þ
|
Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
For
the fiscal year ended July 31, 2006
|
o
|
Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
For
the transition period from __________ to
__________
|
New
York
(State
or other jurisdiction of incorporation or
organization)
|
16-0971022
(IRS
Employer Identification Number)
|
|||
368
Pleasant View Drive, Lancaster, NY
(Address
of principal executive offices)
|
14086-1397
(Zip
code)
|
|||
|
||||
716/684-8060
(Registrant's
telephone number, including area code)
|
||||
Securities
Registered Pursuant to Section 12(b) of the
Act:
|
||||
Title
of each class
Class
A Common Stock par value $.01 per share
|
Name
of each exchange on which registered
American
Stock Exchange
|
|||
Securities
registered pursuant to Section 12(g) of the
Act:
|
None
(Title
of class)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer þ
|
Table
of Contents
|
||
Page
|
||
PART
1
|
||
General
|
4
|
|
START
Contracts
|
4
|
|
Saudi
Arabia / Kuwait Contracts
|
4
|
|
Task
Order Contracts
|
5
|
|
Environmental
Consulting Services
|
5
|
|
Analytical
Laboratory Services
|
7
|
|
Aquaculture
|
7
|
|
Segment
Reporting
|
8
|
|
Regulatory
Background
|
8
|
|
Potential
Liability and Insurance
|
9
|
|
Market
and Customers
|
9
|
|
Backlog
|
10
|
|
Competition
|
10
|
|
Employees
|
10
|
|
10
|
||
10
|
||
12
|
||
12
|
||
13
|
||
PART
II
|
||
14
|
||
15
|
||
16
|
||
22
|
||
23
|
||
44
|
||
44
|
||
44
|
||
PART
III
|
||
45
|
||
46
|
||
47
|
||
49
|
||
50
|
||
PART
IV
|
||
51
|
Item
1.
|
Business
|
· |
Wind
|
· |
Liquefied
Natural Gas (LNG)
|
· |
Pipelines
|
· |
Green
Ride. is
EEI’s ,
Web-based application designed to reduce automobile dependency and
promote
the use of alternative transportation. This program was developed
by EEI
to encourage individuals to ride with others in an effort to help
preserve
air quality, decrease traffic congestion, and conserve fuel. GreenRide
helps users find carpool partners by searching for individuals who
live
near users and have similar travel schedules and needs. It uses the
latest
in ESRI GIS technology to “geo” code carpoolers’ home and destination
locations. GreenRide is applicable to daily commuters, as well as
to those
who are making longer, less frequent trips, such as to vacation
destinations.
|
Green
Buildings.
Understanding and applying environmental-sustainability concepts
can be
challenging in office buildings. Saving energy and natural resources
has
emerged as a critical issue from the standpoint of controlling
operational
costs, as well as maintaining a positive public image. To help
meet these
challenges, EEI has an in-place program to develop practical methods
for
incorporating sustainable practices into daily office operations.
Using
EEI’s Green Office Program, managers can track progress, show results
by
reducing energy usage and solid waste, improve indoor air quality
and
landscape ecology, and develop programs for composting/recycling
and
transportation. The Green Office Program is designed for buildings
that
create $500,000 to $10,000,000 or more a year in energy and
environmentally related costs. The program will typically save
10% to 30%
or more on energy and environmental costs of an office building.
These
savings will more than pay for the cost of the program and have
a positive
effect on the environment.
|
· |
Green
Campus.
EEI’s Green Campus programs provide a practical solution for colleges
and
universities, commercial buildings, hospitals, hotels, schools, and
school
districts to address their environmental sustainability issues in
a manner
that is specific to their own operations.
|
· |
Introduction.
EEI has conducted hazardous waste site evaluations throughout the
United
States. In conducting these site evaluations, the Company provides
site
investigation (e.g., geophysical surveys, monitoring well installation,
and sample collection and analysis), engineering design, and operation
and
maintenance for a wide range of industrial and governmental clients.
In
providing such services, the Company inventories and collects sample
materials on site and then evaluates waste management practices,
potential
off-site impacts and liability concerns. EEI then recommends and
designs
cleanup programs and assists in the implementation and monitoring
of those
cleanup programs.
|
· |
Field
Investigation.
The Company's field investigation services primarily involve the
development of work plans, health and safety plans, and quality assurance
and quality control plans to govern and conduct such field investigations
to define the nature and extent of contaminants at a
site.
|
· |
Engineering
Services.
After field investigation services have been completed and the necessary
approvals obtained, the Company's engineering specialists develop
plans
and specifications for remedial cleanup activities. This work includes
the
development of methods and standard operating procedures to assess
contamination problems, and to identify, develop and design appropriate
pollution control schemes. Alternative cleanup strategies are evaluated
and conceptual engineering approaches are formulated. The Company
also
provides supervision of actual cleanup or remedial construction work
performed by other contractors.
|
· |
The
National Environmental Policy Act
("NEPA")
|
· |
The
Comprehensive Environmental Response, Compensation, And Liability
Act Of
1980, As Amended ("CERCLA", "Superfund" or the "Superfund
Act")
|
· |
The
Resource Conservation And Recovery Act Of 1976
("RCRA")
|
· |
Toxic
Substance Control Act Of 1976
("TSCA")
|
· |
Clean
Air Act
|
· |
Safe
Drinking Water And Clean Water Acts
("SDWA")
|
· |
Other
|
(Millions
of $)
|
|||||||
Fiscal
2006
|
Fiscal
2005
|
||||||
Total
firm backlog
|
$
|
48.3
|
$
|
43.2
|
|||
Anticipated
completion of firm backlog in next twelve months
|
24.1
|
33.5
|
|||||
Maximum
potential gross revenues from task order contracts
|
136.0
|
141.6
|
Item
1A.
|
Risk
Factors
|
Changes
in environmental laws and regulations could reduce demand for the
Company’s services.
|
- |
the
application of the percentage of completion method of accounting
and
revenue recognition on contracts
|
- |
provisions
for uncollectible receivables and contract
reserves
|
- |
provisions
for income taxes and related valuation
reserves
|
- |
accruals
for estimated liabilities, including litigation
reserves
|
-
|
greater
risk of uncollectible accounts and longer collection
cycles;
|
-
|
currency
fluctuations;
|
-
|
logistical
and communication challenges;
|
-
|
exposure
to liability under the Foreign Corrupt Practices
Act;
|
-
|
lack
of developed legal systems to enforce contractual
rights;
|
-
|
general
economic and political conditions in foreign
markets;
|
-
|
civil
disturbance, unrest or violence;
|
-
|
general
difficulties in staffing international operations with highly professional
personnel.
|
Item
1B.
|
Unresolved
Staff Comments
|
Item
2.
|
Properties
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
Item
5.
|
Market
for the Registrant's Common Equity, Related Stockholder Matters
and Issuer
Purchases of Equity
Securities.
|
(a)
|
Principal
Market or Markets. The Company's Class A Common Stock is traded
on the
American Stock Exchange. There is no separate market for the Company's
Class B Common Stock.
|
The
following table represents the range of high and low prices of
the
Company's Class A Common Stock as reported by the American Stock
Exchange
for the periods indicated.
|
High
|
Low
|
||||||
First
Quarter (commencing August 1, 2005 - October 29, 2005)
|
$
|
9.03
|
$
|
6.75
|
|||
Second
Quarter (commencing October 30, 2005 - January 28, 2006)
|
9.49
|
7.70
|
|||||
Third
Quarter (commencing January 29, 2006 - April 29, 2006)
|
10.88
|
9.35
|
|||||
Fourth
Quarter (commencing April 30, 2006 - July 31, 2006)
|
10.85
|
9.75
|
High
|
Low
|
||||||
First
Quarter (commencing August 1, 2004 - October 30, 2004)
|
9.75
|
8.80
|
|||||
Second
Quarter (commencing October 31, 2004 - January 29, 2005)
|
9.00
|
7.65
|
|||||
Third
Quarter (commencing January 30, 2005 - April 30, 2005)
|
8.00
|
6.00
|
|||||
Fourth
Quarter (commencing May 1, 2005 - July 31, 2005)
|
7.00
|
6.22
|
Equity
Compensation Plan Information as of July 31, 2006:
|
||||||
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights.
|
Weighted
average exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for
future
issuance
|
|||
Equity
compensation plans approved by securities holders:
|
||||||
-
1986 Incentive Stock Option Plan
|
---
|
---
|
----
|
|||
-
2003 Stock Award Plan
|
---
|
---
|
118,674
|
|||
Equity
compensation plans not approved by securities holders:
|
||||||
-
1998 Stock Award Plan
|
---
|
---
|
---
|
|||
Total
|
---
|
---
|
118,674
|
Refer
to Note 10 to Consolidated Financial Statements set forth in Part
IV of
this Annual Report on Form 10-K for more information on the Equity
Compensation Plans.
|
(b)
|
Not
Applicable
|
(c)
|
Purchased
Equity Securities. The following table summarizes the Company's
purchases
of its common stock during the quarter ended July 31,
2006.
|
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
1, 2005 - July 31, 2006
|
2,595
|
$9.59
|
2,595
|
214,439
|
(1)
|
The
Company purchased 2,595 shares of its Class A common stock during
the
fiscal year ended July 31, 2006 pursuant to a 200,000 share repurchase
program approved at the Board of Directors meeting held in January
2004.
The purchases were made in open-market transactions. In February
2006, the
Board of Directors authorized the repurchase of an additional 200,000
shares.
|
Item
6.
