10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

SQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

£  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 000-11917

THE DAVEY TREE EXPERT COMPANY

(Exact name of registrant as specified in its charter)

Ohio	34-0176110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1500 North Mantua Street
P.O. Box 5193
Kent, Ohio 44240
(Address of principal executive offices) (Zip code)
(330) 673-9511
(Registrant's telephone number, including area code)

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 S   No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes S   No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):	£ Large Accelerated Filer	S Accelerated Filer
	£ Non-Accelerated Filer	£ Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes £ No S

There were 13,818,530 Common Shares, $1.00 par value, outstanding as of July 27, 2012. 

The Davey Tree Expert Company

Quarterly Report on Form 10-Q

June 30, 2012

INDEX

		Page
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements
	A —  Basis of Financial Statement Preparation	6
	B —  Seasonality of Business	6
	C —  Accounts Receivable, Net and Supplemental Balance-Sheet Information	6
	D —  Identified Intangible Assets and Goodwill, Net	7
	E —   Long-Term Debt	8
	F —   Stock-Based Compensation	9
	G —  Net Periodic Benefit Cost—Defined Benefit Pension Plans	12
	H —  Income Taxes	13
	I  —  Accumulated Other Comprehensive Income (Loss)	13
	J  —  Per Share Amounts and Common Shares Outstanding	14
	K —  Operations by Business Segment	15
	L  —  Fair Value Measurements and Financial Instruments	17
	M —  Contingencies	21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Results of Operations	22
	Liquidity and Capital Resources	26
	Cash Flow Summary	27
	Off-Balance Sheet Arrangements	28
	Contractual Obligations Summary	28
	Capital Resources	29
	Critical Accounting Policies and Estimates	29
	Note Regarding Forward-Looking Statements	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
Part II.	Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	38
Signatures		39
Exhibit Index		40

We,” “Us,” “Our,” “Davey” and “Davey Tree,” unless the context otherwise requires, means The Davey Tree Expert Company and its subsidiaries.

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THE DAVEY TREE EXPERT COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except per share data dollar amounts)

	June 30, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	7,202		$	10,267
Accounts receivable, net	106,280			90,795
Operating supplies	7,063			5,586
Other current assets	17,429			23,888
Total current assets	137,974			130,536
Property and equipment	448,945			438,989
Less accumulated depreciation	317,128			308,841
	131,817			130,148
Other assets	16,663			15,969
Identified intangible assets and goodwill, net	26,198			27,081
	$	312,652		$	303,734
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	33,101		$	35,282
Accrued expenses	32,936			34,123
Other current liabilities	28,115			32,630
Total current liabilities	94,152			102,035
Long-term debt	58,917			51,136
Self-insurance accruals	36,799			30,472
Other noncurrent liabilities	15,529			19,365
	205,397			203,008
Common shareholders' equity:
Common shares, $1.00 par value, per share; 24,000 shares authorized; 21,457 shares issued and outstanding	21,457			21,457
Additional paid-in capital	3,089			1,721
Retained earnings	196,216			188,613
Accumulated other comprehensive loss	(5,846		)	(6,344		)
	214,916			205,447
Less: Cost of Common shares held in treasury; 7,644 shares at June 30, 2012 and 7,611 shares at December 31, 2011	107,661			104,721
	107,255			100,726
	$	312,652		$	303,734
See notes to condensed consolidated financial statements.

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THE DAVEY TREE EXPERT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share dollar amounts)

	Three Months Ended						Six Months Ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Revenues	$	182,411		$	173,953		$	329,055		$	305,277
Costs and expenses:
Operating	116,472			111,242			216,356			207,072
Selling	28,197			25,684			52,600			48,671
General and administrative	11,480			10,783			24,078			22,007
Depreciation and amortization	9,670			9,840			19,127			19,424
Gain on sale of assets, net	(678		)	(163		)	(884		)	(244		)
	165,141			157,386			311,277			296,930
Income from operations	17,270			16,567			17,778			8,347
Other income (expense):
Interest expense	(707		)	(984		)	(1,410		)	(1,874		)
Interest income	29			9			56			14
Other, net	(874		)	(661		)	(1,509		)	(1,324		)
Income before income taxes	15,718			14,931			14,915			5,163
Income taxes	6,302			5,772			6,070			2,050
Net income	$	9,416		$	9,159		$	8,845		$	3,113
Net income per share:
Basic	$	.68		$	.65		$	.64		$	.22
Diluted	$	.66		$	.63		$	.62		$	.21
Weighted-average shares outstanding:
Basic	13,838			14,058			13,851			14,093
Diluted	14,286			14,569			14,325			14,612
Dividends declared per share	$	.045		$	.043		$	.088		$	.085
See notes to condensed consolidated financial statements.

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THE DAVEY TREE EXPERT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In thousands)

	Three Months Ended					Six Months Ended
	June 30, 2012			July 2, 2011		June 30, 2012			July 2, 2011
Net income	$	9,416		$	9,159	$	8,845		$	3,113
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(618		)	114		(125		)	699
Change in deferred gains on cash flow hedges	—			223		77			273
Defined benefit pension plan adjustments	383			120		546			148
Other comprehensive income (loss)	(235		)	457		498			1,120
Comprehensive income	$	9,181		$	9,616	$	9,343		$	4,233
See notes to condensed consolidated financial statements.

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THE DAVEY TREE EXPERT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

	Six Months Ended
	June 30, 2012			July 2, 2011
Operating activities
Net income	$	8,845		$	3,113
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	19,127			19,424
Other	(485		)	358
Changes in operating assets and liabilities:
Accounts receivable	(15,485		)	(15,377		)
Operating liabilities	2,547			5,414
Other, net	2,158			(830		)
	7,862			8,989
Net cash provided by operating activities	16,707			12,102
Investing activities
Capital expenditures:
Equipment	(20,878		)	(25,431		)
Land and buildings	(212		)	(175		)
Purchases of businesses	—			(962		)
Other	1,513			539
Net cash used in investing activities	(19,577		)	(26,029		)
Financing activities
Revolving credit facility proceeds, net	8,400			21,600
Purchase of common shares for treasury	(7,762		)	(7,847		)
Sale of common shares from treasury	5,437			4,972
Dividends	(1,242		)	(1,189		)
Other	(5,028		)	(7,053		)
Net cash (used in) provided by financing activities	(195		)	10,483
Decrease in cash and cash equivalents	(3,065		)	(3,444		)
Cash and cash equivalents, beginning of period	10,267			12,017
Cash and cash equivalents, end of period	$	7,202		$	8,573
Supplemental cash flow information follows:
Interest paid	$	1,465		$	1,992
Income taxes paid	4,799			877
See notes to condensed consolidated financial statements.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

A. Basis of Financial Statement Preparation

The condensed consolidated financial statements present the financial position, results of operations and cash flows of The Davey Tree Expert Company and its subsidiaries. “We,” “us,” “our,” “Davey,” “Davey Tree” and the “Company” means The Davey Tree Expert Company and its subsidiaries, unless the context indicates otherwise.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The consolidated financial statements include all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. All significant intercompany accounts and transactions have been eliminated.

Certain information and disclosures required by U.S. GAAP for complete financial statements have been omitted in accordance with the rules and regulations of the SEC. We suggest that these condensed consolidated financial statements be read in conjunction with the financial statements included in our annual report on Form 10-K for the year ended December 31, 2011 (the “2011 Annual Report”).

Use of Estimates in Financial Statement Preparation--The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect reported amounts. Our consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Estimates are used for, but not limited to, accounts receivable valuation, depreciable lives of fixed assets, self-insurance accruals, income taxes and revenue recognition. Actual results could differ from those estimates.

Interim Results of Operations--Interim results may not be indicative of calendar year performance because of seasonal and short-term variations.

B. Seasonality of Business

Due to the seasonality of our business, our operating results for the six months endedJune 30, 2012 are not indicative of results that may be expected for any other interim period or for the year ending December 31, 2012. Business seasonality is the result of traditionally higher revenues during the second and third quarters as compared with the first and fourth quarters of the year, while the methods of accounting for fixed costs, such as depreciation expense, amortization, rent and interest expense, are not significantly impacted by business seasonality.

C. Accounts Receivable, Net and Supplemental Balance-Sheet Information

The following comprise accounts receivable, net, and other:

Accounts receivable, net	June 30, 2012		December 31, 2011
Accounts receivable	$	87,399	$	82,076
Receivables under contractual arrangements	21,538		11,194
	108,937		93,270
Less allowances for doubtful accounts	2,657		2,475
Accounts receivable, net	$	106,280	$	90,795

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

C. Accounts Receivable, Net and Supplemental Balance-Sheet Information (continued)

Receivables under contractual arrangements consist of work-in-process in accordance with the terms of contracts, primarily with utility services customers.

The following comprise the amounts included in the balance sheet:

Other current assets	June 30, 2012		December 31, 2011
Refundable income taxes	$	2,884	$	2,602
Deferred income taxes	7,927		12,071
Prepaid expenses	5,999		6,968
Other	619		2,247
Total	$	17,429	$	23,888

Accrued expenses	June 30, 2012		December 31, 2011
Employee compensation	$	13,190	$	15,046
Accrued compensated absences	8,158		7,138
Self-insured medical claims	3,148		2,950
Customer advances, deposits	—		1,321
Taxes, other than income	2,771		2,622
Accrued litigation settlement	2,900		2,900
Other	2,769		2,146
Total	$	32,936	$	34,123

D. Identified Intangible Assets and Goodwill, Net

The carrying amounts of the identified intangibles and goodwill acquired in connection with our investments in businesses were as follows:

	June 30, 2012				December 31, 2011
Identified Intangible Assets and Goodwill, Net	Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists/relationships	$	12,411	$	9,728	$	12,627	$	9,570
Employment-related	5,345		4,830		5,345		4,573
Tradenames	4,357		3,030		4,358		2,783
Amortized intangible assets	$	22,113	$	17,588	$	22,330	$	16,926
Less accumulated amortization	17,588				16,926
Identified intangibles, net	4,525				5,404
Unamortized intangible assets:
Goodwill	21,673				21,677
	$	26,198			$	27,081

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

E. Long-Term Debt

Our long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
Revolving credit facility
Prime rate borrowings	$	1,400	$	—
LIBOR borrowings	27,000		20,000
	28,400		20,000
Senior unsecured notes	30,000		30,000
Term loans	1,945		6,973
	60,345		56,973
Less current portion	1,428		5,837
	$	58,917	$	51,136

Revolving Credit Facility and 5.09% Senior Unsecured Notes--We have a $140,000 revolving credit facility with a group of banks, which will expire in December 2014 and permits borrowings, as defined, up to $140,000 with a letter of credit sublimit of $100,000 and which, under certain circumstances, may be increased to $160,000.  The revolving credit facility contains certain affirmative and negative covenants customary for this type of facility and includes financial covenant ratios, as defined, with respect to funded debt to EBITDA (earnings before interest, taxes, depreciation and amortization), and funded debt to capitalization.

As of June 30, 2012, we had unused commitments under the facility approximating$66,913, with $73,087 committed, consisting of borrowings of$28,400 and issued letters of credit of$44,687. Borrowings outstanding bear interest, at Davey Tree’s option, of either (a) a base rate plus a margin adjustment ranging from .0% to .25% or (b) LIBOR plus a margin adjustment ranging from 1.25% to 1.75%--with the margin adjustments in both instances based on a ratio of funded debt to EBITDA. The base rate is the greater of (i) the agent bank’s prime rate, (ii) LIBOR plus 1.5%, or (iii) the federal funds rate plus .5%. A commitment fee ranging from .20% to .30% is also required based on the average daily unborrowed commitment.

We issued $30,000 of 5.09% Senior Unsecured Notes, Series A, during July 2010 that are due July 22, 2020 (the “5.09% Senior Notes”).  The 5.09% Senior Notes were issued pursuant to a Master Note Purchase Agreement (the “Purchase Agreement”) between the Company and the purchasers of the 5.09% Senior Notes.  

The 5.09% Senior Notes are equal in right of payment with our revolving credit facility and all other senior unsecured obligations of the Company. Interest is payable semiannually and five equal, annual principal payments commence on July 22, 2016 (thesixth anniversary of issuance).  The Purchase Agreement contains customary events of default and covenants related to limitations on indebtedness and transactions with affiliates and the maintenance of certain financial ratios.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

F. Stock-Based Compensation

The Davey Tree Expert Company 2004 Omnibus Stock Plan (the “Stock Plan”) was approved by our shareholders at our annual shareholders' meeting in May 2004. The Stock Plan is administered by the Compensation Committee of the Board of Directors, with the maximum number of common shares that may be granted to or purchased by all employees and directors under the Stock Plan being 10,000,000. In addition to the maintenance of the Employee Stock Purchase Plan, the Stock Plan provides for the grant of stock options, restricted stock, stock appreciation rights, stock purchase rights, stock equivalent units, cash awards, and other stock or performance-based incentives. These awards are payable in cash or common shares, or any combination thereof, as established by the Compensation Committee.

Stock-based compensation expense under all share-based payment plans -- our Employee Stock Purchase Plan, stock option plans, stock appreciation rights and performance-based restricted stock units -- included in the results of operations follows:

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Compensation expense, all share-based payment plans	$	294	$	367	$	925	$	704

Stock-based compensation consisted of the following:

Employee Stock Purchase Plan--Under the Employee Stock Purchase Plan, all full-time employees with one year of service are eligible to purchase, through payroll deduction, common shares. Employee purchases under the Employee Stock Purchase Plan are at 85% of the fair market value of the common shares--a 15% discount. We recognize compensation costs as payroll deductions are made. The 15% discount of total shares purchased under the plan resulted in compensation cost of $210 being recognized for the six months endedJune 30, 2012 and $200for the six months endedJuly 2, 2011.

Stock Option Plans--Stock options awarded before January 1, 2006 were granted at an exercise price equal to the fair market value of our common shares at the dates of grant. Stock options awarded on or after January 1, 2006 were required to be measured at fair value. At June 30, 2012, there were 615,501 stock options outstanding that were awarded after January 1, 2006. The stock options were awarded under a graded vesting schedule and have a term of ten years. Compensation costs for stock options are recognized over the requisite service period on the straight-line recognition method. Compensation cost recognized for stock options was $80 for the six months endedJune 30, 2012 and $190 for the six months endedJuly 2, 2011.

Stock-Settled Stock Appreciation Rights--During the six months endedJune 30, 2012, the Compensation Committee of the Board of Directors awarded 105,000 Stock-Settled Stock Appreciation Rights (“SSARs”) to certain management employees and nonemployee directors, which vest ratably over five years. A stock-settled stock appreciation right is an award that allows the recipient to receive common stock equal to the appreciation in the fair market value of our common stock between the date the award was granted and the conversion date of the shares vested.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

F. Stock-Based Compensation (continued)

The following table summarizes our SSARs as of June 30, 2012.

Stock-Settled Stock Appreciation Rights	Number of Rights		Weighted- Average Award Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	210,188		$	3.47
Granted	105,000		2.70
Forfeited	—		—
Vested	(57,371	)	3.43
Unvested, June 30, 2012	257,817		$	3.17	3.6 years	$	699	$	5,079
Employee SSARs	218,400		$	3.31	3.6 years	$	609	$	4,302
Nonemployee Director SSARs	39,417		$	2.34	3.9 years	$	90	$	777

Compensation costs for stock appreciation rights are determined using a fair-value method and amortized over the requisite service period. Compensation expense for stock appreciation rights was $156 for the six months endedJune 30, 2012 and $98 for the six months endedJuly 2, 2011.

Performance-Based Restricted Stock Units--During the six months endedJune 30, 2012, the Compensation Committee of the Board of Directors awarded 23,058 Performance-Based Restricted Stock Units to certain management employees. The Compensation Committee made similar awards in prior periods. The awards vest over specified periods. The following table summarizes Performance-Based Restricted Stock Units as of June 30, 2012.

Performance-Based Restricted Stock Units	Number of Stock Units		Weighted- Average Grant Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	113,908		$	15.15
Granted	23,058		19.41
Forfeited	—		—
Vested	(58,313	)	14.52
Unvested, June 30, 2012	78,653		$	16.87	2.4 years	$	792	$	1,549

The fair value of the restricted stock units for awards made prior to January 1, 2006 is based on the market price of our common shares on the date of award and is recognized as compensation cost on the straight-line recognition method over the vesting period. Compensation cost for awards made after December 31, 2005 is determined using a fair-value method and amortized over the requisite service period. Compensation expense on restricted stock awards totaled $479 for the six months endedJune 30, 2012 and $216 for the six months endedJuly 2, 2011.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

F. Stock-Based Compensation (continued)

For stock-based awards issued on or after January 1, 2006, we estimated the fair value of each award on the date of grant using a binomial option-pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on historical volatility of our stock prices and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock-based awards is derived from the output of the binomial model and represents the period of time that awards granted are expected to be outstanding.

The fair values of stock-based awards granted were estimated at the dates of grant with the following weighted-average assumption.

	Six Months Ended
	June 30, 2012		July 2, 2011
Volatility rate	11.7	%	11.9	%
Risk-free interest rate	1.6	%	2.9	%
Expected dividend yield	1.5	%	1.5	%
Expected life of awards (years)	9.1		8.9

General Stock Option Information--The following table summarizes activity under the stock option plans for the six months endedJune 30, 2012.

Stock Options	Number of Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Outstanding, January 1, 2012	1,110,785		$	10.62
Granted	—		—
Exercised	(117,260	)	8.05
Forfeited	—		—
Outstanding, June 30, 2012	993,525		$	10.93	4.1 years	$	10,855	$	8,717
Exercisable, June 30, 2012	822,525		$	9.81	3.0 years			$	8,138

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

F. Stock-Based Compensation (continued)

“Intrinsic value” is defined as the amount by which the market price of a common share exceeds the exercise price of an option.  Information regarding the stock options outstanding at June 30, 2012 is summarized below:

Stock Options Exercise Price			Number Outstanding	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
Employee options:	$	6.75	378,024	1.4 years	$	6.75	378,024	$	6.75
	11.25		329,133	3.9 years	11.25		329,133	11.25
	16.00		132,300	7.3 years	16.00		49,300	16.00
	16.60		109,400	8.3 years	16.60		21,400	16.60
			948,857	4.2 years	$	10.74	777,857	$	9.51
Director options:	$10.00 to $16.40		44,668	1.9 years	14.95		44,668	14.95
			993,525	4.1 years	$	10.93	822,525	$	9.81

Common shares are issued from treasury upon the exercise of stock options, stock appreciation rights, restricted stock units or purchases under the Employee Stock Purchase Plan.

