UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

Commission File Number 1-9065

Ecology and Environment, Inc.
(Exact name of registrant as specified in its charter)

(716) 684-8060
(Registrant's telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

             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.

             At November 29, 2003,  2,397,845 shares of Registrant's Class A Common Stock (par value $.01) and 1,674,809 shares of Class B Common Stock (par value $.01) were outstanding.

PART 1
FINANCIAL INFORMATION

Item 1.   Financial Statements

Ecology and Environment, Inc
Consolidated Balance Sheet
				(Unaudited)
				November 1,				July 31,
Assets				2003				2003
Current assets:
	Cash and cash equivalents		$	5,978,503			$	6,577,390
	Investment securities available for sale			4,134,028				4,078,181
	Contract receivables, net			38,080,398				40,692,336
	Deferred income taxes			5,031,036				4,970,036
	Other current assets			3,083,788				3,517,283
	Assets of discontinued operations held for sale			122,385				205,545
	Total current assets			56,430,138				60,040,771
Property, building and equipment, net				12,098,700				12,175,137
Deferred income taxes				237,495				261,713
Other assets				3,344,951				3,903,912
	Total assets		$	72,111,284			$	76,381,533
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable		$	4,631,303			$	6,327,389
	Accrued payroll costs			4,304,439				4,872,149
	Income taxes payable			1,721,125				1,150,564
	Deferred revenue			3,552,791				7,375,313
	Current portion of long-term debt and capital lease obligations			326,993				2,378,226
	Other accrued liabilities			14,810,657				10,147,854
	Liabilities of discontinued operations held for sale			305,909				310,378
	Total current liabilities			29,653,217				32,561,873
Deferred revenue				1,760,246				3,835,937
Long-term debt				116,866				137,086
Minority interest				1,408,865				1,469,015
Shareholders' equity:
	Preferred stock, par value $.01 per share;
		authorized - 2,000,000 shares; no shares
		issued		---				---
	Class A common stock, par value $.01 per
		share; authorized - 6,000,000 shares;
		issued – 2,481,771 and 2,469,071 shares		24,818				24,691
	Class B common stock, par value $.01 per
		share; authorized - 10,000,000 shares;
		issued – 1,701,068 and 1,712,068 shares		17,011				17,121
	Capital in excess of par value			17,479,517				17,467,974
	Retained earnings			24,663,932				23,967,504
	Accumulated other comprehensive income			(2,065,499	)			(2,111,830	)
	Unearned compensation, net of tax			(113,863	)			(156,552	)
	Treasury stock - Class A common, 83,926 and 83,513
		shares; Class B common, 26,259 and 26,259 shares, at cost		(833,826	)			(831,286	)
	Total shareholders' equity			39,172,090				38,377,622
	Total liabilities and shareholders' equity		$	72,111,284			$	76,381,533
The accompanying notes are an integral part of these financial statements.

Ecology and Environment, Inc.
Consolidated Statement of Income
(Unaudited)
			Three months ended
				November 1,					October 26,
				2003					2002
Gross revenues			$	26,942,449			$		21,883,433
Less: direct subcontract costs				4,685,222					2,832,261
Net revenues				22,257,227					19,051,172
Operating costs and expenses:
	Cost of professional services and
		other direct operating expenses		12,638,589					9,950,139
	Administrative and indirect operating
		expenses		5,667,673					5,042,439
	Marketing and related costs			2,246,401					1,778,357
	Depreciation			393,859					290,425
Total operating costs & expenses				20,946,522					17,061,360
Income from operations				1,310,705					1,989,812
Interest expense				(29,116	)				(15,285			)
Interest income				30,263					57,429
Other expense				(18,830	)				(66,819			)
Net foreign currency exchange gain				108,361					---
Income from continuing operations before income taxes
	and minority interest			1,401,383					1,965,137
Total income tax provision				609,601					578,508
Net income from continuing operations
	before minority interest			791,782					1,386,629
Minority interest				(32,205	)				(342,622			)
Net income from continuing operations				759,577					1,044,007
Loss from discontinued operations				(111,768	)				(755,621			)
Income tax benefit on loss from discontinued operations				48,619					264,468
Net income			$	696,428			$		552,854
Net income per common share: basic
	Continuing operations		$	0.19			$		0.26
	Discontinued operations			(0.02	)				(0.12			)
Net income per common share: basic			$	0.17			$		0.14
Net income per common share: diluted
	Continuing operations		$	0.19			$		0.26
	Discontinued operations			(0.02	)				(0.12			)
Net income per common share: diluted			$	0.17			$		0.14
Weighted average common shares outstanding: Basic				3,990,792					4,069,060
Weighted average common shares outstanding: Diluted				4,049,330					4,071,404
The accompanying notes are an integral part of these financial statements.

