Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Oct. 04, 2019 | Jan. 31, 2019 | |
Document Information [Line Items] | |||
Entity Registrant Name | ECOLOGY & ENVIRONMENT INC | ||
Entity Central Index Key | 0000809933 | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 36,355,884 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jul. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | NY | ||
Common Class A [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,138,323 | ||
Common Class B [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,191,678 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 13,344 | $ 13,496 |
Investment securities available for sale | 1,577 | 1,497 |
Contract receivables, net of allowance for doubtful accounts and contract adjustments of $1,004 and $1,284, respectively | 25,087 | 25,615 |
Income tax receivable | 912 | 1,230 |
Other current assets | 2,078 | 1,752 |
Total current assets | 42,998 | 43,590 |
Property, buildings and equipment, net of accumulated depreciation of $17,066 and $16,799, respectively | 3,253 | 3,870 |
Deferred income taxes | 2,130 | 789 |
Equity method investment | 1,658 | 2,058 |
Other assets | 1,771 | 2,522 |
Total assets | 51,810 | 52,829 |
Current liabilities: | ||
Accounts payable | 6,099 | 5,635 |
Lines of credit | 284 | 0 |
Accrued payroll costs | 6,661 | 6,066 |
Current portion of long-term debt and capital lease obligations | 41 | 54 |
Customer deposits | 3,551 | 3,191 |
Other accrued liabilities | 1,386 | 1,382 |
Total current liabilities | 18,022 | 16,328 |
Long-term debt and capital lease obligations | 13 | 54 |
Commitments and contingencies (Note 20) | ||
Shareholders' equity: | ||
Preferred stock, par value $.01 per share (2,000,000 shares authorized; no shares issued) | 0 | 0 |
Capital in excess of par value | 16,964 | 17,558 |
Retained earnings | 18,687 | 20,973 |
Accumulated other comprehensive loss | (2,098) | (1,885) |
Treasury stock, at cost (Class A common: 64,823 and 15,789 shares, respectively; Class B common: 0 and 64,801 shares, respectively) | (729) | (907) |
Total Ecology and Environment Inc. shareholders' equity | 32,868 | 35,783 |
Noncontrolling interests | 907 | 664 |
Total shareholders' equity | 33,775 | 36,447 |
Total liabilities and shareholders' equity | 51,810 | 52,829 |
Class A [Member] | ||
Shareholders' equity: | ||
Common stock | 32 | 30 |
Class B [Member] | ||
Shareholders' equity: | ||
Common stock | $ 12 | $ 14 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Assets | ||
Allowance for doubtful accounts and contract adjustments | $ 1,004 | $ 1,284 |
Property, buildings and equipment, accumulated depreciation | $ 17,066 | $ 16,799 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Class A [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 6,000,000 | 6,000,000 |
Common stock, shares issued (in shares) | 3,192,990 | 3,041,911 |
Treasury stock (in shares) | 64,823 | 15,789 |
Class B [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 1,200,735 | 1,351,814 |
Treasury stock (in shares) | 0 | 64,801 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Consolidated Statements of Operations [Abstract] | |||
Revenue, net | $ 88,510 | $ 90,684 | $ 96,083 |
Cost of professional services and other direct operating expenses | 34,228 | 33,855 | 36,179 |
Subcontract costs | 15,859 | 17,191 | 15,975 |
Selling, general and administrative expenses | 38,820 | 39,257 | 38,139 |
Depreciation and amortization | 1,022 | 1,083 | 994 |
(Loss) income from operations | (1,419) | (702) | 4,796 |
Equity investment income | 346 | 595 | 368 |
Net interest income | 237 | 114 | 29 |
Net foreign exchange gain (loss) | 4 | (11) | (86) |
Proxy contest costs, net | 0 | 0 | (375) |
Other income (expense) | 58 | 158 | (54) |
(Loss) Income before income tax provision | (774) | 154 | 4,678 |
Income tax (benefit) provision | (664) | 258 | 2,167 |
Net income (loss) | (110) | (104) | 2,511 |
Net (income) loss attributable to the noncontrolling interest | (444) | (204) | 312 |
Net (loss) income attributable to Ecology and Environment Inc. | $ (554) | $ (308) | $ 2,823 |
Net (loss) income per common share: basic and diluted (in dollars per share) | $ (0.13) | $ (0.07) | $ 0.66 |
Weighted average common shares outstanding: basic and diluted (in shares) | 4,316,316 | 4,304,574 | 4,294,501 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income (loss) including noncontrolling interests | $ (110) | $ (104) | $ 2,511 |
Foreign currency translation adjustments | (273) | (85) | 174 |
Unrealized investment losses, net | 0 | (20) | (18) |
Comprehensive (loss) income | (383) | (209) | 2,667 |
Comprehensive (income) loss attributable to noncontrolling interests | (389) | (189) | 290 |
Comprehensive (loss) income attributable to Ecology and Environment Inc. | $ (772) | $ (398) | $ 2,957 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (110) | $ (104) | $ 2,511 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,022 | 1,083 | 994 |
Provision for deferred income taxes | (1,326) | 66 | 1,992 |
Share-based compensation expense | 100 | 127 | 69 |
Tax impact of share-based compensation | 0 | 0 | (6) |
(Gain) loss on sale of assets and investment securities | 0 | 17 | (81) |
Net recovery of contract adjustments | (745) | (830) | (1,178) |
Net bad debt expense | 92 | 1,034 | 164 |
Changes in: | |||
- contract receivables | 806 | 5,266 | 572 |
- other current assets | (431) | 155 | (178) |
- income tax receivable | 337 | 353 | 134 |
- equity method investment | (15) | (595) | (158) |
- other non-current assets | 661 | (822) | (485) |
- accounts payable | 468 | (2,023) | 259 |
- accrued payroll costs | 590 | 228 | (110) |
- income taxes payable | 0 | (44) | (86) |
- billings in excess of revenue | 365 | 807 | (78) |
- other accrued liabilities | 204 | (490) | (43) |
Net cash provided by operating activities | 2,018 | 4,228 | 4,292 |
Cash flows from investing activities: | |||
Acquisition of noncontrolling interest of subsidiaries | 0 | (27) | 0 |
Proceeds from sale of subsidiaries | 0 | 0 | 75 |
Purchase of property, building and equipment | (482) | (772) | (669) |
Proceeds from sale of building and equipment | 69 | 43 | 1,495 |
Purchase of investment securities | (33) | (31) | (30) |
Net cash (used in) provided by investing activities | (446) | (787) | 871 |
Cash flows from financing activities: | |||
Dividends paid | (1,726) | (1,721) | (1,720) |
Proceeds from debt | 0 | 0 | 200 |
Repayment of debt | (53) | (389) | (241) |
Net borrowings (repayments) under lines of credit | 277 | (342) | 39 |
Distributions to noncontrolling interests | (299) | (454) | (8) |
Net cash used in financing activities | (1,801) | (2,906) | (1,730) |
Effect of exchange rate changes on cash and cash equivalents | 75 | 76 | (228) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (154) | 611 | 3,205 |
Cash, cash equivalents and restricted cash at beginning of period | 13,746 | 13,135 | 9,930 |
Cash, cash equivalents and restricted cash at end of period | 13,592 | 13,746 | 13,135 |
Cash paid during the period for: | |||
Interest | 5 | 38 | 139 |
Income taxes | (50) | 140 | 715 |
Supplemental disclosure of non-cash items: | |||
Dividends declared and not paid | 865 | 863 | 860 |
Proceeds from capital lease obligations | 0 | 59 | 29 |
Acquisition of noncontrolling interest of subsidiaries (equipment) | $ (153) | $ 26 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders Equity - USD ($) $ in Thousands | Common Stock [Member]Class A [Member] | Common Stock [Member]Class B [Member] | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Total |
Balance at Jul. 31, 2016 | $ 30 | $ 14 | $ 17,666 | $ 21,925 | $ (1,929) | $ (1,172) | $ 1,221 | |
Balance (in shares) at Jul. 31, 2016 | 3,035,778 | 1,357,947 | 104,073 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | $ 0 | $ 0 | 0 | 2,823 | 0 | $ 0 | (312) | $ 2,511 |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | 152 | 0 | 22 | 174 |
Cash dividends declared | 0 | 0 | 0 | (1,719) | 0 | 0 | 0 | (1,719) |
Unrealized investment losses, net | 0 | 0 | 0 | 0 | (18) | 0 | 0 | (18) |
Issuance of stock under stock award plan | 0 | 0 | (90) | 0 | 0 | $ 135 | 0 | |
Issuance of stock under stock award plan (in shares) | (11,952) | |||||||
Tax impact of share based compensation | 0 | 0 | (6) | 0 | 0 | $ 0 | 0 | |
Tax impact of noncontrolling interests | 0 | 0 | 0 | (24) | 0 | 0 | 24 | |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (8) | |
Balance at Jul. 31, 2017 | $ 30 | $ 14 | 17,570 | 23,005 | (1,795) | $ (1,037) | 947 | |
Balance (in shares) at Jul. 31, 2017 | 3,035,778 | 1,357,947 | 92,121 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | $ 0 | $ 0 | 0 | (308) | 0 | $ 0 | 204 | (104) |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | (70) | 0 | (15) | (85) |
Cash dividends declared | 0 | 0 | 0 | (1,724) | 0 | 0 | 0 | (1,724) |
Unrealized investment losses, net | 0 | 0 | 0 | 0 | (20) | 0 | 0 | (20) |
Conversion of Class B common stock to Class A common stock | $ 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | |
Conversion of Class B common stock to Class A common stock (in shares) | 6,133 | (6,133) | ||||||
Issuance of stock under stock award plan | $ 0 | $ 0 | (130) | 0 | 0 | $ 130 | 0 | |
Issuance of stock under stock award plan (in shares) | (11,531) | |||||||
Share-based compensation expense | 0 | 0 | 127 | 0 | 0 | $ 0 | 0 | |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (455) | |
Sale of majority-owned subsidiary shares to noncontrolling interests | 0 | 0 | (9) | 0 | 0 | 0 | 0 | |
Purchase of additional noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (17) | |
Balance at Jul. 31, 2018 | 30 | 14 | 17,558 | 20,973 | (1,885) | (907) | 664 | 36,447 |
Balance at Jul. 31, 2018 | $ 30 | $ 14 | 17,558 | 20,968 | (1,880) | $ (907) | 664 | |
Balance (in shares) at Jul. 31, 2018 | 3,041,911 | 1,351,814 | 80,590 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of adoption of ASU 2016-01 | ASU 2016-01 [Member] | $ 0 | $ 0 | 0 | (5) | 5 | $ 0 | 0 | |
Net income (loss) | 0 | 0 | 0 | (554) | 0 | 0 | 444 | (110) |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | (218) | 0 | (55) | (273) |
Cash dividends declared | 0 | 0 | 0 | (1,727) | 0 | 0 | 0 | (1,728) |
Unrealized investment losses, net | 0 | |||||||
Conversion of Class B common stock to Class A common stock | $ 2 | $ (2) | 0 | 0 | 0 | 0 | 0 | |
Conversion of Class B common stock to Class A common stock (in shares) | 151,079 | (151,079) | ||||||
Issuance of stock under stock award plan | $ 0 | $ 0 | (102) | 0 | 0 | $ 178 | 0 | |
Issuance of stock under stock award plan (in shares) | (15,767) | |||||||
Share-based compensation expense | 0 | 0 | 100 | 0 | 0 | $ 0 | 0 | |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (299) | |
Sale of majority-owned subsidiary shares to noncontrolling interests | 0 | 0 | (598) | 0 | 0 | 0 | 0 | |
Adjustment to investment in Brazil | 0 | 0 | (240) | 0 | 0 | 0 | 0 | |
Purchase of additional noncontrolling interests | 0 | 0 | 246 | 0 | 0 | 0 | 153 | |
Balance at Jul. 31, 2019 | $ 32 | $ 12 | $ 16,964 | $ 18,687 | $ (2,098) | $ (729) | $ 907 | $ 33,775 |
Balance (in shares) at Jul. 31, 2019 | 3,192,990 | 1,200,735 | 64,823 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Consolidated Statements of Changes in Shareholders Equity [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.40 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Jul. 31, 2019 | |
Organization and Basis of Presentation [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Ecology and Environment Inc., (“EEI” or the “Parent Company”) was incorporated in 1970 as 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 acceptable impact on the environment. During fiscal year 2019, EEI and its subsidiaries (collectively, the “Company”) included six active wholly-owned and majority-owned operating subsidiaries in four countries (the United States of America, Brazil, Peru and Ecuador), and one majority-owned equity investment in Chile. staff is comprised of individuals representing numerous scientific, engineering, health, and social disciplines working together in multidisciplinary teams to provide innovative environmental solutions. The majority of employees hold bachelor’s and/or advanced degrees in such areas as chemical, civil, mechanical, sanitary, soil, structural and transportation engineering, biology, geology, hydrogeology, ecology, urban and regional planning and oceanography. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Jul. 31, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) establishes changes to U.S. GAAP in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs when they are issued by FASB. ASUs listed below were either adopted by the Company during fiscal year 2019 or will be adopted as each ASU becomes effective during future reporting periods. ASUs not listed below were assessed to be not applicable to the Company’s operations or are expected to have minimal impact on the Company’s consolidated financial position or results of operations. Accounting Pronouncements Adopted During the Fiscal Year Ended July 31, 2019 In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as amended by subsequent ASUs that amended and clarified the guidance in ASU 2014-09, forms the basis for FASB ASC Topic 606 (“ASC Topic 606”), which superseded previous authoritative U.S. GAAP guidance regarding revenue recognition. The Company adopted ASC Topic 606 effective August 1, 2018. Refer to Note 7 of these consolidated financial statements for additional disclosures regarding the Company’s adoption of ASC Topic 606. In January 2016, FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. In February 2018, FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, which clarified certain aspects of the guidance issued in ASU 2016-01. Under the new guidance, entities are no longer able to classify equity investments as either trading or available for sale (“AFS”) and may no longer recognize unrealized holding gains and losses in other comprehensive income on equity securities that were classified as AFS under previous U.S. GAAP. The Company adopted the applicable provisions of ASU 2016-01 effective August 1, 2018 by recording a cumulative effect adjustment of less than $0.1 million to beginning retained earnings and beginning accumulated other comprehensive income on the consolidated balance sheets. The cumulative effect adjustment is also separately reported on the consolidated statements of shareholders’ equity. In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendments included in this update provide guidance regarding eight specific cash flow classification issues that are not specifically addressed in previous U.S. GAAP, only one of which was deemed applicable to the Company’s cash flow reporting. Issue 6 of ASU 2016-15 requires that reporting entities elect an accounting policy to classify distributions received from equity method investees using one of two possible approaches: • the “cumulative earnings approach,” under which, subject to certain limitations, distributions received from equity investees are considered returns on investment and classified as cash inflows from operating activities; or • the “nature of the distribution approach,” under which distributions received from equity investees should be classified on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as a cash inflow from operating activities) or a return of investment (classified as a cash inflow from investing activities). The Company adopted the provisions of ASU 2016-15 effective August 1, 2018 and elected the “cumulative earnings approach.” The Company received $0.2 million of dividends from its equity method investee during the fiscal year ended July 31, 2019 that are included in cash flows from operating activities. Accounting Pronouncements Not Yet Adopted as of July 31, 2019 In March 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The main difference between previous U.S. GAAP and ASU 2016-02 (together with subsequent ASUs that amended and clarified the guidance in ASU 2016-02) is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU 2016-02 provides specific guidance for determining whether a contractual arrangement contains a lease, lease classification by lessees and lessors, initial and subsequent measurement of leases by lessees and lessors, sale and leaseback transactions, transition, and financial statement disclosures. Management is finalizing the Company’s implementation of the guidance in ASU 2016-02, including changes to accounting policies, systems and controls, and implementing new software capable of producing the required data for accounting and disclosure purposes. The adoption of this guidance did not have a material impact on the Company’s results of operations or liquidity. The Company expects to recognize new right-of-use assets and lease liabilities associated with operating leases of approximately $5.9 million to $6.5 million in the first quarter of fiscal year 2020. In June 2016, FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). The amendments included in this update affect entities holding financial assets, including trade receivables and investment securities available for sale, that are not accounted for at fair value through net income. ASU 2016-13, as amended by subsequent updates that amended and clarified the guidance in ASU 2016-13, requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments included in this update also provide guidance for measurement of expected credit losses and for presentation of increases or decreases of expected credit losses on the statement of operations. ASU No. 2016-13 will be effective for the Company beginning August 1, 2020. Early adoption is permitted for the Company beginning August 1, 2019. Management is currently assessing the provisions of ASU 2016-13 and has not yet estimated its impact on the Company’s consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). The amendments included in this update simplify the subsequent measurement of goodwill by revising the steps required during the registrant’s annual goodwill impairment test. This accounting standard update will be effective for the Company beginning August 1, 2021. Management is currently assessing the provisions of ASU 2017-04 and has not yet estimated its impact on the Company’s consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Consolidation, Variable Interest Entities and Equity Method Investment The consolidated financial statements include the accounts of EEI and its consolidated wholly owned and majority owned subsidiaries. All intercompany transactions and balances have been eliminated. Variable Interest Entities (“VIE”) The Company’s majority owned subsidiaries are deemed to be VIEs when, on a stand-alone basis, they lack sufficient capital to finance the activities of the VIE. The Company consolidates investments in VIEs if the Company is the primary beneficiary of the VIE. The Company uses a qualitative approach to determine if the Company is the primary beneficiary of the VIE, which considers factors that indicate the Company has significant influence and control over the activities that most significantly impact the VIE’s economic performance. These factors include representation on the investee’s board of directors, management representation, authority to make decisions, substantive participating rights of the minority shareholders and ownership interest. Equity Method Investments VIEs for which the Company is not the primary beneficiary, and other investee companies over which the Company does not influence or control the activities that most significantly impact the investee company’s economic performance, are not consolidated and are accounted for under the equity method of accounting. