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 November 4, 2015 - 7:00 AM EST
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TRC Announces First-Quarter Fiscal 2016 Financial Results

Net Service Revenue Up 8% and Net Income Up 29% From Prior Year First Quarter

LOWELL, MA--(Marketwired - Nov 4, 2015) - TRC Companies, Inc. (NYSE: TRR), a recognized leader in engineering, environmental consulting and construction management services to the energy, environmental and infrastructure markets, today announced financial results for the fiscal first quarter ended September 25, 2015.

Financial Highlights

           
    Three Months Ended      
    September 25,   September 26,   %  
(In millions, except per share data)   2015   2014   Change  
Net service revenue(1)   $ 100.2   $ 92.6   8 %
Operating income   $ 7.7   $ 6.0   28 %
Net income applicable to TRC Companies, Inc.   $ 4.5   $ 3.5   29 %
Diluted earnings per common share   $ 0.14   $ 0.11   27 %
Diluted weighted-average common shares outstanding     31.3     30.4      
                   
(1) The Company believes net service revenue (NSR) best reflects the value of services provided and is the most meaningful indicator of revenue performance.
 

Comments on the Results
"We began the new fiscal year with solid performance in each of our segments," said Chris Vincze, Chairman and Chief Executive Officer. "We continued to execute on our growth strategy, driving topline growth across our business. NSR increased 8% and net income rose 29% from the same period the prior year.

"In our Environmental segment, NSR increased 11% and profit rose 1% in the quarter, largely as a result of services provided to our midstream oil and gas clients. NSR growth outpaced profit due to the timing of change orders, as well as costs associated with organic growth initiatives, as we invest to take advantage of developing market conditions. Strong demand for electrical transmission and distribution services led to a 5% increase in Energy segment NSR, while strong project execution and efficient labor cost management helped increase segment profit 31% year over year. Infrastructure segment NSR increased 9%, driven by demand from our state transportation and commercial clients. Project execution and labor cost management drove a 37% increase in segment profit during the quarter," Vincze said.

Business Outlook
"Fiscal 2016 is off to a good start, as we continue to execute our strategic growth initiatives," Vincze added. "In our Energy segment, demand for our utility clients remains strong. Our Infrastructure segment backlog is robust, and the prospects for a long-term federal transportation bill are favorable. Environmental issues related to transportation of natural gas and retirement of coal plants should support revenue growth in our Environmental segment. We are looking forward to completing our acquisition of the Willbros Professional Services business, which will become a fourth segment, Pipeline Services. We believe adding this unit's technical capabilities, employees and client base to TRC, with our national reputation and strong financial position, will create a company with an unparalleled capability to address all phases of the pipeline project life cycle."

Conference Call Information
TRC will webcast its financial results conference call today, November 4, 2015 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. 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 and infrastructure markets. TRC serves a broad range of commercial, industrial and governmental 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 subsequent 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  
    September 25,     September 26,  
    2015     2014  
                 
Gross revenue   $ 135,459     $ 123,025  
  Less subcontractor costs and other direct reimbursable charges     35,296       30,406  
Net service revenue     100,163       92,619  
                 
Interest income from contractual arrangements     15       22  
Insurance recoverables and other income     742       4,844  
                 
Operating costs and expenses:                
  Cost of services (exclusive of costs shown separately below)     82,984       81,190  
  General and administrative expenses     7,999       8,038  
  Depreciation and amortization     2,264       2,265  
Total operating costs and expenses     93,247       91,493  
Operating income     7,673       5,992  
Interest expense     (28 )     (31 )
Income from operations before taxes     7,645       5,961  
Income tax provision     (3,157 )     (2,480 )
Net income     4,488       3,481  
Net loss applicable to noncontrolling interest     4       4  
Net income applicable to TRC Companies, Inc.   $ 4,492     $ 3,485  
                 
Basic earnings per common share   $ 0.15     $ 0.12  
Diluted earnings per common share   $ 0.14     $ 0.11  
                 
Weighted-average common shares outstanding:                
  Basic     30,635       29,979  
  Diluted     31,318       30,378  
                   
                   
                   
TRC Companies, Inc.  
Condensed Consolidated Balance Sheets  
(in thousands, except per share data)  
(Unaudited)  
   
    September 25,     June 30,  
    2015     2015  
ASSETS  
Current assets:                
  Cash and cash equivalents   $ 53,149     $ 37,296  
  Restricted cash     -       122  
  Accounts receivable, less allowance for doubtful accounts     135,141       138,346  
  Insurance recoverable - environmental remediation     40,919       40,927  
  Restricted investments     6,382       6,701  
  Deferred income tax assets     16,281       16,057  
  Income taxes refundable     497       412  
  Prepaid expenses and other current assets     14,330       10,499  
    Total current assets     266,699       250,360  
                 
Property and equipment     65,731       64,594  
  Less accumulated depreciation and amortization     (47,351 )     (50,885 )
    Property and equipment, net     18,380       13,709  
Goodwill     37,024       37,024  
Long-term deferred income tax assets     2,813       2,867  
Long-term restricted investments     18,374       18,385  
Long-term prepaid insurance     25,366       25,929  
Other assets     9,255       14,607  
    Total assets   $ 377,911     $ 362,881  
                 
LIABILITIES AND EQUITY  
Current liabilities:                
  Current portion of long-term debt   $ 4,641     $ 50  
  Current portion of capital lease obligations     92       166  
  Accounts payable     31,280       31,999  
  Accrued compensation and benefits     55,412       47,233  
  Deferred revenue     12,404       10,612  
  Environmental remediation liabilities     8,680       8,695  
  Income taxes payable     1,794       3,271  
  Other accrued liabilities     41,599       42,170  
    Total current liabilities     155,902       144,196  
Non-current liabilities:                
  Long-term debt, net of current portion     51       55  
  Capital lease obligations, net of current portion     -       -  
  Income taxes payable and deferred income tax liabilities     1,695       1,647  
  Deferred revenue     67,121       68,579  
  Environmental remediation liabilities     482       489  
    Total liabilities     225,251       214,966  
Commitments and contingencies                
Equity:                
    Common stock, $.10 par value; 40,000,000 shares authorized, 30,834,382 and 30,830,900 shares issued and outstanding, respectively, at September 25, 2015, and 30,485,510 and 30,482,028 shares issued and outstanding, respectively, at June 30, 2015     3,083       3,049  
  Additional paid-in capital     191,536       191,321  
  Accumulated deficit     (41,447 )     (45,939 )
  Accumulated other comprehensive loss     (80 )     (88 )
  Treasury stock, at cost     (33 )     (33 )
    Total shareholders' equity applicable to TRC Companies, Inc.     153,059       148,310  
  Noncontrolling interest     (399 )     (395 )
    Total equity     152,660       147,915  
    Total liabilities and equity   $ 377,911     $ 362,881  
                     

Investor Contact:
Andrew Blazier
Senior Associate
Sharon Merrill
(617) 542-5300
trr@investorrelations.com

Company Contact:
Thomas W. Bennet, Jr.
CFO
(978) 970-5600
tbennet@trcsolutions.com


Source: Marketwired (Canada) (November 4, 2015 - 7:00 AM EST)

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