|
Selected
Consolidated Financial
Data
|
Year
ended July 31,
|
||||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
(In
thousands, except share and per share amounts)
|
||||||||||||||||
Operating
data:
|
||||||||||||||||
Gross
revenues
|
$
|
98,055
|
$
|
91,351
|
$
|
110,623
|
$
|
116,214
|
$
|
85,862
|
||||||
Net
revenues
|
81,836
|
74,461
|
89,501
|
87,771
|
73,408
|
|||||||||||
Income
(loss) from operations
|
5,671
|
(1,951
|
)
|
5,944
|
7,679
|
5,017
|
||||||||||
Income
(loss) from continuing operations before income taxes and minority
interest
|
5,176
|
(2,618
|
)
|
6,000
|
7,421
|
5,146
|
||||||||||
Net
income (loss) from continuing operations
|
$
|
2,723
|
$
|
(1,424
|
)
|
$
|
2,632
|
$
|
3,790
|
$
|
3,125
|
|||||
Net
loss from discontinued operations
|
(140
|
)
|
(163
|
)
|
(231
|
)
|
(4,992
|
)
|
(1,716
|
)
|
||||||
Net
income (loss)
|
$
|
2,583
|
$
|
(1,587
|
)
|
$
|
2,401
|
$
|
(1,202
|
)
|
$
|
1,409
|
||||
Net
income (loss) per common share: basic
|
||||||||||||||||
Continuing
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.66
|
$
|
0.95
|
$
|
0.77
|
|||||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
(1.25
|
)
|
(0.42
|
)
|
||||||
Net
income (loss) per common share: basic
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.60
|
$
|
(0.30
|
)
|
$
|
0.35
|
||||
Net
income (loss) per common share: diluted
|
||||||||||||||||
Continuing
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.65
|
$
|
0.94
|
$
|
0.77
|
|||||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
(1.23
|
)
|
(0.42
|
)
|
||||||
Income
(loss) per common share: diluted
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.59
|
$
|
(0.29
|
)
|
$
|
0.35
|
||||
Cash
dividends declared per common share:
|
||||||||||||||||
Basic
and Diluted
|
$
|
0.35
|
$
|
0.34
|
$
|
0.34
|
$
|
0.33
|
$
|
0.32
|
||||||
Weighted
average common shares outstanding:
|
||||||||||||||||
Basic
|
3,981,226
|
3,962,699
|
3,985,716
|
3,996,796
|
4,069,848
|
|||||||||||
Diluted
|
3,988,836
|
3,962,699
|
4,041,242
|
4,050,385
|
4,072,694
|
Year
Ended July 31,
|
||||||||||||||||
|
||||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
|
(In
thousands, except per share amounts)
|
|||||||||||||||
Balance
sheet data:
|
||||||||||||||||
Working
capital
|
$
|
27,439
|
$
|
27,713
|
$
|
27,480
|
$
|
27,479
|
$
|
30,268
|
||||||
Total
assets
|
69,152
|
57,305
|
62,504
|
76,382
|
74,471
|
|||||||||||
Long-term
debt
|
342
|
328
|
336
|
137
|
---
|
|||||||||||
Shareholders'
equity
|
37,627
|
36,284
|
39,383
|
38,378
|
41,294
|
|||||||||||
Book
value per share:
|
||||||||||||||||
Basic
|
$
|
9.45
|
$
|
9.16
|
$
|
9.88
|
$
|
9.60
|
$
|
10.15
|
||||||
Diluted
|
$
|
9.43
|
$
|
9.16
|
$
|
9.75
|
$
|
9.48
|
$
|
10.14
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
Payments
due by period
|
||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
|||||||||||
Long-Term
Debt Obligations
|
$
|
531,070
|
$
|
314,605
|
$
|
81,486
|
$
|
51,164
|
$
|
83,815
|
||||||
Capital
Lease Obligations
|
213,776
|
88,577
|
118,724
|
6,475
|
---
|
|||||||||||
Operating
Lease Obligations (1)
|
5,500,305
|
1,877,852
|
2,108,808
|
1,145,238
|
368,407
|
|||||||||||
Other
Liabilities (2)
|
161,225
|
161,225
|
---
|
---
|
---
|
|||||||||||
Total
|
$
|
6,405,670
|
$
|
2,442,259
|
$
|
2,309,018
|
$
|
1,202,877
|
$
|
452,222
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Consolidated
Balance Sheet
|
|||||||
July
31,
|
July
31,
|
||||||
Assets
|
2006
|
2005
|
|||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
13,094,499
|
$
|
7,872,116
|
|||
Investment
securities available for sale
|
97,560
|
120,533
|
|||||
Contract
receivables, net
|
37,011,377
|
31,372,003
|
|||||
Deferred
income taxes
|
5,630,832
|
5,016,908
|
|||||
Other
current assets
|
1,041,751
|
2,032,247
|
|||||
Total
current assets
|
56,876,019
|
46,413,807
|
|||||
Property,
building and equipment, net
|
7,776,232
|
7,967,883
|
|||||
Deferred
income taxes
|
1,316,040
|
1,044,524
|
|||||
Other
assets
|
3,184,093
|
1,878,984
|
|||||
Total
assets
|
$
|
69,152,384
|
$
|
57,305,198
|
|||
Liabilities
and Shareholders' Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
6,436,260
|
$
|
5,979,588
|
|||
Accrued
payroll costs
|
6,379,724
|
3,837,435
|
|||||
Income
taxes payable
|
1,499,292
|
36,122
|
|||||
Deferred
revenue
|
161,225
|
231,611
|
|||||
Current
portion of long-term debt and capital lease obligations
|
403,182
|
324,071
|
|||||
Other
accrued liabilities
|
14,557,729
|
8,291,950
|
|||||
Total
current liabilities
|
29,437,412
|
18,700,777
|
|||||
Long-term
debt and capital lease obligations
|
341,664
|
328,053
|
|||||
Minority
interest
|
1,745,849
|
1,992,544
|
|||||
Commitments
and contingencies (see note #15)
|
-
|
-
|
|||||
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
- 2,534,566 and 2,514,235 shares
|
25,346
|
25,143
|
|||||
Class
B common stock, par value $.01 per
|
|||||||
share;
authorized - 10,000,000 shares;
|
|||||||
issued
- 1,650,173 and 1,669,304 shares
|
16,502
|
16,693
|
|||||
Capital
in excess of par value
|
17,684,373
|
17,622,172
|
|||||
Retained
earnings
|
23,163,716
|
22,002,059
|
|||||
Accumulated
other comprehensive income
|
(2,208,830
|
)
|
(2,236,051
|
)
|
|||
Unearned
compensation, net of tax
|
-
|
(158,993
|
)
|
||||
Treasury
stock - Class A common, 102,204 and 94,235
|
|||||||
shares;
Class B common, 26,259 and 26,259 shares, at cost
|
(1,053,648
|
)
|
(987,199
|
)
|
|||
Total
shareholders' equity
|
37,627,459
|
36,283,824
|
|||||
Total
liabilities and shareholders' equity
|
$
|
69,152,384
|
$
|
57,305,198
|
|||
The
accompanying notes are an integral part of these financial
statements.
|
Consolidated
Statement of Income
|
||||||||||
Year
ended July 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Gross
revenues
|
$
|
98,054,528
|
$
|
91,350,613
|
$
|
110,623,427
|
||||
Less:
direct subcontract costs
|
16,219,008
|
16,890,103
|
21,122,904
|
|||||||
Net
revenues
|
81,835,520
|
74,460,510
|
89,500,523
|
|||||||
Cost
of professional services and
|
||||||||||
other
direct operating expenses
|
40,878,554
|
38,015,428
|
49,017,290
|
|||||||
Gross
Profit
|
40,956,966
|
36,445,082
|
40,483,233
|
|||||||
Administrative
and indirect operating
|
||||||||||
expenses
|
25,557,992
|
24,404,071
|
22,797,003
|
|||||||
Marketing
and related costs
|
8,563,688
|
9,740,387
|
9,693,137
|
|||||||
Depreciation
|
1,164,095
|
1,501,035
|
1,606,769
|
|||||||
Long-lived
asset impairment loss
|
-
|
2,750,972
|
442,374
|
|||||||
Income
(loss) from operations
|
5,671,191
|
(1,951,383
|
)
|
5,943,950
|
||||||
Interest
expense
|
(95,907
|
)
|
(122,342
|
)
|
(138,550
|
)
|
||||
Interest
income
|
216,213
|
42,267
|
123,943
|
|||||||
Other
expense
|
(656,934
|
)
|
(641,143
|
)
|
(233,981
|
)
|
||||
Net
foreign currency exchange gain
|
41,452
|
54,868
|
305,044
|
|||||||
Income
(loss) from continuing operations before income
|
||||||||||
taxes
and minority interest
|
5,176,015
|
(2,617,733
|
)
|
6,000,406
|
||||||
Total
income tax provision (benefit)
|
2,027,647
|
(1,824,647
|
)
|
1,955,594
|
||||||
Net
income (loss) from continuing operations
|
||||||||||
before
minority interest
|
3,148,368
|
(793,086
|
)
|
4,044,812
|
||||||
Minority
interest
|
(425,515
|
)
|
(630,963
|
)
|
(1,412,197
|
)
|
||||
Net
income (loss) from continuing operations
|
2,722,853
|
(1,424,049
|
)
|
2,632,615
|
||||||
Loss
from discontinued operations
|
(226,089
|
)
|
(236,635
|
)
|
(354,550
|
)
|
||||
Income
tax benefit on loss from discontinued operations
|
85,823
|
74,144
|
123,252
|
|||||||
Net
income (loss)
|
$
|
2,582,587
|
$
|
(1,586,540
|
)
|
$
|
2,401,317
|
|||
Net
income (loss) per common share: basic
|
||||||||||
Continuing
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.66
|
|||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
||||
Net
income (loss) per common share: basic
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.60
|
|||
Net
income (loss) per common share: diluted
|
||||||||||
Continuing
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.65
|
|||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
||||
Net
income (loss) per common share: diluted
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.59
|
|||
Weighted
average common shares outstanding: basic
|
3,981,226
|
3,962,699
|
3,985,716
|
|||||||
Weighted
average common shares outstanding: diluted
|
3,988,836
|
3,962,699
|
4,041,242
|
|||||||
The
accompanying notes are an integral part of these financial
statements.
|
Ecology
and Environment, Inc
|
||||||||||
Consolidated
Statement of Cash Flows
|
||||||||||
Year
Ended July 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
|
||||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income (loss)
|
$
|
2,582,587
|
$
|
(1,586,540
|
)
|
$
|
2,401,317
|
|||
Net
loss from discontinued operations, net of tax
|
(140,266
|
)
|
(162,491
|
)
|
(231,298
|
)
|
||||
Income
(loss) from continuing operations
|
2,722,853
|
(1,424,049
|
)
|
2,632,615
|
||||||
Adjustments
to reconcile net income to net cash
|
||||||||||
provided
by (used in) operating activities:
|
||||||||||
Impairment
of long-lived assets
|
-
|
2,750,972
|
442,374
|
|||||||
Depreciation
|
1,164,095
|
1,501,035
|
1,606,769
|
|||||||
Amortization
|
212,506
|
299,220
|
379,913
|
|||||||
(Gain)
loss on disposition of property and equipment
|
(12,879
|
)
|
6,286
|
6,804
|
||||||
Minority
interest
|
650,552
|
794,442
|
(86,603
|
)
|
||||||
Provision
for contract adjustments
|
1,524,049
|
467,954
|
627,028
|
|||||||
(Increase)
decrease in:
|
||||||||||
-
contracts receivable, net
|
(7,178,436
|
)
|
4,593,343
|
3,632,008
|
||||||
-
other current assets
|
994,348
|
437,474
|
1,074,383
|
|||||||
-
deferred income taxes
|
(885,440
|
)
|
(1,140,159
|
)
|
378,078
|
|||||
-
other non-current assets
|
(1,305,109
|
)
|
325,526
|
1,699,402
|
||||||
Increase
(decrease) in:
|
||||||||||
-
accounts payable
|
456,672
|
(90,678
|
)
|
(257,123
|
)
|
|||||
-
accrued payroll costs
|
2,542,289
|
(773,662
|
)
|
(261,052
|
)
|
|||||
-
income taxes payable
|
1,463,170
|
(326,992
|
)
|
(787,450
|
)
|
|||||
-
deferred revenue
|
(70,386
|
)
|
(962,608
|
)
|
(10,017,031
|
)
|
||||
-
other accrued liabilities
|
6,272,730
|
(494,677
|
)
|
(1,652,177
|
)
|
|||||
Net
cash provided by (used in) operating activities
|
8,551,014
|
5,963,427
|
(582,062
|
)
|
||||||
Net
cash used in discontinued operating activities (revised)
|
(151,069
|
)
|
(161,593
|
)
|
(72,900
|
)
|
||||
Cash
flows provided by (used in) investing activities:
|
||||||||||
Acquistions
|
-
|
-
|
(150,000
|
)
|
||||||
Purchase
of property, building and equipment
|
(985,323
|
)
|
(246,290
|
)
|
(1,697,088
|
)
|
||||
Proceeds
from sale of investments
|
-
|
-
|
3,899,300
|
|||||||
Proceeds
from maturity of investments
|
24,750
|
26,136
|
-
|
|||||||
Payment
for the purchase of bond
|
(3,279
|
)
|
(3,109
|
)
|
(86,501
|
)
|
||||
Net
cash provided by (used in) investing activities
|
(963,852
|
)
|
(223,263
|
)
|
1,965,711
|
|||||
Cash
flows provided by (used in) financing activities:
|
||||||||||
Dividends
paid
|
(1,420,930
|
)
|
(1,384,092
|
)
|
(1,396,130
|
)
|
||||
Proceeds
from debt
|
549,925
|
747,863
|
465,904
|
|||||||
Repayment
of debt
|
(457,203
|
)
|
(698,729
|
)
|
(2,378,226
|
)
|
||||
Distributions
to minority partners
|
(897,247
|
)
|
(184,310
|
)
|
-
|
|||||
Net
proceeds from issuance of common stock
|
8,700
|
1,812
|
15,938
|
|||||||
Purchase
of treasury stock
|
(25,077
|
)
|
(530,057
|
)
|
(221,275
|
)
|
||||
Net
cash used in financing activities
|
(2,241,832
|
)
|
(2,047,513
|
)
|
(3,513,789
|
)
|
||||
Effect
of exchange rate changes on cash and cash equivalents
|
28,122
|
100,725
|
(134,017
|
)
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
5,222,383
|
3,631,783
|
(2,337,057
|
)
|
||||||
Cash
and cash equivalents at beginning of period
|
7,872,116
|
4,240,333
|
6,577,390
|
|||||||
Cash
and cash equivalents at end of period
|
$
|
13,094,499
|
$
|
7,872,116
|
$
|
4,240,333
|
||||
The
accompanying notes are an integral part of these financial
statements.
