<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 11-K
ANNUAL REPORT PURSUANT
TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------------
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 13 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______.
Commission file number: 0-11917
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Davey 401KSOP and ESOP
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
The Davey Tree Expert Company
1500 North Mantua Street
P. O. Box 5193
Kent, Ohio 44240-5193
<PAGE> 2
FINANCIAL STATEMENTS AND EXHIBIT(S)
<TABLE>
<CAPTION>
PAGE NO.
(a) FINANCIAL STATEMENTS (IN THIS REPORT)
-------------------- ----------------
<S> <C>
Independent Auditors' Report 6
Statement of Net Assets Available For Benefits -
December 31, 1997 7
Statement of Net Assets Available For Benefits -
December 31, 1996 8
Statement of Changes in Net Assets Available
for Benefits - Year Ended December 31, 1997 9
Statement of Changes in Net Assets Available
for Benefits - Year Ended December 31, 1996 10
Notes to Financial Statements - Years Ended
December 31, 1997 and 1996 11
Supplemental Schedule 15
(b) EXHIBIT(S)
----------
Independent Auditors' Consent 16
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned, hereto duly authorized.
THE DAVEY 401KSOP AND ESOP
By: The Davey Tree Expert Company,
as Plan Administrator
By: /s/ David E. Adante
----------------------
David E. Adante
Executive Vice President, CFO and
Secretary-Treasurer
June 29, 1998
<PAGE> 4
THE DAVEY 401KSOP AND ESOP
Financial Statements for the Years Ended
December 31, 1997 and 1996; Supplemental
Schedule for the Year Ended December 31, 1997,
and Independent Auditors' Report
<PAGE> 5
THE DAVEY 401KSOP AND ESOP
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997
AND 1996 AND FOR THE YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2-3
Statements of Changes in Net Assets Available
for Benefits 4-5
Notes to Financial Statements 6-9
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 1997:
Item 27a - Schedule of Assets Held for
Investment Purposes 10
<PAGE> 6
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the 401KSOP and ESOP Committee
The Davey 401KSOP and ESOP
Kent, Ohio
We have audited the accompanying statements of net assets available for benefits
of The Davey 401KSOP and ESOP (the "Plan") as of December 31, 1997 and 1996, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996 and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 1997 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for the purpose of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedule and fund
information have been subjected to the auditing procedures applied in the audit
of the 1997 basic financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the 1997 basic financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
June 5, 1998
<PAGE> 7
THE DAVEY 401KSOP AND ESOP
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
-----------------------------------------------------------
NON-PARTICIPANT
DIRECTED PARTICIPANT DIRECTED
-------------- --------------------------
THE DAVEY TREE TOTAL EB MONEY VICTORY
EXPERT COMPANY PARTICIPANT MARKET INTERMEDIATE
TOTAL STOCK FUND DIRECTED FUND INCOME FUND
----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 399,988 $ 376,785 $ 23,203
Investments, at fair value:
Common stock 41,450,438 41,231,097 219,341
Mutual funds 1,130,147 1,130,147 $ 90,435 $ 87,796
------------ ------------ ----------- ----------- -----------
Total investments 42,580,585 41,231,097 1,349,488 90,435 87,796
Receivables:
Employer's contribution 404,472 404,472
Participants' contributions 47,763 47,763 2,371 2,410
Interest receivable 1,448 1,448
------------ ------------ ----------- ----------- -----------
Total receivables 453,683 405,920 47,763 2,371 2,410
------------ ------------ ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 43,434,256 $ 42,013,802 $ 1,420,454 $ 92,806 $ 90,206
============ ============ =========== =========== ===========
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------------------------------
PARTICIPANT DIRECTED
--------------------------------------------------------------------------
EB EQUITY FRANKLIN FRANKLIN TEMPLETON THE DAVEY TREE
INDEX SMALL CAP MUTUAL GROWTH EXPERT COMPANY
FUND GROWTH FUND DISCOVERY FUND FUND STOCK FUND
----------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 23,203
Investments, at fair value:
Common stock 219,341
Mutual funds $ 289,982 $ 252,225 $ 187,203 $ 222,506
----------- ----------- ------------ ----------- ------------
Total investments 289,982 252,225 187,203 222,506 219,341
Receivables:
Employer's contribution
Participants' contributions 10,234 9,850 6,890 8,676 7,332
Interest receivable
----------- ----------- ------------ ----------- ------------
Total receivables 10,234 9,850 6,890 8,676 7,332
----------- ----------- ------------ ----------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 300,216 $ 262,075 $ 194,093 $ 231,182 $ 249,876
=========== =========== ============ =========== ============
