<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 29, 1996 Commission File No. 0-11917
THE DAVEY TREE EXPERT COMPANY
(Exact name of Registrant as specified in its charter)
OHIO 34-0176110
(State of Incorporation) (IRS Employer Identification No.)
1500 North Mantua Street
P. O. Box 5193
Kent, OH 44240-5193
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 673-9511
Number of Common Shares Outstanding as of August 5, 1996: 2,277,863
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past ninety (90) days.
YES X NO
----- -----
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THE DAVEY TREE EXPERT COMPANY
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - Periods Ended June 29,
1996, July 1, 1995 and December 31, 1995 3
Consolidated Statements of Net Earnings - Three Months
Ended June 29, 1996 and July 1, 1995 4
Consolidated Statements of Net Earnings - Six Months
Ended June 29, 1996 and July 1, 1995 5
Consolidated Statements of Cash Flows - Six Months
Ended June 29, 1996 and July 1, 1995 6
Notes to Consolidated Financial Statements 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II: OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders 12
Item 6: Exhibits and Reports on Form 8-K 12
</TABLE>
2
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THE DAVEY TREE EXPERT COMPANY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 29, JULY 1, DEC. 31,
1996 1995 1995
------------ ------------ ---------
<S> <C> <C> <C>
ASSETS (UNAUDITED)
- ------ -----------
CURRENT ASSETS
Cash and Cash Equivalents $ 1,947 $ 665 $ 1,470
Accounts Receivable 43,232 37,218 34,622
Refundable Income Taxes - - - - - -
Operating Supplies 2,670 2,458 2,136
Prepaid Expenses & Other Assets 1,630 2,993 2,082
Deferred Income Taxes 2,635 1,911 2,697
------------ ------------ ------------
Total Current Assets 52,114 45,245 43,007
PROPERTY AND EQUIPMENT:
Land and Land Improvements 6,226 6,382 6,446
Buildings and Leasehold Improvements 17,137 16,630 15,956
Equipment 148,109 135,676 139,711
------------ ------------ ------------
171,472 158,688 162,113
Less Accumulated Depreciation 112,890 103,702 107,977
------------ ------------ ------------
Net Property and Equipment 58,582 54,986 54,136
OTHER ASSETS AND INTANGIBLES 7,246 7,096 7,309
------------ ------------ ------------
TOTAL ASSETS $ 117,942 $ 107,327 $ 104,452
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts Payable $ 12,180 $ 11,419 $ 10,227
Accrued Liabilities 17,292 13,814 13,935
Income Taxes Payable 1,996 1,381 3,171
Notes Payable, Bank 110 146 400
Current Maturities of Long-Term Debt 10,863 8,460 2,781
------------ ------------ ------------
Total Current Liabilities 42,441 35,220 30,514
LONG-TERM DEBT 15,520 19,227 17,049
DEFERRED INCOME TAXES 3,182 3,256 3,182
INSURANCE LIABILITIES 6,849 5,491 6,380
OTHER LIABILITIES 645 662 797
------------ ------------ ------------
TOTAL LIABILITIES 68,637 63,856 57,922
------------ ------------ ------------
SHAREHOLDERS' EQUITY
Preferred Shares - No Par Value - - - - - -
Authorized 4,000,000 Shares; None Issued
Common Shares - $1.00 Par Value; Authorized
12,000,000 Shares; Issued 4,364,220 Shares at
June 29, 1996, July 1, 1995 and December 31, 1995 4,364 4,364 4,364
Additional Paid-in Capital 7,983 7,704 7,836
Retained Earnings 71,528 63,756 67,922
------------ ------------ ------------
83,875 75,824 80,122
LESS:
Treasury Shares at cost: 2,086,317 Shares at
June 29, 1996; 2,020,481 Shares at July 1, 1995;
and 2,052,488 Shares at December 31, 1995 (34,247) (31,640) (33,198)
Subscriptions Receivable from Employees (275) (568) (297)
Future Contributions to ESOT (48) (145) (97)
------------ ------------ ------------
TOTAL SHAREHOLDERS' EQUITY 49,305 43,471 46,530
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 117,942 $ 107,327 $ 104,452
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
THE DAVEY TREE EXPERT COMPANY
CONSOLIDATED STATEMENTS OF NET EARNINGS
THREE MONTHS ENDED JUNE 29, 1996 AND JULY 1, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 29, 1996 July 1, 1995
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
REVENUES $ 74,064 100.0% $ 61,277 100.0%
------------- ----------- -------------- -----------
COSTS AND EXPENSES
Operating 50,443 68.1 41,045 67.0
Selling 8,997 12.1 7,395 12.1
General and Administrative 4,336 5.9 3,635 5.9
Depreciation and Amortization 3,654 4.9 3,106 5.1
------------- ----------- -------------- -----------
TOTAL COSTS AND EXPENSES 67,430 91.0 55,181 90.1
------------- ----------- -------------- -----------
EARNINGS FROM OPERATIONS 6,634 9.0 6,096 9.9
INTEREST EXPENSE (592) (0.8) (705) (1.1)
OTHER EXPENSE - NET (38) (0.1) (38) (0.1)
-------------- ------------ -------------- -----------
EARNINGS BEFORE INCOME TAXES 6,004 8.1 5,353 8.7
INCOME TAXES 2,361 3.2 2,195 3.6