|
Consolidated
Statement of Changes in Shareholders' Equity
|
||||||||||||||||||||||||||||||||||
|
|
|
Accumulated
|
|
|
|
|
|||||||||||||||||||||||||||
Common
Stock
|
Capital
in
|
|
Other
|
|
|
|
|
|||||||||||||||||||||||||||
Class
A
|
Class
B
|
Excess
of
|
Retained
|
Comprehensive
|
Unearned
|
Treasury
Stock
|
Comprehensive
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Par
Value
|
earnings
|
Income
|
Compensation
|
Shares
|
Amount
|
Income
|
||||||||||||||||||||||||
Balance
at July 31, 2003
|
2,469,071
|
$
|
24,691
|
1,712,068
|
$
|
17,121
|
$
|
17,467,974
|
$
|
23,967,504
|
$
|
(2,111,830
|
)
|
$
|
(156,552
|
)
|
109,772
|
$
|
(831,286
|
)
|
||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
2,401,317
|
-
|
-
|
-
|
-
|
2,401,317
|
|||||||||||||||||||||||
Foreign
currency translation reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
(134,017
|
)
|
-
|
-
|
-
|
(134,017
|
)
|
|||||||||||||||||||||
Cash
dividends paid ($.34 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,396,130
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Unrealized
investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(90,876
|
)
|
-
|
-
|
-
|
(90,876
|
)
|
|||||||||||||||||||||
Conversion
of common stock - B to A
|
30,764
|
308
|
(30,764
|
)
|
(308
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Repurchase
of Class A common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
24,326
|
(221,275
|
)
|
-
|
||||||||||||||||||||||
Stock
options exercised
|
2,150
|
22
|
-
|
-
|
15,916
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Issuance
of stock under stock award plan, net
|
-
|
-
|
-
|
-
|
111,229
|
-
|
-
|
(214,445
|
)
|
(47,795
|
)
|
367,333
|
-
|
|||||||||||||||||||||
Amortization,
net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
177,715
|
-
|
-
|
-
|
|||||||||||||||||||||||
Forfeitures
|
-
|
-
|
-
|
-
|
(2,675
|
)
|
-
|
-
|
-
|
1,446
|
(8,893
|
)
|
-
|
|||||||||||||||||||||
Balance
at July 31, 2004
|
2,501,985
|
$
|
25,021
|
1,681,304
|
$
|
16,813
|
$
|
17,592,444
|
$
|
24,972,691
|
$
|
(2,336,723
|
)
|
$
|
(193,282
|
)
|
87,749
|
$
|
(694,121
|
)
|
$
|
2,176,424
|
||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(1,586,540
|
)
|
-
|
-
|
-
|
-
|
(1,586,540
|
)
|
|||||||||||||||||||||
Foreign
currency translation reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
100,725
|
-
|
-
|
-
|
100,725
|
|||||||||||||||||||||||
Cash
dividends paid ($.34 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,384,092
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Unrealized
investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(53
|
)
|
-
|
-
|
-
|
(53
|
)
|
|||||||||||||||||||||
Conversion
of common stock - B to A
|
12,000
|
120
|
(12,000
|
)
|
(120
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Repurchase
of Class A common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
62,500
|
(530,057
|
)
|
-
|
||||||||||||||||||||||
Stock
options exercised
|
250
|
2
|
-
|
-
|
1,810
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Issuance
of stock under stock award plan, net
|
-
|
-
|
-
|
-
|
38,230
|
-
|
-
|
(134,971
|
)
|
(33,531
|
)
|
265,230
|
-
|
|||||||||||||||||||||
Amortization,
net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
164,717
|
-
|
-
|
-
|
|||||||||||||||||||||||
Forfeitures
|
-
|
-
|
-
|
-
|
(10,312
|
)
|
-
|
-
|
4,543
|
3,776
|
(28,251
|
)
|
-
|
|||||||||||||||||||||
Balance
at July 31, 2005
|
2,514,235
|
$
|
25,143
|
1,669,304
|
$
|
16,693
|
$
|
17,622,172
|
$
|
22,002,059
|
$
|
(2,236,051
|
)
|
$
|
(158,993
|
)
|
120,494
|
$
|
(987,199
|
)
|
$
|
(1,485,868
|
)
|
|||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
2,582,587
|
-
|
-
|
-
|
-
|
2,582,587
|
|||||||||||||||||||||||
Reclassification
due to adoption of FAS 123R
|
-
|
-
|
-
|
-
|
(158,993
|
)
|
-
|
-
|
158,993
|
-
|
-
|
-
|
||||||||||||||||||||||
Foreign
currency translation reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
28,122
|
-
|
-
|
-
|
28,122
|
|||||||||||||||||||||||
Cash
dividends paid ($.35 per share)
|
-
|
-
|
-
|
-
|
-
|
(1,420,930
|
)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Unrealized
investment gain, net
|
-
|
-
|
-
|
-
|
-
|
-
|
(901
|
)
|
-
|
-
|
-
|
(901
|
)
|
|||||||||||||||||||||
Conversion
of common stock - B to A
|
19,131
|
191
|
(19,131
|
)
|
(191
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Repurchase
of Class A common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,595
|
(25,077
|
)
|
-
|
||||||||||||||||||||||
Stock
options exercised
|
1,200
|
12
|
-
|
-
|
8,688
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Share-based
compensation
|
-
|
-
|
-
|
-
|
130,277
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Other
|
-
|
-
|
-
|
-
|
82,229
|
-
|
-
|
-
|
5,374
|
(41,372
|
)
|
-
|
||||||||||||||||||||||
Balance
at July 31, 2006
|
2,534,566
|
$
|
25,346
|
1,650,173
|
$
|
16,502
|
$
|
17,684,373
|
$
|
23,163,716
|
$
|
(2,208,830
|
)
|
$
|
-
|
128,463
|
$
|
(1,053,648
|
)
|
$
|
2,609,808
|
1.
|
Summary
of Operations and Basis of
Presentation
|
Ecology
and Environment, Inc. (the Company) is an environmental consulting
and
testing firm whose underlying philosophy is to provide a broad
range of
environmental consulting services worldwide so that sustainable
economic
and human development may proceed with minimum negative impact
on the
environment. These services include environmental audits and impact
assessments, hazardous material site evaluations and response programs,
water and groundwater monitoring, laboratory analyses, environmental
infrastructure planning and many other projects provided by the
Company's
multidisciplinary professional staff. Gross revenues reflected
in the
Company's consolidated statement of income represent services rendered
for
which the Company maintains a primary contractual relationship
with its
customers. Included in gross revenues are certain services outside
the
Company's normal operations which the Company has elected to subcontract
to other contractors. The costs relative to such subcontract services
are
deducted from gross revenues to derive net
revenues.
|
2.
|
Summary
of Significant Accounting
Policies
|
a.
|
Consolidation
|
b.
|
Use
of estimates
|
The
preparation of financial statements in conformity with generally
accepted
accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results may differ from those
estimates.
|
c.
|
Reclassifications
|
Certain
prior year amounts were reclassified to conform to the 2006 financial
statement presentation.
|
d.
|
Revenue
recognition
|
The
majority of the Company's revenue is derived from environmental
consulting
work, with the balance derived from sample analysis (E&E Analytical
Services Center) and aquaculture. The consulting revenue is principally
derived from the sale of labor hours. The consulting work is performed
under a mix of fixed price, cost-type, and time and material contracts.
Contracts are required from all customers. Revenue is recognized
as
follows:
|
Contract
Type
|
Work
Type
|
Revenue
Recognition Policy
|
||
Fixed
Price
|
Consulting
|
Percentage
of completion, approximating the ratio of total costs incurred
to date to
total estimated costs.
|
||
Cost-Type
|
Consulting
|
Costs
as incurred. Fixed fee portion is recognized using percentage of
completion determined by the percentage of level of effort (LOE)
hours
incurred to total LOE hours in the respective
contracts.
|
||
Time
and Materials
|
Consulting
|
As
incurred at contract rates.
|
||
Unit
Price
|
Laboratory/Aquaculture
|
Upon
completion of reports (laboratory) and upon delivery and payment
from
customers (aquaculture).
|
Substantially
all of the Company's cost-type work is with federal governmental
agencies
and, as such, is subject to audits after contract completion. Provisions
for adjustments to the revenue accrued under these cost-type contracts
are
provided for on an annual basis based on past settlement history.
Government audits have been completed through fiscal year 2001
and are
currently in process for fiscal year 2002. However, final rates
have not
been negotiated under these audits since 1995. The majority of
the balance
in the allowance for contract adjustments accounts represents a
reserve
against possible adjustments for the fiscal years
1996-2006.
|
Deferred
revenue of $232,000 at July 31, 2005 represents net advances received
under the Saudi and Kuwait contracts. Those advances are amortized
against
future progress billings over the respective contract periods.
The Company
has received $161,000 in deferred revenue on the START III contract
as of
July 31, 2006.
|
e.
|
Investment
securities
|
Investment
securities have been classified as available for sale and are stated
at
estimated fair value. Unrealized gains or losses related to investment
securities available for sale are reflected in accumulated other
comprehensive income, net of applicable income taxes in the consolidated
balance sheet and statement of changes in shareholders' equity.
The cost
of securities sold is based on the specific identification
method.
|
f.
|
Property,
building and equipment, depreciation and
amortization
|
Property,
building and equipment are stated at cost. Office furniture and
all
equipment are depreciated on the straight-line method for book
purposes,
excluding computer equipment which is depreciated on the accelerated
method for book purposes, and on accelerated methods for tax purposes
over
the estimated useful lives of the assets (three to seven years).
The
headquarters building is depreciated on the straight-line method
for both
book and tax purposes over an estimated useful life of 32 years.
Its
components are depreciated over their estimated useful lives ranging
from
7 to 15 years. The analytical services center building and warehouse
is
depreciated on the straight-line method over an estimated useful
life of
40 years for both book and tax purposes. Leasehold improvements
are
amortized for book purposes over the terms of the leases or the
estimated
useful lives of the assets, whichever is shorter. Expenditures
for
maintenance and repairs are charged to expense as incurred. Expenditures
for improvements are capitalized. When property or equipment is
retired or
sold, any gain or loss on the transaction is reflected in the current
year's earnings.
|
g.
|
Fair
value of financial instruments
|
The
carrying amount of cash and cash equivalents, contracts receivable
and
accounts payable at July 31, 2006 and 2005 approximate fair value.
The amortized cost and estimated fair value of investment securities
available for sale are fully described in Note 4. Long-term debt
consists of bank loans and capitalized equipment leases. Based
on the
Company's assessment of the current financial market and corresponding
risks associated with the debt, management believes that the carrying
amount of long-term debt at July 31, 2006 and July 31, 2005 approximates
fair value.
|
h.
|
Translation
of foreign currencies
|
The
financial statements of foreign subsidiaries where the local currency
is
the functional currency are translated into U.S. dollars using
exchange
rates in effect at period end for assets and liabilities and average
exchange rates during each
|
The
financial statements of foreign subsidiaries located in highly
inflationary economies are remeasured as if the functional currency
were
the U.S. dollar. The remeasurement of local currencies into U.S.
dollars
creates translation adjustments which are included in net income.
