New York
(State or other jurisdiction of incorporation or organization)
|
|
16-0971022
(IRS Employer Identification Number)
|
|||||
|
|||||||
|
|
|
|||||
368 Pleasant View Drive, Lancaster, NY
(Address of principal executive offices)
|
|
14086
(Zip code)
|
|||||
|
|||||||
|
|
|
|||||
716-684-8060
(Registrant's telephone number, including area code)
|
|||||||
Securities registered pursuant to section 12(b) of the Act:
|
|||||||
Title of each class
|
|
Name of each exchange on which registered
|
|||||
Class A Common Stock par value $.01 per share
|
NASDAQ Stock Exchange
|
|
Securities registered pursuant to section 12(g) of the Act:
|
|
||
|
None
|
|
||
|
(Title of class)
|
|
Large accelerated filer
|
|
|
Accelerated filer
|
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
|
|
Smaller reporting company
|
þ
|
By:
|
/s/Kevin S. Neumaier
|
|
By:
|
/s/H. John Mye III
|
|
Kevin S. Neumaier
Chief Executive Officer
|
|
|
H. John Mye III
Chief Financial and Accounting Officer
|
Ecology and Environment, Inc.
|
||||||||
Consolidated Balance Sheets
|
||||||||
|
||||||||
|
||||||||
Assets
|
July 31, 2012
|
July 31, 2011
|
||||||
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,467,770
|
$
|
8,529,842
|
||||
Investment securities, available for sale
|
1,404,582
|
1,491,459
|
||||||
Contract receivables, net
|
61,568,443
|
63,750,870
|
||||||
Deferred income taxes
|
4,799,724
|
4,949,368
|
||||||
Income tax receivable
|
2,502,431
|
-
|
||||||
Other current assets
|
1,802,843
|
2,254,415
|
||||||
|
||||||||
Total current assets
|
82,545,793
|
80,975,954
|
||||||
|
||||||||
Property, building and equipment, net of accumulated depreciation, $22,584,958 and $22,972,422, respectively
|
12,112,078
|
9,961,304
|
||||||
Deferred income taxes
|
860,499
|
1,300,181
|
||||||
Other assets
|
1,993,785
|
2,030,203
|
||||||
|
||||||||
Total assets
|
$
|
97,512,155
|
$
|
94,267,642
|
||||
|
||||||||
|
||||||||
Liabilities and Shareholders' Equity
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
11,492,602
|
$
|
13,097,765
|
||||
Line of credit
|
12,309,335
|
-
|
||||||
Accrued payroll costs
|
7,529,728
|
9,146,711
|
||||||
Income taxes payable
|
-
|
1,195,741
|
||||||
Current portion of long-term debt and capital lease obligations
|
488,460
|
1,689,920
|
||||||
Billings in excess of revenue
|
8,281,919
|
7,727,725
|
||||||
Other accrued liabilities
|
3,932,588
|
6,139,423
|
||||||
|
||||||||
Total current liabilities
|
44,034,632
|
38,997,285
|
||||||
|
||||||||
Income taxes payable
|
194,023
|
339,027
|
||||||
Deferred income taxes
|
423,324
|
525,106
|
||||||
Long-term debt and capital lease obligations
|
102,635
|
448,391
|
||||||
Commitments and contingencies (see note #17)
|
-
|
-
|
||||||
|
||||||||
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 - 2,685,151 shares
|
26,851
|
26,851
|
||||||
Class B common stock, par value $.01 per share; authorized - 10,000,000 shares; issued - 1,708,574 shares
|
17,087
|
17,087
|
||||||
Capital in excess of par value
|
19,751,992
|
19,983,029
|
||||||
Retained earnings
|
29,534,783
|
30,797,763
|
||||||
Accumulated other comprehensive income
|
711,842
|
1,527,189
|
||||||
Treasury stock - Class A common, 84,730 and 125,923 shares; Class B common, 64,801 shares, at cost
|
(1,897,032
|
)
|
(2,317,515
|
)
|
||||
|
||||||||
Total Ecology and Environment, Inc. shareholders' equity
|
48,145,523
|
50,034,404
|
||||||
Noncontrolling interests
|
4,612,018
|
3,923,429
|
||||||
|
||||||||
Total shareholders' equity
|
52,757,541
|
53,957,833
|
||||||
|
||||||||
Total liabilities and shareholders' equity
|
$
|
97,512,155
|
$
|
94,267,642
|
||||
|
||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
Ecology and Environment, Inc.