Ecology and Environment, Inc
Consolidated Statement of Cash Flows
(Unaudited)
			Three Months Ended,
				November 1,						October 26,
				2003						2002
Cash flows from operating activities:
	Net income from continuing operations		$	759,577					$	1,044,007
	Net loss from discontinued operations			(63,149	)					(491,153	)
	Adjustments to reconcile net income to net cash
		provided by (used in) operating activities:
	Depreciation			393,859						348,102
	Amortization			42,689						65,367
	Gain (loss) on disposition of property and equipment			(11,769	)					1,500
	Minority interest			(60,150	)					322,662
	Net foreign exchange gain			(108,361	)					---
	Provision for contract adjustments			312,333						239,933
	(Increase) decrease in:
		- contracts receivable, net		2,298,471						(3,359,381	)
		- other current assets		312,244						(398,711	)
		- income taxes receivable		---						312,977
		- deferred income taxes		(44,882	)					28,537
		- other non-current assets		558,961						2,349,223
	Increase (decrease) in:
		- accounts payable		(1,692,111	)					(1,228,814	)
		- accrued payroll costs		(564,042	)					338,861
		- income taxes payable		570,561						(25,973	)
		- deferred revenue		(5,898,213	)					(1,288,000	)
		- other accrued liabilities		4,960,675						(1,703,047	)
Net cash provided by (used in) operating activities				1,766,693						(3,443,910	)
Cash flows used in investing activities:
	Purchase of property, building and equipment, gross			(325,306	)					(247,814	)
	Payment for the purchase of bond			(35,596	)					(35,701	)
Net cash used in investing activities				(360,902	)					(283,515	)
Cash flows provided by (used in) financing activities:
	Dividends paid			---						(20,040	)
	Repayment of debt			(2,071,453	)					---
	Net proceeds from issuance of common stock			12,325						3,625
	Foreign currency translation reserve			54,450						(216,033	)
Net cash used in financing activities				(2,004,678	)					(232,448	)
Net decrease in cash and cash equivalents				(598,887	)					(3,959,873	)
Cash and cash equivalents at beginning of period				6,577,390						8,229,034
Cash and cash equivalents at end of period			$	5,978,503					$	4,269,161
The accompanying notes are an integral part of these financial statements.

		Common Stock										Capital in					Other
		Class A				Class B						Excess of			Retained		Comprehensive			Unearned			Treasury Stock
		Shares	|	Amount	|	Shares		|	Amount			Par Value			earnings		Income			Compensation			Shares		|	Amount
Balance at July 31, 2002		2,468,571	$	24,686		1,712,068		$	17,121		$	17,372,444		$	26,570,576		$	(1,681,535	)	$	(222,921	)	108,976		$	(806,401	)
	Net income	---		---		---			---			---			(1,201,955	)		---			---		---			---
	Foreign currency translation reserve	---		---		---			---			---			---			(453,419	)		---		---			---
	Cash dividends paid ($.33 per share)	---		---		---			---			---			(1,356,227	)		---			---		---			---
	Unrealized investment gain, net	---		---		---			---			---			---			2,854			---		---			---
	GAC dividends	---		---		---			---			---			(44,890	)
	Repurchase of Class A common stock	---		---		---			---			---			---			---			---		39,508			(242,337	)
	Stock options	500		5		---			---			3,620			---			---			---		---			---
	Issuance of stock under stock award plan, net	---		---		---			---			60,003			---			---			(255,184	)	(38,712	)		286,469
	Amortization, net of tax	---		---		---			---			---			---			---			307,373		---			---
	Forfeitures	---		---		---			---			31,907			---			---			14,180		---			(69,017	)
Balance at July 31, 2003		2,469,071	$	24,691		1,712,068		$	17,121		$	17,467,974		$	23,967,504		$	(2,132,100	)	$	(156,552	)	109,772		$	(831,286	)
	Net income	---		---		---			---			---			696,428			---			---		---			---
	Foreign currency translation reserve	---		---		---			---			---			---			54,450			---		---			---
	Unrealized investment gain, net	---		---		---			---			---			---			12,151			---		---			---
	Conversion of common stock - B to A	11,000		110		(11,000	)		(110	)		---			---			---			---		---			---
	Stock options	1,700		17		---			---			12,308			---			---			---		---			---
	Amortization, net of tax	---		---		---			---			---			---			---			42,069		---			---
	Forfeitures	---		---		---			---			(765	)		---			---			620		---			(2,540	)
Balance at November 1, 2003		2,481,771	$	24,818		1,701,068		$	17,011		$	17,479,517		$	24,663,932		$	(2,065,499	)	$	(113,863	)	109,772		$	(833,826	)