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and statements of operations. The Company’s share of the earnings of the investee company is reported as earnings from equity method investment in the Company’s consolidated statements of operations. The Company’s carrying value in an equity method investee is reported as equity method investment on the Company’s consolidated balance sheets. The Company’s carrying value in an equity method investee is reduced by the Company’s share of dividends declared by an investee company. If the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions as of the date of the financial statements, which affect the reported values of assets and liabilities and revenue and expenses and disclosures of contingent assets and liabilities. Actual results may differ from those estimates. Investment Securities Prior to August 1, 2018, unrealized gains or losses related to investment securities were recorded in the consolidated balance sheets and statements of comprehensive income. Subsequent to adoption of ASU 2016-01 effective August 1, 2018 (refer to Note 2 of these consolidated financial statements), unrealized gains or losses related to investment securities are recorded in the consolidated statements of operations. The cost basis of securities sold is based on the specific identification method. Reclassification adjustments out of accumulated other comprehensive income resulting from disposition of investment securities are included within other income (expense) in the consolidated statements of operations. Investment securities include mutual funds that are valued at the net asset value (“NAV”) of shares held by the Company at period end. Mutual funds held by the Company are open-end mutual funds that are registered with the SEC. These funds are required to publish their daily NAV and to transact at that price. The mutual funds held by the Company are deemed to be actively traded. Revenue Recognition and Contract Receivables Substantially all of the Company’s revenue is derived from environmental consulting work, which is principally derived from the sale of labor hours. Revenue reflected in the Company’s consolidated statements of operations represent services rendered for which the Company maintains a primary contractual relationship with its customers. Included in revenue are certain services outside the Company’s normal operations which the Company has elected to subcontract to other contractors. The Company’s consulting work is performed under a mix of time and materials, fixed price and cost-plus contracts. The Company accounts for time and material contracts over the period of performance, predominately based on labor hours incurred. Under time and materials contracts, there is no predetermined fee. Instead, the Company negotiates hourly billing rates and charges the clients based upon actual hours expended on a project. In addition, any direct project expenditures are passed through to the client and are typically reimbursed. Time and materials contracts may contain “not to exceed” provisions that effectively cap the amount of revenue that the Company can bill to the client. In order to record revenue that exceeds the billing cap, the Company must obtain approval from the client for expanded scope or increased pricing. The Company accounts for fixed price contracts over time, based on progress determined by the ratio of efforts expended to date in proportion to total efforts expected to be expended over the life of a contract. This revenue recognition method requires the use of estimates and judgment regarding a project’s expected revenue and the extent of progress towards completion. The Company makes periodic estimates of progress towards project completion by analyzing efforts expended to date, plus an estimate of the amount of effort expected to be incurred until the completion of the project. Revenue is then calculated on a cumulative basis (project-to-date) as the proportion of efforts-expended. The revenue for the current period is calculated as cumulative revenue less project revenue already recognized. If an estimate of efforts expended at completion on any contract indicates that a loss will be incurred, the entire estimated loss is charged to operations in the period the loss becomes evident. Cost-plus contracts provide for payment of allowable incurred efforts expended, to the extent prescribed in the contract, plus fees that are recorded as revenue. These contracts establish an estimate of total efforts to be expended and an invoicing ceiling that the contractor may not exceed without the approval of the client. Revenue earned from cost-plus contracts is recognized over the period of performance. Substantially all of the Company’s cost-plus contracts are with federal governmental agencies and, as such, are subject to audits after contract completion. Government audits have been completed and final rates have been negotiated through fiscal year 2014. The Company records an allowance for project disallowances in other accrued liabilities for potential disallowances resulting from government audits (refer to Note 14 of these consolidated financial statements). Allowances for project disallowances are recorded as adjustments to revenue when the amounts are estimable. Resolution of these amounts is dependent upon the results of government audits and other formal contract close-out procedures. Change orders can occur when changes in scope are made after project work has begun and can be initiated by either the Company or its clients. Claims are amounts in excess of the agreed contract price which the Company seeks to recover from a client for customer delays and/or errors or unapproved change orders that are in dispute. The Company recognizes costs related to change orders and claims as incurred. Revenue and profit are recognized on change orders when it is probable that the change order will be approved, and the amount can be reasonably estimated. Revenue is recognized only up to the amount of costs incurred on contract claims when realization is probable, estimable and reasonable support from the customer exists. The Company expenses all bid and proposal and other pre-contract costs as incurred. Out of pocket expenses such as travel, meals, field supplies, and other costs billed direct to contracts are included in both revenue and cost of professional services. Sales and cost of sales within the Company’s South American operations exclude value added tax (VAT) assessments by governmental authorities, which the Company collects from its customers and remits to governmental authorities. Billed contract receivables represent amounts billed to clients in accordance with contracted terms but not collected as of the end of the reporting period. Billed contract receivables may include: (i) amounts billed for revenue from efforts expended and fees that have been earned in accordance with contractual terms; and (ii) progress billings in accordance with contractual terms that include revenue not yet earned as of the end of the reporting period. Unbilled contract receivables, represent amounts billable to clients in accordance with contracted terms that have not been billed as of the end of the reporting period. Unbilled contract receivables that are not expected to be billed and collected within one year from the balance sheet date are reported in other assets on the consolidated balance sheets. The Company reduces contract receivables by recording an Property, Buildings and Equipment, Depreciation and Amortization Property, buildings and equipment are stated at the lower of depreciated or amortized cost or fair value. Land and land improvements are not depreciated or amortized. Methods of depreciation or amortization and useful lives for all other long-lived assets are summarized in the following table. Depreciation / Amortization Method Useful Lives Buildings Straight-line 32-40 Years Building Improvements Straight-line 7-15 Years Field Equipment Straight-line 3-7 Years Computer equipment Straight-line 3-7 Years Computer software Straight-line 3-10 Years Office furniture and equipment Straight-line 3-7 Years Vehicles Straight-line 3-5 Years Leasehold improvements Straight-line (a) (a) 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 either the value or useful life of the related asset have been increased. When property or equipment is retired or sold, any gain or loss on the transaction is reflected in the current year’s earnings. The Company capitalizes costs of software acquisition and development projects, including costs related to software design, configuration, coding, installation, testing and parallel processing. Capitalized software costs are recorded in fixed assets, net of accumulated amortization, on the consolidated balance sheets. Capitalized software costs are evaluated for recoverability/impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The costs of computer software obtained or developed for internal use is amortized on a straight-line basis over the estimated useful life of the software. Amortization begins when the software and all related software modules on which it is functionally dependent are ready for their intended use. Amortization expense is recorded in depreciation and amortization in the consolidated statements of operations. Goodwill Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is included in other assets on the accompanying consolidated balance sheets. Goodwill is subject to an annual assessment for impairment by comparing the estimated fair values of reporting units to which goodwill has been assigned to the recorded book value of the respective reporting units. The Company estimates the fair value of reporting units using a discounted cash flows methodology that . Goodwill is also assessed for impairment between annual assessments whenever events or circumstances make it more likely than not that an impairment may have occurred. Impairment of Long-Lived Assets The Company assesses recoverability of the carrying value of long-lived assets when events occur, or circumstances change that would more likely than not impair the value of the asset. Recoverability is assessed by estimating the future net cash flows (undiscounted) expected to result from the asset, including eventual disposition, and comparing the resulting future cash flows to the carrying value of the asset. 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. Income Taxes The Company follows the asset and liability approach to account for income taxes. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities except for the enactment of changes in tax laws or rates. 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. Income tax expense includes U.S. and international income taxes, determined using the applicable statutory rates. A deferred tax asset is recognized for all deductible temporary differences and net operating loss carryforwards, and a deferred tax liability is recognized for all taxable temporary differences. The Company’s deferred tax assets principally result from timing differences in the recognition of entity operating losses, contract reserves and accrued expenses. The Company periodically evaluates the likelihood of realization of deferred tax assets and provides for a valuation allowance when necessary. U.S. GAAP prescribes a recognition threshold and measurement principles for financial statement disclosure of tax positions taken or expected to be taken on a tax return. A tax position is a position in a previously filed tax filing or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions shall be recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained. Tax positions that meet the more likely than not threshold should be measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. We recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in expenses. Whether the more-likely-than-not recognition threshold is met for a tax position, is a matter of judgment based on the individual facts and circumstances of that position evaluated in light of all available evidence. Defined Contribution Plans EEI has a non-contributory defined contribution plan providing deferred benefits for substantially all of its U.S. employees (the “EEI Defined Contribution Plan”). The annual expense of the EEI Defined Contribution Plan is based on a percentage of eligible wages as authorized by EEI’s Board of Directors. EEI also has a supplemental retirement plan that provides post-retirement health care coverage for EEI’s founders and their spouses. As of July 31, 2019, two founders, their spouses and the spouse of a deceased founder were receiving healthcare coverage under this plan. The annual expense associated with this plan is determined based on discounted annual cost estimates over the estimated life expectancy of the founders and their spouses. Earnings per Share Basic and diluted earnings per share (“EPS”) are computed by dividing the net income attributable to EEI common shareholders by the weighted average number of common shares outstanding for the period. After consideration of all the rights and privileges of the Class A and Class B stockholders (defined in Note 15 of these consolidated financial statements), the Company allocates undistributed earnings between the classes on a one-to-one basis when computing earnings per share. As a result, basic and fully diluted earnings per Class A and Class B share are equal amounts. The Company has determined that its unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities. These securities are included in the computation of earnings per share pursuant to the two-class method. As a result, unvested restricted shares are included in the weighted average shares outstanding calculation. Comprehensive Income (Loss) Comprehensive income (loss) represents the change in shareholders’ equity during a period, excluding changes arising from transactions with shareholders. Comprehensive income includes net income from the consolidated statements of operations, plus other comprehensive income during a reporting period. Other comprehensive income (loss) represents the net effect of accounting transactions that are recognized directly in shareholders’ equity, such as unrealized net income or losses resulting from currency translation adjustments from foreign operations and unrealized gains or losses on available-for-sale securities. Foreign Currencies and Inflation 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 reporting period for results of operations. Translation adjustments are deferred in accumulated other comprehensive income until the related assets and liabilities are settled or otherwise disposed of. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in net foreign exchange (loss) gain in the consolidated statements of operations as incurred. 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 transaction adjustments which are included in net income. The Company did not record any highly inflationary economy adjustments during fiscal years 2019, 2018 or 2017. Noncontrolling Interests The Company discloses noncontrolling interests as a separate component of consolidated shareholders’ equity on the accompanying consolidated balance sheets. Earnings and other comprehensive income (loss) are separately attributed to both the controlling and noncontrolling interests. The Company calculates earnings per share based on net income (loss) attributable to the Company’s controlling interests. The Company considers acquiring additional interests in majority owned subsidiaries when noncontrolling shareholders express their intent to sell their interests. The Company settles and records acquisitions of noncontrolling interests at amounts that approximate fair value. Purchases of noncontrolling interests are recorded as reductions of shareholders’ equity on the consolidated statements of shareholders’ equity. |
