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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 1-9947
TRC COMPANIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-0853807
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5 WATERSIDE CROSSING
WINDSOR, CONNECTICUT 06095
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (860) 298-9692
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK, $.10 PAR VALUE NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
The aggregate market value of the registrant's common stock held by
non-affiliates on September 10, 2001, was approximately $227,500,000.
On September 10, 2001, there were 7,504,341 shares of Common Stock of
the registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the following documents are incorporated by reference into
this Report: (1) registrant's 2001 Annual Report to Shareholders (Part II); and
(2) registrant's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held November 15, 2001 (Part III).
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PART I
ITEM 1. BUSINESS
TRC Companies, Inc. (the Company), together with its wholly-owned subsidiaries
and equity investments, provides technical, financial risk management and
construction services to industry and government primarily in the United States
market. Traditionally much of the Company's work was derived from the
environmental service business and was related to satisfying local, state and
federal regulatory requirements. In early 1998, new TRC management initiated a
growth plan directed toward maintaining the traditional business while
increasing growth by also focusing on economically driven markets. The Company
provides services to its customers in the following business areas:
TECHNICAL SERVICES - This business sector encompasses the Company's engineering,
scientific and technical services to its traditional markets and customers for
environmental management, infrastructure development and information management.
These areas have been the Company's historic focus and they serve as the
foundation for the Company's higher growth markets of Energy (Power) and Exit
Strategy(R) discussed below.
Environmental services provided by the Company include pollution control, waste
management, auditing and assessment, permitting and compliance, design and
engineering and natural and cultural resources management. The Company has
particular expertise in air quality, emissions control and monitoring and in the
investigation and cleanup of environmentally impaired sites. While these
services are generally required by the Company's customers for compliance with
federal, state and local environmental laws, the Company is experiencing an
increase in its business due to the rehabilitation of older business processes
to increase efficiency and productivity and the redevelopment of former
industrial properties to meet changing urban demographic patterns. The Company
believes these economically motivated projects will continue to provide
opportunities to expand and grow its traditional environmental business.
The Company's infrastructure development business targets: (1) growing
geographic areas where new infrastructure improvements are required to keep pace
with population growth; and (2) older areas where rehabilitation of aging or
inadequate infrastructure elements remain a primary focus of public spending for
both community improvement and economic stimulus. These improvements include
public infrastructure elements such as roads, bridges, water resources and waste
water treatment and to a lesser degree, private real estate development projects
for industrial, commercial and residential uses.
The Company's services in the environmental and infrastructure market generate
large amounts of useful data which require customized information management
systems. To meet this need, the Company assists its customers in analyzing its
data management requirements and designing and building software and hardware
solutions for cost effective information management systems. This includes the
use of both private intranets and the public Internet to provide the information
across customer and non-customer locations.
ENERGY (POWER) - Building upon its experience in providing environmental
services to the power generation industry, the Company has developed into a
leading provider of power plant siting and environmental permitting services to
the growing market of independent power producers (IPPs) who have emerged in the
wake of energy deregulation. These services are also provided to the owners and
operators of the natural gas and other fossil fuel pipelines that will supply
these new power plants. The Company believes the need for both power plants and
energy supply pipelines will continue to grow in the next several years and that
the Company is well positioned to provide the services needed to site and
support their construction.
In recognition that power demand will continue to outpace supply, causing the
cost of power to increase and the reliability of the grid during critical
periods to decrease, the Company has expanded its power market services from the
supply side of power generation and distribution to the demand side by
developing capabilities in energy conservation engineering, consulting and
construction and in on-site power generation. As the availability of cheap,
reliable electrical power diminishes, industrial and commercial users are
implementing changes to their facilities to maximize their energy efficiencies.
In addition, because the peak power demands of these facilities, which occur
over relatively shorter periods of time, drive the cost of all of their power
usage, customers are looking to meet these peak requirements with small, on-site
generators. The Company helps its customers
1
determine the need for and the proper application of these units and in
obtaining the land use (zoning) and environmental (air emissions) approvals to
build them.