G. Net Periodic Benefit Cost--Defined Benefit Pension Plans

The results of operations included the following net periodic benefit cost recognized related to our defined-benefit pension plans.

	Three Months Ended						Six Months Ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Components of pension cost
Service costs--increase in benefit obligation earned	$	47		$	34		$	91		$	67
Interest cost on projected benefit obligation	415			417			832			835
Expected return on plan assets	(425		)	(477		)	(853		)	(954		)
Settlement loss	219			—			219			—
Amortization of net actuarial loss	260			133			522			267
Amortization of prior service cost	4			4			7			7
Amortization of transition asset	—			(17		)	—			(34		)
Net pension cost of defined benefit pension plans	$	520		$	94		$	818		$	188

Employer Contributions--Contributions of $428 were made to our defined-benefit pension plans during the six months endedJune 30, 2012. We expect, as of June 30, 2012, to make additional defined-benefit plan contributions totaling $582 before December 31, 2012.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

H. Income Taxes

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate and, if our estimated annual tax rate changes, we make a cumulative adjustment. The 2012 annual effective tax rate is estimated to approximate 40%.  Our annual effective tax rate for 2011 was 39.6%.

At December 31, 2011, we had unrecognized tax benefits of $1,825, of which $1,260 would affect our effective rate if recognized, and accrued interest expense related to unrecognized benefits of $99. At June 30, 2012, there were no significant changes in the unrecognized benefits, including the amount that would affect our effective tax rate if recognized, or the accrued interest expense related to the unrecognized tax benefits. Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for financial reporting purposes.

The amount of income taxes we pay is subject to audit by U.S. federal, state and Canadian tax authorities, which may result in proposed assessments.  With the exception of U.S. state jurisdictions, the Company is no longer subject to examination by tax authorities for the years through 2008. During the quarter ended June 30, 2012, we received notice that the Internal Revenue Service has selected for examination the Company's U.S. income tax return for the year ended December 31, 2010.   

As of June 30, 2012, if certain pending tax matters settle, we believe it is reasonably possible that additional tax payments will be made during the next twelve months within a range of $200 to $300. However, we do not anticipate an increase or decrease in our total uncertain tax positions during the next twelve months that would be material to our financial condition or the results of operations.

I. Accumulated Other Comprehensive Income (Loss)

Comprehensive income (or loss) is comprised of net income (or net loss) and other components, including currency translation adjustments, changes in the fair value of interest rate swaps qualifying as cash flow hedges, and defined-benefit pension plan adjustments.

The following summarizes the components of other comprehensive income (loss) accumulated in shareholders’ equity:

	Foreign Currency Translation Adjustments			Interest Rate Cash Flow Hedges			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2012	$	2,950		$	(77	)	$	(9,217	)	$	(6,344	)
Unrealized gains (losses)	(125		)	—			—			(125		)
Unrealized gains in fair value	—			123			—			123
Unrecognized amounts from defined benefit pension plans	—			—			748			748
Tax effect	—			(46		)	(202		)	(248		)
Net of tax amount	(125		)	77			546			498
Balance at June 30, 2012	$	2,825		$	—		$	(8,671	)	$	(5,846	)

- 13 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

J. Per Share Amounts and Common Shares Outstanding

We calculate our basic earnings per share by dividing net income or net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated in a similar manner, but include the effect of dilutive securities. To the extent these securities are antidilutive, they are excluded from the calculation of earnings per share.  The per share amounts were computed as follows: 

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Income available to common shareholders:
Net Income	$	9,416	$	9,159	$	8,845	$	3,113
Weighted-average shares:
Basic:
Outstanding	13,838		14,058		13,851		14,093
Basic weighted-average shares	13,838		14,058		13,851		14,093
Diluted:
Basic from above	13,838		14,058		13,851		14,093
Incremental shares from assumed:
Exercise of stock options and awards	448		511		474		519
Diluted weighted-average shares	14,286		14,569		14,325		14,612
Net income per share:
Basic	$	.68	$	.65	$	.64	$	.22
Diluted	$	.66	$	.63	$	.62	$	.21

Common Shares Outstanding--A summary of the activity of the common shares outstanding for the six months endedJune 30, 2012 follows: 

Shares outstanding at January 1, 2012	13,845,635
Shares purchased	(394,390	)
Shares sold	232,891
Options and awards exercised	129,081
	(32,418	)
Shares outstanding at June 30, 2012	13,813,217

On June 30, 2012, we had 13,813,217 common shares outstanding, and employee and director options exercisable to purchase 822,525 common shares.

Stock Subscription Offering--Beginning May 2012, the Company offered to eligible employees and nonemployee directors the right to subscribe to common shares of the Company at $19.70 per share in accordance with the provisions of The Davey Tree Expert Company 2004 Omnibus Stock Plan and the rules of the Compensation Committee of the Company's Board of Directors (collectively, the "plan"). The offering period ended on August 1, 2012.

- 14 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

J. Per Share Amounts and Common Shares Outstanding (continued)

Under the plan, a participant in the offering purchasing common shares for an aggregate purchase price of less than $5 had to pay with cash. All participants (excluding Company directors and officers) purchasing $5 or more of the common shares had an option to finance their purchase through a down-payment of at least 10% of the total purchase price and a seven-year promissory note for the balance due with interest at 2%. Payments on the promissory note can be made either by payroll deductions or annual lump-sum payments of both principal and interest.

Common shares purchased under the plan have been pledged as security for the payment of the promissory note and the common shares will not be issued until the promissory note is paid-in-full. Dividends will be paid on all subscribed shares, subject to forfeiture to the extent that payment is not ultimately made for the shares.

All participants in the offering purchasing in excess of $5 of common shares were granted a "right" to purchase one additional common share at a price of $19.70 per share for every three common shares purchased under the plan. Each right may be exercised at the rate of one-seventh per year and will expire seven years after the date that the right was granted. Employees may not exercise a right should they cease to be employed by the Company.

K.    Operations by Business Segment

Our operating results are reported in two segments: Residential and Commercial Services, and Utility Services. Residential and Commercial Services provides for the treatment, preservation, maintenance, cultivation, planting and removal of trees, shrubs and other plant life; its services also include the practice of landscaping, tree surgery, tree feeding, and tree spraying, as well as the application of fertilizer, herbicides and insecticides. Utility Services is principally engaged in the practice of line clearing for investor-owned and municipal utilities, including the clearing of tree growth from power lines, clearance of rights-of-way and chemical brush control. Davey Resource Group, which provides services related to natural resource management and consulting, forestry research and development, and environmental planning and also maintains research, technical support and laboratory diagnostic facilities, is a nonreportable segment and, along with other operating activities, is included in “All Other.”

Measurement of Segment Profit and Loss and Segment Assets--We evaluate performance and allocate resources based primarily on operating income and also actively manage business unit operating assets. Segment information, including reconciling adjustments, is presented consistent with the basis described in the 2011 Annual Report.

- 15 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

K.    Operations by Business Segment (continued)

Segment information reconciled to consolidated external reporting information follows:

	Utility Services		Residential Commercial Services		All Other		Reconciling Adjustments				Consolidated
Three Months Ended June 30, 2012
Revenues	$	78,989	$	87,294	$	16,128	$	—			$	182,411
Income (loss) from operations	1,928		14,867		1,754		(1,279		)	(a)	17,270
Interest expense							(707		)		(707		)
Interest income							29				29
Other income (expense), net							(874		)		(874		)
Income before income taxes											$	15,718
Segment assets, total	124,964		114,934		18,807		53,947			(b)	$	312,652
Three Months Ended July 2, 2011
Revenues	$	79,153	$	80,690	$	14,110	$	—			$	173,953
Income (loss) from operations	2,006		13,810		1,332		(581		)	(a)	16,567
Interest expense							(984		)		(984		)
Interest income							9				9
Other income (expense), net							(661		)		(661		)
Income before income taxes											$	14,931
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107
Six Months Ended June 30, 2012
Revenues	$	159,485	$	138,426	$	31,144	$	—			$	329,055
Income (loss) from operations	5,055		12,133		1,602		(1,012		)	(a)	17,778
Interest expense							(1,410		)		(1,410		)
Interest income							56				56
Other income (expense), net							(1,509		)		(1,509		)
Income before income taxes											$	14,915
Segment assets, total	$	124,964	$	114,934	$	18,807	$	53,947		(b)	$	312,652
Six Months Ended July 2, 2011
Revenues	$	153,804	$	126,349	$	25,124	$	—			$	305,277
Income (loss) from operations	1,336		7,970		96		(1,055		)	(a)	8,347
Interest expense							(1,874		)		(1,874		)
Interest income							14				14
Other income (expense), net							(1,324		)		(1,324		)
Income before income taxes											$	5,163
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107

Reconciling adjustments from segment reporting to consolidated external financial reporting include unallocated corporate items:

(a) Reclassification of depreciation expense and allocation of corporate expenses.

(b) Corporate assets include cash, prepaid expenses, corporate facilities, enterprise-wide information systems and other nonoperating assets.

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The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

L. Fair Value Measurements and Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Market participants are defined as buyers or sellers in the principal or most advantageous market for the asset or liability that are independent of the reporting entity, knowledgeable, and able and willing to transact for the asset or liability.

Valuation Hierarchy--A valuation hierarchy is used for presentation of the inputs to measure fair value.  This hierarchy prioritizes the inputs into three broad levels.  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.  Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.  A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Our assets and liabilities measured at fair value on a recurring basis at June 30, 2012, were as follows:

			Fair Value Measurements at June 30, 2012 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at June 30, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	14,156	$	14,156	$	—	$	—
Liabilities:
Fuel derivatives, classified as accrued expenses	$	306	$	—	$	306	$	—
Fuel derivatives, classified as other noncurrent liabilities	237		—		237		—
Deferred compensation	787		—		787		—

- 17 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

L. Fair Value Measurements and Financial Instruments (continued)

Our assets and liabilities measured at fair value on a recurring basis at December 31, 2011 were as follows:

			Fair Value Measurements at December 31, 2011 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at December 31, 2011		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	13,064	$	13,064	$	—	$	—
Liabilities:
Interest rate swaps, classified as accrued expenses	$	123	$	—	$	123	$	—
Fuel derivatives, classified as accrued expenses	108		—		108		—
Fuel derivatives, classified as other noncurrent liabilities	317		—		317		—
Deferred compensation	684		—		684		—

The assets invested for self-insurance are money market funds--classified as Level 1--based on quoted market prices of the identical underlying securities in active markets. The estimated fair values of our derivative instruments are calculated based on market rates to settle the instruments, representing the amount we would receive upon sale or pay upon transfer-Level 2 inputs. The estimated fair value of the deferred compensation--classified as Level 2--is based on the value of the Company's common shares, determined by independent valuation.

Fair Value of Financial Instruments-- Fair value information is required to be presented for all financial instruments, whether reported at fair value or historical carrying value.

The fair values of our current assets and current liabilities, including cash, accounts receivable, accounts payable, and accrued expenses among others, approximate their reported carrying values because of their short-term nature. The assets invested for self-insurance and derivative instruments are reported at fair value. Financial instruments classified as noncurrent liabilities and their carrying values and fair values were as follows:

	June 30, 2012				December 31, 2011
Financial Instruments Recorded at Historical Carrying Value	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility, noncurrent	$	28,400	$	28,400	$	20,000	$	20,000
Senior unsecured notes	30,000		30,416		30,000		29,925
Term loans, noncurrent	715		715		1,136		1,135
Total	$	59,115	$	59,531	$	51,136	$	51,060

- 18 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

L. Fair Value Measurements and Financial Instruments (continued)

The carrying value of our revolving credit facility approximates fair value as the interest rates on the amounts outstanding are variable. The fair value of our senior unsecured notes and our term loans is determined based on expected future weighted-average interest rates with the same remaining maturities--Level 2 inputs.

Market Risk and Derivative Financial Instruments

In the normal course of business, we are exposed to market risk related to changes in foreign currency exchange rates, changes in interest rates and changes in fuel prices. We do not hold or issue derivative financial instruments for trading or speculative purposes. We use derivative financial instruments to manage risks, in part, associated with changes in interest rates and changes in fuel prices.

Foreign Currency Rate Risk--We are exposed to market risk related to foreign currency exchange rate risk resulting from our operations in Canada, where we provide a comprehensive range of horticultural services.Our financial results could be affected by factors such as changes in the foreign currency exchange rate or differing economic conditions in the Canadian markets as compared with the markets for our services in the United States. Our earnings are affected by translation exposures from currency fluctuations in the value of the U.S. dollar as compared to the Canadian dollar. Similarly, the Canadian dollar-denominated assets and liabilities may result in financial exposure as to the timing of transactions and the net asset / liability position of our Canadian operations. Presently, we do not engage in hedging activities related to our foreign currency rate risk.

Interest Rate Risk--We are exposed to market risk related to changes in interest rates on long-term debt obligations. We regularly monitor and measure our interest rate risk and, to the extent that we believe we are exposed, from time-to-time we have entered into interest rate swap contracts--derivative financial instruments--with the objective of altering interest rate exposures related to a portion of variable debt.

Interest Rate Swaps--From time-to-time we have held interest rate swaps—cash-flow hedges—to effectively convert a portion of our variable-rate revolving credit borrowings to a fixed rate, thus reducing the impact of interest-rate changes on future interest expense. Under the contracts, we agree with the counterparty to exchange, at specified intervals, the difference between variable rate and fixed rate amounts calculated on a notional principal amount. During the first quarter 2012, all interest rate swap contracts previously entered into expired.

Fuel Derivatives--Beginning in the second quarter 2011, we entered into fuel derivatives as “economic hedges” related to fuel consumed by Davey Tree service vehicles. The objectives of the economic hedges are to fix the price of a portion of our fuel needs and mitigate the earnings and cash flow volatility attributable to the risk of changing prices.

- 19 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

L. Fair Value Measurements and Financial Instruments (continued)

The following tables set forth quantitative information related to our derivatives instruments and where these amounts are recorded in our consolidated financial statements.

	As of
	June 30, 2012		December 31, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Liability fair value of interest rate swaps, classified as accrued expenses	$	—	$	123
Notional amount of long-term debt hedged	$	—	$	10,000
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Liability fair value of fuel derivatives, classified as accrued expenses	$	306	$	108
Liability fair value of fuel derivatives, classified as other noncurrent liabilities	$	237	$	317
Longest remaining term, in months	18		24
Notional hedged volume, in thousands of gallons	1,900		2,500

	Three Months Ended					Six Months Ended
	June 30, 2012			July 2, 2011		June 30, 2012		July 2, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Hedge gains, recognized in other comprehensive income	$	—		$	223	$	123	$	441
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Change in fair value, recognized in results of operations, as an (increase in)/decrease in operating costs and expenses	$	(888	)	$	22	$	34	$	22

- 20 -

The Davey Tree Expert Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

(Amounts in thousands, except share data)

M. Contingencies

We are party to a number of lawsuits, threatened lawsuits and other claims arising out of the normal course of business. With respect to all such matters, we record an accrual for a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If we can only estimate a range of probable loss, an amount representing the low end of the range of probable outcomes is recorded.

Management has assessed all such matters, including those described below, based on current information and made a judgment concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment is made subject to the known uncertainty of litigation and management’s judgment as to estimates made may prove materially different from actual results.

Ely v. Davey Tree Surgery Company--Davey Tree Surgery Company, a subsidiary of The Davey Tree Expert Company, was named as a defendant in Peter Ely et al. v. Davey Tree Surgery Company et al., a purported class-action lawsuit in the State of California filed on July 15, 2008 in the Superior Court of the State of California in and for the County of Alameda. The plaintiffs alleged on behalf of themselves and a putative class that Davey Tree Surgery Company failed to comply with California law concerning off-duty meal periods and the required content of paycheck stubs.

The plaintiffs alleged that they and the putative "meal periods" class were not provided with uninterrupted, duty-free 30-minute meal periods. In addition, plaintiffs claimed that because they were allegedly required to work during their meal breaks, Davey Tree Surgery Company violated California's minimum wage law because they and the putative class members were not paid minimum wage for their alleged work during meal breaks. Plaintiffs also contended that Davey Tree Surgery Company violated California law by not including the time that they and the putative "wage statement" class members worked during their meal periods, their hourly rates of pay and the number of hours worked at each hourly rate on their paycheck stubs.

The Court granted plaintiffs' motion for class certification and certified both the "meal periods" class and the "wage statements" class; some individuals were members of both classes, while others were members of only one

class (collectively, the "class members"). A trial was initially scheduled for January 30, 2012 and was rescheduled to March 26, 2012, pending results of a mediation process initiated in January 2012 with plaintiffs and Local Union 1245 of the International Brotherhood of Electrical Workers (the "Union").

As a result of the mediation, on January 6, 2012, Davey Tree Surgery Company entered into a Settlement Agreement and Release of All Claims (the "Settlement Agreement") with the plaintiffs, counsel for the class members, and the Union representing the class members.

The Settlement Agreement requires court approval of its terms. The Court, in April 2012, granted preliminary approval of the Settlement Agreement and set a hearing for final approval on the motion in August 2012. In the event that the Court denies final approval of the Settlement Agreement with prejudice and both Davey Tree Surgery Company and the plaintiffs have exhausted all means to challenge that denial, the Settlement Agreement will be void in all respects and the litigation will continue.

The Settlement Agreement provides for Davey Tree Surgery to pay a total sum of $2,900 that was recorded in the fourth quarter 2011.

- 21 -

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

(Amounts in thousands, except share data)

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to the accompanying condensed consolidated financial statements and notes to help provide an understanding of our financial condition, cash flows and results of operations.

We provide a wide range of horticultural services to residential, commercial, utility and institutional customers throughout the United States and Canada.

Our Business--Our operating results are reported in two segments: Residential and Commercial Services, and Utility Services for operations in the United States and Canada. Residential and Commercial Services provides for the treatment, preservation, maintenance, cultivation, planting and removal of trees, shrubs and other plant life; its services also include the practice of landscaping, tree surgery, tree feeding and tree spraying, as well as the application of fertilizer, herbicides and insecticides. Utility Services is principally engaged in the practice of line clearing for investor-owned and municipal utilities, including the clearing of tree growth from power lines, clearance of rights-of-way and chemical brush control. Davey Resource Group, which provides services related to natural resource management and consulting, forestry research and development, and environmental planning and also maintains research, technical support and laboratory diagnostic facilities, is a nonreportable segment and, along with other operating activities, is included in “All Other.”

