
transportation projects that include reuse of brownfield sites.

The  National  Energy  Policy  Act  (EPAct)  of  1992  established  the  use  of
energy-efficient  technologies  as a national  priority for  improvement  of air
quality and set a goal of 30%  displacement of petroleum fuels with  alternative
fuels in vehicles by the year 2010.  To that end,  EPAct set a schedule by which
industrial  sectors  beginning with the federal  government would be required to
purchase alternative-fueled vehicles.

The Fish and Wildlife Coordination Act (initially enacted 10 March 1934) relates
specifically to the requirement for coordination  with resource agencies for all
federally funded projects.  Consultation has become increasingly  important over
recent years for numerous projects.

The  Endangered  Species  Act  (Public  Law  93-205 and  amendments)  enacted in
December  1973,  specifies  the  requirements  for  the  protection  of  species
determined to be endangered  by the U.S.  Fish and Wildlife  Service.  Under the
requirements  of the Act, any Federal  actions or actions by entities  receiving
Federal funds,  must not  jeopardize  the continuing  existence of endangered or
threatened  plants  or  wildlife,  nor  result  in the  destruction  or  adverse
modification of critical habitat.

The National  Historic  Preservation  Act (NHPA) has established sets of Federal
policy and  implementing  regulations  for the protection of America's  cultural
environment  that can come into conflict  with the needs of a specific  project.
Section 106 of the NHPA  requires  Federal  agencies to consider  the effects of
their actions on historic properties and seek comments from the Advisory Council
on Historic Preservation.

The Wild and  Scenic  Rivers  Act of 1968  designated  certain  rivers  to be of
national  significance  because they possess  outstanding and remarkable scenic,
recreational, geologic, fish and wildlife, historic, cultural, and other similar
values.  These  rivers,  according  to the law,  should  be  preserved  in their
free-flowing  conditions  for the  benefit and  enjoyment  of present and future
generations.

In  addition  to  federal  environmental  regulations,   many  state  and  local
authorities have passed  legislation and other  regulations and policies similar
to the federal laws described above, to provide additional  protection and cover
more detailed aspects of environmental and safety and health management.

Insurance

The Company maintains a full range of insurance coverage including  professional
liability insurance and pollution liability coverage.  There can be no assurance
that the Company will not incur  liability  arising out of its general  business
operations or from the  professional  services it renders to its clients or that
such liability,  if incurred,  will not have a material  adverse effect upon the
Company.  However,  these insurance policies will provide limited protection and
defense up to their stated amounts.

EA has  endeavored to protect itself through  contractual  indemnification  from
clients when  possible and by  intensifying  its  existing  quality  control and
assurance,  internal risk management, and health and safety programs. Generally,
indemnification is not available under the Company's government  contracts.  The
Company's  quality control and assurance  program includes a control function to
establish   standards  and  procedures  for  performance  and  documentation  of
performance  of project  tasks,  and an assurance  function to audit the control
function and to monitor  compliance  with procedures and quality  standards.  An
additional  objective  of this  program  has  been to  establish  practices  and
procedures  to  protect  EA  personnel  from  hazardous   substances.   This  is
accomplished  through a company-wide  occupational  safety and health monitoring
program managed by corporate health and safety professionals.

Equipment

The Company owns  substantially  all of the  computer,  monitoring,  testing and
other equipment  required to render its various consulting and testing services.
Additionally,  the Company leases certain computer,  office furniture, and other
equipment.  Equipment and various other items the Company purchases on behalf of
clients are available from several suppliers and the Company is not dependent on
any one supplier.

Environmental and Other Considerations

The Company does not believe that its compliance  with federal,  state and local
laws and regulations relating to the protection of the environment will have any
material effect on its capital expenditures, earnings or competitive position.

<PAGE>

ITEM 2.  PROPERTIES

The  Company's  headquarters  and  Baltimore  regional  office  are  located  in
approximately  76,100 square feet of leased space, of which  approximately 4,200
square feet are being sublet. The Company's leases for these facilities are with
partnerships  whose members include the Chairman of the Board of Directors of EA
and certain members of his family.

The Company's  primary  regional and satellite  offices in the United States are
located in:

 Baltimore, Maryland      San Francisco, California     Pittsburgh, Pennsylvania
 New Castle, Delaware     Sacramento, California        Lincoln, Nebraska
 New York, New York       Concord, California           Dallas, Texas
 Newburgh, New York       Portland, Oregon              Houston, Texas
 Syracuse, New York       Seattle, Washington           Fairbanks, Alaska
 Iselin, New Jersey       Chicago, Illinois             Honolulu, Hawaii
 Boston, Massachusetts    Oak Brook, Illinois           Miami, Florida

In addition, the Company has established office locations in Mexico City, Mexico
and Yigo, Guam.

The Company  leases  office and storage  facilities  for each  regional  office.
Presently,  the facilities  are suitable,  adequate,  and generally  utilized to
capacity.

ITEM 3.  LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company is a party.
The Company is involved in various  claims and legal  actions  arising  from the
ordinary course of business.  In the opinion of the Company,  the disposition of
these matters will not have a material adverse effect on the financial position,
results of operations or liquidity of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter ended August 31, 2000.

<PAGE>

                                     PART II

ITEM 5.        MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
               MATTERS

On  October  31,   1986,   EA  common   stock  began   public   trading  in  the
over-the-counter  market under the symbol "EACO." The following  table shows the
high and low sales  price  reported  on the  Nasdaq  National  Market  Small Cap
Systems. As of October 13, 1999, the Company's common stock began trading on the
Nasdaq  Small  Cap  Market  System  ("NASDAQ").   Such  over-the-counter  market
quotations,   however,  reflect  inter-dealer  prices,  without  retail  markup,
markdown or commission and may not necessarily represent actual transactions.

                                                            High       Low

      Fiscal 1999:              First Quarter                $2.00       $1.00
                                Second Quarter                1.50        1.00
                                Third Quarter                 1.56        0.94
                                Fourth Quarter                1.38        1.00

      Fiscal 2000:              First Quarter                $1.13       $0.50
                                Second Quarter                3.88        0.50
                                Third Quarter                 2.06        0.53
                                Fourth Quarter                1.09        0.69


On  November  13,  2000,  the closing  price of the common  stock as reported by
NASDAQ was $1.00 per share. On that date, there were  approximately  853 holders
of record.

To date the Company has not paid any cash dividends on its common stock and does
not anticipate paying such dividends in the foreseeable future.

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data for the periods indicated have been derived from the
audited  consolidated  financial statements of the Company. In the quarter ended
May 31, 1999, the Company divested its Analytical Services segment. The selected
financial  data for all these years have been  adjusted to show only  continuing
operations  and does not reflect the  Analytical  Services  segment.  These data
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto included in Item 8.

<TABLE>
<CAPTION>

                                            -----------------------------------------------------------------
                                                 2000         1999        1998       1997        1996
                                                         (In thousands, except for share amounts)
                                            -----------------------------------------------------------------
<S>                                              <C>       <C>         <C>         <C>         <C>
Operations data:
      Total revenue                              $60,868   $ 48,727    $ 52,237    $ 68,189    $ 80,933
      Net revenue                                 35,196     34,146      35,320      37,443      48,495
      Income (loss) from continuing operations       635     (2,228)       (187)     (6,863)         38
      Net income (loss) from continuing
          operations                                 227     (1,447)       (178)     (4,615)       (124)

      Basic (loss) earnings per share from
          continuing operations                  $  0.04   $  (0.23)   $  (0.03)   $  (0.74)   $  (0.02)
      Diluted (loss) earnings per share from
          continuing operations                  $  0.04   $  (0.23)   $  (0.03)   $  (0.74)   $  (0.02)

      Weighted average shares outstanding
                                                   6,168      6,312       6,255       6,206       6,138
      Diluted weighted average shares
          outstanding                              6,170      6,312       6,255       6,206       6,138

Balance sheet data:
      Working capital                            $ 8,839   $  9,331    $  8,807    $ 10,323    $ 15,955
      Total assets                                25,516     22,664      22,140      26,341      33,329
      Long-term borrowings, net of
          current portion                          3,673      3,326       1,349       2,332       2,665

      Stockholders' equity                        11,471     11,616      13,046      13,097      18,558

</TABLE>

<PAGE>

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

General

The Company's results of operations are significantly  affected by the timing of
the award of contracts,  the timing of performance on contracts,  and the extent
to which the Company's  employees are  performing  billable  tasks as opposed to
being engaged in the preparation of contract proposals,  bids and other required
non-billable  activities.  Results of  operations  may also be  affected  to the
extent that the Company  chooses not to reduce its  professional  staff during a
period of  reduced  demand for its  services.  Due to these  factors,  quarterly
results  of  operations  are  not  necessarily  indicative  of  the  results  of
operations for longer periods.

The Company,  in the course of providing  its services,  routinely  subcontracts
such services as drilling,  laboratory analyses, and other specialized services.
In accordance with industry  practice and contract terms that generally  provide
for the recovery of overhead costs,  these costs are passed directly  through to
clients  and are  included in total  revenue.  Because  subcontractor  costs and
direct charges can change  significantly from project to project,  the change in
total  revenue  is  not  necessarily  a  true  indication  of  business  trends.
Accordingly,  the Company  considers  net revenue,  which is total  revenue less
subcontractor and other direct project costs, as its primary measure of revenue.

On February 4, 2000, as a result of the  discovery of accounting  irregularities
related to unbilled  revenue,  the Audit  Committee  of the  Company's  Board of
Directors  ("Audit  Committee")  initiated the Company  Investigation  into such
matters  which has been  completed.  In June  2000,  the  Company  restated  its
financial  results for fiscal years 1999 and 1998 and the  quarterly  periods in
fiscal year 1998 through February 2000. The financial information presented here
has been  restated to  incorporate  all relevant  information  obtained from the
aforementioned investigation.

The Company made adjustments to correct the misapplication of generally accepted
accounting  principles  resulting in improper  revenue  recognition.  This error
involved   recording   fictitious   revenue   resulting   from  the  actions  of
individual(s)  who are no longer employed by or associated with the company.  In
the opinion of the Company's  management,  all adjustments  considered necessary
for a fair presentation of the financial statements have been included.

The  restated  net loss for fiscal  year 1999  totaled  $1,530,400  or $0.24 per
diluted share. The Company originally reported a net loss of $1,473,600 or $0.23
per diluted share for fiscal year 1999.

Additionally,  the restated  net loss for fiscal year 1998  totaled  $240,100 or
$0.04 per diluted share. The Company originally  reported net income of $604,800
or $0.10 per diluted share in fiscal year 1998.

Results of Operations

The following table sets forth the percentage relationships of selected items in
the consolidated statement of operations to net revenue for the years indicated.
The table has been adjusted to show the  relationship  of continuing  operations
for each  year  and does not  include  results  of the  discontinued  Analytical
Services segment.

