EXHIBIT 13
Annual Report to Shareholders for the fiscal year ended June 30, 2000. (Only
those portions expressly incorporated by reference are deemed to be filed
herewith).
32
FINANCIAL HIGHLIGHTS
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT PER SHARE DATA
June 30, 2000 1999 1998 (1)
- ------------------------------------------------------------------------------------------------------
Gross revenue $ 117,131 $ 78,223 $ 69,568
Net service revenue 84,808 57,333 49,708
Income from operations 8,281 4,330 2,217
Net income 4,644 2,447 925
Earnings per share - diluted $ 0.65 $ 0.36 $ 0.14
Working capital $ 36,268 $ 17,431 $ 20,475
Current ratio 3.2 to 1 2.0 to 1 2.8 to 1
Percentage of debt to total capitalization 28.1% 14.4% 14.4%
Shareholders' equity $ 54,448 $ 46,988 $ 44,455
Book value per share $ 7.73 $ 6.91 $ 6.55
Common shares outstanding 7,046 6,799 6,782
(1) OPERATING RESULTS PRESENTED ABOVE FOR FISCAL 1998 DO NOT INCLUDE THE
RESULTS OF THE COMPANY'S INSTRUMENTATION BUSINESS THAT WAS SOLD IN JULY
1998. THE SALE RESULTED IN A GAIN THAT WAS NOT MATERIAL. SEE SELECTED
FINANCIAL DATA ON PAGE 2 FOR RESULTS AS REPORTED FOR FISCAL 1998.
[TABULAR REPRESENTATION OF BAR CHART]
NET SERVICE INCOME FROM EARNINGS
REVENUE OPERATIONS PER SHARE
(in thousands) (in thousands)
00 00 00
$84,808 $8,281 $0.65
99 99 99
$57,333 $4,330 $0.36
98 98 00
$49,708 $2,217 $0.14
33
SELECTED FINANCIAL DATA
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT PER SHARE DATA
Statements of Operations, Years ended June 30, 2000 1999 1998 (1) 1997 (1) 1996 (1)
- ---------------------------------------------------------------------------------------------------------------------------
Gross revenue $117,131 $ 78,223 $ 72,570 $ 68,506 $ 76,999
Less subcontractor costs and direct charges 32,323 20,890 19,861 17,718 16,981
------------ ----------- ----------- ------------ ------------
Net service revenue 84,808 57,333 52,709 50,788 60,018
------------ ----------- ----------- ------------ ------------
Operating costs and expenses:
Direct labor and fringe benefit costs 36,550 26,075 23,324 22,680 26,470
Indirect costs and expenses 34,069 21,998 21,796 21,590 27,918 (2)
General and administrative expenses 2,991 2,462 2,451 3,565 3,950
Depreciation and amortization 2,917 2,468 2,702 2,789 2,896
------------ ----------- ----------- ------------ ------------
76,527 53,003 50,273 50,624 61,234
------------ ----------- ----------- ------------ ------------
Income (loss) from operations 8,281 4,330 2,436 164 (1,216)
Interest expense 1,024 507 725 829 906
------------ ----------- ----------- ------------ ------------
Income (loss) before taxes 7,257 3,823 1,711 (665) (2,122)
Federal and state income tax provision (benefit) 2,613 1,376 650 (160) (807)
------------ ----------- ----------- ------------ ------------
Net income (loss) $ 4,644 $ 2,447 $ 1,061 $ (505) $ (1,315)
============ =========== =========== ============ ============
Earnings (loss) per share:
Basic $ 0.68 $ 0.36 $ 0.16 $ (0.07) $ (0.19)
Diluted 0.65 0.36 0.16 (0.07) (0.19)
============ =========== =========== ============ ============
Average shares outstanding:
Basic 6,845 6,782 6,715 6,741 7,067
Diluted 7,190 6,839 6,726 6,747 7,078
============ =========== =========== ============ ============
Cash dividends declared None None None None None
============ =========== =========== ============ ============
Balance Sheet at June 30,
Total assets $ 94,208 $ 66,072 $ 61,604 $ 62,290 $ 64,235
------------ ----------- ----------- ------------ ------------
Debt 21,300 7,900 7,500 11,000 12,200
------------ ----------- ----------- ------------ ------------
Shareholders' equity 54,448 46,988 44,455 42,844 44,748
============ =========== =========== ============ ============
(1) Include results of Company's instrumentation business that was sold in
July 1998.
(2) Results for fiscal 1996 include operating charges of $4.4 million
(approximately $2.8 million after taxes) related to staff reductions,
excess lease capacity and increased allowances for receivables and
inventories.
34
SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT PER SHARE DATA
The following unaudited quarterly financial data for the fiscal years ended June
30, 2000 and 1999 has been derived from the unaudited consolidated financial
statements, that in the opinion of management, reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of such quarterly information.
- --------------------------------------------------------------------------------------------------------
Fiscal 2000 1st 2nd 3rd 4th
- --------------------------------------------------------------------------------------------------------
Gross revenue $25,129 $27,130 $29,376 $35,496
Net service revenue 18,113 18,754 21,326 26,615
Income from operations 1,625 1,868 2,163 2,625
Income before taxes 1,430 1,640 1,900 2,287
Net income 915 1,050 1,216 1,463
Earnings per share:
Basic $ 0.13 $ 0.15 $ 0.18 $ 0.21
Diluted 0.13 0.15 0.17 0.20
Market price per share:
High $ 7.69 $ 8.19 $ 13.00 $ 11.94
Low 6.00 6.25 7.69 9.25
- --------------------------------------------------------------------------------------------------------
Fiscal 1999 1st 2nd 3rd 4th
- --------------------------------------------------------------------------------------------------------
Gross revenue $18,406 $18,987 $17,930 $22,900
Net service revenue 12,880 13,151 14,071 17,231
Income from operations 879 998 1,080 1,373
Income before taxes 760 877 980 1,206
Net income 471 544 608 824
Earnings per share:
Basic $ 0.07 $ 0.08 $ 0.09 $ 0.12
Diluted 0.07 0.08 0.09 0.12
Market price per share:
High $ 5.13 $ 5.63 $ 5.94 $ 6.25
Low 3.75 3.75 4.63 4.50
35
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the Selected
Financial Data, the Consolidated Financial Statements and related Notes to
Consolidated Financial Statements.