Ecology and Environment, Inc.
Notes To Consolidated Financial Statements

(Unaudited)

1.       Summary of significant accounting principles

          a.   Consolidation

          The consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries.  Also reflected in the financial statements are the 50% ownership in two Chinese operating joint ventures, Beijing Yi Yi Ecology and Engineering Co. Ltd. and The Tianjin Green Engineering Company.  These joint ventures are accounted for under the equity method.  All significant intercompany transactions and balances have been eliminated.  Certain amounts in the prior years' consolidated financial statements and notes have been reclassified to conform with the current year presentation.
 
          b.   Use of Estimates

          The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results may differ from those estimates.

          c.   Reclassifications

          Certain prior year amounts were reclassified to conform to the November 1, 2003 financial statement presentation.

          d.   Revenue recognition

          Substantial amounts of the Company's revenues are derived from cost-plus-fee contracts using the percentage of completion method based on costs incurred plus the fee earned.  Provisions for estimated contract adjustments relating to cost based contracts have been deducted from gross revenues in the accompanying consolidated statement of income.  These provisions are estimated and accrued annually based on government sales volume.  Such adjustments typically arise as a result of interpretations of cost allowability under cost based contracts.

          Revenues related to long-term government contracts are subject to audit by an agency of the United States government.  Government audits have been completed through fiscal year 1994 and are currently in process for fiscal years 1995 through 2000.  However, final rates have not been negotiated under these audits since 1989.  The majority of the balance in the allowance for contract adjustments accounts represent a reserve against possible adjustments for fiscal years 1990 through 2003. 

          The balance of the Company's revenues consist of time and materials and fixed price contracts, including the contracts in Saudi Arabia and Kuwait.  Revenue on fixed price contracts is recognized on the percentage of completion method.

          Deferred revenue balances of $5.3 million and $11.2 million at November 1, 2003 and July 31, 2003, respectively, represent net advances received under the Saudi and Kuwait contracts.  Those advances are recognized against future progress billings over the respective contract periods.

          e.   Translation of foreign currencies

          The financial statements of foreign subsidiaries where the local currency is the functional currency are translated into U.S. dollars using exchange rates in effect at period end for assets and liabilities and average exchange rates during each reporting period for results of operations.  Translation adjustments are deferred in accumulated other comprehensive income.

          The financial statements of foreign subsidiaries located in highly inflationary economies are remeasured as if the functional currency were the U.S. dollar.  The remeasurement of local currencies into U.S. dollars creates translation adjustments which are included in net income.  There were no highly inflationary economy translation adjustments for fiscal years 2002 - 2004.  Management has also estimated and recorded in the current tax accounts the benefits attributable to the extraterritorial income tax deduction.

          f.   Income taxes

          The Company follows the asset and liability approach to account for income taxes.  This approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.  Although realization is not assured, management believes it is more likely than not that the recorded net deferred tax assets will be realized.  Since in some cases management has utilized estimates, the amount of the net deferred tax asset considered realizable could be reduced in the near term.  No provision has been made for United States income taxes applicable to undistributed earnings of foreign subsidiaries as it is the intention of the Company to indefinitely reinvest those earnings in the operations of those entities.

          g.   Earnings per share

          Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

          h.   Impairment of Long-Lived Assets

          The Company accounts for impairment of long-lived assets in accordance with Statement of Financial Accounting Standards (SFAS) No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets."  SFAS No. 144 required that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable.  The Company assesses recoverability of the carrying value of the asset by estimating the future net cash flows expected to result from the asset, including eventual disposition.  If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.  The Company recognized an impairment loss of $5,007,364 ($3,010,005 net of tax) on its shrimp farm operations in FY 2003.  No impairment loss was recognized in the first quarter of fiscal year 2004.