------------- ----------- -------------- -----------
EARNINGS FROM CONTINUING OPERATIONS 3,643 4.9 3,158 5.1
DISCONTINUED OPERATIONS - NET
EARNINGS (LOSS)
------------- ----------- -------------- -----------
NET EARNINGS $ 3,643 4.9% $ 3,158 5.1%
============= =========== ============== ===========
NET EARNINGS PER COMMON SHARE
FROM CONTINUING OPERATIONS $ 1.54 $ 1.31
============= ==============
NET EARNINGS PER COMMON SHARE $ 1.54 $ 1.31
============= ==============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING, INCLUDING
COMMON STOCK EQUIVALENTS 2,358,539 2,420,013
============= ==============
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
THE DAVEY TREE EXPERT COMPANY
CONSOLIDATED STATEMENTS OF NET EARNINGS
SIX MONTHS ENDED JUNE 29, 1996 AND JULY 1, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 29, 1996 July 1, 1995
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
REVENUES $ 134,292 100.0% $ 107,659 100.0%
------------- ----------- -------------- -----------
COSTS AND EXPENSES
Operating 94,328 70.2 76,962 71.5
Selling 16,823 12.5 13,925 12.9
General and Administrative 8,506 6.3 7,352 6.8
Depreciation and Amortization 7,031 5.3 6,314 5.9
------------- ----------- -------------- -----------
TOTAL COSTS AND EXPENSES 126,688 94.3 104,553 97.1
------------- ----------- -------------- -----------
EARNINGS FROM OPERATIONS 7,604 5.7 3,106 2.9
INTEREST EXPENSE (1,080) (0.8) (1,232) (1.2)
OTHER INCOME/(EXPENSE) - NET 152 0.1 (41)
------------- ----------- -------------- -----------
EARNINGS BEFORE INCOME TAXES 6,676 5.0 1,833 1.7
INCOME TAXES 2,625 2.0 752 0.7
------------- ----------- -------------- -----------
EARNINGS FROM CONTINUING OPERATIONS 4,051 3.0 1,081 1.0
DISCONTINUED OPERATIONS - NET
EARNINGS (LOSS) 236 0.2
------------- ----------- -------------- -----------
NET EARNINGS $ 4,051 3.0% $ 1,317 1.2%
============= =========== ============== ===========
NET EARNINGS PER COMMON SHARE
FROM CONTINUING OPERATIONS $ 1.71 $ 0.44
============= ==============
NET EARNINGS PER COMMON SHARE $ 1.71 $ 0.54
============= ==============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING, INCLUDING
COMMON STOCK EQUIVALENTS 2,370,283 2,453,209
============= ==============
</TABLE>
See Notes to Consolidated Financial Statements
5
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THE DAVEY TREE EXPERT COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR SIX MONTHS ENDED JUNE 29, 1996 AND JULY 1, 1995
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 29, JULY 1,
1996 1995
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings $ 4,051 $ 1,317
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Depreciation 6,820 6,090
Amortization 211 224
Deferred Income Taxes 62 (13)
Other 224 189
--------------- ---------------
11,368 7,807
Change in Operating Assets and Liabilities:
Accounts Receivable (8,610) (7,905)
Other Assets 4 329
Accounts Payable and Accrued Liabilities 5,310 5,181
Insurance Liabilities 469 441
Other Liabilities (1,327) (614)
--------------- ---------------
Net Cash Provided by Operating Activities 7,214 5,239
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sales of Property and Equipment 350 561
Acquisitions (820) (395)
Proceeds from Sale of Business 1,300
Capital Expenditures:
Land and Buildings (475) (432)
Equipment (10,561) (6,739)
--------------- ---------------
Net Cash Used In Investing Activities (11,506) (5,705)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
ESOT Payment of Debt Guaranteed by the Company 49 48
Net Borrowings (Payments) Under Notes Payable, Bank (290) 47
Principal Payments of Long-Term Debt (1,498) (1,733)
Proceeds from Issuance of Long-Term Debt 8,051 4,452
Sales of Treasury Shares 517 718
Receipts from Stock Subscriptions 22 38
Dividends Paid (663) (643)
Repurchase of Common Shares (1,419) (2,769)
--------------- ---------------
Net Cash Provided By Financing Activities 4,769 158
--------------- ---------------
NET CHANGE IN CASH AND EQUIVALENTS 477 (308)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,470 973
--------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,947 $ 665
=============== ===============
</TABLE>
See Notes to Consolidated Financial Statements
6
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THE DAVEY TREE EXPERT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SIX MONTHS ENDED JUNE 29, 1996
UNAUDITED
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited Consolidated Financial Statements as of June
29, 1996 and July 1, 1995 and for the periods then ended have been prepared in
accordance with the instructions to Form 10-Q, but do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Reclassifications have been made to the
prior-year financial statements to conform to the current year presentation.
