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TRC Companies Inc. Reports Operating Results (10-Q)

November 06, 2009 | About:
10qk

10qk

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TRC Companies Inc. (TRR) filed Quarterly Report for the period ended 2009-09-25.

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 $63.5 million; its shares were traded at around $3.28 with and P/S ratio of 0.3.

Highlight of Business Operations:

Gross revenue decreased $32.6 million, or 28.4%, to $82.4 million for the three months ended September 25, 2009 from $115.0 million for the same period in the prior year. The wind-down of a large commercial development Exit Strategy project in our environmental business reduced current quarter gross revenue by approximately $14.7 million compared to the same period in the prior year. In addition, the wind-down of certain large environmental compliance projects reduced current quarter gross revenue by approximately $2.3 million. Current quarter revenue in our energy segment declined as work associated with three engineer, procure and construct (EPC) contracts was lower than the same period last year by approximately $15.3 million. The performance associated with the EPC projects was partially replaced by traditional energy service projects which had lower levels of subcontracting requirements and, therefore, generated less gross revenue.

NSR decreased $8.9 million, or 13.6%, to $57.0 million for the three months ended September 25, 2009 from $65.9 million for the same period in the prior year. The decrease was due primarily to a $5.6 million reduction in our environmental segment related to: (1) current quarter adjustments to the estimates at completion on certain Exit Strategy contracts which reduced NSR by approximately $1.9 million; (2) the wind-down of a large commercial development Exit Strategy project which reduced NSR by approximately $0.8 million; and (3) the wind-down of certain large environmental compliance projects which reduced NSR by approximately $1.2 million. In addition, current quarter NSR for our infrastructure segment decreased by $2.2 million primarily due to personnel departures resulting from certain actions taken to eliminate low margin work in the second half of fiscal 2009. Further, the current quarter had one less business day, resulting in a decrease in NSR of approximately $0.9 million.

COS decreased $2.7 million, or 5.0%, to $50.8 million for the three months ended September 25, 2009 from $53.5 million for the same period in the prior year. The current quarter decrease in COS, to a large extent, corresponded to the reduction in NSR. Specifically, the decrease was related to: (1) a $2.8 million decrease in labor costs; (2) a $0.4 million decrease in bonus costs; and (3) a $0.3 million decrease in other discretionary employee costs (e.g. travel costs). The reduction of current quarter COS also showed the effect of a $0.3 million increase in the recovery of certain project-related equipment costs. These decreases were partially offset by a $1.4 million increase in contract loss reserves primarily related to certain Exit Strategy projects that had estimated costs increases during the current quarter. As a percentage of NSR, COS was 89.3% and 81.2% for the three months ended September 25, 2009 and September 26, 2008, respectively.

G&A expenses decreased $1.9 million, or 22.5%, to $6.7 million for the three months ended September 25, 2009 from $8.6 million for the same period in the prior year. The decrease was primarily attributable to a $0.7 million decrease in professional fees. In addition, corporate labor and fringe benefit costs decreased $0.9 million due primarily to headcount reductions and one less payroll day compared to the same period in the prior year.

Depreciation and amortization expense decreased $0.04 million, or 2.1%, to $1.95 million for the three months ended September 25, 2009 from $1.91 million for the same period in the prior year.

Interest expense decreased $0.6 million, or 70.2%, to $0.3 million for the three months ended September 25, 2009 from $0.9 million for the same period in the prior year. The decrease was primarily due to the fact that we did not have an outstanding balance on our credit facility in the first quarter of fiscal 2010 compared to an average outstanding balance of $25.5 million for the same period in the prior year. In June 2009, we raised $15.5 million in additional capital through a preferred stock offering, and the proceeds were used to repay outstanding amounts on our credit facility.

Read the The complete Report

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