2.       Contract Receivables, net

          United States government receivables arise from long-term U.S. government prime contracts and subcontracts.  Unbilled receivables result from revenues which have been earned, but are not billed as of period-end.  The above unbilled balances are comprised of incurred costs plus fees not yet processed and billed; and differences between year-to-date provisional billings and year-to-date actual contract costs incurred and fees earned of approximately ($49,000) at November 1, 2003 and $33,000 at July 31, 2003.  Management anticipates that the November 1, 2003 unbilled receivables will be substantially billed and collected in fiscal year 2004.  Included in the balance of receivables for industrial customers and state and municipal customers are receivables due under the contracts in Saudi Arabia and Kuwait of $10.0 million and $17.4 million at November 1, 2003 and July 31, 2003, respectively.  Within the above billed balances are contractual retainages in the amount of approximately $525,642 at November 1, 2003 and $496,445 at July 31, 2003.  Management anticipates that the November 1, 2003 retainage balance will be substantially collected in fiscal year 2004.  Included in other accrued liabilities is an additional allowance for contract adjustments relating to potential cost disallowances on amounts billed and collected in current and prior years' projects of approximately $1,729,488 at November 1, 2003 and July 31, 2003.  An allowance for contract adjustments is recorded for contract disputes and government audits when the amounts are estimatable.

          The contracts in Saudi Arabia are through the Company's majority owned (66 2/3%) subsidiary Ecology and Environment of Saudi Arabia Co., LTD. (EESAL). The Company has an agreement with its' minority shareholder to divide any profits in EESAL from the current contracts equally, and to pay to the minority shareholder a commission of 5% of the total contract values. The commission and additional profit sharing covers on-going representation in the Kingdom, logistical support including the negotiation and procurement of Saudi national personnel, facilities, equipment, licenses, permits, and any other support deemed necessary in the implementation and performance of the Saudi contracts. As of November 1, 2003 the Company has incurred expense of $1,157,000 ($266,000 in first quarter of FY 2004, $505,000 in FY 2003 and $386,000 in fiscal year 2002) under the terms of this commission agreement.

3.       Line of Credit

          The Company maintains an unsecured line of credit available for working capital and letters of credit of $20 million with a bank at ½% below the prevailing prime rate.  A second line of credit has been established at another bank for up to $13.5 million exclusively for letters of credit.  At November 1, 2003 and July 31, 2003, respectively, the Company had letters of credit outstanding totaling $14,061,556 and $16,822,254, respectively.

          The Company has obtained a waiver from a covenant under one of its bank line of credit agreements.  The waiver reduces the minimum current ratio required (defined as total current assets less deferred income taxes, divided by total current liabilities) from 1.8:1 to 1.7:1.   The current ratio at November 1, 2003 as defined by the covenant is 1.73:1.

4.       Debt and Capital Lease Obligations

          Debt inclusive of capital lease obligations at November 1, 2003 and July 31, 2003 consist of the following:

          The aggregate maturities of long-term debt and capital lease obligations at November 1, 2003 and July 31, 2003 are as follows:

5.       Stock Award Plan

          Effective March 16, 1998, the Company adopted the Ecology and Environment, Inc. 1998 Stock Award Plan (the "Award Plan") under which key employees (including officers) of the Company or any of its present or future subsidiaries may be designated to receive awards of Class A Common stock of the Company as a bonus for services  rendered to the Company or its subsidiaries, without payment therefore,   based upon the fair market value of the common stock at the time of the award.  The plan requires a three-year vesting period. 

          The 1998 plan agreement provides that the stock cannot be sold, assigned, or transferred before a three-year vesting period is completed and that the shares are forfeited if an individual's employment is terminated before the vesting period is completed.  Accordingly, the Company is amortizing the expense associated with the issuance of the shares ratably over the vesting period.

          The Company issued 38,712 shares in November of 2002, 50,242 shares in fiscal year 2002, and 92,339 shares in fiscal year 2001.  Unearned compensation is recorded at the time of issuance and is being amortized over the vesting period.

