PRESS RELEASE - NOVEMBER 14, 2005
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TRANSTECH
INDUSTRIES, INC. REPORTS RESULTS
FOR THE
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2005
PISCATAWAY,
N.J., November 14, 2005 - 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, 2005. The Company’s
subsidiaries perform environmental services and generate electricity utilizing
methane gas as fuel.
Revenues for the electricity generation
segment for the three months ended September 30, 2005 and 2004 were $145,000
and $100,000, respectively. The
increase in revenue was due to an increase in rate received per kilowatt
generated. Gross revenues of the
environmental services segment for the period in 2005 and 2004 were $223,000
and $247,000, respectively. The
environmental services provided in both periods were to members of the
consolidated group and therefore eliminated in the calculation of net revenues.
The cost of operations for the three months ended September 30, 2005 and 2004 were $435,000 and $509,000, respectively. The net decrease in expenses was primarily due to a decline in administrative expenses.
Other income for the three months ended September
30, 2005 was $637,000 versus $2,457,000 reported for the period in 2004. The income for 2005 includes $510,000 of
proceeds from claims against excess insurance carriers. The income for 2004 includes a $2,332,000
gain resulting from the reduction in the Company’s federal tax obligation
recognized with IRS acceptance of the Company’s Offer in Compromise.
Income tax expense for the three months ended September 30,
2005, was $189,000 compared to a benefit of $133,000 reported for the period in
2004.
Net income for the three months ended
September 30, 2005 and 2004 was $158,000 or $.05 per share versus $2,181,000 or
$.73 per share, respectively.
Revenues for the electricity generation
segment for the nine months ended September 30, 2005 and 2004 were $296,000 and
$262,000, respectively. The increase in
revenue was due to an increase in the rate received per kilowatt
generated. Gross revenues of the
environmental services segment for the period in 2005 and 2004 were $652,000
and $721,000, respectively. The
environmental services provided in both periods were to members of the
consolidated group and therefore eliminated in the calculation of net revenues.
The cost of operations for the nine months ended September 30, 2005 and 2004 were $1,452,000 and $1,469,000, respectively. Increases in direct operating costs and accretion expense were offset by a decline in administrative expenses.
Other income for the nine months ended September 30,
2005 was $3,324,000 versus $2,579,000 reported for the period in 2004. The
income for 2005 includes proceeds from insurance claims of $3,220,000. The income for 2004 includes the gain from
the reduction in tax obligations discussed above.
Income tax expense for the nine months ended September 30, 2005,
was $836,000 compared to a benefit of $323,000 reported for the period in 2004.
Net income for the nine months ended
September 30, 2005 and 2004 was $1,332,000 or $.45 per share versus $1,695,000
or $.57 per share, respectively.
As previously disclosed, the Company and
SCA Holdings, Inc., an affiliate of Waste Management, Inc, submitted the
dispute regarding SCA's claim against proceeds from the Company's 2001
settlement with certain excess insurance carriers to arbitration. In February
2004, the arbitrator awarded SCA $3.5 million.
The Company filed suit to overturn or amend the award. On October 31, 2005, the Court affirmed the
arbitrator's award. The Company is
currently evaluating an appeal of the Court's ruling. The amount in dispute is held in escrow and is not reflected on
the Company's financial statements; therefore the Court's decision will not
adversely impact the Company's financial statements.
On October 18, 2005 the U.S. District Court for the
District of New Jersey accepted a consent decree that the Company had executed
on December 30, 2004, which resolved the claims brought against the Company and
others by EPA, the New Jersey Department of Environmental Protection and New
Jersey Spill Compensation Fund regarding the Kin-Buc Landfill.
As previously disclosed, the Company
entered into the contract to sell 60 acres of property during May 2001 for $2.1
million. During March 2005, the Company agreed to the Purchaser's request for an
additional extension of the closing date to December 2005 subject to definitive
documentation. Negotiations continue regarding the accommodation
of stormwater run-off, the Company's continued use of the building on the
property post closing, and an additional extension of the closing date due to
the delay in constructing a replacement facility for the Company's machinery and
equipment.
The Company continues to
face significant potential cash requirements for litigation expenses, as well
as ongoing administrative costs, and post-closure costs associated with sites
of past operations. Although the Company
continues to pursue the sale of property held for sale, 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 months ended September 30, 2005. Certain modifications have been made to the historic classification of accounts contained in the Company’s financial statements.
TRANSTECH INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As
of September 30, 2005
(In
$000's)
Assets
Cash
and cash equivalents $ 1,679
Marketable
securities
3,567
Accounts
receivable, net of reserves 50
Refundable
income taxes
1,111
Restricted
escrow accounts
995
Other
current assets 75
Total current assets 7,477
Other
assets 1,781
Total assets $16,197
Liabilities
and Stockholders' Equity
Total
current liabilities
$ 2,752
Income
taxes payable 1,206
Accrued
closure costs
8,849
Other
liabilities 39
Stockholders'
equity
3,351
Total Liabilities and Stockholders'
Equity $16,197
(In
$000's, except per share data)
Ended September 30,
2005 2004
Less:
Inter-company (223) (247)
Net
Revenues
145 100
Cost
of operations (435) (509)
Other
income (expense)(a)
637 2,457
Income
(taxes) benefit (189) 133
Net
income (loss) $ 158 $2,181
Income
(loss) per common share:
Net income (loss) $
.05 $ .73
Number
of shares used in
calculation 2,979,190 2,979,190
Ended September 30,
2005 2004
Less:
Inter-company (652) (721)
Net
Revenues 296 262
Cost
of operations
(1,452) (1,469)
Other
income (expense)(b)
3,324 2,579
Income
(taxes) benefit (836) 323
Net
income (loss) $1,332 $1,695
Income
(loss) per common share:
Net income (loss) $
.45 $ .57
Number
of shares used in
calculation 2,979,190 2,979,190
(a) Amount for 2005 includes
$510,000 of proceeds from insurance claims.
Amount for 2004 includes a $2,332,000 gain from the reduction of income
tax obligations.
(b) Amount for 2005 includes
$3,220,000 of proceeds from insurance claims.
Amount for 2004 includes a $2,332,000 gain from the reduction of income
tax obligations.
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