New York
|
|
16-0971022
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification Number)
|
|
|
|
368 Pleasant View Drive
|
|
|
Lancaster, New York
|
|
14086
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
o
|
Smaller reporting company
|
þ
|
Unaudited
|
Audited
|
|||||||
Assets
|
January 31, 2013
|
July 31, 2012
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 9,863,490 | $ | 10,467,770 | ||||
Investment securities available for sale
|
2,948,968 | 1,404,582 | ||||||
Contract receivables, net
|
51,649,264 | 61,568,443 | ||||||
Deferred income taxes
|
5,800,688 | 4,799,724 | ||||||
Income tax receivable
|
- | 2,502,431 | ||||||
Other current assets
|
2,927,175 | 1,802,843 | ||||||
Total current assets
|
73,189,585 | 82,545,793 | ||||||
Property, building and equipment, net of accumulated depreciation, $23,658,297 and $22,584,958, respectively
|
11,831,210 | 12,112,078 | ||||||
Deferred income taxes
|
685,245 | 860,499 | ||||||
Other assets
|
1,984,791 | 1,993,785 | ||||||
Total assets
|
$ | 87,690,831 | $ | 97,512,155 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 7,765,179 | $ | 11,492,602 | ||||
Line of credit
|
6,758,538 | 12,309,335 | ||||||
Accrued payroll costs
|
7,953,932 | 7,529,728 | ||||||
Income taxes payable
|
322,099 | - | ||||||
Current portion of long-term debt and capital lease obligations
|
502,757 | 488,460 | ||||||
Billings in excess of revenue
|
6,688,299 | 8,281,919 | ||||||
Other accrued liabilities
|
3,668,800 | 3,932,588 | ||||||
Total current liabilities
|
33,659,604 | 44,034,632 | ||||||
Income taxes payable
|
194,023 | 194,023 | ||||||
Deferred income taxes
|
358,660 | 423,324 | ||||||
Long-term debt and capital lease obligations
|
280,901 | 102,635 | ||||||
Commitments and contingencies (see note #17)
|
- | - | ||||||
Shareholders' equity:
|
||||||||
Preferred stock, par value $.01 per share; authorized - 2,000,000 shares; no shares issued
|
- | - | ||||||
Class A common stock, par value $.01 per share; authorized - 6,000,000 shares; issued - 2,685,151 shares
|
26,851 | 26,851 | ||||||
Class B common stock, par value $.01 per share; authorized - 10,000,000 shares; issued - 1,708,574 shares
|
17,087 | 17,087 | ||||||
Capital in excess of par value
|
19,844,245 | 19,751,992 | ||||||
Retained earnings
|
30,669,856 | 29,534,783 | ||||||
Accumulated other comprehensive income
|
1,042,905 | 711,842 | ||||||
Treasury stock - Class A common, 77,724 and 84,730 shares; Class B common, 64,801 shares, at cost
|
(1,798,233 | ) | (1,897,032 | ) | ||||
Total Ecology and Environment, Inc. shareholders' equity
|
49,802,711 | 48,145,523 | ||||||
Noncontrolling interests
|
3,394,932 | 4,612,018 | ||||||
Total shareholders' equity
|
53,197,643 | 52,757,541 | ||||||
Total liabilities and shareholders' equity
|
$ | 87,690,831 | $ | 97,512,155 |
Three months ended
January 31, 2013
|
Three months ended
January 31, 2012
|
Six months ended
January 31, 2013
|
Six months ended
January 31, 2012
|
|||||||||||||
Revenue
|
$ | 36,151,483 | $ | 40,173,399 | $ | 72,973,251 | $ | 82,485,205 | ||||||||
Cost of professional services and other direct operating expenses
|
12,339,950 | 12,769,082 | 25,647,950 | 28,346,785 | ||||||||||||
Subcontract costs
|
5,411,710 | 9,587,945 | 12,427,068 | 18,700,085 | ||||||||||||
Administrative and indirect operating expenses
|
11,274,618 | 11,630,073 | 22,341,132 | 22,829,327 | ||||||||||||
Marketing and related costs
|
3,169,380 | 3,883,727 | 7,043,535 | 7,826,007 | ||||||||||||
Depreciation and amortization
|
600,479 | 435,202 | 1,183,767 | 876,039 | ||||||||||||
Income from operations
|
3,355,346 | 1,867,370 | 4,329,799 | 3,906,962 | ||||||||||||
Interest expense
|
(101,356 | ) | (83,676 | ) | (185,106 | ) | (163,976 | ) | ||||||||
Interest income
|
52,692 | 20,184 | 111,112 | 31,866 | ||||||||||||
Other income
|
19,668 | 11,245 | 13,426 | 120,523 | ||||||||||||
Net foreign exchange loss
|
(69,619 | ) | (130,181 | ) | (114,789 | ) | (126,849 | ) | ||||||||
Income before income tax provision
|
3,256,731 | 1,684,942 | 4,154,442 | 3,768,526 | ||||||||||||
Income tax provision
|
1,325,589 | 381,867 | 1,680,204 | 1,060,184 | ||||||||||||
Net income
|
$ | 1,931,142 | $ | 1,303,075 | $ | 2,474,238 | $ | 2,708,342 | ||||||||
Net income attributable to noncontrolling interests
|
(20,056 | ) | (799,571 | ) | (320,625 | ) | (1,045,061 | ) | ||||||||
Net income attributable to Ecology and Environment, Inc.
