LOWELL, MA--(Marketwired - May 4, 2016) - TRC Companies, Inc. (NYSE: TRR)

Third-Quarter FY 2016 Highlights

• NSR¹ up 20% to $121.3 million
• Adjusted operating income² of $2.8 million
• Adjusted EBITDA² of $7.9 million
• Adjusted net income² of $1.7 million
• Adjusted EPS² of $0.05
• Operating cash flow of $17.0 million

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 third quarter ended March 25, 2016.

"During the third quarter, we advanced our strategy to position TRC as the leading provider of full-service solutions to our primary markets," said Chris Vincze, Chairman and Chief Executive Officer. "In just 120 days, we have fully integrated the Pipeline Services segment acquisition into TRC's systems. Pipeline Services results drove the 20% increase in NSR from the third quarter a year ago."

		Three Months Ended										Nine Months Ended
		March 25,				March 27,			%			March 25,				March 27,			%
(In millions, except per share data)		2016				2015			Change			2016				2015			Change
GAAP Results
Net service revenue(1)		$	121.3			$	101.0		20	%		$	332.8			$	293.5		13	%
Acquisition and integration expense		$	1.6			$	-		N/A			$	3.7			$	-		N/A
Goodwill impairment		$	24.5			$	-		N/A			$	24.5			$	-		N/A
Depreciation		$	1.9			$	1.3		49	%		$	5.1			$	4.5		13	%
Amortization		$	3.2			$	0.9		249	%		$	5.1			$	2.6		93	%
Operating income		$	(23.3	)		$	7.1		-426	%		$	(8.9	)		$	20.0		-145	%
Net income applicable to TRC Companies, Inc.		$	(14.3	)		$	5.2		-377	%		$	(5.9	)		$	12.7		-146	%
Diluted earnings per common share		$	(0.46	)		$	0.17		-371	%		$	(0.19	)		$	0.41		-146	%
Non-GAAP Results
Adjusted operating income(2)		$	2.8			$	7.1		-61	%		$	19.3			$	20.0		-4	%
Adjusted EBITDA(2)		$	7.9			$	9.4		-16	%		$	29.4			$	27.1		8	%
Adjusted net income(2) (3)		$	1.7			$	5.2		-66	%		$	11.4			$	12.7		-10	%
Adjusted diluted earnings per common share(2) (3)		$	0.05			$	0.17		-71	%		$	0.36			$	0.41		-12	%

(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 $1.6 million and $3.7 million and goodwill impairment charges of $24.5 million for the three and nine months ended March 25, 2016, respectively.
(3)		Excludes goodwill impairment and acquisition related expense in note 2, net of an income tax benefit of $10.1 million and $10.9 million for the three and nine months ended March 25, 2016, respectively.

Comments on Segment Results
"Our Energy segment experienced a 3% decline in NSR and 9% decline in segment profit year over year, driven by delays related to a significant new project award and timing associated with the receipt of change orders," Vincze continued. "In our Infrastructure segment, renewed transportation-related spending by our municipal and state clients drove a 10% increase in segment NSR on solid 20% margins. The 4% decline in segment profit was due to a significant change order awarded in the year-ago quarter. In our Environmental segment, the continued slowdown from certain oil and gas clients led to a 2% decline in NSR and a profit decline of 20% year-over-year.

"Our newest and fourth segment, Pipeline Services, has been affected by the downturn that has spread throughout the oil and gas sector," Vincze said. "Pipeline services delivered NSR of $21.6 million and a segment loss of $3.1 million. We have undertaken a series of cost reduction initiatives with total annualized savings of approximately $15 million, in order to align segment expenses with current revenues in this business. We also incurred $1.6 million of acquisition integration expenses in Q3. In addition, given the steep decline in near-term demand in the oil and gas sector, we incurred a non-cash goodwill impairment charge in the quarter associated with the Pipeline Services segment acquisition."

Business Outlook
"We continue to believe in the long-term prospects for each of our segments. The underlying market fundamentals in our Energy segment remain strong, spurred by demand from our utility clients and activity on the energy efficiency and renewables fronts. Infrastructure segment backlog is healthy, driven by increased transportation spending at both the state and federal levels and a new federal transportation bill. Although we are experiencing a slowdown from our oil and gas clients in our Environmental segment, demand for services related to environmental remediation, construction, transaction support, the retirement of coal plants and the need to transport natural gas should contribute to segment revenue going forward. Despite the market constraints currently affecting our Pipeline Services segment, the long-term outlook is positive on the strength of domestic demand for energy, the need for comprehensive pipeline integrity management, an expected increase in U.S. fossil fuel exports and the transition from coal-fired power plants to natural gas."

