LOWELL, MA — (Marketwire) — 09/08/11 — (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 three months and year ended June 30, 2011.
“Despite challenging market conditions, TRC concluded fiscal 2011 with solid fourth-quarter operating performance,” said Chairman and Chief Executive Officer Chris Vincze. “Our financial results for the quarter were highlighted by 9% growth in net service revenue (NSR), driven primarily by our Energy segment. For the full year, our NSR increased by 7% as we focused our growth initiatives in the energy sector of the economy.”
“Our bottom line for the fourth quarter was affected by the $17.3 million additional reserve recorded for the adverse jury verdict in the four-year ongoing litigation with a former landlord in Houston, TX. We believe the verdict is incorrect for a number of reasons. We have filed a post-trial motion to disregard a substantial portion of it and will also pursue appellate measures. We are now substantially reserved for this matter, and any payment of damages would be at the end of the appeals process, which could take up to several years. Excluding the impact of the verdict, we would have reported positive operating and net income for the quarter. From a margin perspective, excluding the litigation reserve, we continued to see improved operating results in the quarter. As a percentage of NSR, our cost of services improved to 78.4% in the fourth quarter from 81.4% during the same period of fiscal 2010 reflecting an efficient expense structure. Our G&A costs, which decreased 2% in the quarter, also reflected a cost control mindset and finished the full year up only 1% compared to fiscal 2010. Overall, TRC–s fundamentals continue to improve on all fronts.”
“In the fourth quarter, Energy continued to be our fastest growing and most profitable segment. We increased NSR by 29% and operating profit by 50% in the quarter within this segment, and 20% and 84%, respectively, for the full year, as demand for our services continued to generate significant new contract opportunities. The Environmental segment increased NSR by 3% in the quarter and 7% for the full year as demand for services improved overall despite weakness in the permitting and air quality markets we serve. Profit for the Environmental segment declined 43% in the quarter and 2% for the full year primarily as the net result of actions taken in the quarter to resolve issues on several legacy Exit Strategy® projects. NSR for our Infrastructure segment was up 3% in the quarter but down 9% for the full year as uncertainties in federal policy and funding continue to constrain growth. However, on a year-over-year basis our profitability in this segment more than doubled in the quarter and was up 28% for the full year as we continued to shed lower margin work and focused on execution of higher-margin projects.”
“In fiscal 2011, we successfully initiated the first stages of our two-pronged — organic and acquisition — profitable growth strategy. During the last half of the fiscal year, we executed two strategic acquisitions and recently announced a third. Our net service revenue backlog of $230 million held steady compared to the immediately prior quarter and was up by 3% over the prior fiscal year primarily due to the backlog received from the RMT acquisition. Within our Infrastructure segment backlog remains strong. We also see additional opportunities for growth related to the pending legislation for a new transportation bill, and we could potentially benefit from the creation of a national infrastructure bank, which is under consideration in Washington.”
“We believe the long-term outlook remains positive, and we expect our top-line growth to continue into fiscal 2012. In the near term, we are anticipating a highly competitive market environment and ongoing macroeconomic uncertainty. However, capital spending commitments are improving, particularly in markets served by both our Energy and Environmental segments.”
“We enter fiscal 2012 with a leveragable business model that positions us well for margin improvement and growth. We have minimal long-term debt and a healthy balance sheet, which provides us with the financial flexibility to execute our comprehensive profitable growth strategy. We are confident that our unique blend of specialized services, well-established reputation for quality and outstanding team of talented professionals will continue to differentiate TRC in the markets we serve. The three recent acquisitions have expanded and diversified our geographic reach, added new skills to our technical services portfolio, and further strengthened the overall resources available to our clients.”
The Company will broadcast its fourth-quarter fiscal 2011 financial results conference call today, at 9 a.m. ET. Those who wish to listen to the conference call should visit the “Investor Center” section of TRC–s website at . The call also may be accessed by dialing (877) 709-8155 or (201) 689-8881 prior to the start of the call. For interested individuals unable to join the live conference call, a webcast replay will be available on the Company–s website for one year.
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, visit TRC–s website at .
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 availability and adequacy of insurance; the uncertainty of our operational and growth strategies; circumstances which could create large cash outflows, such as contract losses, litigation, uncollectible receivables and income tax assessments, including potential payments related to TRC–s ongoing IRS audit and Houston lease litigation, if not resolved successfully; 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; and general political or economic conditions. Furthermore, market trends are subject to changes, which could adversely affect future results. See additional discussion in TRC–s Annual Report on Form 10-K for the fiscal year ended June 30, 2011, 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.
Sharon Merrill Associates
(617) 542-5300
Thomas W. Bennet, Jr.
CFO
(978) 970-5600