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Ecology & Environment reported a third-quarter loss of $400,000, citing the effect of “risks” from expanding into some overseas markets.

The Lancaster-based environmental services firm’s $400,000 loss compared with net income of $100,000 a year earlier. And the company reported revenues of $32.2 million, down 11.8 percent from $36 million the year before.

E&E said its expansion in recent years to the Middle East, Africa and Asia has led to “heightened political, regulatory and cultural risks” in those regions, compared with similar risks associated with its business in the United States, Canada and South America.

E&E described troubles stemming from a contract it has to provide consulting services to a client in Asia. A new agreement it entered into earlier this year replaced one from fiscal 2011; E&E said it has had difficulty collecting payments due under the agreement.

E&E said it is working with the client to “validate the ongoing viability of these projects” and is considering options including terminating the work. E&E for the third quarter recorded $400,000 for “doubtful accounts and contract adjustments,” and is considering recording additional allowances if the problem persists.

E&E also said it has cut back on staffing in “various technical and indirect departments and reduced utilization of contracted services.” The company expects the changes will save it $2.5 million to $3 million annually, and it continues to evaluate its “organizational and cost structure.”

email: mglynn@buffnews.com