EXIT STRATEGY(R) - In 1996, the Company developed an exclusive, innovative
method for its customers to outsource their environmental compliance obligations
to the Company. The Company's Exit Strategy program provides its customers with
a cost effective alternative to managing their non-core business activities.
This is especially attractive to customers in the following situations:
o MERGERS, ACQUISITIONS AND DIVESTITURES - In many instances,
the risk associated with prior environmental contamination at
a facility can seriously erode the market price for that
facility because neither the buyer nor seller wish to assume
that risk. By conducting thorough due diligence to quantify
the risk and by structuring comprehensive insurance coverage,
the Company is able to step in, assume the cleanup obligations
and thereby facilitate the sale of the property or business.
In this manner, the seller is able to obtain market price and
the buyer can protect itself against future costs for
environmental issues associated with past ownership practices.
More importantly, the transaction, which is often of far
greater value to both parties than the eventual cost of the
environmental issue, is completed.
o DISCONTINUED OPERATIONS - Many times when a customer closes a
facility, it must spend significant time and effort in
managing the environmental cleanup. This activity not only
serves as a distraction away from the customer's on-going
business, but it is also in a highly complex technical field
that few customers can support or perform with their own
employees. By turning these sites over to the Company, its
customers are able to free up management resources to focus on
core business activities and recognize a fixed, liquidated
liability amount for the closure. This latter benefit is
important because the company must recognize the total
expected cost of closure but, in many instances, it cannot
estimate its future environmental liability.
o MULTI-PARTY SUPERFUND SITES - When an owner/operator of a
waste disposal facility becomes insolvent, its customers must
pay for the costs of cleanup. The federal statute that assigns
this liability is known as "Superfund," and many states have
similar laws. Under the Exit Strategy program, the Company
provides these customers with an expedited method to fix their
estimated cost of liability by the Company's assumption of the
cleanup risk responsibility. This is a far cheaper alternative
for the Company's customers because it avoids the legal and
administrative cost of forming and managing the collective
group of the facility's former customers. (The government has
estimated that these expenses can add up to 40% of the cost of
the cleanup.) This also benefits the public because the
Company is able to complete the cleanup faster by avoiding the
legal and management entanglements that characterize
traditional Superfund projects.
o BROWNFIELDS REAL ESTATE DEVELOPMENT - The redevelopment of
environmentally contaminated property is commonly referred to
as "brownfields" redevelopment. The Company has, on occasion,
purchased contaminated property from its customers and is in
the process of cleaning up these properties to increase their
market value for eventual sale or redevelopment. The Company
does not actively pursue these sites on its own because of the
high capital demands and the longer investment cycle necessary
to recognize profit. Instead, the Company generally teams with
a developer or real estate partner who brings the capital and
real estate expertise necessary to realize the property's
economic potential. Because the Company brings it expertise in
managing the cleanup to the venture, both parties contribute
and profit according to their relative strengths.
The Company is recognized as a leader in the Exit Strategy market and the
Company expects the market for these projects to continue to grow at a rapid
pace. Accordingly, the Company is building its staff and capabilities to meet
the expected increased demand.
2
CUSTOMERS
The Company's customers include companies in the chemical, automotive,
petroleum, construction, transportation, mining, waste management and other
industries, financial institutions, public utilities, and local, state and
federal government agencies. Many of the Company's commercial customers are
major multinational corporations. The following customers are representative of
the Company's customers:
AES Enterprises General Motors Southern Energy
ASARCO Hanson PLC Tosco
Burlington Northern Santa Fe RR Lockheed Martin Corporation The Trump Organization
Cisco Systems Meridian Gold U. S. Government
City of Frisco, Texas New York City - EPA
Connecticut Resources Recovery - School Construction Authority - DOD
Authority - Department of Parks - FAA
Consolidated Edison - Department of Transportation Unocal
Duke Energy New York State Dept. of Transportation Waste Management
Exxon/Mobil Orange County, CA
Express Pipeline PG & E National Energy Group
General Electric Sentex Corporation
For fiscal 2001, 2000 and 1999, the federal government (principally the U.S.
