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
|
Item 1. | Financial Statements |
|
Unaudited
|
Audited
|
||||||
Assets
|
April 30, 2013
|
July 31, 2012
|
||||||
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
11,958,764
|
$
|
10,467,770
|
||||
Investment securities available for sale
|
1,467,981
|
1,404,582
|
||||||
Contract receivables, net
|
50,346,278
|
61,568,443
|
||||||
Deferred income taxes
|
5,729,946
|
4,799,724
|
||||||
Income tax receivable
|
1,880,083
|
2,502,431
|
||||||
Other current assets
|
2,566,946
|
1,802,843
|
||||||
|
||||||||
Total current assets
|
73,949,998
|
82,545,793
|
||||||
|
||||||||
Property, building and equipment, net of accumulated depreciation, $24,220,809 and $22,584,958, respectively
|
11,481,737
|
12,112,078
|
||||||
Deferred income taxes
|
685,245
|
860,499
|
||||||
Other assets
|
2,006,902
|
1,993,785
|
||||||
|
||||||||
Total assets
|
$
|
88,123,882
|
$
|
97,512,155
|
||||
|
||||||||
|
||||||||
Liabilities and Shareholders' Equity
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
8,123,725
|
$
|
11,492,602
|
||||
Lines of credit
|
6,519,041
|
12,309,335
|
||||||
Accrued payroll costs
|
8,578,534
|
7,529,728
|
||||||
Current portion of long-term debt and capital lease obligations
|
296,894
|
488,460
|
||||||
Billings in excess of revenue
|
6,924,217
|
8,281,919
|
||||||
Other accrued liabilities
|
3,905,749
|
3,932,588
|
||||||
|
||||||||
Total current liabilities
|
34,348,160
|
44,034,632
|
||||||
|
||||||||
Income taxes payable
|
194,023
|
194,023
|
||||||
Deferred income taxes
|
886,111
|
423,324
|
||||||
Long-term debt and capital lease obligations
|
282,074
|
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
|
19,963,309
|
19,751,992
|
||||||
Retained earnings
|
30,229,262
|
29,534,783
|
||||||
Accumulated other comprehensive income
|
836,101
|
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
|
49,274,377
|
48,145,523
|
||||||
Noncontrolling interests
|
3,139,137
|
4,612,018
|
||||||
|
||||||||
Total shareholders' equity
|
52,413,514
|
52,757,541
|
||||||
|
||||||||
Total liabilities and shareholders' equity
|
$
|
88,123,882
|
$
|
97,512,155
|
|
Three months ended
April 30, 2013
|
Three months ended
April 30, 2012
|
Nine months ended
April 30, 2013
|
Nine months ended
April 30, 2012
|
||||||||||||
|
||||||||||||||||
Revenue
|
$
|
32,218,923
|
$
|
36,011,087
|
$
|
105,192,174
|
$
|
118,496,292
|
||||||||
|
||||||||||||||||
Cost of professional services and other direct operating expenses
|
11,376,594
|
13,560,046
|
37,024,544
|
41,906,831
|
||||||||||||
Subcontract costs
|
6,160,917
|
5,971,336
|
18,587,985
|
24,671,421
|
||||||||||||
Administrative and indirect operating expenses
|
10,766,068
|
10,967,127
|
33,107,200
|
33,796,454
|
||||||||||||
Marketing and related costs
|
3,337,573
|
4,311,887
|
10,381,108
|
12,137,894
|
||||||||||||
Depreciation and amortization
|
622,208
|
626,568
|
1,805,975
|
1,502,607
|
||||||||||||
|
||||||||||||||||
(Loss) income from operations
|
(44,437
|
)
|
574,123
|
4,285,362
|
4,481,085
|
|||||||||||
Interest expense
|
(64,475
|
)
|
(100,554
|
)
|
(249,581
|
)
|
(264,530
|
)
|
||||||||
Interest income
|
77,573
|
54,771
|
188,685
|
86,637
|
||||||||||||
Other (expense) income
|
(34,289
|
)
|
48,063
|
(20,863
|
)
|
168,586
|
||||||||||
Gain on sale of investments
|
63,422
|
-
|
63,422
|
-
|
||||||||||||
Net foreign exchange loss
|
(23,737
|
)
|
(73,059
|
)
|
(138,526
|
)
|
(199,908
|
)
|
||||||||
|
||||||||||||||||
(Loss) income before income tax provision (benefit)
|
(25,943
|
)
|
503,344
|
4,128,499
|
4,271,870
|
|||||||||||
Income tax provision (benefit)
|
80,732
|
(277,775
|
)
|
1,760,936
|
782,409
|
|||||||||||
|
||||||||||||||||
Net (loss) income
|
$
|
(106,675
|
)
|
$
|
781,119
|
$
|
2,367,563
|
$
|
3,489,461
|
|||||||
|
||||||||||||||||
Net income attributable to noncontrolling interests
|
(333,919
|
)
|
(725,178
|
)
|
(654,544
|
)
|
(1,770,239
|
)
|
||||||||
|
||||||||||||||||
Net (loss) income attributable to Ecology and Environment, Inc.
|
$
|
(440,594
|
)
|
$
|
55,941
|
$
|
1,713,019
|
$
|
1,719,222
|
|||||||
|
||||||||||||||||
Net (loss) income per common share: basic and diluted
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
0.40
|
$
|
0.41
|
|||||||
|
||||||||||||||||
Weighted average common shares outstanding: basic and diluted
|
4,251,200
|
4,245,059
|
4,247,150
|
4,230,204
|
|
Three months ended
April 30, 2013
|
Three months ended
April 30, 2012
|
Nine months ended
April 30, 2013
|
Nine months ended
April 30, 2012
|
||||||||||||
|
||||||||||||||||
Comprehensive (loss) income:
|
||||||||||||||||
Net (loss) income including noncontrolling interests
|
$
|
(106,675
|
)
|
$
|
781,119
|
$
|
2,367,563
|
$
|
3,489,461
|
|||||||
Foreign currency translation adjustments
|
(201,500
|
)
|
(227,982
|
)
|
111,247
|
(503,350
|
)
|
|||||||||
Unrealized investment (loss) gain, net
|
(37,552
|
)
|
(5,383
|
)
|
364
|
14,229
|
||||||||||
|
||||||||||||||||
Comprehensive (loss) income
|
(345,727
|
)
|
547,754
|
2,479,174
|
3,000,340
|
|||||||||||
Comprehensive income attributable to noncontrolling interests
|
(301,671
|
)
|
(745,611
|
)
|
(641,896
|
)
|
(1,830,295
|
)
|
||||||||
|
||||||||||||||||
Comprehensive (loss) income attributable to Ecology and Environment, Inc.