OVERVIEW
The Company is a leading provider of technical, financial risk management and
construction services to industry and government primarily in the United States
market. The Company's main focus is in the areas of infrastructure improvements
and expansions, environmental management and information technology.
RESULTS OF OPERATIONS
In the course of providing its services, the Company routinely subcontracts
drilling, laboratory analyses, construction equipment and other services. These
costs are passed directly through to customers and, in accordance with industry
practice, are included in gross revenue. Because subcontractor costs and direct
charges can vary significantly from project to project, the Company considers
net service revenue, which is gross revenue less subcontractor costs and direct
charges, as its primary measure of revenue growth.
The following table presents the percentage relationships of items in the
consolidated statements of operations to net service revenue:
YEARS ENDED JUNE 30, 2000 1999 1998
- ------------------------------------------------------------------------------------------
NET SERVICE REVENUE 100.0% 100.0% 100.0%
------------------------------------------
OPERATING COSTS AND EXPENSES:
Direct labor and fringe benefit costs 43.1 45.5 44.2
Indirect costs and expenses 40.2 38.4 41.4
General and administrative expenses 3.5 4.3 4.7
Depreciation and amortization 3.4 4.3 5.1
------------------------------------------
INCOME FROM OPERATIONS 9.8 7.5 4.6
Interest expense 1.2 0.8 1.4
------------------------------------------
INCOME BEFORE TAXES 8.6 6.7 3.2
Federal and state income tax provision 3.1 2.4 1.2
------------------------------------------
NET INCOME 5.5% 4.3% 2.0%
==========================================
2000 COMPARED TO 1999
The revenue growth trend established in fiscal 1998 continued. Gross revenue
increased $38.9 million, or 50%, to an all time high of $117.1 million in fiscal
2000, from $78.2 million in fiscal 1999. Net service revenue increased $27.5
million, or 48%, to an all time high of $84.8 million in fiscal 2000, from $57.3
million in fiscal 1999. These increases were due to a combination of internal
growth arising out of increased demand for the Company's services including, as
expected, revenue from the Exit Strategy-Registered Trademark- program, and the
additional revenue from the acquisitions completed in fiscal 2000 and 1999.
36
Direct labor and fringe benefit costs increased by 40% in fiscal 2000, as
compared to fiscal 1999, primarily attributable to the increase in revenue.
Indirect costs and expenses increased by 55% in fiscal 2000, as compared to
fiscal 1999. As a percentage of net service revenue, indirect costs and expenses
increased to approximately 40%, from 38% in fiscal 1999. This increase was
primarily attributable to higher costs for professional compensation, the
additional costs associated with acquired businesses, and increased allowances
for doubtful accounts as a result of the significant increase in revenue year
over year.
General and administrative expenses increased by 21.5% in fiscal 2000, as
compared to fiscal 1999. This increase was primarily due to additional costs to
support the Company's growth. However, as a percentage of net service revenue,
these costs decreased to approximately 3.5%, from 4.3% in fiscal 1999.
Depreciation and amortization expense increased by 18% in fiscal 2000, as
compared to fiscal 1999. This increase was primarily attributable to the
additional amortization expense of costs in excess of the net assets of acquired
businesses in fiscal 2000 and 1999 and to a lesser extent the additional
depreciation expense on equipment acquired through acquisitions.
Income from operations increased by approximately $4.0 million, or 91%, to $8.3
million in fiscal 2000, from $4.3 million in fiscal 1999. As a percentage of net
service revenue, operating income increased to approximately 10%, up from 7.5%
in fiscal 1999. The continued improvement in operating performance was primarily
attributable to: (1) the Company's focus toward higher margin, economically
driven markets largely related to the Exit Strategy-Registered Trademark-
program; and (2) the growth in revenue without comparable increases in operating
overhead.
Interest expense increased by approximately 102% during fiscal 2000, as compared
to fiscal 1999. This increase was primarily attributable to higher levels of
debt outstanding at higher interest rates to finance acquisitions completed
during the year and capital expenditures to support the Company's growth.
The provision for federal and state income taxes reflects an effective income
tax rate of 36% in both fiscal 2000 and fiscal 1999. The Company believes that
there will be sufficient taxable income in future periods to enable utilization
of the deferred income tax benefits.
1999 COMPARED TO 1998
The revenue growth trend established in fiscal 1998 continued in fiscal 1999.
Gross revenue increased from $72.6 million in fiscal 1998 to $78.2 million. Net
service revenue increased from $52.7 million in fiscal 1998 to $57.3 million in
fiscal 1999. The increase in revenue was primarily due to continued growth in
the core businesses and from acquisitions completed during the year. Gross and
net service revenue in fiscal 1998 were $69.6 million and $49.7 million,
respectively, without consideration of the Company's instrumentation business
that was sold in July 1998, indicating growth in the core businesses of 12% and
15%, respectively.
Direct labor and fringe benefit costs increased by 12% during fiscal 1999, as
compared to fiscal 1998, primarily due to the increase in revenue. Indirect
costs and expenses increased by only about 1% in fiscal 1999, as compared to
fiscal 1998. As a percentage of net service revenue,
37
indirect costs and expenses decreased to approximately 38%, from 41% in fiscal
1998. This improvement resulted from management's continuing program to increase
staff utilization and reduce non-productive overhead, and to a lesser extent
from cost savings resulting from the sale of the Company's instrumentation
business in July 1998.
General and administrative expenses remained relatively even in fiscal 1999, as
compared to fiscal 1998. This continuing improvement with respect to revenue
growth also reflects management's philosophy of maintaining a flat
organizational structure with minimal non-productive overhead.
Depreciation and amortization expense decreased by 9% in fiscal 1999, as
compared to fiscal 1998. This decrease was primarily due to the sale of the
Company's instrumentation business in July 1998 and to the comparative reduction
in capital expenditures over the past several years, combined with the effect of
equipment that became fully depreciated.