Significant Transactions During
Significant Transactions During the Fiscal Year Ended July 31, 2019 | 12 Months Ended |
Jul. 31, 2019 | |
Significant Transactions During the Fiscal Year Ended July 31, 2019 [Abstract] | |
Significant Transactions During the Fiscal Year Ended July 31, 2019 | 4. Significant Transactions During the Fiscal Year Ended July 31, 2019 Staff Reduction Programs In December 2018, the Company began to notify employees of a voluntary retirement program. In February 2019, the Company began to notify affected employees of an involuntary separation program. These programs (collectively, the “Staff Reduction Programs”), which were being implemented in connection with a corporate restructuring plan within the Company’s U.S. operating segment, were substantially completed by July 31, 2019 and will be completed by December 31, 2019. During the fiscal year 2019, the Company’s U.S. operating segment recorded and paid approximately $1.0 million of employee severance and termination expenses related to the Staff Reduction Programs, which was reported in selling, general and administrative expenses on the consolidated statements of operations. Expenses Associated with Restatements of Financial Statements During fiscal year 2019, the Company restated audited consolidated financial statements for the fiscal years ended July 31, 2016 and 2017 and unaudited condensed consolidated financial statements for the quarters ended October 28, 2017, January 27, 2018 and April 28, 2018. Comparative prior year financial data included in tables and various accounting policies and commentaries included in the Company’s 2018 Annual Report on Form 10-K and 2019 Quarterly Reports on Form 10-Q was also restated or otherwise revised. These restatements required extensive internal and external resources to complete, including significant incremental fees paid to the Company’s independent auditors, tax consultants and external legal counsel. During fiscal year 2019, the Company’s U.S. operating segment recorded and paid incremental audit, tax and legal expenses of approximately $1.0 million as a result of the restatements described above, which were reported as selling, general and administrative expenses on the consolidated statements of operations. Agreement and Plan of Merger On August 28, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WSP Global Inc., a Canadian corporation (“WSP”), and Everest Acquisition Corp., a New York corporation and an indirect wholly owned subsidiary of WSP (“Merger Sub”). Pursuant to the Merger Agreement, the Company will merge with the Merger Sub (the “Merger”) with the Company continuing as the surviving corporation. At the Effective Time (as defined in the Merger Agreement), each share of the Company’s Class A common stock, $0.01 par value per share and Class B common stock, $0.01 par value per share (collectively, the “Company Shares”), issued and outstanding immediately prior to the Effective Time, (other than shares (i) held by the Company (or held in the Company’s treasury), (ii) held by any wholly owned subsidiary of the Company, (iii) held by WSP, Merger Sub or any other wholly owned subsidiary of WSP or (iv) held by holders of Class B common stock who have made a proper demand for appraisal of the shares in accordance with Section 623 of the New York Business Corporation Law) but including shares that are, as of the Effective Time, unvested and subject to restrictions, will be converted into the right to receive $15.00 in cash, without interest and subject to any required tax withholding. In addition, the Merger Agreement provides that record holders of Company Shares as of the close of business on the last business day prior to the Effective Time, including any shares that are then unvested and subject to restrictions, will receive a one-time special dividend from the Company of up to $0.50 in cash per share to be paid shortly after closing (the “Special Dividend”). The amount of the Special Dividend is subject to pro rata reduction if certain expenses incurred by the Company in connection with the Merger exceed $3.05 million in the aggregate, as further described in the Merger Agreement. The consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including: (i) the approval of the Merger at a meeting of the Company’s shareholders, currently scheduled to occur on November 20, 2019, by the affirmative vote of the holders of two-thirds of the Company Shares that are issued and outstanding on the record date for the shareholders meeting, with Class A and Class B shareholders voting as a single class; (ii) the absence of an order, injunction or law issued by a court or governmental authority of competent jurisdiction that makes the consummation of the Merger illegal; (iii) the absence of legal proceedings brought by a governmental authority of competent jurisdiction seeking to restrain or prohibit the Merger; (iv) the clearance of the Merger by the Committee on Foreign Investment in the United States without the imposition of any burdensome conditions, as defined in the Merger Agreement; and (v) subject to certain materiality qualifications, the continued accuracy of the Company’s representations and warranties and continued compliance by the Company with covenants and obligations (to be performed at or prior to the closing of the Merger). If the Merger Agreement is terminated in certain circumstances, the Company may be required to pay WSP a termination fee of $4.0 million or reimburse WSP for certain expenses up to $1.75 million. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 28, 2019. Additional information about the Merger and the Merger Agreement is set forth in the Company’s definitive proxy statement filed with the SEC on October 8, 2019. The Company accrued approximately $0.3 million of expenses during the fourth quarter of fiscal year 2019 related to the Merger Agreement. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 12 Months Ended |
Jul. 31, 2019 | |
Cash, Cash Equivalents and Restricted Cash [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | 5. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash are summarized in the following table. July 31, 2019 2018 (in thousands) Cash and cash equivalents $ 13,344 $ 13,496 Restricted cash included in other assets 248 250 Total cash, cash equivalents and restricted cash $ 13,592 $ 13,746 The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Money market funds of $0 and $0.4 million were included in cash and cash equivalents at July 31, 2019 and 2018, respectively. Restricted cash included in other assets represents collateral for pending litigation matters in Brazil that are not expected to be resolved within one year from the balance sheet date. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Jul. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments The Company’s financial assets or liabilities are measured using inputs from the three levels of the fair value hierarchy. The Company classifies assets and liabilities within the fair value hierarchy based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company has not elected a fair value option on any assets or liabilities. The three levels of the hierarchy are as follows: Level 1 Inputs Level 2 Inputs Level 3 Inputs The Company monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers in or out of levels 1, 2 or 3 during fiscal years 2019, 2018 or 2017. The carrying amount of cash, cash equivalents and restricted cash approximated fair value at July 31, 2019 and 2018. These assets were classified as level 1 instruments at both dates. Investment securities of $1.6 million and $1.5 million at July 31, 2019 and 2018, respectively, primarily included mutual funds invested in U.S. municipal bonds, which the Company may immediately redeem without prior notice. These mutual funds are valued at the NAV of shares held by the Company at period end as a practical expedient to estimate fair value. These mutual funds are deemed to be actively traded, are required to publish their daily NAV and are required to transact at that price. The Company recorded unrealized investment losses or gains of less than $0.1 million in other income on the consolidated statement of operations for fiscal year 2019 and in accumulated other comprehensive loss at July 31, 2018 and 2017. The Company did not record any sales of investment securities during the twelve months ended July 31, 2019 or 2018. Long-term debt consists of bank loans and capitalized equipment leases. Lines of credit consist of borrowings for working capital requirements. The carrying amount of these liabilities approximated fair value at July 31, 2019 and 2018. These liabilities were classified as level 2 instruments at both dates. Refer to Note 11 and Note 12 of these consolidated financial statements for additional disclosures regarding the Company’s lines of credit, debt and capital lease obligations. |
Contract Receivables, net
Contract Receivables, net | 12 Months Ended |
Jul. 31, 2019 | |
Contract Receivables, net [Abstract] | |
Contract Receivables, net | 7. Contract Receivables, net Adoption of ASC Topic 606 The Company adopted ASC Topic 606 effective August 1, 2018. Gross revenue for reporting periods beginning after July 31, 2018 is recognized under ASC Topic 606. Gross revenue for previous reporting periods was recognized in accordance with historic accounting under U.S. GAAP, as summarized in revenue recognition policies included in the Company’s 2018 Annual Report. The Company adopted ASC Topic 606 using the modified retrospective method. As a practical expedient allowed under ASC Topic 606, the Company applied the new guidance only to contracts that were not completed as of the date of initial application. The Company did not record any cumulative effect adjustment to retained earnings as of August 1, 2018 and did not record any material adjustment to gross revenue for the fiscal year ended July 31, 2019 as a result of applying the guidance in ASC Topic 606. Contract Receivables, net and Contract Assets Contract receivables, net are summarized in the following table. July 31, 2019 2018 (in thousands) Contract receivables: Billed $ 12,405 $ 12,905 Unbilled 13,686 13,994 26,091 26,899 Allowance for doubtful accounts (1,004 ) (1,284 ) Contract receivables, net $ 25,087 $ 25,615 The Company anticipates that substantially all billed contract receivables will be collected over the next twelve months. Billed contract receivables included contractual retainage balances of $0.8 million and $1.4 million at July 31, 2019 and 2018, respectively. Management anticipates that the unbilled contract receivables and retainage balances at July 31, 2019, will be substantially billed and collected within one year. Management identified contract receivables, net of allowance for doubtful accounts, of less than $0.1 million and $0.5 million as of July 31, 2019 and July 31, 2018, respectively, that are not expected to be collected within one year. These net receivables represent long-term assets that are included in other assets on the consolidated balance sheets. The Company may record contract assets for the right to receive consideration from customers when that right is conditional based on future performance under a contract. Contract assets are transferred to billed contract receivables when the right to consideration becomes unconditional. The Company did not record any contract assets at July 31, 2019 or 2018. Allowance for Doubtful Accounts Activity within the allowance for doubtful accounts is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Balance at beginning of period $ 1,284 $ 2,044 $ 6,792 Provision for doubtful accounts during the period 182 813 682 Write-offs and recoveries of allowance recorded in prior periods (676 ) (943 ) (5,430 ) Reclassification of allowance (to) from noncurrent assets 214 (630 ) --- Balance at end of period $ 1,004 $ 1,284 $ 2,044 Contract Receivable Concentrations Significant concentrations of contract receivables and the allowance for doubtful accounts are summarized in the following table. July 31, 2019 July 31, 2018 Region Contract Receivables Allowance for Doubtful Accounts Contract Receivables Allowance for Doubtful (in thousands) U.S. operations $ 20,211 $ 489 $ 21,580 $ 569 South American operations 5,880 515 5,319 715 Totals $ 26,091 $ 1,004 $ 26,899 $ 1,284 The allowance for doubtful accounts for the Company’s South American operations represented 9% and 13% of related contract receivables at July 31, 2019 and 2018, respectively. Unstable local economies that adversely impacted certain of our South American clients in recent years demonstrated signs of stabilizing during fiscal year 2019. Management continues to monitor trends and events that may adversely impact the realizability of recorded receivables from our South American clients. Disaggregation of Revenues The following table provides a summary of the Company’s gross revenue, disaggregated by operating segment and contract type. Fiscal Year Ended July 31, 2019 2018 2017 Gross revenue from time and materials contracts: U.S. operations $ 40,478 $ 38,562 $ 47,732 South American operations 27 - - Total gross revenue from time and materials contracts $ 40,505 $ 38,562 $ 47,732 Gross revenue from fixed price contracts: U.S. operations $ 13,113 $ 14,313 $ 16,232 South American operations 17,861 18,949 15,541 Total gross revenue from fixed price contracts $ 30,974 $ 33,262 $ 31,773 Gross revenue from cost-plus contracts: U.S. operations $ 17,031 $ 18,860 $ 16,578 South American operations - - - Total gross revenue from cost-plus contracts $ 17,031 $ 18,860 $ 16,578 Gross revenue from all contracts: U.S. operations $ 70,622 $ 71,735 $ 80,542 South American operations 17,888 18,949 15,541 Consolidated gross revenue $ 88,510 $ 90,684 $ 96,083 Customer Deposits Customer deposits of $3.6 million and $3.2 million at July 31, 2019 and 2018, respectively, represent cash advances received from customers for future services. |
Variable Interest Entities and
Variable Interest Entities and Equity Method Investment | 12 Months Ended |
Jul. 31, 2019 | |
Variable Interest Entities and Equity Method Investment [Abstract] | |
Variable Interest Entities and Equity Method Investment | 8. Variable Interest Entities and Equity Method Investment Variable Interest Entities As of July 31, 2019 and 2018, the Company consolidated one majority owned subsidiary that was deemed to be a VIE. The financial position of this VIE as of July 31, 2019 and 2018 is summarized in the following table. July 31, 2019 July 31, 2018 (in thousands) Current assets $ 3,549 $ 2,359 Noncurrent assets 781 878 Total assets $ 4,330 $ 3,237 Current liabilities $ 5,728 $ 5,408 Noncurrent liabilities 12 32 Total liabilities 5,740 5,440 Total Ecology and Environment Inc. shareholder’s equity (708 ) (1,051 ) Noncontrolling interests shareholders’ equity (702 ) (1,152 ) Total shareholders’ equity (1,410 ) (2,203 ) Total liabilities and shareholders’ equity $ 4,330 $ 3,237 Total gross revenue of the consolidated VIE was $12.1 million, $10.0 million and $8.9 million for the fiscal years ended July 31, 2019, 2018 and 2017, respectively. With the exception of restricted cash of $0.3 million included in noncurrent assets at July 31, 2019 and 2018 (refer to Note 5), all assets of the VIE were available for the general operations of the VIE. Equity Method Investment The Company’s equity method investment in GAC had a carrying value of $1.7 million and $2.1 million at July 31, 2019 and 2018, respectively. The Company’s ownership percentage was 52.48% and 55.10% at July 31, 2019 and 2018. The equity method investment in GAC is included within the Company’s South American operating segment. Activity recorded for the Company’s equity method investment in GAC is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Equity investment carrying value at beginning of period $ 2,058 $ 1,463 $ 1,944 GAC net income attributable to EEI 346 595 368 EEI’s portion of other comprehensive loss recorded by GAC (414 ) --- --- Gain on dilution of investment in GAC 17 --- --- EEI’s portion of dividends declared by GAC (349 ) --- (849 ) Equity investment carrying value at end of period $ 1,658 $ 2,058 $ 1,463 GAC’s financial position is summarized in the following table. July 31, 2019 July 31, 2018 (in thousands) Current assets $ 5,671 $ 5,713 Noncurrent assets 1,215 501 Total assets $ 6,886 $ 6,214 Current liabilities $ 3,232 $ 2,620 Noncurrent liabilities 847 593 Total liabilities 4,079 3,213 Total Ecology and Environment Inc. shareholder’s equity 1,806 1,678 Noncontrolling interest in shareholders’ equity 1,001 1,323 Total shareholders’ equity 2,807 3,001 Total liabilities and shareholders’ equity $ 6,886 $ 6,214 GAC’s results of operations are summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Gross revenue $ 12,912 $ 11,987 $ 7,737 Direct cost of services and subcontract costs (8,353 ) (7,286 ) (4,633 ) Income from operations 924 1,381 568 Net income 637 1,079 668 Net income attributable to EEI 346 595 368 |
