PRESS RELEASE - NOVEMBER 14, 2003
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TRANSTECH INDUSTRIES, INC. REPORTS
RESULTS
FOR THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 2003
PISCATAWAY, N.J., November 14, 2003 - Robert V. Silva, President and Chief
Executive Officer of Transtech Industries, Inc. (OTC BULLETIN BOARD:TRTI)
announced the results of operations for the three and nine months ended
September 30, 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 three months ended September 30,
2003 were $213,000 versus $359,000 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 the period in 2003 increased to $49,000 from
$25,000 in 2002. Deferred repairs to
the generation equipment began in May 2002.
Net consolidated revenues (after the elimination of inter-company
environmental services sales) for the three months of 2003 and 2002 were
$51,000 and $237,000, respectively.
The cost of operations for the three months ended September 30, 2003 and 2002 were $376,000 and $545,000, respectively. The cost for 2003 includes a $50,000 charge for an increase in the allowance for doubtful accounts. The decrease in expenses was primarily due to the reduction in services provided, and lower professional and personnel costs.
Other net expense for the three months
ended September 30, 2003 was $28,000 versus income of $12,000 for 2002. Results for 2003 and 2002 include charges of
$81,000 and $85,000, respectively,
for interest accrued on the Company's estimated federal income tax liability
discussed below.
Income tax credits of $378,000 and $111,000 were recognized for the three months ended September 30, 2003 and 2002, respectively.
Net
income for the three months ended September 30, 2003 was $25,000 or $.01 versus
a net loss of $(185,000) or $(.06) per share for 2002.
Gross revenues of
the environmental services segment for the nine months ended September 30, 2003
were $743,000 versus $1,014,000 for 2002.
The decrease reflects the reduction of services at the Southern Ocean
Landfill. Revenues for the electricity
generation segment for 2003 were $178,000 versus $25,000 for 2002. Net consolidated revenues (after the elimination
of inter-company environmental services sales) for the nine months of 2003 and
2002 were $248,000 and $607,000, respectively.
The cost of
operations for the nine months ended September 30, 2003 and 2002 were
$1,294,000 and $2,247,000, respectively. The cost for 2003 includes a $50,000 charge for an increase in the
allowance for doubtful accounts. Costs for 2002
include charges totaling $950,000 for the write-off of certain receivables, and
an increase in professional and legal fees.
Other expense for the nine months ended in 2003 was
$65,000 and $58,000, respectively. Results for 2003 and 2002 include
$235,000 and $249,000, respectively,
of interest expense accrued on the Company's estimated federal income tax
liability. Other income reported for
2002 includes $8,626,000 of proceeds received from the Company's October 2001
settlement of litigation against certain of its excess insurance carriers, net
of related charges.
An income tax credit of $378,000 was recognized for the nine months ended September 30, 2003 versus a provision for income taxes of $3,151,000 for 2002.
Net
loss for the nine months ended September 30, 2003 was $733,000 or $(.25) per
share compared to net income of $3,777,000 or $1.27 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, and resulted in gross proceeds
to the Company of $13.0 million. As
previously disclosed, the Company agreed that 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 1997 settlement
agreement. The amount that may be due
is in dispute, and the amount in dispute, $3.5 million, has been placed in
escrow pending the outcome of the dispute.
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 September 30, 2003,
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 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. The Company has been
indemnified against the response cost portion of the Kin-Buc claims pursuant to
the aforementioned 1997 litigation settlement. Also in September 2002, EPA
issued a notice to the Company and other PRPs 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 three and nine-month periods ended
September 30, 2003.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of September 30, 2003
(In $000's)
Assets
Cash and cash equivalents $ 5,011
Marketable securities 964
Accounts receivable, net of
reserves 327
Other current assets 500
Assets held for sale 1,312
Other assets 530
Total assets $ 8,644
Liabilities and Stockholders' Equity
Accrued income taxes $ 4,040
Accounts payable and other current
liabilities 1,442
Total current liabilities 5,482
Accrued remediation and closure
costs 2,079
Other liabilities 57
Stockholders' equity 1,026
Total Liabilities and Stockholders' Equity $ 8,644
TRANSTECH
INDUSTRIES, INC.
(In $000's, except per share data)
Ended September 30,
2003 2002
Gross Revenues $ 262 $ 384
Less: Inter-company (211) (147)
Net Revenues 51 237
Cost of operations (a) 376 545
Income (loss) from operations (325) (308)
Other income (expense) (b) (28) 12
Income (taxes) credit 378
111
Net income (loss) $ 25 $ (185)
Income (loss) per common share:
Net income (loss)
$ .01 $ (.06)
calculation
2,979,190 2,979,190
(a) - Cost of operations for 2003 includes a charge of $50,000 for an increase in the allowance for doubtful accounts.
(b) - Other income (expense) for 2003 and 2002 include charges of $81,000 and $85,000, respectively, for interest accrued on the Company's estimated federal income tax liability.
Ended September 30,
2003 2002
Gross Revenues $ 921 $ 1,039
Less: Inter-company (673) (432)
Net Revenues 248 607
Cost of operations (a) 1,294 2,247
Income (loss) from operations (1,046) (1,640)
Net proceeds from insurance claims - 8,626
Other income (expense) (b) (65) (58)
Income (taxes) credit 378
(3,151)
Net income (loss) $ (733) $ 3,777
Income (loss) per common share:
Net income (loss)
$ (.25) $ 1.27
calculation
2,979,190 2,979,190
(a) - Cost of operations for 2003 includes a charge of $50,000 for an increase in the allowance for doubtful accounts. Costs for 2002 include a charge of $700,000 for the write-off of certain receivables.
(b) - Other income (expense) for 2003 and 2002 include charges of $235,000 and $249,000, respectively, for interest expense accrued on the Company's estimated federal income tax liability.
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