|
$
|
(647,398
|
)
|
$
|
(197,857
|
)
|
$
|
1,837,278
|
$
|
1,170,045
|
|
Nine months ended
April 30, 2013
|
Nine months ended
April 30, 2012
|
||||||
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
2,367,563
|
$
|
3,489,461
|
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization expense
|
1,805,975
|
1,502,607
|
||||||
Benefit for deferred income taxes
|
(292,181
|
)
|
53,611
|
|||||
Share based compensation expense
|
379,803
|
547,688
|
||||||
Tax impact of share-based compensation
|
-
|
105,988
|
||||||
Gain on sale of investment securities
|
(63,422
|
)
|
-
|
|||||
Provision for contract adjustments
|
449,946
|
186,368
|
||||||
Decrease (increase) in:
|
||||||||
- contract receivables
|
10,963,958
|
1,981,140
|
||||||
- other current assets
|
(764,168
|
)
|
(26,779
|
)
|
||||
- income tax receivable
|
631,197
|
(2,296,211
|
)
|
|||||
- other non-current assets
|
(11,193
|
)
|
(14,676
|
)
|
||||
(Decrease) increase in:
|
||||||||
- accounts payable
|
(1,732,253
|
)
|
(4,056,771
|
)
|
||||
- accrued payroll costs
|
1,009,998
|
(783,927
|
)
|
|||||
- income taxes payable
|
-
|
(1,377,647
|
)
|
|||||
- billings in excess of revenue
|
(1,456,271
|
)
|
1,610,950
|
|||||
- other accrued liabilities
|
(52,805
|
)
|
(614,000
|
)
|
||||
|
||||||||
Net cash provided by operating activities
|
13,236,147
|
307,802
|
||||||
|
||||||||
Cash flows (used in) provided by investing activities:
|
||||||||
Acquistion of noncontrolling interest of subsidiaries
|
(595,556
|
)
|
(892,294
|
)
|
||||
Purchase of property, building and equipment
|
(1,565,642
|
)
|
(3,150,868
|
)
|
||||
Proceeds from sale of investments
|
1,554,425
|
138,141
|
||||||
Purchase of investment securities
|
(1,616,470
|
)
|
(42,482
|
)
|
||||
|
||||||||
Net cash used in investing activities
|
(2,223,243
|
)
|
(3,947,503
|
)
|
||||
|
||||||||
Cash flows (used in) provided by financing activities:
|
||||||||
Dividends paid
|
(2,037,323
|
)
|
(2,046,657
|
)
|
||||
Proceeds from debt
|
3,170
|
294,199
|
||||||
Repayment of debt and capital lease obligations
|
(732,825
|
)
|
(904,706
|
)
|
||||
Net (payments on) proceeds from line of credit
|
(5,543,495
|
)
|
10,580,912
|
|||||
Distributions to noncontrolling interests
|
(1,338,842
|
)
|
(663,086
|
)
|
||||
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
|
(9,649,315
|
)
|
6,939,246
|
|||||
|
||||||||
Effect of exchange rate changes on cash and cash equivalents
|
127,405
|
(324,278
|
)
|
|||||
|
||||||||
Net increase in cash and cash equivalents
|
1,490,994
|
2,975,267
|
||||||
Cash and cash equivalents at beginning of period
|
10,467,770
|
8,529,842
|
||||||
|
||||||||
Cash and cash equivalents at end of period
|
$
|
11,958,764
|
$
|
11,505,109
|
||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the year for:
|
||||||||
- Interest
|
$
|
244,048
|
$
|
254,737
|
||||
- Income Taxes
|
1,406,346
|
4,001,786
|
||||||
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
|
586,574
|
|
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
|
-
|
-
|
-
|
-
|
-
|
1,713,019
|
-
|
-
|
-
|
654,544
|
||||||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
123,895
|
-
|
-
|
(12,648
|
)
|
|||||||||||||||||||||||||||||
Cash dividends paid ($.24 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,018,540
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Unrealized investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
364
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
-
|
379,803
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Distributions to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,338,842
|
)
|
|||||||||||||||||||||||||||||
Purchase of additional noncontrolling interests
|
-
|
-
|
-
|
-
|
(168,486
|
)
|
-
|
-
|
(7,804
|
)
|
98,799
|
(775,935
|
)
|
|||||||||||||||||||||||||||
Stock award plan forfeitures
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
798
|
-
|
-
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Balance at April 30, 2013
|
2,685,151
|
$
|
26,851
|
1,708,574
|
$
|
17,087
|
$
|
19,963,309
|
$
|
30,229,262
|
$
|
836,101
|
142,525
|
$
|
(1,798,233
|
) |
$
|
3,139,137
|
1. | Organization and Basis of Presentation |
2. | Recent Accounting Pronouncements |
4. | Fair Value of Financial Instruments |
|
April 30, 2013
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets
|
||||||||||||||||
Mutual funds
|
$
|
1,467,981
|
$
|
---
|
$
|
---
|
$
|
1,467,981
|
|
July 31, 2012
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets
|
||||||||||||||||
Mutual funds
|
$
|
1,353,365
|
$
|
51,217
|
$
|
---
|
$
|
1,404,582
|
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.