Property, Buildings and Equipme
Property, Buildings and Equipment, net | 12 Months Ended |
Jul. 31, 2019 | |
Property, Buildings and Equipment, net [Abstract] | |
Property, Buildings and Equipment, net | 9. Property, Buildings and Equipment, net Property, buildings and equipment is summarized in the following table. July 31, 2019 2018 (in thousands) Land and land improvements $ 393 $ 393 Buildings and building improvements 7,471 7,455 Field equipment 1,949 1,970 Computer equipment 4,015 4,156 Computer software 2,981 2,940 Office furniture and equipment 1,964 2,142 Vehicles 884 1,134 Other 662 479 20,319 20,669 Accumulated depreciation and amortization (17,066 ) (16,799 ) Property, buildings and equipment, net $ 3,253 $ 3,870 |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | 10. Goodwill Goodwill of $0.9 million is included in other assets on the accompanying consolidated balance sheets at July 31, 2019 and 2018. The Company completed its annual goodwill impairment assessment at July 31, 2019 and 2018, and determined that the fair value of the reporting units to which goodwill is assigned exceeded its book value at both dates. As a result, no impairment of goodwill was identified as of July 31, 2019 or 2018. |
Lines of Credit
Lines of Credit | 12 Months Ended |
Jul. 31, 2019 | |
Lines of Credit [Abstract] | |
Lines of Credit | 11 . Lines of Credit Unsecured lines of credit are summarized in the following table. July 31, 2019 2018 (in thousands) Outstanding cash advances reported as lines of credit $ 284 $ --- Outstanding letters of credit to support operations 1,635 1,668 Total amounts used under lines of credit 1,919 1,668 Remaining amounts available under lines of credit 33,681 33,932 Total unsecured lines of credit $ 35,600 $ 35,600 The Company’s U.S. operations are supported by two line of credit arrangements: • $19.0 million available line of credit at July 31, 2019; no outstanding cash advances as of July 31, 2019 or 2018; letters of credit of less than $0.1 million were outstanding at July 31, 2019 and 2018; interest rate based on LIBOR plus 275 basis points; and • $13.5 million available line of credit at July 31, 2019; no outstanding cash advances as of July 31, 2019 or 2018; letters of credit of less than $0.1 million outstanding at July 31, 2019 and 2018; interest rate based on LIBOR plus 200 basis points. The Company’s South American operations are supported by two line of credit arrangements: • $2.0 million available line of credit at July 31, 2019 to support operations in Peru; no outstanding cash advances as of July 31, 2019 or 2018; letters of credit of $1.0 million was outstanding as of July 31, 2019 and 2018, respectively; interest rate is affirmed by or negotiated with the lender annually; and • $1.1 million available line of credit at July 31, 2019 to support operations in Brazil; combined balance of outstanding cash advances of $0.3 million and $0 as of July 31, 2019 and 2018, respectively; letters of credit of $0.6 million were outstanding as of July 31, 2019 and 2018, respectively; interest rate based on a Brazilian government economic index. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 12 Months Ended |
Jul. 31, 2019 | |
Debt and Capital Lease Obligations [Abstract] | |
Debt and Capital Lease Obligations | 12. Debt and Capital Lease Obligations Debt and capital lease obligations are summarized in the following table. July 31, 2019 2018 (in thousands) Bank loan (interest rate of 3.86% at July 31, 2019) 17 28 Capital lease obligations (interest rates ranging from 4.8% to 17.07% at July 31, 2019) 37 80 54 108 Current portion of long-term debt and capital lease obligations (41 ) (54 ) Long-term debt and capital lease obligations $ 13 $ 54 The aggregate maturities of long-term debt and capital lease obligations as of July 31, 2019 are summarized in the following table. Fiscal Year Ending July 31, Amount (in thousands) 2020 $ 41 2021 13 Total $ 54 |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 13. Income Taxes Income before income tax provision is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) U.S. operations $ (1,302 ) $ (948 ) $ 4,758 Foreign operations (primarily South American operations) 528 1,102 (80 ) (Loss) income before income tax provision $ (774 ) $ 154 $ 4,678 The Company’s income tax (benefit) provision is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Current income tax provision (benefit): Federal $ 78 $ (62 ) $ (149 ) State 90 26 42 Foreign 494 228 282 Total current 662 192 175 Deferred income tax provision (benefit): Federal (24 ) 289 1,653 State 1 (75 ) 308 Foreign (1,303 ) (148 ) 31 Total deferred (1,326 ) 66 1,992 Total income tax (benefit) provision $ (664 ) $ 258 $ 2,167 On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the “Tax Act”), which significantly revised U.S. corporate income tax regulations including, among other things, lowering U.S. corporate income tax rates and implementing a territorial tax system. The Tax Act lowered our statutory federal tax rate from 34.0% (effective through December 31, 2017) to 21.0% (effective January 1, 2018). As the Company has a July 31 fiscal year-end, the lower corporate income tax rate was phased in, resulting in an average statutory federal tax rate of approximately 26.5% for the fiscal year ending July 31, 2018, and 21.0% for subsequent fiscal years. The statutory U.S. income tax rate was 21.0%, 26.5% and 34% during fiscal years 2019, 2018 and 2017, respectively. A reconciliation of the income tax provision using the statutory U.S. income tax rate compared with the actual income tax provision reported on the consolidated statements of operations is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Income tax (benefit) provision at the U.S. federal statutory income tax rate $ (163 ) $ 41 $ 1,590 Tax on Foreign Earnings 138 129 --- Change in Tax Rates under Tax Act 16 322 --- International rate differences 80 27 33 Peru non-deductible expenses --- 14 53 Foreign dividend income --- --- 240 Income from “pass-through” entities taxable to noncontrolling partners (16 ) --- (1 ) Re-evaluation and settlements of tax contingencies --- --- (33 ) Transaction Costs 69 --- --- Change in valuation allowance (1,241 ) (19 ) 98 State taxes, net of federal benefit 75 (32 ) 200 Other foreign taxes, net of federal benefit 109 (95 ) (111 ) Other permanent differences 269 (129 ) 98 Income tax (benefit) provision, as reported on the consolidated statements of operations $ (664 ) $ 258 $ 2,167 The significant components of deferred tax assets and liabilities are summarized in the following table. July 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 1,413 $ 1,081 Accrued compensation and expenses 623 611 Federal benefit from foreign accounting differences 448 460 Contract and other reserves 253 311 Foreign tax credit 296 296 Capital loss carryforwards 234 143 Fixed assets and intangibles 57 --- Other 155 202 Deferred tax assets 3,479 3,104 Less: valuation allowance (859 ) (2,006 ) Net deferred tax assets $ 2,620 $ 1,098 Deferred tax liabilities: Fixed assets and intangibles $ --- $ (39 ) Federal expense on state deferred taxes (62 ) (60 ) Federal expense from foreign accounting differences (2 ) (7 ) Unremitted foreign earnings (417 ) (206 ) Other (9 ) 3 Net deferred tax liabilities $ (490 ) $ (309 ) As of July 31, 2019, the Company has net operating losses attributable to operations in the U.S., Brazil and Peru. Foreign and U.S. net operating losses at July 31, 2019 were approximately $3.0 million and $1.4 million, respectively. Net operating losses in Brazil and U.S. federal net operating losses may be carried forward indefinitely and a portion of the net operating losses in Peru expire in four years, while the remainder have an indefinite life. U.S. state net operating losses have expiration dates in various years starting in fiscal year 2023 through and including a portion with an indefinite life. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act require the Company to include in the U.S. income from foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. During fiscal year 2019, its first year of applicability, the Company included $0.6 million of GILTI income in the U.S. The Company has elected to account for GILTI in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for fiscal year 2019. The Company periodically evaluates the likelihood of realization of deferred tax assets and provides for a valuation allowance when necessary. Fiscal Year Ended July 31, 2019 2018 (in thousands) Balance at beginning of period $ 2,006 $ 2,020 Additions during the period 420 60 Reductions during period (1,567 ) (74 ) Balance at end of period $ 859 $ 2,006 As of July 31, 2019, the valuation allowance maintained by the Company primarily related to: (i) net operating losses related to operations in Peru, the utilization of which is dependent on future earnings; (ii) excess foreign tax credit carryforwards, the utilization of which is dependent on future foreign source income; and (iii) capital loss carryforwards, the utilization of which is dependent on future capital gains. Additions to the valuation allowance during fiscal year 2019 primarily related to the establishment of a valuation allowance recorded on deferred tax assets related to operating losses from operations in Peru and a capital loss incurred on the sale of operations in Ecuador. During the fiscal year 2019, based on available evidence including recent cumulated losses, management determined that it is more likely than not that the deferred tax assets in Peru will not be realized and therefore established a valuation allowance. During fiscal year 2016, the Company recorded a valuation allowance against deferred tax assets related to net operating losses in Brazil. During fiscal year 2019, based on available evidence including recent cumulative operating income, management determined that it is more likely than not that the deferred tax assets in Brazil will be realized and therefore reversed the related $1.6 million valuation allowance. During the fiscal years ended July 31, 2019, 2018 and 2017, the Company recorded $0.2 million $0.2 million and $0.6 million, respectively, of income taxes applicable to undistributed earnings of foreign subsidiaries in Chile and Peru that will not be indefinitely reinvested in those operations. The Company intends to recover the undistributed earnings through future dividend repatriations. As part of Tax Act, all foreign earnings were taxed in the U.S. through December 31, 2017. The Company had $4.1 million, $6.3 million and $5.6 million of taxed, but undistributed foreign earnings at July 31, 2019, 2018 and 2017, respectively. At July 31, 2019 and 2018, the Company had $2.3 million and $1.0 million of foreign earnings, occurring after January 1, 2018, that will be subject to a full dividend received deduction when distributed. The Company files numerous consolidated and separate income tax returns in U.S. federal, state and foreign jurisdictions. The Company’s U.S. federal tax matters for fiscal years 2016 through 2019 remain subject to examination by the IRS. The Company’s state, local and foreign tax matters for fiscal years 2015 through 2019 remain subject to examination by the respective tax authorities. No waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute. The Company had no uncertain tax positions (“UTPs”) at July 31, 2019 and 2018. The Company recognizes interest accrued related to liabilities for UTPs in other accrued liabilities on the consolidated balance sheets and in selling, general and administrative expenses on the consolidated statements of operations. The Company recorded $0.1 million or less in each of the fiscal years ending July 31, 2019, 2018 and 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company recorded final adjustments for the tax effects of the Tax Act during the fourth quarter of fiscal year 2018, and all tax effects of the Tax Act were recorded in its consolidated financial statements for the fiscal year ended July 31, 2018. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Jul. 31, 2019 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | 14. Other Accrued Liabilities Other accrued liabilities are summarized in the following table. July 31, 2019 2018 (in thousands) Allowance for project disallowances $ 490 $ 687 Other 896 695 Total other accrued liabilities $ 1,386 $ 1,382 Activity within the allowance for project disallowances is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Balance at beginning of period $ 687 $ 687 $ 1,819 Reduction of reserves recorded in prior fiscal years (197 ) --- (1,132 ) Balance at end of period $ 490 $ 687 $ 687 The reductions in the allowance for project disallowances during fiscal years 2019, 2018 and 2017, which were recorded as additions to gross revenue on the consolidated statements of operations, resulted from final settlements of allowances recorded in prior fiscal years. The settlements resulted in cash payments of $0.2 million during fiscal year 2019 and less than $0.1 million during fiscal year 2017. |
Incentive Compensation
Incentive Compensation | 12 Months Ended |
Jul. 31, 2019 | |
Incentive Compensation [Abstract] | |
Incentive Compensation | 15. Incentive Compensation Stock Award Plan EEI adopted the 1998 Stock Award Plan effective March 16, 1998. This plan, together with supplemental plans that were subsequently adopted by the Company’s Board of Directors, are referred to as the “Stock Award Plan”. The Stock Award Plan is not a qualified plan under Section 401(a) of the Internal Revenue Code. Under the Stock Award Plan, directors, officers and other key employees of EEI or any of its subsidiaries may be awarded Class A Common Stock as compensation for services rendered to the Company or its subsidiaries, based upon the fair market value of the common stock at the time of the award. The Stock Award Plan authorizes the Company’s Board of Directors to determine the vesting period and the circumstances under which the awards may be forfeited. In October 2016, the Company’s Board of Directors adopted the current supplemental plan, the 2016 Stock Award Plan. This plan permits awards of up to 200,000 shares of Class A Common Stock for a period of up to five years until its termination in October 2021. During fiscal year 2019, EEI awarded a total of 15,767 shares of Class A Common Stock under the 2016 Stock Award Plan, valued at $0.2 million, under the following compensation arrangements: • 10,367 shares of Class A Common Stock valued at $0.1 million were awarded to certain Directors as a portion of their annual compensation. These shares will vest upon expiration of certain restrictions regarding transfer of the shares that expire in April 2020. • 3,400 shares of Class A Common Stock valued at less than $0.1 million were awarded to the Company’s Executive Chairman, Marshall Heinberg in accordance with the terms of a compensation agreement approved by the Board of Directors. These shares vested immediately upon issuance. • 2,000 shares of Class A Common Stock valued at less than $0.1 million were awarded to the Company’s former Chief Administrative Officer, in accordance with the terms of her compensation agreement. These shares vested immediately upon issuance. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Jul. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 16. Shareholders’ Equity Class A and Class B Common Stock The relative rights, preferences and limitations of the Company’s Class A and Class B Common Stock are summarized as follows: Holders of Class A Common Stock are entitled to elect 25% of the Board of Directors so long as the number of outstanding Class A Common Stock is at least 10% of the combined total number of outstanding Class A and Class B Common Stock. Holders of Class A common shares have one-tenth the voting power of Class B Common Stock with respect to most other matters. In addition, holders of Class A Common Stock are eligible to receive dividends in excess of (and not less than) those paid to holders of Class B Common Stock. Holders of Class B Common Stock 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. Restrictive Shareholder Agreement Messrs. Gerhard J. Neumaier (deceased), Frank B. Silvestro, Ronald L. Frank, and Gerald A. Strobel entered into a Stockholders’ Agreement dated May 12, 1970, as amended January 24, 2011, which governs the sale of certain shares of EEI common stock (now classified as Class B Common Stock) owned by them, certain children of those individuals and any such shares subsequently transferred to their spouses and/or children outright or in trust for their benefit upon the demise of a signatory to the Agreement (“Permitted Transferees”). The Agreement provides that prior to accepting a bona fide offer to purchase some or all of their shares of Class B Common Stock governed by the Agreement, that the selling party must first allow the other signatories to the Agreement (not including any Permitted Transferee) 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. Concurrently with the execution and delivery of the Merger Agreement, Frank B. Silvestro, Ronald L. Frank, Gerald A. Strobel, Marshall A. Heinberg, Michael C. Gross, Michael El-Hillow, the Gerhard J. Neumaier Testamentary Trust, Justin C. Jacobs and Mill Road Capital II, L.P. (the “Supporting Stockholders”) entered into voting and support agreements with WSP (the “Voting Agreements”) with respect to all Company Shares and other Subject Securities (as defined in the Voting Agreements) beneficially owned or owned of record by the Supporting Stockholders (the “Voting Agreement Shares”). Upon the closing of the transaction contemplated by the Merger Agreement, the Shareholders’ Agreement and the Voting Agreements shall terminate. Cash Dividends The Company declared and paid cash dividends of $1.7 million during . The Company recorded declared but unpaid dividends of $0.9 million as of July 31, 2019, 2018 and 2017. Stock Repurchase Program In August 2010, the Company’s Board of Directors approved a program for repurchase of 200,000 shares of Class A Common Stock (the “Stock Repurchase Program”). As of July 31, 2019, the Company had repurchased 122,918 shares of Class A Common Stock, and 77,082 shares had yet to be repurchased under the Stock Repurchase Program. The Company did not acquire any shares of Class A Common Stock under the Stock Repurchase Program during fiscal years 2019, 2018 or 2017. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are summarized in the following table. July 31, 2019 2018 (in thousands) Unrealized net foreign currency translation losses $ (2,098 ) $ (1,880 ) Unrealized net investment (losses) gains on available for sale investments - (5 ) Total accumulated other comprehensive loss $ (2,098 ) $ (1,885 ) |