Environmental Protection Agency and the U. S. Department of Defense) accounted
for 7%, 9% and 19%, respectively, of the Company's net service revenue. No other
customer represented 10% or more of the Company's net service revenue in any of
those years.
MARKETING AND SALES
The Company believes that it attracts customers primarily on the basis of its
reputation for providing value-added and cost-effective solutions to customer
needs and its ability to respond to meet customer schedules. The marketing
activities for the Company's services are generally conducted by senior
professional staff members and executives (seller-doers) who are recognized
experts in our business areas and regularly meet with existing and potential
customers to obtain new business. These activities are typically conducted
through the Company's network of regional resource centers for local customers
and by business sector leaders for national customers. In addition, corporate
and subsidiary marketing departments coordinate representation at trade shows,
prepare sales literature and develop and place advertising.
BACKLOG
At June 30, 2001, the Company's net contract backlog (excluding the estimated
costs of pass-through charges) was approximately $160 million, as compared to
approximately $80 million at June 30, 2000. The Company expects that
approximately 60% of this backlog will be completed in fiscal 2002. In addition
to this net contract backlog, the Company holds open order contracts from
various customers and government agencies. As work under these contracts is
authorized and funded, the Company includes this portion in its net contract
backlog. While most contracts contain cancellation provisions, the Company is
unaware of any material work included in backlog which will be canceled or
delayed.
EMPLOYEES
As of June 30, 2001, the Company had approximately 1,200 full and part-time
employees. Approximately 85% of these employees are primarily engaged in
performing environmental and infrastructure engineering and consulting,
financial risk management, construction management and information management
services for customers. Many of these employees have master's degrees or their
equivalent and a number have Ph.D. degrees. The Company's professional staff
includes program managers, professional engineers and scientists, construction
specialists, computer programmers, systems analysts, attorneys and others with
degrees and experience that enables the Company to provide a diverse range of
services. The balance of the Company's employees are engaged primarily in
executive, administrative and support activities. None of the Company's
employees are represented by a union. The Company considers its relations with
its employees to be very good.
3
COMPETITION
The markets for many of the Company's services are highly competitive. There are
numerous professional architectural, engineering and consulting firms and other
organizations which offer many of the services offered by the Company. The
Company is subject to direct competition with respect to the services it
provides from many other firms, ranging from small local firms to large national
firms having substantially greater financial, management and marketing resources
than the Company. Competitive factors include reputation, performance, price,
geographic location and availability of technically skilled personnel.
However, the majority of the Company's work is repeat orders from long-term
customers because the Company focuses on market areas where it can be a leading
provider due to staff skills, reputation, financial strength and/or geographic
presence. For example, the Company believes that it is one of the top 2 or 3
providers of permitting services for the large deregulated energy business.
Further, the Company appears to be the market leader in providing complete
outsourcing of site remediation services through its Exit Strategy program.
GOVERNMENT CONTRACTS
The Company has contracts with the U.S. Government which are subject to
examination and renegotiation. Contracts and other records of the Company have
been examined through June 30, 1996. The Company believes that adjustments
resulting from such examination or renegotiation proceedings, if any, will not
have a material impact on the Company's operating results, financial condition
or cash flows.
REGULATORY MATTERS
The Company's businesses are subject to various rules and regulations at the
federal, state and local government levels. The Company believes that it is in
compliance with these rules and regulations. The Company has the appropriate
licenses to bid and perform work in the locations in which it operates. The
Company has not experienced any significant limitations on its business as a
result of regulatory, bonding or insurance requirements. The Company does not
believe any changes in law or changes in industry practice would impose
conditions to bidding on future projects.
