LOWELL, MA--(Marketwired - Nov 4, 2015) - TRC Companies, Inc. (
Financial Highlights
| Three Months Ended | |||||||||
| September 25, | September 26, | % | |||||||
| (In millions, except per share data) | 2015 | 2014 | Change | ||||||
| Net service revenue(1) | $ | 100.2 | $ | 92.6 | 8 | % | |||
| Operating income | $ | 7.7 | $ | 6.0 | 28 | % | |||
| Net income applicable to TRC Companies, Inc. | $ | 4.5 | $ | 3.5 | 29 | % | |||
| Diluted earnings per common share | $ | 0.14 | $ | 0.11 | 27 | % | |||
| Diluted weighted-average common shares outstanding | 31.3 | 30.4 | |||||||
| (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
"We began the new fiscal year with solid performance in each of our segments," said Chris Vincze, Chairman and Chief Executive Officer. "We continued to execute on our growth strategy, driving topline growth across our business. NSR increased 8% and net income rose 29% from the same period the prior year.
"In our Environmental segment, NSR increased 11% and profit rose 1% in the quarter, largely as a result of services provided to our midstream oil and gas clients. NSR growth outpaced profit due to the timing of change orders, as well as costs associated with organic growth initiatives, as we invest to take advantage of developing market conditions. Strong demand for electrical transmission and distribution services led to a 5% increase in Energy segment NSR, while strong project execution and efficient labor cost management helped increase segment profit 31% year over year. Infrastructure segment NSR increased 9%, driven by demand from our state transportation and commercial clients. Project execution and labor cost management drove a 37% increase in segment profit during the quarter," Vincze said.
Business Outlook
"Fiscal 2016 is off to a good start, as we continue to execute our strategic growth initiatives," Vincze added. "In our Energy segment, demand for our utility clients remains strong. Our Infrastructure segment backlog is robust, and the prospects for a long-term federal transportation bill are favorable. Environmental issues related to transportation of natural gas and retirement of coal plants should support revenue growth in our Environmental segment. We are looking forward to completing our acquisition of the Willbros Professional Services business, which will become a fourth segment, Pipeline Services. We believe adding this unit's technical capabilities, employees and client base to TRC, with our national reputation and strong financial position, will create a company with an unparalleled capability to address all phases of the pipeline project life cycle."
Conference Call Information
TRC will webcast its financial results conference call today, November 4, 2015 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, environmental consulting and construction management firm that provides integrated services to the energy, environmental and infrastructure markets. TRC serves a broad range of commercial, industrial and governmental clients, 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 and StockTwits 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, 2015, and other factors included from time to time in the Company's other subsequent 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 25, | September 26, | ||||||||
| 2015 | 2014 | ||||||||
| Gross revenue | $ | 135,459 | $ | 123,025 | |||||
| Less subcontractor costs and other direct reimbursable charges | 35,296 | 30,406 | |||||||
| Net service revenue | 100,163 | 92,619 | |||||||
| Interest income from contractual arrangements | 15 | 22 | |||||||
| Insurance recoverables and other income | 742 | 4,844 | |||||||
| Operating costs and expenses: | |||||||||
| Cost of services (exclusive of costs shown separately below) | 82,984 | 81,190 | |||||||
| General and administrative expenses | 7,999 | 8,038 | |||||||
| Depreciation and amortization | 2,264 | 2,265 | |||||||