|
||||||||||||
Consolidated Statements of Income
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
Year ended July 31, 2012
|
Year ended July 31, 2011
|
Year ended July 31, 2010
|
|||||||||
|
||||||||||||
Revenue
|
$
|
155,410,099
|
$
|
169,172,860
|
$
|
144,098,294
|
||||||
|
||||||||||||
Cost of professional services and other direct operating expenses
|
55,632,281
|
65,914,987
|
49,623,816
|
|||||||||
Subcontract costs
|
32,315,179
|
31,325,937
|
30,292,117
|
|||||||||
Administrative and indirect operating expenses
|
44,917,631
|
42,534,303
|
38,166,067
|
|||||||||
Marketing and related costs
|
15,601,112
|
15,251,165
|
14,438,785
|
|||||||||
Depreciation and amortization
|
2,160,062
|
1,760,763
|
1,684,406
|
|||||||||
|
||||||||||||
Income from operations
|
4,783,834
|
12,385,705
|
9,893,103
|
|||||||||
Interest expense
|
(364,305
|
)
|
(355,766
|
)
|
(222,558
|
)
|
||||||
Interest income
|
174,743
|
85,771
|
107,211
|
|||||||||
Other income (expense)
|
206,813
|
64,524
|
(68,349
|
)
|
||||||||
Gain on sale of assets
|
-
|
290,526
|
809,200
|
|||||||||
Net foreign currency exchange gain (loss)
|
(403,419
|
)
|
284,411
|
(59,718
|
)
|
|||||||
|
||||||||||||
Income before income tax provision
|
4,397,666
|
12,755,171
|
10,458,889
|
|||||||||
Income tax provision
|
1,357,916
|
4,631,235
|
3,902,222
|
|||||||||
|
||||||||||||
Net income
|
$
|
3,039,750
|
$
|
8,123,936
|
$
|
6,556,667
|
||||||
|
||||||||||||
Net income attributable to the noncontrolling interest
|
(2,266,171
|
)
|
(1,163,673
|
)
|
(2,299,060
|
)
|
||||||
|
||||||||||||
Net income attributable to Ecology and Environment, Inc.
|
$
|
773,579
|
$
|
6,960,263
|
$
|
4,257,607
|
||||||
|
||||||||||||
Net income per common share: basic and diluted
|
$
|
0.18
|
$
|
1.65
|
$
|
1.02
|
||||||
|
||||||||||||
Weighted average common shares outstanding: basic and diluted
|
4,233,883
|
4,222,688
|
4,160,816
|
|||||||||
|
||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
||||||||||||
|
Ecology and Environment, Inc
|
||||||||||||
Consolidated Statements of Cash Flows
|
||||||||||||
|
||||||||||||
|
Fiscal year ended July 31, 2012
|
Fiscal year ended July 31, 2011
|
Fiscal year ended July 31, 2010
|
|||||||||
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
3,039,750
|
$
|
8,123,936
|
$
|
6,556,667
|
||||||
Adjustments to reconcile net income to net cash
|
||||||||||||
provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization expense
|
2,160,062
|
1,760,763
|
1,684,406
|
|||||||||
Benefit for deferred income taxes
|
487,544
|
(910,413
|
)
|
472,455
|
||||||||
Share based compensation expense
|
731,583
|
541,175
|
485,945
|
|||||||||
Tax impact of share-based compensation
|
105,988
|
-
|
102,737
|
|||||||||
Gain on sale of assets
|
-
|
(290,526
|
)
|
(809,200
|
)
|
|||||||
Provision for contract adjustments
|
1,810,557
|
2,943,470
|
637,846
|
|||||||||
Bad debt expense
|
514,411
|
450,000
|
-
|
|||||||||
(Increase) decrease in:
|
||||||||||||
- contract receivables
|
(2,287,607
|
)
|
(18,286,613
|
)
|
(5,661,388
|
)
|
||||||
- other current assets
|
314,587
|
(114,402
|
)
|
233,414
|
||||||||
- income tax receivable
|
(2,502,431
|
)
|
-
|
802,926
|
||||||||
- other non-current assets
|
31,973
|
42,082
|
(64,430
|
)
|
||||||||
Increase (decrease) in:
|
||||||||||||
- accounts payable
|
(1,859,530
|
)
|
822,701
|
(3,120,409
|
)
|
|||||||
- accrued payroll costs
|
(1,458,928
|
)
|
1,545,961
|
149,316
|
||||||||
- income taxes payable
|
(1,375,614
|
)
|
(98,721
|
)
|
1,066,930
|
|||||||
- billings in excess of revenue
|
1,237,329
|
3,396,873
|
(121,749
|
)
|
||||||||
- other accrued liabilities
|
(936,135
|
)
|
1,084,505
|
18,273
|
||||||||
|
||||||||||||
Net cash provided by operating activities
|
13,539
|
1,010,791
|
2,433,739
|
|||||||||
|
||||||||||||
Cash flows provided by (used in) investing activities:
|
||||||||||||
Acquistion of noncontrolling interest of subsidiaries
|
(908,892
|
)
|
(637,745
|
)
|
(1,000,000
|
)
|
||||||
Purchase of Lowham Engineering LLC
|
-
|
-
|
(200,000
|
)
|
||||||||
Purchase of Engineering Consulting Services, Inc., net of cash equivalents of $309,487
|
-
|
(790,513