6.       Segment Reporting

          Ecology and Environment, Inc. has three reportable segments: consulting services, analytical laboratory services, and aquaculture.  The consulting services segment provides broad based environmental services encompassing audits and impact assessments, surveys, air and water quality management, environmental engineering, environmental infrastructure planning, and industrial hygiene and occupational health studies to a world wide base of customers.  The analytical laboratory provides analytical testing services to industrial and governmental clients for the analysis of waste, soil and sediment samples.  The shrimp aquaculture facility located in Costa Rica and the fish farm located in Jordan, produce shrimp and tilapia, respectively.  Both products are grown in a controlled environment for markets worldwide.  The aquaculture segment results for fiscal year 2003 includes an impairment loss of $5.0 million ($3.0 million net of tax) as a result of the Company's decision to cease operations of its shrimp farm operations.  The assets are treated as "held for sale" in the accompanying financial statements. 

          The Company evaluates segment performance and allocates resources based on operating profit before interest income/expense and income taxes.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.  Intercompany sales from the analytical services segment to the consulting segment are recorded at market selling price, intercompany profits are eliminated.  The Company's reportable segments are separate and distinct business units that offer different products.  Consulting services are sold on the basis of time charges while analytical services and aquaculture products are sold on the basis of product unit prices.

Reportable segments for the quarter ended November 1, 2003 are as follows:

										Aquaculture
			Consulting				Analytical			Continued				Discontinued					Elimination				Total
Net revenues from external customers (1)		$	21,297,883			$	937,863			$	21,481			$	---			$	---			$	22,257,227
Intersegment net revenues			350,767				---				---				---				(350,767	)			---
Total consolidated net revenues		$	21,648,650			$	937,863			$	21,481			$	---			$	(350,767	)		$	22,257,227
Depreciation expense (1)		$	240,721			$	139,270			$	13,868			$	---			$	---			$	393,859
Segment profit (loss) before income
taxes and minority interest			1,934,581				(500,741	)			(32,457	)			(111,768	)			---				1,289,615
Segment assets			62,835,284				8,566,000				588,000				122,000				---				72,111,284
Expenditures for long-lived assets – gross			325,307				---				---				---				---				325,307
Geographic Information:
			Net				Long-Lived
		Revenues (1) (2)				Assets – Gross
United States		$	15,238,227			$	25,354,143
Foreign Countries			7,019,000				836,000

(1)   Net revenue of $6,404 from discontinued operations is excluded from this table.
(2)   Net revenues are attributed to countries based on the location of the customers.

Reportable segments for the quarter ended October 26, 2002 are as follows:

										Aquaculture
			Consulting				Analytical			Continued				Discontinued					Elimination				Total
Net revenues from external customers (1)		$	17,732,134			$	1,319,038			$	---			$	---			$	---			$	19,051,172
Intersegment net revenues			688,889				---				---				---				(688,889	)			---
Total consolidated net revenues		$	18,421,023			$	1,319,038			$	---			$	---			$	(688,889	)		$	19,051,172
Depreciation expense (1)		$	192,558			$	97,867			$	---			$	---			$	---			$	290,425
Segment profit (loss) before income
taxes and minority interest			1,920,394				44,743				---				(755,621	)			---				1,209,516
Segment assets			54,084,531				6,854,000				747,824				6,135,000				---				67,821,355
Expenditures for long-lived assets – gross			151,222				96,592				---				---				---				247,814
Geographic Information:
			Net				Long-Lived
		Revenues (1) (2)				Assets – Gross
United States		$	13,459,824			$	23,810,088
Foreign Countries			5,591,348				6,117,000

(1)   Net revenue of $486,652 and depreciation expense of  $57,677 from discontinued operations is excluded from this table.
(2)   Net revenues are attributed to countries based on the location of the customers.


Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

          At November 1, 2003 the Company had a working capital balance of $26.8 million, down $700,000 from the $27.5 million balance reported at July 31, 2003.  Cash and cash equivalents decreased $599,000 as a result of a $2.6 million decrease in contracts receivable, a $1.7 million decrease in accounts payable, a $3.8 decrease in current deferred revenue, a $2.1 million decrease in the current portion of long-term debt and a $4.7 million increase in other accrued liabilities.  The decrease in contracts receivable was primarily attributable to a $6.3 million payment received on billings from the Company’s Kuwait Contracts.  As of November 1, 2003 the Company has receivables outstanding on the Saudi and Kuwait contracts of $6.0 and $7.6 million respectively.  Net advances on these contracts at November 1, 2003 are $5.3 million, which are backed by letters of credit.  The decrease in the current portion of long-term debt was due to the receipt of deposits to offset the $2.1 million bank overdraft recorded in July 2003.