Operating Lease Commitments
Operating Lease Commitments | 12 Months Ended |
Jul. 31, 2019 | |
Operating Lease Commitments [Abstract] | |
Operating Lease Commitments | 17. Operating Lease Commitments The Company rents certain office facilities and equipment under non-cancelable operating leases and certain other facilities for servicing project sites over the term of the related long-term government contracts. Lease agreements may contain step rent provisions and/or free rent concessions. Lease payments based on a price index result in rent expense recognized on a straight line or substantially equivalent basis and are included in the calculation of minimum lease payments. Gross rental expense associated with lease commitments was $3.1 million, $3.2 million and $3.3 million during fiscal years 2019, 2018 and 2017, respectively. Future minimum rental commitments under operating leases as of July 31, 2019 are summarized in the following table. Fiscal Year Ending July 31, Amount (in thousands) 2020 $ 2,139 2021 1,635 2022 1,156 2023 1,005 2024 647 Thereafter 96 Total $ 6,678 |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Jul. 31, 2019 | |
Defined Contribution Plans [Abstract] | |
Defined Contribution Plans | 18. Defined Contribution Plans Contributions to the EEI Defined Contribution Plan and EEI Supplemental Retirement Plan are discretionary and determined annually by its Board of Directors. The total expense under these plans was $1.2 million, $1.3 million, and $1.5 million for fiscal years 2019, 2018 and 2017, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 19. Earnings Per Share The computation of basic and diluted EPS is included in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands, except share and per share amounts) Net (loss) income attributable to Ecology and Environment Inc. $ (554 ) $ (308 ) $ 2,823 Less: Dividend declared 1,728 1,724 1,719 Undistributed earnings (distributions in excess of earnings) $ (2,282 ) $ (2,032 ) $ 1,104 Weighted-average common shares outstanding - basic and diluted 4,316,316 4,304,574 4,294,501 Distributed earnings per share $ 0.40 $ 0.40 $ 0.40 Undistributed earnings (distributions in excess of earnings) per share (0.53 ) (0.47 ) 0.26 Total (loss) earnings per share $ (0.13 ) $ (0.07 ) $ 0.66 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 20. Segment Reporting Management generally assesses operating performance and makes strategic decisions based on the geographic regions in which the Company does business. The Company reports separate operating segment information for its U.S. and South American operations. Gross revenue, net income (loss) attributable to EEI and total assets by operating segment are summarized in the following tables. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Gross revenue: U.S. operations $ 70,622 $ 71,882 $ 80,659 South American operations 17,888 18,802 15,424 Consolidated gross revenue $ 88,510 $ 90,684 $ 96,083 Gross revenue from U.S. federal government contracts were $14.1 million, $15.8 million and $21.9 million for fiscal years 2019, 2018 and 2017, respectively. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Net (loss) income attributable to EEI: U.S. operations (a) $ (543 ) $ (651 ) $ 3,688 South American operations (b) (11 ) 343 (865 ) Consolidated net (loss) income attributable to EEI $ (554 ) $ (308 ) $ 2,823 (a) Includes depreciation and amortization expense of $0.8 million, $0.8 million and $0.8 million for fiscal years 2019, 2018 and 2017, respectively. (b) Includes depreciation and amortization expense of $0.2 million, $0.3 million and $0.2 million for fiscal years 2019, 2018 and 2017, respectively. July 31, 2019 2018 (in thousands) Total Assets: U.S. operations $ 43,842 $ 43,823 South American operations 7,968 9,006 Consolidated total assets $ 51,810 $ 52,829 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 21. Commitments and Contingencies Legal Proceedings 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 believes will have a material adverse effect on the Company’s results of operations, financial condition or 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. On February 4, 2011, the Chico Mendes Institute of Biodiversity Conservation of Brazil (the “Institute”) issued a Notice of Infraction to ecology and environment do brasil Ltda. (“E&E Brazil”), a majority-owned consolidated subsidiary of EEI. The Notice of Infraction concerned the taking and collecting of wild animal specimens without authorization by the competent authority and imposed a fine of approximately 0.5 million Reals against E&E Brazil. The Institute also filed Notices of Infraction against four employees of E&E Brazil alleging the same claims and imposed fines against those individuals that, in the aggregate, were equal to the fine imposed against E&E Brazil. No claim has been made against EEI. E&E Brazil has filed court claims appealing the administrative decisions of the Institute for E&E Brazil’s employees that: (a) deny the jurisdiction of the Institute; (b) state that the Notice of Infraction is constitutionally vague; and (c) affirmatively state that E&E Brazil 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. The claim of violations against one of the four employees was dismissed. The remaining three employees have fines assessed against them that are being appealed through the federal courts. Violations against E&E Brazil are pending agency determination. At July 31, 2019, the Company recorded a reserve of approximately $0.4 million in other accrued liabilities related to these claims. On October 8 and 14, 2019, two complaints challenging the Merger were filed in the United States District Court for the Southern District of New York, captioned Jordan Rosenblatt v. Ecology & Environment, Inc., et al. and Randall Meidenbauer. v. Ecology & Environment Inc. et al., respectively. The Rosenblatt complaint was filed as a putative class action on behalf of the public shareholders of the Company, while the Meidenbauer complaint was filed as an individual action on behalf of the named plaintiff only. Both complaints name as defendants the Company and the members of the Company’s Board of Directors. The Rosenblatt complaint generally alleges violations of federal securities laws with respect to purported disclosure deficiencies in the preliminary proxy statement for the Merger that the Company filed with the SEC on September 26, 2019, and the Meidenbauer complaint generally alleges violations of federal securities laws with respect to purported disclosure deficiencies in the definitive proxy statement for the Merger that the Company filed with the SEC on October 8, 2019. The complaints seek various forms of relief, including a preliminary injunction preventing the Company from proceeding with the stockholders meeting or the consummation of the Merger until the alleged material information omitted from the proxy statement is disclosed, rescission of the Merger if it is consummated, damages, attorneys’ fees and expenses. The defendants have not yet responded to the complaints but believe that the claims asserted against them are without merit. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Consolidation, Variable Interest Entities and Equity Method Investment | Consolidation, Variable Interest Entities and Equity Method Investment The consolidated financial statements include the accounts of EEI and its consolidated wholly owned and majority owned subsidiaries. All intercompany transactions and balances have been eliminated. Variable Interest Entities (“VIE”) The Company’s majority owned subsidiaries are deemed to be VIEs when, on a stand-alone basis, they lack sufficient capital to finance the activities of the VIE. The Company consolidates investments in VIEs if the Company is the primary beneficiary of the VIE. The Company uses a qualitative approach to determine if the Company is the primary beneficiary of the VIE, which considers factors that indicate the Company has significant influence and control over the activities that most significantly impact the VIE’s economic performance. These factors include representation on the investee’s board of directors, management representation, authority to make decisions, substantive participating rights of the minority shareholders and ownership interest. Equity Method Investments VIEs for which the Company is not the primary beneficiary, and other investee companies over which the Company does not influence or control the activities that most significantly impact the investee company’s economic performance, are not consolidated and are accounted for under the equity method of accounting. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and statements of operations. The Company’s share of the earnings of the investee company is reported as earnings from equity method investment in the Company’s consolidated statements of operations. The Company’s carrying value in an equity method investee is reported as equity method investment on the Company’s consolidated balance sheets. The Company’s carrying value in an equity method investee is reduced by the Company’s share of dividends declared by an investee company. If the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions as of the date of the financial statements, which affect the reported values of assets and liabilities and revenue and expenses and disclosures of contingent assets and liabilities. Actual results may differ from those estimates. |
Investment Securities | Investment Securities Prior to August 1, 2018, unrealized gains or losses related to investment securities were recorded in the consolidated balance sheets and statements of comprehensive income. Subsequent to adoption of ASU 2016-01 effective August 1, 2018 (refer to Note 2 of these consolidated financial statements), unrealized gains or losses related to investment securities are recorded in the consolidated statements of operations. The cost basis of securities sold is based on the specific identification method. Reclassification adjustments out of accumulated other comprehensive income resulting from disposition of investment securities are included within other income (expense) in the consolidated statements of operations. Investment securities include mutual funds that are valued at the net asset value (“NAV”) of shares held by the Company at period end. Mutual funds held by the Company are open-end mutual funds that are registered with the SEC. These funds are required to publish their daily NAV and to transact at that price. The mutual funds held by the Company are deemed to be actively traded. |
Revenue Recognition and Contract Receivables | Revenue Recognition and Contract Receivables Substantially all of the Company’s revenue is derived from environmental consulting work, which is principally derived from the sale of labor hours. Revenue reflected in the Company’s consolidated statements of operations represent services rendered for which the Company maintains a primary contractual relationship with its customers. Included in revenue are certain services outside the Company’s normal operations which the Company has elected to subcontract to other contractors. The Company’s consulting work is performed under a mix of time and materials, fixed price and cost-plus contracts. The Company accounts for time and material contracts over the period of performance, predominately based on labor hours incurred. Under time and materials contracts, there is no predetermined fee. Instead, the Company negotiates hourly billing rates and charges the clients based upon actual hours expended on a project. In addition, any direct project expenditures are passed through to the client and are typically reimbursed. Time and materials contracts may contain “not to exceed” provisions that effectively cap the amount of revenue that the Company can bill to the client. In order to record revenue that exceeds the billing cap, the Company must obtain approval from the client for expanded scope or increased pricing. The Company accounts for fixed price contracts over time, based on progress determined by the ratio of efforts expended to date in proportion to total efforts expected to be expended over the life of a contract. This revenue recognition method requires the use of estimates and judgment regarding a project’s expected revenue and the extent of progress towards completion. The Company makes periodic estimates of progress towards project completion by analyzing efforts expended to date, plus an estimate of the amount of effort expected to be incurred until the completion of the project. Revenue is then calculated on a cumulative basis (project-to-date) as the proportion of efforts-expended. The revenue for the current period is calculated as cumulative revenue less project revenue already recognized. If an estimate of efforts expended at completion on any contract indicates that a loss will be incurred, the entire estimated loss is charged to operations in the period the loss becomes evident. Cost-plus contracts provide for payment of allowable incurred efforts expended, to the extent prescribed in the contract, plus fees that are recorded as revenue. These contracts establish an estimate of total efforts to be expended and an invoicing ceiling that the contractor may not exceed without the approval of the client. Revenue earned from cost-plus contracts is recognized over the period of performance. Substantially all of the Company’s cost-plus contracts are with federal governmental agencies and, as such, are subject to audits after contract completion. Government audits have been completed and final rates have been negotiated through fiscal year 2014. The Company records an allowance for project disallowances in other accrued liabilities for potential disallowances resulting from government audits (refer to Note 14 of these consolidated financial statements). Allowances for project disallowances are recorded as adjustments to revenue when the amounts are estimable. Resolution of these amounts is dependent upon the results of government audits and other formal contract close-out procedures. Change orders can occur when changes in scope are made after project work has begun and can be initiated by either the Company or its clients. Claims are amounts in excess of the agreed contract price which the Company seeks to recover from a client for customer delays and/or errors or unapproved change orders that are in dispute. The Company recognizes costs related to change orders and claims as incurred. Revenue and profit are recognized on change orders when it is probable that the change order will be approved, and the amount can be reasonably estimated. Revenue is recognized only up to the amount of costs incurred on contract claims when realization is probable, estimable and reasonable support from the customer exists. The Company expenses all bid and proposal and other pre-contract costs as incurred. Out of pocket expenses such as travel, meals, field supplies, and other costs billed direct to contracts are included in both revenue and cost of professional services. Sales and cost of sales within the Company’s South American operations exclude value added tax (VAT) assessments by governmental authorities, which the Company collects from its customers and remits to governmental authorities. Billed contract receivables represent amounts billed to clients in accordance with contracted terms but not collected as of the end of the reporting period. Billed contract receivables may include: (i) amounts billed for revenue from efforts expended and fees that have been earned in accordance with contractual terms; and (ii) progress billings in accordance with contractual terms that include revenue not yet earned as of the end of the reporting period. Unbilled contract receivables, represent amounts billable to clients in accordance with contracted terms that have not been billed as of the end of the reporting period. Unbilled contract receivables that are not expected to be billed and collected within one year from the balance sheet date are reported in other assets on the consolidated balance sheets. The Company reduces contract receivables by recording an |