|
$ | 1,911,086 | $ | 503,504 | $ | 2,153,613 | $ | 1,663,281 | ||||||||
Net income per common share: basic and diluted
|
$ | 0.45 | $ | 0.12 | $ | 0.51 | $ | 0.39 | ||||||||
Weighted average common shares outstanding: basic and diluted
|
4,246,371 | 4,242,108 | 4,245,191 | 4,222,776 |
Six months ended
January 31, 2013
|
Six months ended
January 31, 2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 2,474,238 | $ | 2,708,342 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization expense
|
1,183,767 | 876,039 | ||||||
Benefit for deferred income taxes
|
(890,374 | ) | (43,030 | ) | ||||
Share based compensation expense
|
255,985 | 379,860 | ||||||
Tax impact of share-based compensation
|
- | 105,988 | ||||||
Gain on sale of assets
|
(9,100 | ) | - | |||||
Provision for contract adjustments
|
(21,987 | ) | 81,090 | |||||
Decrease (increase) in:
|
||||||||
- contract receivables
|
10,292,264 | 5,375,266 | ||||||
- other current assets
|
(1,089,053 | ) | (557,303 | ) | ||||
- income tax receivable
|
2,502,431 | (1,400,388 | ) | |||||
- other non-current assets
|
12,596 | (13,341 | ) | |||||
(Decrease) increase in:
|
||||||||
- accounts payable
|
(2,107,668 | ) | (2,851,075 | ) | ||||
- accrued payroll costs
|
343,709 | (836,922 | ) | |||||
- income taxes payable
|
321,911 | (1,374,239 | ) | |||||
- billings in excess of revenue
|
(1,694,637 | ) | 1,481,525 | |||||
- other accrued liabilities
|
(302,702 | ) | (946,090 | ) | ||||
Net cash provided by operating activities
|
11,271,380 | 2,985,722 | ||||||
Cash flows (used in) provided by investing activities:
|
||||||||
Acquistion of noncontrolling interest of subsidiaries
|
(577,272 | ) | (817,549 | ) | ||||
Purchase of property, building and equipment
|
(1,336,581 | ) | (2,575,534 | ) | ||||
(Purchase) sale of investment securities, net
|
(1,536,550 | ) | 119,888 | |||||
Net cash used in investing activities
|
(3,450,403 | ) | (3,273,195 | ) | ||||
Cash flows (used in) provided by financing activities:
|
||||||||
Dividends paid
|
(2,037,323 | ) | (2,046,657 | ) | ||||
Proceeds from debt
|
- | 298,648 | ||||||
Repayment of debt and capital lease obligations
|
(230,050 | ) | (637,955 | ) | ||||
Net (payments on) proceeds from line of credit
|
(5,543,495 | ) | 6,500,000 | |||||
Distributions to noncontrolling interests
|
(808,429 | ) | (345,093 | ) | ||||
Proceeds from sale of subsidiary shares to noncontrolling interests
|
- | 41,634 | ||||||
Purchase of treasury stock
|
- | (363,050 | ) | |||||
Net cash (used in) provided by financing activities
|
(8,619,297 | ) | 3,447,527 | |||||
Effect of exchange rate changes on cash and cash equivalents
|
194,040 | 82,516 | ||||||
Net (decrease) increase in cash and cash equivalents
|
(604,280 | ) | 3,242,570 | |||||
Cash and cash equivalents at beginning of period
|
10,467,770 | 8,529,842 | ||||||
Cash and cash equivalents at end of period
|
$ | 9,863,490 | $ | 11,772,412 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the year for:
|
||||||||
- Interst
|
$ | 179,573 | $ | 156,877 | ||||
- Income Taxes
|
284,285 | 3,203,308 | ||||||
Supplemental disclosure of non-cash items:
|
||||||||
Dividends declared and not paid
|
1,018,783 | 1,028,881 | ||||||
Acquistion of noncontrolling interest of subsidiaries - Loan
|
212,401 | 795,856 | ||||||
Charge in accounts payable due to equipment purchases
|
670,678 | (10,392 | ) |
Class A Common Stock Shares
|
Class A Common Stock Amount
|
Class B Common Stock Shares
|
Class B Common Stock Amount
|
Capital in Excess of Par Value
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock Shares
|
Treasury Stock Amount
|
Noncontrolling Interest
|
|||||||||||||||||||||||||||||||
Balance at July 31, 2011
|
2,685,151 | $ | 26,851 | 1,708,574 | $ | 17,087 | $ | 19,983,029 | $ | 30,797,763 | $ | 1,527,189 | 190,724 | $ | (2,317,515 | ) | $ | 3,923,429 | ||||||||||||||||||||||
Net income
|
