PRESS RELEASE - MAY 17, 2004
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TRANSTECH INDUSTRIES, INC. REPORTS RESULTS
FOR THE THREE MONTHS ENDED MARCH 31,
2004
PISCATAWAY, N.J., May 17, 2004 - Robert V. Silva, President and Chief
Executive Officer of Transtech Industries, Inc. (OTC BULLETIN BOARD:TRTI)
announced the results of operations for the three months ended March 31,
2004. The Company’s subsidiaries
perform environmental services and generate electricity utilizing methane gas
as fuel.
Gross revenues of
the environmental services segment for the three months ended March 31, 2004
were $245,000 versus $268,000 for 2003.
The decline is primarily due to the substantial completion of the
Company’s services at the Southern Ocean Landfill. Revenues for the electricity generation segment for the period in
2004 were $63,000 versus $65,000 in 2003.
Net consolidated revenues (after the elimination of inter-company
environmental services sales) for the three months of 2004 and 2003 were
$63,000 and $115,000, respectively.
The cost of operations for the three months ended March 31, 2004 and 2003 were $398,000 and $455,000, respectively. The decrease in expenses was primarily due to the reduction in environmental services provided to third parties, and a decrease in professional fees.
Other net expense for the three months
ended March 31, 2004 was $25,000 versus $15,000 for 2003. Results for 2004 and 2003 include charges of
$58,000 and $77,000, respectively,
for interest accrued on the Company's estimated federal income tax liability
discussed below.
Income tax benefit of $122,000 was recognized for the three months ended March 31, 2004. Neither income tax expense nor benefit was recognized for 2003.
Net
loss for the three months ended March 31, 2004 was $(238,000) or $(.08) versus
a net loss of $(335,000) or $(.12) per share for 2003.
In October 2000, the Company concluded the litigation
with the Tax Court begun in 1994. The
resulting assessed tax obligations, estimated at $4.8 million as of March 31,
2004, are now due. The Company is
pursuing a reduction in the amount due, and a payment plan, for these obligations
through the Offer in Compromise procedure.
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.
As previously announced, the Company is a defendant in a suit
brought by U.S. Environmental Protection Agency (“EPA”) regarding the Kin-Buc
Landfill. EPA seeks reimbursement of
response costs totaling approximately $4.2 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.
The Company has been indemnified against the non-penalty portions of the
Kin-Buc claims pursuant to a 1997 litigation settlement. Also in September
2002, EPA issued a notice to the Company and other PRPs seeking a total of $9.5
million for reimbursement of past costs and contribution to the cleanup plan
for a portion of a site of past operations located 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.
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 three months ended March 31, 2004.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of March 31, 2004
(In $000's)
Assets
Cash and cash equivalents $ 4,052
Marketable securities 979
Accounts receivable, net of
reserves 329
Other current assets 641
Assets held for sale 1,312
Other assets 470
Total assets $ 7,783
Liabilities and Stockholders' Equity
Accrued income taxes $ 4,008
Accounts payable and other current
liabilities 1,149
Total current liabilities 5,157
Accrued remediation and closure
costs 2,054
Other liabilities 49
Stockholders' equity 523
Total Liabilities and Stockholders' Equity $ 7,783
(In $000's, except per share data)
Ended March 31,
2004 2003
Gross Revenues $ 308 $ 333
Less: Inter-company (245) (218)
Net Revenues 63 115
Cost of operations 398 455
Income (loss) from operations (335) (340)
Other income (expense) (a) (25) (15)
Income (taxes) credit (122) -
Net income (loss) $ (238) $ (335)
Income (loss) per common share:
Net income (loss)
$ (.08) $ (.12)
calculation
2,979,190 2,979,190
(a) - Other income (expense) for 2004 and 2003 include charges of $58,000 and $77,000, respectively, for interest accrued on the Company's estimated federal income tax liability.
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