CST: 26/05/2016 07:26:12   

CORRECTION - TRC Announces Second-Quarter Fiscal 2016 Financial Results

112 Days ago

Company Delivers Strong Performance on Top of Transformative Acquisition

LOWELL, MA--(Marketwired - Feb 3, 2016) - In the news release, "TRC Announces Second-Quarter Fiscal 2016 Financial Results" issued earlier today by TRC Companies, Inc. (NYSE: TRR), we are advised by the company that the fourth and fifth bullet sentences of the Second-Quarter FY 2016 Vs. Second-Quarter FY 2015 Highlights should read "Net income of $3.9 million; Adjusted net income2 up 18% to 4.7 million" and "Diluted EPS of $0.13; Adjusted diluted EPS2 up 15% to $0.15." Additionally, the second to last sentence of the second paragraph should read "NSR, adjusted EBITDA, and adjusted net income were up 12%, 13% and 18%, respectively, compared with the same period of fiscal 2015." Please also be advised that the figures to Adjusted net income2 and Adjusted diluted earnings per common share2 from the Non-GAAP Results table have been updated as well. Complete corrected text follows.

LOWELL, MA -- Feb 3, 2016 - TRC Companies, Inc. (NYSE: TRR)

Second-Quarter FY 2016 Vs. Second-Quarter FY 2015 Highlights

  • NSR1 up 12% to $111.4 million
  • Operating income of $6.7 million; Adjusted operating income2 up 16% to $7.9 million
  • EBITDA of $9.5 million; Adjusted EBITDA2 up 13% to $10.7 million
  • Net income of $3.9 million; Adjusted net income2 up 18% to $4.7 million
  • Diluted EPS of $0.13; Adjusted diluted EPS2 up 15% to $0.15

TRC Companies, Inc.  (NYSE: TRR), a recognized leader in engineering, environmental consulting and construction-management services to the energy, environmental, infrastructure and pipeline markets, today announced financial results for the fiscal second quarter ended December 25, 2015.

"During our second quarter, we delivered strong financial results on top of the transformative acquisition of Willbros Professional Services (WPS), which closed November 30," said Chris Vincze, Chairman and Chief Executive Officer. "NSR, adjusted EBITDA, and adjusted net income were up 12%, 13% and 18%, respectively, compared with the same period of fiscal 2015. Results for the second quarter of fiscal 2016 included one month of performance from the Willbros acquisition."

                     
                     
    Three Months Ended         Six Months Ended      
 
(In millions, except per share data)
 
 
December 25,
2015
 
 
December 26,
2014
 
 
%
Change
 
 
 
 
December 25,
2015
 
 
December 26,
2014
 
 
%
Change
 
 
                                     
GAAP Results                                    
                                     
Net service revenue(1)   $ 111.4   $ 99.8   12 %   $ 211.5   $ 192.5   10 %
Acquisition and integration expense   $ 1.2   $ -   N/A     $ 2.1   $ -   N/A  
Operating income   $ 6.7   $ 6.9   -2 %   $ 14.4   $ 12.9   12 %
Net income applicable to TRC Companies, Inc.   $ 3.9   $ 4.0   -2 %   $ 8.4   $ 7.5   13 %
Diluted earnings per common share   $ 0.13   $ 0.13   0 %   $ 0.27   $ 0.25   8 %
                                     
Non-GAAP Results                                    
                                     
Adjusted operating income(2)   $ 7.9   $ 6.9   16 %   $ 16.5   $ 12.9   28 %
Adjusted net income(2)   $ 4.7   $ 4.0   18 %   $ 9.7   $ 7.5   30 %
Adjusted EBITDA(2)   $ 10.7   $ 9.5   13 %   $ 21.5   $ 17.8   21 %
Adjusted diluted earnings per common share(2)   $ 0.15   $ 0.13   15 %   $ 0.31   $ 0.25   24 %
                                     
(1)   TRC believes net service revenue (NSR) best reflects the value of services provided and is the most meaningful indicator of revenue performance.
(2)   Excludes acquisition and integration expenses of $1.2 million and $2.1 million for the three and six months ended December 25, 2015, respectively.
     
     

Comments on the Results
"Overall, our business performed well. In particular, demand for electrical transmission and distribution services resulted in an 11% increase in Energy segment NSR, with segment profit up 17% year over year. In addition, transportation-related spending by our municipal and state clients drove a 26% increase in Infrastructure segment NSR, while project execution and cost control drove a 96% increase in segment profit. In our Environmental segment, a slowdown from certain oil and gas clients and the completion of a large pipeline permitting project led to a 2% decline in NSR and a profit decline of 6%. Even so, other service areas within the Environmental segment remain solid," said Vincze.

Business Outlook
"TRC is the national leader in the environmental permitting of pipeline projects. The acquisition of WPS represents the execution of our strategy to establish a premier pipeline and related facilities engineering, consulting and construction management capability. Now two months after closing, we have functionally integrated our two organizations, migrating the new business onto our payroll system, benefits, IT networks and ERP platform, while building the leading full-service pipeline consulting and engineering company in the nation," Vincze added.