|
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Contract Receivables:
|
||||||||
Billed
|
$
|
35,569,554
|
$
|
42,977,016
|
||||
Unbilled
|
25,442,561
|
28,829,818
|
||||||
|
61,012,115
|
71,806,834
|
||||||
Allowance for doubtful accounts and contract adjustments
|
(10,665,837
|
)
|
(10,238,391
|
)
|
||||
|
||||||||
Total contract receivables, net
|
$
|
50,346,278
|
$
|
61,568,443
|
|
Three Months Ended
April 30,
|
Nine Months Ended
April 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Balance at beginning of period
|
$
|
10,216,404
|
$
|
7,732,072
|
$
|
10,238,391
|
$
|
6,755,087
|
||||||||
Net change recorded during the period
|
449,433
|
114,352
|
427,446
|
1,091,337
|
||||||||||||
Balance at end of period
|
$
|
10,665,837
|
$
|
7,846,424
|
$
|
10,665,837
|
$
|
7,846,424
|
|
Balance at April 30, 2013
|
Balance at July 31, 2012
|
||||||||||||||
Region
|
Contract
Receivables
|
Allowance
for Doubtful
Accounts
and Contract Adjustments
|
Contract
Receivables
|
Allowance
for Doubtful
Accounts
and Contract Adjustments
|
||||||||||||
|
||||||||||||||||
United States, Canada and South America
|
$
|
39,719,664
|
$
|
1,207,686
|
$
|
46,860,299
|
$
|
1,729,515
|
||||||||
Middle East/Africa
|
13,855,925
|
6,826,450
|
21,224,062
|
7,377,650
|
||||||||||||
Asia
|
7,436,526
|
2,631,701
|
3,722,473
|
1,131,226
|
||||||||||||
Totals
|
$
|
61,012,115
|
$
|
10,665,837
|
$
|
71,806,834
|
$
|
10,238,391
|
7. | Lines of Credit |
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Outstanding cash draws, recorded as lines of credit on the accompanying condensed consolidated balance sheets
|
$
|
6,519,041
|
$
|
12,309,335
|
||||
Outstanding letters of credit to support operations
|
3,235,300
|
2,615,415
|
||||||
|
||||||||
Total amounts used under lines of credit
|
9,754,341
|
14,924,750
|
||||||
Remaining amounts available under lines of credit
|
24,614,659
|
19,444,250
|
||||||
|
||||||||
Total approved unsecured lines of credit
|
$
|
34,369,000
|
$
|
34,369,000
|
8. | Debt and Capital Lease Obligations |
Debt and capital lease obligations are summarized in the following table. |
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Various bank loans and advances at interest rates ranging from 5% to 14%
|
$
|
322,751
|
$
|
372,744
|
||||
Capital lease obligations at varying interest rates averaging 11%
|
256,217
|
218,351
|
||||||
|
578,968
|
591,095
|
||||||
Current portion of long-term debt and capital lease obligations
|
(296,894
|
)
|
(488,460
|
)
|
||||
|
||||||||
Long-term debt and capital lease obligations
|
$
|
282,074
|
$
|
102,635
|
May 2013 – April 2014
|
$
|
296,894
|
||
May 2014 – April 2015
|
201,381
|
|||
May 2015 – April 2016
|
80,693
|
|||
May 2016 – April 2017
|
---
|
|||
May 2017 – April 2018
|
---
|
|||
Thereafter
|
---
|
|||
Total
|
$
|
578,968
|
9. | Income Taxes |
10. | Other Accrued Liabilities |
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Allowance for project disallowances
|
$
|
2,746,974
|
$
|
2,724,474
|
||||
Other
|
1,158,775
|
1,208,114
|
||||||
|
||||||||
Total other accrued liabilities
|
$
|
3,905,749
|
$
|
3,932,588
|
11. | Stock Award Plan |
12. | Shareholders' Equity |
In August 2010, the Company’s Board of Directors approved a program for repurchase of 200,000 shares of Class A common stock. As of April 30, 2013, 93,173 shares remain available for repurchase. |
|
Nine
Months Ended
April 30, 2013
|
Fiscal
Year Ended
July 31, 2012
|
||||||
Net increase in shareholders’ equity due to transfers to noncontrolling interest:
|
||||||||
Sale of 600 Gustavson common shares (1)
|
$
|
---
|
$
|
41,634
|
||||
Total transfers to noncontrolling interests
|
---
|
41,634
|
||||||
|
||||||||
Net increases (decreases) in shareholders’ equity due to transfers from noncontrolling interests:
|
||||||||
Purchase of 50 Walsh common shares (2)
|
(18,316
|
)
|
---
|
|||||
Purchase of 25 Lowham common shares (3)
|
(8,737
|
)
|
---
|
|||||
Purchase of 495 Walsh common shares (4)
|
(243,653
|
)
|
---
|
|||||
Purchase of 2,800 Gustavson common shares (5)
|
(293,102
|
)
|
---
|
|||||
Purchase of 370 Walsh common shares (6)
|
(182,125
|
)
|
---
|
|||||
Purchase of 75 Lowham common shares (7)
|
(30,002
|
)
|
---
|
|||||
Purchase of 25 Gestion Ambiental Consultores common shares (8)
|
---
|
(7,452
|
)
|
|||||
Purchase of 166 Walsh common shares (9)
|
---
|
(97,634
|
)
|
|||||
Purchase of 496 Walsh common shares (10)
|
---
|
(277,514
|
)
|
|||||
Purchase of 5,389 Brazil common shares (11)
|
---
|
77,539
|
||||||
Purchase of 26,482 Walsh Peru common shares (12)
|
---
|
(238,677
|
)
|
|||||
Purchase of 152 Walsh common shares (13)
|
---
|
(76,037
|
)
|
|||||
Total transfers from noncontrolling interests
|
(775,935
|
)
|
(619,775
|
)
|
||||
|
||||||||
Net transfers from noncontrolling interests
|
$
|
(775,935
|
)
|
$
|
(578,141
|
)
|
(1) | On August 1, 2011, the noncontrolling shareholders of Gustavson Associates, LLC (“Gustavson”), a subsidiary of Walsh Environmental Scientists and Engineers, LLC (“Walsh”) purchased an additional 1.5% of newly issued shares of the company for less than $0.1 million in cash. |
(2) | On April 22, 2013, the Company purchased an additional 0.1% of Walsh from noncontrolling shareholders for less than $0.1 million in cash. |
(3) | On March 13, 2013, Lowham-Walsh Engineering & Environment Services LLC (“Lowham”), a subsidiary of Walsh, purchased shares from noncontrolling shareholders for less than $0.1 million in cash. |
(4) | On January 28, 2013, the Company purchased an additional 1.3% of Walsh from noncontrolling shareholders for $0.2 million. Two thirds of the purchase price was paid in cash while the remaining one third was paid for with E&E stock. |
