LOWELL, MA--(Marketwired - Sep 12, 2013) - TRC Companies, Inc. (NYSE: TRR), a recognized leader in engineering, consulting and construction management services to the energy, environmental and infrastructure markets, announced today financial results for the fiscal three months and year ended June 30, 2013.

Financial Highlights  
  Three Months Ended     Year Ended  
  June 30,   June 30,     June 30,   June 30,  
(In millions, except per share data) 2013   2012     2013   2012  
Net service revenue(1) $ 86.9   $ 79.3     $ 320.4   $ 301.8  
Arena Towers litigation reversal(2) $ -   $ -     $ -   $ (11.1 )
Operating income $ 6.2   $ 6.0     $ 18.6   $ 30.0  
Federal and state income tax benefit (provision)(3) $ 18.7   $ (0.1 )   $ 18.0   $ 3.9  
Net income applicable to TRC Companies, Inc. $ 24.8   $ 5.8     $ 36.3   $ 33.6  
Diluted earnings per common share $ 0.83   $ 0.20     $ 1.23   $ 1.16  
Diluted weighted-average common shares outstanding   29.8     29.4       29.6     28.8  
(1)   The Company believes net service revenue best reflects the value of services provided and is the most meaningful indicator of 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 $11.1 million reduction of the litigation accrual in fiscal 2012.
(3)   The Company recorded a tax benefit related to the release of the income tax valuation allowance during the fourth quarter of fiscal 2013.

Comments on the Results
"TRC's strategy to drive profitable growth and performance excellence was demonstrated by our strong performance in fiscal 2013," said Chris Vincze Chairman and Chief Executive Officer. "We finished the year with 10% NSR growth for the fourth quarter and a 6% overall increase for the year. The growth in the fourth quarter was split nearly evenly between organic and acquisition related revenues. Net income for the quarter was positively affected by a federal and state income tax benefit of $18.7 million. This benefit was due to the release of the deferred tax asset valuation allowance that had been in place since 2008 and is the result of our consistent financial performance over the past three years.

"Our two largest segments, Energy and Environmental, continue to contribute much of the growth on our top line, while the continued profitability of our Infrastructure segment helped bolster the bottom line for the fourth quarter. Increased activity from our utility clients as they upgrade and replace electric distribution and transmission systems drove the 10% NSR increase in our Energy segment. In our Environmental segment, NSR grew by 8%, primarily as a result of new work on several remediation projects. Our Infrastructure segment also saw an NSR increase of 8%, due to modestly improved general market conditions. Efficient management of projects and revenue growth drove a 40% increase in our Infrastructure segment profit. Higher levels of project activity in our Energy and Environmental segments resulted in 5% and 10% profit growth, respectively."

Business Outlook
"The outlook for each of TRC's three market segments continues to be positive. While the general economic picture is varying and lacking consistent positive trends, we are seeing some capital spending materialize with respect to the utility and power distribution markets as well as bridge and road construction and upgrades. Our $247 million NSR backlog is correspondingly up 5% in the fourth quarter compared with the same quarter of the prior year driven by the 23% NSR backlog increase in our Infrastructure segment. We believe our continued ability to expand TRC's geographic presence and successfully expand key client relationships for electric distribution engineering and energy efficiency services will drive growth in our Energy segment. Air and water regulation, development of natural gas pipelines and environmental management and sustainability investments are expected to create new opportunities for project work within our Environmental segment. Proposal activity for state transportation projects has been increasing in our Infrastructure segment, and we are involved with several projects to repair and upgrade bridges and roads across the country.

"TRC will continue to invest in growth opportunities including acquisitions, key account expansion, and enhanced initiatives focused on the power and oil and gas markets. We have a strong cash position, healthy balance sheet and an enhanced credit facility that provides us with flexibility to invest in our growth. Given this foundation, in the coming year we expect to further our mission to become a top tier financial performer in the engineering, consulting and construction management space," concluded Vincze.