There
were no highly inflationary economy translation adjustments for
fiscal
years 2004 - 2006.
|
i.
|
Income
taxes
|
The
Company follows the asset and liability approach to account for
income
taxes. This approach requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets
and
liabilities. Although realization is not assured, management believes
it
is more likely than not that the recorded net deferred tax assets
will be
realized. Since in some cases management has utilized estimates,
the
amount of the net deferred tax asset considered realizable could
be
reduced in the near term. No provision has been made for United
States
income taxes applicable to undistributed earnings of foreign subsidiaries
as it is the intention of the Company to indefinitely reinvest
those
earnings in the operations of those
entities.
|
j.
|
Pension
costs
|
The
Company has a non-contributory defined contribution plan providing
deferred benefits for substantially all of the Company's employees.
The
Company also has a supplemental defined contribution plan (SERP)
to
provide deferred benefits for senior executives of the Company.
The annual
expense of the Company's supplemental defined contribution plan
is based
on a percentage of eligible wages as authorized by the Company's
Board of
Directors. Benefits under this plan are funded as accrued. The
SERP was
terminated effective July 31, 2006 and balances totaling approximately
$363,000 will be paid in the first quarter of fiscal year
2007.
|
The
Company does not offer any benefits that would result in a liability
under
either SFAS No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions" or SFAS No. 112 "Employers' Accounting for
Post
Employment Benefits."
|
k.
|
Stock
based compensation
|
The
Company adopted FAS 123(R), Share-Based Payment, effective August
1, 2005.
The Statement requires companies to expense the value of employee
stock
options and similar awards. Under FAS 123(R), SBP awards result
in a cost
that will be measured at fair value on the awards' grant date,
based on
the estimated number of awards that are expected to vest. Compensation
cost for awards that vest would not be reversed if the awards expire
without being exercised. The unearned stock compensation balance
of
$158,993 as of July 31, 2005, which was accounted for under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), was reclassified into additional paid-in-capital
upon
adoption of SFAS 123(R). Additionally, the Company elected
the "short-cut" method to calculate the pool of windfall tax
benefits. The impact on the Company's financial statements was not
material.
|
l.
|
Earnings
per share
|
Basic
EPS is computed by dividing income available to common shareholders
by the
weighted average number of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that would occur if
securities
or other contracts to issue common stock were exercised or converted
into
common stock or resulted in the issuance of common stock that then
shared
in the earnings of the Company. See Footnote No.
14.
|
m.
|
Comprehensive
Income
|
Comprehensive
income is defined as "the change in equity of a business enterprise
during
a period from transactions and other events and circumstances from
non-owner sources." The term "comprehensive income" is used to
describe
the total net earnings plus other comprehensive income. For the
Company,
other comprehensive income includes currency translation adjustments
on
foreign subsidiaries and unrealized gains or losses on available-for-sale
securities.
|
n.
|
Segment
reporting
|
Management
designates the internal organization that is used by management
for making
operating decisions and assessing performance as the source of
the
Company's reportable segments. Ecology and Environment, Inc. has
three
reportable segments which are differentiated by product line: consulting
services, analytical laboratory services, and aquaculture. The
consulting
services segment provides broad based environmental service encompassing
audits and impact assessments,
|
surveys,
air and water quality management, environmental engineering, environmental
infrastructure planning, and industrial hygiene and occupational
health
studies to a worldwide base of customers. The analytical laboratory
provided analytical testing services to industrial and governmental
clients for the analysis of waste, soil and sediment
samples.
|
o.
|
Impairment
of Long-Lived Assets
|
The
Company accounts for impairment of long-lived assets in accordance
with
Statement of Financial Accounting Standards (SFAS) No. 144 "Accounting
for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
required
that long-lived assets be reviewed for impairment whenever events
or
changes in circumstances indicate that the book value of the asset
may not
be recoverable. The Company assesses recoverability of the carrying
value
of the asset by estimating the future net cash flows (undiscounted)
expected to result from the asset, including eventual disposition.
If the
future net cash flows are less than the carrying value of the asset,
an
impairment loss is recorded equal to the difference between the
asset's
carrying value and fair value. An impairment loss of $442,000 ($139,000
net of minority interest and tax) was recognized in fiscal year
2004 for
the long-term assets at the Company's fish farm in Jordan. The
impaired
assets consisted of buildings, improvements and equipment which
are
continued to be held for use.
|
In
January 2005, the Company recognized a $1.6 million impairment
loss as a
result of its decision to close its Analytical Services Center
(ASC)
located in Lancaster, New York. At that time, the impairment of
the land
and buildings was determined based on the results of an independent
appraisal and the equipment values were determined by equipment
offers the
Company had received. Operations continued beyond the end of the
Company's
second quarter ended January 2005 and all backlog was completed
by the end
of February. Consequently, at January 2005 the impairment loss
was shown
as from continuing operations and the assets were classified as
held for
use.
|
In
April 2005, the Company recorded an additional impairment loss
on its
remaining ASC land and building assets in the amount of $1.2 million.
This
was the result of information obtained from various commercial
brokers in
April 2005 that provided the Company with additional information
on
current market conditions affecting the value of the real estate.
The
reduced valuation is based on the likelihood that the facility
will not be
sold to an existing laboratory or research company, but will rather
be
sold as combination office and warehouse space. The testing equipment
was
sold during the third quarter of fiscal year 2005. Although business
operations have ceased at the ASC, the impairment losses are shown
in the
accompanying financial statements at July 31, 2006 as from continuing
operations due to the uncertainty that the remaining assets can
by sold
within one year under current market
conditions.
|
p.
|
American
Jobs Creation Act of 2004
|
q.
|
Cash
Flow Revision
|
The
Company has revised its 2005 and 2004 consolidated statement of
cash flows
to separately disclose operating, investing and financing portions
of cash
flows attributable to discontinued operations. The Company had
previously
reported these as separate amounts with cash flows from continuing
operations within each category.
|
3.
|
Cash
and Cash Equivalents
|
The
Company's policy is to invest cash in excess of operating requirements
in
income-producing short-term investments. At July 31, 2006 and 2005,
short-term investments consist of commercial paper and money market
funds
and are carried at cost. Short-term investments amounted to approximately
$55,000 and $52,000 at July 31, 2006 and 2005, respectively, and
are
reflected in cash and cash equivalents in the accompanying consolidated
balance sheet and statement of cash
flows.
|
For
purposes of the consolidated statement of cash flows, the Company
considers all highly liquid instruments purchased with a maturity
of three
months or less to be cash equivalents. Cash paid for interest amounted
to
approximately $96,000, $122,000, and $139,000 in fiscal years 2006,
2005
and 2004, respectively. Cash paid for income taxes amounted to
approximately $1.3 million, $897,000, and $2.3 million in fiscal
years
2006, 2005 and 2004, respectively.
|
4.
|
Investment
Securities
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Estimated
Fair
Value
|
||||||||
July
31, 2006
|
||||||||||
Investment
securities available for sale:
|
||||||||||
Mutual
funds
|
$
|
92,638
|
$
|
4,922
|
$
|
97,560
|
||||
July
31, 2005
|
||||||||||
Investment
securities available for sale:
|
||||||||||
Mutual
funds
|
$
|
89,359
|
$
|
6,424
|
$
|
95,783
|
||||
Municipal
notes and bonds
|
24,750
|
---
|
24,750
|
|||||||
$
|
114,100
|
$
|
6,424
|
$
|
120,533
|
During
fiscal year 2004, the Company sold mutual funds valuing $3,899,300.
There
were no sales of investment securities recorded in fiscal years
2006 and
2005.
|
5.
|
Contract
Receivables, net
|
July
31,
|
|||||||
2006
|
2005
|
||||||
United
States government -
|
|||||||
Billed
|
$
|
3,040,081
|
$
|
2,418,683
|
|||
Unbilled
|
3,454,074
|
3,801,977
|
|||||
6,494,155
|
6,220,660
|
||||||
Industrial
customers and state and municipal governments -
|
|||||||
Billed
|
29,481,874
|
22,065,280
|
|||||
Unbilled
|
3,360,808
|
5,348,293
|
|||||
32,842,682
|
27,413,573
|
||||||
Less
allowance for doubtful accounts and contract adjustments -
|
(2,325,460
|
)
|
(2,262,230
|
)
|
|||
$
|
37,011,377
|
$
|
31,372,003
|
6.
|
Property,
Building and Equipment,
net
|
July
31,
|
|||||||
2006
|
2005
|
||||||
Land
|
$
|
543,051
|
$
|
543,051
|
|||
Buildings
|
11,112,042
|
11,099,757
|
|||||
Laboratory
and other equipment
|
2,917,387
|
2,802,880
|
|||||
Information
technology equipment
|
5,815,183
|
5,281,679
|
|||||
Office
furniture and equipment
|
2,211,654
|
2,140,598
|
|||||
Leasehold
improvements and other
|
1,431,521
|
1,302,449
|
|||||
$
|
24,030,838
|
$
|
23,170,414
|
||||
Less
accumulated depreciation and amortization
|
(16,254,606
|
)
|
(15,202,531
|
)
|
|||
$
|
7,776,232
|
$
|
7,967,883
|
7.
|
Line
of Credit
|
8.
|
Debt
and Capital Lease
Obligations
|
FY
2006
|
FY
2005
|
||||||
Various
bank loans and advances at interest rates ranging from 5% to 14
½ %
|
$
|
531,070
|
$
|
508,978
|
|||
Capital
lease obligations at varying interest rates averaging 12%
|
213,776
|
143,146
|
|||||
744,846
|
652,124
|
||||||
Less:
current portion of debt and capital lease obligations
|
(403,182
|
) |
(324,071
|
)
|
|||
Long-term
debt and capital lease obligations
|
$
|
341,664
|
$
|
328,053
|
Amount
|
||||
FY
2007
|
$
|
403,182
|
||
FY
2008
|
139,845
|
|||
FY
2009
|
60,365
|
|||
FY
2010
|
31,292
|
|||
FY
2011
|
26,347
|
|||
Thereafter
|
83,815
|
|||
$
|
744,846
|
9.
|
Income
Taxes
|
Fiscal
Year
|
||||||||||
2006
|
2005
|
2004
|
||||||||
US
|
$
|
5,027,092
|
$
|
(3,534,726
|
)
|
$
|
4,319,267
|
|||
Foreign
|
(276,592
|
)
|
286,030
|
268,942
|
||||||
$
|
4,750,500
|
$
|
(3,248,696
|
)
|
$
|
4,588,209
|
Fiscal
Year
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
2,340,755
|
$
|
(828,582
|
)
|
$
|
692,639
|
|||
State
|
369,118
|
103,991
|
113,136
|
|||||||
Foreign
|
328,330
|
169,443
|
909,812
|
|||||||
$
|
3,038,203
|
$
|
(555,148
|
)
|
$
|
1,715,587
|
||||
Deferred:
|
||||||||||
Federal
|
$
|
(926,101
|
)
|
$
|
(1,074,049
|
)
|
$
|
189,779
|
||
State
|
(84,455
|
)
|
(195,450
|
)
|
50,228
|
|||||
$
|
(1,010,556
|
)
|
$
|
(1,269,499
|
)
|
$
|
240,007
|
|||
$
|
2,027,647
|
$
|
(1,824,647
|
)
|
$
|
1,955,594
|
2006
|
2005
|
|
2004
|
||
Federal
tax
|
34.0%
|
(34.0%)
|
34.0%
|
||
State
tax, net
|
4.4%
|
1.2%
|
3.4%
|
||
Tax
exempt interest
|
0.0%
|
0.0%
|
(0.6%)
|
||
Foreign
operations
|
5.9%
|
3.3%
|
12.9%
|
||
Extraterritorial
income tax
|
(1.7%)
|
(3.4%)
|
(7.7%)
|
||
Re-evaluation
of tax contingencies
|
0.0%
|
(20.3%)
|
0.0%
|
||
Other
|
0.1%
|
(3.0%)
|
0.6%
|
||
Total
|
42.7%
|
(56.2%)
|
42.6%
|
Fiscal
Year
|
|||||||
2006
|
2005
|
||||||
Contract
and other reserves
|
$
|
3,664,043
|
$
|
2,879,672
|
|||
Discontinued
operations
|
1,662,279
|
1,784,013
|
|||||
Fixed
assets and intangibles
|
1,080,122
|
913,784
|
|||||
Accrued
compensation
|
737,398
|
669,224
|
|||||
Unearned
stock compensation
|
28,506
|
102,576
|
|||||
Other
|
107,141
|
114,041
|
|||||
Gross
deferred tax assets
|
$
|
7,279,489
|
$
|
6,463,310
|
|||
State
income taxes
|
(332,617
|
)
|
(320,297
|
)
|
|||
Investment
in foreign subsidiary
|
---
|
(81,581
|
)
|
||||
Gross
deferred tax liabilities
|
(332,617
|
)
|
(401,878
|
)
|
|||
Net
deferred tax asset
|
$
|
6,946,872
|
$
|
6,061,432
|
10.