|
)
|
-
|
||||||||
Purchase of property, building and equipment
|
(4,443,962
|
)
|
(2,476,059
|
)
|
(1,992,724
|
)
|
||||||
Change in accounts payable due to purchase of equipment
|
(283,071
|
)
|
953,749
|
-
|
||||||||
Proceeds from sale of property and equipment
|
-
|
322,807
|
959,200
|
|||||||||
Sale (purchase) of investment securities, net
|
102,527
|
(195,163
|
)
|
(55,791
|
)
|
|||||||
|
||||||||||||
Net cash used in investing activities
|
(5,533,398
|
)
|
(2,822,924
|
)
|
(2,289,315
|
)
|
||||||
|
||||||||||||
Cash flows provided by (used in) financing activities:
|
||||||||||||
Dividends paid
|
(2,046,657
|
)
|
(1,814,839
|
)
|
(1,684,482
|
)
|
||||||
Proceeds from debt
|
145,401
|
795,795
|
468,038
|
|||||||||
Repayment of debt and capital lease obligations
|
(974,644
|
)
|
(945,320
|
)
|
(778,035
|
)
|
||||||
Net proceeds from line of credit
|
12,309,335
|
-
|
-
|
|||||||||
Distributions to noncontrolling interests
|
(1,123,896
|
)
|
(847,749
|
)
|
(845,106
|
)
|
||||||
Proceeds from sale of subsidiary shares to noncontrolling interests
|
41,634
|
90,368
|
227,562
|
|||||||||
Purchase of treasury stock
|
(363,050
|
)
|
(1,335,960
|
)
|
-
|
|||||||
|
||||||||||||
Net cash provided by (used in) financing activities
|
7,988,123
|
(4,057,705
|
)
|
(2,612,023
|
)
|
|||||||
|
||||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(530,336
|
)
|
52,486
|
49,908
|
||||||||
|
||||||||||||
Net increase (decrease) in cash and cash equivalents
|
1,937,928
|
(5,817,352
|
)
|
(2,417,691
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
8,529,842
|
14,347,194
|
16,764,885
|
|||||||||
|
||||||||||||
Cash and cash equivalents at end of period
|
$
|
10,467,770
|
$
|
8,529,842
|
$
|
14,347,194
|
||||||
|
||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
Ecology and Environment, Inc.
|
||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income
|
||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
|
Class A Common Stock Shares
|
Class A Common Stock Amount
|
Class B Common Stock Shares
|
Class B Common Stock Amount
|
Capital in Excess of Par Value
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock Shares
|
Treasury Stock Amount
|
Noncontrolling Interest
|
Comprehensive Income
|
|||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2009
|
2,677,651
|
$
|
26,776
|
1,716,074
|
$
|
17,162
|
$
|
20,093,952
|
$
|
23,290,768
|
$
|
441,965
|
307,091
|
$
|
(2,819,138
|
)
|
$
|
5,273,455
|
$
|
6,517,228
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
4,257,607
|
-
|
-
|
-
|
2,299,060
|
6,556,667
|
|||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
423,493
|
-
|
-
|
(59,236
|
)
|
291,546
|
||||||||||||||||||||||||||||||||
Cash dividends paid ($.42 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,747,572
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
Unrealized investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
23,159
|
-
|
-
|
-
|
23,159
|
|||||||||||||||||||||||||||||||||
Conversion of common stock - B to A
|
7,421
|
74
|
(7,421
|
)
|
(74
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||
Issuance of stock under stock award plan
|
-
|
-
|
-
|
-
|
(372,172
|
)
|
-
|
-
|
(42,675
|
)
|
372,172
|
-
|
-
|
|||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
-
|
485,945
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
Tax impact of share based compensation
|
-
|
-
|
-
|
-
|
102,737
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
227,562
|
-
|
|||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(845,106
|
)
|
-
|
||||||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
-
|
-
|
-
|
-
|
(254,181
|
)
|
-
|
(72,711
|
)
|
(66,667
|
)
|
616,670
|
(2,526,094
|
)
|
(72,711
|
)
|
||||||||||||||||||||||||||||
Other
|
-
|
-
|
-
|
-
|
2,919
|
-
|
-
|
3,513
|
(25,170
|
)
|
-
|
-
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2010
|
2,685,072
|
$
|
26,850
|
1,708,653
|
$
|
17,088
|
$
|
20,059,200
|
$
|
25,800,803
|
$
|
815,906
|
201,262
|
$
|
(1,855,466
|
)
|
$
|
4,369,641
|
$
|
6,798,661
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
6,960,263
|
-
|
-
|
-
|
1,163,673
|
8,123,936
|
