PRESS RELEASE - NOVEMBER 15, 2004
Home Page | Investor Relations | Transtech Profile | Press Releases | United Environmental Services Profile
TRANSTECH INDUSTRIES, INC. REPORTS
RESULTS
FOR THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 2004
PISCATAWAY, N.J., November 15, 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 and nine month periods ended
September 30, 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
September 30, 2004 were $247,000 versus $213,000 for 2003. Revenues for the electricity generation
segment for the period in 2004 were $100,000 compared to $49,000 in 2003. Net consolidated revenues (after the
elimination of inter-company environmental services sales) for the three months
of 2004 and 2003 were $100,000 and $51,000, respectively.
The cost of operations for the three months ended September 30, 2004 and 2003 were $401,000 and $376,000, respectively. The net increase in expenses was primarily due to increased professional fees and personnel related expenses.
Other net income for the three months
ended September 30, 2004 was $17,000 versus a net expense of $28,000 for
2003. The increase was primarily due to
a reduction in interest accrued on the Company's estimated federal income tax
liability discussed below.
An income tax benefit of $133,000 and $378,000 was recognized for the three months ended September 30, 2004 and 2003, respectively.
On
July 28, 2004 the Company announced the acceptance of the Company’s Offer in
Compromise by the Internal Revenue Service.
The difference between the total payments required under the Offer and
the federal tax and interest obligation previously accrued by the Company has
been reported as an extraordinary gain of $2,332,000 in the Company’s results
for the period ended September 30, 2004.
The gain is not subject to
income tax.
Net
income for the three months ended September 30, 2004 was $2,181,000 or $.73 per
share versus a net income of $25,000 or $.01 per share for 2003.
Gross revenues of
the environmental services segment for the nine months ended September 30, 2004
were $721,000 versus $743,000 for 2003.
Revenues for the electricity generation segment for 2004 were $262,000 versus
$178,000 for 2003. Net consolidated
revenues (after the elimination of inter-company environmental services sales)
for the nine months of 2004 and 2003 were $262,000 and $248,000, respectively.
The cost of operations for the nine months ended September 30, 2004 and 2003 were $1,213,000 and $1,294,000, respectively. The net decrease in expenses was primarily due to the reduction in professional fees and bad debt expense.
Other net expense for the nine months ended September
30,2004 and 2003 were $9,000 and $65,000, respectively. The
decrease was primarily due to increased rental income and a reduction in
interest accrued on the Company's estimated federal income tax liability.
An income tax benefit of $323,000 and $378,000 was recognized for the nine months ended September 30, 2004 and 2003, respectively.
An extraordinary gain of $2,332,000 was recognized in the period for 2004 due to the reduction in federal income taxes and interest payable as a result of the IRS acceptance of the Company’s Offer in Compromise.
Net
income for the nine months ended September 30, 2004 was $1,695,000 or $.57 per
share compared to net loss of $(733,000) or $(.25) per share for 2003.
The previously
mentioned Offer in Compromise was accepted by the United States
Internal Revenue Service (the "IRS")
by letter dated July 21, 2004 and obligates
the Company to pay a total of $2,490,000 in satisfaction of the assessed income
taxes and interest for the years 1980 through 1996 stemming from the
settlements of litigation before the Tax Court. A portion of the amount due, $810,000 was paid during October
2004. The balance due is to be paid in
monthly installments payable over nine years. Interest will not be imposed on
the amount outstanding.
Also 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 losses 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 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, 2004.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of September 30, 2004
(In $000's)
Assets
Cash and cash equivalents $ 1,810
Marketable securities 2,691
Accounts receivable, net of
reserves 336
Refundable income taxes 993
Other current assets 464
Assets held for sale 1,312
Other assets 491
Total assets $ 8,097
Liabilities and Stockholders' Equity
Income taxes payable $ 1,029
Accounts payable and other current
liabilities 1,073
Total current liabilities 2,102
Income taxes payable 1,425
Accrued remediation and closure
costs 2,054
Other liabilities 65
Stockholders' equity 2,451
Total Liabilities and Stockholders' Equity $ 8,097
TRANSTECH
INDUSTRIES, INC.
(In $000's, except per share data)
Ended September 30,
2004 2003
Gross Revenues $ 347 $ 262
Less: Inter-company (247) (211)
Net Revenues 100 51
Cost of operations (401) (376)
Other income (expense) 17
(28)
Income (taxes) credit 133 378
Extraordinary gain (a) 2,332 -
Net income (loss) $ 2,181 $ 25
Income (loss) per common share:
Net income (loss)
$ .73 $ .10
calculation
2,979,190 2,979,190
Ended September 30,
2004 2003
Less: Inter-company (721) (673)
Net Revenues 262 248
Cost of operations (1,213) (1,294)
Other income (expense) (9) (65)
Income (taxes) credit 323 378
Extraordinary gain (a) 2,332 -
Net income (loss) $ 1,695 $ (733)
Income
(loss) per common share:
Net income (loss) $ .57 $ (.25)
Number
of shares used in
calculation 2,979,190 2,979,190
(a) Resulting from reduction of accrued federal income taxes and related interest.
Home Page | Investor Relations | Transtech Profile | Press Releases | United Environmental Services Profile