The net earnings per common share from continuing operations and the net
earnings per common share were calculated by using the weighted average number
of common shares outstanding, including common stock equivalents, during the
period.
NOTE 2 - RESULTS OF OPERATIONS
- ------------------------------
Due to the seasonal nature of some of the Company's services, the
results of operations for the periods ended June 29, 1996 and July 1, 1995 are
not necessarily indicative of the results to be expected for the full year.
NOTE 3 - DIVIDENDS
- ------------------
On June 10, 1996 the Registrant paid a $.15 per share dividend to all
shareholders of record at June 1, 1996. This compares to a $.14 per share
dividend paid in the second quarter of 1995. For the six months ended June 29,
1996, the Registrant paid cumulative dividends of $.29 per share to all
shareholders of record. This compared to a $.27 cumulative per share dividend
paid the first half of 1995.
NOTE 4 - ACCRUED LIABILITIES
- ----------------------------
Accrued liabilities consisted of:
<TABLE>
<CAPTION>
JUNE 29, JULY 1, DEC. 31,
1996 1995 1995
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Compensation $ 4,841 $ 4,311 $ 3,521
Vacation 2,242 1,751 1,658
Insurance Liabilities 7,565 5,175 7,082
Taxes, other than taxes on income 1,546 1,150 915
Other 1,098 1,427 759
------------- ------------- -------------
$ 17,292 $ 13,814 $ 13,935
============= ============= =============
</TABLE>
7
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NOTE 5 - LONG-TERM DEBT
- -----------------------
Long-term debt consisted of:
<TABLE>
<CAPTION>
JUNE 29, JULY 1, DEC. 31,
1996 1995 1995
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Revolving Credit Agreement:
Prime rate borrowings $ 7,400 $ 2,900
London Interbank Offered Rate
(LIBOR) borrowings $ 17,000 6,000
Term note agreement 8,400 10,800 9,600
Notes payable 8,000
------------- ------------- -------------
25,400 26,200 18,500
Long-term debt of ESOT 48 145 97
Subordinated notes - stock redemption 515 769 673
Term loans and others 420 573 560
------------- ------------- -------------
26,383 27,687 19,830
Less current maturities 10,863 8,460 2,781
------------- ------------- -------------
$ 15,520 $ 19,227 $ 17,049
============= ============= =============
</TABLE>
NOTE 6 - ACQUISITIONS
- ---------------------
In the first quarter of 1996, the Registrant acquired the assets of two
organizations which provide horticultural services for a total purchase price of
$820,000, and accounted for each transaction as a purchase. Their results of
operations, which were not material, have been included in the accompanying
financial statements from their respective acquisition dates. Goodwill and other
intangibles recognized in connection with these purchases are being amortized
over three to fifteen years.
NOTE 7 - DISCONTINUED OPERATION
- -------------------------------
In March, 1995 the Company sold substantially all of the operating
assets, excluding real estate, of its interior plant care business. Amounts
related to the discontinued operation and recognized in the financial statements
are as follows:
<TABLE>
<CAPTION>
JUNE 29 JULY 1
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Revenue $ 555
-----------
Loss from discontinued operation, net of applicable
income tax benefits of $116,000 in 1995. (168)
Gain on sale of assets, less applicable income taxes
of $280,000 404
-----------
Discontinued operation, net $ 236
-----------
Remaining assets and liabilities:
Real estate and receivable, net $ 433 $ 485
----------- -----------
Accounts payable, accrued liabilities and long-term debt $ 75 $ 392
----------- -----------
</TABLE>
8
<PAGE> 9
THE DAVEY TREE EXPERT COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
SIX MONTHS ENDED JUNE 29, 1996
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Operating activities provided $7,214,000 during the first half of 1996, a net
increase of $1,975,000 when compared to the $5,239,000 provided last year. The
net improvement was mainly due to higher net earnings and depreciation,
partially offset by an increase in accounts receivable and a larger reduction in
other liabilities.