          The Company maintains an unsecured line of credit of $20.0 million with a bank at ½% below the prevailing prime rate.  A second line of credit is available at another bank for up to $13.5 million, exclusively for letters of credit.  The Company has outstanding letters of credit (LOC’s) at November 1, 2003 in the amount of $14.1 million.  These LOC’s were obtained to secure advance payments and performance guarantees for contracts in the Middle East.  Other than the LOC’s, there are no outstanding borrowings under the lines of credit and there is $19.4 million of line still available at November 1, 2003.  There are no significant additional working capital requirements pending at November 1, 2003.

          The Company has obtained a waiver from a covenant under one of its bank lines of credit agreement.  The waiver reduces the minimum current ratio required (defined as total current assets less deferred income taxes, divided by total current liabilities.) from 1.8:1 to 1.7:1.  The current ratio at November 1, 2003 as defined by the covenant is 1.73:1.

Results of Operations

Net Revenue

           Net revenues for the first quarter of fiscal year 2004 were $22.3 million, up 17% from the $19.1 million reported in fiscal year 2003.   The Company’s Saudi Arabia and Kuwait contracts have continued to benefit the Company’s net revenues.  During the first quarter of fiscal year 2004, these contracts reported net revenues of $7.1 million, and increase of 48% from the $4.8 reported in the first quarter of fiscal year 2003.  Net revenues reported from various state clients were $3.9 million, up 30% from the $3.0 million reported in the first quarter of fiscal year 2003. The Company’s Analytical Services Center (ASC) reported net revenues of $938,000 for the first quarter of fiscal year 2004, a decrease of 28% from the $1,300,000 million reported in the first quarter of the prior year.  Walsh Environmental, a majority owned subsidiary, reported net revenues of  $1.9 million for the first quarter of fiscal year 2004, an increase of $480,000 from the $1.4 million reported for the first quarter of fiscal year 2003. 

          Net revenues for the first quarter of fiscal year 2003 were $19.5 million, up 17% from the $16.6 million reported in fiscal year 2002.  The increase is mainly attributable to the Company’s Saudi Arabia and Kuwait contracts.  During the first quarter these contracts reported increased net revenues of $5.2 million.  The Company’s Analytical Services Center (ASC) reported an increase in net revenues of 28% for the first quarter of fiscal year 2003, mainly attributable to work received from these contracts. 

          Walsh Environmental, a majority owned subsidiary, reported net revenues of  $1.5 million for the first quarter of fiscal year 2003, a decrease of $347,000 from the $1.8 million reported for the first quarter of fiscal year 2002.

Income From Continuing Operations Before Income Taxes and Minority Interest

          The Company’s income from continuing operations before income taxes and minority interest for the first quarter of fiscal year 2004 was $1.4 million, down $564,000 from the $2.0 million reported in the first quarter of fiscal year 2003.  The decrease is mainly attributable to the Company’s Analytical Services Center (ASC) and the Central Environmental Laboratory (CEL) operation located in Kuwait and operated under the Kuwait contract.  The ASC reported an operating loss of $501,000 for the first quarter of fiscal year 2004 compared to operating income of $45,000 for the prior year, a decrease of $546,000 or approximately $.08 per share.  The ASC reported a decrease in work in Kuwait as well as a loss of funding on a significant state project.  The CEL operation in Kuwait reported a net loss for the first quarter of fiscal year 2004 of $336,000 compared to a net loss of $58,000 for the first quarter of fiscal year 2003, a decrease of  $278,000 or approximately $.04 per share.  This decrease was principally a result of low work volume.  Volume is projected to increase during the second quarter of fiscal year 2004.  Management is currently evaluating several options to increase revenue and eliminate losses in the ASC.  The Company incurred exchange gains as a result of its contracts in Kuwait which are payable in Kuwaiti dinars.  Realized gains for the first quarter amounted to $108,000.