RESULTS OF OPERATIONS

The following table sets forth our consolidated results of operations as a percentage of revenues and the percentage change in dollar amounts of the results of operations for the periods presented.

	Three Months Ended						Six Months Ended
	June 30, 2012		July 2, 2011		Percentage Change		June 30, 2012		July 2, 2011		Percentage Change
Revenues	100.0	%	100.0	%	4.9	%	100.0	%	100.0	%	7.8	%
Costs and expenses:
Operating	63.9		63.9		4.7		65.8		67.9		4.5
Selling	15.4		14.8		9.8		16.0		15.9		8.1
General and administrative	6.3		6.2		6.5		7.3		7.2		9.4
Depreciation and amortization	5.3		5.7		(1.7	)	5.8		6.4		(1.5	)
Gain on sale of assets, net	(.4	)	(.1	)	nm		(.3	)	(.1	)	nm
Income from operations	9.5		9.5		4.2		5.4		2.7		113.0
Other income (expense):
Interest expense	(.4	)	(.5	)	(28.2	)	(.4	)	(.6	)	(24.8	)
Interest income	—		—		nm		—		—		nm
Other, net	(.5	)	(.4	)	32.2		(.5	)	(.4	)	14.0
Income before income taxes	8.6		8.6		5.3		4.5		1.7		188.9
Income taxes	3.4		3.3		9.2		1.8		.7		196.1
Net income	5.2	%	5.3	%	2.8	%	2.7	%	1.0	%	184.1	%
nm--not meaningful

- 22 -

Second Quarter—Three Months EndedJune 30, 2012 Compared to Three Months EndedJuly 2, 2011

Our results of operations for the three months endedJune 30, 2012 compared to the three months endedJuly 2, 2011 follows:

	Three Months Ended
	June 30, 2012			July 2, 2011			Change			Percentage Change
Revenues	$	182,411		$	173,953		$	8,458		4.9	%
Costs and expenses:
Operating	116,472			111,242			5,230			4.7
Selling	28,197			25,684			2,513			9.8
General and administrative	11,480			10,783			697			6.5
Depreciation and amortization	9,670			9,840			(170		)	(1.7	)
Gain on sale of assets, net	(678		)	(163		)	(515		)	nm
	165,141			157,386			7,755			4.9
Income from operations	17,270			16,567			703			4.2
Other income (expense):
Interest expense	(707		)	(984		)	277			(28.2	)
Interest income	29			9			20			nm
Other, net	(874		)	(661		)	(213		)	32.2
Income before income taxes	15,718			14,931			787			5.3
Income taxes	6,302			5,772			530			9.2
Net income	$	9,416		$	9,159		$	257		2.8	%
nm--not meaningful

Revenues--Revenues of $182,411 increased $8,458 compared with $173,953 in the second quarter2011. Utility Services decreased $164 or .2% compared with the second quarter2011. Crew reductions on two existing contracts, coupled with the loss of a contract within our U.S. operations, were partially offset by new contracts and increases on existing contracts within our U.S. and Canadian operations. Residential and Commercial Services increased $6,604 or 8.2% from the second quarter2011. Residential and Commercial revenues for the second quarter2012 continue to be favorably impacted by unseasonably warm weather conditions across the U.S. and an increase in consumer demand for our services. Total revenues of $182,411 include production incentive revenue, recognized under the completed-performance method,of $998during the second quarter2012 compared with $2,009 during the second quarter2011.

Operating Expenses--Operating expenses of $116,472 increased $5,230 compared with the second quarter2011 and, as a percentage of revenues, remained level at 63.9%. Utility Services decreased $241 or .4% compared with the second quarter2011 and as a percentage of revenues decreased .1% to 78.5%. Decreased labor expense and subcontractor expense were partially offset by increases in equipment maintenance expense and material expense.Residential and Commercial Services increased $4,041 or 10.3% compared with the second quarter2011 and, as a percentage of revenues, increased .9% to 49.5%. Increased labor expense, fuel expense, material expense, crew expenses, subcontractor expense and tools and saw expense, associated with the increase in revenues, account for the increase.

- 23 -

Fuel costs of $8,484 increased $216, or 2.6%, from the $8,268 incurred in the second quarter2011 and impacted operating expenses within all segments. The $216 increase (exclusive of fair value changes in our fuel derivatives) included price increases approximating $200 and usage increases approximating $16. Operating costs and expenses also includes expense of $888 for the second quarter2012 as compared with expense of $22 for the second quarter2011 related to our fuel derivatives that are fair valued.

Selling Expenses--Selling expenses of $28,197 increased $2,513 compared with the second quarter2011 and as a percentage of revenues increased .6% to 15.4%. Utility Services increased $454 or 8.0% over the second quarter2011 and as a percentage of revenues increased .6% to 7.8%. Increases in field management wages and incentive expense, field management travel expense and communication expense were partially offset by decreases in field management vehicle expense and professional services expense. Residential and Commercial Services experienced an increase of $1,688 or 8.9% over the second quarter2011. Increases in field management wages and incentive expense, field management vehicle expense, field management travel expense, professional service expense and employee development expense were partially offset by decreases in office rent expense, office utilities expense and communication expense.

General and Administrative Expenses--General and administrative expenses of $11,480 increased $697 from $10,783 in the second quarter2011. Increases in salary and incentive expense, professional service expense, office supplies expense, pension expense and stock-based compensation expense were partially offset by decreases in travel and living expenses.

Depreciation and Amortization Expense--Depreciation and amortization expense of $9,670 decreased $170 from $9,840 in the second quarter of 2011.  The decrease is attributable to a reduction in depreciation related to lower capital expenditures.

Gain on the Sale of Assets, Net--Gain on the sale of assets was $678 for the second quarter2012 as compared with $163 in the second quarter2011.  The increase is the result of an increase in the number of equipment units sold in the second quarter2012 as compared with the second quarter2011.

Interest Expense--Interest expense of $707 decreased $277 from the $984 incurred in the second quarter2011.The decrease is attributable to lower average debt levels necessary to fund operations and capital expenditures as compared to the second quarter2011.

Other, Net--Other, net, of $874 increased $213 from the $661 incurred in the second quarter2011 and consisted of nonoperating income and expense, including foreign currency gains on the intercompany account balances of our Canadian operations as compared with foreign currency losses in the second quarter2011.

Income Taxes--Income tax expense for the second quarter2012 was $6,302, as compared to $5,772 for the second quarter2011. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. The 2012 annual effective tax rate is estimated to approximate 40%. Our annual effective tax rate for 2011 was 39.6%.

Net Income--Net income of $9,416 for the second quarter2012 was $257 greater than the $9,159 experienced in the second quarter2011.

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First Half—Six Months EndedJune 30, 2012 Compared to Six Months EndedJuly 2, 2011

Our results of operations for the six months ended June 30, 2012 compared to the six months ended July 2, 2011 follows:

	Six Months Ended
	June 30, 2012			July 2, 2011			Change			Percentage Change
Revenues	$	329,055		$	305,277		$	23,778		7.8	%
Costs and expenses:
Operating	216,356			207,072			9,284			4.5
Selling	52,600			48,671			3,929			8.1
General and administrative	24,078			22,007			2,071			9.4
Depreciation and amortization	19,127			19,424			(297		)	(1.5	)
Gain on sale of assets, net	(884		)	(244		)	(640		)	nm
	311,277			296,930			14,347			4.8
Income from operations	17,778			8,347			9,431			113.0
Other income (expense):
Interest expense	(1,410		)	(1,874		)	464			(24.8	)
Interest income	56			14			42			nm
Other, net	(1,509		)	(1,324		)	(185		)	14.0
Income before income taxes	14,915			5,163			9,752			188.9
Income taxes	6,070			2,050			4,020			196.1
Net income	$	8,845		$	3,113		$	5,732		184.1	%
nm--not meaningful

Revenues--Revenues of $329,055 increased $23,778 compared with $305,277 in the first half2011. Utility Services increased $5,681 or 3.7% compared with the first half2011. New contracts and increases on existing contracts within our U.S. and Canadian operations offset the crew reductions on two existing accounts and the loss of an account within our U.S. operations. Residential and Commercial Services increased $12,077 or 9.6% from the first half2011. Residential and Commercial revenues for the first half2012 were favorably impacted by unseasonably warm weather conditions and an increase in consumer demand for our services. Total revenue of $329,055 includes production incentive revenue, recognized under the completed-performance method,of $4,068during the first half2012 compared with $2,388 during the first half2011.

Operating Expenses--Operating expenses of $216,356 increased $9,284 compared with the first half2011 but, as a percentage of revenues, decreased 2.1% to 65.8%. Utility Services increased $1,412 or 1.2% compared with the first half2011, but as a percentage of revenues decreased 1.9% to 77.7%. Increased labor expense,fuel expense, equipment maintenance expense, disposal expense, materials expense and tool expense, associated with the increase in revenues, were partially offset by a reduction in subcontractor expense.Residential and Commercial Services increased $6,101 or 9.1% compared with the first half2011 but, as a percentage of revenues, decreased .2% to 52.9%. Increased labor expense, fuel expense, equipment maintenance expense, materials expense, crew expenses and tools and saw expense were partially offset by a reduction in subcontractor expense.

Fuel costs of $15,433 increased $787, or 5.4%, from the $14,646 incurred in the first half2011 and impacted operating expenses within all segments. The $787 increase (exclusive of fair value changes in our fuel derivatives) included price increases approximating $726 and usage increases approximating $61. Operating costs and expenses also includes an expense reduction of $34 for the first half2012 as compared with an expense reduction of $22 for the first half2011 related to our fuel derivatives that are fair valued.

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Selling Expenses--Selling expenses of $52,600 increased $3,929 compared with the first half2011 and as a percentage of revenues increased .1% to 16.0%. Utility Services increased $821 or 7.0% over the first half2011 and as a percentage of revenues increased .3% to 7.9%. Increases in field management wages and incentive expense, field management travel expense, office expenses andfield management vehicle expense were partially offset by decreases in computer expense, professional services expense and communication expense. Residential and Commercial Services experienced an increase of $1,666 or 4.8% over the first half2011 but as a percentage of revenues decreased 1.1% to 26.2%. Increases in field management wages and incentive expense, field management travel expense, field management vehicle expense, computer expense and employee development expense were partially offset by decreases in office rent expense, utilities expense, communication expense and office expense.

General and Administrative Expenses--General and administrative expenses of $24,078 increased $2,071 from $22,007 in the first half2011. Increases in salary and incentive expense, professional service expense, travel and living expense, pension expense, office supplies expense and stock-based compensation expense were partially offset by decreases in utilities expense and postage expense.

Depreciation and Amortization Expense--Depreciation and amortization expense of $19,127 decreased $297 from $19,424 in the first half of 2011.  The decrease is attributable to a reduction in depreciation expense related to capital expenditures coupled with a decrease in amortization expense related to acquisitions.

Gain on the Sale of Assets, Net--Gain on the sale of assets was $884 for the first half2012 as compared with $244 in the first half2011.  The increase is the result of an increase in the number of equipment units sold in the first half2012 as compared with the first half2011.

Interest Expense--Interest expense of $1,410 decreased $464 from the $1,874 incurred in the first half2011.The decrease is attributable to lower average debt levels necessary to fund operations and capital expenditures as compared to the first half2011.

Other, Net--Other, net, of $1,509 increased $185 from the $1,324 incurred in the first half2011 and consisted of nonoperating income and expense, including foreign currency gains on the intercompany account balances of our Canadian operations as compared with foreign currency losses in the first half2011.

Income Taxes--Income tax expense for the first half2012 was $6,070, as compared to $2,050 for the first half2011. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. The 2012 annual effective tax rate is estimated to approximate 40%. Our annual effective tax rate for 2011 was 39.6%.

Net Income--Net income of $8,845 for the first half2012 was $5,732 greater than the $3,113 experienced in the first half2011.

LIQUIDITY AND CAPITAL RESOURCES

Our principal financial requirements are for capital spending, working capital and business acquisitions.

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Cash Flow Summary

Our cash flows from operating, investing and financing activities for the six months endedJune 30, 2012 and July 2, 2011 follows:

	2012			2011
Cash provided by (used in):
Operating activities	$	16,707		$	12,102
Investing activities	(19,577		)	(26,029		)
Financing activites	(195		)	10,483
Decrease in cash	$	(3,065	)	$	(3,444	)

Cash Provided by Operating Activities--Cash provided by operating activities was $16,707 for the first six months of 2012, or $4,605 more than the $12,102 provided in the first six months of 2011. The increase in operating cash flow was primarily attributable to an increase in our net income, a decrease in depreciation and amortization of $297 and $13 less cash used for operating assets and liabilities.

Overall, accounts receivable increased $15,485 during the first six months of 2012, as compared to the increase of $15,377 during the first six months of 2011. With respect to the change in accounts receivable arising from business levels, the “days-sales-outstanding” in accounts receivable (sometimes referred to as “DSO”) at the end of the first six months of 2012 increased 3 days to 53 days, as compared to the end of the first six months of 2011. The DSO at July 2, 2011 was 50 days.

Operating liabilities increased $2,547 in the first six months of 2012, or $2,867 less than the $5,414 increase in the first six months of 2011. Accounts payable and accrued expenses decreased $3,674 during the first six months of 2012 as compared with a decrease of $566 for the first six months of 2011. Decreases in trade payables,401KSOP liabilities and employee compensation were partially offset by increases in advance payments from customers, compensated-absence and vacation accruals and professional services. Self-insurance accruals increased $6,221 in the first six months of 2012, which was $241 more than the increase of $5,980 experienced in the first six months of 2011. The increase occurred in all classifications--workers’ compensation, general liability and vehicle liability--and resulted primarily from an overall increase in deductible amounts under commercial insurance and the self-insured risk retention.

The change in operating assets and liabilities other, net, was a decrease in cash of $2,158 for the first six months of 2012 as compared with an increase in cash of $830 for the first six months of 2011, with the $2,988 net change related primarily to the noncash decrease in deferred taxes being greater in 2011 as compared with 2012.

Cash Used In Investing Activities--Cash used in investing activities for the first six months of 2012 was $19,577, or $6,452 less than the $26,029 used during the first six months of 2011. The decrease was primarily the result of a reduction in expenditures for the purchase of equipment and businesses and increased proceeds on the sale of equipment.

Cash Provided By (Used In) Financing Activities--Cash used in financing activities of $195 decreased $10,678 during the first six months of 2012 as compared with the $10,483 of cash provided during the first six months of 2011. During the first six months of 2012, our revolving credit facility provided $8,400 in cash as compared with the $21,600 provided during the first six months of 2011. We use the credit facility primarily for capital expenditures and payments of notes payable related to acquisitions. Payments on notes payable used $5,028 during the first six months of 2012, $2,025 less than the $7,053 used in the first six months of 2011. Treasury share transactions (purchases and sales) used $2,325 for the first six months of 2012, or $550 less cash than the $2,875 used in the first six months of 2011. Dividends paid of $1,242 increased $53, as compared with $1,189 paid in the first six months of 2011.

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Revolving Credit Facility and 5.09% Senior Unsecured Notes--We have a $140,000 revolving credit facility with a group of banks, which will expire in December 2014 and permits borrowings, as defined, up to $140,000 with a letter of credit sublimit of $100,000 and which, under certain circumstances, may be increased to $160,000. The revolving credit facility contains certain affirmative and negative covenants customary for this type of facility and includes financial covenant ratios, as defined, with respect to funded debt to EBITDA (earnings before interest, taxes, depreciation and amortization), and funded debt to capitalization.

As of June 30, 2012, we had unused commitments under the facility approximating$66,913, with $73,087committed, consisting of borrowings of $28,400 and issued letters of credit of$44,687. Borrowings outstanding bear interest, at Davey Tree’s option, of either (a) a base rate plus a margin adjustment ranging from .0% to .25% or (b) LIBOR plus a margin adjustment ranging from 1.25% to 1.75%--with the margin adjustments in both instances based on a ratio of funded debt to EBITDA. The base rate is the greater of (i) the agent bank’s prime rate, (ii) LIBOR plus 1.5%, or (iii) the federal funds rate plus .5%. A commitment fee ranging from .20% to .30% is also required based on the average daily unborrowed commitment.

During July 2010 we issued $30,000 of 5.09% Senior Unsecured Notes, Series A, due July 22, 2020 (the “5.09% Senior Notes”). The 5.09% Senior Notes were issued pursuant to a Master Note Purchase Agreement (the “Purchase Agreement”) between us and the purchasers of the 5.09% Senior Notes.

The 5.09% Senior Notes are equal in right of payment with our revolving credit facility and all of our other senior unsecured obligations. Interest is payable semiannually and five equal, annual principal payments commence on July 22, 2016 (thesixth anniversary of issuance). The Purchase Agreement contains customary events of default and covenants related to limitations on indebtedness and transactions with affiliates and the maintenance of certain financial ratios.

Off-Balance Sheet Arrangements

There are no “off-balance sheet arrangements” as that term is defined in Securities and Exchange Commission Regulation S-K, Item 303(a)(4)(ii).

Contractual Obligations Summary

The following summarizes our long-term contractual obligations, as of June 30, 2012, to make future payments for the periods indicated.

			Six Months Ending December 31, 2012
					Year Ending December 31,
Description	Total				2013		2014		2015		2016		Thereafter
Revolving credit facility	$	28,400	$	—	$	—	$	28,400	$	—	$	—	$	—
Senior unsecured notes	30,000		—		—		—		—		6,000		24,000
Term loans	1,945		810		618		517		—		—		—
Operating lease obligations	9,315		2,340		3,248		1,647		1,049		778		253
Self-insurance accruals	63,486		24,027		16,869		10,869		6,338		2,938		2,445
Purchase obligations	2,593		2,593		—		—		—		—		—
Other liabilities	15,529		4,916		409		624		803		588		8,189
	$	151,268	$	34,686	$	21,144	$	42,057	$	8,190	$	10,304	$	34,887

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The self-insurance accruals in the summary above reflect the total of the undiscounted amount accrued, for which amounts estimated to be due each year may differ from actual payments required to fund claims. Purchase obligations in the summary above represent open purchase-order amounts we anticipate will become payable for goods and services we have negotiated for delivery as of June 30, 2012. Other liabilities include estimates of future expected funding requirements related to retirement plans and other sundry items. Because their future cash outflows are uncertain, accrued income tax liabilities for uncertain tax positions, as of June 30, 2012, have not been included in the summary above. Noncurrent deferred taxes and payments related to defined benefit pension plans are also not included in the summary.