(5) | On December 28, 2012, Gustavson purchased an additional 6.7% of its shares from noncontrolling shareholders for $0.4 million. Half of the purchase price was paid in cash and Gustavson issued a three year note for the other half. |
(6) | On December 17, 2012, the Company purchased an additional 0.9% of Walsh from noncontrolling shareholders for $0.2 million in cash. |
(7) | During the three months ending October 31, 2012, Lowham purchased shares from noncontrolling shareholders for less than $0.1 million in cash. |
(8) | On May 1, 2012, Gestion Ambiental Consultores S.A (“GAC”), a subsidiary of the Company, purchased 2.5% of its stock back from noncontrolling shareholders for less than $0.1 million in cash. |
(9) | On April 23, 2012, the Company purchased an additional 0.4% of Walsh from noncontrolling shareholders for $0.1 million in cash. |
(10) | On January 4, 2012, the Company purchased an additional 1.3% of Walsh from noncontrolling shareholders for $0.3 million. Two thirds of the purchase price was paid in cash while the remaining one third was paid for with E&E stock. |
(11) | On December 14, 2011, the Company purchased an additional 4.0% of Ecology and Environment do Brasil LTDA (E&E Brasil) from noncontrolling shareholders for $0.2 million cash. |
(12) | On November 18, 2011, Walsh Peru S.A. Ingenieros y Cientificos Consultores (“Walsh Peru”), a subsidiary of Walsh, purchased an additional 3.9% of its shares from noncontrolling shareholders for $0.4 million in cash. |
(13) | On October 24, 2011, the Company purchased an additional 0.4% of Walsh from noncontrolling shareholders for $0.1 million in cash. |
13. | Accumulated Comprehensive Income |
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Foreign Currency Translation Adjustment
|
$
|
792,908
|
$
|
669,013
|
||||
Unrealized investment gain, net
|
43,193
|
42,829
|
||||||
|
||||||||
Total accumulated comprehensive income
|
$
|
836,101
|
$
|
711,842
|
14. | Earnings Per Share |
|
Three Months Ended
April 30,
|
Nine Months Ended
April 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Net (loss) income attributable to Ecology and Environment, Inc.
|
$
|
(440,594
|
)
|
$
|
55,941
|
$
|
1,713,019
|
$
|
1,719,222
|
|||||||
Dividend declared
|
---
|
---
|
1,018,540
|
1,017,776
|
||||||||||||
Undistributed earnings
|
$
|
(440,594
|
)
|
$
|
55,941
|
$
|
694,479
|
$
|
701,446
|
|||||||
|
||||||||||||||||
Weighted-average common shares outstanding (basic)
|
4,251,200
|
4,245,059
|
4,247,150
|
4,230,204
|
||||||||||||
|
||||||||||||||||
Distributed earnings per share
|
$
|
---
|
$
|
---
|
$
|
0.24
|
$
|
0.24
|
||||||||
Undistributed earnings per share
|
(0.10
|
)
|
0.01
|
0.16
|
0.17
|
|||||||||||
Total earnings per share
|
$
|
(0.10
|
)
|
$
|
0.01
|
$
|
0.40
|
$
|
0.41
|
15. | Foreign Currencies |
16. | Segment Reporting |
Segment information as of April 30, 2013:
|
Revenue
|
|||||||||||
|
Three Months
Ended
April 30, 2013
|
Nine Months
Ended
April 30, 2013
|
Gross Long-
Lived Assets as of
April 30, 2013
|
|||||||||
|
||||||||||||
United States
|
$
|
21,754,001
|
$
|
68,732,966
|
$
|
30,174,992
|
||||||
Foreign countries (1)
|
10,464,922
|
36,459,208 |
5,527,554
|
(1) | Significant foreign revenues included revenues in Peru ($3.1 million and $8.8 million for the three and nine months ended April 30, 2013, respectively), Brazil ($3.7 million and $11.5 million for the three and nine months ended April 30, 2013, respectively) and Chile ($2.3 million and $8.1 million for the three and nine months ended April 30, 2013, respectively). |
Segment information as of April 30, 2012:
|
Revenue
|
|||||||||||
|
Three Months
Ended
April 30, 2012
|
Nine Months
Ended
April 30, 2012
|
Gross Long-
Lived Assets as of
April 30, 2012
|
|||||||||
|
||||||||||||
United States
|
$
|
21,945,087
|
$
|
74,891,292
|
$
|
26,975,047
|
||||||
Foreign countries (1)
|
14,066,000
|
43,605,000
|
5,236,000
|
(1) | Significant foreign revenues include revenues in Peru ($4.0 million and $14.1 million for the three and nine months ended April 30, 2012, respectively), Brazil ($4.4 million and $11.3 million for the three and nine months ended April 30, 2012, respectively) and Chile ($3.2 million and $7.9 million for the three and nine months ended April 30, 2012, respectively). |
17. | Commitments and Contingencies |
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Nine Months Ended April 30,
|
|||||||
|
2013
|
2012
|
||||||
Cash provided by (used in):
|
||||||||
Operating activities
|
$
|
13,236,147
|
$
|
307,802
|
||||
Investing activities
|
(2,223,243
|
)
|
(3,947,503
|
)
|
||||
Financing activities
|
(9,649,315
|
)
|
6,939,246
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
127,405
|
(324,278
|
)
|
|||||
|
||||||||
Net increase in cash and cash equivalents
|
$
|
1,490,994
|
$
|
2,975,267
|
||||
|
||||||||
Cash and cash equivalents, by location:
|
||||||||
U.S. operations
|
$
|
6,377,304
|
$
|
3,800,520
|
||||
Foreign operations
|
5,581,460
|
7,704,589
|
||||||
|
||||||||
Total cash and cash equivalents
|
$
|
11,958,764
|
$
|
11,505,109
|
· | Net income (after adjustment for non-cash items) provided $4.6 million of operating cash; |
· | Lower net contract receivables provided $11.0 million of operating cash, which resulted primarily from cash received on outstanding receivables, including $7.1 million of cash received on outstanding receivables in the Middle East; and |