Property, Buildings and Equipment, Depreciation and Amortization | Property, Buildings and Equipment, Depreciation and Amortization Property, buildings and equipment are stated at the lower of depreciated or amortized cost or fair value. Land and land improvements are not depreciated or amortized. Methods of depreciation or amortization and useful lives for all other long-lived assets are summarized in the following table. Depreciation / Amortization Method Useful Lives Buildings Straight-line 32-40 Years Building Improvements Straight-line 7-15 Years Field Equipment Straight-line 3-7 Years Computer equipment Straight-line 3-7 Years Computer software Straight-line 3-10 Years Office furniture and equipment Straight-line 3-7 Years Vehicles Straight-line 3-5 Years Leasehold improvements Straight-line (a) (a) 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 either the value or useful life of the related asset have been increased. When property or equipment is retired or sold, any gain or loss on the transaction is reflected in the current year’s earnings. The Company capitalizes costs of software acquisition and development projects, including costs related to software design, configuration, coding, installation, testing and parallel processing. Capitalized software costs are recorded in fixed assets, net of accumulated amortization, on the consolidated balance sheets. Capitalized software costs are evaluated for recoverability/impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The costs of computer software obtained or developed for internal use is amortized on a straight-line basis over the estimated useful life of the software. Amortization begins when the software and all related software modules on which it is functionally dependent are ready for their intended use. Amortization expense is recorded in depreciation and amortization in the consolidated statements of operations. |
Goodwill | Goodwill Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is included in other assets on the accompanying consolidated balance sheets. Goodwill is subject to an annual assessment for impairment by comparing the estimated fair values of reporting units to which goodwill has been assigned to the recorded book value of the respective reporting units. The Company estimates the fair value of reporting units using a discounted cash flows methodology that . Goodwill is also assessed for impairment between annual assessments whenever events or circumstances make it more likely than not that an impairment may have occurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses recoverability of the carrying value of long-lived assets when events occur, or circumstances change that would more likely than not impair the value of the asset. Recoverability is assessed by estimating the future net cash flows (undiscounted) expected to result from the asset, including eventual disposition, and comparing the resulting future cash flows to the carrying value of the asset. 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. |
Income Taxes | Income Taxes The Company follows the asset and liability approach to account for income taxes. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities except for the enactment of changes in tax laws or rates. 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. Income tax expense includes U.S. and international income taxes, determined using the applicable statutory rates. A deferred tax asset is recognized for all deductible temporary differences and net operating loss carryforwards, and a deferred tax liability is recognized for all taxable temporary differences. The Company’s deferred tax assets principally result from timing differences in the recognition of entity operating losses, contract reserves and accrued expenses. The Company periodically evaluates the likelihood of realization of deferred tax assets and provides for a valuation allowance when necessary. U.S. GAAP prescribes a recognition threshold and measurement principles for financial statement disclosure of tax positions taken or expected to be taken on a tax return. A tax position is a position in a previously filed tax filing or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions shall be recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained. Tax positions that meet the more likely than not threshold should be measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. We recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in expenses. Whether the more-likely-than-not recognition threshold is met for a tax position, is a matter of judgment based on the individual facts and circumstances of that position evaluated in light of all available evidence. |
Defined Contribution Plans | Defined Contribution Plans EEI has a non-contributory defined contribution plan providing deferred benefits for substantially all of its U.S. employees (the “EEI Defined Contribution Plan”). The annual expense of the EEI Defined Contribution Plan is based on a percentage of eligible wages as authorized by EEI’s Board of Directors. EEI also has a supplemental retirement plan that provides post-retirement health care coverage for EEI’s founders and their spouses. As of July 31, 2019, two founders, their spouses and the spouse of a deceased founder were receiving healthcare coverage under this plan. The annual expense associated with this plan is determined based on discounted annual cost estimates over the estimated life expectancy of the founders and their spouses. |
Earnings per Share | Earnings per Share Basic and diluted earnings per share (“EPS”) are computed by dividing the net income attributable to EEI common shareholders by the weighted average number of common shares outstanding for the period. After consideration of all the rights and privileges of the Class A and Class B stockholders (defined in Note 15 of these consolidated financial statements), the Company allocates undistributed earnings between the classes on a one-to-one basis when computing earnings per share. As a result, basic and fully diluted earnings per Class A and Class B share are equal amounts. The Company has determined that its unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities. These securities are included in the computation of earnings per share pursuant to the two-class method. As a result, unvested restricted shares are included in the weighted average shares outstanding calculation. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) represents the change in shareholders’ equity during a period, excluding changes arising from transactions with shareholders. Comprehensive income includes net income from the consolidated statements of operations, plus other comprehensive income during a reporting period. Other comprehensive income (loss) represents the net effect of accounting transactions that are recognized directly in shareholders’ equity, such as unrealized net income or losses resulting from currency translation adjustments from foreign operations and unrealized gains or losses on available-for-sale securities. |
Foreign Currencies and Inflation | Foreign Currencies and Inflation 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 reporting period for results of operations. Translation adjustments are deferred in accumulated other comprehensive income until the related assets and liabilities are settled or otherwise disposed of. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in net foreign exchange (loss) gain in the consolidated statements of operations as incurred. 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 transaction adjustments which are included in net income. The Company did not record any highly inflationary economy adjustments during fiscal years 2019, 2018 or 2017. |
Noncontrolling Interests | Noncontrolling Interests The Company discloses noncontrolling interests as a separate component of consolidated shareholders’ equity on the accompanying consolidated balance sheets. Earnings and other comprehensive income (loss) are separately attributed to both the controlling and noncontrolling interests. The Company calculates earnings per share based on net income (loss) attributable to the Company’s controlling interests. The Company considers acquiring additional interests in majority owned subsidiaries when noncontrolling shareholders express their intent to sell their interests. The Company settles and records acquisitions of noncontrolling interests at amounts that approximate fair value. Purchases of noncontrolling interests are recorded as reductions of shareholders’ equity on the consolidated statements of shareholders’ equity. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Methods of Depreciation or Amortization and Useful Lives for All Other Long-Lived Assets | Methods of depreciation or amortization and useful lives for all other long-lived assets are summarized in the following table. Depreciation / Amortization Method Useful Lives Buildings Straight-line 32-40 Years Building Improvements Straight-line 7-15 Years Field Equipment Straight-line 3-7 Years Computer equipment Straight-line 3-7 Years Computer software Straight-line 3-10 Years Office furniture and equipment Straight-line 3-7 Years Vehicles Straight-line 3-5 Years Leasehold improvements Straight-line (a) (a) Leasehold improvements are amortized for book purposes over the terms of the leases or the estimated useful lives of the assets, whichever is shorter. |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Cash, Cash Equivalents and Restricted Cash [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash are summarized in the following table. July 31, 2019 2018 (in thousands) Cash and cash equivalents $ 13,344 $ 13,496 Restricted cash included in other assets 248 250 Total cash, cash equivalents and restricted cash $ 13,592 $ 13,746 |
Contract Receivables, net (Tabl
Contract Receivables, net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Contract Receivables, net [Abstract] | |
Contract Receivables, Net | Contract receivables, net are summarized in the following table. July 31, 2019 2018 (in thousands) Contract receivables: Billed $ 12,405 $ 12,905 Unbilled 13,686 13,994 26,091 26,899 Allowance for doubtful accounts (1,004 ) (1,284 ) Contract receivables, net $ 25,087 $ 25,615 |
Allowance for Doubtful Accounts | Activity within the allowance for doubtful accounts is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Balance at beginning of period $ 1,284 $ 2,044 $ 6,792 Provision for doubtful accounts during the period 182 813 682 Write-offs and recoveries of allowance recorded in prior periods (676 ) (943 ) (5,430 ) Reclassification of allowance (to) from noncurrent assets 214 (630 ) --- Balance at end of period $ 1,004 $ 1,284 $ 2,044 |
Contract Receivable and Allowance for Doubtful Accounts by Geographical Areas | Significant concentrations of contract receivables and the allowance for doubtful accounts are summarized in the following table. July 31, 2019 July 31, 2018 Region Contract Receivables Allowance for Doubtful Accounts Contract Receivables Allowance for Doubtful (in thousands) U.S. operations $ 20,211 $ 489 $ 21,580 $ 569 South American operations 5,880 515 5,319 715 Totals $ 26,091 $ 1,004 $ 26,899 $ 1,284 |
Disaggregation of Revenues | The following table provides a summary of the Company’s gross revenue, disaggregated by operating segment and contract type. Fiscal Year Ended July 31, 2019 2018 2017 Gross revenue from time and materials contracts: U.S. operations $ 40,478 $ 38,562 $ 47,732 South American operations 27 - - Total gross revenue from time and materials contracts $ 40,505 $ 38,562 $ 47,732 Gross revenue from fixed price contracts: U.S. operations $ 13,113 $ 14,313 $ 16,232 South American operations 17,861 18,949 15,541 Total gross revenue from fixed price contracts $ 30,974 $ 33,262 $ 31,773 Gross revenue from cost-plus contracts: U.S. operations $ 17,031 $ 18,860 $ 16,578 South American operations - - - Total gross revenue from cost-plus contracts $ 17,031 $ 18,860 $ 16,578 Gross revenue from all contracts: U.S. operations $ 70,622 $ 71,735 $ 80,542 South American operations 17,888 18,949 15,541 Consolidated gross revenue $ 88,510 $ 90,684 $ 96,083 |
Variable Interest Entities an_2
Variable Interest Entities and Equity Method Investment (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Variable Interest Entities and Equity Method Investment [Abstract] | |
Financial Position of Variable Interest Entity | The financial position of this VIE as of July 31, 2019 and 2018 is summarized in the following table. July 31, 2019 July 31, 2018 (in thousands) Current assets $ 3,549 $ 2,359 Noncurrent assets 781 878 Total assets $ 4,330 $ 3,237 Current liabilities $ 5,728 $ 5,408 Noncurrent liabilities 12 32 Total liabilities 5,740 5,440 Total Ecology and Environment Inc. shareholder’s equity (708 ) (1,051 ) Noncontrolling interests shareholders’ equity (702 ) (1,152 ) Total shareholders’ equity (1,410 ) (2,203 ) Total liabilities and shareholders’ equity $ 4,330 $ 3,237 |
Activity Recorded for Equity Method Investment | Activity recorded for the Company’s equity method investment in GAC is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Equity investment carrying value at beginning of period $ 2,058 $ 1,463 $ 1,944 GAC net income attributable to EEI 346 595 368 EEI’s portion of other comprehensive loss recorded by GAC (414 ) --- --- Gain on dilution of investment in GAC 17 --- --- EEI’s portion of dividends declared by GAC (349 ) --- (849 ) Equity investment carrying value at end of period $ 1,658 $ 2,058 $ 1,463 GAC’s financial position is summarized in the following table. July 31, 2019 July 31, 2018 (in thousands) Current assets $ 5,671 $ 5,713 Noncurrent assets 1,215 501 Total assets $ 6,886 $ 6,214 Current liabilities $ 3,232 $ 2,620 Noncurrent liabilities 847 593 Total liabilities 4,079 3,213 Total Ecology and Environment Inc. shareholder’s equity 1,806 1,678 Noncontrolling interest in shareholders’ equity 1,001 1,323 Total shareholders’ equity 2,807 3,001 Total liabilities and shareholders’ equity $ 6,886 $ 6,214 GAC’s results of operations are summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Gross revenue $ 12,912 $ 11,987 $ 7,737 Direct cost of services and subcontract costs (8,353 ) (7,286 ) (4,633 ) Income from operations 924 1,381 568 Net income 637 1,079 668 Net income attributable to EEI 346 595 368 |
Property, Buildings and Equip_2
Property, Buildings and Equipment, net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Property, Buildings and Equipment, net [Abstract] | |
Property, Buildings and Equipment, net | Property, buildings and equipment is summarized in the following table. July 31, 2019 2018 (in thousands) Land and land improvements $ 393 $ 393 Buildings and building improvements 7,471 7,455 Field equipment 1,949 1,970 Computer equipment 4,015 4,156 Computer software 2,981 2,940 Office furniture and equipment 1,964 2,142 Vehicles 884 1,134 Other 662 479 20,319 20,669 Accumulated depreciation and amortization (17,066 ) (16,799 ) Property, buildings and equipment, net $ 3,253 $ 3,870 |
Lines of Credit (Tables)
Lines of Credit (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Lines of Credit [Abstract] | |
Unsecured Lines of Credit | Unsecured lines of credit are summarized in the following table. July 31, 2019 2018 (in thousands) Outstanding cash advances reported as lines of credit $ 284 $ --- Outstanding letters of credit to support operations 1,635 1,668 Total amounts used under lines of credit 1,919 1,668 Remaining amounts available under lines of credit 33,681 33,932 Total unsecured lines of credit $ 35,600 $ 35,600 |
Debt and Capital Lease Obliga_2
Debt and Capital Lease Obligations (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Debt and Capital Lease Obligations [Abstract] | |
Debt Inclusive of Capital Lease Obligations | Debt and capital lease obligations are summarized in the following table. July 31, 2019 2018 (in thousands) Bank loan (interest rate of 3.86% at July 31, 2019) 17 28 Capital lease obligations (interest rates ranging from 4.8% to 17.07% at July 31, 2019) 37 80 54 108 Current portion of long-term debt and capital lease obligations (41 ) (54 ) Long-term debt and capital lease obligations $ 13 $ 54 |
