TRTI Transtech Industries Inc (CE)

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 (the "Court") 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. -0- *T 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 Restricted escrow accounts 6,939 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 ====== CONSOLIDATED STATEMENTS OF OPERATIONS (In $000's, except per share data) For the Three Months Ended September 30, 2005 2004 ---- ---- Gross Revenues $ 368 $ 347 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 For the Nine Months Ended September 30, 2005 2004 ---- ---- Gross Revenues $ 948 $ 983 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. *T