<TABLE>
<CAPTION>

                                                          Year Ended August 31,
                                                       -------   -------   ------
                                                         2000      1999     1998
---------------------------------------------------    -------   -------   ------
<S>                                                     <C>       <C>       <C>
Net revenue                                             100.0%    100.0%    100.0%
---------------------------------------------------     -----     -----     -----
Operating expenses:
  Direct salaries and other operating expenses           78.4      76.7      76.2
  Sales, general and administrative                      19.8      23.6      25.0
  Gain on "key employee" life insurance                  --        --        (0.7)
  Restructuring charges                                  --         6.2      --
---------------------------------------------------     -----     -----     -----
    Total operating expenses                             98.2     106.5     100.5
---------------------------------------------------     -----     -----     -----
Income (loss) from operations                             1.8      (6.5)     (0.5)
Interest expense, net                                    (0.7)     (0.5)     (0.4)
---------------------------------------------------     -----     -----     -----
Income (loss) before income taxes                         1.1      (7.0)     (0.9)
Provision (benefit) for income taxes                      0.4      (2.8)     (0.4)
---------------------------------------------------     -----     -----     -----
    Net income (loss) from operations                     0.7%     (4.2)%    (0.5)%
===================================================     =====     =====     =====
</TABLE>

Fiscal 2000 Compared to Fiscal 1999

Net  revenue  from  continuing  operations  in  fiscal  2000  increased  3.1% to
$35,195,600 from  $34,146,900.  This increase in net revenue is due to increased
total revenue in fiscal year 2000 primarily related to large new contracts.

Direct  salaries and other  operating  costs of  $27,595,800  increased  for the
twelve months ended August 31, 2000 compared to $26,199,400 for the prior fiscal
period. As a result of increased technical headcount,  direct salaries and other
operating costs as a percentage of net revenue increased to 78.4% in fiscal 2000
compared to 76.7% in fiscal 1999.

Sales, general and administrative costs decreased 13.4% to $6,964,400,  or 19.8%
of net revenue in fiscal 2000 from $8,042,500,  or 23.6% of net revenue, for the
twelve  months  ended August 31,  1999.  The decrease is primarily  due to lower
general and administrative  related costs. Sales costs decreased by $431,400 and
general and  administrative  costs  decreased  by $646,700.  The  decrease  also
included a non-recurring  forfeiture  associated with the Company's 401K plan of
approximately  $240,000.  Additionally,  the Company had  one-time out of pocket
costs relating to accounting irregularities of approximately $300,000.

In February  1999,  to address the  Company's  high  overhead in relation to net
revenue,  the Company  implemented several  cost-cutting  measures to effect its
long-term  profitability  objectives  and  align  expenses  more  directly  with
revenues. In connection with the restructuring,  the Company incurred a one-time
charge of  $2,132,600  related  primarily  to severance  agreements  of 30 staff
members including several senior sales and executive staff.

Additionally,  in  April  1999,  the  Company  completed  the  sale  of  the  EA
Laboratories  division  to Severn  Trent  Laboratories,  Inc.  The assets of the
analytical  chemistry services segment that were sold consisted  primarily of an
inventory of supplies,  the balance of costs and estimated earnings in excess of
billings on  uncompleted  contracts  as of the  transaction  date and  property,
plant, and equipment. The cash transaction resulted in a pretax gain of $58,800.
Since the analytical  services segment was discontinued on April 1999, there are
no comparative results to discuss.

As a result of the above factors,  income from  operations for the twelve months
ended August 31, 2000 was $635,400,  or 1.8% of net revenue,  compared to a loss
from  operations  in the  prior  fiscal  period  of  $2,227,600,  or 6.5% of net
revenue.  Interest expense,  net, increased $77,300 in fiscal 2000,  compared to
fiscal  1999,  due to a higher  line of credit  balance  used to fund  operating
activity.

For the twelve  months ended August 31,  2000,  the Company had a provision  for
income taxes of $150,400  compared to a benefit from income taxes of $961,400 in
the prior fiscal year.  This  represents an effective rate of 40% in both fiscal
years.

Net income  from  operations  for the  fiscal  year  ended  August 31,  2000 was
$227,200,  or  0.7%  of net  revenue,  compared  to a loss  from  operations  of
$1,446,700, or 4.2% in the prior fiscal period.

For the twelve  months ended  August 31,  1999,  the Company had a loss from its
discontinued Analytical Services segment of $83,700. Included in this loss was a
gain of $35,300, net of income taxes, on the sale of the segment.

As a result of the above, the Company had net income of $227,200, or 0.7% of net
revenue for the twelve  months ended August 31, 2000,  compared to a net loss of
$1,530,400, or 4.5%, in the prior fiscal period.

Fiscal 1999 Compared to Fiscal 1998

Net revenue from  operations in fiscal 1999 decreased  3.3% to $34,146,900  from
$35,319,900.  This  decrease in net revenue is primarily  due to lower  contract
volume  with the federal  government  as a result of the  completion  of certain
indefinite delivery/indefinite quantity contracts. In addition to lower contract
volume,  $500,000 of certain noncollectible prior period revenue was written off
in the second quarter of fiscal 1999.  Additionally  impacting the decrease,  in
fiscal 1998 the Company realized  approximately  $676,700 in additional contract
net revenue on certain  landfill  projects  which had loss  provisions in fiscal
1997.

Direct salaries and other operating costs of $26,199,400  slightly decreased for
the twelve  months ended August 31, 1999  compared to  $26,935,300  in the prior
fiscal period.  However,  as a result of lower net revenue,  direct salaries and
other  operating  costs as a  percentage  of net revenue  increased  to 76.7% in
fiscal 1999 compared to 76.2% in fiscal 1998.

Sales, general and administrative  costs decreased 8.9% to $8,042,500,  or 23.6%
of net revenue, in fiscal 1999 from $8,832,700, or 25.0% of net revenue, for the
twelve  months  ended  August 31,  1998.  The decrease is due to lower sales and
marketing  related costs incurred as a result of strategic  initiatives  made in
fiscal 1999.  These  initiatives  included a restructuring in the second quarter
reducing personnel and implementing a regional sales organization to support the
decentralization of its marketing and business development program.

In the prior  period  ended  August 31,  1998,  the  Company  recorded a gain of
$261,100,  reducing its operating expenses. The gain was related to the increase
in the cash surrender value of "key employee" life insurance  policies  included
in the Company's balance sheet.

To address the Company's  high overhead in relation to net revenue,  in February
1999,  the  Company  implemented  several  cost-cutting  measures  to effect its
long-term  profitability  objectives  by aligning  expenses  more  directly with
revenues. In connection with the restructuring,  the Company incurred a one-time
charge of  $2,132,600  related  primarily  to severance  agreements  of 30 staff
members including several senior sales and executive staff.

As a result of the above factors, the loss from operations for the twelve months
ended August 31, 1999 was $2,227,600,  or 6.5% of net revenue,  compared to loss
from operations in the prior fiscal period of $187,000,  or 0.5% of net revenue.
Interest expense,  net, increased $58,800 in fiscal 1999 compared to fiscal 1998
due to a higher line of credit balance used to fund operating activity.

For the twelve  months  ended  August 31,  1999,  the Company had a benefit from
income taxes of $961,400  compared to a benefit from income taxes of $130,900 in
the prior fiscal year.  This  represents an effective rate of 40% in fiscal year
1999 and 42.4% in fiscal 1998.

The  loss  from  operations  for the  fiscal  year  ended  August  31,  1999 was
$1,446,700,  or 4.2% of net  revenue,  compared  to a net loss  from  continuing
operations of $177,800, or 0.5% in the prior fiscal period.

For the twelve  months ended  August 31,  1999,  the Company had a loss from its
discontinued Analytical Services segment of $83,700. Included in this loss was a
gain  of  $35,300,  net of  income  taxes,  on the  sale  of  the  segment.  The
discontinued segment in the prior fiscal period had a loss of $62,300.

As a result of the above,  the Company had an net loss of  $1,530,400 or 4.5% of
net revenue for the twelve months ended August 31, 1999,  compared to a net loss
of $240,100, or 0.7%, in the prior fiscal period.

Inflation

Because of its ability to generally pass through increased costs to its clients,
as well as the  generally  low levels of  inflation,  the Company  believes that
inflation has not had a material impact on its operations.

Liquidity and Capital Resources

Cash and cash equivalents  (cash) decreased by $299,300 in 2000,  compared to an
increase of $112,800 in 1999 and a decrease of $481,600 in 1998.  During  fiscal
year 2000, the Company  generated  $733,000 of cash from  operating  activities,
principally as a result of the 2000 net income as well as significant  increases
in billings in excess of cost and estimated  earnings on uncompleted  contracts.
In addtion,  the Company  increased the line of credit  balance by $159,900 from
$3,326,200  in fiscal year 1999 to $3,486,100 in fiscal year 2000. At August 31,
2000, the availability under the revolving line of credit was $4,370,500 up from
$2,733,800 at August 31, 1999.  The Company  anticipates a further  reduction in
its line of credit balance during the next several quarters,  as revenues exceed
operating expenses.*

The  Company's  capital  expenditures  (consisting  primarily  of  purchases  of
equipment and leasehold  improvements)  of $738,400,  $487,300,  and $546,500 in
2000,  1999, and 1998,  respectively,  have been funded primarily from operating
cash flows.

The Company maintains a bank credit  arrangement with a regional bank consisting
of: (i) a $7,000,000 Working Capital Revolving Line of Credit; (ii) a $1,500,000
Fixed  Asset/Lease/Acquisition  Revolving  Line of Credit.  Borrowings  from the
revolving  line of  credit  are  limited  to  certain  percentages  of  accounts
receivables  and estimated  earnings in excess of billings.  The interest on all
borrowings is LIBOR + 300.

At August 31, 2000,  the Company had  outstanding  long-term debt of $3,486,100,
which  represented  an increase of $72,400  from the August 31, 1999  balance of
$3,413,700. The Company had no short-term borrowings under its line of credit at
August 31, 2000 and 1999.

The Company's existing funds, cash from operations, and the available portion of
its $7,000,000 bank line of credit and $1,500,000 equipment line are expected to
be  sufficient  to meet the  Company's  present  cash needs.  The  Company  also
currently believes it has the ability to raise capital through placement of debt
and may  pursue  such  options  if the need  arises to expand  facilities,  make
acquisitions  or  acquire  equipment  in  conjunction  with a review of the most
cost-effective means for the Company and its stockholders.

While the Company believes that there is sufficient demand for current operating
levels,  there can be no  assurance  that this  demand  will exist or  continue.
Although the Company has the ability to reduce its professional staff in periods
of reduced  demand,  it may choose not to make full  reductions in such periods,
with resulting adverse effects on operations.