- | - | - | - | - | 773,579 | - | - | - | 2,266,171 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | - | - | (871,476 | ) | - | - | 124,455 | |||||||||||||||||||||||||||||
Cash dividends paid ($.48 per share)
|
- | - | - | - | - | (2,036,559 | ) | - | - | - | - | |||||||||||||||||||||||||||||
Unrealized investment gain, net
|
- | - | - | - | - | - | 17,597 | - | - | - | ||||||||||||||||||||||||||||||
Repurchase of Class A common stock
|
- | - | - | - | - | - | - | 22,825 | (363,050 | ) | - | |||||||||||||||||||||||||||||
Issuance of stock under stock award plan
|
- | - | - | - | (716,662 | ) | - | - | (62,099 | ) | 716,662 | - | ||||||||||||||||||||||||||||
Share-based compensation expense
|
- | - | - | - | 731,583 | - | - | - | - | - | ||||||||||||||||||||||||||||||
Tax impact of share based compensation
|
- | - | - | - | 105,988 | - | - | - | - | - | ||||||||||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interests
|
- | - | - | - | - | - | - | - | - | 41,634 | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
- | - | - | - | - | - | - | - | - | (1,123,896 | ) | |||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
- | - | - | - | (351,946 | ) | - | 38,532 | (5,208 | ) | 66,871 | (619,775 | ) | |||||||||||||||||||||||||||
Stock award plan forfeitures
|
- | - | - | - | - | - | - | 3,289 | - | - | ||||||||||||||||||||||||||||||
Balance at July 31, 2012
|
2,685,151 | $ | 26,851 | 1,708,574 | $ | 17,087 | $ | 19,751,992 | $ | 29,534,783 | $ | 711,842 | 149,531 | $ | (1,897,032 | ) | $ | 4,612,018 | ||||||||||||||||||||||
Net income
|
- | - | - | - | - | 2,153,613 | - | - | - | 320,625 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | - | - | 312,405 | - | - | 342 | ||||||||||||||||||||||||||||||
Cash dividends paid ($.24 per share)
|
- | - | - | - | - | (1,018,540 | ) | - | - | - | - | |||||||||||||||||||||||||||||
Unrealized investment gain, net
|
- | - | - | - | - | - | 18,658 | - | - | 19,258 | ||||||||||||||||||||||||||||||
Share-based compensation expense
|
- | - | - | - | 255,985 | - | - | - | - | - | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
- | - | - | - | - | - | - | - | - | (808,429 | ) | |||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
- | - | - | - | (163,732 | ) | - | - | (7,804 | ) | 98,799 | (748,882 | ) | |||||||||||||||||||||||||||
Stock award plan forfeitures
|
- | - | - | - | - | - | - | 798 | - | - | ||||||||||||||||||||||||||||||
Balance at January 31, 2013
|
2,685,151 | $ | 26,851 | 1,708,574 | $ | 17,087 | $ | 19,844,245 | $ | 30,669,856 | $ | 1,042,905 | 142,525 | $ | (1,798,233 | ) | $ | 3,394,932 |
Three months ended
January 31, 2013
|
Three months ended
January 31, 2012
|
Six months ended
January 31, 2013
|
Six months ended
January 31, 2012
|
|||||||||||||
Comprehensive income (loss):
|
||||||||||||||||
Net income including noncontrolling interests
|
$ | 1,931,142 | $ | 1,303,075 | $ | 2,474,238 | $ | 2,708,342 | ||||||||
Foreign currency translation adjustments
|
195,755 | (89,074 | ) | 312,747 | (275,368 | ) | ||||||||||
Unrealized investment gain (loss), net
|
(2,700 | ) | 19,834 | 37,916 | 19,612 | |||||||||||
Comprehensive income
|
2,124,197 | 1,233,835 | 2,824,901 | 2,452,586 | ||||||||||||
Comprehensive income attributable to noncontrolling interests
|
(44,828 | ) | (839,047 | ) | (340,225 | ) | (1,084,684 | ) | ||||||||
Comprehensive income attributable to Ecology and Environment, Inc.
|
$ | 2,079,369 | $ | 394,788 | $ | 2,484,676 | $ | 1,367,902 |
1.
|
Organization and Basis of Presentation
|
2.
|
Recent Accounting Pronouncements
|
4.
|
Fair Value of Financial Instruments
|
|
|
January 31, 2013
|
|
|||||||||||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available for sale
|
|
$
|
1,322,116
|
|
|
$
|
1,626,852
|
|
|
$
|
---
|
|
|
$
|
2,948,968
|
|
|
|
July 31, 2012
|
|
|||||||||||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities available for sale
|
|
$
|
1,353,365
|
|
|
$
|
51,217
|
|
|
$
|
---
|
|
|
$
|
1,404,582
|
|
5.