|||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
686,380
|
-
|
-
|
12,119
|
698,499
|
|||||||||||||||||||||||||||||||||
Cash dividends paid ($.46 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,963,303
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
Unrealized investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,189
|
)
|
-
|
-
|
-
|
(11,189
|
)
|
|||||||||||||||||||||||||||||||
Conversion of common stock - B to A
|
79
|
1
|
(79
|
)
|
(1
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||
Repurchase of Class A common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
84,002
|
(1,335,960
|
)
|
-
|
-
|
||||||||||||||||||||||||||||||||
Issuance of stock under stock award plan
|
-
|
-
|
-
|
-
|
(482,061
|
)
|
-
|
-
|
(55,041
|
)
|
482,061
|
-
|
-
|
|||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
-
|
541,175
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
90,368
|
-
|
|||||||||||||||||||||||||||||||||
Issuance of shares to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
667,000
|
-
|
|||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(847,749
|
)
|
-
|
||||||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
-
|
-
|
-
|
-
|
(135,285
|
)
|
-
|
36,092
|
(39,895
|
)
|
391,850
|
(1,531,623
|
)
|
36,092
|
||||||||||||||||||||||||||||||
Stock award plan forfeitures
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
396
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2011
|
2,685,151
|
$
|
26,851
|
1,708,574
|
$
|
17,087
|
$
|
19,983,029
|
$
|
30,797,763
|
$
|
1,527,189
|
190,724
|
$
|
(2,317,515
|
)
|
$
|
3,923,429
|
$
|
8,847,338
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
773,579
|
-
|
-
|
-
|
2,266,171
|
3,039,750
|
|||||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
(871,476
|
)
|
-
|
-
|
124,455
|
(747,021
|
)
|
|||||||||||||||||||||||||||||||
Cash dividends paid ($.48 per share)
|
-
|
-
|
-
|
-
|
-
|
(2,036,559
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
Unrealized investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
17,597
|
-
|
-
|
-
|
17,597
|
|||||||||||||||||||||||||||||||||
Repurchase of Class A common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
22,825
|
(363,050
|
)
|
-
|
-
|
||||||||||||||||||||||||||||||||
Issuance of stock under stock award plan
|
-
|
-
|
-
|
-
|
(716,662
|
)
|
-
|
-
|
(62,099
|
)
|
716,662
|
-
|
-
|
|||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
-
|
731,583
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
Tax impact of share based compensation
|
-
|
-
|
-
|
-
|
105,988
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
41,634
|
-
|
|||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,123,896
|
)
|
-
|
||||||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
-
|
-
|
-
|
-
|
(351,946
|
)
|
-
|
38,532
|
(5,208
|
)
|
66,871
|
(619,775
|
)
|
38,532
|
||||||||||||||||||||||||||||||
Stock award plan forfeitures
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,289
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2012
|
2,685,151
|
$
|
26,851
|
1,708,574
|
$
|
17,087
|
$
|
19,751,992
|
$
|
29,534,783
|
$
|
711,842
|
149,531
|
$
|
(1,897,032
|
)
|
$
|
4,612,018
|
$
|
2,348,858
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
|
1. | Summary of Operations and Basis of Presentation |
2. | Summary of Significant Accounting Policies |
a. | Consolidation |
b. | Use of estimates |
c. | Revenue recognition |
Contract Type
|
|
Work Type
|
|
Revenue Recognition Policy
|
|
|
|
|
|
Time and Materials
|
|
Consulting
|
|
As incurred at contract rates.
|
|
|
|
|
|
Fixed Price
|
|
Consulting
|
|
Percentage of completion, approximating the ratio of either total costs or Level of Effort (LOE) hours incurred to date to total estimated costs or LOE hours.
|
|
|
|
|
|
Cost-Type
|
|
Consulting
|
|
Costs as incurred. Fixed fee portion is recognized using percentage of completion determined by the percentage of Level Of Effort (LOE) hours incurred to total LOE hours in the respective contracts.
|