Income from operations was $4.3 million in fiscal 1999, compared to $2.4 million
in fiscal 1998. The continuing improvement in operating performance was
primarily due to the growth in revenue (without comparable increases in
operating overhead) and acquisitions.
Interest expense decreased by 30% in fiscal 1999, as compared to fiscal 1998,
resulting primarily from lower levels of debt outstanding.
The provision for federal and state income taxes reflects an effective income
tax rate of 36% in fiscal 1999, compared to an effective income tax rate of 38%
in fiscal 1998. This decrease was due to lower state income taxes.
IMPACT OF INFLATION
The Company's operations have not been materially affected by inflation or
changing prices because of the short-term nature of many of its contracts, and
the fact that most contracts of a longer term are subject to adjustment or have
been priced to cover anticipated increases in labor and other costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash provided by operations and borrowings based upon the
strength of its balance sheet to fund operations. The Company's liquidity is
assessed in terms of its overall ability to generate cash to fund its operating
and investing activities, and to reduce debt. Of particular importance in the
management of liquidity are cash flows generated from operating activities,
capital expenditure levels and an adequate bank line of credit.
Operating activities are the principal source of cash flow for the Company.
Operating activities used approximately $1.4 million of cash flow during fiscal
2000, as compared to providing $3.8 million of cash flow last year. Although
operating performance improved significantly in fiscal 2000, the cash generated
by net income, the non-cash charges against income for depreciation and
amortization, and the increase in billings in excess of revenue earned were
offset by several factors, principally the growth in accounts receivable related
to the significant increase in
38
revenue especially in the fourth quarter, higher income tax deposits and payment
of the accrued interest on the subordinated note repaid in July 1999. Operating
cash flow in fiscal 1998 contained a non-recurring settlement recovery of
approximately $.9 million from the former Chairman and the former President, as
further described in Note 9 to the Consolidated Financial Statements.
Investing activities used cash of approximately $12.0 million in fiscal 2000.
The acquisition of businesses completed in fiscal 2000 and earnout payments on
acquisitions completed in fiscal 1999 required the use of approximately $8.2
million (net of cash acquired). Capital expenditures during fiscal 2000 for
additional equipment and information technology systems to support business
growth increased to $3.3 million, up from $1.3 million last year. In fiscal
2000, the Company also invested approximately $.6 million in certain Brownfield
redevelopment property. In July 1998, the Company completed the sale of its
instrumentation business that provided approximately $2.8 million in cash. In
fiscal 2001, the Company expects to make capital expenditures to support
continuing business growth of approximately $3 million and also expects
expenditures for acquisitions to continue at a pace similar to fiscal 2000.
The Company relies on its bank financing arrangement to assist in funding
various operating and investing activities. The Company has a $25 million
revolving credit agreement, secured by accounts receivable, which expires March
2003. Borrowings under the agreement bear interest at the bank's base rate or
the Eurodollar rate plus 1 3/4%. At June 30, 2000, borrowings outstanding
pursuant to the agreement were $21 million at an average interest rate of 8 1/2%
The Company also had outstanding at June 30, 2000 a $.3 million 7 3/4%
subordinated note issued in connection with the March 1998 purchase of Hydro-Geo
Consultants, Inc. The note is repayable in three remaining equal annual
installments.
The Company expects to increase its available cash flow over the next fiscal
year, primarily from operations and reductions in working capital derived mainly
from the collection of accounts receivable. The Company believes that cash
generated from operations, the cash on hand at June 30, 2000 and available
borrowings under the revolving credit agreement will be sufficient to meet the
Company's cash requirements for fiscal 2001.
MARKET RISKS
The Company's exposure to market risk for changes in interest rates relates
primarily to borrowings under the Company's revolving credit agreement with a
commercial bank. These borrowings bear interest at variable rates and the fair
value of this indebtedness is not significantly affected by changes in market
interest rates. An effective increase or decrease of 10% in the current
effective interest rate under the revolving credit agreement would not have a
material effect on the Company's operating results, financial condition or cash
flows.
NEW ACCOUNTING STANDARD
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVES AND HEDGING
ACTIVITIES. The Statement, as amended, is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000. The Statement requires companies to
recognize all derivative instruments on their balance sheet as either assets or
liabilities measured at fair value. The Statement also specifies a new
39
method of accounting for hedging transactions, prescribes the types of items and
transactions that may be hedged, and specifies detailed criteria to be met to
qualify for hedge accounting. The Company will adopt this Statement in fiscal
2001. Adoption of this Statement is not expected to have a material impact on
the Company's operating results, financial condition or cash flows.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that describe the Company's
business prospects. These statements involve risks and uncertainties including,
but not limited to, regulatory uncertainty, government funding, level of demand
for the Company's services, industry-wide competitive factors and political,
economic or other conditions. Furthermore, market trends are subject to changes
that could adversely affect future results.