|
Shareholders'
Equity
|
a.
|
Class
A and Class B common stock
|
The
relative rights, preferences and limitations of the Company's Class
A and
Class B common stock can be summarized as follows: Holders of Class
A
shares are entitled to elect 25% of the Board of Directors so long
as the
number of outstanding Class A shares is at least 10% of the combined
total
number of outstanding Class A and Class B common shares. Holders
of Class
A common shares have one-tenth the voting power of Class B common
shares
with respect to most other matters.
|
In
addition, Class A shares are eligible to receive dividends in excess
of
(and not less than) those paid to holders of Class B shares. Holders
of
Class B shares have the option to convert at any time, each share
of Class
B common stock into one share of Class A common stock. Upon sale
or
transfer, shares of Class B common stock will automatically convert
into
an equal number of shares of Class A common stock, except that
sales or
transfers of Class B common stock to an existing holder of Class
B common
stock or to an immediate family member will not cause such shares
to
automatically convert into Class A common
stock.
|
b.
|
Incentive
stock compensation
|
Under
the Company's incentive stock option plan (the "plan"), key employees,
including officers of the Company, were granted options to purchase
shares
of Class A Common stock at an option price of at least 100% of
the shares'
fair market value at the date of grant. Shares become exercisable
after a
minimum holding period of five years from the date of grant and
expire
after a period of ten years from the date of grant. A total of
209,390
shares were granted under the plan. The plan was terminated in
March of
1996 and all options expired during fiscal
year 2006.
|
Activity
under the plan is as follows:
|
Options
outstanding at July 31, 2003 at a weighted average price at $9.28
per
share
|
33,390
|
Exercised
shares
|
2,150
|
Cancelled
shares at $7.25 per share
|
500
|
Expired
shares at $12.38 per share
|
10,290
|
Options
outstanding at July 31, 2004 at a weighted average price of $7.96
per
share
|
20,450
|
Exercised
shares at $7.25 per share
|
250
|
Cancelled
shares
|
1,700
|
Expired
shares at $9.00 per share
|
8,100
|
Options
outstanding at July 31, 2005 at a weighted average price of $7.25
per
share
|
10,400
|
Exercised
shares at $7.25 per share
|
1,200
|
Expired
shares at $7.25 per share
|
9,200
|
Options
outstanding at July 31, 2006
|
---
|
The
Company estimates that if it elected to measure compensation cost
for
employee stock based compensation arrangements under SFAS No. 123,
it
would not have caused net income and earnings per share for fiscal
years
2004 - 2005 to be materially different from their reported
amounts.
|
c.
|
Stock
Award Plan
|
Effective
March 16, 1998, the Company adopted the Ecology and Environment,
Inc. 1998
Stock Award Plan (the “1998 Plan”). To supplement the 1998 Plan, the 2003
Stock Award Plan (the "2003 Plan") was approved by the shareholders
at the
annual meeting held in January 2004 (the 1998 Plan and the 2003
Plan are
collectively referred to as the “Award Plan”). The 2003 Plan will
terminate on October 15, 2008. Under the Award Plan key employees
(including officers) of the Company or any of its present or future
subsidiaries may be designated to receive awards of Class A common
stock
of the Company as a bonus for services rendered to the Company
or its
subsidiaries, without payment therefore, based upon the fair market
value
of the common stock at the time of the award. The Award Plan authorizes
the Company’s board of directors to determine for what period of time and
under what circumstances awards can be forfeited.
|
The
Company issued 33,531 shares in fiscal year 2005 and 47,795 shares
in
fiscal year 2004 pursuant to the Award Plan. Unearned compensation
is
recorded at the time of issuance and is being amortized over the
vesting
period.
|
11.
|
Shareholders'
Equity - Restrictive
Agreement
|
Messrs.
Gerhard J. Neumaier, Frank B. Silvestro, Ronald L. Frank and Gerald
A.
Strobel entered into a Stockholders' Agreement in 1970 which governs
the
sale of an aggregate of 1,167,068 shares Class B Common Stock owned
by
them and the former spouse of one of the individuals and the children
of
the individuals. The agreement provides that prior to accepting
a bona
fide offer to purchase all or any part of their shares, each party
must
first allow the other members to the agreement the opportunity
to acquire
on a pro rata basis, with right of over-allotment, all of such
shares
covered by the offer on the same terms and conditions proposed
by the
offer.
|
12.
|
Lease
Commitments
|
The
Company rents certain office facilities and equipment under non-cancelable
operating leases. The Company also rents certain facilities for
servicing
project sites over the term of the related long-term government
contracts.
These contracts provide for reimbursement of any remaining rental
commitments under such lease agreements in the event that the government
terminates the contract
|
At
July 31, 2006, future minimum rental commitments, net of estimated
amounts
allocable to government contracts with rental cost reimbursement
clauses,
were as follows:
|
Fiscal
Year
|
Gross
|
Reimbursable
|
Net
|
|||||||
2007
|
$
|
1,877,852
|
$
|
155,509
|
$
|
1,722,343
|
||||
2008
|
1,240,036
|
146,303
|
1,093,733
|
|||||||
2009
|
868,772
|
149,070
|
719,702
|
|||||||
2010
|
646,855
|
153,955
|
492,900
|
|||||||
2011
|
498,383
|
141,283
|
357,100
|
|||||||
Thereafter
|
368,407
|
180,001
|
188,406
|
13.
|
Defined
Contribution Plans
|
Contributions
to the defined contribution plan and supplemental retirement plan
are
discretionary and determined annually by the Board of Directors.
The total
expense under the plans for fiscal years 2006, 2005, and 2004 was
approximately $1.3 million, $1.3 million and $1.5 million,
respectively.
|
14.
|
Earnings
Per Share
|
The
computation of basic earnings per share reconciled to diluted earnings
per
share follows:
|
Fiscal
Year
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Income
(loss) from continuing operations available to common stockholders
|
$
|
2,722,853
|
$
|
(1,424,049
|
)
|
$
|
2,632,615
|
|||
Loss
from discontinued operations available to common
stockholders
|
(140,266
|
)
|
(162,491
|
)
|
(231,298
|
)
|
||||
Income
(loss) available to common stockholders
|
$
|
2,582,587
|
$
|
(1,586,540
|
)
|
$
|
2,401,317
|
|||
Weighted-average
common shares outstanding (basic)
|
3,981,226
|
3,962,699
|
3,985,716
|
|||||||
Basic
earnings per share:
|
||||||||||
Continued
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.66
|
|||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
||||
Basic
earnings (loss) per share
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.60
|
|||
Incremental
shares from assumed conversions of stock options and restricted
stock
awards
|
7,610
|
---
|
55,526
|
|||||||
Adjusted
weighted-average common shares outstanding
|
3,988,836
|
3,962,699
|
4,041,242
|
|||||||
Diluted
earnings per share:
|
||||||||||
Continued
operations
|
$
|
0.68
|
$
|
(0.36
|
)
|
$
|
0.65
|
|||
Discontinued
operations
|
(0.04
|
)
|
(0.04
|
)
|
(0.06
|
)
|
||||
Diluted
earnings (loss) per share
|
$
|
0.64
|
$
|
(0.40
|
)
|
$
|
0.59
|
As
of December 12, 2005, all outstanding stock options expired. At
July 31,
2005, there were 10,400 stock options outstanding with an exercise
price
of $7.25, which was not included in the above calculations due
to their
antidilutive nature.
|
15.
|
Commitments
and Contingencies
|
16.
|
Recent
Accounting
Pronouncements
|
In
September 2006, the SEC staff issued Staff Accounting Bulletin
No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." SAB 108 was
issued in
order to eliminate the diversity of practice surrounding how public
companies quantify financial statement
misstatements.
|
Traditionally,
there have been two widely-recognized methods for quantifying the
effects
of financial statement misstatements: the "roll-over" method and
the "iron
curtain" method. The roll-over method focuses primarily on the
impact of a
misstatement of the income statement--including the reversing effect
of
prior year misstatements--but its use can lead to the accumulation
of
misstatements in the balance sheet. The iron-curtain method, on
the other
hand, focuses primarily on the effect of correcting the period-end
balance
sheet with less emphasis on the reversing effects of prior year
errors on
the income statement. We currently use the roll-over method for
quantifying identified financial statement
misstatements.
|
In
SAB 108, the SEC staff established an approach that requires
quantification of financial statement misstatements based on the
effects
of the misstatements on each of the company's financial statements
and the
related financial statement disclosures. This model is commonly
referred
to as a "dual approach" because it requires quantification of errors
under
both the iron curtain and the roll-over
methods.
|
SAB
108 permits existing public companies to initially apply its provisions
either by (i) restating prior financial statements as if the "dual
approach" had always been used or (ii) recording the cumulative
effect of
initially applying the "dual approach" as adjustments
to the carrying values of assets and liabilities as of August 1, 2006
with an offsetting adjustment recorded to the opening
balance of retained earnings. Use of the "cumulative effect" transition
method requires detailed disclosure of the nature and amount of
each
individual error being corrected through the cumulative adjustment
and how
and when it arose.
|
The
Company will initially apply the provisions of SAB 108 using the
cumulative effect transition method in fiscl year 2007. When we
initially apply the provision of SAB 108, management anticipates
that the
impact on the Company's financial statements will not be
material.
|
17.
|
Acquisitions
|
On
May 3, 2004 the Company's sixty-percent owned subsidiary, Walsh
Environmental Scientists and Engineers, LLC (Walsh), acquired a
sixty-percent interest in Gustavson Associates, LLC (GAL). Walsh
paid
$150,000 for its interest in GAL. GAL is an independent oil and
minerals
consultancy providing services to banks, investors, government
agencies
and industrial clients around the world. Walsh began consolidating
the
balance sheet and operating results of GAL with its own since the
date of
acquisition. Walsh's consolidated financial statements are consolidated
with the Company's.
|
This
acquisition has been accounted for under the purchase method with
the
results of their operations consolidated with the Company's results
of
operations from the acquisition date. No proforma statements have
been
provided due to the relative insignificance of this
transaction.
|
18.
|
Transfer
of
Ownership/Dispositions
|
19.
|
Goodwill
|
In
July 2001, the FASB issued SFAS No. 141, Business
Combinations,
and SFAS No. 142, Goodwill
and Other Intangible Assets.
Statement No. 141 requires that all business combinations initiated
after
June 30, 2001, be accounted for using the purchase method of accounting.