We reduce our contract receivables and costs and estimated earnings in excess of billings on contracts in process by establishing an allowance for amounts that, in the future, may become uncollectible or unrealizable, respectively. We determine our estimated allowance for uncollectible amounts based on management's judgments regarding our operating performance related to the adequacy of the services performed, the status of change orders and claims, our experience settling change orders and claims and the financial condition of our clients, which may be dependent on the type of client and current economic conditions that the client may be subject to. |
Change orders can occur when changes in scope are made after project work has begun, and can be initiated by either the Company or its clients. Claims are amounts in excess of the agreed contract price which the Company seeks to recover from a client for customer delays and / or errors or unapproved change orders that are in dispute. Costs related to change orders and claims are recognized as incurred. Revenues and profit are recognized on change orders when it is probable that the change order will be approved and the amount can be reasonably estimated. Revenues are recognized only up to the amount of costs incurred on contract claims when realization is probable, estimatable and reasonable support from the customer exists. |
All bid and proposal and other pre-contract costs are expensed as incurred. Out of pocket expenses such as travel, meals, field supplies, and other costs billed direct to contracts are included in both revenues and cost of professional services. Sales and cost of sales at the Company's South American subsidiaries exclude tax assessments by governmental authorities, which are collected by the Company from its customers and then remitted to governmental authorities. |
d. | Investment securities |
e. | Property, building and equipment, depreciation and amortization |
f. | Fair value of financial instruments |
Financial assets as of July 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available for sale
|
|
$
|
1,353,365
|
|
|
$
|
51,217
|
|
|
$
|
---
|
|
|
$
|
1,404,582
|
|
Financial assets as of July 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available for sale
|
|
$
|
1,438,286
|
|
|
$
|
53,173
|
|
|
$
|
---
|
|
|
$
|
1,491,459
|
|
g. | Foreign currencies |
h. | Income taxes |
i. | Defined contribution plans |
j. | Stock based compensation |
k. | Earnings per share (EPS) |
l. | Comprehensive Income |
Comprehensive income is defined as "the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources." The term "comprehensive income" is used to describe the total net earnings plus other comprehensive income. Other comprehensive income includes currency translation adjustments on foreign subsidiaries and unrealized gains or losses on available-for-sale securities. |
m. | Impairment of Long-Lived Assets |
n. | Goodwill |
3. | Cash and Cash Equivalents |
4. | Contract Receivables, net |
|
|
July 31,
|
|
|||||
|
|
2012
|
|
|
2011
|
|
||
|
|
|
|
|
|
|
||
Billed
|
|
$
|
42,977,016
|
|
|
$
|
42,636,632
|
|
Unbilled
|
|
|
28,829,818
|
|
|
|
27,869,325
|
|
|
|
|
71,806,834
|
|
|
|
70,505,957
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts and contract adjustments
|
|
|
(10,238,391
|
)
|
|
|
(6,755,087
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
61,568,443
|
|
|
$
|
63,750,870
|
|
5. | Property, Building and Equipment, net |
|
|
July 31,
|
|
|||||
|
|
2012
|
|
|
2011
|
|
||
|
|
|
|
|
|
|
||
Land and land improvements
|
|
$
|
393,051
|
|
|
$
|
393,051
|
|
Buildings and building improvements
|
|
|
12,231,788
|
|
|
|
12,149,915
|
|
Equipment
|
|
|
3,214,319
|
|
|
|
3,786,584
|
|
Information technology equipment
|
|
|
12,591,421
|
|
|
|
9,576,535
|
|
Office furniture and equipment
|
|
|
3,898,444
|
|
|
|
3,835,900
|
|
Leasehold improvements and other
|
|
|
2,363,250
|
|
|
|
2,237,992
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,692,273
|
|
|
$
|
31,979,977
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and amortization
|
|
|
(22,584,958
|
)
|
|
|
(22,972,422
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
12,107,315
|
|
|
|
9,007,555
|
|
|
|
|
|
|
|
|
|
|
Construction in progress
|
|
|
4,763
|
|
|
|
