TRC Announces Fourth-Quarter Fiscal 2015 Financial Results
Net Service Revenue Up 21% and Net Income Up 34% From Prior Year Fourth Quarter
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LOWELL, MA -- (Marketwired) -- 09/09/15 -- 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 fourth quarter and year ended June 30, 2015.
Financial Highlights
Three Months
Ended Year Ended
----------------- -----------------
(In millions, except per June 30, June 30, % June 30, June 30, %
share data) 2015 2014 Change 2015 2014 Change
----------------------------------------------------------------------------
Net service revenue(1) $ 114.6 $ 94.5 21% $ 408.0 $ 355.0 15%
Operating income $ 10.7 $ 9.0 19% $ 30.7 $ 20.9 47%
Net income applicable to
TRC Companies, Inc. $ 6.8 $ 5.0 34% $ 19.4 $ 12.1 61%
Diluted earnings per
common share $ 0.22 $ 0.17 29% $ 0.63 $ 0.40 58%
Diluted weighted-average
common shares outstanding 31.2 30.3 30.7 30.1
(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 completed a solid year with strong performance in each of our segments during the fourth quarter," said Chris Vincze, Chairman and Chief Executive Officer. "Overall NSR, operating income and net income were all up significantly as we continued to experience healthy demand across our markets.
"In the fourth quarter of fiscal 2015, NSR increased 21% compared with the same period of fiscal 2014, while operating income was up 19%. For the full fiscal year, NSR was up 15% and operating income rose 47%. Net income was up 34% for the fourth quarter and 61% for the year.
"In our Environmental segment, NSR increased 28% and profit increased 47% in the fourth quarter, driven largely by pipeline permitting activity for our oil and gas clients. For the full fiscal year, NSR and profit in this segment were up 23% and 25%, respectively.
"Energy segment NSR was up 12%, and profit increased 35% in the fourth quarter of 2015 as a result of demand for transmission and distribution services. For the full fiscal year, Energy segment NSR rose 8% and profit increased 20%.
"In the Infrastructure segment, NSR increased 11% and segment profit climbed 16% during the fourth quarter. In addition, backlog grew 92%, driven by increased funding for infrastructure projects at state and local levels," Vincze said. "Infrastructure segment NSR increased 8% and profit grew 7% for the full fiscal year."
Business Outlook "The steady expansion of our business provides us with increased confidence that our strategy is working," Vincze added. "We are consistently growing NSR and margins across the company. The increase in the Infrastructure segment backlog demonstrates improvement in that market during the next several quarters. In the Energy segment, the demand for renewables, transmission asset upgrades and the retirement of coal-fired generation stations will continue to drive growth. In our Environmental segment, pipeline companies continue to transport low-cost natural gas and related liquids to key markets, although we are monitoring the pace of new development."