· | Other working capital activity resulted in a net use of $2.4 million of operating cash, due primarily to lower work levels associated with lower revenue and payment of subcontractor invoices as a result of an improved liquidity position at the Parent Company. |
· | Purchases of property, building and equipment resulted in a use of $1.6 million of cash; and |
· | Acquisitions of noncontrolling interests in two majority-owned subsidiaries, Walsh Environmental Scientists & Engineers, LLC (“Walsh”) and Gustavson Associates, LLC (“Gustavson”) resulted in a use of $0.6 million of cash. |
· | Net repayment of borrowings against our lines of credit of $5.5 million, which was made possible by the receipt of cash on outstanding receivables in the Middle East; |
· | Repayments of debt and capital lease obligations of $0.7 million, |
· | Dividend payments to common shareholders of $2.0 million; and |
· | Distributions to non-controlling interests of $1.3 million. |
|
April 30,
2013
|
July 31,
2012
|
||||||
|
||||||||
Outstanding cash draws, recorded as lines of credit on the consolidated balance sheets
|
$
|
6,519,041
|
$
|
12,309,335
|
||||
Outstanding letters of credit
|
3,235,300
|
2,615,415
|
||||||
Total amounts used under lines of credit
|
9,754,341
|
14,924,750
|
||||||
Remaining amounts available under lines of credit
|
24,614,659
|
19,444,250
|
||||||
Total approved lines of credit
|
$
|
34,369,000
|
$
|
34,369,000
|
|
April 30,
2013
|
July 31,
2012
|
||||||
Contract Receivables:
|
||||||||
Billed
|
$
|
35,569,554
|
$
|
42,977,016
|
||||
Unbilled
|
25,442,561
|
28,829,818
|
||||||
|
61,012,115
|
71,806,834
|
||||||
Allowance for doubtful accounts and contract adjustments
|
(10,665,837
|
)
|
(10,238,391
|
)
|
||||
|
||||||||
Total contract receivables, net
|
$
|
50,346,278
|
$
|
61,568,443
|
Three Months Ended
April 30,
|
Nine Months Ended
April 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Balance at beginning of period
|
$
|
10,216,404
|
$
|
7,732,072
|
$
|
10,238,391
|
$
|
6,755,087
|
||||||||
Net change recorded during the period
|
449,433
|
114,352
|
427,446
|
1,091,337
|
||||||||||||
Balance at end of period
|
$
|
10,665,837
|
$
|
7,846,424
|
$
|
10,665,837
|
$
|
7,846,424
|
Balance at April 30, 2013
|
Balance at July 31, 2012
|
|||||||||||||||
Region
|
Contract
Receivables
|
Allowance
for Doubtful
Accounts
and Contract Adjustments
|
Contract
Receivables
|
Allowance
for Doubtful
Accounts
and Contract Adjustments
|
||||||||||||
|
||||||||||||||||
United States, Canada and South America
|
$
|
39,719,664
|
$
|
1,207,686
|
$
|
46,860,299
|
$
|
1,729,515
|
||||||||
Middle East/Africa
|
13,855,925
|
6,826,450
|
21,224,062
|
7,377,650
|
||||||||||||
Asia
|
7,436,526
|
2,631,701
|
3,722,473
|
1,131,226
|
||||||||||||
Totals
|
$
|
61,012,115
|
$
|
10,665,837
|
$
|
71,806,834
|
$
|
10,238,391
|
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.
|
|
Three Months ended April 30,
|
Nine Months ended April 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Time and materials
|
$
|
16,298,241
|
$
|
17,643,678
|
$
|
51,459,723
|
$
|
59,296,965
|
||||||||
Fixed price
|
13,292,425
|
16,321,422
|
44,931,215
|
51,586,819
|
||||||||||||
Cost-type
|
2,628,257
|
2,045,987
|
8,801,236
|
7,612,508
|
||||||||||||
Total revenue by contract type
|
$
|
32,218,923
|
$
|
36,011,087
|
$
|
105,192,174
|
$
|
118,496,292
|
|
Three Months Ended April 30,
|
|||||||
|
2013
|
2012
|
||||||
Earned revenue from current period operations, by entity:
|
||||||||
Parent Company and all wholly-owned subsidiaries
|
$
|
17,929,266
|
$
|
18,920,860
|
||||
Majority-owned subsidiaries:
|
||||||||
Walsh
|
6,605,977
|
8,335,532
|
||||||
Ecology and Environment do Brasil, Ltda. (“E&E Brasil”)
|
5,053,095
|
4,835,297
|
||||||
Gestion Ambiental Consultores S.A. (“GAC”)
|
2,215,778
|
2,548,478
|
||||||
ECSI, LLC (“ECSI”)
|
1,100,055
|
1,327,678
|
||||||
|
||||||||
Total earned revenue from current period operations
|
32,904,171
|
35,967,845
|
||||||
|
||||||||
Adjustments to revenues earned in prior periods and amounts recorded as billings in excess of revenue in prior periods
|
(685,248
|
)
|
43,242
|
|||||
|
||||||||
Total revenue per condensed consolidated statements of income
|
$
|
32,218,923
|
$
|
36,011,087
|
· | Lower Parent Company and wholly-owned subsidiary revenues from current operations resulted from lower sales volume, particularly within state and federal government markets. |
· | Lower Walsh revenues from current operations resulted from lower sales volume, particularly within the energy and mining markets. |
· | Higher E&E Brasil revenues and lower GAC revenues from current operations primarily resulted from normal timing differences between billings of contract receivables and recording related revenue. Variances in earned revenue from current period operations are offset by revenue earned during the current period that was billed to clients in prior periods. |
|
Nine Months Ended April 30,
|
|||||||
|
2013
|
2012
|
||||||
Earned revenue from current period operations, by entity:
|
||||||||
Parent Company and all wholly owned subsidiaries
|
$
|
57,904,619
|
$
|
63,388,647
|
||||
Majority-owned subsidiaries:
|
||||||||
Walsh
|
21,352,942
|
31,887,345
|
||||||
E&E Brasil
|
13,491,100
|
13,214,316
|
||||||
GAC
|
7,901,527
|
8,191,448
|
||||||
ECSI
|
3,864,018
|
3,858,534
|
||||||
|
||||||||
Total earned revenues from current period operations
|
104,514,206
|
120,540,290
|
||||||
|
||||||||
Adjustments to revenues earned in prior periods and amounts recorded as billings in excess of revenue in prior periods
|
677,968
|
(2,043,998
|
)
|
|||||
|
||||||||