953,749
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,112,078
|
|
|
$
|
9,961,304
|
|
7. | Debt and Capital Lease Obligations |
|
|
July 31, 2012
|
|
|
July 31, 2011
|
|
||
|
|
|
|
|
|
|
||
Various bank loans and advances at subsidiaries with interest rates ranging from
5% to 14%
|
|
$
|
372,744
|
|
|
$
|
1,907,369
|
|
Capital lease obligations at subsidiaries with varying interest rates averaging 11%
|
|
|
218,351
|
|
|
|
230,942
|
|
|
|
|
591,095
|
|
|
|
2,138,311
|
|
|
|
|
|
|
|
|
|
|
Current portion of debt and capital lease obligations
|
|
|
(488,460
|
)
|
|
|
(1,689,920
|
)
|
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
$
|
102,635
|
|
|
$
|
448,391
|
|
|
|
Amount
|
|
|
|
|
|
|
|
Fiscal Year 2013
|
|
$
|
488,460
|
|
Fiscal Year 2014
|
|
|
87,693
|
|
Fiscal Year 2015
|
|
|
14,942
|
|
Fiscal Year 2016
|
|
|
---
|
|
Fiscal Year 2017
|
|
|
---
|
|
Thereafter
|
|
|
---
|
|
|
|
|
|
|
|
|
$
|
591,095
|
|
8. | Income Taxes |
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Domestic
|
|
$
|
(993,959
|
)
|
|
$
|
7,212,154
|
|
|
$
|
3,216,835
|
|
Foreign
|
|
|
5,391,625
|
|
|
|
5,543,017
|
|
|
|
7,242,054
|
|
|
|
|
4,397,666
|
|
|
|
12,755,171
|
|
|
|
10,458,889
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
(175,203
|
)
|
|
$
|
3,014,130
|
|
|
$
|
1,381,857
|
|
State
|
|
|
(232,800
|
)
|
|
|
786,651
|
|
|
|
411,636
|
|
Foreign
|
|
|
1,652,202
|
|
|
|
1,740868
|
|
|
|
1,636,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,244,199
|
|
|
|
5,541,649
|
|
|
|
3,429,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
509,161
|
|
|
|
(409,268
|
)
|
|
|
262,326
|
|
State
|
|
|
(35,273
|
)
|
|
|
(91,656
|
)
|
|
|
77,151
|
|
Foreign
|
|
|
(360,171
|
)
|
|
|
(409,489
|
)
|
|
|
132,978
|
|
|
|
|
113,717
|
|
|
|
(910,413
|
)
|
|
|
472,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,357,916
|
|
|
$
|
4,631,236
|
|
|
$
|
3,902,222
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
|
|
|
|
U.S. federal statutory income tax rate
|
34.0%
|
|
34.0%
|
|
34.0%
|
Income from "pass-through" entities taxable to noncontrolling partners
|
(5.8%)
|
|
(2.3%)
|
|
(1.3%)
|
International rate differences
|
(7.5%)
|
|
(2.1%)
|
|
(2.4%)
|
Other foreign taxes, net of federal benefit
|
4.8%
|
|
0.9%
|
|
1.7%
|
Foreign dividend income
|
7.5%
|
|
3.3%
|
|
1.9%
|
Domestic manufacturing deduction
|
---
|
|
(1.8%)
|
|
(0.3%)
|
State taxes, net of federal benefit
|
0.3%
|
|
3.4%
|
|
3.5%
|
Re-evaluation and settlements of tax contingencies
|
(4.1%)
|
|
---
|
|
(0.9%)
|
Other permanent differences
|
1.7%
|
|
0.9%
|
|
1.1%
|
|
|
|
|
|
|
Total
|
30.9%
|
|
36.3%
|
|
37.3%
|
|
2012
|
|
2011
|
||||||||||||
|
Current
|
|
Noncurrent
|
|
Current
|
|
Noncurrent
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Contract and other reserves
|
$
|
4,004,631
|
|
|
$
|
---
|
|
|
$
|
3,561,551
|
|
|
$
|
---
|
|
Fixed assets and intangibles
|
|
---
|
|
|
|
(579,932
|
)
|
|
|
---
|
|
|
|
159,452
|
|
Accrued compensation and expenses
|
|
1,267,004
|
|
|
|
531,386
|
|
|
|
1,537,003
|
|
|
|
381,767
|
|
Net operating loss carryforwards
|
|
---
|
|
|
|
555,437
|
|
|
|
---
|
|
|
|
282,885
|
|
Foreign and state income taxes
|
|
---
|
|
|
|
65,274
|
|
|
|
---
|
|
|
|
117,122
|
|
Federal benefit on state deferred taxes
|
|
(192,927
|
)
|
|
|
(41,259
|
)
|
|
|
(188,199
|
)
|
|
|
(33,383
|
)
|
Foreign tax credit
|
|
---
|
|
|
|
295,674
|
|
|
|
---
|
|
|
|
346,469
|
|
Valuation Allowance
|
|
(258,831
|
)
|
|
|
(61,406
|
)
|
|
|
(267,371
|
)
|
|
|
(79,098
|
)
|
Other
|
|
(20,153
|
)
|
|
|
95,325
|
|
|
|
306,384
|
|
|
|
124,967
|
|
Net deferred tax assets
|
$
|
4,799,724
|
|
|
$
|
860,499
|
|
|
$
|
4,949,368
|
|
|
$
|
1,300,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
$
|
---
|
|
|
$
|
(423,324
|
)
|
|
$
|
---
|
|
|
$
|
(525,106
|
)
|
Net deferred tax liabilities
|
$
|
---
|
|
|
$
|
(423,324
|
)
|
|
$
|
---
|
|
|
$
|
(525,106
|
)
|
|
|
2012
|
|
|
2011
|
|
||
|
|
|
|
|
|
|
||
Beginning balance
|
|
$
|
530,500
|
|
|
$
|
240,900
|
|
Additions for tax positions during the current year
|
|
|
---
|
|
|
|
280,700
|
|
Additions for tax positions of prior years
|
|
|
23,100
|
|
|
|
40,300
|
|