"Our strategic growth initiatives are progressing through the first half of fiscal 2016, as demonstrated by our results. Demand for our Energy segment services from our utility clients remains robust. Our Infrastructure segment backlog continues to grow, and the new transportation bill improves the outlook for this segment. Although we expect to see a slowdown from our oil and gas clients, services related to environmental remediation, construction, transaction support, the retirement of coal plants and the need to transport natural gas should contribute to revenue in our Environmental segment going forward. These factors and the need to ensure the integrity of our national pipeline infrastructure also should support our new Pipeline Services segment. We believe the oil and gas market is a good long-term investment, and we have positioned TRC to be a leader in this industry."

Conference Call Information
TRC will webcast its financial results conference call on Thursday, February 4, 2016 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, infrastructure and pipeline services markets. TRC serves a broad range of commercial, industrial and government 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     Six Months Ended  
    December 25,     December 26,     December 25,     December 26,  
    2015     2014     2015     2014  
                                 
Gross revenue   $ 157,743     $ 143,228     $ 293,202     $ 266,253  
  Less subcontractor costs and other direct reimbursable charges     46,361       43,390       81,657       73,796  
Net service revenue     111,382       99,838       211,545       192,457  
                                 
Interest income from contractual arrangements     27       22       42       44  
Insurance recoverables and other income     1,031       641       1,773       5,485  
                                 
Operating costs and expenses:                                
  Cost of services (exclusive of costs shown separately below)     93,676       82,599       176,660       163,789  
  General and administrative expenses     8,046       8,395       15,167       16,433  
  Acquisition and integraton expenses     1,240       -       2,118       -  
  Depreciation and amortization     2,780       2,641       5,044       4,906  
Total operating costs and expenses     105,742       93,635       198,989       185,128  
Operating income     6,698       6,866       14,371       12,858  
Interest income     137       -       137       -  
Interest expense     (461 )     (21 )     (489 )     (52 )
Income from operations before taxes     6,374       6,845       14,019       12,806  
Income tax provision     (2,439 )     (2,848 )     (5,596 )     (5,328 )
Net income     3,935       3,997       8,423       7,478  
Net loss applicable to noncontrolling interest     2       5       6       9  
Net income applicable to TRC Companies, Inc.   $ 3,937     $ 4,002     $ 8,429     $ 7,487  
                                 
Basic earnings per common share   $ 0.13     $ 0.13     $ 0.27     $ 0.25  
Diluted earnings per common share   $ 0.13     $ 0.13     $ 0.27     $ 0.25  
                                 
Weighted-average common shares outstanding:                                
  Basic     30,968       30,329       30,805       30,157  
  Diluted     31,369       30,531       31,347       30,458  
                                   
                                   
                                   
 TRC Companies, Inc.     
 Condensed Consolidated Balance Sheets     
 (in thousands, except per share data)     
 (Unaudited)      
           
  December 25,     June 30,  
  2015     2015  
ASSETS  
Current assets:              
  Cash and cash equivalents $ 9,450     $ 37,296  
  Restricted cash   199       122  
  Accounts receivable, less allowance for doubtful accounts   152,608       138,346  
  Insurance recoverable - environmental remediation   40,422       40,927  
  Restricted investments   6,582       6,701  
  Deferred income tax assets   15,414       16,057  
  Income taxes refundable   -       412  
  Prepaid expenses and other current assets   23,902       10,499  
    Total current assets   248,577       250,360  
               
Property and equipment   71,018       64,594  
  Less accumulated depreciation and amortization   (48,607 )     (50,885 )
    Property and equipment, net   22,411       13,709  
Goodwill   101,697       37,024  
Intangible assets, net   51,888       9,304  
Long-term deferred income tax assets   2,583       2,867  
Long-term restricted investments   17,102       18,385  
Long-term prepaid insurance   24,809       25,929  
Other assets   23,131       5,303  
    Total assets $ 492,198     $ 362,881  
               
LIABILITIES AND EQUITY  
Current liabilities:              
  Current portion of long-term debt $ 22,242     $ 50  
  Current portion of capital lease obligations   33       166  
  Accounts payable   33,202       31,999  
  Accrued compensation and benefits   44,858       47,233  
  Deferred revenue   16,350       10,612  
  Environmental remediation liabilities   8,673       8,695  
  Income taxes payable   230       3,271  
  Other accrued liabilities   46,243       42,170  
    Total current liabilities   171,831       144,196  
Non-current liabilities:              
  Long-term debt, net of current portion   96,563       55  
  Income taxes payable and deferred income tax liabilities   1,863       1,647  
  Deferred revenue   63,567       68,579  
  Environmental remediation liabilities   450       489  
    Total liabilities   334,274       214,966  
Commitments and contingencies              
Equity:              
  Common stock, $.10 par value; 40,000,000 shares authorized, 31,039,895 and 31,036,413 shares issued and outstanding, respectively, at December 25, 2015, and 30,485,510 and 30,482,028 shares issued and outstanding, respectively, at June 30, 2015   3,104       3,049  
  Additional paid-in capital   192,847       191,321  
  Accumulated deficit   (37,510 )     (45,939 )
  Accumulated other comprehensive loss   (83 )     (88 )
  Treasury stock, at cost   (33 )     (33 )
    Total shareholders' equity applicable to TRC Companies, Inc.   158,325       148,310  
  Noncontrolling interest   (401 )     (395 )
    Total equity   157,924       147,915  
    Total liabilities and equity $ 492,198     $ 362,881  
               

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