As of June 30, 2012, we were contingently liable for letters of credit in the amount of $1,052, of which $45 is committed under the revolving credit facility. Substantially all of these letters of credit, which expire within a year, are planned for renewal as necessary.

Also, as is common in our industry, we have performance obligations that are supported by surety bonds, which expire during 2012 through 2016. We intend to renew the surety bonds where appropriate and as necessary.

Capital Resources

Cash generated from operations and our revolving credit facility are our primary sources of capital.

Business seasonality results in higher revenues during the second and third quarters as compared with the first and fourth quarters of the year, while our methods of accounting for fixed costs, such as depreciation expense, are not significantly impacted by business seasonality. Capital resources during these periods are equally affected. We satisfy seasonal working capital needs and other financing requirements with the revolving credit facility and three other short-term lines of credit. We are continually reviewing our existing sources of financing and evaluating alternatives. At June 30, 2012, we had working capital of $43,822, short-term lines of credit approximating $11,383 and $66,913 available under our revolving credit facility.

We believe our sources of capital, at this time, provide us with the financial flexibility to meet our capital-spending plans and to continue to complete business acquisitions for at least the next twelve months and for the foreseeable future.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.

As discussed in our annual report on Form 10-K for the year ended December 31, 2011, we believe that our policies related to revenue recognition, the allowance for doubtful accounts and self-insurance accruals are our “critical accounting policies and estimates”—those most important to the financial presentations and those that require the most difficult, subjective or complex judgments.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to accounts receivable, specifically those receivables under contractual arrangements primarily with Utility Services customers; allowance for doubtful accounts; and self-insurance accruals. We base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance.  In some cases, forward-looking statements may be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to differ materially from what is expressed or implied in these forward-looking statements. Some important factors that could cause actual results to differ materially from those in the forward-looking statements include:

• Our business, other than tree services to utility customers, is highly seasonal and weather dependent.

• The effects of the recent economic downturn and the continuing financial and credit uncertainties may reduce our customers’ spending, adversely impact pricing for our services, and impede our collection of accounts receivable.

• Significant customers, particularly utilities, may experience financial difficulties, resulting in payment delays or delinquencies.

• The seasonal nature of our business and changes in general and local economic conditions, among other factors, may cause our quarterly results to fluctuate, and our prior performance is not necessarily indicative of future results.

• The uncertainties in the credit and financial markets may limit our access to capital.

• Significant increases in fuel prices for extended periods of time will increase our operating expenses.

• We have significant contracts with our utility, commercial and government customers that include liability risk exposure as part of those contracts. Consequently, we have substantial excess-umbrella liability insurance, and increases in the cost of obtaining, or inability to obtain, adequate insurance, or the inadequacy of our self-insurance accruals or insurance coverages, could negatively impact our liquidity.

• Because no public market exists for our common shares, the ability of shareholders to sell their common shares is limited.

• We are subject to intense competition.

• Our failure to comply with environmental laws could result in significant liabilities, fines and/or penalties.

• The impact of regulations initiated as a response to possible changing climate conditions could have a negative effect on our results of operations or our financial condition.

• We may encounter difficulties obtaining surety bonds or letters of credit necessary to support our operations.

• We are dependent, in part, on our reputation of quality, integrity and performance.  If our reputation is damaged, we may be adversely affected.

• We may be unable to attract and retain a sufficient number of qualified employees for our field operations, and we may be unable to attract and retain qualified management personnel.

• Our facilities could be damaged or our operations could be disrupted, or our customers or vendors may be adversely affected, by events such as natural disasters, pandemics, terrorist attacks or other external events.

• We are subject to claims and litigation that may have an adverse effect on us.

• We may misjudge a competitive bid and be contractually bound to an unprofitable contract.

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Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this quarterly report on Form 10-Q to conform these statements to actual future results.

The factors described above, as well as other factors that may adversely impact our actual results, are discussed in our annual report on Form 10-K for the year ended December 31, 2011 in “ Part I - Item 1A. Risk Factors.”

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

During the six months endedJune 30, 2012, there have been no material changes in the market risk previously presented in our annual report on Form 10-K for the year ended December 31, 2011.

Item 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of June 30, 2012 in ensuring that information required to be included in the reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended June 30, 2012, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

The Davey Tree Expert Company

Part II. Other Information

Items 3, 4 and 5 are not applicable.

Item 1. Legal Proceedings.

We are party to a number of lawsuits, threatened lawsuits and other claims arising out of the normal course of business.

With respect to all such matters, we record an accrual for a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In addition, narrative information is provided for matters as to which management believes a material loss is reasonably possible.

Management has assessed all such matters, including those described below, based on current information and made a judgment concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success.  Management's judgment is made subject to the known uncertainty of litigation and management's judgment as to estimates made may prove materially different from actual results.

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Ely v. Davey Tree Surgery Company--Davey Tree Surgery Company, a subsidiary of The Davey Tree Expert Company, was named as a defendant in Peter Ely et al. v. Davey Tree Surgery Company et al., a purported class-action lawsuit in the State of California filed on July 15, 2008 in the Superior Court of the State of California in and for the County of Alameda. The plaintiffs alleged on behalf of themselves and a putative class that Davey Tree Surgery Company failed to comply with California law concerning off-duty meal periods and the required content of paycheck stubs.

The plaintiffs alleged that they and the putative "meal periods" class were not provided with uninterrupted, duty-free 30-minute meal periods. In addition, plaintiffs claimed that because they were allegedly required to work during their meal breaks, Davey Tree Surgery Company violated California's minimum wage law because they and the putative class members were not paid minimum wage for their alleged work during meal breaks. Plaintiffs also contended that Davey Tree Surgery Company violated California law by not including the time that they and the putative "wage statement" class members worked during their meal periods, their hourly rates of pay and the number of hours worked at each hourly rate on their paycheck stubs.

The Court granted plaintiffs' motion for class certification and certified both the "meal periods" class and the "wage statements" class; some individuals were members of both classes, while others were members of only one class (collectively, the "class members"). A trial was initially scheduled for January 30, 2012 and was rescheduled to March 26, 2012, pending results of a mediation process initiated in January 2012 with plaintiffs and Local Union 1245 of the International Brotherhood of Electrical Workers (the "Union").

As a result of the mediation, on January 6, 2012, Davey Tree Surgery Company entered into a Settlement Agreement and Release of All Claims (the "Settlement Agreement") with the plaintiffs, counsel for the class members, and the Union representing the class members.

The Settlement Agreement requires court approval of its terms. The Court, in April 2012, granted preliminary approval of the Settlement Agreement and set a hearing for final approval on the motion in August 2012. In the event that the Court denies final approval of the Settlement Agreement with prejudice and both Davey Tree Surgery Company and the plaintiffs have exhausted all means to challenge that denial, the Settlement Agreement will be void in all respects and the litigation will continue.

The Settlement Agreement provides for Davey Tree Surgery to pay a total sum of $2,900 that was recorded in the fourth quarter 2011.

California Fire Litigation: San Diego County--Davey Tree Surgery Company, a Davey subsidiary, and Davey Resource Group, a Davey division, have previously been sued, together with a utility services customer, San Diego Gas & Electric ("SDG&E"), and its parent company, as defendants, and as cross-defendants in cross-complaints filed by SDG&E, in the Superior Court of the State of California in and for the County of San Diego, arising out of a wildfire in San Diego County that started on October 22, 2007, referred to as the Rice Canyon fire.

Numerous lawsuits related to the Rice Canyon fire were filed against SDG&E, its parent company, Sempra Energy, and Davey. The earliest of the lawsuits naming Davey was filed on April 18, 2008. The Court ordered that the lawsuits be organized into four groups based on type of plaintiff, namely insurance subrogation claimants, individual/business claimants, governmental claimants, and plaintiffs seeking class certification. Plaintiffs’ motions seeking class certification have since been denied. SDG&E has filed cross-complaints against Davey for contractual indemnity, declaratory relief, and breach of contract. SDG&E has reportedly settled many of the third-party claims and is now actively asserting damage claims against Davey.

Davey has notified its insurers of the Rice Canyon fire claims, is vigorously defending the third-party claims, and continues to work with the insurers both to defend the claims and to ensure coverage of any potential liabilities.

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At this time, and as previously reported, Davey believes that insurance coverage and recorded accruals are sufficient to provide for losses related to these potential liabilities and additional losses, if any, would be remote.

However, due to the nature and extent of these claims, an adverse result in these proceedings leading to a loss in excess of Davey’s available insurance coverage could have a material and adverse effect on Davey’s business, financial condition, results of operations and cash flows. Adverse results, even if within the limits of Davey’s available insurance coverage, could materially and adversely (a) affect Davey’s ability to obtain comparable insurance in the future, or, (b) if such insurance were obtainable, affect the policy limits, premiums, self-insured retentions and other terms and conditions thereof.

Item 1A. Risk Factors.

The factors described below represent the principal risks we face. Except as otherwise indicated, these factors may or may not occur and we are not in a position to express a view on the likelihood of any such factor occurring. Other factors may exist that we do not consider to be significant based on information that is currently available or that we are not currently able to anticipate.

Our business is highly seasonal and weather dependent.

Our business, other than tree services to utility customers, is highly seasonal and weather dependent, primarily due to fluctuations in horticultural services provided to Residential and Commercial customers. We have historically incurred losses in the first quarter, while revenue and operating income are generally highest in the second and third quarters of the calendar year. Inclement weather, such as uncharacteristically low or high (drought) temperatures, in the second and third quarters could dampen the demand for our horticultural services, resulting in reduced revenues that would have an adverse effect on our results of operations.

The effects of the recent economic downturn and the continuing financial and credit uncertainties may adversely impact our customers' future spending as well as pricing and payment for our services, thus negatively impacting our operations and growth.

While the economy has shown signs of improvement, sustainability of economic recovery remains uncertain. A slowing or stoppage in economic recovery may adversely impact the demand for our services and potentially result in depressed prices for our services and the delay or cancellation of projects. This makes it difficult to estimate our customers' requirements for our services and, therefore, adds uncertainty to customer demand. Increased uncertainty about the economy may cause a reduction in our customers' spending for our services and may also impact the ability of our customers to pay amounts owed, which could reduce our cash flow and adversely impact our debt or equity financing. These events could have a material adverse effect on our operations and our ability to grow at historical levels.

Financial difficulties or the bankruptcy of one or more of our major customers could adversely affect our results.

Our ability to collect our accounts receivable and future sales depends, in part, on the financial strength of our customers. We grant credit, generally without collateral, to our customers. Consequently, we are subject to credit risk related to changes in business and economic factors throughout the United States and Canada. In the event customers experience financial difficulty, and particularly if bankruptcy results, our profitability may be adversely impacted by our failure to collect our accounts receivable in excess of our estimated allowance for uncollectible accounts. Additionally, our future revenues could be reduced by the loss of a customer due to bankruptcy. Our failure to collect accounts receivable and/or the loss of one or more major customers could have an adverse effect on our net income and financial condition.

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Our business is dependent upon service to our utility customers and we may be affected by developments in the utility industry.

We derive approximately 50% of our total revenues from our Utility Services segment, including approximately 10% of our total revenues from PG&E. Significant adverse developments in the utility industry generally, or specifically for our major utility customers, could result in pressure to reduce costs by utility industry service providers (such as us), delays in payments of our accounts receivable, or increases in uncollectible accounts receivable, among other things. As a result, such developments could have an adverse effect on our results of operations.

Our quarterly results may fluctuate.

We have experienced and expect to continue to experience quarterly variations in revenues and operating income as a result of many factors, including:

▪ the seasonality of our business;

▪ the timing and volume of customers' projects;

▪ budgetary spending patterns of customers;

▪ the commencement or termination of service agreements;

▪ costs incurred to support growth internally or through acquisitions;

▪ changes in our mix of customers, contracts and business activities;

▪ fluctuations in insurance expense due to changes in claims experience and actuarial assumptions; and

▪ general and local economic conditions.

Accordingly, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for the entire year.

We may not have access to capital in the future due to continuing uncertainties in the financial and credit markets.

We may need new or additional financing in the future to conduct our operations, expand our business or refinance existing indebtedness. Continued weakness in the general economic conditions and/or financial markets in the United States or globally could affect adversely our ability to raise capital on favorable terms or at all. From time-to-time we have relied, and may also rely in the future, on access to financial markets as a source of liquidity for working capital requirements, acquisitions and general corporate purposes. Our access to funds under our revolving credit facility is dependent on the ability of the financial institutions that are parties to the facility to meet their funding commitments. Those financial institutions may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time. The continuation of economic disruptions and any resulting limitations on future funding, including any restrictions on access to funds under our revolving credit facility, could have a material adverse effect on us.

We are subject to the risk of increased fuel costs.

The cost of fuel is a major operating expense of our business. Significant increases in fuel prices for extended periods of time will increase our operating expenses. An increase in cost with partial or no corresponding compensation from customers leads to lower margins that would have an adverse effect on our results of operations.

- 34 -

We could be negatively impacted if our self-insurance accruals or our insurance coverages prove to be inadequate.

We are generally self-insured for losses and liabilities related to workers' compensation, vehicle liability and general liability claims (including California wild fire claims). A liability for unpaid claims and associated expenses, including incurred but not reported losses, is actuarially determined and reflected in our consolidated balance sheet as an accrued liability. The determination of such claims and expenses, and the extent of the need for accrued liabilities, are continually reviewed and updated. If we were to experience insurance claims or costs above our estimates and were unable to offset such increases with earnings, our business could be adversely affected. Also, where we self-insure, deterioration in claims management, whether by our management or by a third-party claims administrator, could lead to delays in settling claims, thereby increasing claim costs, particularly as it relates to workers' compensation. In addition, catastrophic uninsured claims filed against us or the inability of our insurance carriers to pay otherwise-insured claims would have an adverse effect on our financial condition.

Furthermore, many customers, particularly utilities, prefer to do business with contractors with significant financial resources, who can provide substantial insurance coverage. Should we be unable to renew our excess liability insurance and other commercial insurance policies at competitive rates, this loss would have an adverse effect on our financial condition and results of operations.

The unavailability or cancellation of third-party insurance coverage may have a material adverse effect on our financial condition and results of operations as well as disrupt our operations.

There can be no assurance that any of our existing excess insurance coverage will be renewed upon the expiration of the coverage period or that future coverage will be available at competitive rates for the required limits. In addition, our third-party insurers could fail, suddenly cancel our coverage or otherwise be unable to provide us with adequate insurance coverage. If any of these events occur, they may have a material adverse effect on our financial condition and results of operations as well as disrupt our operations. For example, we have operations in California, which has an environment prone to wildfires. Should our third-party insurers determine to exclude coverage for wildfires in the future, we could be exposed to significant liabilities, having a material adverse effect on our financial condition and results of operations and potentially disrupting our California operations.

Because no public market exists for our common shares, your ability to sell your common shares may be limited.

Our common shares are not traded on any national exchange, market system or over-the-counter bulletin board. Because no public market exists for our common shares, your ability to sell these shares is limited.

We are subject to intense competition.

We believe that each aspect of our business is highly competitive. Principal methods of competition in our operating segments are customer service, marketing, image, performance and reputation. Pricing is not always a critical factor in a customer's decision with respect to Residential and Commercial Services; however, pricing is generally the principal method of competition for our Utility Services, although in most instances consideration is given to reputation and past production performance. On a national level, our competition is primarily landscape construction and maintenance companies as well as residential and commercial lawn care companies. At a local and regional level, our competition comes mainly from small, local companies which are engaged primarily in tree care and lawn services. Our Utility Services group competes principally with one major national competitor, as well as several smaller regional firms. Furthermore, competitors may have lower costs because privately-owned companies operating in a limited geographic area may have significantly lower labor and overhead costs. Our competitors may develop the expertise, experience and resources to provide services that are superior in both price and quality to our services. These strong competitive pressures could inhibit our success in bidding for profitable business.

- 35 -

Our failure to comply with environmental laws could result in significant liabilities.

Our facilities and operations are subject to governmental regulations designed to protect the environment, particularly with respect to our services regarding insect and disease control, because these services involve to a considerable degree the blending and application of spray materials, which require formal licensing in most areas. Continual changes in environmental laws, regulations and licensing requirements, environmental conditions, environmental awareness, technology and social attitudes make it necessary for us to maintain a high degree of awareness of the impact such changes have on our compliance programs and the market for our services. We believe that we comply in all material respects with existing federal, state and local laws, regulations and licensing requirements regulating the use of materials in our spraying operations as well as the other aspects of our business that are subject to any such regulation. However, if we fail to comply with such laws, regulations or licensing requirements, we may become subject to significant liabilities, fines and/or penalties, which could adversely affect our financial condition and results of operations.

We cannot predict the impact that the debate on changing climate conditions, including legal, regulatory and social responses thereto, may have on our business.

Various scientists, environmentalists, international organizations, political activists, regulators and other commentators believe that global climate change has added, and will continue to add, to the unpredictability, frequency and severity of natural disasters in certain parts of the world. In response, a number of legal and regulatory measures and social initiatives have been introduced in an effort to reduce greenhouse gas and other carbon emissions that these parties believe may be contributors to global climate change. These proposals, if enacted, could result in a variety of regulatory programs, including potential new regulations, additional charges and taxes to fund energy efficiency activities, or other regulatory actions. Any of these actions could result in increased costs associated with our operations and impact the prices we charge our customers.

We cannot predict the impact that changing climate conditions, if any, will have on us or our customers. However, it is possible that the legal, regulatory and social responses to real or imagined climate change could have a negative effect on our results of operations or our financial condition.

We may be adversely affected if we are unable to obtain necessary surety bonds or letters of credit.

Surety market conditions are currently difficult as a result of significant losses incurred by many sureties in recent years, both in the construction industry as well as in certain larger corporate bankruptcies. As a result, less bonding capacity is available in the market and terms have become more expensive and restrictive. Further, under standard terms in the surety market, sureties issue or continue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of collateral as a condition to issuing or renewing any bonds. If surety providers were to limit or eliminate our access to bonding, we would need to post other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure sufficient letters of credit on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding capacity, our liquidity may be adversely affected.

We may be adversely affected if our reputation is damaged.

We are dependent, in part, upon our reputation of quality, integrity and performance. If our reputation were damaged in some way, it may impact our ability to grow or maintain our business.

We may be unable to employ a sufficient workforce for our field operations.

Our industry operates in an environment that requires heavy manual labor. We may experience slower growth in the labor force for this type of work than in the past. As a result, we may experience labor shortages or the need to pay more to attract and retain qualified employees.

