PRESS RELEASE - MARCH 30, 2004
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TRANSTECH INDUSTRIES, INC. REPORTS RESULTS
FOR THE YEAR ENDED DECEMBER 31,
2003
PISCATAWAY, N.J., March 30, 2004 - Robert V. Silva, President and Chief
Executive Officer of Transtech Industries, Inc. (OTC BULLETIN BOARD:TRTI)
announced the results of operations for the year ended December 31, 2003. The Company’s subsidiaries perform
environmental services and generate electricity utilizing methane gas as fuel.
Gross revenues of
the environmental services segment for the year ended December 31, 2003 were
$961,000 versus $1,306,000 for 2002.
The decline is due to a reduction in services provided on the Southern
Ocean Landfill project. Revenues for
the electricity generation segment for 2003 increased to $228,000 from $70,000
in 2002. The increase is due to the
completion of repairs to generation equipment that began in May 2002. Net consolidated revenues (after the
elimination of inter-company environmental services sales) for 2003 and 2002
were $298,000 and $737,000, respectively.
The cost of operations for the years ended December 31, 2003 and 2002 were $1,642,000 and $2,782,000, respectively. The cost for 2002 includes charges totaling $950,000 for the write-off of a receivable, and an increase in professional fees. The cost for 2003 includes bad debt expense of $56,000. The decrease in cost for 2003 also reflects the reduction in environmental services provided, and reduced personnel costs.
Other net expense for the years ended
December 31, 2003 and 2002 were $173,000 and
$86,000, respectively. Results for 2003 and 2002 include $317,000
and $337,000, respectively, of
interest expense accrued on the Company's estimated federal income tax
liability. The results for 2002 also
includes income of $8,626,000 related to the Company's October 2001 settlement
of litigation against certain of its excess insurance carriers, net of related
charges.
Income tax benefit of $522,000 was recognized for the year ended December 31,2003 versus income tax expense of $2,992,000 reported for 2002.
Net
loss for the year ended December 31, 2003 was $(995,000) or $(.33) per share
versus net income of $3,503,000 or $1.18 per share for 2002.
During February 2002, the Company consummated
an October 2001 settlement of its claims against certain excess insurance
carriers for recovery of past remediation costs that resulted in gross proceeds
to the Company of $13.0 million. As
previously disclosed, the Company agreed that SCA Services, Inc., (“SCA”), a
party to the 1997 settlement of litigation regarding the allocation of
remediation expenses may claim against such proceeds in accordance with the
terms of the agreement. The amount that
may be due was disputed, and the amount in dispute, $3.5 million, was placed in
escrow pending the outcome of the dispute.
The dispute was submitted to arbitration, and resulted in a reward of
$3.5 million to SCA. Ongoing litigation
initiated by the Company in February 2004 seeks to vacate or modify the award.
In October 2000, the Company concluded the litigation with the Tax
Court begun in 1994. The resulting
assessed tax obligations, estimated at $4.7 million as of December 31, 2003,
are now due. The Company submitted an
Offer in Compromise with the Internal Revenue Service that sought a reduction
in the amount due, and a payment plan.
The offer was rejected, and the Company filed an appeal. The Company's offer is now before an appeal
officer. The amount of the Company’s
funds remaining after an immediate payment of the full tax obligations may be
insufficient to satisfy the Company's other contingent obligations and meet its
operating expenses as they come due.
The
Company is a defendant in two suits brought by U.S. Environmental Protection
Agency (“EPA”) regarding two sites, the Kin-Buc Landfill and a site in
Piscataway, N.J. The suits seek
reimbursement of response costs totaling approximately $7.1 million and
penalties totaling approximately $18.1 million. The N.J. Dept. of Environmental Protection initiated a similar
suit regarding the Kin-Buc Landfill in September 2002, seeking unspecified
un-reimbursed response costs and natural resource damage claims.
A
proposed settlement of the suit regarding the Piscataway, N.J. site has been
posted on the Federal Register for public comment. If approved by the court at the end of the comment period, the
Company will pay EPA $100,000 in settlement of its claims.
The
Company has been indemnified by SCA against the response cost and resource
damage portions of the Kin-Buc claims pursuant to the aforementioned 1997
litigation settlement. The Kin-Buc
suits have been stayed pending the outcome of mediation.
There
are no developments to report regarding the September 2002 notice issued by EPA
to the Company and other parties seeking contribution to an estimated $7.2
million cleanup plan for a portion of a site of past operations in Carlstadt,
NJ.
The
Company is unable to predict the outcome of the matters described above or
reasonably estimate a range of possible loss given the current status of the
proceedings. The Company continues to
contest the charges vigorously.
Work on the
capping plan at the Southern Ocean Landfill in Ocean County, New Jersey was
substantially completed in September 2003.
The capping plan utilized recycled materials where possible to cover and
close a portion of the landfill, and to provide tipping fees to fund certain
tasks of the closure. During 2002, the
Company wrote-off $700,000 owed the Company due primarily to insufficient
tipping fee revenue, and reserved an additional $50,000 against amounts owed on
the project in 2003.
The
Company continues to face significant short-term and long-term cash
requirements for its federal and state income tax obligations, as well as
professional and administrative costs, and remediation costs associated with
sites of past operations. Although the
Company continues to pursue the sale of property held for sale and claims
against non-settling insurance carriers for recoveries of past remediation
costs, no assurance can be given that the timing or amount of the proceeds from
such sources will be sufficient to meet the cash requirements of the Company.
This
news release may contain forward-looking statements as defined by federal
securities laws, that are based on current expectations and involve a number of
known and unknown risks, uncertainties and other factors that may cause the
actual results, levels of activity, performance or achievements to differ
materially from results expressed or implied by this press release. Such risks and uncertainties include among
others, the following: general economic and business conditions; the ability of
the Company to implement its business strategy; the Company’s ability to
successfully identify new business opportunities; changes in the industry;
competition; the effect of regulatory and legal proceedings. The forward-looking statements contained in
this news release speak only as of the date of release; and the Company does
not undertake to revise those forward-looking statements to reflect events
after the date of this release.
Presented
below are the consolidated balance sheet and comparative consolidated
statements of operations for the year ended December 31, 2003.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of December 31, 2003
(In $000's)
Assets
Cash and cash equivalents $ 4,322
Marketable securities 971
Accounts receivable, net of
reserves 330
Other current assets 637
Assets held for sale 1,312
Other assets 479
Total assets $ 8,051
Liabilities and Stockholders' Equity
Accrued income taxes $ 4,063
Accounts payable and other current
liabilities 1,117
Total current liabilities 5,180
Accrued remediation and closure costs 2,056
Other liabilities 54
Stockholders' equity 761
Total Liabilities and Stockholders' Equity $ 8,051
TRANSTECH
INDUSTRIES, INC.
(In $000's, except per share data)
Ended December 31,
2003 2002
Gross Revenues $ 1,189 $ 1,376
Less: Inter-company (891) (639)
Net Revenues 298 737
Cost of operations (a) 1,642 2,782
Income (loss) from operations (1,344) (2,045)
Net proceeds from insurance claims - 8,626
Other income (expense) (b) (173) (86)
Income (taxes) benefit 522 (2,992)
Net income (loss) $ (995) $ 3,503
Income (loss) per common share:
Net income (loss)
$ (.33) $ (1.18)
calculation 2,979,190 2,979,190
(a) - Cost of operations for 2003 and 2002 include charges for bad debt expense of $56,000 and $700,000, respectively.
(b) - Other income (expense) for 2003 and 2002 include charges of $317,000 and $337,000, respectively, for interest accrued on the Company's estimated federal income tax liability.
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