Net earnings of $4,051,000 for the first six months of 1996 represented an
improvement of $2,734,000 when compared to the $1,317,000 earned in 1995. They
were improved in most of the Registrant's operations; in particular, earnings
generated by the Registrant's Utility services continued to be substantially
higher, as well as Residential and Commercial services. The improvements
continue to result primarily from the following factors. First, the Registrant's
Utility and Consulting services obtained additional work with a major Western
U.S. customer during the fourth quarter of 1995, which continued into the first
quarter and to a lesser extent the second quarter of 1996. Second, Residential
and Commercial service revenues continue to be favorably influenced by
heightened sales efforts as well as a generally improved economy. The Registrant
remains encouraged by year-to-date results; however, in that some of the
additional work with this major Western U.S. customer is now complete, and that
the third quarter is a significant component of its prime sales season, it is
premature to draw conclusions regarding annual performance. Nonetheless,
earnings are still expected to be higher than in 1995.
Accounts receivable increased $8,610,000, $705,000 more than the $7,905,000
increase experienced in the first six months of 1995. This increase was mainly
due to work in process related to certain contracts with one of the Registrant's
Utility customers, and to a lesser extent the higher level of Residential and
Commercial revenues. Similarly, accounts receivable days outstanding of 53.0
days were 3.4 days higher than last year at this time, although they have
declined by .8 days from December 31, 1995.
Other liabilities used $1,327,000 in cash during the first six months of 1996,
an increase of $713,000 when compared to last year. This increase was primarily
due to an acceleration of estimated income tax payments in the current year
required as a result of the Registrant's improved earnings.
Net cash used in investing activities totaled $11,506,000, an increase of
$5,801,000 when compared to the first six months of 1995. This increase was due
to higher capital expenditures in the current year, as well as proceeds received
in 1995 pertaining to the sale of certain Interior plant care assets. (See Note
#7 to the Financial Statements on page 8 on this Form 10-Q). The increase in
capital expenditures is consistent with the Registrant's 1996 capital budget of
$14,500,000, which is necessary to continue to expand services, maintain
equipment on existing operations, and provide for the ongoing expansion of its
branch office facilities.
Financing activities provided $4,769,000, a net increase of $4,611,000 when
compared to the $158,000 provided during the first six months of 1995. This net
increase was due mostly to higher borrowings required by the increase in capital
expenditures. Also, the Registrant's current year repurchase of its common
shares declined substantially when compared to last year, primarily due to a
significant repurchase in 1995 of shares held by a former vice president.
Depreciation increased by $730,000 compared to the first six months of 1995, the
result of a $3,865,000 increase in the Registrant's capital expenditures.
At June 29, 1996, the Registrant's principal source of liquidity consisted of
$1,947,000 in cash and cash equivalents; short-term lines of credit and amounts
available to be borrowed from banks via notes
9
<PAGE> 10
payable totaling $3,818,000, of which $110,000 had been drawn; and a credit
agreement in the amount of $35,000,000, of which $17,000,000 had been drawn and
$5,843,000 was considered drawn to cover outstanding standby letters of credit.
Including the outstanding balance on the term note agreement of $8,400,000, the
Registrant's credit facilities totaled $47,218,000. The Registrant believes its
available credit will exceed credit requirements, and that its liquidity is
adequate.
RESULTS OF OPERATIONS
- ---------------------
Revenues of $134,292,000 for the first six months of 1996 increased $26,633,000
or 25%, when compared to the same period in 1995. Similarly, second quarter
revenues of $74,064,000 exceeded last year by $12,787,000 or approximately 21%.
The year to date increase, as stated previously, was primarily due to higher
revenues from the Registrant's Utility and Consulting services, as well as
higher Residential and Commercial service revenues. As anticipated, the
additional work obtained by the Registrant's Utility and Consulting operations
with a major Western U.S. customer was substantially completed during the second
quarter of 1996. Accordingly, although revenues are expected to remain higher
during the second half of the year, the rate of increase will not be as
favorable as that experienced during the first six months.