- 36 -

We may be unable to attract and retain skilled management.

Our success depends, in part, on our ability to attract and retain key managers. Competition for the best people can be intense and we may not be able to promote, hire or retain skilled managers. The loss of services of one or more of our key managers could have a material adverse impact on our business because of the loss of the manager's skills, knowledge of our industry and years of industry experience, and the difficulty of promptly finding qualified replacement personnel.

Natural disasters, pandemics, terrorist attacks and other external events could adversely affect our business.

Natural disasters, pandemics, terrorist attacks and other adverse external events could materially damage our facilities or disrupt our operations, or damage the facilities or disrupt the operations of our customers or vendors. The occurrence of any such event could adversely affect our business, financial condition and results of operations.

We are subject to claims and litigation.

From time-to-time, customers, vendors, employees and others may make claims and take legal action against us. Whether these claims and legal actions are founded or unfounded, if such claims and legal actions are not resolved in our favor, they may result in significant financial liability. Any financial liability could have a material adverse effect on our financial condition and results of operations. Any such claims and legal actions may also require significant management attention and may detract from management's focus on our operations.

We may be adversely affected if we enter into a major unprofitable contract.

Our Residential and Commercial Services and our Utility Services segments frequently operate in a competitive bid contract environment. As a result, we may misjudge a bid and be contractually bound to an unprofitable contract, which could adversely affect our results of operations.

- 37 -

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information on purchases of our common shares outstanding made by us during the first six months of 2012.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
Fiscal 2012
January 1 to January 28	902	$	18.00	n/a	n/a
January 29 to February 25	298	18.00		n/a	n/a
February 26 to March 31	125,179	19.70		n/a	n/a
Total First Quarter	126,379	19.68
April 1 to April 28	120,433	19.70		n/a	n/a
April 29 to May 26	91,168	19.70		n/a	n/a
May 27 to June 30	56,410	19.70		n/a	n/a
Total Second Quarter	268,011	19.70
Total Year to Date	394,390	19.69
n/a--Not applicable. There are no publicly announced plans or programs to purchase common shares.

Our common shares are not listed or traded on an established public trading market and market prices are, therefore, not available. Semiannually, for purposes of the Davey 401KSOP and ESOP, the fair market value of our common shares is determined by an independent stock valuation firm, based upon our performance and financial condition, using a peer group of comparable companies selected by that firm. The peer group currently consists of ABM Industries Incorporated, Comfort Systems USA, Inc., Dycom Industries, Inc., FirstService Corporation, MYR Group, Inc., Quanta Services, Inc., Rollins, Inc., and Scotts Miracle-Gro Company. The semiannual valuations are effective for a period of six months and the per-share price established by those valuations is the price at which our Board of Directors has determined our common shares will be bought and sold during that six-month period in transactions involving Davey Tree or one of its employee benefit or stock purchase plans. Since 1979, we have provided a ready market for all shareholders through our direct purchase of their common shares, although we are under no obligation to do so. The purchases described above are added to our treasury stock.

Item 6. Exhibits.

See Exhibit Index page, below.

- 38 -

Signatures

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.

			THE DAVEY TREE EXPERT COMPANY
		By:	/s/ David E. Adante
Date:	August 1, 2012		David E. Adante
			Executive Vice President, Chief Financial Officer and Secretary
			(Principal Financial Officer)
Date:	August 1, 2012	By:	/s/ Nicholas R. Sucic
			Nicholas R. Sucic
			Vice President and Controller
			(Principal Accounting Officer)

- 39 -

Exhibit Index

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed Herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed Herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Furnished Herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Furnished Herewith
101	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statement of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.*	Furnished Herewith

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

- 40 -

EX-31.1

Exhibit 31.1

Certification

Certification of Chief Executive Officer

I, Karl J. Warnke, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Davey Tree Expert Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 1, 2012	/s/ Karl J. Warnke
		Karl J. Warnke
		Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

Certification of Chief Financial Officer

I, David E. Adante, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Davey Tree Expert Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 1, 2012	/s/ David E. Adante
		David E. Adante
		Executive Vice President, Chief Financial Officer and Secretary

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer

I, Karl J. Warnke, Chairman, President and Chief Executive Officer of The Davey Tree Expert Company (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1.) The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2012 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 1, 2012	/s/ Karl J. Warnke
		Karl J. Warnke
		Chairman, President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer

I, David E. Adante, Executive Vice President, Chief Financial Officer and Secretary of The Davey Tree Expert Company (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1.) The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2012  (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 1, 2012	/s/ David E. Adante
		David E. Adante
		Executive Vice President, Chief Financial Officer and Secretary

XML

Per Share Amounts and Common Shares Outstanding (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jul. 02, 2011	Jun. 30, 2012	Jul. 02, 2011
Per Share Amounts and Common Shares Outstanding [Abstract]
Net income	$ 9,416	$ 9,159	$ 8,845	$ 3,113
Basic weighted average shares	13,838,000	14,058,000	13,851,000	14,093,000
Exercise of stock options and awards	448,000	511,000	474,000	519,000
Diluted weighted-average shares	14,286,000	14,569,000	14,325,000	14,612,000
Net income per share, basic	$ 0.68	$ 0.65	$ 0.64	$ 0.22
Net income per share, diluted	$ 0.66	$ 0.63	$ 0.62	$ 0.21
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares outstanding at January 1, 2012			13,845,635
Shares purchased			(394,390)
Shares sold			232,891
Options and awards exercised			129,081
Change in shares outstanding			(32,418)
Shares outstanding at June 30, 2012	13,813,217		13,813,217
Common shares, outstanding	13,813,217		13,813,217
Employee and director options exercisable	822,525		822,525

XML

Long-Term Debt (Narrative) (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Minimum [Member]	Jun. 30, 2012 Maximum [Member]	Jun. 30, 2012 Line of credit [Member]	Jun. 30, 2012 Line of credit [Member] Base rate, LIBOR [Member]	Jun. 30, 2012 Line of credit [Member] Base rate, federal funds [Member]	Jun. 30, 2012 Line of credit [Member] Base rate [Member] Minimum [Member]	Jun. 30, 2012 Line of credit [Member] Base rate [Member] Maximum [Member]	Jun. 30, 2012 Line of credit [Member] LIBOR [Member] Minimum [Member]	Jun. 30, 2012 Line of credit [Member] LIBOR [Member] Maximum [Member]	Jun. 30, 2012 Letter of credit [Member]
Debt Instrument [Line Items]
Revolving credit facility, current borrowing Capacity	$ 140,000
Letter of credit, sublimit	100,000
Revolving credit facility, maximum borrowing Capacity	160,000
Unused commitments under credit facility	66,913
Committed under credit facility					73,087
Revolving credit facility borrowings	28,400	20,000
Letters of credit issued												44,687
Outstanding borrowings interest rate, range								0.00%	0.25%	1.25%	1.75%
Debt instrument, variable rate, base rate calculation						1.50%	0.50%
Line of credit facility, commitment fee percentage			0.20%	0.30%
Senior unsecured notes	$ 30,000	$ 30,000
Senior unsecured notes, interest rate	5.09%

XML

Net Periodic Benefit Cost - Defined Benefit Pension Plans (Tables)

6 Months Ended

Jun. 30, 2012

Net Periodic Benefit Cost, Defined Benefit Pension Plans [Abstract]

Schedule of defined benefit pension plans, components of pesion cost [Table Text Block]

The results of operations included the following net periodic benefit cost recognized related to our defined-benefit pension plans.

	Three Months Ended						Six Months Ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Components of pension cost
Service costs--increase in benefit obligation earned	$	47		$	34		$	91		$	67
Interest cost on projected benefit obligation	415			417			832			835
Expected return on plan assets	(425		)	(477		)	(853		)	(954		)
Settlement loss	219			—			219			—
Amortization of net actuarial loss	260			133			522			267
Amortization of prior service cost	4			4			7			7
Amortization of transition asset	—			(17		)	—			(34		)
Net pension cost of defined benefit pension plans	$	520		$	94		$	818		$	188

XML

Fair Value Measurements and Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair value, measurements, recurring [Member] | Quoted prices in active markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets invested for self-insurance, classified as other assets, noncurrent	$ 14,156	$ 13,064
Interest rate swaps, classified as accrued expenses		0
Fuel derivatives, classified as accrued expenses	0	0
Fuel derivatives, classified as other noncurrent liabilities	0	0
Deferred compensation	0	0
Fair value, measurements, recurring [Member] | Significant other observable inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets invested for self-insurance, classified as other assets, noncurrent	0	0
Interest rate swaps, classified as accrued expenses		123
Fuel derivatives, classified as accrued expenses	306	108
Fuel derivatives, classified as other noncurrent liabilities	237	317
Deferred compensation	787	684
Fair value, measurements, recurring [Member] | Significant unobservable inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets invested for self-insurance, classified as other assets, noncurrent	0	0
Interest rate swaps, classified as accrued expenses		0
Fuel derivatives, classified as accrued expenses	0	0
Fuel derivatives, classified as other noncurrent liabilities	0	0
Deferred compensation	0	0
Fair value, measurements, recurring [Member] | Carrying (reported) amount, fair value disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets invested for self-insurance, classified as other assets, noncurrent	14,156	13,064
Interest rate swaps, classified as accrued expenses		123
Fuel derivatives, classified as accrued expenses	306	108
Fuel derivatives, classified as other noncurrent liabilities	237	317
Deferred compensation	787	684
Carrying (reported) amount, fair value disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, classified as accrued expenses	0	123
Fuel derivatives, classified as accrued expenses	306	108
Fuel derivatives, classified as other noncurrent liabilities	$ 237	$ 317

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012 Rate	Dec. 31, 2011 Rate
Income Taxes [Abstract]
Effective income tax rate	40.00%	39.60%
Unrecognized tax benefits	$ 1,825	$ 1,825
Unrecognized tax benefits that would impact effective tax rate	1,260	1,260
Unrecognized tax benefits, interest on income taxes accrued	99	99
Significant change in unrecognized tax benefits is reasonably possible, estimated range of change, lower bound	200
Significant change in unrecognized tax benefits is reasonably possible, estimated range of change, upper bound	$ 300

XML

Accounts Receivable, Net and Supplemental Balance-Sheet Information

6 Months Ended

Jun. 30, 2012

Accounts Receivable, Net and Supplemental Balance Sheet Information [Abstract]

Accounts receivable net and supplemental balance sheet information [Text Block]

Accounts Receivable, Net and Supplemental Balance-Sheet Information

The following comprise accounts receivable, net, and other:

Accounts receivable, net	June 30, 2012		December 31, 2011
Accounts receivable	$	87,399	$	82,076
Receivables under contractual arrangements	21,538		11,194
	108,937		93,270
Less allowances for doubtful accounts	2,657		2,475
Accounts receivable, net	$	106,280	$	90,795

C. Accounts Receivable, Net and Supplemental Balance-Sheet Information (continued)

Receivables under contractual arrangements consist of work-in-process in accordance with the terms of contracts, primarily with utility services customers.

The following comprise the amounts included in the balance sheet:

Other current assets	June 30, 2012		December 31, 2011
Refundable income taxes	$	2,884	$	2,602
Deferred income taxes	7,927		12,071
Prepaid expenses	5,999		6,968
Other	619		2,247
Total	$	17,429	$	23,888

Accrued expenses	June 30, 2012		December 31, 2011
Employee compensation	$	13,190	$	15,046
Accrued compensated absences	8,158		7,138
Self-insured medical claims	3,148		2,950
Customer advances, deposits	—		1,321
Taxes, other than income	2,771		2,622
Accrued litigation settlement	2,900		2,900
Other	2,769		2,146
Total	$	32,936	$	34,123

XML

Fair Value Measurements and Financial Instruments Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended										3 Months Ended		6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Carrying (reported) amount, fair value disclosure [Member]	Dec. 31, 2011 Carrying (reported) amount, fair value disclosure [Member]	Jun. 30, 2012 Portion at fair value, fair value disclosure [Member]	Dec. 31, 2011 Portion at fair value, fair value disclosure [Member]	Jun. 30, 2012 Longest remaining term, in months [Member]	Dec. 31, 2011 Longest remaining term, in months [Member]	Jun. 30, 2012 Notional hedged volume, in thousands of gallons [Member] gal	Dec. 31, 2011 Notional hedged volume, in thousands of gallons [Member] gal	Jun. 30, 2012 Change during period, fair value disclosure [Member]	Jul. 02, 2011 Change during period, fair value disclosure [Member]	Jun. 30, 2012 Change during period, fair value disclosure [Member]	Jul. 02, 2011 Change during period, fair value disclosure [Member]
Liabilities, Fair Value Disclosure [Abstract]
Revolving credit facility, noncurrent			$ 28,400	$ 20,000	$ 28,400	$ 20,000
Senior unsecured notes	30,000	30,000	30,000	30,000	30,416	29,925
Term loans, noncurrent			715	1,136	715	1,135
Total			59,115	51,136	59,531	51,060
Interest Rate Derivatives, at Fair Value, Net [Abstract]
Liability fair value of interest rate swaps classified as accrued expenses			0	123
Notional amount of long-term debt hedged			0	10,000
Price Risk Derivatives [Abstract]
Liability fair value of fuel derivatives, classified as accrued expenses			306	108
Liability fair value of fuel derivatives, classified as other noncurrent liabilities			237	317
Longest remaining term, in months							18 months	24 months
Notional hedged volume, in thousands of gallons									1,900,000	2,500,000
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract]
Hedge gains, recognized in other comprehensive income, Effective Portion, Net	123										0	223	123	441
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Change in fair value, recognized in results of operations, as a decrease in operating costs and expenses											$ (888)	$ 22	$ 34	$ 22

XML

Fair Value Measurements and Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Jul. 02, 2011

Financial Instruments and Fair Value Measurements [Abstract]

Assets and liabilities measured at fair value on a recurring basis [Table Text Block]

Our assets and liabilities measured at fair value on a recurring basis at June 30, 2012, were as follows:

			Fair Value Measurements at June 30, 2012 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at June 30, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	14,156	$	14,156	$	—	$	—
Liabilities:
Fuel derivatives, classified as accrued expenses	$	306	$	—	$	306	$	—
Fuel derivatives, classified as other noncurrent liabilities	237		—		237		—
Deferred compensation	787		—		787		—

Our assets and liabilities measured at fair value on a recurring basis at December 31, 2011 were as follows:

			Fair Value Measurements at December 31, 2011 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at December 31, 2011		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	13,064	$	13,064	$	—	$	—
Liabilities:
Interest rate swaps, classified as accrued expenses	$	123	$	—	$	123	$	—
Fuel derivatives, classified as accrued expenses	108		—		108		—
Fuel derivatives, classified as other noncurrent liabilities	317		—		317		—
Deferred compensation	684		—		684		—

Financial instruments recorded at historical carrying value [Table Text Block]

	June 30, 2012				December 31, 2011
Financial Instruments Recorded at Historical Carrying Value	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility, noncurrent	$	28,400	$	28,400	$	20,000	$	20,000
Senior unsecured notes	30,000		30,416		30,000		29,925
Term loans, noncurrent	715		715		1,136		1,135
Total	$	59,115	$	59,531	$	51,136	$	51,060

Schedule of derivative instruments in statement of financial position, fair value [Table Text Block]

The following tables set forth quantitative information related to our derivatives instruments and where these amounts are recorded in our consolidated financial statements.

	As of
	June 30, 2012		December 31, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Liability fair value of interest rate swaps, classified as accrued expenses	$	—	$	123
Notional amount of long-term debt hedged	$	—	$	10,000
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Liability fair value of fuel derivatives, classified as accrued expenses	$	306	$	108
Liability fair value of fuel derivatives, classified as other noncurrent liabilities	$	237	$	317
Longest remaining term, in months	18		24
Notional hedged volume, in thousands of gallons	1,900		2,500

	Three Months Ended					Six Months Ended
	June 30, 2012			July 2, 2011		June 30, 2012		July 2, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Hedge gains, recognized in other comprehensive income	$	—		$	223	$	123	$	441
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Change in fair value, recognized in results of operations, as an (increase in)/decrease in operating costs and expenses	$	(888	)	$	22	$	34	$	22

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Operations by Business Segment (Tables)

6 Months Ended

Jun. 30, 2012

Operations by Business Segment [Abstract]

Schedule of segment reporting information, by segment [Table Text Block]

Segment information reconciled to consolidated external reporting information follows:

	Utility Services		Residential Commercial Services		All Other		Reconciling Adjustments				Consolidated
Three Months Ended June 30, 2012
Revenues	$	78,989	$	87,294	$	16,128	$	—			$	182,411
Income (loss) from operations	1,928		14,867		1,754		(1,279		)	(a)	17,270
Interest expense							(707		)		(707		)
Interest income							29				29
Other income (expense), net							(874		)		(874		)
Income before income taxes											$	15,718
Segment assets, total	124,964		114,934		18,807		53,947			(b)	$	312,652
Three Months Ended July 2, 2011
Revenues	$	79,153	$	80,690	$	14,110	$	—			$	173,953
Income (loss) from operations	2,006		13,810		1,332		(581		)	(a)	16,567
Interest expense							(984		)		(984		)
Interest income							9				9
Other income (expense), net							(661		)		(661		)
Income before income taxes											$	14,931
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107
Six Months Ended June 30, 2012
Revenues	$	159,485	$	138,426	$	31,144	$	—			$	329,055
Income (loss) from operations	5,055		12,133		1,602		(1,012		)	(a)	17,778
Interest expense							(1,410		)		(1,410		)
Interest income							56				56
Other income (expense), net							(1,509		)		(1,509		)
Income before income taxes											$	14,915
Segment assets, total	$	124,964	$	114,934	$	18,807	$	53,947		(b)	$	312,652
Six Months Ended July 2, 2011
Revenues	$	153,804	$	126,349	$	25,124	$	—			$	305,277
Income (loss) from operations	1,336		7,970		96		(1,055		)	(a)	8,347
Interest expense							(1,874		)		(1,874		)
Interest income							14				14
Other income (expense), net							(1,324		)		(1,324		)
Income before income taxes											$	5,163
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107

Reconciling adjustments from segment reporting to consolidated external financial reporting include unallocated corporate items:

(a) Reclassification of depreciation expense and allocation of corporate expenses.

(b) Corporate assets include cash, prepaid expenses, corporate facilities, enterprise-wide information systems and other nonoperating assets.