40
CONSOLIDATED STATEMENTS OF OPERATIONS
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT PER SHARE DATA
Years ended June 30, 2000 1999 1998
- -----------------------------------------------------------------------------------------------------
Gross revenue $117,131 $78,223 $72,570
Less subcontractor costs and direct charges 32,323 20,890 19,861
--------------- ------------- -------------
Net service revenue 84,808 57,333 52,709
--------------- ------------- -------------
Operating costs and expenses:
Direct labor and fringe benefit costs 36,550 26,075 23,324
Indirect costs and expenses 34,069 21,998 21,796
General and administrative expenses 2,991 2,462 2,451
Depreciation and amortization 2,917 2,468 2,702
--------------- ------------- -------------
76,527 53,003 50,273
--------------- ------------- -------------
Income from operations 8,281 4,330 2,436
Interest expense 1,024 507 725
--------------- ------------- -------------
Income before taxes 7,257 3,823 1,711
Federal and state income tax provision 2,613 1,376 650
--------------- ------------- -------------
Net income $ 4,644 $ 2,447 $ 1,061
=============== ============= =============
Earnings per share:
Basic $ 0.68 $ 0.36 $ 0.16
Diluted 0.65 0.36 0.16
=============== ============= =============
Average shares outstanding:
Basic 6,845 6,782 6,715
Diluted 7,190 6,839 6,726
=============== ============= =============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
41
CONSOLIDATED BALANCE SHEETS
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT PER SHARE DATA
As of June 30, 2000 1999
- ------------------------------------------------------------------------------------------------------------------
Assets
Current Assets:
Cash $ 1,566 $ 1,368
Accounts receivable, less allowance for doubtful accounts 48,995 31,913
Deferred income tax benefits 1,208 1,231
Prepaid expenses and other current assets 1,053 1,096
------------ ------------
52,822 35,608
------------ ------------
Property and equipment:
Furniture and equipment 21,833 18,743
Leasehold improvements 1,784 1,634
------------ ------------
23,617 20,377
Less accumulated depreciation and amortization 17,361 16,603
------------ ------------
6,256 3,774
------------ ------------
Costs in excess of net assets of acquired businesses,
net of accumulated amortization of $6,512 and $5,355, respectively 33,512 26,519
------------ ------------
Other assets 1,618 605
------------ ------------
$94,208 $66,506
============ ============
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of debt $ 100 $ 7,600
Accounts payable 6,216 4,152
Accrued compensation and benefits 4,308 3,433
Income taxes payable 1,782 1,399
Billings in excess of revenue earned 3,160 434
Other accrued liabilities 988 1,159
------------ ------------
16,554 18,177
------------ ------------
Non-current liabilities:
Long-term debt 21,200 300
Deferred income taxes 2,006 1,041
------------ ------------
23,206 1,341
------------ ------------
Commitments and contingencies (Notes 7 and 9)
Shareholders' equity:
Capital stock:
Preferred, $.10 par value; 500,000 shares authorized, none issued -- --
Common, $.10 par value; 30,000,000 shares authorized,
7,674,329 and 7,427,846 shares issued at June 30, 2000 and
1999, respectively 767 743
Additional paid-in capital 41,511 38,719
Retained earnings 15,067 10,423
------------ ------------
57,345 49,885
Less treasury stock, at cost 2,897 2,897
------------ ------------
54,448 46,988
------------ ------------
$94,208 $66,506
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
42
CONSOLIDATED STATEMENTS OF CASH FLOWS
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS
Years ended June 30, 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 4,644 $ 2,447 $ 1,061
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 2,917 2,468 2,702
Change in deferred taxes and other non-cash items 119 (444) 609
Changes in assets and liabilities, net of effects from
acquisitions and disposition:
Accounts receivable (13,155) 277 (520)
Billings in excess of revenue earned 2,135 175 (141)
Inventories - (292) (331)
Prepaid expenses and other current assets (92) (135) 820
Accounts payable 1,933 (845) 1,384
Accrued compensation and benefits 365 30 (40)
Income taxes payable 160 549 1,177
Other accrued liabilities (391) (472) (999)
----------- ----------- -----------
Net cash provided by (used in) operating activities (1,365) 3,758 5,722
----------- ----------- -----------
Cash flows from investing activities:
Additions to property and equipment (3,323) (1,270) (1,039)
Acquisition of businesses, net of cash acquired (8,156) (4,784) (431)
Proceeds from sale of instrumentation business -- 2,750 --
Acquisition of equity investments and other (754) 33 98
Proceeds from sale of equipment 252 7 9
----------- ----------- -----------
Net cash used in investing activities (11,981) (3,264) (1,363)
----------- ----------- -----------
Cash flows from financing activities:
Repayment of long-term debt (3,600) (3,600) --
Net borrowings (repayments) under revolving credit agreement 17,000 3,085 (4,000)
Proceeds from exercise of stock options and warrants 144 10 --
----------- ----------- -----------
Net cash provided by (used in) financing activities 13,544 (505) (4,000)
----------- ----------- -----------
Increase (decrease) in cash 198 (11) 359
Cash, beginning of year 1,368 1,379 1,020
----------- ----------- -----------
Cash, end of year $ 1,566 $ 1,368 $ 1,379
=========== =========== ===========
Supplemental cash flow information:
Interest paid $ 1,238 $ 435 $ 611
Income taxes paid (refunded), net 2,156 1,018 (315)
=========== =========== ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
43
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT SHARE DATA
Common stock issued Treasury stock
------------------------ -----------------------
Additional
Number paid-in Retained Number
Years ended June 30, 2000, 1999 and 1998 of shares Amount capital earnings of shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
BALANCES, JUNE 30, 1997 7,316,755 $ 732 $ 38,094 $ 6,915 628,653 $(2,897)
Issuance of common stock and warrant in connection
with business acquired 94,100 9 541 -- -- --
Net income -- -- -- 1,061 -- --
------------ ----------- ------------ ----------- ----------- ----------
BALANCES, JUNE 30, 1998 7,410,855 741 38,635 7,976 628,653 (2,897)
Issuance of common stock in connection
with business acquired 14,741 2 74 -- -- --
Exercise of stock options (including tax benefits) 2,250 -- 10 -- -- --
Net income -- -- -- 2,447 -- --
------------ ----------- ------------ ----------- ----------- ----------
BALANCES, JUNE 30, 1999 7,427,846 743 38,719 10,423 628,653 (2,897)
Issuance of common stock and warrants in connection
with businesses acquired 222,000 22 2,611 -- -- --
Exercise of stock options and warrants (including
tax benefits) 24,483 2 181 -- -- --
Net income -- -- -- 4,644 -- --
------------ ----------- ------------ ----------- ----------- ----------
BALANCES, JUNE 30, 2000 7,674,329 $ 767 $ 41,511 $15,067 628,653 $(2,897)
============ =========== ============ =========== =========== ==========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TRC COMPANIES, INC. AND SUBSIDIARIES
IN THOUSANDS, EXCEPT SHARE DATA
Note 1. ACCOUNTING POLICIES
A. The consolidated financial statements include the Company, its
wholly-owned subsidiaries and equity investments, after elimination of
intercompany accounts and transactions. Certain financial statement items have
been reclassified to conform to the current year's format.