Conference Call Information

TRC will broadcast its financial results conference call today, September 12, 2013 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) 709-8155 or (201) 689-8881. 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 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, 2013, 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.
Consolidated Statements of Operations
(in thousands, except per share data)
  Three Months Ended   Year Ended
  June 30,   June 30,   June 30,   June 30,
  2013   2012   2013   2012
Gross revenue $ 118,955   $ 109,728   $ 441,517   $ 419,959
  Less subcontractor costs and other direct reimbursable charges 32,066   30,434   121,114   118,179
Net service revenue 86,889   79,294   320,403   301,780
Interest income from contractual arrangements 53   66   239   295
Insurance recoverables and other income 789   (678)   4,514   614
Operating costs and expenses:              
  Cost of services (exclusive of costs shown separately below) 69,849   62,261   268,545   246,506
  General and administrative expenses 9,774   8,543   30,739   31,025
  Provision for doubtful accounts -   390   408   755
  Depreciation and amortization 1,944   1,481   6,903   5,508
  Arena Towers litigation reversal -   -   -   (11,061)
Total operating costs and expenses 81,567   72,675   306,595   272,733
Operating income 6,164   6,007   18,561   29,956
Interest expense (67)   (84)   (337)   (668)
Income from operations before taxes and equity in earnings 6,097   5,923   18,224   29,288
Federal and state income tax benefit (provision) 18,666   (145)   17,986   3,930
Income from operations before equity in earnings 24,763   5,778   36,210   33,218
Equity in earnings from unconsolidated affiliates, net of taxes -   -   -   270
Net income 24,763   5,778   36,210   33,488
Net loss applicable to noncontrolling interest 16   17   65   87
Net income applicable to TRC Companies, Inc. $ 24,779   $ 5,795   $ 36,275   $ 33,575
Basic earnings per common share $ 0.85   $ 0.21   $ 1.26   $ 1.21
Diluted earnings per common share $ 0.83   $ 0.20   $ 1.23   $ 1.16
Weighted-average common shares outstanding:              
  Basic 29,031   27,921   28,843   27,781
  Diluted 29,776   29,433   29,601   28,822
TRC Companies, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
  June 30,   June 30,
  2013   2012
Current assets:      
  Cash and cash equivalents $ 18,136   $ 16,561
  Accounts receivable, less allowance for doubtful accounts 109,320   95,215
  Insurance recoverable - environmental remediation 26,305   25,744
  Restricted investments 5,582   4,413
  Deferred income tax assets 12,518   512
  Income taxes refundable 1,444   958
  Prepaid expenses and other current assets 12,045   10,607
    Total current assets 185,350   154,010
Property and equipment:      
  Land and building 480   480
  Equipment, furniture and fixtures 51,104   47,819
  Leasehold improvements 5,421   5,053
  57,005   53,352
  Less accumulated depreciation and amortization (43,171)   (39,621)
    Property and equipment, net 13,834   13,731
Goodwill 28,797   24,888
Investments in and advances to unconsolidated affiliates and construction joint ventures 113   109
Long-term deferred income tax assets 6,601   -
Long-term restricted investments 27,580   35,265
Long-term prepaid insurance 31,497   34,272
Other assets 13,992   12,853
    Total assets $ 307,764   $ 275,128
Current liabilities:      
  Current portion of long-term debt $ 4,745   $ 1,315
  Current portion of capital lease obligations 568   267
  Accounts payable 32,238   30,712
  Accrued compensation and benefits 34,040   36,292
  Deferred revenue 20,094   18,236
  Environmental remediation liabilities 291   422
  Other accrued liabilities 31,737   30,315
    Total current liabilities 123,713   117,559
Non-current liabilities:      
  Long-term debt, net of current portion 568   3,860
  Capital lease obligations, net of current portion 789   462
  Income taxes payable and deferred income tax liabilities 310   622
  Deferred revenue 68,514   79,104
  Environmental remediation liabilities 6,973   5,473
    Total liabilities 200,867   207,080
Commitments and contingencies      
  Common stock, $.10 par value; 40,000,000 shares authorized, 29,053,301 and 29,049,819 shares issued and outstanding, respectively, at June 30, 2013, and 28,130,702 and 28,127,220 shares issued and outstanding, respectively, at June 30, 2012 2,905   2,813
Additional paid-in capital 181,874   179,402
Accumulated deficit (77,405)   (113,680)
Accumulated other comprehensive loss (109)   (184)
Treasury stock, at cost (33)   (33)
  Total shareholders' equity applicable to TRC Companies, Inc. 107,232   68,318
Noncontrolling interest (335)   (270)
  Total equity 106,897   68,048
  Total liabilities and equity $ 307,764   $ 275,128

Contact Information:

Investor Contact:
Dennis Walsh
Sharon Merrill
(617) 542-5300

Company Contact:
Thomas W. Bennet, Jr.
(978) 970-5600