PRESS RELEASE - AUGUST 13, 2004
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TRANSTECH INDUSTRIES, INC. REPORTS
RESULTS
FOR THE THREE AND SIX MONTH PERIODS ENDED
JUNE 30, 2004
PISCATAWAY, N.J., August 13, 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 six months ended June 30,
2004. The Company’s subsidiaries
perform environmental services and generate electricity utilizing methane gas
as fuel.
On
July 28, 2004 the Company announced the acceptance of the Company’s Offer in
Compromise by the IRS. The gain that
will be recognized as a result of the corresponding reduction in the federal
tax and interest payable has not been included in the results for this period as
previously announced, but will be reported in the Company’s results for the
period ended September 30, 2004. The
gain, estimated at approximately $2.3 million, represents the difference
between the total payments required under the Offer and the federal tax
obligation accrued by the Company. The
gain is not subject to income tax.
Gross
revenues of the environmental services segment for the three months ended June
30, 2004 were $229,000 versus $262,000 for 2003. Revenues for the electricity generation segment for the period in
2004 increased to $99,000 from $64,000 in 2003. Net consolidated revenues (after the elimination of inter-company
environmental services sales) for the three months of 2004 and 2003 were
$99,000 and $82,000, respectively.
The cost of operations for the three months ended June 30, 2004 and 2003 were $414,000 and $463,000, respectively. The net decrease in expenses was primarily due to the reduction in professional fees and related costs.
Other net expense for the three months
ended June 30, 2004 was $1,000 versus $22,000 for 2003. The decrease reflects increased rental
income and a reduction in interest accrued on
the Company's estimated federal income
tax liability discussed below.
An income tax benefit of $68,000 was recognized for the three months ended June 30, 2004. Neither expense nor benefit was reported for the period in 2003.
Net
loss for the three months ended June 30, 2004 was $(248,000) or $(.08) per
share versus a net loss of $(403,000) or $(.13) per share for 2003.
Gross revenues of
the environmental services segment for the six months ended June 30, 2004 were
$474,000 versus $530,000 for 2003.
Revenues for the electricity generation segment for 2004 were $162,000
versus $129,000 for 2003. Net
consolidated revenues (after the elimination of inter-company environmental
services sales) for the six months of 2004 and 2003 were $162,000 and $197,000,
respectively.
The cost of operations for the six months ended June 30, 2004 and 2003 were $812,000 and $918,000, respectively. The net decrease in expenses was primarily due to the reduction in professional fees and related costs.
Other expense for the six months ended June 30,2004 and
2003 were $26,000 and $37,000, respectively.
The decrease
reflects increased rental income and a reduction in interest accrued on the
Company's estimated federal income tax liability discussed below.
An income tax benefit of $190,000 was recognized for the six months ended June 30, 2004. Neither expense nor benefit was reported for the period in 2003.
Net
loss for the six months ended June 30, 2004 was $(486,000) or $(.16) per share
compared to net loss of $(758,000) 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 payment, $810,000 is due within ninety days of
the Service’s acceptance of the Offer.
The balance due is to be paid in monthly installments payable over nine
years. Interest will not be imposed on
the amount payable pursuant to the Offer.
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 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 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 six-month periods ended
June 30, 2004.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of June 30, 2004
(In $000's)
Assets
Cash and cash equivalents $ 2,640
Marketable securities 2,095
Accounts receivable, net of reserves 335
Refundable income taxes 868
Other current assets 456
Assets held for sale 1,312
Other assets 468
Total assets $ 8,174
Liabilities and Stockholders' Equity
Accrued income taxes $ 1,077
Accounts payable and other current
liabilities 942
Total current liabilities 2,019
Accrued income taxes 3,788
Accrued remediation and closure
costs 2,054
Other liabilities 45
Stockholders' equity 268
Total Liabilities and Stockholders' Equity $ 8,174
TRANSTECH
INDUSTRIES, INC.
(In $000's, except per share data)
Ended June 30,
2004 2003
Gross Revenues $ 328 $ 326
Less: Inter-company (229) (244)
Net Revenues 99 82
Cost of operations 414 463
Income (loss) from operations (315)
(381)
Other income (expense) (1) (22)
Income (taxes) credit 68 -
Net income (loss) $ (248) $ (403)
Income (loss) per common share:
Net income (loss)
$ (.08) $ (.13)
calculation
2,979,190 2,979,190
Ended June 30,
2004 2003
Less: Inter-company (474) (462)
Net Revenues 162 197
Cost of operations 812 918
Income (loss) from operations (650) (721)
Other income (expense) (26) (37)
Income (taxes) credit 190 -
Net income (loss) $ (486) $ (758)
Income
(loss) per common share:
Net income (loss) $ (.16) $ (.25)
Number
of shares used in
calculation 2,979,190 2,979,190
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