|
Revenue and Contract Receivables, net
|
Contract Type
|
|
Work Type
|
|
Revenue Recognition Policy
|
|
|
|
|
|
Time and Materials
|
|
Consulting
|
|
As incurred at contract rates.
|
|
|
|
|
|
Fixed Price
|
|
Consulting
|
|
Percentage of completion, approximating the ratio of either total costs or Level of Effort (LOE) hours incurred to date to total estimated costs or LOE hours.
|
|
|
|
|
|
Cost-Type
|
|
Consulting
|
|
Costs as incurred. Fixed fee portion is recognized using percentage of completion determined by the percentage of LOE hours incurred to total LOE hours in the respective contracts.
|
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
||
|
|
|
|
|
|
|
||
Contract Receivables:
|
|
|
|
|
|
|
||
Billed
|
|
$
|
35,556,793
|
|
|
$
|
42,977,016
|
|
Unbilled
|
|
|
26,308,875
|
|
|
|
28,829,818
|
|
|
|
61,865,668
|
|
|
|
71,806,834
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts and contract adjustments
|
|
|
(10,216,404
|
)
|
|
|
(10,238,391
|
)
|
|
|
|
|
|
|
|
|
|
Total contract receivables, net
|
|
$
|
51,649,264
|
|
|
$
|
61,568,443
|
|
Three Months ended
January 31,
|
Six Months ended
January 31,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Balance at beginning of period
|
$ | 11,322,000 | $ | 7,850,597 | $ | 10,238,391 | $ | 6,755,087 | ||||||||
Net change recorded during the period
|
(1,105,596 | ) | (118,525 | ) | (21,987 | ) | 976,985 | |||||||||
Balance at end of period
|
$ | 10,216,404 | $ | 7,732,072 | $ | 10,216,404 | $ | 7,732,072 |
6.
|
Goodwill
|
7.
|
Lines of Credit
|
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
||
|
|
|
|
|
|
|
||
Cash draws, recorded as lines of credit on the consolidated balance sheet
|
|
$
|
6,758,538
|
|
|
$
|
12,309,335
|
|
Letters of credit
|
1,577,931
|
2,615,415
|
||||||
Total amounts drawn under lines of credit
|
|
|
8,336,469
|
|
|
|
14,924,750
|
|
Remaining amounts available under lines of credit
|
|
|
26,032,531
|
|
|
|
19,444,250
|
|
Total approved unsecured lines of credit
|
|
$
|
34,369,000
|
|
|
$
|
34,369,000
|
|
8.
|
Debt and Capital Lease Obligations
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
|||
|
|
|
|
|
|
|||
Various bank loans and advances at interest rates ranging from 5% to 14%
|
|
$
|
524,557
|
|
|
$
|
372,744
|
|
Capital lease obligations at varying interest rates averaging 11%
|
|
|
259,101
|
|
|
|
218,351
|
|
|
|
783,658
|
|
|
|
591,095
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt and capital lease obligations
|
|
|
(502,757
|
)
|
|
|
(488,460
|
)
|
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
$
|
280,901
|
|
|
$
|
102,635
|
|
|
Amount
|
|
||
|
|
|
||
February 2013 – January 2014
|
|
$
|
502,757
|
|
February 2014 – January 2015
|
|
|
198,455
|
|
February 2015 – January 2016
|
|
|
82,446
|
|
February 2016 – January 2017
|
|
|
---
|
|
February 2017 – January 2018
|
|
|
---
|
|
Thereafter
|
|
|
---
|
|
|
$
|
783,658
|
|
9.
|
Income Taxes
|
10.
|
Other Accrued Liabilities
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
|||
|
|
|
|
|
|
|||
Allowance for contract adjustments
|
|
$
|
2,724,474
|
|
|
$
|
2,724,474
|
|
Other
|
|
|
944,326
|
|
|
|
1,208,114
|
|
|
|
|
|
|
|
|
|
|
Total other accrued liabilities
|
|
$
|
3,668,800
|
|
|
$
|
3,932,588
|
|
11.
|
Stock Award Plan
|
12.