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Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2011
Contingencies [Abstract]
Settlement amount	$ 2,900,000

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Accounts Receivable, Net and Supplemental Balance-Sheet Information (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accounts Receivable, Net and Supplemental Balance Sheet Information [Abstract]
Accounts receivable	$ 87,399	$ 82,076
Receivables under contractual arrangements	21,538	11,194
Accounts receivable, gross, current	108,937	93,270
Less allowances for doubtful accounts	2,657	2,475
Accounts receivable, net	106,280	90,795
Prepaid Expense and Other Assets, Current [Abstract]
Refundable income taxes	2,884	2,602
Deferred income taxes	7,927	12,071
Prepaid expenses	5,999	6,968
Other	619	2,247
Total	17,429	23,888
Accrued Liabilities [Abstract]
Employee compensation	13,190	15,046
Accrued compensated absences	8,158	7,138
Self-insured medical claims	3,148	2,950
Customer advances, deposits	0	1,321
Taxes, other than income	2,771	2,622
Accrued litigation settlement	2,900	2,900
Other	2,769	2,146
Total	$ 32,936	$ 34,123

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Identified Intangible Assets and Goodwill, Net (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Finite-Lived Intangible Assets [Line Items]
Carrying amount of intangible assets	$ 22,113	$ 22,330
Accumulated amortization	17,588	16,926
Identified intangibles, net	4,525	5,404
Goodwill	21,673	21,677
Identified intangible assets and goodwill, net	26,198	27,081
Customer lists/relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount of intangible assets	12,411	12,627
Accumulated amortization	9,728	9,570
Employment-related [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount of intangible assets	5,345	5,345
Accumulated amortization	4,830	4,573
Tradenames [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount of intangible assets	4,357	4,358
Accumulated amortization	$ 3,030	$ 2,783

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Seasonality of Business

6 Months Ended

Jun. 30, 2012

Seasonality of Business [Abstract]

Seasonality of Business [Text Block]

Seasonality of Business

Due to the seasonality of our business, our operating results for the six months endedJune 30, 2012 are not indicative of results that may be expected for any other interim period or for the year ending December 31, 2012. Business seasonality is the result of traditionally higher revenues during the second and third quarters as compared with the first and fourth quarters of the year, while the methods of accounting for fixed costs, such as depreciation expense, amortization, rent and interest expense, are not significantly impacted by business seasonality.

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Long-Term Debt Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Debt Disclosure [Abstract]
Prime rate borrowings	$ 1,400	$ 0
LIBOR borrowings	27,000	20,000
Revolving credit facility borrowings, total	28,400	20,000
Senior unsecured notes	30,000	30,000
Term loans	1,945	6,973
Long-term debt	60,345	56,973
Less current portion	1,428	5,837
Long-term debt	$ 58,917	$ 51,136

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Per Share Amounts and Common Shares Outstanding stock subscription (Details) (USD $)	6 Months Ended
	Jun. 30, 2012 Rate
Per Share Amounts and Common Shares Outstanding [Abstract]
Stock subscription offering, subscription price	$ 19.70
Stock subscription offering, minimum financed amount	$ 5,000
Stock subscription offering, down payment	10.00%
Stock subscription offering, term (in years)	7
Stock subscription offering interest rate	2.00%
Stock subscription offering, minimum amount to receive right	$ 5,000
Stock subscription offering, number of shares purchased to receive one right	3
Stock subscription offering, right expiration term (in years)	7
Stock subscription offering, portion exercisable per year	14.29%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 7,202	$ 10,267
Accounts receivable, net	106,280	90,795
Operating supplies	7,063	5,586
Other current assets	17,429	23,888
Total current assets	137,974	130,536
Property and equipment	448,945	438,989
Less accumulated depreciation	317,128	308,841
Property and equipment, net	131,817	130,148
Other assets	16,663	15,969
Identified intangible assets and goodwill, net	26,198	27,081
Total assets	312,652	303,734
Current liabilities:
Accounts payable	33,101	35,282
Accrued expenses	32,936	34,123
Other current liabilities	28,115	32,630
Total current liabilities	94,152	102,035
Long-term debt	58,917	51,136
Self-insurance accruals	36,799	30,472
Other noncurrent liabilities	15,529	19,365
Common shareholders' equity:
Common shares, $1.00 par value, per share; 24,000 shares authorized; 21,457 shares issued	21,457	21,457
Total liabilities	205,397	203,008
Additional paid-in capital	3,089	1,721
Retained earnings	196,216	188,613
Accumulated other comprehensive loss	(5,846)	(6,344)
Stockholders' Equity before Treasury Stock	214,916	205,447
Less: Cost of Common shares held in treasury; 7,644 shares at June 30, 2012 and 7,611 shares at December 31, 2011	107,661	104,721
Stockholders' Equity Attributable to Parent	107,255	100,726
Total liabilities and shareholders' equity	$ 312,652	$ 303,734

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jul. 02, 2011
Operating activities
Net income	$ 8,845	$ 3,113
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	19,127	19,424
Other	(485)	358
Changes in operating assets and liabilities:
Accounts receivable	(15,485)	(15,377)
Operating liabilities	2,547	5,414
Other, net	2,158	(830)
Adjustments to reconcile net income to cash provided by operating activities	7,862	8,989
Net cash provided by operating activities	16,707	12,102
Capital expenditures:
Equipment	(20,878)	(25,431)
Land and buildings	(212)	(175)
Purchases of businesses	0	(962)
Other	1,513	539
Net cash used in investing activities	(19,577)	(26,029)
Financing activities
Revolving credit facility proceeds, net	8,400	21,600
Purchase of common shares for treasury	(7,762)	(7,847)
Sale of common shares from treasury	5,437	4,972
Dividends	(1,242)	(1,189)
Other	(5,028)	(7,053)
Net cash (used in) provided by financing activities	(195)	10,483
Decrease in cash and cash equivalents	(3,065)	(3,444)
Cash and cash equivalents, beginning of period	10,267	12,017
Cash and cash equivalents, end of period	7,202	8,573
Supplemental cash flow information follows:
Interest paid	1,465	1,992
Income taxes paid	$ 4,799	$ 877

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Stock-Based Compensation Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range (Details) (USD $)	6 Months Ended
	Jun. 30, 2012 Y
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding	993,525
Weighted average remaining contractual life (years)	4.1
Outstanding options, weighted-average exercise price	$ 10.93
Number exercisable	822,525
Exercisable options, weighted-average exercise price	$ 9.81
Employee options [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number outstanding	948,857
Weighted average remaining contractual life (years)	4.2
Outstanding options, weighted-average exercise price	$ 10.74
Number exercisable	777,857
Exercisable options, weighted-average exercise price	$ 9.51
Employee options [Member] | $6.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit	$ 6.75
Upper range limit	$ 6.75
Number outstanding	378,024
Weighted average remaining contractual life (years)	1.4
Outstanding options, weighted-average exercise price	$ 6.75
Number exercisable	378,024
Exercisable options, weighted-average exercise price	$ 6.75
Employee options [Member] | $11.25 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit	$ 11.25
Upper range limit	$ 11.25
Number outstanding	329,133
Weighted average remaining contractual life (years)	3.9
Outstanding options, weighted-average exercise price	$ 11.25
Number exercisable	329,133
Exercisable options, weighted-average exercise price	$ 11.25
Employee options [Member] | $16.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit	$ 16.00
Upper range limit	$ 16.00
Number outstanding	132,300
Weighted average remaining contractual life (years)	7.3
Outstanding options, weighted-average exercise price	$ 16.00
Number exercisable	49,300
Exercisable options, weighted-average exercise price	$ 16.00
Employee options [Member] | $16.60 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit	$ 16.60
Upper range limit	$ 16.60
Number outstanding	109,400
Weighted average remaining contractual life (years)	8.3
Outstanding options, weighted-average exercise price	$ 16.60
Number exercisable	21,400
Exercisable options, weighted-average exercise price	$ 16.60
Director options [Member] | $10.00 to $16.40 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range limit	$ 10.00
Upper range limit	$ 16.40
Number outstanding	44,668
Weighted average remaining contractual life (years)	1.9
Outstanding options, weighted-average exercise price	$ 14.95
Number exercisable	44,668
Exercisable options, weighted-average exercise price	$ 14.95

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Identified Intangible Assets and Goodwill, Net (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of identified intangible assets and goodwill, net [Table Text Block]

The carrying amounts of the identified intangibles and goodwill acquired in connection with our investments in businesses were as follows:

	June 30, 2012				December 31, 2011
Identified Intangible Assets and Goodwill, Net	Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists/relationships	$	12,411	$	9,728	$	12,627	$	9,570
Employment-related	5,345		4,830		5,345		4,573
Tradenames	4,357		3,030		4,358		2,783
Amortized intangible assets	$	22,113	$	17,588	$	22,330	$	16,926
Less accumulated amortization	17,588				16,926
Identified intangibles, net	4,525				5,404
Unamortized intangible assets:
Goodwill	21,673				21,677
	$	26,198			$	27,081

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Net Periodic Benefit Cost - Defined Benefit Pension Plans (Details) (Pension plans, defined benefit [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jul. 02, 2011	Jun. 30, 2012	Jul. 02, 2011
Pension plans, defined benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Service costs--increase in benefit obligation earned	$ 47	$ 34	$ 91	$ 67
Interest cost on projected benefit obligation	415	417	832	835
Expected return on plan assets	(425)	(477)	(853)	(954)
Settlement loss	219	0	219	0
Amortization of net actuarial loss	260	133	522	267
Amortization of prior service cost	4	4	7	7
Amortization of transition asset	0	(17)	0	(34)
Net pension cost of defined benefit pension plans	520	94	818	188
Contributions by employer			428
Estimated future employer contributions in current fiscal year	$ 582		$ 582

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of share-based compensation arrangements by share-based payment award [Table Text Block]

Stock-based compensation expense under all share-based payment plans -- our Employee Stock Purchase Plan, stock option plans, stock appreciation rights and performance-based restricted stock units -- included in the results of operations follows:

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Compensation expense, all share-based payment plans	$	294	$	367	$	925	$	704

Schedule of share-based compensation, stock-settled stock appreciation rights award activity [Table Text Block]

The following table summarizes our SSARs as of June 30, 2012.

Stock-Settled Stock Appreciation Rights	Number of Rights		Weighted- Average Award Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	210,188		$	3.47
Granted	105,000		2.70
Forfeited	—		—
Vested	(57,371	)	3.43
Unvested, June 30, 2012	257,817		$	3.17	3.6 years	$	699	$	5,079
Employee SSARs	218,400		$	3.31	3.6 years	$	609	$	4,302
Nonemployee Director SSARs	39,417		$	2.34	3.9 years	$	90	$	777

Schedule of share-based compensation, performance-based restricted stock units award activity [Table Text Block]

The following table summarizes Performance-Based Restricted Stock Units as of June 30, 2012.

Performance-Based Restricted Stock Units	Number of Stock Units		Weighted- Average Grant Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	113,908		$	15.15
Granted	23,058		19.41
Forfeited	—		—
Vested	(58,313	)	14.52
Unvested, June 30, 2012	78,653		$	16.87	2.4 years	$	792	$	1,549

Schedule of share-based payment award, stock options, valuation assumptions [Table Text Block]

The fair values of stock-based awards granted were estimated at the dates of grant with the following weighted-average assumption.

	Six Months Ended
	June 30, 2012		July 2, 2011
Volatility rate	11.7	%	11.9	%
Risk-free interest rate	1.6	%	2.9	%
Expected dividend yield	1.5	%	1.5	%
Expected life of awards (years)	9.1		8.9

Schedule of share-based compensation, stock options activity [Table Text Block]

The following table summarizes activity under the stock option plans for the six months endedJune 30, 2012.

Stock Options	Number of Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Outstanding, January 1, 2012	1,110,785		$	10.62
Granted	—		—
Exercised	(117,260	)	8.05
Forfeited	—		—
Outstanding, June 30, 2012	993,525		$	10.93	4.1 years	$	10,855	$	8,717
Exercisable, June 30, 2012	822,525		$	9.81	3.0 years			$	8,138

Schedule of share-based compensation, shares authorized under stock option plans, by exercise price Range [Table Text Block]

“Intrinsic value” is defined as the amount by which the market price of a common share exceeds the exercise price of an option.  Information regarding the stock options outstanding at June 30, 2012 is summarized below:

Stock Options Exercise Price			Number Outstanding	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
Employee options:	$	6.75	378,024	1.4 years	$	6.75	378,024	$	6.75
	11.25		329,133	3.9 years	11.25		329,133	11.25
	16.00		132,300	7.3 years	16.00		49,300	16.00
	16.60		109,400	8.3 years	16.60		21,400	16.60
			948,857	4.2 years	$	10.74	777,857	$	9.51
Director options:	$10.00 to $16.40		44,668	1.9 years	14.95		44,668	14.95
			993,525	4.1 years	$	10.93	822,525	$	9.81

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Basis of Financial Statement Preparation

6 Months Ended

Jun. 30, 2012

Basis of Financial Statement Preparation [Abstract]

Basis of Financial Statement Preparation [Text Block]

Basis of Financial Statement Preparation

The condensed consolidated financial statements present the financial position, results of operations and cash flows of The Davey Tree Expert Company and its subsidiaries. “We,” “us,” “our,” “Davey,” “Davey Tree” and the “Company” means The Davey Tree Expert Company and its subsidiaries, unless the context indicates otherwise.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The consolidated financial statements include all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. All significant intercompany accounts and transactions have been eliminated.

Certain information and disclosures required by U.S. GAAP for complete financial statements have been omitted in accordance with the rules and regulations of the SEC. We suggest that these condensed consolidated financial statements be read in conjunction with the financial statements included in our annual report on Form 10-K for the year ended December 31, 2011 (the “2011 Annual Report”).

Use of Estimates in Financial Statement Preparation--The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect reported amounts. Our consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Estimates are used for, but not limited to, accounts receivable valuation, depreciable lives of fixed assets, self-insurance accruals, income taxes and revenue recognition. Actual results could differ from those estimates.

Interim Results of Operations--Interim results may not be indicative of calendar year performance because of seasonal and short-term variations.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Common Stock, Par or Stated Value Per Share	$ 1.00	$ 1.00
Common Stock, Shares Authorized	24,000	24,000
Common Stock, Shares, Issued	21,457	21,457
Treasury Stock, Shares	7,505	7,611

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Operations by Business Segment

6 Months Ended

Jun. 30, 2012

Operations by Business Segment [Abstract]

Operations by business segment [Text Block]

Operations by Business Segment

Our operating results are reported in two segments: Residential and Commercial Services, and Utility Services. Residential and Commercial Services provides for the treatment, preservation, maintenance, cultivation, planting and removal of trees, shrubs and other plant life; its services also include the practice of landscaping, tree surgery, tree feeding, and tree spraying, as well as the application of fertilizer, herbicides and insecticides. Utility Services is principally engaged in the practice of line clearing for investor-owned and municipal utilities, including the clearing of tree growth from power lines, clearance of rights-of-way and chemical brush control. Davey Resource Group, which provides services related to natural resource management and consulting, forestry research and development, and environmental planning and also maintains research, technical support and laboratory diagnostic facilities, is a nonreportable segment and, along with other operating activities, is included in “All Other.”

Measurement of Segment Profit and Loss and Segment Assets--We evaluate performance and allocate resources based primarily on operating income and also actively manage business unit operating assets. Segment information, including reconciling adjustments, is presented consistent with the basis described in the 2011 Annual Report.

K.    Operations by Business Segment (continued)

Segment information reconciled to consolidated external reporting information follows:

	Utility Services		Residential Commercial Services		All Other		Reconciling Adjustments				Consolidated
Three Months Ended June 30, 2012
Revenues	$	78,989	$	87,294	$	16,128	$	—			$	182,411
Income (loss) from operations	1,928		14,867		1,754		(1,279		)	(a)	17,270
Interest expense							(707		)		(707		)
Interest income							29				29
Other income (expense), net							(874		)		(874		)
Income before income taxes											$	15,718
Segment assets, total	124,964		114,934		18,807		53,947			(b)	$	312,652
Three Months Ended July 2, 2011
Revenues	$	79,153	$	80,690	$	14,110	$	—			$	173,953
Income (loss) from operations	2,006		13,810		1,332		(581		)	(a)	16,567
Interest expense							(984		)		(984		)
Interest income							9				9
Other income (expense), net							(661		)		(661		)
Income before income taxes											$	14,931
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107
Six Months Ended June 30, 2012
Revenues	$	159,485	$	138,426	$	31,144	$	—			$	329,055
Income (loss) from operations	5,055		12,133		1,602		(1,012		)	(a)	17,778
Interest expense							(1,410		)		(1,410		)
Interest income							56				56
Other income (expense), net							(1,509		)		(1,509		)
Income before income taxes											$	14,915
Segment assets, total	$	124,964	$	114,934	$	18,807	$	53,947		(b)	$	312,652
Six Months Ended July 2, 2011
Revenues	$	153,804	$	126,349	$	25,124	$	—			$	305,277
Income (loss) from operations	1,336		7,970		96		(1,055		)	(a)	8,347
Interest expense							(1,874		)		(1,874		)
Interest income							14				14
Other income (expense), net							(1,324		)		(1,324		)
Income before income taxes											$	5,163
Segment assets, total	$	126,441	$	112,383	$	17,722	$	52,561		(b)	$	309,107

Reconciling adjustments from segment reporting to consolidated external financial reporting include unallocated corporate items:

(a) Reclassification of depreciation expense and allocation of corporate expenses.

(b) Corporate assets include cash, prepaid expenses, corporate facilities, enterprise-wide information systems and other nonoperating assets.

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Document and Entity Information Document	6 Months Ended
	Jun. 30, 2012	Jul. 27, 2012
Entity Information [Line Items]
Entity Registrant Name	DAVEY TREE EXPERT CO
Entity Central Index Key	0000277638
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		13,818,530

XML

Fair Value Measurements and Financial Instruments

6 Months Ended

Jun. 30, 2012

Fair Value Measurements and Financial Instruments [Abstract]

Fair value measurements and financial instruments [Text Block]

Fair Value Measurements and Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Market participants are defined as buyers or sellers in the principal or most advantageous market for the asset or liability that are independent of the reporting entity, knowledgeable, and able and willing to transact for the asset or liability.