Total revenue per condensed consolidated statements of income
|
$
|
105,192,174
|
$
|
118,496,292
|
· | 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 partially offset by a $3.8 million reduction in direct cost associated with these contracts. |
· | Lower Walsh revenues from current operations primarily resulted from lower sales volume, particularly within the energy and mining markets. |
· | Higher E&E Brasil revenues and lower GAC revenues from current operations primarily resulted from normal timing differences between billings of contract receivables and recording related revenue. Variances in earned revenue from current period operations are offset by revenue earned during the current period that was billed to clients in prior periods. |
|
Nine
Months Ended
April 30, 2013
|
Fiscal
Year Ended
July 31, 2012
|
||||||
Net increase in shareholders’ equity due to transfers to noncontrolling interest:
|
||||||||
Sale of 600 Gustavson common shares (1)
|
$
|
---
|
$
|
41,634
|
||||
Total transfers to noncontrolling interests
|
---
|
41,634
|
||||||
|
||||||||
Net increases (decreases) in shareholders’ equity due to transfers from noncontrolling interests:
|
||||||||
Purchase of 50 Walsh common shares (2)
|
(18,316
|
)
|
---
|
|||||
Purchase of 25 Lowham common shares (3)
|
(8,737
|
)
|
---
|
|||||
Purchase of 495 Walsh common shares (4)
|
(243,653
|
)
|
---
|
|||||
Purchase of 2,800 Gustavson common shares (5)
|
(293,102
|
)
|
---
|
|||||
Purchase of 370 Walsh common shares (6)
|
(182,125
|
)
|
---
|
|||||
Purchase of 75 Lowham common shares (7)
|
(30,002
|
)
|
---
|
|||||
Purchase of 25 Gestion Ambiental Consultores common shares (8)
|
---
|
(7,452
|
)
|
|||||
Purchase of 166 Walsh common shares (9)
|
---
|
(97,634
|
)
|
|||||
Purchase of 496 Walsh common shares (10)
|
---
|
(277,514
|
)
|
|||||
Purchase of 5,389 Brazil common shares (11)
|
---
|
77,539
|
||||||
Purchase of 26,482 Walsh Peru common shares (12)
|
---
|
(238,677
|
)
|
|||||
Purchase of 152 Walsh common shares (13)
|
---
|
(76,037
|
)
|
|||||
Total transfers from noncontrolling interests
|
(775,935
|
)
|
(619,775
|
)
|
||||
|
||||||||
Net transfers from noncontrolling interests
|
$
|
(775,935
|
)
|
$
|
(578,141
|
)
|
(1) | On August 1, 2011, the noncontrolling shareholders of Gustavson Associates, LLC (“Gustavson”), a subsidiary of Walsh Environmental Scientists and Engineers, LLC (“Walsh”), purchased an additional 1.5% of newly issued shares of the company for less than $0.1 million in cash. |
(2) | On April 22, 2013, the Company purchased an additional 0.1% of Walsh from noncontrolling shareholders for less than $0.1 million in cash. |
(3) | On March 13, 2013, Lowham-Walsh Engineering & Environment Services LLC (“Lowham”), a subsidiary of Walsh, purchased shares from noncontrolling shareholders for less than $0.1 million in cash. |
(4) | On January 28, 2013, the Company purchased an additional 1.3% of Walsh from noncontrolling shareholders for $0.2 million. Two thirds of the purchase price was paid in cash while the remaining one third was paid for with E&E stock. |
(5) | On December 28, 2012, Gustavson purchased an additional 6.7% of its shares from noncontrolling shareholders for $0.4 million. Half of the purchase price was paid in cash and Gustavson issued a three year note for the other half. |
(6) | On December 17, 2012, the Company purchased an additional 0.9% of Walsh from noncontrolling shareholders for $0.2 million in cash. |
(7) | During the three months ending October 31, 2012, Lowham purchased shares from noncontrolling shareholders for less than $0.1 million in cash. |
(8) | On May 1, 2012, Gestion Ambiental Consultores S.A (“GAC”), a subsidiary of the Company, purchased 2.5% of its stock from noncontrolling shareholders for less than $0.1 million in cash. |
(9) | On April 23, 2012, the Company purchased an additional 0.4% of Walsh from noncontrolling shareholders for $0.1 million in cash. |
(10) | On January 4, 2012, the Company purchased an additional 1.3% of Walsh from noncontrolling shareholders for $0.3 million. Two thirds of the purchase price was paid in cash while the remaining one third was paid for with E&E stock. |
(11) | On December 14, 2011, the Company purchased an additional 4.0% of Ecology and Environment do Brasil LTDA (E&E Brasil) from noncontrolling shareholders for $0.2 million cash. |
(12) | On November 18, 2011, Walsh Peru S.A. Ingenieros y Cientificos Consultores (“Walsh Peru”), a subsidiary of Walsh, purchased an additional 3.9% of its shares from noncontrolling shareholders for $0.4 million in cash. |
(13) | On October 24, 2011, the Company purchased an additional 0.4% of Walsh from noncontrolling shareholders for $0.1 million in cash. |
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
|
||||||||||||
February
|
---
|
---
|
---
|
93,173
|
||||||||||||
March
|
---
|
---
|
---
|
93,173
|
||||||||||||
April
|
---
|
---
|
---
|
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. |
(b) | Registrant filed a Form 8-K report on May 31, 2013 to announce that it sent a notice to its directors and executive officers regarding the beginning of a blackout period that was being imposed on the Ecology and Environment, Inc. 401(k) Plan pursuant to which Participants will be unable to direct or diversify investments, including E&E Common Stock held in a self-directed brokerage account or shares in the Ecology and Environment Unitized Stock Fund, from June 21, 2013 through the week of July 14, 2013. |
(c) | 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. |
|
Ecology and Environment, Inc.