</TABLE>
<PAGE> 8
THE DAVEY 401KSOP AND ESOP
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
---------------
THE DAVEY TREE
EXPERT COMPANY
STOCK FUND
---------------
<S> <C>
ASSETS:
Cash and cash equivalents $ 112,717
Investment in common stock, at fair value 29,613,493
--------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 29,726,210
==============
</TABLE>
<PAGE> 9
THE DAVEY 401KSOP AND ESOP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------
NON-PARTICIPANT DIRECTED PARTICIPANT DIRECTED
-------------------------- ---------------------------
THE DAVEY TREE EXPERT
COMPANY STOCK FUND TOTAL EB MONEY VICTORY
-------------------------- PARTICIPANT MARKET INTERMEDIATE
TOTAL ALLOCATED UNALLOCATED DIRECTED FUND INCOME FUND
----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 1,323,529 $ 1,323,529 $ 91,170 $ 88,208
Employer contributions - common shares 404,472 $ 404,472
Net appreciation (depreciation) in fair
value of investments 12,535,387 12,496,367 39,020 1,652 618
Dividend and interest income 616,208 557,760 58,448 54 2,038
----------- ------------ ----------- ----------- ----------- -----------
Total additions 14,879,596 13,458,599 1,420,997 92,876 90,864
----------- ------------ ----------- ----------- ----------- -----------
DEDUCTIONS:
Distributions to participants:
Cash 1,117,208 1,117,208
Common shares 10,373 10,373
Administrative expenses 43,969 43,426 543
----------- ------------ ----------- ----------- ----------- -----------
Total deductions 1,171,550 1,171,007 543
----------- ------------ ----------- ----------- ----------- -----------
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS/
TRANSFERS BETWEEN FUNDS - NET 0 (70) (658)
----------- ------------ ----------- ----------- ----------- -----------
NET ADDITIONS (DEDUCTIONS) 13,708,046 12,287,592 1,420,454 92,806 90,206
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 29,726,210 29,726,210 --- ---
------------ ------------ ----------- ----------- ----------- -----------
End of year $ 43,434,256 $ 42,013,802 $ 0 $ 1,420,454 $ 92,806 $ 90,206
============ ============ =========== ============ =========== ===========
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
-------------------------------------------------------------------------
PARTICIPANT DIRECTED
-------------------------------------------------------------------------
EB EQUITY FRANKLIN FRANKLIN TEMPLETON THE DAVEY TREE
INDEX SMALL CAP MUTUAL GROWTH EXPERT COMPANY
FUND GROWTH FUND DISCOVERY FUND FUND STOCK FUND
----------- ----------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 279,947 $ 251,707 $ 183,698 $ 229,103 $ 199,696
Employer contributions - common shares
Net appreciation (depreciation) in fair value
of investments 20,718 (1,540) (7,758) (24,539) 49,869
Dividend and interest income 221 10,319 17,061 26,528 2,227
----------- ----------- ----------- ----------- -----------
Total additions 300,886 260,486 193,001 231,092 251,792
----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Distributions to participants:
Cash
Common shares
Administrative expenses 543
----------- ----------- ----------- ----------- -----------
Total deductions 543
----------- ----------- ----------- ----------- -----------
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS/
TRANSFERS BETWEEN FUNDS - NET (670) 1,589 1,092 90 (1,373)
----------- ----------- ----------- ----------- -----------
NET ADDITIONS (DEDUCTIONS) 300,216 262,075 194,093 231,182 249,876
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year --- --- --- --- ---
----------- ----------- ----------- ----------- -----------
End of year $ 300,216 $ 262,075 $ 194,093 $ 231,182 $ 249,876
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 10
THE DAVEY 401KSOP AND ESOP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-PARTICIPANT DIRECTED
-----------------------------
THE DAVEY TREE EXPERT
COMPANY STOCK FUND
-----------------------------
TOTAL ALLOCATED UNALLOCATED
----------- ------------- -------------
<S> <C> <C> <C>
ADDITIONS:
Employer contributions - common shares $ 90,077 $ 90,077
Net appreciation (depreciation) in fair
value of investment 7,654,055 $ 7,473,222 180,833
Dividend and interest income 500,828 489,303 11,525
----------- ------------- -----------
Total additions 8,244,960 7,962,525 282,435
----------- ------------- -----------
DEDUCTIONS:
Interest expense 5,224 5,224
Distributions to participants:
Cash 1,507,959 1,507,959
Common shares 473,668 473,668
Administrative expenses 59,289 59,289
----------- ------------- -----------
Total deductions 2,046,140 2,040,916 5,224
------------ ------------- -----------
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS/
TRANSFERS BETWEEN FUNDS - NET 0 709,254 (709,254)
------------ ------------- -----------
NET ADDITIONS (DEDUCTIONS) 6,198,820 6,630,863 (432,043)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 23,527,390 23,095,347 432,043
------------ ------------- -----------
End of year $ 29,726,210 $ 29,726,210 $ 0
============ ============= ===========
</TABLE>
See notes to financial statements.