                           --------------------------
Forward-Looking Statements

The foregoing contains  "forward-looking  information" within the meaning of The
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements  may be  identified  by an  asterisk  (*) or by such  forward-looking
terminology  as "may,"  "will,"  "believe,"  "anticipate,"  "expect," or similar
words or variations thereof. Such forward-looking statements involve significant
risks and uncertainties,  including,  among other things,  risks associated with
(1) substantial reliance on government contracts,  public budgetary restrictions
and  uncertainties,  discrepancies  between awarded  contract amounts and actual
revenues,  and  cancellation of contracts at the option of the  government,  (2)
timing and award of contracts,  (3) timing and performance of contracts, and (4)
successful  bidding  of  government  and  non-government  contracts  in  a  very
competitive environment. IN EACH CASE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
SUCH FORWARD-LOOKING STATEMENTS.

Important  assumptions  and other  important  factors  that could  cause  actual
results  to  differ  materially  from  those in the  forward-looking  statements
include, but are not limited to the accounting  irregularities discussed in Item
1 and their  further  impact,  if any, on the  Company's  operations  and/or the
Company's  future  profitability.  Other  important  factors  that  the  Company
believes may cause actual results to differ materially from such forward-looking
statements  are  discussed  throughout  this Report and in the  Company's  other
filings  with the  Securities  and  Exchange  Commission.  The Company  does not
undertake to publicly  update or revise its  forward-looking  statements even if
experience or future changes indicate that any such results or events (expressed
or implied) will not be realized.

                           --------------------------

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

None

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Supplementary Financial Data


                                                                            Page

                                                                         ----

Report of Independent Public Accountants                                  16

Consolidated Financial Statements:

      Consolidated Balance Sheets as of August 31, 2000 and 1999          17

      Consolidated Statements of Operations for the years ended
         August 31, 2000, 1999, and 1998                                  19

      Consolidated Statements of Changes in Stockholders' Equity

         for the years ended August 31, 2000, 1999, and 1998              20

      Consolidated Statements of Cash Flows for the years ended
         August 31, 2000, 1999, and 1998                                  21

      Notes to Consolidated Financial Statements for the years
         ended August 31, 2000, 1999, and 1998                            22


<PAGE>

                        Report of Independent Accountants

To the Board of Directors and Stockholders of
EA Engineering, Science, and Technology, Inc.:


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows present fairly,  in all material  respects,  the financial  position of EA
Engineering, Science, and Technology, Inc. and its subsidiaries as of August 31,
2000 and 1999, and the results of their operations and their cash flows for each
of the three years in the period  ended  August 31,  2000,  in  conformity  with
accounting principles generally accepted in the United States of America.  These
financial  statements are the  responsibility of the Company's  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.

                                           /s/ PricewaterhouseCoopers LLP

Baltimore, Maryland
November 1, 2000

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>

                                                          August 31,         August 31,
                                                             2000              1999
                                                        ------------        ------------
 <S>                                                     <C>                 <C>
  CURRENT ASSETS:

         Cash and cash equivalents                       $  1,663,700        $  1,963,000
         Accounts receivable, net                          10,829,200           8,679,600
         Costs and estimated earnings in excess of
              billings on uncompleted contracts             6,027,700           5,176,000
         Prepaid expenses and other                           377,200             636,700
         Deferred income taxes                                311,900             597,800
                                                        ------------        ------------
           Total Current Assets                            19,209,700          17,053,100
                                                         ------------        ------------

  PROPERTY AND EQUIPMENT, at cost:

         Furniture, fixtures and equipment                  9,816,500           8,920,600
         Leasehold improvements                             1,039,100           1,031,700
                                                         ------------        ------------
         Total property and equipment                      10,855,600           9,952,300

         Accumulated depreciation and amortization         (9,344,000)         (9,102,900)
                                                         ------------        ------------
           Net Property and Equipment                       1,511,600             849,400
                                                         ------------        ------------

  OTHER ASSETS:

         Deferred income taxes                              3,586,500           3,451,000
         Other assets                                       1,207,900           1,310,500
                                                         ------------        ------------
          Total Other Assets:                               4,794,400           4,761,500
                                                         ------------        ------------
          Total Assets                                   $ 25,515,700        $ 22,664,000
                                                         ============        ============
</TABLE>


      The accompanying notes are an integral part of these balance sheets.

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                         August 31,           August 31,
                                                            2000                1999
                                                         ------------        ------------
<S>                                                      <C>                 <C>
  CURRENT LIABILITIES:

     Accounts payable                                    $  5,673,200        $  3,555,300
     Accrued expenses                                         459,800           1,443,200
     Accrued salaries, wages and benefits                   2,320,800           2,228,400
     Current portion of long-term debt                             --              87,500
     Current portion of capital lease obligation               44,700                  --
     Billings in excess of costs and estimated
       earnings on uncompleted contracts                    1,872,500             407,800
                                                         ------------        ------------
       Total Current Liabilities                           10,371,000           7,722,200
                                                         ------------        ------------
  LONG-TERM DEBT
     Capital lease obligation                                 187,300                  --
     Long-term debt, net of current portion                 3,486,100           3,326,200
                                                         ------------        ------------
        Total Long-Term Debt                                3,673,400           3,326,200
                                                         ------------        ------------
       Total Liabilities                                   14,044,400          11,048,400
                                                         ------------        ------------
  COMMITMENTS AND CONTINGENCIES

  STOCKHOLDERS EQUITY:
      Common stock, $.01 par value; voting;
        10,000,000 shares authorized; 6,378,800
        and 6,335,000 shares issued and outstanding             63,800              63,400
      Preferred stock, $.01 par value; 8,000,000
        shares authorized; none issued                              --                  --
      Capital in excess of par value                        11,149,700          11,108,300
      Notes receivable from stockholders                            --             (78,000)
      Retained earnings                                        749,100             521,900
      Treasury stock, 463,600 shares, at cost                 (491,300)                 --
                                                          ------------        ------------
        Total Stockholders Equity                           11,471,300          11,615,600
                                                          ------------        ------------
     Total Liabilities and Stockholders Equity            $ 25,515,700        $ 22,664,000
                                                          ============        ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                       Year Ended August 31,
                                                           2000                1999                1998
                                                        ------------       ------------       ------------
<S>                                                     <C>                <C>                <C>
  Total revenue                                         $ 60,867,600       $ 48,727,600       $ 52,237,400
  Less - Subcontractor costs                             (19,399,000)        (8,904,300)       (11,003,000)
  Less - Other direct project costs                       (6,273,000)        (5,676,400)        (5,914,500)
                                                        ------------       ------------       ------------
         Net revenue                                      35,195,600         34,146,900         35,319,900
                                                        ------------       ------------       ------------
  Operating costs and expenses:
       Direct salaries and other operating                27,595,800         26,199,400         26,935,300
       Sales, general and administrative                   6,964,400          8,042,500          8,832,700
       Gain on "key employee" life insurance                      --                 --           (261,100)
       Restructuring charges                                      --          2,132,600                 --
                                                        ------------       ------------       ------------
         Total operating expenses                         34,560,200         36,374,500         35,506,900
                                                        ------------       ------------       ------------
  Income (loss) from continuing operations                   635,400         (2,227,600)          (187,000)
                                                        ------------       ------------       ------------
  Interest expense                                          (355,500)          (268,600)          (220,500)
  Interest income                                             97,700             88,100             98,800
                                                        ------------       ------------       ------------
  Income (loss) from continuing operations
    before income taxes                                      377,600         (2,408,100)          (308,700)
  Provision (benefit) from income taxes                      150,400           (961,400)          (130,900)
                                                        ------------       ------------       ------------
  Income (loss) from continuing operations                   227,200         (1,446,700)          (177,800)
                                                        ------------       ------------       ------------
  Discontinued operations
       Loss from operations of discontinued
        segment (net of tax)                                      --           (119,000)           (62,300)
       Gain on disposal of discontinued segment,
       including operating losses during phase-out
       period (net of tax)                                        --             35,300                 --
                                                        ------------       ------------       ------------
  Loss from discontinued operations                               --            (83,700)           (62,300)
                                                        ------------       ------------       ------------
  Net income (loss)                                     $    227,200       $ (1,530,400)      $   (240,100)
                                                        ============       ============       ============
  Income (loss) per share - basic
       Continuing operations                            $       0.04       $      (0.23)      $      (0.03)
       Discontinued operations                                    --              (0.01)             (0.01)
                                                        ------------       ------------       ------------
       Net income (loss)                                $       0.04       $      (0.24)      $      (0.04)
                                                        ============       ============       ============
  Income (loss) per share - diluted
       Continuing operations                            $       0.04       $      (0.23)      $      (0.03)
       Discontinued operations                                    --              (0.01)             (0.01)
                                                        ------------       ------------       ------------
       Net income (loss)                                $       0.04       $      (0.24)      $      (0.04)
                                                        ============       ============       ============

  Weighted average shares outstanding                      6,168,400          6,312,300          6,255,500
  Effect of dilutive stock options                             1,300                 --                 --
                                                        ------------       ------------       ------------
  Diluted weighted average shares outstanding              6,169,700          6,312,300          6,255,500
                                                        ============       ============       ============
</TABLE>

        The accompanying notes are an integral part of these statements.

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

               FOR THE YEARS ENDED AUGUST 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
                                                            Capital in        Notes
                                     Common       Common    Excess of    Receivable from    Treasury      Retained
                                  Stock Shares    Stock    of Par Value    Stockholders       Stock       Earnings         Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>        <C>             <C>           <C>            <C>           <C>
Balance, August 31, 1997            6,227,300    $ 62,300   $ 10,902,300    $ (160,000)   $         -    $ 2,292,400   $ 13,097,000

Issuance of stock                      57,700         600        147,000             -              -              -        147,600

Writedown of notes receivable
from stockholders                           -           -              -        41,000              -              -         41,000

Net loss                                    -           -              -             -              -       (240,100)      (240,100)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 1998            6,285,000      62,900     11,049,300      (119,000)             -      2,052,300     13,045,500

Issuance of stock                      50,000         500         59,000             -              -              -         59,500

Writedown of notes receivable
from stockholders                           -           -              -        41,000              -              -         41,000

Net loss                                    -           -              -             -              -     (1,530,400)    (1,530,400)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 1999            6,335,000      63,400     11,108,300       (78,000)             -        521,900     11,615,600

Issuance of stock                      44,200         400         41,400             -              -              -         41,800

Writedown of notes receivable
from stockholders                           -           -             -        16,000              -               -         16,000

Treasury Stock Transactions          (463,600)          -             -        62,000       (491,300)              -       (429,300)

Net loss                                    -           -             -             -              -         227,200        227,200
                               ----------------------------------------------------------------------------------------------------
Balance, August 31, 2000            5,915,600    $ 63,800  $ 11,149,700     $       -     $ (491,300)      $ 749,100   $ 11,471,300
===================================================================================================================================
</TABLE>

        The accompanying notes are an integral part of these statements.