|
|
|
|
|
Date: June 21, 2013
|
By:
|
/s/ H. John Mye
|
|
|
H. John Mye III
|
|
|
Vice President, Treasurer and Chief Financial Officer –
Principal Financial and Accounting Officer
|
|
ECOLOGY AND ENVIRONMENT, INC.
|
|
|
Date: June 21, 2013
|
/s/ Kevin S. Neumaier
|
|
Kevin S. Neumaier
President and Chief Executive Officer
(Principal Executive Officer)
|
|
ECOLOGY AND ENVIRONMENT, INC.
|
|
|
Date: June 21, 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: June 21, 2013
|
/s/ Kevin S. Neumaier
|
|
Kevin S. Neumaier
President and Chief Executive Officer
(Principal Executive Officer)
|
|
ECOLOGY AND ENVIRONMENT, INC.
|
|
|
Date: June 21, 2013
|
/s/ H. John Mye III
|
|
H. John Mye III
Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer)
|
Income Taxes
|
9 Months Ended | ||
---|---|---|---|
Apr. 30, 2013
|
|||
Income Taxes [Abstract] | |||
Income Taxes |
The estimated effective tax rate was 42.7% and 18.3% for the nine months ended April 30, 2013 and April 30, 2012, respectively. The increase was mainly a result of: (i) one-time favorable tax settlements of $0.3 million during the nine months ended April 30, 2012; (ii) favorable return-to-provisions adjustments of $0.3 million during the nine months ended April 30, 2012; and (iii) decreased income during the nine months ended April 30, 2013 from foreign entities in countries with a lower effective tax rate than in the U.S. |
Consolidated Statements of Income Unaudited (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Consolidated Statements of Income Unaudited [Abstract] | ||||
Revenue | $ 32,218,923 | $ 36,011,087 | $ 105,192,174 | $ 118,496,292 |
Cost of professional services and other direct operating expenses | 11,376,594 | 13,560,046 | 37,024,544 | 41,906,831 |
Subcontract costs | 6,160,917 | 5,971,336 | 18,587,985 | 24,671,421 |
Administrative and indirect operating expenses | 10,766,068 | 10,967,127 | 33,107,200 | 33,796,454 |
Marketing and related costs | 3,337,573 | 4,311,887 | 10,381,108 | 12,137,894 |
Depreciation and amortization | 622,208 | 626,568 | 1,805,975 | 1,502,607 |
(Loss) income from operations | (44,437) | 574,123 | 4,285,362 | 4,481,085 |
Interest expense | (64,475) | (100,554) | (249,581) | (264,530) |
Interest income | 77,573 | 54,771 | 188,685 | 86,637 |
Other (expense) income | (34,289) | 48,063 | (20,863) | 168,586 |
Gain on sale of assets | 63,422 | 0 | 63,422 | 0 |
Net foreign exchange loss | (23,737) | (73,059) | (138,526) | (199,908) |
(Loss) income before income tax provision | (25,943) | 503,344 | 4,128,499 | 4,271,870 |
Income tax provision (benefit) | 80,732 | (277,775) | 1,760,936 | 782,409 |
Net (loss) income | (106,675) | 781,119 | 2,367,563 | 3,489,461 |
Net (loss) attributable to noncontrolling interests | (333,919) | (725,178) | (654,544) | (1,770,239) |
Net (loss) income attributable to Ecology and Environment, Inc. | $ (440,594) | $ 55,941 | $ 1,713,019 | $ 1,719,222 |
Net (loss) income per common share: basic and diluted (in dollars per share) | $ (0.10) | $ 0.01 | $ 0.40 | $ 0.41 |
Weighted average common shares outstanding: basic and diluted (in shares) | 4,251,200 | 4,245,059 | 4,247,150 | 4,230,204 |
Recent Accounting Pronouncements
|
9 Months Ended | ||
---|---|---|---|
Apr. 30, 2013
|
|||
Recent Accounting Pronouncements [Abstract] | |||
Recent Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU 2013-02"). ASU 2013-02 requires entities to provide information about amounts reclassified out of accumulated other comprehensive income ("AOCI") by component. In addition, entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The Company adopted ASU 2013-12 effective February 1, 2013 and applied its provisions prospectively. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In June 2011, FASB issued ASU No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 increases the prominence of other comprehensive income in financial statements. Under ASU 2011-05, companies have the option to present the components of net income and comprehensive income in either one or two consecutive financial statements. The Company adopted ASU 2011-05 effective August 1, 2012 and applied its provisions retrospectively. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. |
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Segment Reporting
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting |
The Company reports segment information based on the geographic location of its customers (for revenues) and the location of its offices (for long-lived assets). Segment information is summarized in the following tables.
|
Other Accrued Liabilities
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Accrued Liabilities |
Other accrued liabilities are summarized in the following table.
The allowance for project disallowances represents potential disallowances of amounts billed and collected resulting from contract disputes and government audits. Allowances for project disallowances are recorded when the amounts are estimable. |
Foreign Currencies (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Foreign Currencies [Abstract] | ||||
Foreign currency transaction losses | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.2 |
Revenue and Contract Receivables, net (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Contract Receivables, net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Receivables, Net | Contract receivables, net are summarized in the following table.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Doubtful Accounts and Contract Adjustments | Activity within the allowance for doubtful accounts and contract adjustments is summarized in the following table.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Receivables and Allowance for Doubtful Accounts and Contract Adjustments by Geographical Areas | Significant concentrations of contract receivables and the allowance for doubtful accounts and contract adjustments are summarized in the following table.
|
Fair Value of Financial Instruments (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | The fair value of the Company's assets and liabilities that are measured at fair value on a recurring basis is summarized by level within the fair value hierarchy in the following table.
