TRC COMPANIES INC /DE/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 6, 2013

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8-K - 8-K - TRC COMPANIES INC /DE/trcform8-kq1f14.htm
Exhibit 99.1

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


TRC Announces First-Quarter Fiscal 2014 Financial Results

Growth in All Three Segments Drives 8% NSR Increase

Lowell, MA, November 6, 2013 - TRC Companies, Inc. (NYSE: TRR), a recognized leader in engineering, consulting and construction management services to the energy, environmental and infrastructure markets, announced today financial results for the fiscal three months ended September 27, 2013.

Financial Highlights
 
Three Months Ended
 
September 27,
 
September 28,
(In millions, except per share data)
2013
 
2012
 
 
 
 
Net service revenue (1)
$
81.3

 
$
75.2

Insurance recoverables and other income
$
12.3

 
$
1.7

Operating income
$
4.3

 
$
4.6

Federal and state income tax provision
$
(1.7
)
 
$
(0.2
)
Net income applicable to TRC Companies, Inc.
$
2.5

 
$
4.3

Diluted earnings per common share
$
0.08

 
$
0.15

Diluted weighted-average common shares outstanding
30.0

 
29.4


(1) The Company believes net service revenue (NSR) best reflects the value of services provided and is the most meaningful indicator of revenue performance.


Comments on the Results

“TRC began fiscal 2014 with a strong first quarter highlighted by NSR growth in all segments,” said Chris Vincze Chairman and Chief Executive Officer. “For the first quarter of fiscal 2014, NSR grew by 8%, primarily driven by strength in our Energy and Infrastructure segments.

“NSR growth of 3% in our Environmental segment was affected by an Exit Strategy project cost estimate adjustment, which reduced the segment’s NSR growth in the first quarter of fiscal 2014. The adjustment did not impact sector profit, which was up 35%. NSR grew 12% in our Energy segment reflecting increased

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


transmission and distribution activities from our utility clients, however profit decreased 32%, primarily due to acquisition integration related expenses, as well as an estimated cost overrun on a new project. In our Infrastructure segment, increased work on several large transportation design projects and strong project execution drove 12% NSR and 36% profit growth.”

Business Outlook

“TRC is well-positioned to capitalize on the long-term growth opportunities across each of our markets. Demand for our services is stable, driven by increased capital spending for electric transmission and distribution activities, energy efficiency initiatives, decommissioning and infrastructure repairs and upgrades. Our strategic relationships with key clients remain strong. New project momentum continues to contribute to our healthy backlog which we expect will grow over the next several quarters. Supported by our strong balance sheet and cash position, we will continue to drive profitable growth both organically and through acquisitions,” concluded Vincze.

Conference Call Information

TRC will broadcast its financial results conference call today, November 6, 2013 at 9 a.m. ET. To listen to the live webcast and access the accompanying presentation slides, visit the “Investor Center” section of TRC’s website at www.TRCsolutions.com. The call also may be accessed by dialing (877) 407-5790 or (201) 689-8328. A webcast replay will be available on the Company’s website for approximately one year.

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.

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


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, 2013, 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 27,
2013
 
September 28,
2012
Gross revenue
$
106,574

 
$
108,286

Less subcontractor costs and other direct reimbursable charges
25,322

 
33,070

Net service revenue
81,252

 
75,216

Interest income from contractual arrangements
47

 
45

Insurance recoverables and other income
12,300

 
1,744

Operating costs and expenses:
 
 
 
Cost of services (exclusive of costs shown separately below)
78,398

 
63,686

General and administrative expenses
8,771

 
7,175

Depreciation and amortization
2,176

 
1,538

Total operating costs and expenses
89,345

 
72,399

Operating income
4,254

 
4,606

Interest expense
(92
)
 
(112
)
Income from operations before taxes
4,162

 
4,494

Federal and state income tax provision
(1,702
)
 
(234
)
Net income
2,460

 
4,260

Net loss applicable to noncontrolling interest
27

 
12

Net income applicable to TRC Companies, Inc.
$
2,487

 
$
4,272

 
 
 
 
Basic earnings per common share
$
0.08

 
$
0.15

Diluted earnings per common share
$
0.08

 
$
0.15

 
 
 
 
Weighted-average common shares outstanding:
 
 
 
Basic
29,298

 
28,460

Diluted
30,027

 
29,439



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 27,
2013
 
June 30,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21,988

 
$
18,136

Accounts receivable, less allowance for doubtful accounts
112,721

 
109,320

Insurance recoverable - environmental remediation
37,747

 
26,305

Restricted investments
5,632

 
5,582

Deferred income tax assets
11,979

 
12,518

Income taxes refundable
3,980

 
1,444

Prepaid expenses and other current assets
16,205

 
12,045

Total current assets
210,252

 
185,350

Property and equipment
58,343

 
57,005

Less accumulated depreciation and amortization
(44,327
)
 
(43,171
)
Property and equipment, net
14,016

 
13,834

Goodwill
30,977

 
28,797

Investments in and advances to unconsolidated affiliates and construction joint ventures
109

 
113

Long-term deferred income tax assets
6,328

 
6,601

Long-term restricted investments
25,536

 
27,580

Long-term prepaid insurance
30,725

 
31,497

Other assets
15,226

 
13,992

Total assets
$
333,169

 
$
307,764

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Current portion of long-term debt
$
8,325

 
$
4,745

Current portion of capital lease obligations
524

 
568

Accounts payable
27,444

 
32,238

Accrued compensation and benefits
41,717

 
34,040

Deferred revenue
18,289

 
20,094

Environmental remediation liabilities
134

 
291

Other accrued liabilities
42,565

 
31,737

Total current liabilities
138,998

 
123,713

Non-current liabilities:
 
 
 
Long-term debt, net of current portion
366

 
568

Capital lease obligations, net of current portion
630

 
789

Income taxes payable and deferred income tax liabilities
531

 
310

Deferred revenue
74,014

 
68,514

Environmental remediation liabilities
6,479

 
6,973

Total liabilities
221,018

 
200,867

Commitments and contingencies
 
 
 
Equity:
 
 
 
Common stock, $.10 par value; 40,000,000 shares authorized, 29,534,240 and 29,530,758 shares issued and outstanding, respectively, at September 27, 2013, and 29,053,301 and 29,049,819 shares issued and outstanding, respectively, at June 30, 2013
2,953

 
2,905

Additional paid-in capital
184,589

 
181,874

Accumulated deficit
(74,918
)
 
(77,405
)
Accumulated other comprehensive loss
(78
)
 
(109
)
Treasury stock, at cost
(33
)
 
(33
)
Total shareholders' equity applicable to TRC Companies, Inc.
112,513

 
107,232

Noncontrolling interest
(362
)
 
(335
)
Total equity
112,151

 
106,897

Total liabilities and equity
$
333,169

 
$
307,764


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

TRC COMPANIES INC /DE/ Reports