<PAGE>

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                       Year Ended August 31,
                                                                         ---------------------------------------------
                                                                            2000             1999             1998
                                                                         -----------      -----------      -----------
<S>                                                                      <C>              <C>              <C>
  CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES:
      Net Income (loss)                                                  $   227,200      $(1,530,400)     $  (240,100)
      Noncash expenses included in net income (loss)-
        Depreciation and amortization                                        324,400          418,800        1,162,200
        Loss from operations of discontinued segment                              --          119,000               --
        Writedown of notes receivable from stockholders                       16,400           41,000           41,000
        Provision for losses on accounts receivable
          and unbilled receivable                                            344,300          243,500          130,500
        Gain (loss) on disposal of fixed assets                              (37,800)          48,000          (56,500)
        Gain on disposal of discontinued segment                                  --          (35,300)              --
        Provision for restructuring                                               --        2,132,600               --
        Deferred income taxes                                                150,400         (960,200)        (128,900)
      Changes in operating assets and liabilities -
        (Increase) decrease in accounts receivable                        (2,493,900)      (1,444,000)         924,900
        Decrease (increase) in costs and estimated
          earnings in excess of billings on uncompleted contracts           (851,700)        (896,900)         635,400
        (Increase) decrease  in prepaid expenses and other assets            362,100         (105,100)        (194,200)
        Increase (decrease) in accounts payable and accrued expenses       1,226,900       (2,073,900)      (2,433,500)
        Refundable income taxes                                                   --          407,600        1,476,300
        Increase (decrease) in billings in excess of
          of costs and estimated earnings on
          uncompleted contracts                                            1,464,700          161,100         (265,500)
                                                                         -----------      -----------      -----------
          Net cash flows (used for) from operating
              activities                                                     733,000       (3,474,200)       1,051,600
                                                                         -----------      -----------      -----------
  CASH FLOWS USED FOR INVESTING ACTIVITIES:
      Purchase of equipment                                                 (738,400)        (487,300)        (546,500)
      Proceeds from sales of discontinued operations                              --        1,908,500               --
      Proceeds from sale of fixed assets                                      46,600               --           58,000
                                                                         -----------      -----------      -----------
          Net cash flows used for investing activities                      (691,800)       1,421,200         (488,500)
                                                                         -----------      -----------      -----------
  CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES:
      Net borrowings from revolving line of credit                           159,900        2,064,800         (566,300)
      Proceeds from issuance of common stock                                  41,800           59,500          147,600
      Reduction of long-term debt                                            (87,500)        (330,900)        (626,000)
      Purchase of treasury stock                                            (429,700)              --               --
      Repayment of capital lease obligations                                 (25,000)              --               --
                                                                         -----------      -----------      -----------
          Net cash flows from (used for) financing
            activities                                                      (340,500)       1,793,400       (1,044,700)
                                                                         -----------      -----------      -----------

  CASH PROVIDED BY DISCONTINUED OPERATIONS:                                       --          372,400               --
                                                                         -----------      -----------      -----------
  NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                                             (299,300)         112,800         (481,600)

  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           1,963,000        1,850,200        2,331,800
                                                                         -----------      -----------      -----------
  CASH AND CASH EQUIVALENTS, END OF PERIOD                               $ 1,663,700      $ 1,963,000      $ 1,850,200
                                                                         ===========      ===========      ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED AUGUST 31, 2000 , 1999, AND 1998

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation--

The accompanying  consolidated  financial  statements present the accounts of EA
Engineering,  Science, and Technology, Inc. (EA); its wholly-owned subsidiaries,
EA  International,  Inc.  and  EA  Financial,  Inc.;  and EA  Financial,  Inc.'s
wholly-owned  subsidiaries,  EA Global,  Inc. and EA de Mexico, S.A. de C.V. The
entities are  collectively  referred to herein as the "Company." All significant
intercompany transactions have been eliminated in consolidation.

On February 4, 2000, as a result of the discovery of accounting  irregularities,
the Audit  Committee of the Company's  Board of Directors  initiated the Company
Investigation into such matters which recently has been completed. In June 2000,
the Company restated its previously  reported financial results for fiscal years
1999 and 1998 and the  quarterly  periods in fiscal year 1998 through  February,
2000.  The  accompanying  consolidated  financial  statements  and notes thereto
incorporate   all  relevant   information   obtained  from  the   investigation.
Accordingly, the restated consolidated financial statements presented herein are
the Company's primary historical financial statements for the periods presented.

Segment Information--

Historically,  the Company was organized around two operating segments. However,
in the quarter ended May 31, 1999, the Company divested its Analytical  Services
segment.  The remaining  segment is  Management  Consulting  Services,  provided
through a network of offices throughout the United States, Mexico and Guam.

Revenue Recognition--

EA Engineering,  Science,  and Technology,  Inc., together with its wholly owned
subsidiaries  ("EA" or the "Company") is a global  consulting firm that provides
integrated solutions to environmental,  safety, and health issues. The Company's
services are  generally  performed  under  time-and-material,  fixed-price,  and
cost-plus-fixed-fee  contracts.  Task orders from these contracts vary in length
from one month to two years.

The Company accounts for contract revenues and costs under fixed-price contracts
using the  percentage-of-completion  method.  The  percentage  of  completion is
determined  using the  "cost-to-cost"  method for each contract cost  component.
Under this method,  direct labor and other  contract  costs incurred to date are
compared to  periodically  revised  estimates of the total of each contract cost
component at contract  completion to determine the  percentage of revenues to be
recognized.  Revenues from time-and-material  contracts are recognized currently
as the  work  is  performed.  Revenues  on  cost-plus-fixed  fee  contracts  are
recognized to the extent of costs  incurred plus a  proportionate  amount of the
contracted fee. Certain  cost-plus-fixed  fee contracts also include  provisions
for earning performance based incentive fees.  Provision for estimated losses on
uncompleted contracts, to the full extent of the loss, is made during the period
in which the Company first becomes aware that a loss on a contract is probable.

Contract costs and estimated earnings recognized in excess of amounts billed are
classified as current  assets under "costs and  estimated  earnings in excess of
billings on  uncompleted  contracts."  Billings in excess of contract  costs and
estimated  earnings are  classified as current  liabilities  under  "billings in
excess of costs and estimated earnings on uncompleted contracts."

Generally,  contracts  provide for the billing of costs  incurred and  estimated
fees on a monthly basis.  Amounts  included in "costs and estimated  earnings in
excess of billings  on  uncompleted  contracts"  in the  accompanying  financial
statements will be billed within twelve months of the balance sheet date.

Major Clients--

Various agencies of the federal government accounted for approximately 52%, 54%,
and 50% of the Company's net revenue for the years ended August 31, 2000,  1999,
and 1998, respectively. Additionally, various agencies of the federal government
accounted for approximately 46% and 40% of the Company's accounts receivable and
costs and estimated  earnings in excess of billings on uncompleted  contracts as
of August 31, 2000 and 1999, respectively.

Cash and Cash Equivalents--

Cash equivalents  consist of money market  instruments with a purchased original
maturity of three months or less, stated at cost, which approximates fair value.

Property and Equipment--

Property and  equipment,  stated at acquired  cost,  are  depreciated  using the
straight-line  method over their  estimated  useful  lives  ranging from 3 to 10
years.  Leasehold  improvements  are amortized over the shorter of the estimated
useful life or the term of the lease.  Depreciation expense for the fiscal years
ended August 31, 2000,  1999, and 1998 was $324,400,  $418,800,  and $1,162,200,
respectively.  The Company is the lessee of telephone  equipment  under  capital
leases expiring in 2005. The assets,  subject to capital  leases,  are amortized
over the lower of their related lease terms or their estimated productive lives.
The  depreciation  of assets under  capital  leases is included in  depreciation
expense for fiscal year 2000. The cost and accumulated depreciation for property
and  equipment  sold,  returned,  or otherwise  disposed of are removed from the
Company's  books,  and the net gain or loss is included in the  determination of
net income.

Fair Value Information--

The  carrying  amounts  of  financial  instruments,  principally  cash  and cash
equivalents,  accounts receivable and accounts payable,  reported in the balance
sheets  approximate  their fair value,  due to the relatively  short maturity of
these  instruments.   The  carrying  amount  of  variable-rate   long-term  debt
approximates fair value.

Reclassifications--

Certain prior year balances,  primarily related to discontinued operations, have
been reclassified to conform to current year presentation.

Risks and Uncertainties--

Reliance on major government  contracts subjects the Company to risks associated
with public budgetary  restrictions  and  uncertainties,  discrepancies  between
awarded contract amounts and actual revenues,  and cancellation at the option of
the government. The Company attempts to mitigate these risks by staffing only to
meet reasonably anticipated average workloads, by using subcontractors to handle
peak  workloads,  and by  obtaining  termination  benefit  contract  provisions.
Cancellation of any of the Company's major government contracts,  however, could
have a material  adverse  effect on the Company.  See also Note 3 regarding  net
operating loss carryforwards.

Use of Estimates--

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets, liabilities,  revenues and expenses in the
financial   statements  and  in  the   disclosures  of  contingent   assets  and
liabilities. While actual results could differ from these estimates,  management
believes  that actual  results  will not be  materially  different  from amounts
provided in the accompanying consolidated financial statements.

Supplemental Disclosures and Other Cash Flow Information--

Cash paid during the years ended August 31, 2000,  1999,  and 1998 for interest,
was $355,500, $268,600, and $220,500, respectively. During fiscal year 2000, the
Company purchased $257,000 of equipment under capital leases.

Accounting for Income Taxes--

The Company uses the asset and liability  method of accounting for income taxes.
Under the asset and liability  method,  deferred income taxes are recognized for
the tax  consequences of differences  between the financial  statement  carrying
amounts  and the tax  bases of  existing  assets  and  liabilities  by  applying
currently  enacted  statutory  rates  applicable  to  future  years.   Valuation
allowances are established when deferred tax assets are not currently assured of
realization.

Accounting Pronouncements--

In June 1998,  the FASB issued  Statement  No. 133 (SFAS 133),  "Accounting  for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts and for hedging activities.  SFAS 133 is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The Company does not hold  derivatives  and, as such,  SFAS 133 will not have an
impact.

Note 2.  DISPOSAL OF ANALYTICAL SERVICES SEGMENT

On April 30, 1999,  the Company  completed the cash sale of the EA  Laboratories
division  to Severn  Trent  Laboratories,  Inc.  The  assets  of the  analytical
sampling  segment sold  consisted  primarily  of an  inventory of supplies,  the
balance of costs and  estimated  earnings in excess of  billings on  uncompleted
contracts as of the  transaction  date,  and property  and  equipment.  The cash
transaction resulted in a net pretax gain of $58,800.

The income  statements for the fiscal years 1999 and 1998 have been reclassified
to present the operating results of the discontinued segment separately.

Gross  revenue of the  Analytical  Services  segment for the twelve months ended
August 31, 1999 and 1998 were  $4,298,900 and  $6,373,300,  respectively.  These
amounts are not included in the total revenue from continuing  operations in the
accompanying income statement, but are reflected within discontinued operations.