<PAGE> 11
THE DAVEY 401KSOP AND ESOP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of The Davey 401KSOP and ESOP (the "Plan")
(formerly The Davey Tree Company Employee Stock Ownership Plan) is provided
for general information purposes only. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
GENERAL - On March 15, 1979, The Davey Tree Expert Company (the "Employer"
or "Company") consummated a plan which transferred control of the Employer
to its employees through an Employee Stock Ownership Plan (the "ESOP"). At
December 31, 1996, all of the 2,880,000 shares sold to the ESOP had been
allocated to the participants in the Plan. Accordingly, effective January
1, 1997, an amendment was adopted which renamed and restated the Plan in
its entirety to incorporate a deferred savings plan (401(k)plan) feature.
The Plan retained the existing ESOP assets and participant accounts.
The Plan is a qualified defined contribution plan (non-contributory prior
to January 1, 1997) covering all domestic employees who have attained age
21, completed one year of continuous service and who are not members of a
collective bargaining unit. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Key Trust Company of Ohio, N.A. (the "Trustee") served as the Plan's
trustee for 1997. The trust division of National City Corporation served
as the Plan's trustee for 1996.
CONTRIBUTIONS - Contributions made by the participants are limited to the
amount allowed by the Internal Revenue Service with a weekly minimum
contribution of $5. The Company contributes 50 percent of the first 3
percent of compensation that a participant contributes to the Plan.
Employer contributions are made in either cash or the Employer's common
stock.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the Employer's
contribution and, (b) Plan earnings, and charged with an allocation of
administrative expenses. Allocations are based on the participant's
selected investment mix. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
VESTING - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching contribution
plus actual earnings thereon is based on years of continuous service. A
participant is 100 percent vested after five years of continuous service,
retirement (at 65 years of age or early retirement), permanent disability
or death.
INVESTMENT OPTIONS - Upon enrollment in the Plan, a participant may direct
employee contributions in any of seven investment options; however, a
participant may not elect to invest more than 25 percent of their
contribution in The Davey Tree Expert Company Stock Fund.
EMPLOYEE BENEFITS MONEY MARKET FUND - Funds are invested in high-grade
money market instruments.
VICTORY INTERMEDIATE INCOME FUND - Funds are invested in bonds issued
by corporations and obligations of the U.S. Government and its
agencies or instrumentalities.
EMPLOYEE BENEFITS EQUITY INDEX FUND - Funds are invested in a
diversified portfolio of common stocks included in the Standard and
Poor's 500 Index designed to replicate the performance of the
Standard & Poor's 500 Index.
<PAGE> 12
1. DESCRIPTION OF THE PLAN (Continued)
FRANKLIN SMALL CAP GROWTH FUND - Funds are invested in common stocks
of small and medium size companies.
FRANKLIN MUTUAL DISCOVERY FUND - Funds are invested in common and
preferred stocks, debt securities and convertible securities of small
size companies. Approximately 50 percent of the funds are invested in
foreign investments.
TEMPLETON GROWTH FUND - Funds are invested in common stocks and debt
obligations of companies and governments in the U.S. and abroad.
THE DAVEY TREE EXPERT COMPANY STOCK FUND - Funds are invested in
common stock of The Davey Tree Expert Company.
Participants may change their investment options quarterly.
PAYMENT OF BENEFITS - Participants who terminate may elect to receive
distributions of vested benefits either in the form of cash or common
shares of the Company. Shares are to be distributed in a lump-sum whereas,
at the option of the participant, cash may be distributed either in
lump-sum or monthly, quarterly, or annual installments over a period not
exceeding either the participant's normal life expectancy, or the normal
life expectancy of the participant and their beneficiary. Former
participants wishing to sell their shares must offer such shares first to
the Plan and then to the Employer.
FORFEITED ACCOUNTS - At December 31, 1997, forfeited nonvested accounts
totaled $333,704. These accounts will be used to reduce future Employer
contributions.
VOTING RIGHTS - Each participant is entitled to exercise voting rights
attributable to the shares allocated to his or her account and is notified
by the Trustee at least thirty days prior to the time such rights are to be
exercised. The Trustee is not permitted to vote any share for which
instructions have not been given by a participant.
ESOP - The ESOP was a non-contributory defined contribution plan, the
assets of which were invested in common shares of the Employer.
Participation and vesting requirements were the same as those of the Plan.
The ESOP was funded solely by the Employer's contributions to the ESOP in
such an amount, if any, as determined by the Employer's Board of Directors.