B. The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
from those estimates.
C. Property and equipment are stated on the basis of cost, including
costs to bring the equipment into operation. Major improvements and betterments
to existing equipment are capitalized. Maintenance and repairs are charged to
expense as incurred.
The Company provides for depreciation of property and
equipment on the straight-line method using estimated useful lives of 3 to 10
years. Accelerated methods are used for income tax purposes.
D. Leasehold improvements are amortized over the lives of the various
leases or the useful lives of the improvements, whichever is shorter.
E. Costs in excess of the fair value of net assets of acquired
businesses are amortized over 20 to 30 years on a straight-line basis. On a
periodic basis, the Company reassesses the appropriateness of both the carrying
value and remaining life of these costs. Such reassessments are computed using
forecasted cash flows on an undiscounted basis and other factors.
F. Revenue on engineering and remediation contracts is recorded using
the percentage-of-completion (cost-to-cost) method of accounting. Under this
method, revenue is recognized in the ratio that contract costs incurred bear to
total estimated costs. Costs and revenue on long-term contracts are subject to
revision throughout the lives of the contracts and any required adjustments are
made in the period in which the revisions become known. Losses on contracts are
recorded in the period in which they are identified. Revenue from the sale of
instruments in fiscal 1998 was recognized when the products were shipped.
On contracts where billings are in excess of revenue earned, the excess
is presented on the balance sheet as a current liability.
45
G. Research and development costs related to the Company's
instrumentation business that was sold in July 1998 were charged to operations
as incurred and amounted to approximately $187 in fiscal 1998.
H. The Company applies the provisions of Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25), and related
interpretations in accounting for stock options
I. In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No.130, REPORTING COMPREHENSIVE
INCOME. The statement established standards for reporting and displaying
comprehensive income in a set of financial statements. The Company has no items
of other comprehensive income.
J. Earnings per share is computed in accordance with the provisions of
Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE. Basic
earnings per share is based upon the weighted average common shares outstanding
during the year. Diluted earnings per share reflects the potential dilutive
effect of outstanding stock options and warrants.
There are no adjustments to net income for purposes of
computing earnings per common share for the years ended June 30, 2000, 1999
and 1998. For purposes of computing diluted earnings per share, the weighted
average number of shares outstanding was increased by 344,946 shares, 56,278
shares and 10,988 shares in fiscal 2000, 1999 and 1998, respectively,
representing the potential dilutive effects of outstanding stock options and
warrants.
K. The Company has 401(k) savings plans covering substantially all
employees. The Company's contributions to the plans were approximately $816,
$578 and $562 in fiscal 2000, 1999 and 1998, respectively.
The Company does not provide post-employment or other post-retirement benefits.
L. Cash, accounts receivable, accounts payable, accrued liabilities and
the Company's subordinated note as reflected in the financial statements are
reasonable estimates of their fair value because of the short-term maturity of
those instruments. The carrying amount of the Company's note payable pursuant to
its revolving credit agreement at June 30, 2000, approximates fair value because
the interest rate on this instrument changes with market interest rates.
M. Financial instruments which subject the Company to credit risk
consist primarily of cash, accounts receivable and unbilled costs. The Company
performs on-going credit evaluations of its customers and maintains an allowance
for potential credit losses.
Note 2. BUSINESS ACTIVITIES
The Company conducts its activities under one business segment which
involves providing engineering and consulting services primarily in the areas of
infrastructure improvements and expansions, environmental management and
information technology. The Company's services and products are provided to
commercial organizations and government agencies primarily in the U.S. market.
In July 1998, the Company sold its instrumentation subsidiary that
developed and manufactured air monitoring instrumentation. In addition, during
fiscal 1998 the Company recorded charges aggregating approximately $890 to exit
certain non-core businesses. The decision to exit these non-core businesses was
consistent with the Company's objective to focus on its strategic market
sectors.
46
Note 3. ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 2000 and 1999 are comprised of the
following:
2000 1999
- ---------------------------------------------------------------------------------------
Amounts Billed $27,863 $17,258
Unbilled costs 23,251 16,273
Retainage 1,086 928
------------- -------------
52,200 34,459
Less allowance for doubtful accounts 3,205 2,546
------------- -------------
$48,995 $31,913
============= =============
Unbilled costs represent billable amounts recognized as revenue primarily
in the last month of the fiscal year. Management expects that substantially all
unbilled costs will be billed and collected in the subsequent year. Retainage
represents amounts billed but not paid by the customer which, pursuant to the
contract, are due at completion.
Net service revenue from contracts with U.S. Government agencies
amounted to approximately $7,728, $9,407 and $10,721 in fiscal 2000, 1999 and
1998, respectively.
Note 4. ACQUISITIONS AND DIVESTITURE
In January 2000, the Company acquired 100% of the outstanding shares of
Hunter Associates, Inc., a civil engineering firm headquartered in Dallas,
Texas. The purchase price of $3,107 consisted of cash of $2,775 (net of cash
acquired), 25,000 shares of the Company's common stock and a five-year warrant
to purchase 20,000 shares of the Company's common stock at $7.81 per share. The
Company may make additional payments if certain revenue objectives are achieved
in each of the years in the three-year period ending December 31, 2002. The
acquisition has been accounted for using the purchase method of accounting.
In April 2000, the Company acquired substantially all of the business
assets and assumed certain liabilities and obligations of Triangle
Environmental, Inc., a civil engineering and environmental services firm
headquartered in Raleigh, North Carolina. The purchase price of $1,141 consisted
of $500 in cash, 32,000 shares of the Company's common stock and a five-year
warrant to purchase 50,000 shares of the Company's common stock at $11.25 per
share. The Company may make additional payments if certain profit objectives are
achieved over the four and one-quarter year period ending June 30, 2004.
In May 2000, the Company acquired 100% of the outstanding shares of
Lowney Associates, a geotechnical and environmental services firm headquartered
in Mountain View, California. The purchase price of $5,566 consisted of cash of
$3,478 (net of cash acquired) and 165,000 shares of the Company's common stock.