Operating costs for the year of $94,328,000 increased $17,366,000, but as a
percentage of revenues declined 1.3% to 70.2%. Conversely, these costs increased
during the quarter by $9,398,000 and 1.1% as a percentage of revenues. The
improvement in operating costs for the first six months of 1996 continues to
reflect the positive influence of substantially increased consulting service
revenues. Consulting services are far less capital intensive and any increase in
these revenues relative to the Registrant's other services will favorably impact
its cost structure. The increase in operating costs as a percentage of revenues
for the quarter was primarily attributable to equipment related costs incurred
upon completion of the additional utility work that had been obtained.
For the quarter, selling costs remained virtually even with last year as a
percentage of revenues at 12.1% but on a year-to-date basis, they declined 0.4%
to 12.5%, despite an increase of $2,898,000. The year-to-date dollar increase
was affected by higher sales commissions, and branch office costs attributable
to increased Residential and Commercial service revenues, as well as higher
travel and other sales costs associated with the Registrant's Consulting
services.
Even though general and administrative (G&A) expenses were higher than last year
in both the year-to-date and quarter, as a percentage of revenues G&A of 6.3%
was, on a year-to-date basis, 0.5% lower than in 1995. For the year, G&A expense
of $8,506,000 was $1,154,000 higher than the first six months of last year. Most
of the increase resulted from additional administrative costs associated with
the Registrant's expansion of its Commercial and Consulting services, as well as
professional services related to the Registrant's upgrade of its information
service technologies.
Depreciation and amortization expense of $7,031,000 was $717,000 higher than the
same period in 1995. As a percentage of revenues, both the year and quarter were
lower, with the year-to-date result 0.6% lower than the 5.9% experienced last
year. The lower percentage was primarily the result of relatively lower capital
expenditures in the prior two years, coupled with higher Consulting service
revenues in the current year. In 1996, the Registrant anticipates that
depreciation expense will approximate $13,000,000.
Interest expense of $1,080,000 was $152,000 lower than last year, and as a
percentage of revenues it declined .4%. The decrease was primarily a function of
more favorable rates obtained under the Registrant's credit facility which had
been entered into in September 1995.
As a result of the above factors, earnings from continuing operations before
income taxes increased $4,843,000 to $6,676,000 or 3.3% to 5.0% as a percentage
of revenues. For the quarter, earnings of $6,004,000 increased $651,000 but
declined as a percentage of revenues by 0.6% to 8.1%. Effective income tax rates
of 39.3% and 41.0% were used to compute the tax provisions for 1996 and 1995,
respectively.
10
<PAGE> 11
The Registrant's year-to-date net earnings of $4,051,000 increased $2,734,000 or
1.8% as a percentage of revenues when compared to the first half of 1995, after
reflecting a net $236,000 contributed by the Registrant's discontinued operation
in the prior year (See Note #7 on page 8 to the Financial Statements on this
Form 10-Q).
11
<PAGE> 12
THE DAVEY TREE EXPERT COMPANY
PART II: OTHER INFORMATION
--------------------------
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 21, 1996, the Registrant held its annual meeting of
shareholders. The shareholders voted to:
a. Elect the following persons to serve as directors for a term to
expire on the date of the annual meeting in 1999:
John W. Joy
R. Douglas Cowan
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE DAVEY TREE EXPERT COMPANY
BY:/s/David E. Adante
------------------------------
David E. Adante
Executive Vice President, CFO and
Secretary-Treasurer
BY:/s/Bradley L. Comport
------------------------------
Bradley L. Comport
Corporate Controller
August 5, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-29-1996
<EXCHANGE-RATE> 1
<CASH> 1,947
<SECURITIES> 0
<RECEIVABLES> 43,232
<ALLOWANCES> 342
<INVENTORY> 2,670
<CURRENT-ASSETS> 52,114
<PP&E> 171,472
<DEPRECIATION> 112,890
<TOTAL-ASSETS> 117,942
<CURRENT-LIABILITIES> 42,441
<BONDS> 0
<COMMON> 4,364
0
0
<OTHER-SE> 44,941
<TOTAL-LIABILITY-AND-EQUITY> 117,942
<SALES> 0
<TOTAL-REVENUES> 134,292
<CGS> 0
<TOTAL-COSTS> 126,688
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,080
<INCOME-PRETAX> 6,676
<INCOME-TAX> 2,625
<INCOME-CONTINUING> 4,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,051
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
</TABLE>
