TRC COMPANIES INC /DE/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 5, 2012

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8-K - 8-K - TRC COMPANIES INC /DE/trcform8-kq1f13.htm
Exhibit 99.1

Investor Contact:
 
Company Contact:
Dennis Walsh
Thomas W. Bennet, Jr., CFO
Sharon Merrill
(978) 970-5600
(617) 542-5300
tbennet@trcsolutions.com
trr@investorrelations.com
 


TRC Announces First-Quarter Fiscal 2013 Financial Results

Lowell, MA, November 5, 2012 - TRC Companies, Inc. (NYSE: TRR), a recognized leader in engineering, consulting and construction management services to the energy, environmental and infrastructure markets, today announced financial results for the fiscal three months ended September 28, 2012.

Financial Highlights
 
Three Months Ended
 
September 28,
 
September 30,
(In millions, except per share data)
2012
 
2011
 
 
 
 
Net service revenue (1)
$
75.2

 
$
73.5

Arena Towers litigation reversal (2)
$
—

 
$
(11.2
)
Operating income
$
4.6

 
$
15.5

Federal and state income tax (provision) benefit (3)
$
(0.2
)
 
$
3.3

Net income applicable to TRC Companies, Inc.
$
4.3

 
$
18.7

Diluted earnings per common share
$
0.15

 
$
0.66

Diluted weighted-average common shares outstanding
29.4

 
28.4


(1) The Company believes net service revenue best reflects the value of services provided to its customers and is the most meaningful indicator of TRC's revenue performance.
(2) On October 5, 2011 a post-trial motion was granted to disregard a substantial portion of the verdict in this matter resulting in an $11.2 million reduction of the litigation accrual in the first quarter of fiscal 2012. In the fourth quarter of fiscal 2011 the Company had recorded litigation expense of $17.3 million related to the verdict.
(3) The Company received approval of a federal tax settlement resulting in a one-time benefit in the first quarter of fiscal 2012.



Comments on the Results

“We reported incremental growth and steady profitability in the first quarter of fiscal 2013,” said Chairman and Chief Executive Officer Chris Vincze. “Net Service Revenue (NSR) was up 2%, and we achieved operating income of $4.6 million, up 7% excluding last year's litigation reversal.”

“Our Energy segment continues to be our top performer with NSR up 25% and profit up 42%. Demand

TRC
650 Suffolk Street • Lowell, Massachusetts 01854
Telephone 978-970-5600 • Fax 978-453-1995


remains strong for electric transmission and distribution engineering services as our utility customers increase investments to modernize or replace outdated infrastructure and enhance energy efficiency performance. Our Energy segment is also benefiting from greater geographic reach as recent office startups are now rapidly expanding our ability to service clients in those areas.”

“Our Environmental and Infrastructure segments both experienced a sluggish quarter. NSR was down 6% for both segments, while profit decreased 22% and 20%, respectively. Importantly, however, each segment continued to be profitable at the operating level. Our results are consistent with the overall state of the economy as many clients have delayed or postponed capital programs until there is more clarity surrounding federal policy and the direction of the economy in the new year. The long-term prospects for the infrastructure market are supported by Congress' recent passing of the MAP-21 Federal Transportation Bill, which will provide states with a stable funding source through 2014.”


Business Outlook

“TRC's long-term opportunities remain promising with favorable underlying industry trends. We are seeing material capital spending in the energy and power markets where TRC has become a leader in providing integrated professional services. Proposal activity in these areas is strong, although funding commitments for some of these projects continues to be affected by economic and policy factors. In the interim, TRC is focused on enhancing our integrated service offerings - such as RE Power, Shale Gas and Ports and Pipelines - where we expect the activity levels to strengthen first. In addition, we are continuing to identify potential acquisition targets to support our geographic and service expansion strategy.”

Conference Call Information

The Company will broadcast its financial results conference call today, November 5, 2012 at 5 p.m. ET. Those who wish to listen to the conference call should visit the “Investor Center” section of TRC's website at www.TRCsolutions.com. The call may also be accessed by dialing (877) 709-8155 or (201) 689-8881. For interested individuals unable to join the live conference call, a webcast replay will be available on the Company's website for one year.




TRC
650 Suffolk Street • Lowell, Massachusetts 01854
Telephone 978-970-5600 • Fax 978-453-1995


About TRC

A pioneer in groundbreaking scientific and engineering developments since the 1960s, TRC is a national engineering, consulting and construction management firm that provides integrated services to the energy, environmental and infrastructure markets. TRC serves a broad range of clients in government and industry, implementing complex projects from initial concept to delivery and operation. TRC delivers results that enable clients to achieve success in a complex and changing world. For more information and updates from the Company, visit TRC's website at www.TRCsolutions.com and follow TRC on Twitter at @TRC_Companies and on LinkedIn.