Aggregate Maturities of Long-term Debt and Capital Lease Obligations | The aggregate maturities of long-term debt and capital lease obligations as of July 31, 2019 are summarized in the following table. Fiscal Year Ending July 31, Amount (in thousands) 2020 $ 41 2021 13 Total $ 54 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Taxes [Abstract] | |
Income Before Income Tax Provision | Income before income tax provision is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) U.S. operations $ (1,302 ) $ (948 ) $ 4,758 Foreign operations (primarily South American operations) 528 1,102 (80 ) (Loss) income before income tax provision $ (774 ) $ 154 $ 4,678 |
Income Tax (Benefit) Provision | The Company’s income tax (benefit) provision is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Current income tax provision (benefit): Federal $ 78 $ (62 ) $ (149 ) State 90 26 42 Foreign 494 228 282 Total current 662 192 175 Deferred income tax provision (benefit): Federal (24 ) 289 1,653 State 1 (75 ) 308 Foreign (1,303 ) (148 ) 31 Total deferred (1,326 ) 66 1,992 Total income tax (benefit) provision $ (664 ) $ 258 $ 2,167 |
Reconciliation of Income Tax Provision to Effective Tax Rate | A reconciliation of the income tax provision using the statutory U.S. income tax rate compared with the actual income tax provision reported on the consolidated statements of operations is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Income tax (benefit) provision at the U.S. federal statutory income tax rate $ (163 ) $ 41 $ 1,590 Tax on Foreign Earnings 138 129 --- Change in Tax Rates under Tax Act 16 322 --- International rate differences 80 27 33 Peru non-deductible expenses --- 14 53 Foreign dividend income --- --- 240 Income from “pass-through” entities taxable to noncontrolling partners (16 ) --- (1 ) Re-evaluation and settlements of tax contingencies --- --- (33 ) Transaction Costs 69 --- --- Change in valuation allowance (1,241 ) (19 ) 98 State taxes, net of federal benefit 75 (32 ) 200 Other foreign taxes, net of federal benefit 109 (95 ) (111 ) Other permanent differences 269 (129 ) 98 Income tax (benefit) provision, as reported on the consolidated statements of operations $ (664 ) $ 258 $ 2,167 |
Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities are summarized in the following table. July 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 1,413 $ 1,081 Accrued compensation and expenses 623 611 Federal benefit from foreign accounting differences 448 460 Contract and other reserves 253 311 Foreign tax credit 296 296 Capital loss carryforwards 234 143 Fixed assets and intangibles 57 --- Other 155 202 Deferred tax assets 3,479 3,104 Less: valuation allowance (859 ) (2,006 ) Net deferred tax assets $ 2,620 $ 1,098 Deferred tax liabilities: Fixed assets and intangibles $ --- $ (39 ) Federal expense on state deferred taxes (62 ) (60 ) Federal expense from foreign accounting differences (2 ) (7 ) Unremitted foreign earnings (417 ) (206 ) Other (9 ) 3 Net deferred tax liabilities $ (490 ) $ (309 ) |
Deferred Tax Asset Valuation Allowance | Activity within the deferred tax asset valuation allowance is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 (in thousands) Balance at beginning of period $ 2,006 $ 2,020 Additions during the period 420 60 Reductions during period (1,567 ) (74 ) Balance at end of period $ 859 $ 2,006 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities are summarized in the following table. July 31, 2019 2018 (in thousands) Allowance for project disallowances $ 490 $ 687 Other 896 695 Total other accrued liabilities $ 1,386 $ 1,382 |
Allowance for Project Disallowances | Activity within the allowance for project disallowances is summarized in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Balance at beginning of period $ 687 $ 687 $ 1,819 Reduction of reserves recorded in prior fiscal years (197 ) --- (1,132 ) Balance at end of period $ 490 $ 687 $ 687 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are summarized in the following table. July 31, 2019 2018 (in thousands) Unrealized net foreign currency translation losses $ (2,098 ) $ (1,880 ) Unrealized net investment (losses) gains on available for sale investments - (5 ) Total accumulated other comprehensive loss $ (2,098 ) $ (1,885 ) |
Operating Lease Commitments (Ta
Operating Lease Commitments (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Operating Lease Commitments [Abstract] | |
Future Minimum Rental Commitments | Future minimum rental commitments under operating leases as of July 31, 2019 are summarized in the following table. Fiscal Year Ending July 31, Amount (in thousands) 2020 $ 2,139 2021 1,635 2022 1,156 2023 1,005 2024 647 Thereafter 96 Total $ 6,678 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic Earnings Per Share | The computation of basic and diluted EPS is included in the following table. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands, except share and per share amounts) Net (loss) income attributable to Ecology and Environment Inc. $ (554 ) $ (308 ) $ 2,823 Less: Dividend declared 1,728 1,724 1,719 Undistributed earnings (distributions in excess of earnings) $ (2,282 ) $ (2,032 ) $ 1,104 Weighted-average common shares outstanding - basic and diluted 4,316,316 4,304,574 4,294,501 Distributed earnings per share $ 0.40 $ 0.40 $ 0.40 Undistributed earnings (distributions in excess of earnings) per share (0.53 ) (0.47 ) 0.26 Total (loss) earnings per share $ (0.13 ) $ (0.07 ) $ 0.66 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | Gross revenue, net income (loss) attributable to EEI and total assets by operating segment are summarized in the following tables. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Gross revenue: U.S. operations $ 70,622 $ 71,882 $ 80,659 South American operations 17,888 18,802 15,424 Consolidated gross revenue $ 88,510 $ 90,684 $ 96,083 Gross revenue from U.S. federal government contracts were $14.1 million, $15.8 million and $21.9 million for fiscal years 2019, 2018 and 2017, respectively. Fiscal Year Ended July 31, 2019 2018 2017 (in thousands) Net (loss) income attributable to EEI: U.S. operations (a) $ (543 ) $ (651 ) $ 3,688 South American operations (b) (11 ) 343 (865 ) Consolidated net (loss) income attributable to EEI $ (554 ) $ (308 ) $ 2,823 (a) Includes depreciation and amortization expense of $0.8 million, $0.8 million and $0.8 million for fiscal years 2019, 2018 and 2017, respectively. (b) Includes depreciation and amortization expense of $0.2 million, $0.3 million and $0.2 million for fiscal years 2019, 2018 and 2017, respectively. |
Assets by Geographic Areas | July 31, 2019 2018 (in thousands) Total Assets: U.S. operations $ 43,842 $ 43,823 South American operations 7,968 9,006 Consolidated total assets $ 51,810 $ 52,829 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Jul. 31, 2019SubsidiaryCountry |
Organization and Basis of Presentation [Abstract] | |
Number of wholly owned and majority owned operating subsidiaries | Subsidiary | 6 |
Number of countries in which the company operates | Country | 4 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Oct. 31, 2019 | Jul. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |||
Dividends from equity method investments | $ 200 | ||
ASU 2016-01 [Member] | Retained Earnings [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Cumulative effect of adoption | $ (5) | ||
ASU 2016-01 [Member] | Retained Earnings [Member] | Maximum [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Cumulative effect of adoption | (100) | ||
ASU 2016-01 [Member] | Accumulated Other Comprehensive Income [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Cumulative effect of adoption | $ 5 | ||
ASU 2016-01 [Member] | Accumulated Other Comprehensive Income [Member] | Maximum [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Cumulative effect of adoption | $ 100 | ||
ASU 2016-02 [Member] | Plan [Member] | Minimum [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Right-of-use assets | $ 5,900 | ||
Lease liabilities | 5,900 | ||
ASU 2016-02 [Member] | Plan [Member] | Maximum [Member] | |||
Recent Accounting Pronouncements [Abstract] | |||
Right-of-use assets | 6,500 | ||
Lease liabilities | $ 6,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Jul. 31, 2019Founder | ||
Defined Contribution Plans [Abstract] | ||
Number of founders | 2 | |
Buildings [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Buildings [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 32 years | |
Buildings [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 40 years | |
Building Improvements [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Building Improvements [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 7 years | |
Building Improvements [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 15 years | |
Field Equipment [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Field Equipment [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 3 years | |
Field Equipment [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 7 years | |
Computer Equipment [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Computer Equipment [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 7 years | |
Computer Software [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Computer Software [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 3 years | |
Computer Software [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 10 years | |
Office Furniture and Equipment [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Office Furniture and Equipment [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 3 years | |
Office Furniture and Equipment [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 7 years | |
Vehicles [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Vehicles [Member] | Minimum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 3 years | |
Vehicles [Member] | Maximum [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Useful lives | 5 years | |
Leasehold Improvements [Member] | ||
Depreciation/ amortization method and useful lives [Abstract] | ||
Depreciation/ amortization method | Straight-line | |
Useful lives | [1] | |
[1] | Leasehold improvements are amortized for book purposes over the terms of the leases or the estimated useful lives of the assets, whichever is shorter. |
Significant Transactions Duri_2
Significant Transactions During the Fiscal Year Ended July 31, 2019 (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 28, 2019 | Jul. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 |
Class A [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Class B [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Selling, General and Administrative Expenses [Member] | U.S. Operations [Member] | ||||
Staff Reduction Programs [Abstract] | ||||
Employee severance and termination costs | $ 1,000 | |||
Expenses Associated with Restatements of Financial Statements [Abstract] | ||||
Incremental audit, tax and legal expenses | $ 1,000 | |||
Merger Agreement [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Expenses related to merger agreement | $ 300 | |||
Subsequent Event [Member] | Merger Agreement [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Minimum amount of merger expenses considered for special dividend | $ 3,050 | |||
Termination fee | $ 4,000 | |||
Subsequent Event [Member] | Merger Agreement [Member] | Class A [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Common stock, conversion into cash (in dollars per share) | 15 | |||
Subsequent Event [Member] | Merger Agreement [Member] | Class B [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Common stock, par value (in dollars per share) | 0.01 | |||
Common stock, conversion into cash (in dollars per share) | 15 | |||
Subsequent Event [Member] | Merger Agreement [Member] | Maximum [Member] | ||||
Agreement and Plan of Merger [Abstract] | ||||
Special dividend payable (in dollars per share) | $ 0.50 | |||
Reimbursement of expenses | $ 1,750 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 13,344 | $ 13,496 | ||
Restricted cash included in other assets | 248 | 250 | ||
Total cash, cash equivalents and restricted cash | 13,592 | 13,746 | $ 13,135 | $ 9,930 |
Money Market Funds [Member] | ||||
Short-term Investments [Abstract] | ||||
Short-term investments | $ 0 | $ 400 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | |||
Investment securities available for sale | $ 1,577 | $ 1,497 | |
Maximum [Member] | |||
Investments, Debt and Equity Securities [Abstract] | |||
Unrealized investment losses or gains | $ 100 | $ 100 | $ 100 |
Contract Receivables, net, Summ
Contract Receivables, net, Summary of Contract Receivables, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Contract Receivables, net [Abstract] | ||
Billed contracts receivable | $ 12,405 | $ 12,905 |
Unbilled contracts receivable | 13,686 | 13,994 |
Contracts receivable, gross | 26,091 | 26,899 |
Allowance for doubtful accounts | (1,004) | (1,284) |
Contract receivables, net | 25,087 | 25,615 |
Contractual retainage balance included under billed contract receivable | $ 800 | 1,400 |
Management anticipation for receivables collection | 1 year | |
Contract receivables net, not expected to be collected within one year | $ 100 | 500 |
Contract assets | $ 0 | $ 0 |
Contract Receivables, net, Allo
Contract Receivables, net, Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of period | $ 1,284 | $ 2,044 | $ 6,792 |
Provision for doubtful accounts during the period | 182 | 813 | 682 |
Write-offs and recoveries of allowance recorded in prior periods | (676) | (943) | (5,430) |
Reclassification of allowance (to) from noncurrent assets | 214 | (630) | 0 |
Balance at end of period | $ 1,004 | $ 1,284 | $ 2,044 |
Contract Receivables, net, Cont
Contract Receivables, net, Contract Receivable Concentrations (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Contract Receivable Concentrations [Abstract] | ||
Contracts Receivables | $ 26,091 | $ 26,899 |
Allowance for Doubtful Accounts | $ 1,004 | $ 1,284 |
Contract receivables | 9.00% | 13.00% |
United States [Member] | ||
Contract Receivable Concentrations [Abstract] | ||
Contracts Receivables | $ 20,211 | $ 21,580 |
Allowance for Doubtful Accounts | 489 | 569 |
South America [Member] | ||
Contract Receivable Concentrations [Abstract] | ||
Contracts Receivables | 5,880 | 5,319 |
Allowance for Doubtful Accounts | $ 515 | $ 715 |
Contract Receivables, net, Disa
Contract Receivables, net, Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Disaggregation of Revenue [Abstract] | |||
Gross revenue | $ 88,510 | $ 90,684 | $ 96,083 |
U.S. Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 70,622 | 71,735 | 80,542 |
South American Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 17,888 | 18,949 | 15,541 |
Time and Materials [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 40,505 | 38,562 | 47,732 |
Time and Materials [Member] | U.S. Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 40,478 | 38,562 | 47,732 |
Time and Materials [Member] | South American Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 27 | 0 | 0 |
Fixed Price [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 30,974 | 33,262 | 31,773 |
Fixed Price [Member] | U.S. Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 13,113 | 14,313 | 16,232 |
Fixed Price [Member] | South American Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 17,861 | 18,949 | 15,541 |
Cost-Plus [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 17,031 | 18,860 | 16,578 |
Cost-Plus [Member] | U.S. Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | 17,031 | 18,860 | 16,578 |
Cost-Plus [Member] | South American Operations [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Gross revenue | $ 0 | $ 0 | $ 0 |
Contract Receivables, net, Cust
Contract Receivables, net, Customer Deposits (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Customer Deposits [Abstract] | ||
Customer deposits | $ 3,551 | $ 3,191 |
Variable Interest Entities an_3
Variable Interest Entities and Equity Method Investment, Variable Interest Entities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |||
Current assets | $ 42,998 | $ 43,590 | |
Total assets | 51,810 | 52,829 | |
Current liabilities | 18,022 | 16,328 | |
Total Ecology and Environment Inc. shareholder's equity | 32,868 | 35,783 | |
Noncontrolling interests shareholders' equity | 907 | 664 | |
Total shareholders' equity | 33,775 | 36,447 | |
Total liabilities and shareholders' equity | 51,810 | 52,829 | |
Gross revenue | 88,510 | 90,684 | $ 96,083 |
Variable Interest Entity [Member] | |||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |||
Current assets | 3,549 | 2,359 | |
Noncurrent assets | 781 | 878 | |
Total assets | 4,330 | 3,237 | |
Current liabilities | 5,728 | 5,408 | |
Noncurrent liabilities | 12 | 32 | |
Total liabilities | 5,740 | 5,440 | |
Total Ecology and Environment Inc. shareholder's equity | (708) | (1,051) | |
Noncontrolling interests shareholders' equity | (702) | (1,152) | |
Total shareholders' equity | (1,410) | (2,203) | |
Total liabilities and shareholders' equity | 4,330 | 3,237 | |
Gross revenue | 12,100 | 10,000 | $ 8,900 |
Restricted cash | $ 300 | $ 300 |
Variable Interest Entities an_4
Variable Interest Entities and Equity Method Investment, Equity Method Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | |||