During the period that the debt under the loan agreement was outstanding,
the Employer, as guarantor, agreed to make contributions to the ESOP which
would be sufficient, along with all dividends and other earnings of the
ESOP, to enable the Trustee to make payments of the principal and interest
due under the loan agreement.
Allocations of the Employer's common shares were made to participants'
accounts as of the Plan's year-end. The number of shares released from
collateral and available for allocation was determined by dividing the sum
of the current year loan principal and interest payments by the sum of the
current and future years principal and interest payments. Because interest
costs were higher in the earlier years of the loan repayment period, the
shares released from collateral and available for allocation were
correspondingly higher in the earlier years. As of December 31, 1996, all
2,880,000 shares had been released from collateral (38,970 shares were
released during 1996). Of the 2,880,000 shares released, 242,795 shares
have been distributed to participants and 1,010,090 shares have been sold
to the Employer primarily to fund cash distributions to terminated
participants. The remaining 1,627,115 shares were allocated to the
participants at a current value of $18.20 per share or $29,613,493
($1,525,420 at cost) at December 31, 1996.
Allocations of shares were made to participants based on the ratio of each
participant's W-2 earnings to the earnings of all participants, subject to
certain limitations as defined by the ESOP. Participant forfeited
nonvested accounts were allocated in the same manner among the remaining
eligible participants and former participants.
<PAGE> 13
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared on
the accrual basis of accounting.
CASH AND CASH EQUIVALENTS - The Plan considers all highly liquid
investments with maturities of three months or less when purchased to be
cash equivalents.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of shares held
by the Plan at year-end. The fair value of the Employer's common stock
(1,591,166 and 1,627,115 shares at December 31, 1997 and 1996,
respectively) is based upon a common stock valuation performed by an
independent stock valuation firm.
Purchases and sales of securities are recorded on a trade-date basis.
Interest and dividend income is recorded on the accrual basis.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES - Costs of administering the Plan are paid by the
Employer, except for management and audit fees, which are paid by the Plan.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. RELATED PARTY TRANSACTIONS
Certain plan investments are shares of mutual funds managed by Key Asset
Management. Key Trust Company of Ohio, N.A. is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Fees paid by the Plan for the investment management services amount to
$20,785 for the year ended December 31, 1997.
4. TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
5. TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by a
letter dated June 12, 1996, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of
the Internal Revenue Code (IRC). The Plan has been amended since receiving
the determination letter. However, the Plan administrator and the Plan's
tax counsel believe that the Plan is currently designed and being operated
in compliance with the applicable requirements of the IRC. Therefore, they
believe that the Plan is qualified and the related trust was tax-exempt as
of the financial statement date. The Employer has filed an application
with the Internal Revenue Service for a determination letter for the Plan
revisions effective after December 31, 1996.
<PAGE> 14
6. LOAN PAYABLE
The unallocated common shares collateralized the loan obtained by the Plan
to finance its purchase of the shares in accordance with the applicable
provisions of the Internal Revenue Code. As of December 31, 1996, this
loan was completely paid off. The Employer had guaranteed the repayment
of the loan. The bank loan agreement provided for interest at 8.4% and
quarterly principal payments of $24,097 with the final installment due on
December 31, 1996. Employer contributions to the Plan and dividends
received during the year on the collateralized shares were used to repay
the principal and to pay the interest on the debt.
* * * * * *
<PAGE> 15
THE DAVEY 401KSOP AND ESOP
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
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<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
IDENTITY OF ISSUER, BORROWER, CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
----------------------------- --------------------------- -------- -----------
<S> <C> <C> <C> <C>
* Key Trust Company Employee Benefits Money
Market Fund - 7,963 units 88,999 $ 90,435
* Key Trust Company Victory Intermediate Income
Fund - 9,159 units 87,407 87,796
* Key Trust Company Employee Benefits Equity Index
Fund - 762 units 270,034 289,982
Franklin Templeton Franklin Small Cap Growth Fund-
11,024 shares 254,326 252,225
Franklin Templeton Franklin Mutual Discovery Fund-
9,963 shares 195,365 187,203
Franklin Templeton Templeton Growth Fund -
11,498 shares 247,590 222,506
* The Davey Tree Expert Company 1,591,166 Common Shares 1,651,960 41,450,438
-------------
$ 42,580,585
=============
</TABLE>
* Represents a party-in-interest.
<PAGE> 1
EXHIBIT 13
----------
INDEPENDENT AUDITORS' CONSENT
The Davey Tree Expert Company
We consent to the incorporation by reference in Registration Statement No.
333-24155 of The Davey Tree Expert Company on Form S-8 of our report dated
June 5, 1998, appearing in this Annual Report on Form 11-K of The Davey 401KSOP
and ESOP for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
June 26, 1998