PATENTS, TRADEMARKS AND LICENSES
The Company has a number of trademarks, service marks, copyrights and licenses,
none of which are considered material to the Company's business as a whole.
ENVIRONMENTAL AND OTHER CONSIDERATIONS
The Company does not believe that its compliance with federal, state and local
laws and regulations relating to the protection of the environment will have any
material effect on capital expenditures, earnings or competitive position.
ITEM 2. PROPERTIES
The Company provides its services through a network of 42 offices located
nationwide and an office in Lima, Peru. The Company does not own any real estate
and leases approximately 320,000 square feet of office and laboratory space to
support these operations. These leased properties are adequately maintained and
are suitable and adequate for the business activities conducted therein.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are not a party to any pending legal
proceedings in which an adverse decision, in the opinion of the Company, would
have a material adverse effect upon the Company.
4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information on "Market for the Registrant's Common Equity and Related
Stockholder Matters" is contained on pages 8 and 25 of the Company's 2001 Annual
Report to Shareholders and such information is incorporated herein by reference.
On September 10, 2001, there were approximately 4,400 holders of the Company's
common stock, of which 328 were shareholders of record.
ITEM 6. SELECTED FINANCIAL DATA
The following table provides summarized information with respect to the
operations of the Company.
Statements of Operations, years ended June 30, 2001 2000 1999 1998 (1) 1997 (1)
------------------------------------------------------------------------------------------------------------------------
Gross revenue $181,473 $117,131 $78,223 $72,570 $68,506
Less subcontractor costs and direct charges 57,271 32,323 20,890 19,861 17,718
-------- -------- ------- ------- -------
Net service revenue 124,202 84,808 57,333 52,709 50,788
-------- -------- ------- ------- -------
Operating costs and expenses:
Cost of services 100,587 70,619 48,073 45,120 44,270
General and administrative expenses 3,909 2,991 2,462 2,451 3,565
Depreciation and amortization 3,771 2,917 2,468 2,702 2,789
-------- -------- ------- ------- -------
108,267 76,527 53,003 50,273 50,624
-------- -------- ------- ------- -------
Income from operations 15,935 8,281 4,330 2,436 164
Interest expense 1,541 1,024 507 725 829
-------- -------- ------- ------- -------
Income (loss) before taxes 14,394 7,257 3,823 1,711 (665)
Federal and state income tax provision (benefit) 5,409 2,613 1,376 650 (160)
-------- -------- ------- ------- -------
Net income (loss) $ 8,985 $ 4,644 $ 2,447 $ 1,061 $ (505)
======== ======== ======= ======= =======
Earnings (loss) per share:
Basic $ 1.24 $ 0.68 $ 0.36 $ 0.16 $ (0.07)
Diluted 1.13 0.65 0.36 0.16 (0.07)
======== ======== ======= ======= =======
Average shares outstanding:
Basic 7,236 6,845 6,782 6,715 6,741
Diluted 7,956 7,190 6,839 6,726 6,747
======== ======== ======= ======= =======
Cash dividends declared None None None None None
======== ======== ======= ======= =======
Balance Sheets at June 30,
Total assets $127,672 $ 94,208 $66,072 $61,604 $62,290
-------- -------- ------- ------- -------
Debt 15,005 21,300 7,900 7,500 11,000
-------- -------- ------- ------- -------
Shareholders' equity 69,975 54,448 46,988 44,455 42,844
======== ======== ======= ======= =======
(1) Includes results of Company's instrumentation business that was sold in
July 1998. The sale resulted in a gain that was not material.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" is contained on pages 9 through 11 of the Company's 2001 Annual
Report to Shareholders and such information is incorporated herein by reference.
