|By Marketwired .||
|November 5, 2012 04:01 PM EST||
LOWELL, MA -- (Marketwire) -- 11/05/12 -- 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.
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 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and distribution engineering services as our utility customers increase investments to modernize or replace outdated infrastructure and enhance energy efficiency performance.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."
"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.
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.
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 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 Companies, Inc. Condensed Consolidated Balance Sheets (in thousands, except share data) (Unaudited) September 28, June 30, 2012 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 ============= =============
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