Note 3.  INCOME TAXES:

The  benefit  for  income  taxes  includes  current  and  deferred  tax  amounts
summarized as follows:

<TABLE>
<CAPTION>

                                                    Year Ended August 31,
--------------------------------------- -------------------------------------------
                                               2000          1999          1998
--------------------------------------- -------------------------------------------
<S>                                       <C>            <C>            <C>
Current tax expense (benefit):
   Federal                                $        --    $    (1,200)   $ (43,500)
   State                                           --             --           --
---------------------------------------   -----------    -----------    ---------
                                                   --         (1,200)     (43,500)
---------------------------------------   -----------    -----------    ---------
Deferred tax expense (benefit):
   Federal                                    124,900       (863,600)    (109,500)
   State                                       25,500       (152,400)     (19,400)
---------------------------------------   -----------    -----------    ---------
                                              150,400     (1,016,000)    (128,900)
---------------------------------------   -----------    -----------    ---------
Provision (benefit) for income taxes      $   150,400    $(1,017,200)   $(172,400)
=======================================   ===========    ===========    =========
</TABLE>

<PAGE>

Total deferred tax assets and liabilities as of August 31, 2000 and 1999 and the
sources of the differences  between the tax and financial reporting bases of the
Company's assets and liabilities  which give rise to the deferred tax assets and
liabilities are as follows:

<PAGE>
<TABLE>
<CAPTION>

                                                   Year Ended August 31,
  ---------------------------------------------- ------------------------
                                                     2000         1999
                                                 ------------------------
<S>                                              <C>          <C>
Deferred tax assets:
    Property and equipment                       $  280,000   $  354,000
    Accrued expenses and reserves                   606,500      764,900
    Net operating loss and other carryforwards    3,288,200    3,299,800
-----------------------------------------------  ----------   ----------
                                                  4,174,700    4,418,700
-----------------------------------------------  ----------   ----------
Deferred tax liabilities:
    Prepaid expenses                                 45,000       34,600
    Miscellaneous                                   231,300      335,300
-----------------------------------------------  ----------   ----------
                                                    276,300      369,900
-----------------------------------------------  ----------   ----------
   Net deferred tax assets                       $3,898,400   $4,048,800
===============================================  ==========   ==========
</TABLE>

The  Company  has net  operating  loss  carryforwards  at August 31, 2000 in the
amount of  approximately  $8,400,000 for federal purposes which expire beginning
2017 and has  recognized  a related  deferred  tax asset of  approximately  $3.3
million.  The ability of the Company to benefit from these  carryforwards in the
future is  dependent on the  Company's  ability to generate  sufficient  taxable
income prior to their expiration dates. Although realization of the net deferred
tax assets is not assured,  management  believes that it is more likely than not
that all of the net  deferred  tax assets  will be  realized.  The amount of net
deferred tax assets considered realizable,  however could be reduced in the near
term based on  changing  conditions.  Should the  Company  undergo an  ownership
change as defined in Section 382 of the Internal Revenue Code, the Company's net
tax operating loss carryforwards generated prior to the ownership change will be
subject  to annual  limitation  which  could  substantially  reduce or defer the
utilization of theses losses.

Reconciliation of the statutory federal income tax rate and the effective income
tax rate is summarized as follows:

<TABLE>
<CAPTION>

                                                           Year Ended August 31,
  ----------------------------------------------------   -------------------------
                                                           2000    1999    1998
  ----------------------------------------------------   ----------------- -------
  <S>                                                     <C>     <C>      <C>
  Statutory federal income tax rate                        34.0%  (34.0)%  (34.0)%
  State income tax, net of federal income tax effect        4.5    (5.3)    (5.3)
  Other                                                     1.3    (0.6)    (3.1)
  ----------------------------------------------------     ----    ----     ----
  Effective income tax rate                                39.8%  (39.9)%  (42.4)%
  ====================================================     ====    ====     ====
</TABLE>

Note 4.  ACCOUNTS RECEIVABLE:

Accounts receivable, excluding receivables from the disposed Analytical Segment,
consist of the following:

<TABLE>
<CAPTION>

                                                  Year Ended August 31,
  ------------------------------------------  -------------   -------------
                                                  2000             1999
  ------------------------------------------  -------------   -------------
<S>                                           <C>              <C>
  Contract accounts receivable                $ 10,154,000     $ 7,632,100
  Retainage by clients                           1,040,300       1,082,400
  -----------------------------------------   ------------     -----------
  Total accounts receivable                     11,194,300       8,714,500
  Less-Allowance for doubtful accounts            (365,100)        (34,900)
  -----------------------------------------   ------------     -----------
  Accounts receivable, net                    $ 10,829,200     $ 8,679,600
  =========================================   ============     ===========
</TABLE>

Retention  balances are billable at contract  completion  or upon  attainment of
other specified milestones. Consistent with industry practice, these receivables
are classified as current assets.  Management anticipates that substantially all
retainages will be billed within one year.

Note 5.  BANK FINANCING ARRANGEMENTS:

The Company  maintains a credit  arrangement with a regional bank consisting of:
(i) an $7,000,000  revolving line of credit and (ii) a $1,500,000 revolving line
of credit  for fixed  assets,  leases,  or  acquisitions.  Borrowings  under the
revolving line of credit are limited to 80% of certain accounts receivable;  and
costs and estimated  earnings in excess of billings on uncompleted  contracts up
to a maximum of  $4,000,000.  As of August 31, 2000,  $4,370,500  was  available
under the  revolving  line of credit.  The line of credit is  collateralized  by
substantially all the assets of the Company. Under the revolving line of credit,
the Company is required to comply with covenants  which require  certain minimum
ratios including debt service  coverage,  tangible net worth, and liabilities to
tangible  net worth,  and restrict  the amount of annual  capital  expenditures.
During fiscal years 2000,  1999,  and 1998, the Company was either in compliance
or had obtained waivers on all covenants related to these arrangements.  <TABLE>
<CAPTION>

                                                                      Year Ended August 31,
                                                                      2000          1999
  ------------------------------------------------------------     ----------     -----------
<S>                                                                <C>            <C>
  Long-term debt consists of the following:
    Revolving credit facility  payable to commercial  bank,  interest charged at
     LIBOR  plus 300  basis  points at  August  31,  2000 and plus 250 at August
     31,1999, (9.12% and 7.66% at August 31, 2000 and 1999)

     facility expires September 2002                               $3,486,100     $ 3,326,200
                                                                   ----------     -----------
    Note  payable  to  a  commercial  bank  in  equal  monthly  installments  of
     $29,600,which   includes   interest   at  9.1%,   through   December   1999
     collaterialized by

     certain computer equipment                                            --          87,500
  ------------------------------------------------------------     ----------     -----------
  Total long-term debt                                              3,486,100       3,413,700
                                                                                  -----------
  Less-current portion                                                     --         (87,500)
  ------------------------------------------------------------     ----------     -----------
  Long-term portion                                                $3,486,100     $ 3,326,200
  ------------------------------------------------------------     ==========     ===========
</TABLE>

Note 6.  LEASE COMMITMENTS:

The  Company's  central  office,  regional  offices,  and certain  furniture and
equipment are held under operating leases.  These leases expire at various dates
through fiscal 2007, and certain leases call for annual proportionate  increases
due to property  taxes and  certain  other  operating  expenses.  Lease  expense
amounted to $4,078,200,  $5,732,900,  and $6,061,000, for the years ended August
31, 2000,  1999,  and 1998,  respectively.  Lease expense  included  payments of
approximately $1,495,700,  $1,775,000,  and 1,900,400 for the years ended August
31, 2000, 1999, and 1998,  respectively,  to partnerships whose partners include
the  Chairman  of the Board of EA and  certain  members  of his  family  for its
central  office,  and  Loveton,  Maryland,  regional  office and the  laboratory
facility.  As part of the  Analytical  Services  divestiture  in April 1999, the
Company ended the lease of the  laboratory  facility  resulting in reduced lease
expenses. These lease payments include pass-through reimbursements for taxes and
operating  expenses  incurred by the lessor which include local property  taxes,
janitorial  services,  and utility costs related to the operation of both office
and laboratory  leased space.  Management of the Company  believes the terms and
conditions of the  transactions  between the Company and entities with which the
Chairman is  affiliated,  are at least as favorable to the Company as could have
been  obtained  from third  parties and are in the best interest of the Company.
The Company is the lessee of telephone  equipment  under capital leases expiring
in 2005.  The  present  value  of the  future  minimum  lease  payments,  at the
inception of the lease, is recorded as a capital lease asset and related capital
lease  obligation.  Assets  under  these  capital  leases  are  included  in the
consolidated balance sheet at $257,000 less accumulated  depreciation of $15,300
as of August 31, 2000.

<PAGE>

The minimum lease commitments under capital leases and noncancellable  operating
leases are as follows:

<TABLE>
<CAPTION>

    Year Ending                              Capital         Operating
     August 31,
    -------------------------------------- ------------- ----------------
<S>                                          <C>            <C>
    2001                                      $ 63,000      $ 2,991,100
    2002                                        63,000        2,516,200
    2003                                        63,000        2,092,200
    2004                                        63,000        1,924,600
    2005                                        28,400        1,752,700
    2006 and thereafter                              -        2,222,400
    -------------------------------------- ------------- ----------------
    Total minimum payments                     280,400      $13,499,200

    Less - amount representing interest         48,400
                                                ------
    Net minimum lease payments                 232,000
    Less - current portion of obligations       44,700
                                                ------
    Long-term portion of obligations          $187,300
                                              ========
    ======================================================================
</TABLE>

Note 7.  NET INCOME (LOSS) PER SHARE:

In accordance with Statement of Financial  Accounting  Standards  (SFAS) No. 128
"Earnings per Share," basic  earnings  (loss) per share is based on the weighted
average number of shares of common stock outstanding during the period.  Diluted
earnings  (loss) per share is based on the weighted  average number of shares of
common stock and common stock equivalents  outstanding during the period. Common
stock  equivalents are calculated  using the treasury stock method.  The diluted
share base for the years ending August 31, 1999,  and 1998 excludes  incremental
shares of 600, and 91,000,  respectively,  due to their antidilutive effect as a
result of the Company's loss from continuing operations in each of the years.

Note 8.  PROFIT SHARING:

EA maintains a defined contribution plan which allows employees over 21 years of
age to be  eligible  to  participate  in the plan on the  first day of the month
following  their date of hire.  The plan  provides  for  discretionary  employer
contributions for each fiscal year, in amounts determined  annually by the Board
of Directors.  The plan also includes a 401(k)  provision,  allowing for Company
matching  contributions.  For the years ended August 31, 2000,  1999,  and 1998,
matching contributions to the plan made under the 401(k) provisions of the plan,
were $467,100, $451,200, and $472,100, respectively.

Note 9.  STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS:

The Company  maintains an Amended and Restated  Stock Option Plan (the  "Plan"),
which provides for the grant of  nonqualified  stock options and incentive stock
options to certain key employees and officers of the Company. The exercise price
of an option  granted  under the Plan may not be less than the fair market value
of the  underlying  shares of Common Stock on the date of the grant.  Under this
Plan, options generally vest over 3 years and have a maximum term of 10 years. A
total of 669,000 options are issued and outstanding of the 1,448,147 reserved as
of  August  31,  2000,  having  an  average  exercise  price  of  $2.44.  Of the
outstanding  options,  400,000  are held by the former  President  and CEO.  The
exercise price of the 400,000  shares ranges between $2.25 and $3.67,  which was
equal to the market value on the dates of grant.