5
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Consolidated Financial Statements of TRC Companies, Inc. and
Report of Independent Accountants set forth on pages 12 through 23 of the
Company's 2001 Annual Report to Shareholders are incorporated herein by
reference:
Consolidated Statements of Operations, Cash Flows and Changes in
Shareholders' Equity - Years ended June 30, 2001, 2000 and 1999
Consolidated Balance Sheets - June 30, 2001 and 2000
Notes to Consolidated Financial Statements
Report of Independent Accountants
The supplementary data regarding quarterly results of operations is contained on
page 8 of the Company's 2001 Annual Report to Shareholders and such information
is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
6
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information on the Company's Directors and Executive Officers is contained on
pages 3 through 9 of the Company's Proxy Statement for its 2001 Annual Meeting
of Shareholders to be held November 14, 2001, and such information is
incorporated herein by reference.
The following table presents the name and age of each of the Company's executive
officers, their present positions with the Company and date of appointment
thereto, and other positions held during the past five years, including
positions held with other companies and with subsidiaries of the Company:
PRESENT POSITION AND OTHER POSITIONS HELD
NAME AND AGE DATE OF APPOINTMENT DURING LAST FIVE YEARS
------------ -------------------- ----------------------
John H. Claussen..........(52) Senior Vice President, TRC Senior Vice President and General
Companies, Inc. and President, TRC Counsel
Environmental Corporation (February
1997)
Martin H. Dodd............(48) Vice President, General Counsel and Vice President and Deputy General
Secretary (February 1997) Counsel
Richard D. Ellison........(62) Chairman, President and Chief Senior Vice President and Chief Engineer
Executive Officer (April 1997)
Harold C. Elston, Jr......(57) Senior Vice President (March 1998), Vice President and Treasurer
Chief Financial Officer (May 1999)
Glenn E. Harkness.........(53) Senior Vice President, TRC Vice President, TRC Environmental
Environmental Corporation Corporation
(September 1997)
Miro Knezevic.............(52) Senior Vice President, TRC
Companies, Inc. (August 1998),
Executive Vice President, TRC
Environmental Solutions, Inc.
(March 1994)
Michael C. Salmon.........(46) Senior Vice President, TRC General Manager, Southern California
Companies, Inc. (June 2000), Senior Region, IT Corporation
Vice President, TRC Environmental
Solutions, Inc. (April 1997)
NO FAMILY RELATIONSHIP EXISTS BETWEEN ANY OF THE INDIVIDUALS NAMED ABOVE.
7
ITEM 11. EXECUTIVE COMPENSATION
Information on "Executive Compensation" is contained on pages 6 through 9 of the
Company's Proxy Statement for its Annual Meeting of Shareholders to be held
November 14, 2001, and such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information on "Security Ownership of Certain Beneficial Owners and Management"
is contained on pages 2 through 5 of the Company's Proxy Statement for its
Annual Meeting of Shareholders to be held November 14, 2001, and such
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information on "Certain Relationships and Related Transactions" is contained on
page 13 of the Company's Proxy Statement for its Annual Meeting of Shareholders
to be held November 14, 2001 and such information is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS AND SCHEDULE
1. The Consolidated Financial Statements and Report of Independent
Accountants set forth on pages 12 through 23 of the Company's 2001
Annual Report to Shareholders are incorporated by reference into
this report by Item 8 herein.
2. The Consolidated Financial Statement Schedule and Report of
Independent Accountants on such schedule are included in this
report on the pages indicated.
PAGE
Report of Independent Accountants on Financial
Statement Schedule 11
Schedule II - Valuation and Qualifying Accounts 12
All other schedules are omitted because they are not applicable,
not required or the information required is included in the
financial statements or notes thereto.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the fourth
quarter of fiscal 2001.
(c) EXHIBITS
3.1 Restated Certificate of Incorporation, dated November 18,
1994, incorporated by reference to the Company's Form 10-K for
the fiscal year ended June 30, 1995.
3.2 Bylaws of the Company, as amended, incorporated by reference
to the Company's Form S-1 as filed on April 16, 1986,
Registration No. 33-4896.
10.1 Restated Stock Option Plan, dated May 6, 1998, incorporated by
reference to the Company's Form 10-K for the year ended June
30, 1998.