Statement No. 142 discusses how intangible assets that are acquired
should
be accounted for in financial statements upon their acquisition
and also
how goodwill and other intangible assets should be accounted for
after
they have been initially recognized in the financial statements.
Beginning
on August 1, 2001 with the adoption of Statement No. 142, goodwill
existing on July 31, 2001, is no longer being amortized. Rather
the
remaining goodwill of approximately $740,000 is subject to an
annual assessment for impairment. During fiscal year 2006, this
test did
not result in any charges.
|
During
the fourth quarter of fiscal year 2003, the Company made the decision
to
discontinue its shrimp farm operation, Frutas Marinas S.A. The
Company
made the decision to terminate operations at its Board of Directors'
meeting in July 2003 and is committed to sell the
assets.
|
In
accordance with Financial Accounting Standards No. 144 "Accounting
for the
Impairment or Disposal of Long-Lived Assets," the Company reviewed
the
assets of Frutas Marinas S.A. to determine the extent of the impairment
loss in the carrying value of the assets. The Company reports results
of
operations for the shrimp farm under its Aquaculture Segment. The
Company
is committed to marketing the sale of its farm for its highest
and best
value. The Company has estimated the fair value of its assets primarily
based on external appraisals of the property and buildings for
general
farm use due to anticipated difficulty in selling the property
as a shrimp
farm operation because of lack of a profitable operating history.
As a
result, the Company has recognized an impairment loss of
$5,007,364.
|
Operating
results for the discontinued Frutas Marinas S.A. are as
follows:
|
FY
2006
|
FY
2005
|
FY
2004
|
||||||||
Net
revenues
|
$
|
3,676
|
$
|
25,736
|
$
|
---
|
||||
Operating
loss before income tax benefit
|
(226,089
|
)
|
(236,625
|
)
|
(354,550
|
)
|
||||
Provision
for income tax benefit
|
85,823
|
74,144
|
123,252
|
|||||||
Loss
on discontinued operations
|
$
|
(140,266
|
)
|
$
|
(162,491
|
)
|
$
|
(231,298
|
)
|
21.
|
Impairment
of Long-Lived Assets
|
The
Company accounts for impairment of long-lived assets in accordance
with
Statement of Financial Accounting Standards (SFAS) No. 144 "Accounting
for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
required
that long-lived assets be reviewed for impairment whenever events
or
changes in circumstances indicate that the book value of the asset
may not
be recoverable. The Company assesses recoverability of the carrying
value
of the asset by estimating the future net cash flows (undiscounted)
expected to result from the asset, including eventual disposition.
If the
future net cash flows are less than the carrying value of the asset,
an
impairment loss is recorded equal to the difference between the
asset's
carrying value and fair value. An impairment loss of $442,000 ($139,000
net of minority interest and tax) was recognized in fiscal year
2004 for
the long-term assets at the Company's fish farm in Jordan. The
impaired
assets consist of buildings, improvements and equipment which are
continued to be held for use.
|
In
January 2005, the Company recognized a $1.6 million impairment
loss as a
result of its decision to close its Analytical Services Center
(ASC)
located in Lancaster, New York. At that time, the impairment of
the land
and buildings was determined based on the results of an independent
appraisal and the equipment values were determined by equipment
offers the
Company had received. The impairment was precipitated by the Company’s
decision to close the operation rather than to sustain further
losses
while attempting to sell the segment as an on-going business. Continued
losses incurred in this segment as a result of market price deterioration
and a reduced emphasis by the Federal government on analytical
laboratory
testing was the basis for this decision. In
April 2005, the Company recorded an additional impairment loss
on its
remaining ASC land and building assets in the amount of $1.2 million.
This
was the result of meetings with various commercial brokers that
provided
the Company with additional information on current market conditions
affecting the value of the real estate. The reduced valuation is
based on
the likelihood that the facility will not be sold to an existing
laboratory or research company, but will rather be sold as combination
office and warehouse space. The testing equipment was sold during
the
third quarter of fiscal year 2005. Although all business operations
have
ceased, the ASC impairment losses are shown in the accompanying
financial
statements as from “continuing operations” due to the uncertainty that the
assets can be sold within one year under current market
conditions.
|
22.
|
Segment
Reporting
|
Ecology
and Environment, Inc. has three reportable segments: consulting
services,
analytical laboratory services, and aquaculture. The consulting
services
segment provides broad based environmental service encompassing
audits and
impact assessments, surveys, air and water quality management,
environmental engineering, environmental infrastructure planning,
and
industrial hygiene and occupational health studies to a worldwide
base of
customers. The analytical laboratory provides analytical testing
services
to industrial and governmental clients for the analysis of waste,
soil and
sediment samples. The analytical segment recognized a pretax impairment
loss in the amount of $2.8 million in fiscal year 2005 as a result
of its
|
decision
to close the ASC located in Lancaster, N.Y. The fish farm located
in
Jordan produces tilapia fish grown in a controlled environment
for markets
worldwide. In fiscal year 2004, an impairment loss of $442,000
($139,000
net of minority interest and tax) was recognized for the long-term
assets
at the Company's fish farm operations in
Jordon.
|
The
Company evaluates segment performance and allocates resources based
on
operating profit before interest income/expense and income taxes.
The
accounting policies of the reportable segments are the same as
those
described in the summary of significant accounting policies. Intercompany
sales from the analytical services segment to the consulting segment
are
recorded at market selling price, intercompany profits are eliminated.
The
Company's reportable segments are separate and distinct business
units
that offer different products. Consulting services are sold on
the bases
of time charges while analytical service and aquaculture products
are sold
on the basis of product unit
prices.
|
Aquaculture
|
|||||||||||||||||||
Consulting
|
Analytical
|
Continued
|
Discontinued
|
Elimination
|
Total
|
||||||||||||||
Net
revenues from external customers
|
$
|
81,784,255
|
$
|
---
|
$
|
51,265
|
$
|
---
|
$
|
---
|
$
|
81,835,520
|
|||||||
Intersegment
net revenues
|
---
|
---
|
---
|
---
|
---
|
---
|
|||||||||||||
Consolidated
net revenues
|
$
|
81,784,255
|
$
|
---
|
$
|
51,265
|
$
|
---
|
$
|
---
|
$
|
81,835,520
|
|||||||
Depreciation
expense
|
$
|
1,151,439
|
$
|
---
|
$
|
12,656
|
$
|
---
|
$
|
1,164,095
|
|||||||||
Segment
profit (loss) before income taxes and minority interest
|
$
|
5,291,878
|
$
|
---
|
$
|
(115,863
|
)
|
$
|
(226,089
|
)
|
$
|
4,949,926
|
|||||||
Segment
assets
|
$
|
66,823,384
|
$
|
2,100,000
|
$
|
198,000
|
$
|
31,000
|
$
|
69,152,384
|
|||||||||
Expenditures
for long-lived assets - gross
|
$
|
985,323
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
985,323
|
Geographic
Information:
|
|||||||
Net
Revenues (1)
|
Long-Lived
Assets
- Gross
|
||||||
United
States
|
$
|
69,390,520
|
$
|
22,258,838
|
|||
Foreign
Countries
|
12,445,000
|
1,772,000
|
(1)
|
Net
revenues are attributed to countries based on the location of the
customers. Net revenues in foreign countries include $2.1 million
in
Kuwait.
|
Aquaculture
|
|||||||||||||||||||
Consulting
|
Analytical
|
Continued
|
Discontinued
|
Elimination
|
Total
|
||||||||||||||
Net
revenues from external customers (1)
|
$
|
72,327,559
|
$
|
2,005,782
|
$
|
127,169
|
$
|
---
|
$
|
---
|
$
|
74,460,510
|
|||||||
Intersegment
net revenues
|
668,663
|
---
|
---
|
---
|
(668,663
|
)
|
---
|
||||||||||||
Consolidated
net revenues
|
$
|
72,996,222
|
$
|
2,005,782
|
$
|
127,169
|
$
|
---
|
$
|
(668,663
|
)
|
$
|
74,460,510
|
||||||
Depreciation
expense
|
$
|
1,169,572
|
$
|
318,806
|
$
|
12,657
|
$
|
---
|
$
|
1,501,035
|
|||||||||
Segment
profit (loss) before income taxes and minority interest
|
$
|
1,279,209
|
$
|
(3,888,153
|
)
|
$
|
(8,789
|
)
|
$
|
(236,635
|
)
|
$
|
(2,854,368
|
)
|
|||||
Segment
assets
|
$
|
53,536,535
|
$
|
2,100,000
|
$
|
314,000
|
$
|
27,000
|
$
|
55,977,535
|
|||||||||
Expenditures
for long-lived assets - gross
|
$
|
246,290
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
246,290
|
Geographic
Information:
|
|||||||
Net
Revenues (1) (2)
|
Long-Lived
Assets - Gross
|
||||||
United
States
|
$
|
61,058,510
|
$
|
22,651,414
|
|||
Foreign
Countries
|
13,402,000
|
519,000
|
(1)
|
Net
revenue of $27,536 from discontinued operations is excluded from
this
table.
|
(2)
|
Net
revenues are attributed to countries based on the location of the
customers. Net revenue in foreign countries includes $2.7 million
in Saudi
Arabia and $3.5 million in Kuwait.
|
Aquaculture
|
|||||||||||||||||||
Consulting
|
Analytical
|
Continued
|
Discontinued
|
Elimination
|
Total
|
||||||||||||||
Net
revenues from external customers (1)
|
$
|
84,464,323
|
$
|
5,002,770
|
$
|
33,340
|
$
|
---
|
$
|
---
|
$
|
89,500,523
|
|||||||
Intersegment
net revenues
|
995,510
|
---
|
---
|
---
|
(995,510
|
)
|
---
|
||||||||||||
Consolidated
net revenues
|
$
|
85,459,833
|
$
|
5,002,770
|
$
|
33,430
|
$
|
---
|
$
|
(995,510
|
)
|
$
|
89,500,523
|
||||||
Depreciation
expense
|
$
|
1,006,661
|
$
|
544,636
|
$
|
55,472
|
$
|
---
|
$
|
1,606,769
|
|||||||||
Segment
profit (loss) before income taxes and minority interest
|
$
|
7,976,832
|
$
|
(1,378,988
|
)
|
$
|
(597,438
|
)
|
$
|
(354,550
|
)
|
$
|
5,645,856
|
||||||
Segment
assets
|
$
|
54,992,626
|
$
|
7,447,000
|
$
|
34,000
|
$
|
30,000
|
$
|
62,503,626
|
|||||||||
Expenditures
for long-lived assets - gross
|
$
|
1,624,260
|
$
|
72,828
|
$
|
---
|
$
|
---
|
$
|
1,697,088
|
Geographic
Information:
|
|||||||
Net
Revenues (1) (2)
|
Long-Lived
Assets - Gross
|
||||||
United
States
|
$
|
55,729,523
|
$
|
26,687,802
|
|||
Foreign
Countries
|
33,771,000
|
474,000
|
(1)
|
Net
revenue of $13,641 from discontinued operations is excluded from
this
table (sale of remaining inventories and miscellaneous supplies).
|
(2)
|
Net
revenues are attributed to countries based on the location of the
customers. Net revenue in foreign countries includes $16.6 million
in
Saudi Arabia and $10.0 million in
Kuwait.