Valuation Hierarchy--A valuation hierarchy is used for presentation of the inputs to measure fair value.  This hierarchy prioritizes the inputs into three broad levels.  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.  Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.  A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Our assets and liabilities measured at fair value on a recurring basis at June 30, 2012, were as follows:

			Fair Value Measurements at June 30, 2012 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at June 30, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	14,156	$	14,156	$	—	$	—
Liabilities:
Fuel derivatives, classified as accrued expenses	$	306	$	—	$	306	$	—
Fuel derivatives, classified as other noncurrent liabilities	237		—		237		—
Deferred compensation	787		—		787		—

L. Fair Value Measurements and Financial Instruments (continued)

Our assets and liabilities measured at fair value on a recurring basis at December 31, 2011 were as follows:

			Fair Value Measurements at December 31, 2011 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at December 31, 2011		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance, classified as other assets, noncurrent	$	13,064	$	13,064	$	—	$	—
Liabilities:
Interest rate swaps, classified as accrued expenses	$	123	$	—	$	123	$	—
Fuel derivatives, classified as accrued expenses	108		—		108		—
Fuel derivatives, classified as other noncurrent liabilities	317		—		317		—
Deferred compensation	684		—		684		—

The assets invested for self-insurance are money market funds--classified as Level 1--based on quoted market prices of the identical underlying securities in active markets. The estimated fair values of our derivative instruments are calculated based on market rates to settle the instruments, representing the amount we would receive upon sale or pay upon transfer-Level 2 inputs. The estimated fair value of the deferred compensation--classified as Level 2--is based on the value of the Company's common shares, determined by independent valuation.

Fair Value of Financial Instruments-- Fair value information is required to be presented for all financial instruments, whether reported at fair value or historical carrying value.

The fair values of our current assets and current liabilities, including cash, accounts receivable, accounts payable, and accrued expenses among others, approximate their reported carrying values because of their short-term nature. The assets invested for self-insurance and derivative instruments are reported at fair value. Financial instruments classified as noncurrent liabilities and their carrying values and fair values were as follows:

	June 30, 2012				December 31, 2011
Financial Instruments Recorded at Historical Carrying Value	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility, noncurrent	$	28,400	$	28,400	$	20,000	$	20,000
Senior unsecured notes	30,000		30,416		30,000		29,925
Term loans, noncurrent	715		715		1,136		1,135
Total	$	59,115	$	59,531	$	51,136	$	51,060

L. Fair Value Measurements and Financial Instruments (continued)

The carrying value of our revolving credit facility approximates fair value as the interest rates on the amounts outstanding are variable. The fair value of our senior unsecured notes and our term loans is determined based on expected future weighted-average interest rates with the same remaining maturities--Level 2 inputs.

Market Risk and Derivative Financial Instruments

In the normal course of business, we are exposed to market risk related to changes in foreign currency exchange rates, changes in interest rates and changes in fuel prices. We do not hold or issue derivative financial instruments for trading or speculative purposes. We use derivative financial instruments to manage risks, in part, associated with changes in interest rates and changes in fuel prices.

Foreign Currency Rate Risk--We are exposed to market risk related to foreign currency exchange rate risk resulting from our operations in Canada, where we provide a comprehensive range of horticultural services.Our financial results could be affected by factors such as changes in the foreign currency exchange rate or differing economic conditions in the Canadian markets as compared with the markets for our services in the United States. Our earnings are affected by translation exposures from currency fluctuations in the value of the U.S. dollar as compared to the Canadian dollar. Similarly, the Canadian dollar-denominated assets and liabilities may result in financial exposure as to the timing of transactions and the net asset / liability position of our Canadian operations. Presently, we do not engage in hedging activities related to our foreign currency rate risk.

Interest Rate Risk--We are exposed to market risk related to changes in interest rates on long-term debt obligations. We regularly monitor and measure our interest rate risk and, to the extent that we believe we are exposed, from time-to-time we have entered into interest rate swap contracts--derivative financial instruments--with the objective of altering interest rate exposures related to a portion of variable debt.

Interest Rate Swaps--From time-to-time we have held interest rate swaps—cash-flow hedges—to effectively convert a portion of our variable-rate revolving credit borrowings to a fixed rate, thus reducing the impact of interest-rate changes on future interest expense. Under the contracts, we agree with the counterparty to exchange, at specified intervals, the difference between variable rate and fixed rate amounts calculated on a notional principal amount. During the first quarter 2012, all interest rate swap contracts previously entered into expired.

Fuel Derivatives--Beginning in the second quarter 2011, we entered into fuel derivatives as “economic hedges” related to fuel consumed by Davey Tree service vehicles. The objectives of the economic hedges are to fix the price of a portion of our fuel needs and mitigate the earnings and cash flow volatility attributable to the risk of changing prices.

L. Fair Value Measurements and Financial Instruments (continued)

The following tables set forth quantitative information related to our derivatives instruments and where these amounts are recorded in our consolidated financial statements.

	As of
	June 30, 2012		December 31, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Liability fair value of interest rate swaps, classified as accrued expenses	$	—	$	123
Notional amount of long-term debt hedged	$	—	$	10,000
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Liability fair value of fuel derivatives, classified as accrued expenses	$	306	$	108
Liability fair value of fuel derivatives, classified as other noncurrent liabilities	$	237	$	317
Longest remaining term, in months	18		24
Notional hedged volume, in thousands of gallons	1,900		2,500

	Three Months Ended					Six Months Ended
	June 30, 2012			July 2, 2011		June 30, 2012		July 2, 2011
Cash Flow Hedges - Derivatives Designated as Hedging Instruments
Interest Rate Swaps:
Hedge gains, recognized in other comprehensive income	$	—		$	223	$	123	$	441
Economic Hedges - Derivatives Not Designated as Hedging Instruments
Fuel Derivatives:
Change in fair value, recognized in results of operations, as an (increase in)/decrease in operating costs and expenses	$	(888	)	$	22	$	34	$	22

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jul. 02, 2011	Jun. 30, 2012	Jul. 02, 2011
Revenues	$ 182,411	$ 173,953	$ 329,055	$ 305,277
Costs and expenses:
Operating	116,472	111,242	216,356	207,072
Selling	28,197	25,684	52,600	48,671
General and administrative	11,480	10,783	24,078	22,007
Depreciation and amortization	9,670	9,840	19,127	19,424
Gain on sale of assets, net	(678)	(163)	(884)	(244)
Total costs and expenses	165,141	157,386	311,277	296,930
Income from operations	17,270	16,567	17,778	8,347
Other income (expense):
Interest expense	(707)	(984)	(1,410)	(1,874)
Interest income	29	9	56	14
Other, net	(874)	(661)	(1,509)	(1,324)
Income before income taxes	15,718	14,931	14,915	5,163
Income taxes	6,302	5,772	6,070	2,050
Net income	$ 9,416	$ 9,159	$ 8,845	$ 3,113
Net income per share:
Basic	$ 0.68	$ 0.65	$ 0.64	$ 0.22
Diluted	$ 0.66	$ 0.63	$ 0.62	$ 0.21
Weighted-average shares outstanding:
Basic	13,838	14,058	13,851	14,093
Diluted	14,286	14,569	14,325	14,612
Dividends declared per share	$ 0.045	$ 0.043	$ 0.088	$ 0.085

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation[Text Block]

Stock-Based Compensation

The Davey Tree Expert Company 2004 Omnibus Stock Plan (the “Stock Plan”) was approved by our shareholders at our annual shareholders' meeting in May 2004. The Stock Plan is administered by the Compensation Committee of the Board of Directors, with the maximum number of common shares that may be granted to or purchased by all employees and directors under the Stock Plan being 10,000,000. In addition to the maintenance of the Employee Stock Purchase Plan, the Stock Plan provides for the grant of stock options, restricted stock, stock appreciation rights, stock purchase rights, stock equivalent units, cash awards, and other stock or performance-based incentives. These awards are payable in cash or common shares, or any combination thereof, as established by the Compensation Committee.

Stock-based compensation expense under all share-based payment plans -- our Employee Stock Purchase Plan, stock option plans, stock appreciation rights and performance-based restricted stock units -- included in the results of operations follows:

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Compensation expense, all share-based payment plans	$	294	$	367	$	925	$	704

Stock-based compensation consisted of the following:

Employee Stock Purchase Plan--Under the Employee Stock Purchase Plan, all full-time employees with one year of service are eligible to purchase, through payroll deduction, common shares. Employee purchases under the Employee Stock Purchase Plan are at 85% of the fair market value of the common shares--a 15% discount. We recognize compensation costs as payroll deductions are made. The 15% discount of total shares purchased under the plan resulted in compensation cost of $210 being recognized for the six months endedJune 30, 2012 and $200for the six months endedJuly 2, 2011.

Stock Option Plans--Stock options awarded before January 1, 2006 were granted at an exercise price equal to the fair market value of our common shares at the dates of grant. Stock options awarded on or after January 1, 2006 were required to be measured at fair value. At June 30, 2012, there were 615,501 stock options outstanding that were awarded after January 1, 2006. The stock options were awarded under a graded vesting schedule and have a term of ten years. Compensation costs for stock options are recognized over the requisite service period on the straight-line recognition method. Compensation cost recognized for stock options was $80 for the six months endedJune 30, 2012 and $190 for the six months endedJuly 2, 2011.

Stock-Settled Stock Appreciation Rights--During the six months endedJune 30, 2012, the Compensation Committee of the Board of Directors awarded 105,000 Stock-Settled Stock Appreciation Rights (“SSARs”) to certain management employees and nonemployee directors, which vest ratably over five years. A stock-settled stock appreciation right is an award that allows the recipient to receive common stock equal to the appreciation in the fair market value of our common stock between the date the award was granted and the conversion date of the shares vested.

F. Stock-Based Compensation (continued)

The following table summarizes our SSARs as of June 30, 2012.

Stock-Settled Stock Appreciation Rights	Number of Rights		Weighted- Average Award Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	210,188		$	3.47
Granted	105,000		2.70
Forfeited	—		—
Vested	(57,371	)	3.43
Unvested, June 30, 2012	257,817		$	3.17	3.6 years	$	699	$	5,079
Employee SSARs	218,400		$	3.31	3.6 years	$	609	$	4,302
Nonemployee Director SSARs	39,417		$	2.34	3.9 years	$	90	$	777

Compensation costs for stock appreciation rights are determined using a fair-value method and amortized over the requisite service period. Compensation expense for stock appreciation rights was $156 for the six months endedJune 30, 2012 and $98 for the six months endedJuly 2, 2011.

Performance-Based Restricted Stock Units--During the six months endedJune 30, 2012, the Compensation Committee of the Board of Directors awarded 23,058 Performance-Based Restricted Stock Units to certain management employees. The Compensation Committee made similar awards in prior periods. The awards vest over specified periods. The following table summarizes Performance-Based Restricted Stock Units as of June 30, 2012.

Performance-Based Restricted Stock Units	Number of Stock Units		Weighted- Average Grant Date Value		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Unvested, January 1, 2012	113,908		$	15.15
Granted	23,058		19.41
Forfeited	—		—
Vested	(58,313	)	14.52
Unvested, June 30, 2012	78,653		$	16.87	2.4 years	$	792	$	1,549

The fair value of the restricted stock units for awards made prior to January 1, 2006 is based on the market price of our common shares on the date of award and is recognized as compensation cost on the straight-line recognition method over the vesting period. Compensation cost for awards made after December 31, 2005 is determined using a fair-value method and amortized over the requisite service period. Compensation expense on restricted stock awards totaled $479 for the six months endedJune 30, 2012 and $216 for the six months endedJuly 2, 2011.

F. Stock-Based Compensation (continued)

For stock-based awards issued on or after January 1, 2006, we estimated the fair value of each award on the date of grant using a binomial option-pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on historical volatility of our stock prices and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock-based awards is derived from the output of the binomial model and represents the period of time that awards granted are expected to be outstanding.

The fair values of stock-based awards granted were estimated at the dates of grant with the following weighted-average assumption.

	Six Months Ended
	June 30, 2012		July 2, 2011
Volatility rate	11.7	%	11.9	%
Risk-free interest rate	1.6	%	2.9	%
Expected dividend yield	1.5	%	1.5	%
Expected life of awards (years)	9.1		8.9

General Stock Option Information--The following table summarizes activity under the stock option plans for the six months endedJune 30, 2012.

Stock Options	Number of Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Unrecognized Compensation Cost		Aggregate Intrinsic Value
Outstanding, January 1, 2012	1,110,785		$	10.62
Granted	—		—
Exercised	(117,260	)	8.05
Forfeited	—		—
Outstanding, June 30, 2012	993,525		$	10.93	4.1 years	$	10,855	$	8,717
Exercisable, June 30, 2012	822,525		$	9.81	3.0 years			$	8,138

F. Stock-Based Compensation (continued)

“Intrinsic value” is defined as the amount by which the market price of a common share exceeds the exercise price of an option.  Information regarding the stock options outstanding at June 30, 2012 is summarized below:

Stock Options Exercise Price			Number Outstanding	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
Employee options:	$	6.75	378,024	1.4 years	$	6.75	378,024	$	6.75
	11.25		329,133	3.9 years	11.25		329,133	11.25
	16.00		132,300	7.3 years	16.00		49,300	16.00
	16.60		109,400	8.3 years	16.60		21,400	16.60
			948,857	4.2 years	$	10.74	777,857	$	9.51
Director options:	$10.00 to $16.40		44,668	1.9 years	14.95		44,668	14.95
			993,525	4.1 years	$	10.93	822,525	$	9.81

Common shares are issued from treasury upon the exercise of stock options, stock appreciation rights, restricted stock units or purchases under the Employee Stock Purchase Plan.

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Long-term debt [Text Block]

Long-Term Debt

Our long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
Revolving credit facility
Prime rate borrowings	$	1,400	$	—
LIBOR borrowings	27,000		20,000
	28,400		20,000
Senior unsecured notes	30,000		30,000
Term loans	1,945		6,973
	60,345		56,973
Less current portion	1,428		5,837
	$	58,917	$	51,136

Revolving Credit Facility and 5.09% Senior Unsecured Notes--We have a $140,000 revolving credit facility with a group of banks, which will expire in December 2014 and permits borrowings, as defined, up to $140,000 with a letter of credit sublimit of $100,000 and which, under certain circumstances, may be increased to $160,000.  The revolving credit facility contains certain affirmative and negative covenants customary for this type of facility and includes financial covenant ratios, as defined, with respect to funded debt to EBITDA (earnings before interest, taxes, depreciation and amortization), and funded debt to capitalization.

As of June 30, 2012, we had unused commitments under the facility approximating$66,913, with $73,087 committed, consisting of borrowings of$28,400 and issued letters of credit of$44,687. Borrowings outstanding bear interest, at Davey Tree’s option, of either (a) a base rate plus a margin adjustment ranging from .0% to .25% or (b) LIBOR plus a margin adjustment ranging from 1.25% to 1.75%--with the margin adjustments in both instances based on a ratio of funded debt to EBITDA. The base rate is the greater of (i) the agent bank’s prime rate, (ii) LIBOR plus 1.5%, or (iii) the federal funds rate plus .5%. A commitment fee ranging from .20% to .30% is also required based on the average daily unborrowed commitment.

We issued $30,000 of 5.09% Senior Unsecured Notes, Series A, during July 2010 that are due July 22, 2020 (the “5.09% Senior Notes”).  The 5.09% Senior Notes were issued pursuant to a Master Note Purchase Agreement (the “Purchase Agreement”) between the Company and the purchasers of the 5.09% Senior Notes.  

The 5.09% Senior Notes are equal in right of payment with our revolving credit facility and all other senior unsecured obligations of the Company. Interest is payable semiannually and five equal, annual principal payments commence on July 22, 2016 (thesixth anniversary of issuance).  The Purchase Agreement contains customary events of default and covenants related to limitations on indebtedness and transactions with affiliates and the maintenance of certain financial ratios.

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Schedule of debt [Table Text Block]

Our long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
Revolving credit facility
Prime rate borrowings	$	1,400	$	—
LIBOR borrowings	27,000		20,000
	28,400		20,000
Senior unsecured notes	30,000		30,000
Term loans	1,945		6,973
	60,345		56,973
Less current portion	1,428		5,837
	$	58,917	$	51,136

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Contingencies

6 Months Ended

Jun. 30, 2012

Contingencies [Abstract]

Contingencies [Text Block]

Contingencies

We are party to a number of lawsuits, threatened lawsuits and other claims arising out of the normal course of business. With respect to all such matters, we record an accrual for a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If we can only estimate a range of probable loss, an amount representing the low end of the range of probable outcomes is recorded.

Management has assessed all such matters, including those described below, based on current information and made a judgment concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment is made subject to the known uncertainty of litigation and management’s judgment as to estimates made may prove materially different from actual results.

Ely v. Davey Tree Surgery Company--Davey Tree Surgery Company, a subsidiary of The Davey Tree Expert Company, was named as a defendant in Peter Ely et al. v. Davey Tree Surgery Company et al., a purported class-action lawsuit in the State of California filed on July 15, 2008 in the Superior Court of the State of California in and for the County of Alameda. The plaintiffs alleged on behalf of themselves and a putative class that Davey Tree Surgery Company failed to comply with California law concerning off-duty meal periods and the required content of paycheck stubs.

The plaintiffs alleged that they and the putative "meal periods" class were not provided with uninterrupted, duty-free 30-minute meal periods. In addition, plaintiffs claimed that because they were allegedly required to work during their meal breaks, Davey Tree Surgery Company violated California's minimum wage law because they and the putative class members were not paid minimum wage for their alleged work during meal breaks. Plaintiffs also contended that Davey Tree Surgery Company violated California law by not including the time that they and the putative "wage statement" class members worked during their meal periods, their hourly rates of pay and the number of hours worked at each hourly rate on their paycheck stubs.

The Court granted plaintiffs' motion for class certification and certified both the "meal periods" class and the "wage statements" class; some individuals were members of both classes, while others were members of only one

class (collectively, the "class members"). A trial was initially scheduled for January 30, 2012 and was rescheduled to March 26, 2012, pending results of a mediation process initiated in January 2012 with plaintiffs and Local Union 1245 of the International Brotherhood of Electrical Workers (the "Union").

As a result of the mediation, on January 6, 2012, Davey Tree Surgery Company entered into a Settlement Agreement and Release of All Claims (the "Settlement Agreement") with the plaintiffs, counsel for the class members, and the Union representing the class members.

The Settlement Agreement requires court approval of its terms. The Court, in April 2012, granted preliminary approval of the Settlement Agreement and set a hearing for final approval on the motion in August 2012. In the event that the Court denies final approval of the Settlement Agreement with prejudice and both Davey Tree Surgery Company and the plaintiffs have exhausted all means to challenge that denial, the Settlement Agreement will be void in all respects and the litigation will continue.