Reductions for tax positions of prior years for:
|
|
|
|
|
|
|
|
|
- Changes in judgment
|
|
|
---
|
|
|
|
---
|
|
- Settlements during the period
|
|
|
(422,300
|
)
|
|
|
(31,400
|
)
|
- Changes in non-controlling interests
|
|
|
---
|
|
|
|
---
|
|
- Lapses of the applicable statute of limitations
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
131,300
|
|
|
$
|
530,500
|
|
|
July 31,
|
|
||||||
|
2012
|
|
2011
|
|
||||
|
|
|
|
|
||||
General cost disallowances
|
|
$
|
2,724,474
|
|
|
$
|
3,882,810
|
|
Other
|
|
|
1,208,114
|
|
|
|
2,256,613
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,932,588
|
|
|
$
|
6,139,423
|
|
10. | Stock Award Plan |
a. | Class A and Class B common stock |
b. | Cash Dividend |
c. | Stock Repurchase |
The Company's Board of Directors approved a 200,000 share repurchase program in August 2010 in which 93,173 shares remain available for repurchase. |
d. | Noncontrolling Interest |
|
Fiscal year
ended
July 31,
2012
|
|
|
Fiscal year
ended
July 31,
2011
|
|
|
Fiscal year
ended
July 31,
2010
|
|
|||
Transfers to noncontrolling interest:
|
|
|
|
|
|
|
|
|
|
|
|
Sale of 160 Walsh common shares
|
$
|
---
|
|
|
$
|
---
|
|
|
$
|
40,850
|
|
Sale of 196 Walsh common shares
|
|
---
|
|
|
|
---
|
|
|
|
50,040
|
|
Sale of 200 Lowham – Walsh common shares
|
|
---
|
|
|
|
---
|
|
|
|
52,222
|
|
Sale of 15,000 Walsh Peru common shares
|
|
---
|
|
|
|
---
|
|
|
|
84,450
|
|
Sale of 900 Gustavson common shares
|
|
---
|
|
|
|
62,451
|
|
|
|
---
|
|
Issuance of 667 ECSI common shares
|
|
---
|
|
|
|
667,000
|
|
|
|
---
|
|
Sale of 75 Lowham – Walsh common shares
|
|
---
|
|
|
|
27,917
|
|
|
|
---
|
|
Sale of 600 Gustavson common shares
|
|
41,634
|
|
|
|
---
|
|
|
|
---
|
|
Total transfers to noncontrolling interest
|
|
41,634
|
|
|
|
757,368
|
|
|
|
227,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfers from noncontrolling interest:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of 182 Walsh common shares
|
|
---
|
|
|
|
---
|
|
|
|
(59,486
|
)
|
Purchase of 7,343 Walsh common shares
|
|
---
|
|
|
|
---
|
|
|
|
(2,289,778
|
)
|
Purchase of 11,000 Walsh Peru common shares
|
|
---
|
|
|
|
---
|
|
|
|
(126,830
|
)
|
Purchase of 50 Gestion Ambiental Consultores common shares
|
|
---
|
|
|
|
---
|
|
|
|
(50,000
|
)
|
Purchase of 20 Walsh common shares
|
|
---
|
|
|
|
(7,776
|
)
|
|
|
---
|
|
Purchase of 496 Walsh common shares
|
|
---
|
|
|
|
(208,156
|
)
|
|
|
---
|
|
Purchase of 2,205 Walsh common shares
|
|
---
|
|
|
|
(974,750
|
)
|
|
|
---
|
|
Purchase of 243 Walsh common shares
|
|
---
|
|
|
|
(101,905
|
)
|
|
|
---
|
|
Purchase of 426 Walsh common shares
|
|
---
|
|
|
|
(197,945
|
)
|
|
|
---
|
|
Purchase of 100 Walsh common shares
|
|
---
|
|
|
|
(41,091
|
)
|
|
|
---
|
|
Purchase of 152 Walsh common shares
|
|
(73,748
|
)
|
|
|
---
|
|
|
|
---
|
|
Purchase of 496 Walsh common shares
|
|
(269,064
|
)
|
|
|
---
|
|
|
|
---
|
|
Purchase of 5,389 Brazil common shares
|
|
77,539
|
|
|
|
---
|
|
|
|
---
|
|
Purchase of 26,482 Walsh Peru common shares
|
|
(213,917
|
)
|
|
|
---
|
|
|
|
---
|
|
Purchase of 166 Walsh common shares
|
|
(94,601
|
)
|
|
|
---
|
|
|
|
---
|
|
Purchase of 25 Gestion Ambiental Consultores common shares
|
|
(7,452
|
)
|
|
|
---
|
|
|
|
---
|
|
Total transfers from noncontrolling interest
|
|
(581,243
|
)
|
|
|
(1,531,623
|
)
|
|
|
(2,526,094
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfers to (from) noncontrolling interest
|
$
|
(539,609
|
)
|
|
$
|
(774,255
|
)
|
|
$
|
(2,298,532
|
)
|
12. | Shareholders' Equity - Restrictive Agreement |
13. | Lease Commitments |
Fiscal Year
|
|
Amount
|
||
|
|
|
|
|
2013
|
|
$
|
3,114,799
|
|
2014
|
|
|
2,325,349
|
|
2015
|
|
|
1,460,362
|
|
2016
|
|
|
1,027,248
|
|
2017
|
|
|
854,542
|
|
Thereafter
|
|
|
1,066,545
|
|
14. | Defined Contribution Plans |
15. | Earnings Per Share |
|
|
Fiscal Year
|
|
|||||||||
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total income available to common stockholders
|
|
$
|
773,579
|
|
|
$
|
6,960,263
|
|
|
$
|
4,257,607
|
|
Dividend paid
|
|
|
2,036,559
|
|
|
|
1,963,303
|
|
|
|
1,747,572
|
|
Undistributed earnings
|
|
|