|
Shareholders' Equity
|
Six
months ended
January 31, 2013
|
Fiscal year ended
July 31, 2012
|
|||||||
Net increase in shareholders’ equity due to transfers to noncontrolling interest:
|
|
|
||||||
Sale of 600 Gustavson common shares
|
$ | --- | $ | 41,634 | ||||
Total transfers to noncontrolling interest
|
--- | 41,634 | ||||||
Net increases (decreases) in shareholders’ equity due to transfers from noncontrolling interest:
|
||||||||
Purchase of 152 Walsh common shares, net of translation adjustments
|
--- | (76,037 | ) | |||||
Purchase of 496 Walsh common shares, net of translation adjustments
|
--- | (277,514 | ) | |||||
Purchase of 5,389 Brazil common shares
|
--- | 77,539 | ||||||
Purchase of 26,482 Walsh Peru common shares, net of translation adjustments
|
--- | (238,677 | ) | |||||
Purchase of 166 Walsh common shares, net of translation adjustments
|
--- | (97,634 | ) | |||||
Purchase of 25 Gestion Ambiental Consultores common shares
|
--- | (7,452 | ) | |||||
Purchase of 75 Lowham common shares
|
(30,002 | ) | --- | |||||
Purchase of 370 Walsh common shares
|
(182,125 | ) | --- | |||||
Purchase of 2,800 Gustavson common shares
|
(293,102 | ) | --- | |||||
Purchase of 495 Walsh common shares
|
(243,653 | ) | --- | |||||
Total transfers from noncontrolling interest, net of translation adjustments
|
(748,882 | ) | (619,775 | ) | ||||
Transfers to (from) noncontrolling interest, net of translation adjustments
|
$ | (748,882 | ) | $ | (578,141 | ) |
13.
|
Accumulated Comprehensive Income
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
|||
|
|
|
|
|
|
|||
Foreign Currency Translation Adjustment
|
|
$
|
981,418
|
|
|
$
|
669,013
|
|
Unrealized investment gain, net
|
61,487
|
42,829
|
||||||
|
|
|
|
|
|
|
|
|
Total accumulated comprehensive income
|
|
$
|
1,042,905
|
|
|
$
|
711,842
|
|
14.
|
Earnings Per Share
|
|
Three months ended
January 31,
|
|
|
Six months ended
January 31
|
|
|||||||||||
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total income available to Ecology and Environment, Inc.
|
|
$
|
1,911,086
|
|
|
$
|
503,504
|
|
|
$
|
2,153,613
|
|
|
$
|
1,663,281
|
|
Dividend declared
|
|
|
1,018,540
|
|
|
|
1,017,776
|
|
|
|
1,018,540
|
|
|
|
1,017,776
|
|
Undistributed earnings
|
|
$
|
892,546
|
|
|
$
|
(514,272
|
)
|
|
$
|
1,135,073
|
|
|
$
|
645,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (basic)
|
|
|
4,246,371
|
|
|
|
4,242,108
|
|
|
|
4,245,191
|
|
|
|
4,222,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributed earnings per share
|
|
$
|
.24
|
|
|
$
|
.24
|
|
|
$
|
.24
|
|
|
$
|
.24
|
|
Undistributed earnings per share
|
|
|
.21
|
|
|
|
(.12
|
)
|
|
|
.27
|
|
|
|
.15
|
|
Total earnings per share
|
|
$
|
.45
|
|
|
$
|
.12
|
|
|
$
|
.51
|
|
|
$
|
.39
|
|
15.
|
Foreign Currencies
|
16.
|
Segment Reporting
|
Segment information as of January 31, 2013:
|
|
Revenue (1)
|
|
|
|
|
||||||
|
Three months ended
January 31, 2013
|
|
|
Six months ended
January 31, 2013
|
|
|
Gross Long-
Lived Assets as of
January 31, 2013
|
|
||||
|
|
|
|
|
|
|
|
|
||||
United States
|
|
$
|
21,888,000
|
|
|
$
|
45,978,000
|
|
|
$
|
29,983,000
|
|
Foreign countries
|
|
|
14,263,000
|
|
|
|
26,995,000
|
|
|
|
5,507,000
|
|
|
(1)
|
Significant foreign revenues include revenues in Peru ($2.2 million and $5.8 million for the three and six months ended January 31, 2013, respectively), Brazil ($3.7 million and $7.8 million for the three and six months ended January 31, 2013, respectively) and Chile ($3.2 million and $5.8 million for the three and six months ended January 31, 2013, respectively).
|
Segment information as of January 31, 2012:
|
|
Revenue (1)
|
|
|
|
|
||||||
|
Three months ended
January 31, 2012
|
|
|
Six months ended
January 31, 2012
|
|
|
Gross Long-
Lived Assets as of
January 31, 2012
|
|
||||
|
|
|
|
|
|
|
|
|
||||
United States
|
|
$
|
24,516,000
|
|
|
$
|
52,946,000
|
|
|
$
|
26,014,000
|
|
Foreign countries
|
|
|
15,657,000
|
|
|
|
29,539,000
|
|
|
|
5,323,000
|
|
(1)
|
S ignificant foreign revenues include revenues in Peru ($5.5 million and $10.1 million for the three and six months ended January 31, 2012, respectively), Brazil ($3.6 million and $6.9 million for the three and six months ended January 31, 2012, respectively) and Chile ($2.2 million and $4.6 million for the three and six months ended January 31, 2012, respectively).
|
17.