|
Year
ended
|
Balance
at beginning of period
|
Charged
to cost and expense
|
Deduction
|
Balance
at end of year
|
|||||||||
July
31, 2006
|
$
|
5,620,133
|
$
|
1,524,049
|
$
|
448,236
|
$
|
6,695,946
|
|||||
July
31, 2005
|
5,752,596
|
467,954
|
600,417
|
5,620,133
|
|||||||||
July
31, 2004
|
5,853,983
|
627,028
|
728,415
|
5,752,596
|
2006
|
First
|
Second
|
Third
|
Fourth
|
|||||||||
Gross
revenues
|
$
|
23,525
|
$
|
24,029
|
$
|
27,154
|
$
|
23,347
|
|||||
Net
revenues
|
20,275
|
19,853
|
21,253
|
20,455
|
|||||||||
Gross
profit
|
10,009
|
9,739
|
10,671
|
10,538
|
|||||||||
Income
from operations
|
1,580
|
1,300
|
1,365
|
1,426
|
|||||||||
Income
from continuing operations before income taxes and minority
interest
|
1,438
|
1,130
|
1,333
|
1,275
|
|||||||||
Net
income from continuing operations
|
783
|
656
|
648
|
636
|
|||||||||
Net
loss from discontinued operations
|
(37
|
)
|
(28
|
)
|
(28
|
)
|
(47
|
)
|
|||||
Net
income
|
$
|
746
|
$
|
628
|
$
|
620
|
$
|
589
|
|||||
Net
income (loss) per common share: basic
|
|||||||||||||
Continuing
operations
|
$
|
.20
|
$
|
.16
|
$
|
.16
|
$
|
.16
|
|||||
Discontinued
operations
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
|||||
Net
income (loss) per common share: basic
|
$
|
.19
|
$
|
.15
|
$
|
.15
|
$
|
.15
|
|||||
Net
income per common share: diluted
|
|||||||||||||
Continuing
operations
|
$
|
.20
|
$
|
.16
|
$
|
.16
|
$
|
.16
|
|||||
Discontinued
operations
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
|||||
Net
income per common share: diluted
|
$
|
.19
|
$
|
.15
|
$
|
.15
|
$
|
.15
|
2005
|
First
|
Second
|
Third
|
Fourth
|
|||||||||
Gross
revenues
|
$
|
22,716
|
$
|
21,172
|
$
|
23,717
|
$
|
23,746
|
|||||
Net
revenues
|
19,158
|
17,414
|
19,036
|
18,852
|
|||||||||
Gross
profit
|
9,571
|
8,144
|
9,346
|
9,384
|
|||||||||
Income
(loss) from operations
|
420
|
(2,200
|
)
|
(1,364
|
)
|
1,193
|
|||||||
Income
from continuing operations before income taxes and minority
interest
|
303
|
(2,383
|
)
|
(1,512
|
)
|
974
|
|||||||
Net
income (loss) from continuing operations
|
52
|
(1,731
|
)
|
(317
|
)
|
572
|
|||||||
Net
loss from discontinued operations
|
(47
|
)
|
(32
|
)
|
(29
|
)
|
(54
|
)
|
|||||
Net
income (loss)
|
$
|
5
|
$
|
(1,763
|
)
|
$
|
(346
|
)
|
$
|
518
|
|||
Net
income (loss) per common share: basic
|
|||||||||||||
Continuing
operations
|
$
|
.01
|
$
|
(.44
|
)
|
$
|
(.08
|
)
|
$
|
.15
|
|||
Discontinued
operations
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
|||||
Net
income (loss) per common share: basic
|
$
|
-
|
$
|
(.45
|
)
|
$
|
(.09
|
)
|
$
|
.14
|
|||
Net
income (loss) per common share: diluted
|
|||||||||||||
Continuing
operations
|
$
|
.01
|
$
|
(.44
|
)
|
$
|
(.08
|
)
|
$
|
.15
|
|||
Discontinued
operations
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
(.01
|
)
|
|||||
Net
income (loss) per common share: diluted
|
$
|
-
|
$
|
(.45
|
)
|
$
|
(.09
|
)
|
$
|
.14
|
2004
|
First
|
Second
|
Third
|
Fourth
|
|||||||||
Gross
revenues
|
$
|
26,942
|
$
|
27,785
|
$
|
29,227
|
$
|
26,668
|
|||||
Net
revenues
|
22,257
|
20,981
|
24,665
|
21,597
|
|||||||||
Gross
profit
|
9,619
|
9,574
|
10,967
|
10,323
|
|||||||||
Income
from operations
|
1,311
|
1,792
|
1,674
|
1,167
|
|||||||||
Income
from continuing operations before income taxes and minority
interest
|
1,401
|
1,855
|
1,726
|
1,018
|
|||||||||
Net
income (loss) from continuing operations
|
759
|
1,017
|
864
|
(8
|
)
|
||||||||
Net
loss from discontinued operations
|
(63
|
)
|
(51
|
)
|
(56
|
)
|
(61
|
)
|
|||||
Total
net income (loss)
|
$
|
696
|
$
|
966
|
$
|
808
|
$
|
(69
|
)
|
||||
Net
income (loss) per common share: basic
|
|||||||||||||
Continuing
operations
|
$
|
.19
|
$
|
.25
|
$
|
.21
|
$
|
.00
|
|||||
Discontinued
operations
|
(.02
|
)
|
(.01
|
)
|
(.01
|
)
|
(.02
|
)
|
|||||
Net
income (loss) per common share: basic
|
$
|
.17
|
$
|
.24
|
$
|
.20
|
$
|
(.02
|
)
|
||||
Net
income (loss) per common share: diluted
|
|||||||||||||
Continuing
operations
|
$
|
.19
|
$
|
.25
|
$
|
.21
|
$
|
.00
|
|||||
Discontinued
operations
|
(.02
|
)
|
(.01
|
)
|
(.01
|
)
|
(.02
|
)
|
|||||
Net
income (loss) per common share: diluted
|
$
|
.17
|
$
|
.24
|
$
|
.20
|
$
|
(.02
|
)
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosures
|
Item
9A.
|
Controls
and Procedures
|
Item
10.
|
Directors
and Executive Officers of the
Registrant
|
Name
|
Age
|
Position
|
Gerhard
J. Neumaier
|
69
|
President
and Director
|
Frank
B. Silvestro
|
69
|
Executive
Vice President and Director
|
Gerald
A. Strobel
|
66
|
Executive
Vice President of Technical Services and Director
|
Ronald
L. Frank
|
68
|
Executive
Vice President of Finance, Secretary, Treasurer and
Director
|
Gerard
A. Gallagher, Jr.
|
75
|
Director
|
Roger
J. Gray
|
66
|
Senior
Vice President
|
Laurence
M. Brickman
|
62
|
Senior
Vice President
|
Harvey
J. Gross
|
78
|
Director
|
Ross
M. Cellino
|
73
|
Director
|
Timothy
Butler
|
65
|
Director
|
SUMMARY
COMPENSATON TABLE
|
|||||||||||
Annual
Compensation
|
Long-Term
Compensation
|
||||||||||
Name
and Principal Position
|
Fiscal
Year
|
Salary
|
Bonus
(1)
|
Other
|
Stock
Incentive Options (Shares)
|
Restricted
Stock Awards (3)
|
Long-Term
Compensation Payouts
|
All
Other (2)
|
|||
Gerhard
J. Neumaier
|
2006
|
$290,289
|
$45,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$18,164
|
|||
President
and Director
|
2005
|
$286,847
|
$-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$14,962
|
|||
2004
|
$278,897
|
$30,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$16,035
|
||||
Frank
B. Silvestro
|
2006
|
$251,526
|
$45,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$16,712
|
|||
Executive
Vice President
|
2005
|
$261,436
|
$-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$13,638
|
|||
and
Director
|
2004
|
$253,730
|
$30,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$14,724
|
|||
Ronald
L. Frank
|
2006
|
$211,658
|
$45,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$14,218
|
|||
Executive
Vice President
|
2005
|
$247,359
|
$-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$12,934
|
|||
of
Finance, Secretary,
|
2004
|
$253,730
|
$30,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$14,724
|
|||
Treasurer,
and Director
|
|||||||||||
Gerald
A. Strobel
|
2006
|
$264,573
|
$45,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$16,864
|
|||
Executive
Vice President
|
2005
|
$261,436
|
$-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$13,638
|
|||
of
Technical Services and
|
2004
|
$253,730
|
$30,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$14,724
|
|||
Director
|
|||||||||||
Laurence
M. Brickman
|
2006
|
$164,474
|
$21,000
|
-0-
|
-0-
|
-0-
|
-0-
|
$10,085
|
|||
Senior
Vice President
|
2005
|
$162,524
|
$-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$8,478
|
|||
2004
|
$158,366
|
$12,000
|
-0-
|
-0-
|
$8,000
|
-0-
|
$8,845
|
(1)
|
Amounts
earned for bonus compensation determined by the Board of
Directors.
|
(2)
|
Represents
group term life insurance premiums, contributions made by the Company
to
its Defined Contribution Plan and Defined Contribution Plan SERP
accruals
on behalf of each of the Named
Executives.
|
(3)
|
As
of July 31, 2006, there were 884 shares of the Company's Class
A Common
Stock which was restricted stock issued pursuant to the Company's
Stock
Award Plan issued to Laurence Brickman having a value of
$8,901.
|
· |
Defined
Contribution Plan.
The Company maintains a Defined Contribution Plan ("the DC Plan")
which is
qualified under the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code") pursuant to which the Company contributes
an
amount not in excess of 15% of the aggregate compensation of all
employees
who participate in the DC Plan. All employees, including the executive
officers identified under "Executive Compensation", are eligible
to
participate in the plan, provided that they have attained age 21
and
completed one year of employment with at least 1,000 hours of service.
The
amounts contributed to the plan by the Company are allocated to
participants based on a ratio of each participant's points to total
points
of all participants determined as follows: one point per $1,000 of
compensation plus two points per year of service completed prior
to August
1, 1979, and one point for each year of service completed after August
1,
1979.
|
· |
Supplemental
Retirement Plan.
In April 1994, the Board of Directors of the Company, in response
to
changes in the tax code, voted to establish a Supplemental Executive
Retirement Plan ("SERP") for purposes of providing retirement benefits
to
employees including officers of the Company whose retirement benefits
under the DC Plan are reduced as a result of the compensation limitation
imposed by the tax code change. This plan is a non-qualified plan
which
provides benefits that would have been lost from the DC Plan due
to the
imposition of the compensation restriction. As of July 31, 2006,
the SERP
plan was terminated by the Company. All existing balances will be
paid out
during the first quarter of fiscal year
2007.
|
· |
Stock
Award Plan.
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholders Matters
|
Class
A Common Stock
|
Class
B Common Stock
|
||||||||
Name
and Address (1)
|
Nature
and Amount
of
Beneficial
Ownership
(2) (3)
|
Percent
of
Class
as
Adjusted
(3)
|
Nature
and Amount
of
Beneficial
Ownership
(2) (3)
|
Percent
Of
Class
|
|||||
Gerhard
J. Neumaier*
|
359,911
|
13.0%
|
345,894
|
21.3%
|
|||||
Frank
B. Silvestro*
|
276,937
|
10.2%
|
276,937
|
17.1%
|
|||||
Ronald
L. Frank*
|
202,459
|
7.7%
|
189,544
|
11.7%
|
|||||
Gerald
A. Strobel*
|
208,578
|
7.9%
|
208,578
|
12.8%
|
|||||
Franklin
Resources, Inc.
|
215,000
|
8.9%
|
---
|
---
|
|||||
Wedbush,
Inc. (4)
|
227,300
|
9.4%
|
---
|
---
|
(1)
|
The
address for Gerhard J. Neumaier, Frank B. Silvestro, Ronald L.
Frank and
Gerald A. Strobel is c/o Ecology and Environment, Inc., 368 Pleasant
View
Drive, Lancaster, New York 14086, unless otherwise indicated. The
address
for Franklin Resources, Inc. is One Franklin Parkway, Building
920, San
Mateo, California 94403. The address for Wedbush, Inc. is 1000
Wiltshire
Blvd., Los Angeles, CA 90017-2459 and the address for Edward W.
