TRC Announces Strong Third-Quarter Fiscal 2015 Financial Results
Net Service Revenue Up 15% and Operating Income Up 185% From Prior Year Third Quarter
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LOWELL, MA -- (Marketwired) -- 05/06/15 -- 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 third quarter ended March 27, 2015.
Financial Highlights
Fiscal Third Quarter
Ended
-----------------------
March 27, March 28, %
(In millions, except per share data) 2015 2014 Change
---------------------------------------------------------------------------
Net service revenue(1) $ 101.0 $ 88.1 15%
Operating income $ 7.1 $ 2.5 185%
Net income applicable to TRC Companies,
Inc. $ 5.2 $ 1.4 261%
Diluted earnings per common share $ 0.17 $ 0.05 240%
Diluted weighted-average common shares
outstanding 30.7 30.2
(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 delivered a strong performance in all three of our segments during the third quarter," said Chris Vincze, Chairman and Chief Executive Officer. "Overall NSR increased 15%, and operating income nearly tripled, driven by strong fundamentals in all of our markets. Additionally, this year's third quarter was impacted less by the weather and medical cost issues that affected results in the same period last year.
"In our Environmental segment, NSR increased 22%, and profit increased 28%, on steady demand throughout the segment. Energy segment NSR was up 5%, while segment profit increased 10%, due to new project demand and efficient resource management. In the Infrastructure segment, NSR increased 19%, and segment profit rose 99%, resulting from project execution and receipt of pending change orders," Vincze said.
Business Outlook "We continue to execute a profitable growth strategy across our three segments," Vincze added. "The Infrastructure segment, where backlog grew 56% in the quarter, is gaining momentum as several states have deployed significant capital projects. In the Energy segment, we are seeing increased demand from renewables as states such as California push for increasing energy efficiency and reduced carbon emissions. In addition, high levels of capital continue to be spent upgrading transmission and distribution assets. Meanwhile, in our Environmental segment, focused project execution and recent acquisitions are contributing to our growth and profitability. We have a strong balance sheet to support our growth through ongoing organic investments and strategic acquisitions, and we are optimistic about the remainder of fiscal 2015."
Conference Call Information TRC will broadcast its financial results conference call today, May 6, 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, 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, 2014, 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 Nine Months Ended
-------------------- --------------------
March 27, March 28, March 27, March 28,
2015 2014 2015 2014
--------- --------- --------- ---------
Gross revenue $ 130,777 $ 120,836 $ 397,030 $ 350,002
Less subcontractor costs and
other direct reimbursable
charges 29,783 32,755 103,579 89,538
--------- --------- --------- ---------
Net service revenue 100,994 88,081 293,451 260,464
--------- --------- --------- ---------
Interest income from contractual
arrangements 23 73 67 26
Insurance recoverables and other
income 753 5,008 6,238 17,613
Operating costs and expenses:
Cost of services (exclusive
of costs shown separately
below) 83,486 80,127 247,275 234,914
General and administrative
expenses 8,927 8,363 25,360 24,642
Depreciation and
amortization 2,208 2,161 7,114 6,587
--------- --------- --------- ---------
Total operating costs and
expenses 94,621 90,651 279,749 266,143
--------- --------- --------- ---------
Operating income 7,149 2,511 20,007 11,960
Interest expense (73) (22) (125) (152)
--------- --------- --------- ---------
Income from operations before
taxes 7,076 2,489 19,882 11,808
Provision for income taxes (1,916) (1,060) (7,244) (4,830)
--------- --------- --------- ---------
Net income 5,160 1,429 12,638 6,978
Net loss applicable to
noncontrolling interest 5 2 14 36
--------- --------- --------- ---------
Net income applicable to TRC
Companies, Inc. $ 5,165 $ 1,431 $ 12,652 $ 7,014
========= ========= ========= =========
Basic earnings per common share $ 0.17 $ 0.05 $ 0.42 $ 0.24
========= ========= ========= =========
Diluted earnings per common
share $ 0.17 $ 0.05 $ 0.41 $ 0.23
========= ========= ========= =========
Weighted-average common shares
outstanding:
Basic 30,382 29,691 30,233 29,549
========= ========= ========= =========
Diluted 30,737 30,166 30,551 30,088
========= ========= ========= =========
TRC Companies, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
March 27, June 30,
2015 2014
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 21,343 $ 27,597
Restricted cash 277 5,756
Accounts receivable, less allowance for doubtful
accounts 131,666 116,937
Insurance recoverable - environmental
remediation 42,647 42,062
Restricted investments 6,892 2,934
Deferred income tax assets 12,281 12,293
Income taxes refundable 2,266 1,021
Prepaid expenses and other current assets 12,354 12,441
----------- -----------
Total current assets 229,726 221,041
----------- -----------
Property and equipment 63,501 60,240
Less accumulated depreciation and amortization (50,283) (47,190)
----------- -----------
Property and equipment, net 13,218 13,050
----------- -----------
Goodwill 36,354 31,679
Long-term deferred income tax assets 3,046 4,267
Long-term restricted investments 19,729 23,537
Long-term prepaid insurance 26,505 28,521
Other assets 15,076 13,490
----------- -----------
Total assets $ 343,654 $ 335,585
=========== ===========
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ 1,035 $ 463
Current portion of capital lease obligations 261 562
Accounts payable 27,188 32,663
Accrued compensation and benefits 43,150 36,586
Deferred revenue 14,580 14,503
Environmental remediation liabilities 8,147 138
Other accrued liabilities 40,623 47,310
----------- -----------
Total current liabilities 134,984 132,225
----------- -----------
Non-current liabilities:
Long-term debt, net of current portion 60 105
Capital lease obligations, net of current
portion - 167
Income taxes payable and deferred income tax
liabilities 1,481 1,539
Deferred revenue 66,538 70,398
Environmental remediation liabilities 527 6,268
----------- -----------
Total liabilities 203,590 210,702
----------- -----------
Commitments and contingencies
Equity:
Common stock, $.10 par value; 40,000,000
shares authorized, 30,436,459 and 30,432,977
shares issued and outstanding, respectively,
at March 27, 2015, and 29,752,934 and
29,749,452 shares issued and outstanding,
respectively, at June 30, 2014 3,044 2,975
Additional paid-in capital 190,214 187,748
Accumulated deficit (52,702) (65,354)
Accumulated other comprehensive loss (69) (77)
Treasury stock, at cost (33) (33)
----------- -----------
Total shareholders' equity applicable to TRC
Companies, Inc. 140,454 125,259
Noncontrolling interest (390) (376)
----------- -----------
Total equity 140,064 124,883
----------- -----------
Total liabilities and equity $ 343,654 $ 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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