The Company may make additional payments if certain pre-tax profit goals are
achieved in each of the years in the three-year period ending March 31, 2003.
The acquisition has been accounted for using the purchase method of accounting.
47
The aggregate excess of purchase price over the fair value of the net
assets acquired for the acquisitions completed in fiscal 2000 was $6,743 (before
contingent consideration), which is being amortized over 20 years on a
straight-line basis.
In March 1999, the Company acquired all of the outstanding shares of
Alton Geoscience, Inc. (Alton), headquartered in Irvine, California. Alton's
primary business activities include site investigations, remediation and
monitoring services for major oil and pipeline companies. The initial purchase
price included cash of $1,562 (net of cash acquired) and a $500 holdback which
was paid in March 2000. Additionally, in accordance with the terms of the
agreement, the Company made an earnout payment of approximately $860 in fiscal
2000 equal to 75% of Alton's pre-tax profit for the twelve-month period ended
September 30, 1999. The Company recorded the earnout payment as additional costs
in excess of the net assets acquired. The acquisition has been accounted for
using the purchase method of accounting,
In April 1999, the Company acquired all of the outstanding shares of
Vectre Corporation, an environmental engineering and consulting firm located in
Lafayette, New Jersey. The initial purchase price consisted of cash of $1,489
(net of cash acquired). In accordance with the terms of the agreement, the
Company may make additional payments if certain profit objectives are achieved
in each of the years in the four-year period ending June 30, 2003. The Company
made an earnout payment of $45 in fiscal 2000 and recorded the amount as
additional costs in excess of the net assets acquired. The acquisition has been
accounted for using the purchase method of accounting.
In May 1999, A & H Engineers, P.C., a transportation consulting and
engineering firm located in New York City, merged into a subsidiary of the
Company. The initial purchase price consisted of $1,733 (net of cash acquired).
In accordance with the terms of the agreement, the Company may make additional
payments based upon revenue objectives in each of the years in the four-year
period ending April 30, 2003. The Company did not record an earnout payment in
fiscal 2000 as the earnout provision was subject to adjustment based upon final
determination of the net assets acquired. The Company recorded an adjustment to
purchase price allocation in fiscal 2000 of $725 related to the final valuation
of assets acquired. The acquisition has been accounted for using the purchase
method of accounting.
The aggregate excess of purchase price over the fair values of the net
assets acquired for the acquisitions completed in fiscal 1999 was $2,528 (before
contingent consideration), which is being amortized over 30 years on a
straight-line basis.
In March 1998, the Company acquired substantially all of the business
assets, liabilities and obligations of Hydro-Geo Consultants, Inc., a
Denver-based firm servicing principally the domestic and international mining
and water resource sectors. The purchase price of approximately $1,500 consisted
of a combination of cash, a $500 five-year 7 3/4% subordinated note, 94,100
shares of the Company's common stock and a five-year warrant to purchase 75,000
shares of the Company's common stock at $4.25 per share. The acquisition has
been accounted for using the purchase method of accounting. The purchase price
and expenses associated with the acquisition resulted in costs in excess of the
fair value of the net assets acquired of approximately $1,075, which is being
amortized over 30 years on a straight-line basis.
48
The following unaudited pro forma summary presents the consolidated
results of operations as if the current year and prior year acquisitions had
occurred at the beginning of the earliest year presented, after giving effect to
certain adjustments, including amortization of costs in excess of the net assets
acquired, increased interest expense on acquisition borrowings and related
income tax effects.
YEARS ENDED JUNE 30 (UNAUDITED), 2000 1999
- ---------------------------------------------------------------------------------------
Net service revenue $94,806 $79,647
------------- -------------
Net income 5,521 3,903
------------- -------------
Earnings per share - diluted $ 0.75 $ 0.55
------------- -------------
The unaudited pro forma financial information does not purport to be
indicative of the results that would have occurred had the acquisitions taken
place at the beginning of the periods presented, nor do they purport to be
indicative of the results that will be obtained in the future.
In July 1998, the Company sold its instrumentation business which had
sales of approximately $3,000 in fiscal 1998, for $2,750 in cash resulting in a
gain that was not significant.
Note 5. DEBT
Debt at June 30, 2000 and 1999 is comprised of the following:
2000 1999
- ------------------------------------------------------------------------------------
Note payable - revolving credit agreement $21,000 $4,000
Subordinated note, due July 1999 -- 3,500
7 3/4% subordinated note, due March 2003 300 400
------------- ------------
21,300 7,900
Less current portion 100 7,600
------------- ------------
Long-term debt $21,200 $ 300
============= ============
The Company has a $25,000 revolving credit agreement with a bank to
support its working capital and acquisition needs. Borrowings under the
agreement are secured by accounts receivable and are due and payable in March
2003 when the credit agreement expires. Borrowings under the agreement bear
interest at the bank's base rate or the Eurodollar rate plus 1 3/4%. The
weighted average interest rate on outstanding borrowings at June 30, 2000 was
8 1/2%. The Company also pays a commitment fee of 1/4% on the unused portion of
the agreement. The Company was in compliance with all covenants contained in
the agreement at all times during the year ended June 30, 2000.
The subordinated note due July 1999 was issued in March 1994 in
connection with the acquisition of Environmental Solutions, Inc. In exchange for
an extension of the payment term, the note was amended in July 1997 to increase
the interest rate to the greater of the interest paid on the bank debt or
7 3/4%. In addition, warrants to purchase
49
50,000 shares of the Company's common stock were issued to the noteholder are
exercisable at $4.50 per share and expire in July 2002. The outstanding balance
on the subordinated note at June 30, 1999 was repaid on July 1, 1999.
The 7 3/4% subordinated note due March 2003 was issued in March 1998 in
connection with the acquisition of Hydro-Geo Consultants, Inc. The balance
outstanding at June 30, 2000 is payable in three equal annual installments.