The Company  maintains an Employee Stock Purchase Plan (the "Purchase  Plan") to
provide  eligible  employees  with the  opportunity  to  purchase  shares of the
Company's Common Stock through voluntary payroll deductions.  Under the Purchase
Plan,  eligible employees may purchase shares through monthly payroll deductions
at 90% of current  market  value at the time of  purchase.  The Company pays all
administrative  expenses related to employee purchases. A total of 70,500 shares
remain  authorized  for  distribution  under the Purchase  Plan as of August 31,
2000.

The Company  maintains two  Non-Employee  Director Stock Option Plans ("1993 and
1995 Plans") which provide for the granting of nonqualified stock options to its
non-employee  directors.  Under the 1993 and 1995 plan, options vest immediately
and have a maximum term of 5 years. A total of 39,500  options were  outstanding
as of August 31,  2000.  A total of 60,500  options  remain  reserved  for as of
August 31, 2000.

A summary of the status of activity in fiscal years 2000,  1999,  and 1998 under
the Company's Employee Stock Option Plan and Non-Employee  Director Stock Option
Plans (1993 and 1995) follows:

<TABLE>
<CAPTION>

                                                    2000                    1999                    1998
                                           ---------------------- ------------------------ ----------------------
                                            Shares    Wgtd.Avg.     Shares    Wgtd.Avg.     Shares    Wgtd.Avg.
                                            (000)     Exer.Price    (000)     Exer.Price    (000)    Exer.Price
                                           --------  ------------ --------- ------------- --------- -------------
<S>                                         <C>        <C>          <C>      <C>            <C>      <C>
  Outstanding at beginning of year            766      $  2.45       817     $   2.44        616     $   2.37
  Granted                                      71         1.11       135         1.17        273         2.65
  Exercised                                    --           --        --           --        (27)        2.45
  Forfeited                                  (126)        1.98      (186)        2.23        (45)        2.72
  Expired                                      (3)        6.12        --           --         --           --
                                             ----        -----      -----       -----       -----       -----
  Outstanding at end of year                  708         2.20       766         2.27        817         2.44
                                             ----        -----      -----       -----       -----       -----
  Exercisable at year end                     591      $  2.38       383      $  2.45        269     $   2.59
  Weighted Average Fair Value of Options

  Granted                                              $  0.88               $   0.52                $   1.35
</TABLE>

The following table summarizes  information about stock options  outstanding and
exercisable at August 31, 2000 (shares in thousands).
<TABLE>
<CAPTION>
                                                      Weighted
                                                       Average

                                                      Remaining

                                                     Contractual                    Weighted
  Range of exercise                     Average         Life                         Average
       prices          Outstanding   Exercise Price   (in years)    Exercisable   Exercise Price
--------------------- -------------- ---------------  ------------- ----------- -------------------
<S>                      <C>           <C>              <C>          <C>           <C>
  $1.031 - $1.94           245         $   1.34           7.0          139         $   1.49
  $1.95 - $3.90            446         $   2.47           6.8          436         $   2.47
  $3.95 - $11.75            17         $   7.44           4.0           17         $   7.44
                           ---            -----          ----          ---            -----
  Total:                   708         $   2.20                        591         $   2.38
  ====================     ===            =====          ====          ===            =====
</TABLE>
The Company  accounts  for these plans under APB Opinion No. 25,  under which no
compensation  cost has been  recognized.  Had  compensation  cost for plans been
determined  consistent  with FASB  Statement  No. 123, the  Company's net income
(loss) and income (loss) per share would have changed to the following pro forma
amounts:

<TABLE>
<CAPTION>
                                               2000          1999          1998
   ------------------------- -------------  ----------   ------------   ----------
<S>                          <C>             <C>         <C>            <C>
   Net loss                  As Reported    $ 227,200    $(1,530,400)   $(240,100)
                             Pro Forma        127,100     (1,655,600)    (331,700)
   Basic loss per share      As Reported    $    0.04    $     (0.24)   $   (0.04)
                             Pro Forma           0.02          (0.26)       (0.05)
   Diluted loss per share    As Reported    $    0.04    $     (0.24)   $   (0.04)
                             Pro Forma           0.02          (0.26)       (0.05)
</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for grants in 2000,  1999 and 1998:  Risk-free  interest rates
ranging from 5.14% to 6.68%; expected volatility is 65% in 2000, and 63% in 1999
and 62% in 1998;  dividend yield of 0% in 2000, 1999, and 1998; expected life of
10 years.

<PAGE>

Note 10.  STOCK REPURCHASE

On  November  2,  1999,  the  Company  announced  that its  Board  of  Directors
authorized  management  to  purchase up to 500,000  shares of its common  stock.
During the twelve months ended August 31, 2000,  the Company  purchased  393,200
shares of common stock under this plan.  The Company  suspended  the  repurchase
program on February 4, 2000, when it was reported that management had discovered
accounting  irregularities.  The Company  purchased these shares, at cost, which
are presented as Treasury Stock in the  consolidated  balance sheet. On July 24,
2000, the company  announced the reinstitution of the Company's stock repurchase
program.  Between November 5, 1999 and February 4, 2000, the Company repurchased
a total of 267,600 shares of its outstanding common stock at an average price of
$1.12 per  share.  The  Company  repurchased  a total of  125,600  shares of its
outstanding common stock at an average price of $1.04 from July 24, 2000 through
August 31, 2000.

Note 11.  COMPANY RESTRUCTURINGS:

In February  1999,  the Company  implemented  several cost  cutting  measures to
affect its long-term profitability objectives by aligning expenses more directly
with  revenues.  In  connection  with the  restructuring,  the Company  incurred
charges of $2,132,600 during the fiscal 1999 second quarter primarily related to
severance   agreements  of  several  senior  sales  and  executive  staff.  This
restructuring included a staff reduction of approximately 30 employees including
several officers.

As of August 31,  2000,  the  Company  had an accrual of  $130,800  included  in
current liabilities in the accompanying consolidated balance sheet.

Note 12.  "KEY EMPLOYEE" LIFE INSURANCE

In April  1998,  adjustments  were  made to the  actual  cash  value of two "key
employee"  life insurance  policies for the Chairman of the Board,  of which the
Company is the named  beneficiary.  Prior to April 1998, the policies had a cash
surrender value of $515,500, which was included in Other Assets on the Company's
balance  sheet.  In fiscal 1994,  the asset value of the policies was originally
adjusted downward due to bankruptcy proceedings involving the original insurance
company.  In April 1998,  Phoenix Home Life Mutual  Insurance Co., the successor
underwriter  of the policies,  confirmed  that the cash  surrender  value of the
policies was $776,600. As a result, Other Assets was increased by $261,100,  and
a one-time  gain was  recognized  during the third quarter of fiscal 1998. As of
August 31, 2000, the policies had a cash surrender value of $848,600.

Note 13.  RELATED PARTY TRANSACTIONS

At the  request  of its  former  primary  lender  and in order to  maintain  its
favorable  relationship with that lender, the Company in December 1996 purchased
from  this  lender  the  secured  loans  of  three  former  EA  officers.  These
interest-free demand loans, in the aggregate amount of $301,000,  are secured by
pledges of the Company's  common stock. The Company had maintained a reserve for
the difference between the fair market value of the pledged stock and the amount
of the loans.  While the loans have not been  forgiven,  during fiscal year 2000
the Company increased the reserve and reclassified the note receivable.

Note 14.  COMMITMENTS AND CONTINGENCIES

There are no material pending legal proceedings to which the Company is a party.
The  Company is  involved  in various  claims and legal  actions  arising in the
ordinary course of business.  In the opinion of the Company,  the disposition of
these matters will not have a material adverse effect on the financial position,
results of operations or liquidity of the Company.

Note 15.  SUBSEQUENT EVENTS

On September  18, 2000,  the Company  announced  that its Board of Directors has
hired investment bankers Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy
Strategic Group to explore  strategic  alternatives that may be available to the
Company to maximize shareholder value,  including,  but not limited to, the sale
of the Company or business  combination with another company. EA stated that the
Board's decision to explore strategic  alternatives is driven by its belief that
EA's stock price is undervalued in the public market.

<PAGE>

Note 16.  QUARTERLY INFORMATION (Unaudited)
<TABLE>
<CAPTION>

                                                          FY 2000 Quarter Ended                       FY 1999 Quarter Ended
                                                Nov 30     Feb 29    May 31     Aug 31       Nov 30     Feb 28     May 31     Aug 31
                                              --------------------------------------------------------------------------------------
<S>                                              <C>       <C>       <C>       <C>         <C>         <C>         <C>       <C>
    Total Revenue                                $14,808   $13,830   $14,350   $ 17,879    $ 11,684    $ 10,940    $12,307   $13,796
    Net Sales                                      8,702     8,779     9,039      8,676       8,034       7,662      9,145     9,306
    Gross Profit                                     427       149       130        (71)        (13)     (3,180)       457       508
    Income (loss) from Continuing Operations         228        57        38        (97)        (29)     (1,925)       228       278
    Income (loss) from Discontinued Operations        --        --        --         --          29        (147)        35        --
    Net income (loss)                                228        57        38        (97)         --      (2,072)       263       278
    Net income (loss) per Common Share
       Basic                                     $  0.04   $  0.01   $  0.01   $  (0.02)   $     --    $  (0.33)   $  0.04   $  0.04
       Diluted                                   $  0.04   $  0.01   $  0.01   $  (0.02)   $     --    $  (0.33)   $  0.04   $  0.04
    Weighted Average Shares Outstanding

       Basic                                       6,332     6,135     6,093      6,080       6,292       6,306      6,319     6,319
       Diluted                                     6,332     6,146     6,094      6,080       6,292       6,306      6,320     6,320
  </TABLE>

                         -------------------------------

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.