Equity investment carrying value at beginning of period | $ 2,058 | ||
GAC net income attributable to EEI | 346 | $ 595 | $ 368 |
Equity investment carrying value at end of period | $ 1,658 | $ 2,058 | |
GAC [Member] | |||
Equity Method Investment [Abstract] | |||
Ownership percentage | 52.48% | 55.10% | |
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | |||
Equity investment carrying value at beginning of period | $ 2,058 | $ 1,463 | 1,944 |
GAC net income attributable to EEI | 346 | 595 | 368 |
EEI's portion of other comprehensive loss recorded by GAC | (414) | 0 | 0 |
Gain on dilution of investment in GAC | (17) | 0 | 0 |
EEI's portion of dividends declared by GAC | (349) | 0 | (849) |
Equity investment carrying value at end of period | 1,658 | 2,058 | 1,463 |
Equity Method Investment, Summarized Financial Information [Abstract] | |||
Current assets | 5,671 | 5,713 | |
Noncurrent assets | 1,215 | 501 | |
Total assets | 6,886 | 6,214 | |
Current liabilities | 3,232 | 2,620 | |
Noncurrent liabilities | 847 | 593 | |
Total liabilities | 4,079 | 3,213 | |
Total Ecology and Environment Inc. shareholder's equity | 1,806 | 1,678 | |
Noncontrolling interest in shareholders' equity | 1,001 | 1,323 | |
Total shareholders' equity | 2,807 | 3,001 | |
Total liabilities and shareholders' equity | 6,886 | 6,214 | |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Gross revenue | 12,912 | 11,987 | 7,737 |
Direct cost of services and subcontract costs | (8,353) | (7,286) | (4,633) |
Income from operations | 924 | 1,381 | 568 |
Net income | 637 | 1,079 | 668 |
Net income attributable to EEI | $ 346 | $ 595 | $ 368 |
Property, Buildings and Equip_3
Property, Buildings and Equipment, net (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 20,319 | $ 20,669 |
Accumulated depreciation and amortization | (17,066) | (16,799) |
Property, buildings and equipment, net | 3,253 | 3,870 |
Land and Land Improvements [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 393 | 393 |
Building and Building Improvements [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 7,471 | 7,455 |
Field Equipment [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 1,949 | 1,970 |
Computer Equipment [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 4,015 | 4,156 |
Computer Software [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 2,981 | 2,940 |
Office Furniture and Equipment [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 1,964 | 2,142 |
Vehicles [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | 884 | 1,134 |
Other [Member] | ||
Property, buildings and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 662 | $ 479 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Goodwill [Roll Forward] | ||
Impairment of goodwill | $ 0 | $ 0 |
Other Assets [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | $ 0.9 | $ 0.9 |
Lines of Credit (Details)
Lines of Credit (Details) $ in Thousands | 12 Months Ended | |
Jul. 31, 2019USD ($)Arrangement | Jul. 31, 2018USD ($) | |
Unsecured lines of credit [Abstract] | ||
Outstanding cash advances reported as lines of credit | $ 284 | $ 0 |
Outstanding letters of credit to support operations | 1,635 | 1,668 |
Total amounts used under lines of credit | 1,919 | 1,668 |
Remaining amounts available under lines of credit | 33,681 | 33,932 |
Total unsecured lines of credit | $ 35,600 | 35,600 |
U.S. [Member] | ||
Unsecured lines of credit [Abstract] | ||
Number of line of credit arrangements | Arrangement | 2 | |
U.S. [Member] | U.S. Operations Credit Arrangement One [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding cash advances reported as lines of credit | $ 0 | 0 |
Total unsecured lines of credit | $ 19,000 | |
U.S. [Member] | U.S. Operations Credit Arrangement One [Member] | LIBOR [Member] | ||
Unsecured lines of credit [Abstract] | ||
Basis spread on variable rate | 2.75% | |
U.S. [Member] | U.S. Operations Credit Arrangement Two [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding cash advances reported as lines of credit | $ 0 | 0 |
Total unsecured lines of credit | $ 13,500 | |
U.S. [Member] | U.S. Operations Credit Arrangement Two [Member] | LIBOR [Member] | ||
Unsecured lines of credit [Abstract] | ||
Basis spread on variable rate | 2.00% | |
South America [Member] | ||
Unsecured lines of credit [Abstract] | ||
Number of line of credit arrangements | Arrangement | 2 | |
South America [Member] | South American Operations Credit Arrangement One [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding cash advances reported as lines of credit | $ 0 | 0 |
Outstanding letters of credit to support operations | 1,000 | 1,000 |
Total unsecured lines of credit | 2,000 | |
South America [Member] | South American Operations Credit Arrangement Two [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding cash advances reported as lines of credit | 300 | 0 |
Outstanding letters of credit to support operations | 600 | 600 |
Total unsecured lines of credit | 1,100 | |
Maximum [Member] | U.S. [Member] | U.S. Operations Credit Arrangement One [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding letters of credit to support operations | 100 | 100 |
Maximum [Member] | U.S. [Member] | U.S. Operations Credit Arrangement Two [Member] | ||
Unsecured lines of credit [Abstract] | ||
Outstanding letters of credit to support operations | $ 100 | $ 100 |
Debt and Capital Lease Obliga_3
Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Jul. 31, 2018 |
Long-term debt and capital lease obligations [Abstract] | ||
Total | $ 54 | $ 108 |
Current portion of long-term debt and capital lease obligations | (41) | (54) |
Long-term debt and capital lease obligations | 13 | 54 |
Long-term Debt, by Maturity [Abstract] | ||
2020 | 41 | |
2021 | 13 | |
Total | 54 | 108 |
Bank Loan [Member] | ||
Long-term debt and capital lease obligations [Abstract] | ||
Total | $ 17 | 28 |
Interest rate | 3.86% | |
Long-term Debt, by Maturity [Abstract] | ||
Total | $ 17 | 28 |
Capital Lease Obligations [Member] | ||
Long-term debt and capital lease obligations [Abstract] | ||
Total | 37 | 80 |
Long-term Debt, by Maturity [Abstract] | ||
Total | $ 37 | $ 80 |
Capital Lease Obligations [Member] | Minimum [Member] | ||
Long-term debt and capital lease obligations [Abstract] | ||
Interest rate | 4.80% | |
Capital Lease Obligations [Member] | Maximum [Member] | ||
Long-term debt and capital lease obligations [Abstract] | ||
Interest rate | 17.07% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income before income tax provision [Abstract] | ||||||||
U.S. operations | $ (1,302) | $ (948) | $ 4,758 | |||||
Foreign operations (primarily South American operations) | 528 | 1,102 | (80) | |||||
(Loss) Income before income tax provision | (774) | 154 | 4,678 | |||||
Current income tax provision (benefit) [Abstract] | ||||||||
Federal | 78 | (62) | (149) | |||||
State | 90 | 26 | 42 | |||||
Foreign | 494 | 228 | 282 | |||||
Total current | 662 | 192 | 175 | |||||
Deferred income tax provision (benefit) [Abstract] | ||||||||
Federal | (24) | 289 | 1,653 | |||||
State | 1 | (75) | 308 | |||||
Foreign | (1,303) | (148) | 31 | |||||
Total deferred | (1,326) | 66 | 1,992 | |||||
Total income tax (benefit) provision | $ (664) | $ 258 | $ 2,167 | |||||
Statutory federal tax rate | 34.00% | 21.00% | 21.00% | 26.50% | 34.00% | |||
Reconciliation of income tax provision from statutory U.S. income tax rate to the effective income tax rate [Abstract] | ||||||||
Income tax (benefit) provision at the U.S. federal statutory income tax rate | $ (163) | $ 41 | $ 1,590 | |||||
Tax on Foreign Earnings | 138 | 129 | 0 | |||||
Change in Tax Rates under Tax Act | 16 | 322 | 0 | |||||
International rate differences | 80 | 27 | 33 | |||||
Peru non-deductible expenses | 0 | 14 | 53 | |||||
Foreign dividend income | 0 | 0 | 240 | |||||
Income from "pass-through" entities taxable to noncontrolling partners | (16) | 0 | (1) | |||||
Re-evaluation and settlements of tax contingencies | 0 | 0 | (33) | |||||
Transaction costs | 69 | 0 | 0 | |||||
Change in valuation allowance | (1,241) | (19) | 98 | |||||
State taxes, net of federal benefit | 75 | (32) | 200 | |||||
Other foreign taxes, net of federal benefit | 109 | (95) | (111) | |||||
Other permanent differences | 269 | (129) | 98 | |||||
Total income tax (benefit) provision | (664) | 258 | 2,167 | |||||
Deferred tax assets [Abstract] | ||||||||
Net operating loss carryforwards | $ 1,413 | $ 1,081 | ||||||
Accrued compensation and expenses | 623 | 611 | ||||||
Federal benefit from foreign accounting differences | 448 | 460 | ||||||
Contract and other reserves | 253 | 311 | ||||||
Foreign tax credit | 296 | 296 | ||||||
Capital loss carryforwards | 234 | 143 | ||||||
Fixed assets and intangibles | 57 | 0 | ||||||
Other | 155 | 202 | ||||||
Deferred tax assets | 3,479 | 3,104 | ||||||
Less: Valuation allowance | $ (2,020) | $ (2,006) | $ (859) | (2,006) | (2,020) | (859) | (2,006) | $ (2,020) |
Net deferred tax assets | 2,620 | 1,098 | ||||||
Deferred tax liabilities [Abstract] | ||||||||
Fixed assets and intangibles | 0 | (39) | ||||||
Federal expense on state deferred taxes | (62) | (60) | ||||||
Federal expense from foreign accounting differences | (2) | (7) | ||||||
Unremitted foreign earnings | (417) | (206) | ||||||
Other | (9) | 3 | ||||||
Net deferred tax liabilities | (490) | (309) | ||||||
Foreign operating loss carryforwards | 3,000 | |||||||
State operating loss carryforwards | 1,400 | |||||||
Net operating loss carryforwards expiration period | 4 years | |||||||
Provision of global intangible low taxed income, amount | $ 600 | |||||||
Deferred tax assets valuation allowance [Abstract] | ||||||||
Balance at beginning of period | $ 2,020 | 2,006 | 2,020 | |||||
Additions during the period | 420 | 60 | ||||||
Reductions during period | (1,567) | (74) | ||||||
Balance at end of period | $ 2,006 | 859 | 2,006 | 2,020 | ||||
Amount of undistributed income that will not be indefinitely reinvested in foreign operations | 200 | 200 | 600 | |||||
Undistributed foreign earnings | 4,100 | 6,300 | $ 5,600 | |||||
Foreign earnings | 2,300 | 1,000 | ||||||
Uncertain tax positions [Abstract] | ||||||||
Uncertain tax positions | $ 0 | $ 0 | ||||||
Maximum [Member] | ||||||||
Uncertain tax positions [Abstract] | ||||||||
Interest accrued related to liabilities for uncertain tax positions | $ 100 | $ 100 | $ 100 | |||||
IRS [Member] | ||||||||
Income Tax Examination [Abstract] | ||||||||
Income tax examination, year subject to examination | 2019 2018 2017 2016 | |||||||
State, Local and Foreign [Member] | ||||||||
Income Tax Examination [Abstract] | ||||||||
Income tax examination, year subject to examination | 2019 2018 2017 2016 2015 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | |
Other Accrued Liabilities [Abstract] | |||||
Allowance for project disallowances | $ 490 | $ 687 | $ 687 | $ 490 | $ 687 |
Other | 896 | 695 | |||
Total other accrued liabilities | $ 1,386 | $ 1,382 | |||
Allowance for Project Disallowances [Roll Forward] | |||||
Balance at beginning of period | 687 | 687 | 1,819 | ||
Reduction of reserves recorded in prior fiscal years | (197) | 0 | (1,132) | ||
Balance at end of period | $ 490 | $ 687 | 687 | ||
Maximum [Member] | |||||
Allowance for Project Disallowances [Roll Forward] | |||||
Reduction of reserves recorded in prior fiscal years | $ 100 |
Incentive Compensation (Details
Incentive Compensation (Details) - Class A [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2016 | |
Employee Service Share-based Compensation [Abstract] | |||
Shares authorized (in shares) | 6,000,000 | 6,000,000 | |
Shares awarded (in shares) | 15,767 | ||
Shares awarded, value | $ 0.2 | ||
Directors Chairman [Member] | |||
Employee Service Share-based Compensation [Abstract] | |||
Shares authorized (in shares) | 200,000 | ||
Directors [Member] | |||
Employee Service Share-based Compensation [Abstract] | |||
Shares awarded (in shares) | 10,367 | ||
Shares awarded, value | $ 0.1 | ||
Maximum [Member] | Directors Chairman [Member] | |||
Employee Service Share-based Compensation [Abstract] | |||
Term of the award plan | 5 years | ||
Maximum [Member] | Executive Chairman [Member] | |||
Employee Service Share-based Compensation [Abstract] | |||
Shares awarded (in shares) | 3,400 | ||
Shares awarded, value | $ 0.1 | ||
Maximum [Member] | Chief Administrative Officer [Member] | |||
Employee Service Share-based Compensation [Abstract] | |||
Shares awarded (in shares) | 2,000 | ||
Shares awarded, value | $ 0.1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Aug. 31, 2010 | |
Cash Dividends [Abstract] | ||||
Cash dividends declared | $ 1,728 | $ 1,724 | $ 1,719 | |
Dividends paid | 1,700 | 1,700 | 1,700 | |
Dividends declared but unpaid | 865 | 863 | $ 860 | |
Accumulated Other Comprehensive Loss [Abstract] | ||||
Unrealized net foreign currency translation losses | (2,098) | (1,880) | ||
Unrealized net investment (losses) gains on available for sale investments | 0 | (5) | ||
Total accumulated other comprehensive loss | $ (2,098) | $ (1,885) | ||
Class A [Member] | ||||
Class A and Class B common stock [Abstract] | ||||
Percentage equity holders entitled to elect Board of Directors | 25.00% | |||
Minimum percentage of the number of outstanding Class A common stock to combined classes of shares | 10.00% | |||
Voting power of Class A common share holders to the Class B common stock holders | 0.1 | |||
Number of Class B shares to be converted into Class A shares (in shares) | 1 | |||
Stock Repurchase [Abstract] | ||||
Number of shares authorized to be repurchased (in shares) | 122,918 | 200,000 | ||
Remaining number of shares authorized to be repurchased (in shares) | 77,082 | |||
Number of share acquired (in shares) | 0 | 0 | 0 |
Operating Lease Commitments (De
Operating Lease Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Operating Lease Commitments [Abstract] | |||
Gross rental expense | $ 3,100 | $ 3,200 | $ 3,300 |
Future minimum rental commitments [Abstract] | |||
2020 | 2,139 | ||
2021 | 1,635 | ||
2022 | 1,156 | ||
2023 | 1,005 | ||
2024 | 647 | ||
Thereafter | 96 | ||
Total | $ 6,678 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Defined Contribution Plans [Abstract] | |||
Total plan expense | $ 1.2 | $ 1.3 | $ 1.5 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net (loss) income attributable to Ecology and Environment Inc. | $ (554) | $ (308) | $ 2,823 |
Less: Dividend declared | 1,728 | 1,724 | 1,719 |
Undistributed earnings (distributions in excess of earnings) | $ (2,282) | $ (2,032) | $ 1,104 |
Weighted-average common shares outstanding - basic and diluted (in shares) | 4,316,316 | 4,304,574 | 4,294,501 |
Distributed earnings per share (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.40 |
Undistributed earnings (distributions in excess of earnings) per share (in dollars per share) | (0.53) | (0.47) | 0.26 |
Total (loss) earnings per share (in dollars per share) | $ (0.13) | $ (0.07) | $ 0.66 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | ||
Segment Reporting Information [Abstract] | ||||
Gross revenue | $ 88,510 | $ 90,684 | $ 96,083 | |
Consolidated net (loss) income attributable to EEI | (554) | (308) | 2,823 | |
Depreciation and amortization expense | 1,022 | 1,083 | 994 | |
Assets | 51,810 | 52,829 | ||
United States [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Gross revenue | 70,622 | 71,882 | 80,659 | |
Consolidated net (loss) income attributable to EEI | [1] | (543) | (651) | 3,688 |
Depreciation and amortization expense | 800 | 800 | 800 | |
Assets | 43,842 | 43,823 | ||
United States [Member] | Government Contract [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Gross revenue | 14,100 | 15,800 | 21,900 | |
South America [Member] | ||||
Segment Reporting Information [Abstract] | ||||
Gross revenue | 17,888 | 18,802 | 15,424 | |
Consolidated net (loss) income attributable to EEI | [2] | (11) | 343 | (865) |
Depreciation and amortization expense | 200 | 300 | $ 200 | |
Assets | $ 7,968 | $ 9,006 | ||
[1] | Includes depreciation and amortization expense of $0.8 million, $0.8 million and $0.8 million for fiscal years 2019, 2018 and 2017, respectively. | |||
[2] | Includes depreciation and amortization expense of $0.2 million, $0.3 million and $0.2 million for fiscal years 2019, 2018 and 2017, respectively. |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, R$ in Millions | 12 Months Ended | |||
Jul. 31, 2019USD ($)Employee | Oct. 14, 2019Complaints | Jul. 31, 2019BRL (R$) | Jul. 31, 2018USD ($) | |
Loss Contingencies [Abstract] | ||||
Other accrued liabilities | $ | $ 1,386 | $ 1,382 | ||
Subsequent Event [Member] | ||||
Loss Contingencies [Abstract] | ||||
Number of complaints challenging merger were filed | Complaints | 2 | |||
Pending Litigation [Member] | Ecology and Environment do Brasil LTDA [Member] | ||||
Loss Contingencies [Abstract] | ||||
Loss contingency, estimate of possible loss | R$ | R$ 0.5 | |||
Number of employees individually served with notices of infraction | 4 | |||
Settled Litigation [Member] | Ecology and Environment do Brasil LTDA [Member] | ||||
Loss Contingencies [Abstract] | ||||
Number of employees individually served with claim of violations dismissed | 1 | |||
Number of employees that have fines assessed against them, which are being appealed | 3 | |||
Other accrued liabilities | $ | $ 400 |