          The Company’s income from continuing operations before income taxes and minority interest for the first quarter of fiscal year 2003 was $2.0 million, up 54% from the $1.3 million reported in the first quarter of fiscal year 2002.  The increase in income from continuing operations before income taxes and minority interest was attributable to the overall increased net revenues and the performance of the Company’s Analytical Services Center.  The ASC reported an operating income of $45,000 for the first quarter of fiscal year 2003, compared to an operating loss of $186,000 reported during the first quarter of fiscal year 2002.  This increase in the ASC profits was due to both increased production efficiencies and an increased sales volume.  The Company’s subsidiaries reported a 600% increase in operating income during the first quarter of fiscal year 2003.  The new contracts in Saudi Arabia and Kuwait were the main reason for this increase. 

Discontinued Operations

           During the fourth quarter of fiscal year 2003, the Company made the decision to discontinue its Costa Rican shrimp farm operation, Frutas Marinas S.A.  The farm had failed to achieve planned production estimates.  Operations management was unable to control repeated outbreaks of disease, primarily White Spot Syndrome Virus resulting in repeated operating losses for the last three years all amid depressed selling prices for the shrimp.  The Company made the decision to terminate operations at its Board of Directors’ meeting in July 2003 and has embarked on a program to liquidate the assets within one year.  In accordance with Financial Accounting Standards No 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company reviewed the assets of Frutas Marinas S.A. to determine the extent of the impairment loss in the carrying value of the assets.  The Company has estimated the fair value of its assets based on an appraisal of the property for general farm use (the predominate land use surrounding the farm) due to the anticipated difficulty in selling the property as a shrimp farm operation.  As a result, the Company has recognized an impairment loss on discontinued operations of $5,007,364 ($3,010,005 net of tax) during the fourth quarter of fiscal year 2003.  During the first quarter of fiscal year 2004, the shrimp farm reported a loss before taxes of $112,000.  Although not expected to be significant, expenses will continue to be necessary for overall farm security, maintenance and upkeep.  As of November 1, 2003 the shrimp farm operation is still being held for sale.

          The shrimp farm operation reported a loss before taxes of $756,000 million for the first quarter of fiscal year 2003, an increase of 48% from the $512,000 reported in the first quarter of fiscal year 2002.

Critical Accounting Policies and Use of Estimates

        Management's discussion and analysis of financial condition and results of operations discusses the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United State of America.  The preparation of these statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, allowance for doubtful accounts, inventories, income taxes, impairment of long-lived assets and contingencies.  Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

        Management believes the following accounting policies involve its more significant judgments and estimates used in the preparation of its consolidated financial statements.  The Company maintains reserves for cost disallowances on its cost based contracts as a result of government audits.  However, final rates have not been negotiated under these audits since 1989.  The Company has estimated its exposure based on completed audits, historical experience and discussions with the government auditors.  The Company recorded an impairment loss on its shrimp farm operation in fiscal year 2003.  An estimate of the fair value of its assets was made based on external appraisals of the land and buildings and internal estimates of the realizable value of the equipment.  If these estimates or their related assumptions change, the Company may be required to record additional impairment losses for its shrimp farm operation or additional charges for disallowed costs on its government contracts.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

          The Company may have exposure to market risk for change in interest rates, primarily related to its investments.  The Company does not have any derivative financial instruments included in its investments.  The Company invests only in instruments that meet high credit quality standards.  The Company is averse to principal loss and ensures the safety and preservation of its invested funds by limiting default risk, market risk and reinvestment risk.  As of November 1, 2003, the Company's investments consisted of short-term commercial paper and mutual funds.  The Company does not expect any material loss with respect to its investments.

Item 4.    Controls and Procedures

(a)      Evaluation of disclosure controls and procedures. 

          The Company's chief executive officer and chief financial officer have concluded that the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-14(c)) are sufficiently effective to ensure that the information required to be disclosed by the Company in the reports it files under the Exchange Act is gathered, analyzed and disclosed with adequate timeliness, accuracy and completeness, based on an evaluation of such controls and procedures conducted within 90 days prior to the date hereof.

(b)      Changes in internal controls:  There have been no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referred to above.

Item 5.   Other Information

          The Registrant has no information for Item 5 required to be presented.

Item 6.   Exhibits and Reports on Form 8-K

(a)		31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
		31.2		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
		32.1		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
		32.2		Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b)		Not Applicable

      

PART II - OTHER INFORMATION

None.

SIGNATURE

       Pursuant to the requirements 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:

		ECOLOGY AND ENVIRONMENT, INC.
Dated:  December 16, 2003		/s/ RONALD L. FRANK
		RONALD L. FRANK EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL ACCOUNTING OFFICER)