Note 6. FEDERAL AND STATE INCOME TAXES
The federal and state income tax provision for fiscal 2000, 1999 and
1998 consists of the following:
YEARS ENDED JUNE 30, 2000 1999 1998
- -------------------------------------------------------------------------------------
Current:
Federal $2,359 $1,427 $ 679
State 226 103 34
Deferred:
Federal 24 (45) (116)
State 4 (109) 53
------------ ----------- ------------
$2,613 $1,376 $ 650
============ =========== ============
Deferred income taxes represent the tax effect of transactions that are
reported in different periods for financial and tax reporting purposes.
Temporary differences and carryforwards that give rise to a significant portion
of deferred income tax benefits (liabilities) are as follows:
AS OF JUNE 30, 2000 1999
- ---------------------------------------------------------------------------------------
Current deferred income tax benefits:
Doubtful accounts and other accruals $ 920 $ 767
Vacation pay accrual 307 283
Other, net (19) 181
--------------- --------------
$ 1,208 $ 1,231
=============== ==============
Long-term deferred income tax liabilities:
Depreciation and amortization $(1,880) $(1,613)
Cash to accrual from acquisitions (742) (51)
Loss carryforwards from acquisition 459 528
Accrued lease obligations -- 68
Other, net 157 27
--------------- --------------
$(2,006) $(1,041)
=============== ==============
50
A reconciliation of the U.S. federal statutory income tax rate and the
Company's consolidated effective income tax rate follows:
YEARS ENDED JUNE 30, 2000 1999 1998
- -----------------------------------------------------------------------------------------
U.S. federal statutory income tax rate 34.0% 34.0% 34.0%
State income taxes (net of federal benefit) 2.1 1.8 4.4
Adjustment of deferred income taxes due to
state income tax rate changes -- (2.8) --
Other, net (.1) 3.0 (.4)
----------- ----------- ----------
Effective income tax rate 36.0% 36.0% 38.0%
=========== =========== ==========
At June 30, 1999, the Company had approximately $1,330 of operating
loss carryforwards available to reduce future federal taxable income. These loss
carryforwards relate to the March 1999 acquisition of Alton Geoscience, Inc. and
expire in years 2008 through 2018. Although utilization of these carryforwards
is subject to certain limitations, the Company believes that all of the
carryforwards will be utilized prior to their expiration. In fiscal 2000, the
Company received a tax benefit of $226 as a result of the utilization of
previously limited acquired operating loss carryforwards. The benefit was
recorded as a reduction to costs in excess of net assets of acquired businesses.
Note 7. LEASE COMMITMENTS
The Company has commitments at June 30, 2000 under noncancelable
operating leases for office facilities and equipment. Rental payments, net of
sublease receipts, charged to operations in fiscal 2000, 1999 and 1998 were
approximately $4,887, $4,189 and $3,674, respectively. Certain leases for office
facilities require payments for expenses under escalation clauses.
Minimum future lease obligations payable in future fiscal years are as
follows:
YEARS ENDING JUNE 30,
- -----------------------------------------------------------
2001 $ 4,760
2002 4,598
2003 4,209
2004 3,758
2005 2,678
2006 and thereafter 5,379
------------
$25,382
============
Note 8. STOCK OPTIONS
The Company's non-qualified stock option plan for employees and
directors, as amended, authorizes the granting of options, including
performance-based options, with exercise prices at no less than the fair market
value of the common stock on the date such options are granted. The option term
is fixed by the Board of Directors at the time of grant, but cannot exceed ten
years and generally begins within a specified period after the date of grant. No
accounting recognition is given to stock options until they are exercised, at
which time the proceeds are credited to the capital accounts. The Company
51
receives a tax benefit upon exercise of these options in an amount equal to the
difference between the option price and the fair market value of the common
stock at that date. Tax benefits related to the exercise of stock options are
credited to additional paid-in capital when realized for financial reporting
purposes.
A summary of stock option activity for the three years ended June 30,
2000 follows:
2000 1999 1998
-----------------------------------------------------------------
Average Average Average
Options Price Options Price Options Price
- ------------------------------------------------------------------------------------------------------------
Outstanding options, beginning of year 886,230 $ 4.71 688,677 $ 5.04 738,352 $ 4.38
Granted 484,684 8.45 254,000 4.29 497,500 4.50
Exercised (22,283) 5.83 (2,250) 4.33 -- --
Canceled (13,643) 6.36 (54,197) 6.99 (547,175) 3.67
-----------------------------------------------------------------
Outstanding options, end of year 1,334,988 $ 6.03 886,230 $ 4.71 688,677 $ 5.04
=================================================================
Options exercisable at end of year 887,874 $ 5.02 457,333 $ 4.99 120,519 $ 6.91
=================================================================
Options available for future grants 178,648 649,689 849,492
============ ========= =========
The following table summarizes information about outstanding stock options
at June 30, 2000:
Options Outstanding Options Exercisable
-------------------------------------------- --------------------------
Average
Average Term Average
Exercise price Shares Price (Years) Shares Price
- ------------------------------------------------------------------------------------------------------------
$3.50 - $4.25 251,500 $ 4.10 7.0 184,334 $ 4.09
$4.50 - $6.00 518,575 4.53 7.9 502,177 4.52
$6.25 - $9.56 348,029 6.76 7.2 191,363 6.94
$10.13 - $10.88 216,884 10.67 9.9 10,000 10.13
----------------------------- --------------------------
1,334,988 $ 6.03 887,874 $ 5.02
============================= ==========================
Grants in fiscal 2000 include 141,334 options granted to certain senior
managers in exchange for a reduction in cash compensation to the grantees
over a one-year period, with the individual's receiving one option for every
$3.75 of salary reduction. Grants in fiscal 1998 include 485,000 options
granted to certain senior managers in exchange for a reduction in cash
compensation to the grantees over the next two years, with individuals
receiving one option for every $2.00 in aggregate salary reduction over such
two-year period. Cancellations in fiscal 1998 include 516,600 options granted
in fiscal 1997 that were contingent upon the attainment of certain
performance goals.
In connection with the acquisition of Environmental Solutions, Inc.