<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS OF THE COMPANY

The  Company's  Board of  Directors  consists  of four  members,  each  serves a
one-year term and until his successor is duly elected and qualified.
<TABLE>
<CAPTION>
Name of Director, Age and Background                                                      Director Since
------------------------------------                                                      --------------
<S>                                                                                           <C>
Edmund J. Cashman, Jr., age 64, Senior Executive Vice President of Legg Mason Inc.             1986
and Legg Mason Wood Walker, Inc.; Director/Trustee, Various Legg Mason Registered
Investment Companies

Loren D. Jensen, Ph.D., age 63, President, Chief Executive Officer and Chairman of             1973
the Board of Directors of the Company

Rudolph P. Lamone, Ph.D., age 68, Chairman of the Board, Michael D. Dingman Center             1986
for Entrepreneurship, Robert H. Smith School of Business, University of Maryland

Cleaveland D. Miller, Esq., age 62, Managing Partner, Semmes, Bowen & Semmes, a                1997
Professional Corporation
</TABLE>

EXECUTIVE OFFICERS OF THE COMPANY

Executive  Officers  of the  Company  are  elected  annually  and  serve  at the
discretion  of the Board of  Directors.  As of November 15, 2000,  the Executive
Officers of the Company are Loren D. Jensen,  Ph.D.,  as to whom  information is
provided  above  under  Directors  of the Company and Barbara L. Posner for whom
related information is as follows:

Barbara L. Posner, 41, Executive Vice President,  Chief Financial Officer, Chief
Operating  Officer.  Ms.  Posner  joined  the  Company in March 1997 and was the
Senior Vice President of Finance and Administration until February 1999 when she
was appointed Chief Financial  Officer and Chief  Operating  Officer.  With more
than 20 years  experience,  Ms. Posner began her career in public accounting and
later moved into  operations.  Prior to joining EA, she served as Vice President
and Controller at Metcalf & Eddy,  Inc., a water,  wastewater,  and  remediation
technologies company.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

                         EXECUTIVE OFFICER COMPENSATION

                           SUMMARY COMPENSATION TABLE

The  following  table  sets  forth  certain  information   concerning  executive
compensation  for services  during each of the Company's last three fiscal years
to (i) those persons  serving as chief  executive  officer of the Company during
the fiscal year ended August 31, 2000; and (ii) those persons who were among the
four most highly  compensated  executive  officers  during the fiscal year ended
August 31, 2000.

<TABLE>
<CAPTION>
                                            Annual Compensation                           Long-Term
                                                                                     Compensation Awards

------------------------------------------------------------------------------------------------------------------
                                                                                             Restricted              All Other
                                                                          Other Annual         Stock       Option   Compensation(1)
     Name and Principal                Year      Salary      Bonus        Compensation        Awards       Shares        ($)
      Position in 2000                             ($)        ($)             ($)               (#)          (#)
------------------------------     ---------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>        <C>                 <C>             <C>        <C>
  Loren D. Jensen, Ph.D                 2000     240,384         --                  --              --         --       4,986
  Chairman of the Board,                1999     233,600         --                  --              --         --       9,264
  President and Chief                   1998     282,000         --                  --              --         --       4,750
  Executive Officer
  ------------------------------     -------     -------     ------     ---------------     -----------     ------     -------
  Barbara L. Posner                     2000     191,154     40,000                  --              --         --       5,031
  Senior Vice President, Chief          1999     171,154         --                  --              --     65,000       4,858
  Financial Officer and Chief           1998     145,000         --                  --              --     25,000       3,052
  Operating Officer
  ------------------------------     -------     -------     ------     ---------------     -----------     ------     -------
  Edward M. Greco, P.E.(2)              2000      43,750         --                  --              --         --     144,224
  Former Senior Vice President          1999     175,000         --                  --              --         --     267,300(3)
  and President of EA                   1998      60,577     20,000                  --              --     70,000       2,000
  International, Inc.
  ------------------------------     -------     -------     ------     ---------------     -----------     ------     -------
</TABLE>

(1)  Includes the Company's  matching  contributions  under its 401(k) Employees
     Savings Plan.  Includes severance and vacation accrual payout for Mr. Greco
     made in the fiscal year ended August 31, 2000.

(2)  Edward M. Greco separated from the Company effective November 12, 1999.

(3)  Includes a change in control  payout  made to Mr.  Greco in the fiscal year
     ended August 31, 1999.

<PAGE>

                     STOCK-BASED INCENTIVE COMPENSATION PLAN

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

The Company did not make any Options/Stock Appreciation Rights ("SAR") grants to
any of its named executive officers in the fiscal year ended August 31, 2000.

The following table sets forth certain  information  regarding  option exercises
during the fiscal year ended August 31,  2000,  as well as the number and value,
as of August  31,  2000,  of  unexercised  options  held by the named  executive
officers.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                                      Number of Securities             Value of Unexercised
                                                                     Underlying Unexercised                in-the-Money
                                                                        Options/SARs at                   Options/SARs at
                                                                        Fiscal Year-End                 Fiscal Year-End(1)
                                                                             (#)                               ($)
  ----------------------     ---------------     --------------  --------------------------------- --------------------------------
                                 Shares
                               Acquired on            Value

          Name                 Exercise (#)        Realized ($)    Exercisable     Unexercisable     Exercisable    Unexercisable
  ----------------------     ---------------     --------------  -------------- ------------------ -------------- -----------------
<S>                          <C>                 <C>             <C>            <C>                <C>            <C>
  Loren D. Jensen                         --                 --         --                --                   --                --
  ---------------------      ---------------     --------------  -------------- ------------------ -------------- -----------------
  Barbara L. Posner                       --                 --     51,667            48,333                   --                --
  ----------------------     ---------------     --------------  -------------- ------------------ -------------- -----------------
  Edward M. Greco                         --                 --         --                --                   --                --
  ---------------------      ---------------     --------------  -------------- ------------------ -------------- -----------------
</TABLE>
(1) Based on a  closing  NASDAQ  price of $0.875  per  share of Common  Stock on
    August 31, 2000.  Values are  calculated by  subtracting  the exercise price
    from the fair market value of the stock as of the fiscal year end.

<PAGE>

Employment Agreements and Change-in-Control Arrangements

In March,  1999,  the Company  entered into a Change of Control1  Agreement with
Barbara L. Posner. The Agreement provides that if, within thirty (30) days after
a Change of Control,  Ms. Posner  terminates  her  employment she is entitled to
receive  a lump sum  payment  equal to two times her  annual  salary  (presently
$195,000 per year) plus company provided benefits for 24 months from the date of
termination.  She will also receive  ownership of the vehicle,  computer and fax
machine currently provided to her by the Company.

The Agreement also provides that if Ms. Posner's employment is terminated by the
Company  without  cause,  Ms.  Posner  will  continue to receive her salary plus
benefits for a period of 18 months from the date of termination of employment.

On March 4, 1999, the Company  entered into an Employment  Agreement with Edward
M. Greco1 under which Mr.  Greco was to serve as President of EA  International,
Inc. and Senior Vice President of EA Engineering,  Science, and Technology, Inc.
The Agreement was to expire upon the earlier of one year or a Change of Control1
of the Company.  The Agreement provided that in the event of a Change of Control
or Mr.  Greco's  involuntary  termination,  Mr.  Greco  will  receive  severance
benefits equal to nine (9) months salary (based on a rate of $175,000  annually)
plus benefits and the ownership of the vehicle currently  provided to him by the
Company.  On  November  12,  1999,  Mr.  Greco's  employment  with  the  Company
terminated. All payments have been made to him in accordance with the Agreement.

--------


1 Under the terms of the Company's respective Agreements with Ms. Posner and Mr.
Greco discussed  herein,  "Change of Control" is defined as the occurrence of an
event with  respect to the  Company  that is a change of a nature  that would be
required  to be  reported,  by persons  or  entities  subject  to the  reporting
requirements  of Section 13(d) of the  Securities  and Exchange Act of 1934 (the
"Exchange  Act"),  in  Schedule  13D  of  Regulation  13D-G,  or  any  successor
provisions  thereto,  promulgated under the Exchange Act; provided that a Change
of Control  shall be deemed to have  occurred only if any "person" (as that term
is used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
"beneficial  owner" (as defined in Rule 13d-3 issued  under the  Exchange  Act),
directly or  indirectly,  of securities of the Company  representing  forty-five
percent  (45%)  or more of the  combined  voting  power  of the  Company's  then
outstanding securities.

<PAGE>

Director Compensation

Effective March 31, 1998, each  non-employee  Director of the Company received a
fee of $1,500 for each meeting of the Board of Directors  which he attended.  In
addition,  each  non-employee  director  received  $1,500 for attendance at each
meeting of any committee of the Board not held on the day of a Board meeting.

In addition to such fees, under the Company's 1993  Non-Employee  Director Stock
Option Plan,  each  director who is newly  elected to the Board and who, at that
time,  is not an employee of the Company is granted an option to purchase  4,000
shares of  Common  Stock  when he or she  becomes a  director.  Also,  under the
Company's  1995  Non-Employee  Director  Stock Option Plan,  per approval at the
January 14, 1999 meeting of Company stockholders,  each non-employee director is
granted an option to  purchase  4,750  shares of Common  Stock as of the date of
each annual meeting of stockholders  at which such director is reelected.  Prior
to this approval, 1,000 shares of Common Stock were awarded to each non-employee
director as of the date of each  annual  meeting of  stockholders  at which such
director is  reelected.  All such  options  have an exercise  price equal to the
market price of the Common Stock on the date of grant and vest  immediately upon
grant.

For  the  fiscal  year  ended  August  31,  2000,  the   compensation  for  each
non-employee Director was as follows:

            Director                                            Amount
     --------------------------                                 -------
     Edmund J. Cashman, Jr.                                     $12,000
     Rudolph P. Lamone, Ph.D.                                   $12,000
     Cleaveland D. Miller, Esq.                                 $15,000


Compensation Committee Interlocks and Insider Participation

All  non-employee  members of the Board of Directors  serve on the  Compensation
Committee of the Board of Directors and except as otherwise described in Item 13
of this Report 10-K,  Certain  Relationships and Related  Transactions,  set out
below,  there are no  affiliations  between  the  Company and the members of the
Compensation Committee.

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                             PRINCIPAL STOCKHOLDERS

The following  table shows,  as of August 31, 2000 the total number of shares of
Common  Stock  beneficially  owned by each  person who was known by the Board of
Directors to own more than 5% of the Company's  Common Stock. On that date there
were 6,378,800 shares of Common Stock outstanding.

                               Shares Beneficially

         Name and Address of      Owned Directly or     Percent of
         Beneficial Owner           Indirectly          Common Stock
  ----------------------------------------------------------------------
  Loren D. Jensen                   1,552,978               24.3%
  12 Burnbrae Road
  Towson, Maryland 21204

  Cleaveland D. Miller, Trustee       717,625(1)            11.3%
  250 W. Pratt Street
  Baltimore, Maryland 21201

----------
  (1)  Cleaveland  D.  Miller  holds  702,000 of these  shares as the trustee of
       irrevocable  trusts for the  benefit of each of Loren D.  Jensen's  three
       children.

               SECURITIES HELD BY DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>

                                                                Shares Beneficially Owned(1)(2)
  Director/Executive Officer                                        Amount             Percent
  --------------------------                                      ---------            -------
<S>                                                               <C>                   <C>
  Edmund J. Cashman, Jr., Director                                   58,375                 *

  Loren D. Jensen, Ph.D., President, Chief Executive              1,552,978               24.3%
  Officer and Chairman of the Board of Directors of the
  Company

  Rudolph P. Lamone, Ph.D., Director                                 15,298                *

  Cleaveland D. Miller, Esq., Director                              717,625(3)            11.3%

  Barbara L. Posner, Senior Vice President, Chief                    65,299                1.0%
  Financial Officer, Chief Operating Officer
  All executive officers and directors of the Company as          2,409,505               37.8%
  a group (5 individuals)

</TABLE>
  --------------
    * Less than 1%

(1)  Based upon information  supplied by each director and executive  officer as
     of October 29, 2000.  Unless otherwise noted, all shares indicated are held
     with sole voting and sole investment power.