|
Accumulated Comprehensive Income (Details) (USD $)
|
Apr. 30, 2013
|
Jul. 31, 2012
|
---|---|---|
Accumulated Comprehensive Income [Abstract] | ||
Foreign Currency Translation Adjustment | $ 792,908 | $ 669,013 |
Unrealized investment gain, net | 43,193 | 42,829 |
Total accumulated comprehensive income | $ 836,101 | $ 711,842 |
Segment Reporting (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting |
|
Lines of Credit (Details) (USD $)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Apr. 30, 2013
|
Jul. 31, 2012
|
|
Line of Credit Facility [Line Items] | ||
Cash draws, recorded as lines of credit on the accompanying condensed consolidated balance sheets | $ 6,519,041 | $ 12,309,335 |
Outstanding letters of credit to support operations | 3,235,300 | 2,615,415 |
Total amounts used under lines of credit | 9,754,341 | 14,924,750 |
Remaining amounts available under lines of credit | 24,614,659 | 19,444,250 |
Total approved unsecured lines of credit | $ 34,369,000 | $ 34,369,000 |
Interest rate, minimum (in hundredths) | 2.50% | 2.50% |
Interest rate, maximum (in hundredths) | 4.30% | 5.00% |
Segment Reporting (Details) (USD $)
|
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|||||||||
United States [Member]
|
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Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Line Items] | ||||||||||||
Revenue | $ 21,754,001 | $ 21,945,087 | $ 68,732,966 | $ 74,891,292 | ||||||||
Gross Long-Lived Assets | 30,174,992 | 26,975,047 | 30,174,992 | 26,975,047 | ||||||||
Foreign Countries [Member]
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Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Line Items] | ||||||||||||
Revenue | 10,464,922 | [1] | 14,066,000 | [2] | 36,459,208 | [1] | 43,605,000 | [2] | ||||
Gross Long-Lived Assets | 5,527,554 | [1] | 5,236,000 | [2] | 5,527,554 | [1] | 5,236,000 | [2] | ||||
Peru [Member]
|
||||||||||||
Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Line Items] | ||||||||||||
Revenue | 3,100,000 | 4,000,000 | 8,800,000 | 14,100,000 | ||||||||
Brazil [Member]
|
||||||||||||
Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Line Items] | ||||||||||||
Revenue | 3,700,000 | 4,400,000 | 11,500,000 | 11,300,000 | ||||||||
Chile [Member]
|
||||||||||||
Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Line Items] | ||||||||||||
Revenue | $ 2,300,000 | $ 3,200,000 | $ 8,100,000 | $ 7,900,000 | ||||||||
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Shareholders' Equity (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2013
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Shareholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of Changes in Ownership Interest in Subsidiaries | Transactions with noncontrolling shareholders for the nine months ended April 30, 2013 and fiscal year ended July 31, 2012 were recorded at amounts that approximated fair value. Effects on shareholders' equity resulting from changes in E&E's ownership interest in its subsidiaries are summarized in the following table.
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Other Accrued Liabilities (Details) (USD $)
|
Apr. 30, 2013
|
Jul. 31, 2012
|
---|---|---|
Other Accrued Liabilities [Abstract] | ||
Allowance for contract adjustments | $ 2,746,974 | $ 2,724,474 |
Other | 1,158,775 | 1,208,114 |
Total other accrued liabilities | $ 3,905,749 | $ 3,932,588 |
Commitments and Contingencies
|
9 Months Ended | ||
---|---|---|---|
Apr. 30, 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 April 30, 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. |
Consolidated Statements of Changes in Shareholders' Equity Unaudited (Parenthetical) (USD $)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Apr. 30, 2013
|
Jul. 31, 2012
|
|
Consolidated Statements of Changes in Shareholders' Equity Unaudited [Abstract] | ||
Cash dividends paid (in dollars per share) | $ 0.24 | $ 0.48 |
Cash and Cash Equivalents
|
9 Months Ended |
---|---|
Apr. 30, 2013
|
|
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents The Company invests cash in excess of operating requirements in income-producing short-term investments. At April 30, 2013 and July 31, 2012, money market funds of $3.7 million and $2.2 million, respectively, were included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. |
Organization and Basis of Presentation
|
9 Months Ended | ||
---|---|---|---|
Apr. 30, 2013
|
|||
Organization and Basis of Presentation [Abstract] | |||
Organization and Basis of Presentation |
Ecology and Environment, Inc., ("E&E" or "Company") is a global broad-based environmental consulting firm whose underlying philosophy is to provide professional services worldwide so that sustainable economic and human development may proceed with minimum negative impact on the environment. The Company's staff is comprised of individuals representing 85 scientific, engineering, health, and social disciplines working together in multidisciplinary teams to provide innovative environmental solutions. The Company has completed more than 50,000 projects for a wide variety of clients in 122 countries, providing environmental solutions in nearly every ecosystem on the planet. Revenues reflected in the Company's consolidated statements of income represent services rendered for which the Company maintains a primary contractual relationship with its customers. Included in revenues are certain services outside the Company's normal operations which the Company has elected to subcontract to other contractors. The condensed consolidated financial statements included herein have been prepared by Ecology and Environment, Inc., without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of such information. All such adjustments are of a normal recurring nature. The Company follows the same accounting policies in preparation of interim reports. Although E&E believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in E&E's 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The condensed consolidated results of operations for the three and nine months ended April 30, 2013 are not necessarily indicative of the results for any subsequent period or the entire fiscal year ending July 31, 2013. Certain prior year amounts were reclassified to conform to the condensed consolidated financial statement presentation for the three and nine months ended April 30, 2013. |
Lines of Credit (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2013
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Lines of Credit [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured Lines of Credit | Unsecured lines of credit are summarized in the following table.
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Accumulated Comprehensive Income (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2013
|
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Accumulated Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Comprehensive Income | Accumulated comprehensive income is summarized in the following table.
|
Fair Value of Financial Instruments (Details) (USD $)
|
Apr. 30, 2013
|
Jul. 31, 2012
|
---|---|---|
Assets [Abstract] | ||
Gross unrealized gains | $ 100,000 | $ 100,000 |
Recurring [Member]
|
||
Assets [Abstract] | ||
Mutual funds | 1,467,981 | 1,404,582 |
Recurring [Member] | Level 1 [Member]
|
||
Assets [Abstract] | ||
Mutual funds | 1,467,981 | 1,353,365 |
Recurring [Member] | Level 2 [Member]
|
||
Assets [Abstract] | ||
Mutual funds | 0 | 51,217 |
Recurring [Member] | Level 3 [Member]
|
||
Assets [Abstract] | ||
Mutual funds | $ 0 | $ 0 |