|
Commitments and Contingencies
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Six months ended
January 31, 2013
|
|
|
Six months ended
January 31, 2012
|
|
|||
Cash (used in) provided by:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
11,271,380
|
|
|
$
|
2,985,722
|
|
Investing activities
|
(3,450,403
|
)
|
(3,273,195
|
)
|
||||
Financing activities
|
(8,619,297
|
)
|
3,447,527
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
|
194,040
|
|
|
|
82,516
|
|
Net (decrease) increase in cash and cash equivalents
|
$
|
(604,280
|
)
|
$
|
3,242,570
|
|||
Cash and cash equivalents:
|
||||||||
U.S. operations
|
$
|
5,450,048
|
$
|
3,847,762
|
||||
Foreign operations
|
4,413,442
|
7,924,650
|
||||||
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents
|
|
$
|
9,863,490
|
|
|
$
|
11,772,412
|
|
|
·
|
Net income (after adjustment for non-cash items) provided approximately $3.0 million of operating cash;
|
|
·
|
Net contract receivables decreased approximately $10.3 million, which resulted from cash received on outstanding receivables, including $7.1 million of cash received on outstanding receivables in the Middle East that were billed prior to July 31, 2012, and from lower revenues due to lower sales volume in the energy, mining, state and federal government markets; and
|
|
·
|
Other working capital activity resulted in a net use of $2.0 million of operating cash, due primarily to decreased work levels associated with lower revenue and payment of subcontractor invoices as a result of an improved liquidity position at the Parent Company.
|
|
·
|
Purchase of $1.5 million of investment securities by a foreign subsidiary;
|
|
·
|
Purchases of property, building and equipment of $1.3 million; and
|
|
·
|
Acquisitions of $0.6 million of noncontrolling interests in two majority-owned subsidiaries, Walsh Environmental Scientists & Engineers, LLC (“Walsh”) and Gustavson Associates, LLC (“Gustavson”).
|
|
·
|
Repayment of borrowings against our line of credit of $5.5 million, which was made possible by the receipt of cash on outstanding receivables in the Middle East noted above;
|
|
·
|
Dividend payments to common shareholders of $2.0 million; and
|
|
·
|
Distributions to non-controlling interests of $0.8 million.
|
|
January 31,
2013
|
|
|
July 31,
2012
|
|
|||
|
|
|
|
|
||||
Cash draws, recorded as lines of credit on the consolidated balance sheet
|
|
$
|
6,758,538
|
|
|
$
|
12,309,335
|
|
Letters of credit
|
1,577,931
|
2,615,415
|
||||||
Total amounts drawn under lines of credit
|
|
|
8,336,469
|
|
|
|
14,924,750
|
|
Remaining amounts available under lines of credit
|
|
26,032,531
|
|
|
|
19,444,250
|
|
|
Total approved lines of credit
|
$
|
34,369,000
|
|
|
$
|
34,369,000
|
|
Three Months ended
January 31,
|
Six Months ended
January 31,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Time and materials
|
$ | 15,841,401 | $ | 19,626,335 | $ | 35,161,482 | $ | 41,653,287 | ||||||||
Fixed price
|
17,459,737 | 17,654,246 | 31,638,790 | 35,265,397 | ||||||||||||
Cost-type
|
2,850,345 | 2,892,818 | 6,172,979 | 5,566,521 | ||||||||||||
Total revenue by contract type
|
$ | 36,151,483 | $ | 40,173,399 | $ | 72,973,251 | $ | 82,485,205 |
Three months ended January 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue associated with current operations:
|
||||||||
Parent Company and all wholly owned subsidiaries
|
$ | 18,998,899 | $ | 19,293,724 | ||||
Walsh
|
7,015,672 | 12,020,285 | ||||||
Ecology and Environment do Brasil, Ltda. (Brasil)
|
4,318,692 | 4,814,487 | ||||||
Gestion Ambiental Consultores S.A. (GAC)
|
3,150,139 | 3,264,773 | ||||||
ECSI, LLC (ECSI)
|
1,304,865 | 1,398,239 | ||||||
Total revenues associated with current operations, by entity
|
34,788,267 | 40,791,508 | ||||||
Activity related to contract adjustments and billings in excess of revenue
|
1,363,216 | (618,109 | ) | |||||
Total revenue per financial statements
|
$ | 36,151,483 | $ | 40,173,399 |
|
·
|
Lower Walsh revenues from current operations resulted from lower sales volume, particularly within the energy and mining markets. Lower revenue was offset by a $3.2 million reduction in direct cost associated with these contracts.
|
|
·
|
Lower Brasil and GAC revenues from current operations primarily resulted from normal timing differences between billings of contract receivables and recording related revenue. The decreases noted in the table are offset by revenue earned during the current period that was billed to clients in prior periods.
|
|
·
|
Lower Parent Company and wholly-owned subsidiary revenues from current operations resulted from lower sales volume, particularly within state and federal government markets. Lower revenue was offset by a $2.4 million reduction in direct cost associated with these contracts.