(ESI) in fiscal 1994, the Company issued warrants to employees of ESI to
purchase shares of common stock, under the same terms and conditions as the
employee stock option plan. In fiscal 2000, warrants to purchase 2,200 shares of
common stock were exercised at $6.63 per share. At June 30, 2000, warrants to
purchase 15,800 shares of common stock at $6.63 per share were outstanding.
52
Since the Company applies the provisions of APB 25 and related
interpretations in accounting for stock options and warrants, no compensation
cost has been recognized in the Company's consolidated statements of operations
for the stock option and warrant plans. Had compensation cost for the stock
option and warrant plans been determined based on the fair value at the grant
date for awards under those plans, consistent with the requirements of Statement
of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, the Company's pro forma net income and earnings per share for the
years ended June 30, 2000, 1999 and 1998 would have been as follows:
YEARS ENDED JUNE 30, 2000 1999 1998
- ---------------------------------------------------------------------------------
Net income, as reported $4,644 $2,447 $1,061
Net income, pro forma 3,507 1,647 903
Earnings per share, as reported:
Basic $ 0.68 $ 0.36 $ 0.16
Diluted 0.65 0.36 0.16
Earnings per share, pro forma:
Basic $ 0.51 $ 0.24 $ 0.13
Diluted 0.49 0.24 0.13
In arriving at the pro forma amounts, the fair value of each option and
warrant grant was estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted average assumptions:
YEARS ENDED JUNE 30, 2000 1999 1998
- ------------------------------------------------------------------------------------
Risk-free interest rate 6.4% 4.7% 5.4%
Expected life 7.5 years 7.5 years 7.4 years
Expected volatility 47% 49% 63%
Expected dividend yield None None None
The weighted average fair value of options and warrants granted during
fiscal 2000, 1999 and 1998 was $5.06, $2.50 and $3.42, respectively.
Note 9. CONTINGENCIES
The Company recently entered into several long-term contracts under its
Exit Strategy-Registered Trademark- program which involve the transfer of
liability from the responsible parties to the Company for remediation of
environmental conditions at a site. In exchange, the responsible parties have
entered into fixed fee contracts with the Company in amounts based on the
estimated costs of remediation. The Company generally assumes the risk for all
remediation costs for pre-existing site conditions and believes that through
in-depth technical analysis, comprehensive cost estimation and creative remedial
approaches as approved by applicable regulatory agencies, it is able to execute
pricing strategies which protect the Company's return on these projects. As
additional protection, the Company obtains remediation cost cap insurance from
rated insurance companies which provides coverage for cost increases arising
from unknown or changed conditions. The
53
Company believes that it is adequately protected from risks on these projects
and that adverse developments, if any, will not have a material impact on the
Company's operating results, financial condition or cash flows.
The Company's contracts with the U.S. Government are subject to
examination and renegotiation. Contracts and other records of the Company have
been examined through June 30, 1993. The Company believes that adjustments
resulting from such examinations or renegotiation proceedings, if any, will not
have a material impact on the Company's operating results, financial condition
or cash flows.
In 1997, the Board of Directors created a Special Committee of outside
board members of the Company to investigate the exercise of stock options by the
former Chairman and the former President, as well as other matters. The Special
Committee conducted its investigation with the assistance of outside counsel and
accountants who had no prior affiliation with the Company, and also consulted
with the Company's independent accountants. The investigation revealed no
circumstances that had any material effect on the Company's historical audited
financial statements. In December 1997, the Company entered into settlement
agreements with those former executive officers. The Company was fully
reimbursed for costs of the investigation and damages incurred. As a result, the
Company recorded income in fiscal 1998 of approximately $900 related to the
settlement.
54
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of TRC Companies, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in shareholders' equity, and
of cash flows present fairly, in all material respects, the financial position
of TRC Companies, Inc. and its subsidiaries at June 30, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended June 30, 2000 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Hartford, Connecticut
August 15, 2000
55
DIRECTORS AND OFFICERS
DIRECTORS
Richard D. Ellison
Chairman, President and Chief Executive Officer
TRC Companies, Inc.
Edward W. Large *
Formerly Executive Vice President
and Director of United
Technologies Corporation
Richard J. McGuire, Jr.
Formerly President of TRC Environmental Corporation and
TRC Mariah Associates, Inc.
J. Jeffrey McNealey *
Partner in the law firm of
Porter, Wright, Morris & Arthur
Edward G. Jepsen *
Executive Vice President and
Chief Financial Officer of
Amphenol Corporation
* Audit Committee Member
OFFICERS
Richard D. Ellison
Chairman, President and Chief Executive Officer
Harold C. Elston, Jr.
Senior Vice President and Chief Financial Officer
John H. Claussen
Senior Vice President
Miro Knezevic
Senior Vice President
Michael C. Salmon
Senior Vice President
Martin H. Dodd
Vice President and General Counsel
Ronald D. Reed
Vice President
56
CORPORATE INFORMATION
EXECUTIVE OFFICES
TRC Companies, Inc.
5 Waterside Crossing
Windsor, CT 06095
(860) 298-9692
Fax: (860) 298-6291
www.trcsolutions.com
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 Pearl Street
Hartford, CT 06103
ANNUAL MEETING
The 2000 annual meeting of shareholders will be held on Friday, October
27, 2000, at 10:00 a.m., at the Company's executive offices.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission, Washington, D.C., is available without
charge by writing to:
TRC Companies, Inc.
5 Waterside Crossing
Windsor, CT 06095
Attn: Investor Relations
STOCK EXCHANGE, DIVIDEND AND MARKET INFORMATION
The Company's common stock is traded on the New York Stock Exchange
under the symbol "TRR".
To date the Company has not paid any cash dividends. The payment of
dividends in the future will be subject to the financial condition, capital
requirements and earnings of the Company. However, future earnings are expected
to be used for expansion of the Company's operations, and cash dividends are not
likely for the foreseeable future.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10005
Shareholders may call the agent's Shareholder Services Department directly
concerning stock certificates and address changes at (800) 937-5449.
57