| Total operating costs and expenses | 93,247 | 91,493 | |||||||
| Operating income | 7,673 | 5,992 | |||||||
| Interest expense | (28 | ) | (31 | ) | |||||
| Income from operations before taxes | 7,645 | 5,961 | |||||||
| Income tax provision | (3,157 | ) | (2,480 | ) | |||||
| Net income | 4,488 | 3,481 | |||||||
| Net loss applicable to noncontrolling interest | 4 | 4 | |||||||
| Net income applicable to TRC Companies, Inc. | $ | 4,492 | $ | 3,485 | |||||
| Basic earnings per common share | $ | 0.15 | $ | 0.12 | |||||
| Diluted earnings per common share | $ | 0.14 | $ | 0.11 | |||||
| Weighted-average common shares outstanding: | |||||||||
| Basic | 30,635 | 29,979 | |||||||
| Diluted | 31,318 | 30,378 | |||||||
| TRC Companies, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| September 25, | June 30, | |||||||||
| 2015 | 2015 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 53,149 | $ | 37,296 | ||||||
| Restricted cash | - | 122 | ||||||||
| Accounts receivable, less allowance for doubtful accounts | 135,141 | 138,346 | ||||||||
| Insurance recoverable - environmental remediation | 40,919 | 40,927 | ||||||||
| Restricted investments | 6,382 | 6,701 | ||||||||
| Deferred income tax assets | 16,281 | 16,057 | ||||||||
| Income taxes refundable | 497 | 412 | ||||||||
| Prepaid expenses and other current assets | 14,330 | 10,499 | ||||||||
| Total current assets | 266,699 | 250,360 | ||||||||
| Property and equipment | 65,731 | 64,594 | ||||||||
| Less accumulated depreciation and amortization | (47,351 | ) | (50,885 | ) | ||||||
| Property and equipment, net | 18,380 | 13,709 | ||||||||
| Goodwill | 37,024 | 37,024 | ||||||||
| Long-term deferred income tax assets | 2,813 | 2,867 | ||||||||
| Long-term restricted investments | 18,374 | 18,385 | ||||||||
| Long-term prepaid insurance | 25,366 | 25,929 | ||||||||
| Other assets | 9,255 | 14,607 | ||||||||
| Total assets | $ | 377,911 | $ | 362,881 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt | $ | 4,641 | $ | 50 | ||||||
| Current portion of capital lease obligations | 92 | 166 | ||||||||
| Accounts payable | 31,280 | 31,999 | ||||||||
| Accrued compensation and benefits | 55,412 | 47,233 | ||||||||
| Deferred revenue | 12,404 | 10,612 | ||||||||
| Environmental remediation liabilities | 8,680 | 8,695 | ||||||||
| Income taxes payable | 1,794 | 3,271 | ||||||||
| Other accrued liabilities | 41,599 | 42,170 | ||||||||
| Total current liabilities | 155,902 | 144,196 | ||||||||
| Non-current liabilities: | ||||||||||
| Long-term debt, net of current portion | 51 | 55 | ||||||||
| Capital lease obligations, net of current portion | - | - | ||||||||
| Income taxes payable and deferred income tax liabilities | 1,695 | 1,647 | ||||||||
| Deferred revenue | 67,121 | 68,579 | ||||||||
| Environmental remediation liabilities | 482 | 489 | ||||||||
| Total liabilities | 225,251 | 214,966 | ||||||||
| Commitments and contingencies | ||||||||||
| Equity: | ||||||||||
| Common stock, $.10 par value; 40,000,000 shares authorized, 30,834,382 and 30,830,900 shares issued and outstanding, respectively, at September 25, 2015, and 30,485,510 and 30,482,028 shares issued and outstanding, respectively, at June 30, 2015 | 3,083 | 3,049 | ||||||||
| Additional paid-in capital | 191,536 | 191,321 | ||||||||
| Accumulated deficit | (41,447 | ) | (45,939 | ) | ||||||
| Accumulated other comprehensive loss | (80 | ) | (88 | ) | ||||||
| Treasury stock, at cost | (33 | ) | (33 | ) | ||||||
| Total shareholders' equity applicable to TRC Companies, Inc. | 153,059 | 148,310 | ||||||||
| Noncontrolling interest | (399 | ) | (395 | ) | ||||||
| Total equity | 152,660 | 147,915 | ||||||||
| Total liabilities and equity | $ | 377,911 | $ | 362,881 | ||||||
Contact Information:
Investor Contact:
Andrew Blazier
Senior Associate
Sharon Merrill
(617) 542-5300
trr@investorrelations.com
Company Contact:
Thomas W. Bennet, Jr.
CFO
(978) 970-5600
tbennet@trcsolutions.com