The Settlement Agreement provides for Davey Tree Surgery to pay a total sum of $2,900 that was recorded in the fourth quarter 2011.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated other comprehensive income (loss) [Text Block]

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (or loss) is comprised of net income (or net loss) and other components, including currency translation adjustments, changes in the fair value of interest rate swaps qualifying as cash flow hedges, and defined-benefit pension plan adjustments.

The following summarizes the components of other comprehensive income (loss) accumulated in shareholders’ equity:

	Foreign Currency Translation Adjustments			Interest Rate Cash Flow Hedges			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2012	$	2,950		$	(77	)	$	(9,217	)	$	(6,344	)
Unrealized gains (losses)	(125		)	—			—			(125		)
Unrealized gains in fair value	—			123			—			123
Unrecognized amounts from defined benefit pension plans	—			—			748			748
Tax effect	—			(46		)	(202		)	(248		)
Net of tax amount	(125		)	77			546			498
Balance at June 30, 2012	$	2,825		$	—		$	(8,671	)	$	(5,846	)

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Net Periodic Benefit Cost - Defined Benefit Pension Plans

6 Months Ended

Jun. 30, 2012

Net Periodic Benefit Cost, Defined Benefit Pension Plans [Abstract]

Net periodic benefit cost--defined benefit pension plans [Text Block]

Net Periodic Benefit Cost--Defined Benefit Pension Plans

The results of operations included the following net periodic benefit cost recognized related to our defined-benefit pension plans.

	Three Months Ended						Six Months Ended
	June 30, 2012			July 2, 2011			June 30, 2012			July 2, 2011
Components of pension cost
Service costs--increase in benefit obligation earned	$	47		$	34		$	91		$	67
Interest cost on projected benefit obligation	415			417			832			835
Expected return on plan assets	(425		)	(477		)	(853		)	(954		)
Settlement loss	219			—			219			—
Amortization of net actuarial loss	260			133			522			267
Amortization of prior service cost	4			4			7			7
Amortization of transition asset	—			(17		)	—			(34		)
Net pension cost of defined benefit pension plans	$	520		$	94		$	818		$	188

Employer Contributions--Contributions of $428 were made to our defined-benefit pension plans during the six months endedJune 30, 2012. We expect, as of June 30, 2012, to make additional defined-benefit plan contributions totaling $582 before December 31, 2012.

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income taxes [Text Block]

Income Taxes

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate and, if our estimated annual tax rate changes, we make a cumulative adjustment. The 2012 annual effective tax rate is estimated to approximate 40%.  Our annual effective tax rate for 2011 was 39.6%.

At December 31, 2011, we had unrecognized tax benefits of $1,825, of which $1,260 would affect our effective rate if recognized, and accrued interest expense related to unrecognized benefits of $99. At June 30, 2012, there were no significant changes in the unrecognized benefits, including the amount that would affect our effective tax rate if recognized, or the accrued interest expense related to the unrecognized tax benefits. Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for financial reporting purposes.

The amount of income taxes we pay is subject to audit by U.S. federal, state and Canadian tax authorities, which may result in proposed assessments.  With the exception of U.S. state jurisdictions, the Company is no longer subject to examination by tax authorities for the years through 2008. During the quarter ended June 30, 2012, we received notice that the Internal Revenue Service has selected for examination the Company's U.S. income tax return for the year ended December 31, 2010.   

As of June 30, 2012, if certain pending tax matters settle, we believe it is reasonably possible that additional tax payments will be made during the next twelve months within a range of $200 to $300. However, we do not anticipate an increase or decrease in our total uncertain tax positions during the next twelve months that would be material to our financial condition or the results of operations.

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Per Share Amounts and Common Shares Outstanding

6 Months Ended

Jun. 30, 2012

Per Share Amounts and Common Shares Outstanding [Abstract]

Per share amounts and common shares outstanding [Text Block]

Per Share Amounts and Common Shares Outstanding

We calculate our basic earnings per share by dividing net income or net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated in a similar manner, but include the effect of dilutive securities. To the extent these securities are antidilutive, they are excluded from the calculation of earnings per share.  The per share amounts were computed as follows: 

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Income available to common shareholders:
Net Income	$	9,416	$	9,159	$	8,845	$	3,113
Weighted-average shares:
Basic:
Outstanding	13,838		14,058		13,851		14,093
Basic weighted-average shares	13,838		14,058		13,851		14,093
Diluted:
Basic from above	13,838		14,058		13,851		14,093
Incremental shares from assumed:
Exercise of stock options and awards	448		511		474		519
Diluted weighted-average shares	14,286		14,569		14,325		14,612
Net income per share:
Basic	$	.68	$	.65	$	.64	$	.22
Diluted	$	.66	$	.63	$	.62	$	.21

Common Shares Outstanding--A summary of the activity of the common shares outstanding for the six months endedJune 30, 2012 follows: 

Shares outstanding at January 1, 2012	13,845,635
Shares purchased	(394,390	)
Shares sold	232,891
Options and awards exercised	129,081
	(32,418	)
Shares outstanding at June 30, 2012	13,813,217

On June 30, 2012, we had 13,813,217 common shares outstanding, and employee and director options exercisable to purchase 822,525 common shares.

Stock Subscription Offering--Beginning May 2012, the Company offered to eligible employees and nonemployee directors the right to subscribe to common shares of the Company at $19.70 per share in accordance with the provisions of The Davey Tree Expert Company 2004 Omnibus Stock Plan and the rules of the Compensation Committee of the Company's Board of Directors (collectively, the "plan"). The offering period ended on August 1, 2012.

J. Per Share Amounts and Common Shares Outstanding (continued)

Under the plan, a participant in the offering purchasing common shares for an aggregate purchase price of less than $5 had to pay with cash. All participants (excluding Company directors and officers) purchasing $5 or more of the common shares had an option to finance their purchase through a down-payment of at least 10% of the total purchase price and a seven-year promissory note for the balance due with interest at 2%. Payments on the promissory note can be made either by payroll deductions or annual lump-sum payments of both principal and interest.

Common shares purchased under the plan have been pledged as security for the payment of the promissory note and the common shares will not be issued until the promissory note is paid-in-full. Dividends will be paid on all subscribed shares, subject to forfeiture to the extent that payment is not ultimately made for the shares.

All participants in the offering purchasing in excess of $5 of common shares were granted a "right" to purchase one additional common share at a price of $19.70 per share for every three common shares purchased under the plan. Each right may be exercised at the rate of one-seventh per year and will expire seven years after the date that the right was granted. Employees may not exercise a right should they cease to be employed by the Company.

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Stock-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012 Y	Jul. 02, 2011	Jun. 30, 2012 Y Rate	Jul. 02, 2011 Y Rate
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, number of shares authorized	10,000,000		10,000,000
Compensation expense, all share-based payment plans	$ 294	$ 367	$ 925	$ 704
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Volatility rate			11.70%	11.90%
Risk free interest rate			1.60%	2.90%
Expected dividend yield			1.50%	1.50%
Expected life of awards (years)			9.1	8.9
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding, beginning balance			1,110,785
Granted			0
Exercised			(117,260)
Forfeited			0
Outstanding, ending balance	993,525		993,525
Exercisable	822,525		822,525
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, weighted average exercise price, beginning balance			$ 10.62
Granted, weighted average exercise price	$ 0.00		$ 0.00
Exercised, weighted average exercise price	$ 8.05		$ 8.05
Forfeited, weighted average exercise price	$ 0.00		$ 0.00
Outstanding, weighted average exercise price, ending balance	$ 10.93		$ 10.93
Exercisable, weighted average exercise price	$ 9.81		$ 9.81
Outstanding, weighted average remaining contractual life (years)	4.1		4.1
Exercisable, weighted average remaining contractual life (years)			3.0
Outstanding, unrecognized compensation cost	10,855		10,855
Outstanding, aggregate intrinsic value	8,717		8,717
Exercisable, aggregate intrinsic value	8,138		8,138
Employee stock purchase plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock purchase plan, service period			1 year
Employee stock purchase plan, percentage of market price, Purchase Date			85.00%
Employee stock purchase, discount from market price, purchase date			15.00%
Compensation cost			210	200
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			80	190
Stock options, awarded, outstanding	615,501		615,501
Stock options awarded, vesting period (years)			10
Stock-Settled Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			156	98
Stock appreciation rights, awarded			105,000
Stock appreciation rights, vesting period			5
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Unvested, beginning balance			210,188
Granted			105,000
Forfeited			0
Vested			(57,371)
Unvested, ending balance	257,817		257,817
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Unvested, weighted average award date value, beginning balance			$ 3.47
Granted, weighted average award date value			$ 2.70
Forfeited, weighted average award date value	$ 0		$ 0
Vested, weighted average award date value			$ 3.43
Unvested, weighted average award date value, ending balance	$ 3.17		$ 3.17
Weighted average remaining contractual life (years)			3.6
Unrecognized compensation cost	699		699
Aggregate intrinsic value	5,079		5,079
Employee SSARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Unvested, ending balance	218,400		218,400
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Unvested, weighted average award date value, ending balance	$ 3.31		$ 3.31
Weighted average remaining contractual life (years)			3.6
Unrecognized compensation cost	609		609
Aggregate intrinsic value	4,302		4,302
Nonemployee director SSARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Unvested, ending balance	39,417		39,417
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Unvested, weighted average award date value, ending balance	$ 2.34		$ 2.34
Weighted average remaining contractual life (years)			3.9
Unrecognized compensation cost	90		90
Aggregate intrinsic value	777		777
Restricted stock units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			479	216
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Unvested, beginning balance			113,908
Granted			23,058
Forfeited			0
Vested			(58,313)
Unvested, ending balance	78,653		78,653
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Unvested, weighted average award date value, beginning balance			$ 15.15
Granted, weighted average award date value			$ 19.41
Forfeited, weighted average award date value	$ 0		$ 0
Vested, weighted average award date value			$ 14.52
Unvested, weighted average award date value, ending balance	$ 16.87		$ 16.87
Weighted average remaining contractual life (years)			2.4
Unrecognized compensation cost	792		792
Aggregate intrinsic value	$ 1,549		$ 1,549

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Accounts Receivable, Net and Supplemental Balance-Sheet Information (Tables)

6 Months Ended

Jun. 30, 2012

Accounts Receivable, Net and Supplemental Balance Sheet Information [Abstract]

Schedule of accounts receivable, net [Table Text Block]

The following comprise accounts receivable, net, and other:

Accounts receivable, net	June 30, 2012		December 31, 2011
Accounts receivable	$	87,399	$	82,076
Receivables under contractual arrangements	21,538		11,194
	108,937		93,270
Less allowances for doubtful accounts	2,657		2,475
Accounts receivable, net	$	106,280	$	90,795

Schedule of other current assets [Table Text Block]

The following comprise the amounts included in the balance sheet:

Other current assets	June 30, 2012		December 31, 2011
Refundable income taxes	$	2,884	$	2,602
Deferred income taxes	7,927		12,071
Prepaid expenses	5,999		6,968
Other	619		2,247
Total	$	17,429	$	23,888

Schedule of accrued expenses [Table Text Block]

Accrued expenses	June 30, 2012		December 31, 2011
Employee compensation	$	13,190	$	15,046
Accrued compensated absences	8,158		7,138
Self-insured medical claims	3,148		2,950
Customer advances, deposits	—		1,321
Taxes, other than income	2,771		2,622
Accrued litigation settlement	2,900		2,900
Other	2,769		2,146
Total	$	32,936	$	34,123

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2012

Comprehensive Income (Loss) [Abstract]

Schedule of other comprehensive income (loss) [Table Text Block]

The following summarizes the components of other comprehensive income (loss) accumulated in shareholders’ equity:

	Foreign Currency Translation Adjustments			Interest Rate Cash Flow Hedges			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2012	$	2,950		$	(77	)	$	(9,217	)	$	(6,344	)
Unrealized gains (losses)	(125		)	—			—			(125		)
Unrealized gains in fair value	—			123			—			123
Unrecognized amounts from defined benefit pension plans	—			—			748			748
Tax effect	—			(46		)	(202		)	(248		)
Net of tax amount	(125		)	77			546			498
Balance at June 30, 2012	$	2,825		$	—		$	(8,671	)	$	(5,846	)

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Operations by Business Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jul. 02, 2011		Jun. 30, 2012		Jul. 02, 2011		Dec. 31, 2011
Segment Reporting Information [Line Items]
Revenues	$ 182,411		$ 173,953		$ 329,055		$ 305,277
Income (loss) from operations	17,270		16,567		17,778		8,347
Interest expense	(707)		(984)		(1,410)		(1,874)
Interest income	29		9		56		14
Other income (expense), net	(874)		(661)		(1,509)		(1,324)
Income before income taxes	15,718		14,931		14,915		5,163
Segment assets, total	312,652		309,107		312,652		309,107		303,734
Utility services [Member]
Segment Reporting Information [Line Items]
Revenues	78,989		79,153		159,485		153,804
Income (loss) from operations	1,928		2,006		5,055		1,336
Segment assets, total	124,964		126,441		124,964		126,441
Residential commercial services [Member]
Segment Reporting Information [Line Items]
Revenues	87,294		80,690		138,426		126,349
Income (loss) from operations	14,867		13,810		12,133		7,970
Segment assets, total	114,934		112,383		114,934		112,383
All other [Member]
Segment Reporting Information [Line Items]
Revenues	16,128		14,110		31,144		25,124
Income (loss) from operations	1,754		1,332		1,602		96
Segment assets, total	18,807		17,722		18,807		17,722
Reconciling adjustments [Member]
Segment Reporting Information [Line Items]
Revenues	0		0		0		0
Income (loss) from operations	(1,279)	[1]	(581)	[1]	(1,012)	[1]	(1,055)	[1]
Interest expense	(707)		(984)		(1,410)		(1,874)
Interest income	29		9		56		14
Other income (expense), net	(874)		(661)		(1,509)		(1,324)
Segment assets, total	$ 53,947	[2]	$ 52,561	[2]	$ 53,947	[2]	$ 52,561	[2]

[1] (a)Reclassification of depreciation expense and allocation of corporate expenses.

[2] (b)Corporate assets include cash, prepaid expenses, corporate facilities, enterprise-wide information systems and other nonoperating assets.

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Condensed Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jul. 02, 2011	Jun. 30, 2012	Jul. 02, 2011
Net income	$ 9,416	$ 9,159	$ 8,845	$ 3,113
Other Comprehensive Income (Loss), Net of Tax
Foreign Currency Translation Adjustment	(618)	114	(125)	699
Change in deferred gains on cash flow hedges	0	223	77	273
Defined benefit pension plan adjustments	383	120	546	148
Other comprehensive income (loss)	(235)	457	498	1,120
Comprehensive income	$ 9,181	$ 9,616	$ 9,343	$ 4,233

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Identified Intangible Assets and Goodwill, Net

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Identified intangible assets and goodwill, net [Text Block]

Identified Intangible Assets and Goodwill, Net

The carrying amounts of the identified intangibles and goodwill acquired in connection with our investments in businesses were as follows:

	June 30, 2012				December 31, 2011
Identified Intangible Assets and Goodwill, Net	Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists/relationships	$	12,411	$	9,728	$	12,627	$	9,570
Employment-related	5,345		4,830		5,345		4,573
Tradenames	4,357		3,030		4,358		2,783
Amortized intangible assets	$	22,113	$	17,588	$	22,330	$	16,926
Less accumulated amortization	17,588				16,926
Identified intangibles, net	4,525				5,404
Unamortized intangible assets:
Goodwill	21,673				21,677
	$	26,198			$	27,081

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Per Share Amounts and Common Shares Outstanding (Tables)

6 Months Ended

Jun. 30, 2012

Per Share Amounts and Common Shares Outstanding [Abstract]

Schedule of earnings per share, basic and diluted [Table Text Block]

The per share amounts were computed as follows: 

	Three Months Ended				Six Months Ended
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Income available to common shareholders:
Net Income	$	9,416	$	9,159	$	8,845	$	3,113
Weighted-average shares:
Basic:
Outstanding	13,838		14,058		13,851		14,093
Basic weighted-average shares	13,838		14,058		13,851		14,093
Diluted:
Basic from above	13,838		14,058		13,851		14,093
Incremental shares from assumed:
Exercise of stock options and awards	448		511		474		519
Diluted weighted-average shares	14,286		14,569		14,325		14,612
Net income per share:
Basic	$	.68	$	.65	$	.64	$	.22
Diluted	$	.66	$	.63	$	.62	$	.21

Schedule of common shares outstanding [Table Text Block]

Common Shares Outstanding--A summary of the activity of the common shares outstanding for the six months endedJune 30, 2012 follows: 

Shares outstanding at January 1, 2012	13,845,635
Shares purchased	(394,390	)
Shares sold	232,891
Options and awards exercised	129,081
	(32,418	)
Shares outstanding at June 30, 2012	13,813,217

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Accumulated other comprehensive income (loss) [Roll Forward]
Balance at January 1, 2012	$ (6,344)
Unrealized gains (losses)	(125)
Unrealized gains in fair value	123
Unrecognized amounts from defined benefit pension plans	748
Tax effect	(248)
Net of tax amount	498
Balance at June 30, 2012	(5,846)
Foreign currencty translation adjustments [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Balance at January 1, 2012	2,950
Unrealized gains (losses)	(125)
Unrealized gains in fair value	0
Unrecognized amounts from defined benefit pension plans	0
Tax effect	0
Net of tax amount	(125)
Balance at June 30, 2012	2,825
Interest rate cash flow hedges [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Balance at January 1, 2012	(77)
Unrealized gains (losses)	0
Unrealized gains in fair value	123
Unrecognized amounts from defined benefit pension plans	0
Tax effect	(46)
Net of tax amount	77
Balance at June 30, 2012	0
Defined benefit pension plans [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Balance at January 1, 2012	(9,217)
Unrealized gains (losses)	0
Unrealized gains in fair value	0
Unrecognized amounts from defined benefit pension plans	748
Tax effect	(202)
Net of tax amount	546
Balance at June 30, 2012	$ (8,671)

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Basis of Financial Statement Preparation (Policies)

6 Months Ended

Jun. 30, 2012

Basis of Financial Statement Preparation [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates in Financial Statement Preparation--The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect reported amounts. Our consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Estimates are used for, but not limited to, accounts receivable valuation, depreciable lives of fixed assets, self-insurance accruals, income taxes and revenue recognition. Actual results could differ from those estimates.