Wedbush
and Wedbush Morgan Securities is P.O. Box 30014, Los Angeles, CA
90030-0014.
|
(2)
|
Each
named individual or corporation is deemed to be the beneficial
owners of
securities that may be acquired within 60 days through the exercise
of
exchange or conversion rights. The shares of Class A Common Stock
issuable
upon conversion by any such shareholder are not included in calculating
the number of shares or percentage of Class A Common Stock beneficially
owned by any other shareholder.
|
(3)
|
There
are 2,427,463 shares of Class A Common Stock issued and outstanding
and
1,643,914 shares of Class B Common Stock issued and outstanding
as of
September 30, 2006. The figures in the "as adjusted" columns are
based
upon these totals and except as set forth in the preceding sentence,
upon
the assumptions described in footnote 2 above.
|
(4)
|
Includes
87,000 shares owned by Edward W. Wedbush and 3,000 shares owned
by Wedbush
Morgan Securities, Inc.
|
Class
A Common Stock
|
Class
B Common Stock
|
|||||||||||
Name
(1)
|
Nature
and Amount
of
Beneficial
Ownership
(2) (3)
|
Percent
of
Class
as
Adjusted
(3)
|
Nature
and Amount
of
Beneficial
Ownership
(2) (3)
|
Percent
of
Class
|
||||||||
Gerhard
J. Neumaier* (5) (11)
|
359,911
|
13.0%
|
345,894
|
21.3%
|
||||||||
Frank
B. Silvestro* (11)
|
276,937
|
10.2%
|
276,937
|
17.1%
|
||||||||
Ronald
L. Frank* (6) (11)
|
202,459
|
7.7%
|
189,544
|
11.7%
|
||||||||
Gerald
A. Strobel* (7) (11)
|
208,578
|
7.9%
|
208,578
|
12.8%
|
||||||||
Harvey
J. Gross (8)
|
80,047
|
3.2%
|
80,047
|
4.9%
|
||||||||
Gerard
A. Gallagher, Jr.
|
61,641
|
2.5%
|
61,300
|
3.8%
|
||||||||
Ross
M. Cellino (9)
|
16,111
|
*
|
1,050
|
*
|
||||||||
Roger
Gray
|
9,816
|
*
|
5,662
|
*
|
||||||||
Timothy
Butler
|
1,600
|
*
|
---
|
---
|
||||||||
Directors
and Officers Group (10)
(10
individuals)
|
1,232,078
|
34.2%
|
1,176,939
|
72.5%
|
1.
|
The
address of each of the above shareholders is c/o Ecology and Environment,
Inc., 368 Pleasant View Drive, Lancaster, New York 14086.
|
2.
|
Pursuant
to Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
beneficial ownership of a security consists of sole or shared voting
power
(including the power to vote or direct the vote) or sole or shared
investment power (including the power to dispose or direct the
disposition) with respect to a security whether through any contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, the shareholders identified in this table have sole
voting and
investment power of the shares beneficially owned by
them.
|
3.
|
Each
named person and all Directors and officers as a group are deemed
to be
the beneficial owners of securities that may be acquired within
60 days
through the exercise of exchange or conversion rights. The shares
of Class
A Common Stock issuable upon conversion by any such shareholder
are not
included in calculating the number of shares or percentage of Class
A
Common Stock beneficially owned by any other shareholder.
|
4.
|
There
are 2,427,463 shares of Class A Common Stock issued and outstanding
and
1,623,914 shares of Class B Common Stock issued and outstanding
as of
September 30, 2006. The figure in the "as adjusted" columns are
based upon
these totals and except as set forth in the preceding sentence,
upon the
assumptions described in footnotes 2 and 3
above.
|
5.
|
Includes
525 shares of Class A Common Stock owned by Mr. Neumaier's spouse,
as to
which he disclaims beneficial ownership. Includes 5,525 shares
of Class A
Common Stock owned by Mr. Neumaier's Individual Retirement Account.
Does
not include any shares of Class A Common Stock or Class B Common
Stock
held by Mr. Neumaier's adult children. Includes 7,967 shares of
Class A
Common Stock owned by a Partnership in which Mr. Neumaier is a
general
partner.
|
6.
|
Includes
8,625 Shares of Class B Common Stock owned by Mr. Frank's former
spouse as
to which he disclaims beneficial ownership except for the right
to vote
the shares which he retains pursuant to an agreement with his former
spouse. Includes 2,515 shares of Class A Common Stock owned by
Mr. Frank's
individual retirement account and 9,400 shares of Class A Common
Stock
owned by Mr. Frank’s 401(k) plan
account.
|
7.
|
Includes
1,008 shares of Class B Common Stock held in equal amounts by Mr.
Strobel
as custodian for his three children, as to which he disclaims beneficial
ownership.
|
8.
|
Includes
an aggregate of 21,047 shares of Class B Common Stock owned by
two trusts
created by Mr. Gross of which he and his spouse are the sole beneficiaries
during their lifetimes.
|
9.
|
Includes
10,396 shares of Class A Common Stock owned by Mr. Cellino's spouse,
as to
which shares he disclaims beneficial ownership; also includes 4,555
shares
of Class A Common Stock owned by Mr. Cellino's Individual Retirement
Account. Includes 5 shares of Class A Common Stock owned by a limited
partnership in which Mr. Cellino is a general
partner.
|
10.
|
Does
not include 81,007 shares (45,550 shares of Class A Common Stock
and
35,457shares of Class B Common Stock) owned by the Company's Defined
Contribution Plan of which Messrs. Gerhard J. Neumaier, Frank,
Silvestro
and Strobel constitute four of the five trustees of each
Plan.
|
11.
|
Subject
to the terms of the Restrictive Agreement. See "Security Ownership
of
Certain Beneficial Owners-Restrictive
Agreement."
|
Item
13.
|
Certain
Relationships and Related
Transactions
|
Item
14.
|
Principal
Accounting Fees and
Services
|
FY
2006
|
FY
2005
|
||||||
Audit
Fees
|
$
|
213,200
|
$
|
162,000
|
|||
Audit
Related Services
|
38,800
|
6,000
|
|||||
Grand
Total
|
$
|
252,000
|
$
|
168,000
|
Page
|
||||
(a)
|
1.
|
Financial
Statements
|
||
Reports
of Independent Registered Public Accounting Firms
|
23
|
|||
Consolidated
Balance Sheets - July 31, 2006 and 2005
|
24
|
|||
Consolidated
Statements of Income for the fiscal years ended July 31, 2006,
2005 and
2004
|
25
|
|||
Consolidated
Statements of Cash Flows for the Fiscal years ended July 31, 2006,
2005
and 2004
|
26
|
|||
Consolidated
Statements of Changes in Shareholders Equity for the fiscal years
ended
July 31, 2006, 2005 and 2004
|
27
|
|||
Notes
to Consolidated Financial Statements
|
28
|
|||
2.
|
Financial
Statement Schedule
|
|||
Schedule
II - Allowance for Doubtful Accounts and Other Reserves
|
42
|
|||
All
other schedules are omitted because they are not applicable, or
the
required information is shown in the consolidated financial statements
or
notes thereto.
|
|
3.
|
Exhibits
|
|
Exhibit
No.
|
Description
|
||
3.1
|
Certificate
of Incorporation (1)
|
||
3.2
|
Certificate
of Amendment of Certificate of Incorporation filed on March 23,
1970
(1)
|
||
3.3
|
Certificate
of Amendment of Certificate of Incorporation filed on January 19,
1982
(1)
|
||
3.4
|
Certificate
of Amendment of Certificate of Incorporation filed on January 29,
1987
(1)
|
||
3.5
|
Certificate
of Amendment of Certificate of Incorporation filed on February
10, 1987
(1)
|
||
3.6
|
Restated
By-Laws adopted on July 30, 1986 by Board of Directors
(1)
|
||
3.7
|
Certificate
of Change under Section 805-A of the Business Corporation Law filed
August
18, 1988 (2)
|
||
3.8
|
Certificate
of Change under Section 805-A of the Business Corporation Law filed
August
18, 1988 (2)
|
||
4.1
|
Specimen
Class A Common Stock Certificate (1)
|
||
4.2
|
Specimen
Class B Common Stock Certificates (1)
|
||
10.1
|
Stockholders'
Agreement among Gerhard J. Neumaier, Ronald L. Frank, Frank B. Silvestro
and Gerald A. Strobel dated May 12, 1970 (1)
|
||
10.4
|
Ecology
and Environment, Inc. Defined Contribution Plan Agreement dated
July 25,
1980 as amended on April 28, 1981 and July 21, 1983 and restated
effective
August 1, 1984 (1)
|
||
10.5
|
Summary
of Ecology and Environment Discretionary Performance Plan
(3)
|
||
10.6
|
1998
Ecology and Environment, Inc. Stock Award Plan and Amendments
(3)
|
||
10.7
|
2003
Ecology and Environment, Inc. Stock Award Plan (4)
|
||
14.1
|
Code
of Ethics (4)
|
||
21.5
|
Schedule
of Subsidiaries as of July 31, 2006 (5)
|
||
23.1
|
Consent
of Independent Registered Public Accounting Firm - Schneider Downs
&
Co., Inc. (6)
|
||
23.2
|
Consent
of Independent Registered Public Accounting Firm - PricewaterhouseCoopers
LLP (6)
|
||
31.1
|
Certification
of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (6)
|
||
31.2
|
Certification
of Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (6)
|
||
32.1
|
Certification
of Principal Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (6)
|
||
32.2
|
Certification
of Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (6)
|
|
Footnotes
|
|
(1)
|
Filed
as exhibits to the Company's Registration Statement on Form S-1,
as
amended by Amendment Nos. 1 and 2, (Registration No. 33-11543),
and
incorporated herein by reference.
|
|
(2)
|
Filed
as exhibits to the Company's Form 10-K for Fiscal Year Ending July
31,
2002, and incorporated herein by reference.
|
|
(3)
|
Filed
as exhibits to the Company's 10-K for the Fiscal Year Ended July
31, 2003,
and incorporated herein by reference.
|
|
(4)
|
Filed
as exhibits to the Company's 10-K for the Fiscal Year Ending July
31,
2004, and incorporated herein by reference.
|
|
(5)
|
Filed
as exhibits to the Company's 10-K for the Fiscal Year Ending July
31,
2005, and incorporated herein by reference.
|
|
(6)
|
Filed
herewith.
|
ECOLOGY
AND ENVIRONMENT, INC.
|
|
Dated: October
30, 2006
|
/s/
GERHARD J. NEUMAIER
|
GERHARD
J. NEUMAIER, PRESIDENT
|
Signature
|
Title
|
Date
|
||
/s/
GERHARD J. NEUMAIER
|
||||
GERHARD
J. NEUMAIER
|
President
(Chief Executive Officer)
|
October
30, 2006
|
||
/s/
FRANK B. SILVESTRO
|
||||
FRANK
B. SILVESTRO
|
Executive
Vice-President
|
October
30, 2006
|
||
/s/
GERALD A. STROBEL
|
||||
GERALD
A. STROBEL
|
Executive
Vice-President
|
October
30, 2006
|
|
||||
/s/
RONALD L. FRANK
|
||||
RONALD
L. FRANK
|
Secretary,
Treasurer, Executive Vice-President of Finance
|
October
30, 2006
|
||
(Principal
Financial and Accounting Officer)
|
||||
/s/
GERARD A. GALLAGHER, JR.
|
||||
GERARD
A. GALLAGHER, JR.
|
Director
|
October
30, 2006
|
||
/s/
HARVEY J. GROSS
|
||||
HARVEY
J. GROSS
|
Director
|
October
30, 2006
|
||
/s/
ROSS M. CELLINO
|
||||
ROSS
M. CELLINO
|
Director
|
October
30, 2006
|
||
/s/
TIMOTHY BUTLER
|
||||
TIMOTHY
BUTLER
|
Director
|
October
30, 2006
|