PRESS RELEASE - AUGUST 14, 2003
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TRANSTECH INDUSTRIES, INC. REPORTS
RESULTS
FOR THE THREE AND SIX MONTH PERIODS ENDED
JUNE 30, 2003
PISCATAWAY, N.J., August 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 six months ended June 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 June 30, 2003
declined to $262,000 from $364,000 for 2002 due to a reduction in services
provided at the Southern Ocean Landfill.
Revenues for the electricity generation segment for the period in 2003
were $64,000. This segment reported no
revenues for 2002. Deferred repairs to
the generation equipment began in May 2002.
Net consolidated revenues (after the elimination of inter-company
environmental services sales) were $82,000 for 2003 compared to $232,000 for
2002.
The cost of
operations for the three months ended June 30, 2003 and 2002 were $463,000 and
$559,000, respectively. The cost for
2002 includes a $200,000 charge for the write-off certain receivables. Increased equipment maintenance,
professional fees and personnel costs were incurred in 2003.
Other net expense for the three months
ended June 30, 2003 was $22,000 versus $6,000 for 2002. Results for 2003 and 2002 include charges of
$77,000 and $81,000, respectively,
for interest accrued on the Company's estimated federal income tax liability
discussed below.
No provision for taxes was recognized for the three months ended June 30, 2003 versus an income tax credit of $134,000 for the period in 2002.
Net
loss for the three months ended June 30, 2002 was $(403,000) or $(.13) versus a
net loss of $(199,000) or $(.07) per share for 2001.
Gross revenues of
the environmental services segment for the six months ended June 30, 2003 were
$530,000 versus $655,000 for 2002.
Revenues for the electricity generation segment for 2003 were $129,000. This segment reported no revenues for
2002. Net consolidated revenues (after
the elimination of inter-company environmental services sales) were $197,000
for 2003 compared to $370,000 for 2002, reflecting the reduction of services at
the Southern Ocean Landfill.
The cost of
operations for the six months ended June 30, 2003 and 2002 were $918,000 and
$1,702,000, respectively. Costs for
2002 included charges totaling $950,000 for write-off of certain receivables,
and an increase in professional and legal fees.
Other expense for the six months ended in 2003 was
$37,000 and $52,000, respectively. Results for 2003 and 2002 include
$154,000 and $164,000, respectively,
of interest expense accrued on the Company's estimated federal income tax
liability. Other income reported for
2002 includes $8,608,000 of proceeds received from the Company's October 2001
settlement of litigation against certain of its excess insurance carriers, net
of related charges.
No provision for taxes was recognized for the period in 2003 versus a provision for income taxes of $3,262,000 for the period in 2002.
Net
loss for the six months ended June 30, 2003 was $758,000 or $(.25) per share
compared to net income of $3,962,000 or $1.33 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 $4.6 million as of June 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
(“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. Work
began again in June 2003 and is expected to be 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.
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 six month periods ended
June 30, 2003.
TRANSTECH
INDUSTRIES, INC.
AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEET
As of June 30, 2003
(In $000's)
Assets
Cash and cash equivalents $ 4,228
Marketable securities 1,921
Accounts receivable, net of
reserves 350
Other current assets 623
Total current assets 7,122
Assets held for sale 1,312
Other assets 494
Total
assets $ 8,928
Liabilities and Stockholders' Equity
Accrued income taxes $ 4,338
Accounts payable and other current
liabilities 1,455
Total current liabilities 5,793
Accrued remediation and closure
costs 2,088
Other liabilities 23
Stockholders' equity 1,024
Total Liabilities and Stockholders' Equity $ 8,928
TRANSTECH
INDUSTRIES, INC.
(In $000's, except per share data)
Ended June 30,
2003 2002
Gross Revenues $ 326 $ 364
Less: Inter-company (244) (132)
Net Revenues 82 232
Cost of operations (a) 463 559
Income (loss) from operations (381) (327)
Other income (expense) (b) (22) (6)
Income (taxes) credit - 134
Net income (loss) $ (403) $ (199)
Income (loss) per common share:
Net income (loss)
$ (.13) $ (.07)
calculation 2,979,190 2,979,190
(a) - Cost of operations for 2002 includes a charge of $200,000 for the write-off of certain receivables.
(b) - Other income (expense) for 2003 and 2002 include charges of $77,000 and $81,000, respectively, for interest accrued on the Company's estimated federal income tax liability.
Ended June 30,
2003 2002
Gross Revenues $ 659 $ 655
Less: Inter-company (462) (285)
Net Revenues 197 370
Cost of operations (a) 918 1,702
Income (loss) from operations (721) (1,332)
Net proceeds from insurance claims - 8,608
Other income (expense) (b) (37) (52)
Income (taxes) credit - (3,262)
Net income (loss) $ (758) $ 3,962
Income (loss) per common share:
Net income (loss)
$ (.25) $ 1.33
calculation
2,979,190 2,979,190
(a) - Cost of operations for 2002 includes a charge of $700,000 for the write-off of certain receivables.
(b) - Other income (expense) for 2003 and 2002 include charges of $154,000 and $164,000, respectively, for interest expense accrued on the Company's estimated federal income tax liability.
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