Conference Call Information TRC will broadcast its financial results conference call today, September 9, 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 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 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 Year Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2015 2014 2015 2014
--------- --------- --------- ---------
Gross revenue $ 149,087 $ 125,675 $ 546,117 $ 475,677
Less subcontractor costs and
other direct reimbursable
charges 34,520 31,183 138,099 120,721
--------- --------- --------- ---------
Net service revenue 114,567 94,492 408,018 354,956
--------- --------- --------- ---------
Interest income from contractual
arrangements 30 26 97 52
Insurance recoverables and other
income 295 261 6,533 17,874
Operating costs and expenses:
Cost of services (exclusive of
costs shown separately below) 90,016 77,194 337,291 312,108
General and administrative
expenses 11,622 6,411 36,982 31,053
Provision for doubtful
accounts 349 - 349 -
Depreciation and amortization 2,202 2,213 9,316 8,800
--------- --------- --------- ---------
Total operating costs and
expenses 104,189 85,818 383,938 351,961
--------- --------- --------- ---------
Operating income 10,703 8,961 30,710 20,921
Interest expense (9) (17) (134) (169)
--------- --------- --------- ---------
Income from operations before
taxes 10,694 8,944 30,576 20,752
Income tax provision (3,936) (3,912) (11,180) (8,742)
--------- --------- --------- ---------
Net income 6,758 5,032 19,396 12,010
Net loss applicable to
noncontrolling interest 5 5 19 41
--------- --------- --------- ---------
Net income applicable to TRC
Companies, Inc. $ 6,763 $ 5,037 $ 19,415 $ 12,051
========= ========= ========= =========
Basic earnings per common share $ 0.22 $ 0.17 $ 0.64 $ 0.41
--------- --------- --------- ---------
Diluted earnings per common
share $ 0.22 $ 0.17 $ 0.63 $ 0.40
--------- --------- --------- ---------
Weighted-average common shares
outstanding:
Basic 30,457 29,725 30,291 29,594
--------- --------- --------- ---------
Diluted 31,232 30,290 30,724 30,140
--------- --------- --------- ---------
TRC Companies, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
June 30, June 30,
2015 2014
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 37,296 $ 27,597
Restricted cash 122 5,756
Accounts receivable, less allowance for doubtful
accounts 138,346 116,937
Insurance recoverable - environmental remediation 40,927 42,062
Restricted investments 6,701 2,934
Deferred income tax assets 16,057 12,293
Income taxes refundable 412 1,021
Prepaid expenses and other current assets 10,499 12,441
--------- ---------
Total current assets 250,360 221,041
--------- ---------
Property and equipment:
Land and building 480 480
Equipment, furniture and fixtures 58,734 54,340
Leasehold improvements 5,380 5,420
--------- ---------
64,594 60,240
Less accumulated depreciation and amortization (50,885) (47,190)
--------- ---------
Property and equipment, net 13,709 13,050
--------- ---------
Goodwill 37,024 31,679
Long-term deferred income tax assets 2,867 4,267
Long-term restricted investments 18,385 23,537
Long-term prepaid insurance 25,929 28,521
Other assets 14,607 13,490
--------- ---------
Total assets $ 362,881 $ 335,585
========= =========
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ 50 $ 463
Current portion of capital lease obligations 166 562
Accounts payable 31,999 32,663
Accrued compensation and benefits 47,233 36,586
Deferred revenue 10,612 14,503
Environmental remediation liabilities 8,695 138
Income taxes payable 3,271 193
Other accrued liabilities 42,170 47,117
--------- ---------
Total current liabilities 144,196 132,225
--------- ---------
Non-current liabilities:
Long-term debt, net of current portion 55 105
Capital lease obligations, net of current portion - 167
Income taxes payable and deferred income tax
liabilities 1,647 1,539
Deferred revenue 68,579 70,398
Environmental remediation liabilities 489 6,268
--------- ---------
Total liabilities 214,966 210,702
--------- ---------
Commitments and contingencies
Equity:
Common stock, $.10 par value; 40,000,000 shares
authorized, 30,485,510 and 30,482,028 shares
issued and outstanding, respectively, at June 30,
2015, and 29,752,934 and 29,749,452 shares issued
and outstanding, respectively, at June 30, 2014 3,049 2,975
Additional paid-in capital 191,321 187,748
Accumulated deficit (45,939) (65,354)
Accumulated other comprehensive loss (88) (77)
Treasury stock, at cost (33) (33)
--------- ---------
Total shareholders' equity applicable to TRC
Companies, Inc. 148,310 125,259
Noncontrolling interest (395) (376)
--------- ---------
Total equity 147,915 124,883
--------- ---------
Total liabilities and equity $ 362,881 $ 335,585
========= =========
Investor Contact: Andrew Blazier Senior Associate Sharon Merrill (617) 542-5300 [email protected] Company Contact: Thomas W. Bennet, Jr. CFO (978) 970-5600 [email protected]
Source: TRC Companies, Inc.
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