TRC COMPANIES INC. provides a full range of environmental engineering and consulting services and specialized pollution control measurement instrumentation to government and industry. TRC Companies Inc. has a market cap of $53.6 million; its shares were traded at around $3.14 with and P/S ratio of 0.2.
Highlight of Business Operations:We incurred a net loss of $19.3 million for the six months ended December 26, 2008 as well as significant net losses for the fiscal years ended June 30, 2008, 2007 and 2006. The net loss for the six months ended December 26, 2008 was primarily attributable to a goodwill impairment charge of $19.3 million and an intangible asset impairment charge of $2.1 million. During the six months ended December 26, 2008, we began to realize the benefits from the turnaround and restructuring efforts undertaken in prior fiscal years as evidenced by the improved financial results. We continue to take actions aimed at improving profitability and cash flows from operations. Specifically, we are enhancing controls over project acceptance, which we believe will reduce the level of contract losses; we are increasing the level of experience of our accounting personnel in order to improve internal controls and reduce compliance costs; and we continue to improve the timeliness of customer invoicing and enhance our collection efforts. We believe this will result in fewer write-offs of project revenue and reduce our reliance on our revolving credit agreement. We also continue to improve project management, which we believe will improve project profitability. We believe that existing cash resources, cash forecasted to be generated from operations and availability under our credit facility are adequate to meet our requirements for the foreseeable future.
Energy: The utilities in the United States are in the process of a multi-year build-out of the electric transmission grid. Years of underinvestment coupled with an increasingly favorable regulatory environment has provided a good business opportunity for those serving this market. According to a Department of Energy study, $50 billion to $100 billion of investment is needed to modernize the grid. These needs and increased returns on large investments in energy assets provide opportunities to sell services including: permitting, engineering and construction for the electric transmission system and development of renewable energy projects. We are well established in the Northeast and are actively growing our presence in other geographic regions where demand for services is the highest.
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