PRESS RELEASE - MAY 15, 2003
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QUARTER ENDED MARCH 31, 2003
PISCATAWAY, N.J., May 15, 2003 - Robert V. Silva, President and Chief
Executive Officer of Transtech Industries, Inc. (OTC BULLETIN BOARD: TRTI)
announced the results of operations for the quarter ended March 31, 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 quarter ended March 31, 2003 were
$268,000 versus $291,000 for 2002 due to a reduction in services provided at
the Southern Ocean Landfill. Revenues
for the electricity generation segment for 2003 were $65,000 versus no revenues
for 2002. Deferred repairs to the
electricity generation equipment began in May 2002. Net consolidated revenues (after the elimination of inter-company
environmental services sales) were $115,000 for 2003 compared to $138,000 for
2002.
The cost of
operations for the quarter ended March 31, 2003 and 2002 were $455,000 and
$1,143,000, respectively. The cost for
2002 included charges totaling $750,000 for the write-off of certain
receivables, and an increase in professional and legal fees. Increased equipment repair/maintenance and
personnel costs were incurred in 2003.
Other expenses for the quarter ended
March 31, 2003 totaled $15,000. Other
income reported for 2002 of $8,562,000 included
$8,608,000 of proceeds received from the Company's settlement of litigation
against certain of its excess insurance carriers, discussed below, net of
related charges. This category for 2003
and 2002 includes $77,000 and $83,000, respectively, of interest
expense accrued on the Company's estimated federal income tax liability
discussed below.
No provision for taxes was recognized for the quarter ended March 31, 2003 versus a provision of $3,396,000 recognized for 2002.
Net
loss for the quarter ended March 31, 2003 was $355,000, or $0.12 per share,
versus net income of $4,161,000 or $1.40 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 $4.5 million as of March 31, 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 (“NJDEP”) 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
reduced over the winter months, and is expected to begin again in late May
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 has wrote-off
$700,000 of the $1,162,000 owed the Company due primarily to insufficient
tipping fee revenue.
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 quarter ended March 31, 2003.
Transtech Industries, Inc.
And
Subsidiaries
(In $000's)
Assets
Cash and cash equivalents $ 3,588
Marketable securities 3,408
Accounts receivable,
Net of reserves
469
Other current assets 541
Total current assets
8,006
Assets held for sale 1,312
Other assets 499
Total assets $
9,817
Accrued income taxes $ 4,883
Accounts payable and other
current liabilities 1,405
Total current liabilities
6,288
Accrued remediation and
closure costs 2,090
Other liabilities 25
Stockholders' equity 1,414
Total Liabilities and
Stockholders' Equity $
9,817
(In $000's, except per share data)
Ended March 31,
2003 2002
Gross Revenues $ 333 $
291
Less: Inter-company (218) (153)
Net Revenues 115
138
Cost of operations 455 1,143
Income (loss) from
operations
(340) (1,005)
Net proceeds from
insurance claim
- 8,608
Income (taxes) credit - (3,396)
Net income (loss) $ (355)
$4,161
Income (loss) per common share:
Net income (loss) $ (.12) $ 1.40
calculation
2,979,190 2,979,190
(a) - Cost of operations for 2002 includes a charge of $500,000 for the write-off of certain trade receivables.
(b) Other income (expense) for 2002 and 2001 include charges of $77,000 and $83,000, respectively, for interest expense accrued on the estimated federal income tax liability.
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