(2)  Includes  2,409,505 shares for which directors and executive  officers have
     sole voting and dispositive powers and presently  exercisable option shares
     of 48,333  for Ms.  Posner and  13,500,  13,500,  and  14,500  for  Messrs.
     Cashman, Lamone and Miller, respectively.

(3)  Cleaveland  D.  Miller  holds  702,000  of these  shares as the  trustee of
     irrevocable  trusts  for the  benefit  of each of Loren D.  Jensen's  three
     children.

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions With Management and Others

The Company  leases  approximately  43,700  square feet of office  space,  which
serves as its corporate  head-quarters,  in Hunt Valley, Maryland from Merrymack
Limited Partnership,  a Maryland limited partnership of which Loren D. Jensen is
the  limited  partner  and  Ecolair  Limited  Partnership,  a  Maryland  limited
partnership of which Loren D. Jensen is the general partner ("Ecolair"),  is the
general  partner.  Of the 43,700 square feet,  the Company  sublets 4,200 square
feet to other tenants.  The prime lease expires  December 31, 2006. For the year
ended August 31, 2000,  total payments under the lease  (including  pass-through
taxes and operating expenses) were $883,900.

The Company  also leases  approximately  32,400  square feet of office  space in
Sparks, Maryland from Ecolair. The lease expires November 30, 2007. For the year
ended August 31, 2000 total  payments  under the lease  (including  pass-through
taxes and operating expenses) were $611,800.

Certain Business Relationships

Legg Mason  Wood  Walker,  Inc.,  with which  Edmund J.  Cashman is  affiliated,
provides investment advisory services to the Company.

Semmes,  Bowen & Semmes  ("Semmes"),  of which  Cleaveland D. Miller is managing
partner,  provided  legal services to the Company during fiscal 2000. The firm's
billings  to the  Company in fiscal 2000 were less than  $60,000,  however,  the
Director's fees paid to Mr. Miller, plus fees paid to Semmes, totaled $73,300 in
the fiscal year ended August 31, 2000.

Management  of the  Company  believes  that  the  terms  and  conditions  of the
transactions  between  the  Company  and  entities  with  which  certain  of its
directors are  affiliated  were on terms and conditions at least as favorable to
the Company as could have been  obtained from third parties and were in the best
interests of the Company.

<PAGE>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON  FORM 8-K
<TABLE>
<CAPTION>
A.  Financial Statements and Schedule II                                        Page
-------------------------------------------------                               ----
<S> <C>                                                                         <C>
1.  The following financial statements are included in Item 8 of
       Part II of this report:

       Report of Independent Public Accountants                                   16

       Consolidated Financial Statements:
         Consolidated Balance Sheets as of August 31, 2000 and 1999               17
         Consolidated Statements of Operations for the years ended
           August 31, 2000, 1999, and 1998                                        19
         Consolidated Statements of Changes in Stockholders' Equity
           for the years ended August 31, 2000, 1999, and 1998                    20
         Consolidated Statements of Cash Flows for the years ended
           August 31, 2000, 1999, and 1998                                        21
         Notes to Consolidated Financial Statements for the years
           ended August 31, 2000, 1999, and 1998                                  22

2.     The following financial statement schedule for the years ended August 31,
       2000, 1999, and 1998 is submitted herewith:

       Report of Independent Public Accountants on Schedule                       40
       Schedule II - Valuation and Qualifying Accounts and Reserves               41
</TABLE>
All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

3.  Exhibits

     The following exhibits are filed herewith unless otherwise indicated:

    Exhibit
      No.         Description

    -------    --------------------------
      3.1      Certificate of Incorporation of the Company.(1)
      3.2      By-laws of the Company.(1)
      4.1      Article SIXTH of the Company's Certificate of Incorporation.(1)
     10.1      The Company's Profit Sharing Plan.(1)
     10.2      The Company's Stock Option Plan.(2)
     10.3      The Company's Employee Stock Purchase Plan.(3)
     10.4      The 1993 Stock Incentive Plan.(4)
     10.5      1993 Non-Employee Director Stock Option Plan.(5)
     10.6      The Amended and Restated Stock Option Plan(5)
     10.7      1995 Non-Employee Director Stock Option Plan(5)
     10.8      Employment Agreement dated March 17, 1997, between the
                Company and Donald A. Deieso.(6)


<PAGE>

     10.9     Lease, dated August 6, 1997, between ARE Sparks Limited
               Partnership, as landlord, and the Company as tenant.(7)
     10.10    Lease, dated August 6, 1997, between Ecolair Limited
               Partnership, as landlord, and the Company, as tenant.(7)
     10.11    Lease, dated August 6, 1997, between Merrymack Limited
               Partnership, as landlord, and the Company, as tenant.(7)
     10.12    Loan Agreement, dated August 22, 1997, between the Company
               and First National Bank of Maryland.(7)
     10.13    Amended and Restated Revolving Loan Promissory Note and
               Sixth Amended Modification Agreement dated November 1, 2000
               between the Company and AllFirst Bank
     13       2000 Annual Report to Stockholders.
     21       Subsidiaries of the Company.
     27       Financial Data Schedule.

    (1)  Incorporated  by  reference  to  the  Registrant's   Registration
         Statement on Form S-1, No. 33-8958,  which was declared effective
         by the Commission on October 31, 1986.

    (2)  Incorporated  by reference to the Company's  Registration  Statement on
         Form S-8, File Number 0-15587 filed on October 15, 1990.

    (3)  Incorporated  by reference to the  Registrant's  Annual  Report on Form
         10-K, File Number 0-15587 filed on November 28, 1990.

    (4)  Incorporated  by reference to the Company's  Registration  Statement on
         Form S-8, File Number 0-15587 filed on March 3, 1994.

    (5)  Incorporated  by reference to the Company's  Registration  Statement on
         Form S-8, File Number 0-15587 filed on April 15, 1998.

    (6)  Incorporated by reference to the Registrant's  Quarterly Report on Form
         10-Q, File Number 0-15587 filed on April 18, 1997.

    (7)  Incorporated by reference to the Company's  Annual Report on Form 10-K,
         File Number 0-15587 filed on November 17, 1997.

     b.   Reports on Form 8-K

      -    On  September  19, 2000,  the Company  filed a Form 8-K relative to a
           press  release of  September  18, 2000  announcing  that the Board of
           Directors   hired   investment   bankers   Legg  Mason  Wood  Walker,
           Incorporated and TechKNOWLEDGEy  Strategic Group to explore strategic
           alternatives  that  may be  available  to  the  Company  to  maximize
           shareholder  value,  including,  but not  limited to, the sale of the
           Company or business combination with another company.

      -    On October 16, 2000, the Company filed a Form 8-K relative to a press
           release of October 5, 2000 reporting that effective  Friday,  October
           6, 2000, the Company's  trading symbol would be changed from EACOC to
           EACO.

<PAGE>

        Report of Independent Accountants on Financial Statement Schedule

To the Board of Directors and Stockholders of
EA Engineering, Science, and Technology, Inc.:


Our audit of the  consolidated  financial  statements  as of August 31, 2000 and
1999,  and for each of the three  years in the period  ended  August  31,  2000,
referred to in our report dated November 1, 2000, included in this Annual Report
on Form 10-K, also included an audit of the financial  statement schedule listed
in Item  14(a)(2) of this Form 10-K.  In our opinion,  the  financial  statement
schedule  presents fairly, in all material  respects,  the information set forth
therein  when  read in  conjunction  with  the  related  consolidated  financial
statements.

                                  /s/ PricewaterhouseCoopers LLP


Baltimore, Maryland
November 1, 2000

<PAGE>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                   Years Ended August 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
        Allowance         Balance at

      for Doubtful        Beginning         Charged to                            Balance at
        Accounts          of Period       Cost and Expense       Write-offs      End of Period
  -------------------- ---------------  ---------------------  --------------  -----------------
<S>                         <C>               <C>                 <C>               <C>
          2000              $260,300          $344,300            $239,500          $365,100
          1999               257,200           243,500             240,400           260,300
          1998               532,000           130,500             405,300           257,200

</TABLE>

<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                              EA ENGINEERING, SCIENCE, AND
                                              TECHNOLOGY, INC.

Date: November 15, 2000                       By  /s/ Loren D. Jensen
                                              --------------------------------
                                              Loren D. Jensen
                                              Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

Name                        Title                              Date
----                        -----                              ----
                            Chairman of the Board, President,  November 15, 2000
/s/ Loren D. Jensen         and Chief Executive Officer
--------------------------
Loren D. Jensen

                            Chief Financial Officer            November 15, 2000
/s/ Barbara L. Posner       and Chief Operating Officer
--------------------------
Barbara L. Posner

/s/ Edmund J. Cashman, Jr.  Director                           November 15, 2000
--------------------------
Edmund J. Cashman, Jr.


/s/ Rudolph P. Lamone       Director                           November 15, 2000
--------------------------
Rudolph P. Lamone

/s/ Cleaveland D. Miller    Director                           November 15, 2000
--------------------------
Cleaveland D. Miller

<PAGE>

                                  EXHIBIT INDEX

Exhibit

  No.              Description                                              Page
  ---     -----------------------------------------                         ----

3.1      Certificate of Incorporation of the Company.                         38

3.2      By-laws of the Company.                                              38

4.1      Article SIXTH of the Company's Certificate of Incorporation.         38

10.1     The Company's Profit Sharing Plan.                                   38

10.2     The Company's Stock Option Plan.                                     38

10.3     The Company's Employee Stock Purchase Plan.                          38

10.4     The 1993 Stock Incentive Plan.                                       38

10.5     1993 Non-Employee Director Stock Option Plan.                        38

10.6     The Amended and Restated Stock Option Plan.                          38

10.7     1995 Non-Employee Director Stock Option Plan.                        38

10.8     Employment Agreement dated March 17, 1997, between the
          Company and Donald A. Deieso.                                       38

10.9     Lease, dated August 6, 1997, between ARE Sparks Limited
          Partnership, as landlord, and the Company as tenant.                39

10.10    Lease, dated August 6, 1997, between Ecolair Limited
          Partnership, as landlord, and the Company, as tenant.               39

10.11    Lease, dated August 6, 1997, between Merrymack Limited
          Partnership, as landlord, and the Company, as tenant.               39

10.12    Loan Agreement, dated August 22, 1997, between the Company
          and First National Bank of Maryland.                                39

10.13    Amended and Restated Revolving Loan Promissory Note and
          Sixth Amended Modification Agreement dated November 1, 2000
          between the Company and AllFirst Bank                               39

13       2000 Annual Report to Stockholders.                                  39

21       Subsidiaries of the Company.                                         39

27       Financial Data Schedule.                                             39


<PAGE>