(1,262,980
|
)
|
|
|
4,996,960
|
|
|
|
2,510,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: basic and diluted
|
|
|
4,233,883
|
|
|
|
4,222,688
|
|
|
|
4,160,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributed earnings per share
|
|
$
|
.48
|
|
|
$
|
.46
|
|
|
$
|
.42
|
|
Undistributed earnings per share
|
|
|
(.30
|
)
|
|
|
1.19
|
|
|
|
.60
|
|
Total earnings per share
|
|
$
|
.18
|
|
|
$
|
1.65
|
|
|
$
|
1.02
|
|
|
Revenue (1)
|
Gross Long-
Lived Assets
|
||||||
|
||||||||
United States
|
$
|
98,558,000
|
$
|
29,506,000
|
||||
Foreign countries
|
56,852,000
|
5,191,000
|
|
Revenue
|
Gross Long-
Lived Assets
|
||||||
|
||||||||
United States
|
$
|
115,041,000
|
$
|
27,872,000
|
||||
Foreign countries
|
54,132,000
|
5,062,000
|
|
Revenue
|
Gross Long-
Lived Assets
|
||||||
|
||||||||
United States
|
$
|
101,105,000
|
$
|
25,991,000
|
||||
Foreign countries
|
42,993,000
|
3,714,000
|
17. | Commitments and Contingencies |
18. | Supplemental Cash Flow Information Disclosure |
19. | Transactions |
20. | Recent Accounting Pronouncements |
21. | Selected Quarterly Financial Data (unaudited) |
(In thousands, except per share information) |
2012
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
|
||||||||||||||||
Revenues
|
$
|
42,312
|
$
|
40,173
|
$
|
36,011
|
$
|
36,914
|
||||||||
Income from operations
|
2,040
|
1,867
|
574
|
303
|
||||||||||||
Income from continuing operations before income taxes
|
2,084
|
1,685
|
503
|
126
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
1,160
|
$
|
503
|
$
|
56
|
$
|
(945
|
)
|
|||||||
|
||||||||||||||||
Net income per common share: basic and diluted
|
$
|
.28
|
$
|
.12
|
$
|
.01
|
$
|
(.23
|
)
|
2011
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
|
||||||||||||||||
Revenues
|
$
|
42,026
|
$
|
41,866
|
$
|
41,120
|
$
|
44,161
|
||||||||
Income from operations
|
4,008
|
3,204
|
2,199
|
2,975
|
||||||||||||
Income from continuing operations before income taxes
|
3,941
|
3,238
|
2,587
|
2,989
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
1,859
|
$
|
1,758
|
$
|
1,429
|
$
|
1,914
|
||||||||
|
||||||||||||||||
Net income per common share: basic and diluted
|
$
|
.44
|
$
|
.42
|
$
|
.34
|
$
|
.45
|
|
Balance at
beginning
of period
|
Increase
|
Decrease
|
Balance at
end of year
|
||||||||||||
|
||||||||||||||||
July 31, 2012
|
||||||||||||||||
Allowance for doubtful accounts and contract adjustments
|
$
|
6,755,087
|
$
|
5,080,894
|
$
|
1,597,590
|
$
|
10,238,391
|
||||||||
General cost disallowances
|
3,882,810
|
---
|
1,158,336
|
2,724,474
|
||||||||||||
Total
|
$
|
10,637,897
|
$
|
5,080,894
|
$
|
2,755,926
|
$
|
12,962,865
|
||||||||
|
||||||||||||||||
July 31, 2011
|
||||||||||||||||
Allowance for doubtful accounts and contract adjustments
|
$
|
3,373,673
|
$
|
6,042,070
|
$
|
2,660,656
|
$
|
6,755,087
|
||||||||
General cost disallowances
|
3,483,876
|
899,875
|
500,941
|
3,882,810
|
||||||||||||
Total
|
$
|
6,857,549
|
$
|
6,941,945
|
$
|
3,161,597
|
$
|
10,637,897
|
||||||||
|
||||||||||||||||
July 31, 2010
|
||||||||||||||||
Allowance for doubtful accounts and contract adjustments
|
$
|
2,520,338
|
$
|
1,463,072
|
$
|
609,737
|
$
|
3,373,673
|
||||||||
General cost disallowances
|
3,417,828
|
66,048
|
---
|
3,483,876
|
||||||||||||
Total
|
$
|
5,938,166
|
$
|
1,529,120
|
$
|
609,737
|
$
|
6,857,549
|
Item 9A. | Controls and Procedures |
|
ECOLOGY AND ENVIRONMENT, INC.
|
|
|
|
|
Dated: March 12, 2013
|
/s/ Kevin S. Neumaier
|
|
Kevin S. Neumaier
President and Chief Executive Officer
|
Exhibit No.
|
|
Description
|
||
EX-31.1
|
|
Certification of Principal Executive Officer
|
||
EX-31.2
|
|
Certification of Principal Financial Officer
|
||
EX-32.1
|
|
Certification of Principal Executive Officer
|
||
EX-32.2
|
|
Certification of Principal Financial Officer
|
||
EX-101.INS | XBRL Instance Document | |||
EX-101.SCH | XBRL Taxanomy Extension Schema | |||
EX-101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||
EX-101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||
EX-101.LAB | XBRL Taxonomy Extension Label Linkbase | |||
EX-101.PRE | XBRL Taxonomy Extention Presentation Linkbase |