Conference Call Information / Reconciliation of Non-GAAP Metrics
TRC will webcast its financial results conference call today, May 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. Those slides also contain a reconciliation of non-GAAP metrics utilized in this press release to GAAP metrics. 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 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 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 25,				March 27,				March 25,				March 27,
			2016				2015				2016				2015
Gross revenue			$	158,130			$	130,777			$	451,332			$	397,030
	Less subcontractor costs and other direct reimbursable charges			36,877				29,783				118,534				103,579
Net service revenue				121,253				100,994				332,798				293,451
Interest income from contractual arrangements				27				23				69				67
Insurance recoverables and other income				146				753				1,919				6,238
Operating costs and expenses:
	Cost of services (exclusive of costs shown separately below)			104,030				83,486				280,690				247,275
	General and administrative expenses			9,523				8,927				24,690				25,360
	Acquisition and integraton expenses			1,606				-				3,724				-
	Goodwill impairment			24,465				-				24,465				-
	Depreciation			1,942				1,303				5,070				4,481
	Amortization			3,162				905				5,078				2,633
Total operating costs and expenses				144,728				94,621				343,717				279,749
Operating (loss) income				(23,302	)			7,149				(8,931	)			20,007
Interest income				189				-				326				-
Interest expense				(1,073	)			(73	)			(1,562	)			(125	)
(Loss) income from operations before taxes				(24,186	)			7,076				(10,167	)			19,882
Income tax benefit (provision)				9,954				(1,916	)			4,358				(7,244	)
Net (loss) income				(14,232	)			5,160				(5,809	)			12,638
Net (income) loss applicable to noncontrolling interest				(65	)			5				(59	)			14
Net (loss) income applicable to TRC Companies, Inc.			$	(14,297	)		$	5,165			$	(5,868	)		$	12,652
Basic (loss) earnings per common share			$	(0.46	)		$	0.17			$	(0.19	)		$	0.42
Diluted (loss) earnings per common share			$	(0.46	)		$	0.17			$	(0.19	)		$	0.41
Weighted-average common shares outstanding:
	Basic			31,045				30,382				30,886				30,233
	Diluted			31,045				30,737				30,886				30,551

TRC Companies, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
				March 25,				June 30,
				2016				2015
ASSETS
Current assets:
	Cash and cash equivalents			$	9,120			$	37,296
	Restricted cash				-				122
	Accounts receivable, less allowance for doubtful accounts				145,789				138,346
	Insurance recoverable - environmental remediation				38,745				40,927
	Restricted investments				6,156				6,701
	Deferred income tax assets				16,280				16,057
	Income taxes refundable				203				412
	Prepaid expenses and other current assets				27,559				10,499
		Total current assets			243,852				250,360
Property and equipment					73,114				64,594
	Less accumulated depreciation and amortization				(50,356	)			(50,885	)
		Property and equipment, net			22,758				13,709
Goodwill					75,337				37,024
Intangible assets, net					48,726				9,304
Long-term deferred income tax assets					10,284				2,867
Long-term restricted investments					16,870				18,385
Long-term prepaid insurance					24,258				25,929
Other assets					20,174				5,303
		Total assets		$	462,259			$	362,881
LIABILITIES AND EQUITY
Current liabilities:
	Current portion of long-term debt			$	20,031			$	50
	Current portion of capital lease obligations				-				166
	Accounts payable				32,370				31,999
	Accrued compensation and benefits				47,552				47,233
	Deferred revenue				16,010				10,612
	Environmental remediation liabilities				8,669				8,695
	Income taxes payable				212				3,271
	Other accrued liabilities				45,605				42,170
		Total current liabilities			170,449				144,196
Non-current liabilities:
	Long-term debt, net of current portion				83,756				55
	Capital lease obligations, net of current portion				-				-
	Income taxes payable and deferred income tax liabilities				2,067				1,647
	Deferred revenue				60,492				68,579
	Environmental remediation liabilities				461				489
		Total liabilities			317,225				214,966
Commitments and contingencies
Equity:
		Common stock, $.10 par value; 40,000,000 shares authorized, 31,057,243 and 31,053,761 shares issued and outstanding, respectively, at March 25, 2016, and 30,485,510 and 30,482,028 shares issued and outstanding, respectively, at June 30, 2015			3,106				3,049
	Additional paid-in capital				193,288				191,321
	Accumulated deficit				(51,807	)			(45,939	)
	Accumulated other comprehensive loss				(79	)			(88	)
	Treasury stock, at cost				(33	)			(33	)
		Total shareholders' equity applicable to TRC Companies, Inc.			144,475				148,310
	Noncontrolling interest				559				(395	)
		Total equity			145,034				147,915
		Total liabilities and equity		$	462,259			$	362,881