TRC Companies Inc. (TRR, Financial) filed Quarterly Report for the period ended 2010-09-24.
Trc Companies Inc. has a market cap of $46 million; its shares were traded at around $2.43 with and P/S ratio of 0.2. TRR is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
We reported a net loss applicable to our common shareholders of $1.1 million and $0.9 million for the three months ended September 24, 2010 and September 25, 2009, respectively, primarily due to preferred stock accretion charges of $3.8 million for the three months ended September 24, 2010 and $0.8 million for the three months ended September 25, 2009. The preferred stock accretion charges will continue until the preferred stock converts to common stock in December 2010.We expect to record $3.5 million of additional preferred stock accretion charges through the December 1, 2010 conversion date.
Gross revenue decreased $3.6 million, or 4.3%, to $78.8 million for the three months ended September 24, 2010 from $82.4 million for the same period in the prior year. Current quarter gross revenue in our energy segment decreased $1.8 million primarily due to a decline in work performed by our subcontractors. In the comparable period in fiscal year 2010, our projects experienced higher levels of subcontracting and procurement activity and, therefore, generating higher gross revenues and other direct costs (ODCs). The wind-down of a large transportation design project in our infrastructure segment also reduced current fiscal quarter gross revenue by approximately $1.2 million compared to the same period in the prior year. The remainder of the decrease in gross revenue was primarily attributable to certain actions taken in the prior fiscal year to eliminate lower margin work in our infrastructure operating segment.
NSR increased $0.6 million, or 1.1%, to $57.6 million for the three months ended September 24, 2010 from $57.0 million for the same period in the prior year. The increase in current quarter NSR was primarily related to the effect of adjustments to the estimates at completion on certain Exit Strategy contracts which reduced NSR by approximately $1.9 million in the same period in the prior year. In fiscal year 2011, we did not experience similar estimated cost increases. This increase was offset, in part, by a $1.7 decrease in our infrastructure segment primarily due to the aforementioned actions taken to eliminate lower margin work and the wind down of a large transportation design project.
COS decreased $4.3 million, or 8.5%, to $46.6 million for the three months ended September 24, 2010 from $50.9 million for the same period in the prior year. The decrease was related, in part, to a $2.1 million decrease in Exit Strategy contract loss reserves. As discussed above, increases to our Exit Strategy cost estimates did not occur at the same level in the current period as compared to the same period last year. In addition, the decrease in COS was attributable to a $1.7 million reduction in payroll due headcount reductions and a $1.2 million decrease in claims costs associated with our self insured medical benefits plan, due, in part, to plan design changes. These decreases were partially offset by higher bonus costs. As a percentage of NSR, COS was 80.9% and 89.3% for the three months ended September 24, 2010 and September 25, 2009, respectively.
Depreciation and amortization expense decreased $0.7 million, or 37.0%, to $1.2 million for the three months ended September 24, 2010 from $1.9 million for the same period in the prior year. The decrease in depreciation expense was principally related to technology equipment becoming fully depreciated since the same period in the prior year. Also, amortization expense decreased during the three months ended September 24, 2010 due to accelerated amortization expense on certain intangible assets in the fourth quarter of fiscal year 2010.
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Trc Companies Inc. has a market cap of $46 million; its shares were traded at around $2.43 with and P/S ratio of 0.2. TRR is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Infrastructure: Demand for services is expected to continue to be flat for fiscal year 2011 due to general economic conditions, heavy budget cuts and deficit issues, the lack of a new federal transportation bill, and revenue shortfalls at state and municipal levels. Recent estimates indicate that approximately $2.0 trillion needs to be invested over the next five years in national infrastructure alone to restore the system to a state of good repair. In January 2010, the current administration committed $8 billion in federal stimulus to high speed rail. The Senate version of the Jobs Bill passed in mid March 2010 included $15 billion for infrastructure funding (plus a $20 billion Highway Trust Fund Transfer to maintain Federal Obligations through 2010), and the Transportation Reauthorization Act has included several short extensions and $500 billion in long term commitments. The long-term outlook for the infrastructure operating segment also remains strong due to alternative funding mechanisms (e.g., a proposed National Infrastructure Bank); the continued attractiveness of Public Private Partnerships; potential additional economic stimulus initiatives; and the continued need to upgrade, replace or repair aging transportation infrastructure.We reported a net loss applicable to our common shareholders of $1.1 million and $0.9 million for the three months ended September 24, 2010 and September 25, 2009, respectively, primarily due to preferred stock accretion charges of $3.8 million for the three months ended September 24, 2010 and $0.8 million for the three months ended September 25, 2009. The preferred stock accretion charges will continue until the preferred stock converts to common stock in December 2010.We expect to record $3.5 million of additional preferred stock accretion charges through the December 1, 2010 conversion date.
Gross revenue decreased $3.6 million, or 4.3%, to $78.8 million for the three months ended September 24, 2010 from $82.4 million for the same period in the prior year. Current quarter gross revenue in our energy segment decreased $1.8 million primarily due to a decline in work performed by our subcontractors. In the comparable period in fiscal year 2010, our projects experienced higher levels of subcontracting and procurement activity and, therefore, generating higher gross revenues and other direct costs (ODCs). The wind-down of a large transportation design project in our infrastructure segment also reduced current fiscal quarter gross revenue by approximately $1.2 million compared to the same period in the prior year. The remainder of the decrease in gross revenue was primarily attributable to certain actions taken in the prior fiscal year to eliminate lower margin work in our infrastructure operating segment.
NSR increased $0.6 million, or 1.1%, to $57.6 million for the three months ended September 24, 2010 from $57.0 million for the same period in the prior year. The increase in current quarter NSR was primarily related to the effect of adjustments to the estimates at completion on certain Exit Strategy contracts which reduced NSR by approximately $1.9 million in the same period in the prior year. In fiscal year 2011, we did not experience similar estimated cost increases. This increase was offset, in part, by a $1.7 decrease in our infrastructure segment primarily due to the aforementioned actions taken to eliminate lower margin work and the wind down of a large transportation design project.
COS decreased $4.3 million, or 8.5%, to $46.6 million for the three months ended September 24, 2010 from $50.9 million for the same period in the prior year. The decrease was related, in part, to a $2.1 million decrease in Exit Strategy contract loss reserves. As discussed above, increases to our Exit Strategy cost estimates did not occur at the same level in the current period as compared to the same period last year. In addition, the decrease in COS was attributable to a $1.7 million reduction in payroll due headcount reductions and a $1.2 million decrease in claims costs associated with our self insured medical benefits plan, due, in part, to plan design changes. These decreases were partially offset by higher bonus costs. As a percentage of NSR, COS was 80.9% and 89.3% for the three months ended September 24, 2010 and September 25, 2009, respectively.
Depreciation and amortization expense decreased $0.7 million, or 37.0%, to $1.2 million for the three months ended September 24, 2010 from $1.9 million for the same period in the prior year. The decrease in depreciation expense was principally related to technology equipment becoming fully depreciated since the same period in the prior year. Also, amortization expense decreased during the three months ended September 24, 2010 due to accelerated amortization expense on certain intangible assets in the fourth quarter of fiscal year 2010.
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