8
10.2.1 Termination Policy for Members of TRC Key Person Group, as
adopted on December 1, 1998, incorporated by reference to the
Company's Form 10-K for the fiscal year ended June 30, 1999.
10.2.2 TRC Key Person Bonus Plan for Fiscal Years 1999 - 2003, as
adopted on March 22, 1999, incorporated by reference to the
Company's Form 10-K for the fiscal year ended June 30, 1999.
10.3 Third Amended and Restated Revolving Credit Agreement, by and
among TRC Companies, Inc. and its subsidiaries and Fleet
National Bank (formerly BankBoston, N.A.) dated July 10, 1998,
incorporated by reference to the Company's Form 10-K for the
year ended June 30, 1998.
10.3.1 Amendment No. 1 to the Third Amended and Restated Revolving
Credit Agreement, by and among TRC Companies, Inc. and its
subsidiaries and Fleet National Bank (formerly BankBoston,
N.A.) dated July 1, 1999 incorporated by reference to the
Company's Form 10-K for the year ended June 30, 1999.
10.3.2 Amendment Nos. 2 and 3 to the Third Amended and Restated
Revolving Credit Agreement by and among TRC Companies, Inc and
its subsidiaries and Fleet National Bank, dated March 14, 2000
and May 19, 2000, respectively, incorporated by reference to
the Company's Form 10-K for the fiscal year ended June 30,
2000.
13 Annual Report to Shareholders for the fiscal year ended June
30, 2001. (Only those portions expressly incorporated by
reference are deemed to be filed herewith.)
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
As to any security holder requesting a copy of this Form 10-K, the Company will
furnish any exhibit indicated above as being filed with the Form 10-K.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TRC COMPANIES, INC.
Dated: October 9, 2001 By: /s/ RICHARD D. ELLISON
-------------------------------
Richard D. Ellison, Ph.D., P.E.
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
/s/ Richard D. Ellison Chairman, President and October 9, 2001
-------------------------------------- Chief Executive Officer
Richard D. Ellison
/s/ Edward G. Jepsen Director October 9, 2001
--------------------------------------
Edward G. Jepsen
/s/ Edward W. Large Director October 9, 2001
--------------------------------------
Edward W. Large
/s/ J. Jeffrey McNealey Director October 9, 2001
--------------------------------------
J. Jeffrey McNealey
/s/ Harold. C. Elston, Jr. Senior Vice President and October 9, 2001
-------------------------------------- Chief Financial Officer
Harold C. Elston, Jr.
10
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Shareholders and Board of Directors
of TRC Companies, Inc.
Our audits of the consolidated financial statements referred to in our report
dated October 9, 2001, appearing on page 23 of the 2001 Annual Report to
Shareholders of TRC Companies, Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
/s/PricewaterhouseCoopers LLP
Hartford, Connecticut
October 9, 2001
11
TRC COMPANIES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(IN THOUSANDS)
Additions
-------------------------------
Balance at Charged to Charged to Balance at
beginning costs and Other end of
Description of period expenses accounts* Deductions** period
---------------------------------- ----------- ------------ --------------- -------------- ----------
2001
Allowance for doubtful accounts $3,205 $2,312 $231 $(1,464) $4,284
------ ------ ---- ------- ------
2000
Allowance for doubtful accounts $2,546 $2,934 $223 $(2,498) $3,205
------ ------ ---- ------- ------
1999
Allowance for doubtful accounts $2,375 $ 725 $200 $ (754) $2,546
------ ------ ---- ------- ------
* Allowances from acquired businesses.
** Uncollectable accounts written off, net of recoveries.
12
TRC COMPANIES, INC.
Form 10-K Exhibit Index
Fiscal Year Ended June 30, 2001
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
13 Annual Report to Shareholders for the fiscal year 14
ended June 30, 2001
21 Subsidiaries of the Registrant 40
23 Consent of Independent Accountants 41
13