|
Six months ended January 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue associated with current operations:
|
||||||||
Parent Company and all wholly owned subsidiaries
|
$ | 41,252,268 | $ | 44,467,787 | ||||
Walsh
|
14,763,584 | 23,551,813 | ||||||
Brasil
|
7,907,266 | 8,379,019 | ||||||
GAC
|
4,993,394 | 5,642,970 | ||||||
ECSI
|
2,699,186 | 2,530,856 | ||||||
Total revenues associated with current operations, by entity
|
71,615,698 | 84,572,445 | ||||||
Activity related to contract adjustments and billings in excess of revenue
|
1,357,553 | (2,087,240 | ) | |||||
Total revenue per financial statements
|
$ | 72,973,251 | $ | 82,485,205 |
|
·
|
Lower Walsh revenues from current operations resulted from lower sales volume, particularly within the energy and mining markets. Lower revenue was offset by a $6.4 million reduction in direct cost associated with these contracts.
|
|
·
|
Lower Brasil and GAC revenues from current operations primarily resulted from normal timing differences between billings of contract receivables and recording related revenue. The decreases noted in the table are offset by revenue earned during the current period that was billed to clients in prior periods.
|
|
·
|
Lower Parent Company and wholly-owned subsidiary revenues from current operations resulted from lower sales volume, particularly within state and federal government markets. Lower revenue was offset by a $3.9 million reduction in direct cost associated with these contracts.
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Changes in Securities and Use of Proceeds
|
Period
|
|
Total Number
of Shares Purchased
|
|
Average Price
Paid Per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (1)
|
|
Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans
or Programs
|
August
|
---
|
$---
|
---
|
93,173
|
||||
September
|
---
|
---
|
---
|
93,173
|
||||
October
|
---
|
---
|
---
|
93,173
|
||||
November
|
---
|
---
|
---
|
93,173
|
||||
December
|
---
|
---
|
---
|
93,173
|
||||
January
|
---
|
---
|
---
|
93,173
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits and Reports on Form 8-K
|
|
(a)
|
- 31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
- 31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
- 32.1 Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
- 32.2 Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
(b)
|
Registrant filed a Form 8-K report on January 18, 2013 to record the issuance of a press release to announce that it had entered into a contract to provide environmental consulting services to the China International Finance and Guarantee Group in connection with a contract awarded to E & E of approximately $39 million.
|
Registrant filed a Form 8-K report on January 17, 2013 to report a Submission of Matters to a Vote of Security Holders. The Company held its Annual Meeting of Stockholders. At the meeting, stockholders elected two (2) Class A nominees and six (6) Class B nominees for election as Directors of the Company.
|
Ecology and Environment, Inc.
|
||
|
|
|
Date: March 18, 2013
|
By:
|
/s/ H. John Mye III |
|
|
H. John Mye III
|
|
|
Vice President, Treasurer and Chief Financial Officer –
Principal Financial and Accounting Officer
|
ECOLOGY AND ENVIRONMENT, INC.
|
||
Date:
|
March 18, 2013
|
/s/ Kevin S. Neumaier
|
Kevin S. Neumaier
President and Chief Executive Officer
(Principal Executive Officer)
|
ECOLOGY AND ENVIRONMENT, INC.
|
||
Date:
|
March 18, 2013
|
/s/ H. John Mye III
|
H. John Mye III
Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer)
|
ECOLOGY AND ENVIRONMENT, INC.
|
||
Date:
|
March 18, 2013
|
/s/ Kevin S. Neumaier
|
Kevin S. Neumaier
President and Chief Executive Officer
(Principal Executive Officer)
|
ECOLOGY AND ENVIRONMENT, INC.