Forward-Looking Statements

Certain statements in this press release may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these statements by forward-looking words such as "may," "expects," "plans," "anticipates," "believes," "estimates," or other words of similar import. You should consider statements that contain these words carefully because they discuss TRC's future expectations, contain projections of the Company's future results of operations or of its financial condition, or state other "forward-looking" information. TRC believes that it is important to communicate its future expectations to its investors. However, there may be events in the future that the Company is not able to accurately predict or control and that may cause its actual results to differ materially from the expectations described in its forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including, but not limited to, the uncertainty of TRC's operational and growth strategies; circumstances which could create large cash outflows, such as contract losses, litigation, uncollectible receivables and income tax assessments; regulatory uncertainty; the availability of funding for government projects; the level of demand for TRC's services; product acceptance; industry-wide competitive factors; the ability to continue to attract and retain highly skilled and qualified personnel; the availability and adequacy of insurance; and general political or economic conditions. Furthermore, market trends are subject to changes, which could adversely affect future results. See the risk factors and additional discussion in TRC's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, Quarterly Reports on Form 10-Q, and other factors detailed from time to time in the Company's other filings with the Securities and Exchange Commission.





TRC
650 Suffolk Street • Lowell, Massachusetts 01854
Telephone 978-970-5600 • Fax 978-453-1995


TRC Companies, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

 
 
 
Three Months Ended
 
 
 
September 28,

 
September 30,

 
 
 
2012
 
2011
 
 
 
 
 
 
Gross revenue
 
$
108,286

 
$
103,735

 
Less subcontractor costs and other direct reimbursable charges
 
33,070

 
30,280

Net service revenue
 
75,216

 
73,455

 
 
 
 
 
 
Interest income from contractual arrangements
 
45

 
78

Insurance recoverables and other income
 
1,744

 
220

 
 
 
 
 
 
Operating costs and expenses:
 
 
 
 
 
Cost of services (exclusive of costs shown separately below)
 
63,686

 
60,162

 
General and administrative expenses
 
7,175

 
7,548

 
Provision for doubtful accounts
 
—

 
365

 
Depreciation and amortization
 
1,538

 
1,362

 
Arena Towers litigation reversal
 
—

 
(11,224
)
Total operating costs and expenses
 
72,399

 
58,213

Operating income
 
4,606

 
15,540

Interest expense
 
(112
)
 
(181
)
Income from operations before taxes
 
4,494

 
15,359

Federal and state income tax (provision) benefit
 
(234
)
 
3,298

Net income
 
4,260

 
18,657

Net loss applicable to noncontrolling interest
 
12

 
31

Net income applicable to TRC Companies, Inc.
 
$
4,272

 
$
18,688

 
 
 
 
 
 
Basic earnings per common share
 
$
0.15

 
$
0.68

Diluted earnings per common share
 
$
0.15

 
$
0.66

 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
Basic
 
28,460

 
27,472

 
Diluted
 
29,439

 
28,392



TRC
650 Suffolk Street • Lowell, Massachusetts 01854
Telephone 978-970-5600 • Fax 978-453-1995


TRC Companies, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
 
September 28,
2012
 
June 30,
2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
14,852

 
$
16,561

Accounts receivable, less allowance for doubtful accounts
103,667

 
95,215

Insurance recoverable - environmental remediation
26,396

 
25,744

Restricted investments
5,591

 
4,413

Prepaid expenses and other current assets
16,022

 
12,077

Total current assets
166,528

 
154,010

Property and equipment
53,879

 
53,352

Less accumulated depreciation and amortization
(40,172
)
 
(39,621
)
Property and equipment, net
13,707

 
13,731

Goodwill
24,888

 
24,888

Investments in and advances to unconsolidated affiliates and construction joint ventures
118

 
109

Long-term restricted investments
32,643

 
35,265

Long-term prepaid insurance
33,568

 
34,272

Other assets
12,471

 
12,853

Total assets
$
283,923

 
$
275,128

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Current portion of long-term debt
$
4,404

 
$
1,315

Current portion of capital lease obligations
326

 
267

Accounts payable
28,532

 
30,712

Accrued compensation and benefits
42,542

 
36,292

Deferred revenue
18,844

 
18,236

Environmental remediation liabilities
318

 
422

Other accrued liabilities
30,902

 
30,315

Total current liabilities
125,868

 
117,559

Non-current liabilities:
 
 
 
Long-term debt, net of current portion
3,652

 
3,860

Capital lease obligations, net of current portion
575

 
462

Income taxes payable and deferred income tax liabilities
624

 
622

Deferred revenue
75,941

 
79,104

Environmental remediation liabilities
5,505

 
5,473

Total liabilities
212,165

 
207,080

Commitments and contingencies
 
 
 
Equity:
 
 
 
Common stock, $.10 par value; 40,000,000 shares authorized, 28,727,905 and 28,724,423 shares issued and outstanding, respectively, at September 28, 2012, and 28,130,702 and 28,127,220 shares issued and outstanding, respectively, at June 30, 2012
2,873

 
2,813

Additional paid-in capital
178,687

 
179,402

Accumulated deficit
(109,408
)
 
(113,680
)
Accumulated other comprehensive loss
(79
)
 
(184
)
Treasury stock, at cost
(33
)
 
(33
)
Total shareholders' equity applicable to TRC Companies, Inc.
72,040

 
68,318

Noncontrolling interest
(282
)
 
(270
)
Total equity
71,758

 
68,048

Total liabilities and equity
$
283,923

 
$
275,128

 
 
 
 

TRC
650 Suffolk Street • Lowell, Massachusetts 01854
Telephone 978-970-5600 • Fax 978-453-1995

TRC COMPANIES INC /DE/ Reports