|
||
Date:
|
March 18, 2013
|
/s/ H. John Mye III
|
H. John Mye III
Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer)
|
Goodwill (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended |
---|---|
Jan. 31, 2013
|
|
Goodwill [Abstract] | |
Goodwill | $ 1.2 |
Goodwill impairment | $ 0 |
Foreign Currencies (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jan. 31, 2013
|
Jan. 31, 2012
|
Jan. 31, 2013
|
Jan. 31, 2012
|
|
Foreign Currencies [Abstract] | ||||
Foreign currency transaction losses | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Accumulated Comprehensive Income (Details) (USD $)
|
Jan. 31, 2013
|
Jul. 31, 2012
|
---|---|---|
Accumulated Comprehensive Income [Abstract] | ||
Foreign Currency Translation Adjustment | $ 981,418 | $ 669,013 |
Unrealized investment gain, net | 61,487 | 42,829 |
Total accumulated comprehensive income | $ 1,042,905 | $ 711,842 |
Earnings Per Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic Earnings per Share Reconciled to Diluted Earnings per Share | The computation of basic earnings per share reconciled to diluted earnings per share follows:
|
Commitments and Contingencies
|
6 Months Ended | ||
---|---|---|---|
Jan. 31, 2013
|
|||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
From time to time, the Company is a named defendant in legal actions arising out of the normal course of business. The Company is not a party to any pending legal proceeding the resolution of which the management of the Company believes will have a material adverse effect on the Company's results of operations, financial condition, cash flows, or to any other pending legal proceedings other than ordinary, routine litigation incidental to its business. The Company maintains liability insurance against risks arising out of the normal course of business. Certain contracts contain termination provisions under which the customer may, without penalty, terminate the contracts upon written notice to the Company. In the event of termination, the Company would be paid only termination costs in accordance with the particular contract. Generally, termination costs include unpaid costs incurred to date, earned fees and any additional costs directly allocable to the termination. On September 21, 2012 the Colorado Department of Public Health and Environment (the "Department") issued a proposed Compliance Order on Consent (the " Proposed Consent Order") to the City and County of Denver ("Denver") and to Walsh Environmental Scientists and Engineers, LLC ("Walsh"). Walsh is a majority-owned subsidiary of Ecology and Environment, Inc. The Proposed Consent Order concerns construction improvement activities of certain property owned by Denver which was the subject of asbestos remediation. Denver had entered into a contract with Walsh for Walsh to provide certain environmental consulting services (asbestos monitoring services) in connection with the asbestos containment and/or removal performed by other contractors at Denver's real property. Without admitting liability or the Department's version of the underlying facts, Walsh on February 13, 2013 entered into a Compliance Order on Consent with the Department and paid a penalty of less than $0.1 million and paid for a Supplemental Environmental Project to benefit the public at large in an amount less than $0.1 million. Denver was served with a final Compliance Order and Assessment of Administrative Penalty against Denver alone for approximately $0.2 million. Under Walsh's environmental consulting contract with Denver, Walsh has agreed to indemnify Denver for certain liabilities where Walsh could potentially be held responsible for a portion of the penalty imposed upon Denver. Walsh has put its professional liability and general liability carriers on notice of this indemnification claim by Denver. The Company believes that this administrative proceeding involving Walsh will not have an adverse material effect upon the operations of the Company. On February 4, 2011 the Chico Mendes Institute of Biodiversity Conservation of Brazil (the "Institute") issued a Notice of Infraction to E & E Brasil. E & E Brasil is a majority-owned subsidiary of Ecology and Environment, Inc. The Notice of Infraction concerns the taking and collecting species of wild animal specimens without authorization by the competent authority and imposes a fine of 520,000 Reais, which has a value of approximately $0.3 million at January 31, 2013. No claim has been made against Ecology and Environment, Inc. The Institute has also filed Notices of Infraction against four employees of E & E Brasil alleging the same claims and has imposed fines against those individuals that, in the aggregate, are equal to the fine imposed against E & E Brasil. E & E Brasil has filed administrative responses with the Institute for itself and its employees that: (a) denies the jurisdiction of the Institute, (b) states that the Notice of Infraction is constitutionally vague and (c) affirmatively stated that E & E Brasil had obtained the necessary permits for the surveys and collections of specimens under applicable Brazilian regulations and that the protected conservation area is not clearly marked to show its boundaries. At this time, E & E Brasil has attended one meeting where depositions were taken. The Company believes that these administrative proceedings in Brazil will not have an adverse material effect upon the operations of the Company. |
Commitments and Contingencies (Details)
|
6 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 13, 2013
USD ($)
|
Jan. 31, 2013
Ecology and Environment do Brasil LTDA [Member]
USD ($)
Employee
|
Feb. 04, 2011
Ecology and Environment do Brasil LTDA [Member]
BRL
|
Jan. 31, 2013
City of Denver [Member]
USD ($)
|
Jan. 31, 2013
Walsh Environmental Scientists and Engineers [Member]
USD ($)
|
|
Loss Contingencies [Line Items] | |||||
Loss Contingency, Estimate of Possible Loss | $ 300,000 | 520,000 | |||
Number of employees individually served with Notices of Infraction | 4 | ||||
Penalty | 200,000 | 100,000 | |||
Supplemental Environmental Project | $ 100,000 |
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jan. 31, 2013
|
Jan. 31, 2012
|
|
Income Taxes [Abstract] | ||
Estimated effective tax rate (in hundredths) | 40.50% | 28.10% |
Tax settlements | $ (0.1) | $ 0.3 |
Fair Value of Financial Instruments (Details) (USD $)
|
Jan. 31, 2013
|
Jul. 31, 2012
|
---|---|---|
Assets [Abstract] | ||
Gross unrealized gains | $ 0.1 | $ 100,000 |
Recurring [Member]
|
||
Assets [Abstract] | ||
Investment securities available for sale | 2,948,968 | 1,404,582 |
Recurring [Member] | Level 1 [Member]
|
||
Assets [Abstract] | ||
Investment securities available for sale | 1,322,116 | 1,353,365 |
Recurring [Member] | Level 2 [Member]
|
||
Assets [Abstract] | ||
Investment securities available for sale | 1,626,852 | 51,217 |
Recurring [Member] | Level 3 [Member]
|
||
Assets [Abstract] | ||
Investment securities available for sale | $ 0 | $ 0 |
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