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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended June 30, 1998
Commission file number 1-9947
TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
(Full title of the plan)
TRC COMPANIES, INC.
(Name of issuer of securities held pursuant to the plan)
5 Waterside Crossing
Windsor, Connecticut 06095
(Address of principal executive offices)
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TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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FINANCIAL STATEMENTS:
<S>
<C>
Report of Independent Accountants .............................................................. 3
Statement of Net Assets Available for Benefits at
June 30, 1998 and 1997 ....................................................................... 4
Statement of Changes in Net Assets Available for Benefits for the
Years Ended June 30, 1998 and 1997 ........................................................... 5
Notes to Financial Statements .................................................................. 6
ADDITIONAL INFORMATION: *
Schedule of Assets Held for Investment Purposes at
June 30, 1998 (Schedule I) ................................................................... 11
Schedule of Reportable Transactions for the Year Ended
June 30, 1998 (Schedule II) .................................................................. 12
Consent of Independent Accountants ............................................................. 13
Signature ...................................................................................... 14
</TABLE>
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* Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
2
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Report of Independent Accountants
To the Participants and Administrators
of the TRC Companies, Inc. 401(k) Retirement and Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the TRC Companies, Inc. 401(k) Retirement and Savings Plan (the "Plan") at
June 30, 1998 and 1997, and the changes in net assets available for benefits for
the years then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules I and II is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. Such information has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
Hartford, Connecticut
December 19, 1998
3
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TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
June 30,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
Investments, at fair value:
Shares of registered investment
companies (mutual funds) offered
by Merrill Lynch Trust Company,
as Trustee:
Money Market Fund $ 1,038,954 $ 918,537
International Equity Fund 1,629,104 1,632,468
Asset Allocation Fund 3,443,755 2,727,795
Growth Stock Fund 3,841,437 3,322,620
S&P 500 Stock Fund 6,484,891 4,805,809
U.S. Treasury Allocation Fund 933,972 875,287
----------- -----------
17,372,113 14,282,516
TRC Stock Fund 1,445,317 1,216,646
Employee Loan Fund 481,779 485,927
----------- -----------
Net assets available for benefits $19,299,209 $15,985,089
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
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TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
Additions to net assets:
Contributions:
Employees $ 1,293,080 $ 1,298,420
Employer match 444,681 459,028
Rollovers 110,292 89,058
----------- -----------
` 1,848,053 1,846,506
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Investment income:
Net realized and unrealized appreciation in
market value of investments 2,302,626 775,945
Interest and dividend income 960,278 581,248
----------- -----------
3,262,904 1,357,193
----------- -----------
Total additions 5,110,957 3,203,699
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Deductions from net assets:
Benefits paid to participants 1,791,842 1,562,885
Administrative fees and expenses 4,995 4,950
----------- -----------
1,796,837 1,567,835
----------- -----------
Net increase during year 3,314,120 1,635,864
Net assets at beginning of year 15,985,089 14,349,225
----------- -----------
Net assets at end of year $19,299,209 $15,985,089
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1--DESCRIPTION OF THE PLAN
The following description of the TRC Companies, Inc. (the "Company") 401(k)
Retirement and Savings Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all employees of
the Company and its subsidiaries who have attained 18 years of age and completed
90 days of service. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended.
Contributions
Generally, participants may contribute up to 15% of their base salary subject to
certain limitations established by government regulations. Participants may also
contribute amounts representing distributions from other qualified plans. On the
first 6% of base salary contributed, the Company may provide a matching
contribution. The amount of the matching contribution is determined annually by
the Compensation Committee of the Company's Board of Directors based upon
operating performance. For the years ended June 30, 1998 and 1997, the Company's
matching contributions were equal to $.50 for each $1.00 contributed by the
participants. During the year ended June 30, 1997, the Plan was amended to allow
participants to direct employer matching contributions among investment options.
Participant Accounts
Each participant's account is credited with the participant's contribution, the
Company's matching contribution, allocations of forfeitures of terminated
participants' nonvested accounts and Plan earnings. Allocations are based upon
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching contributions and actual earnings
thereon is based upon years of continuous service. A participant is fully vested
after four years of credited service.
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Investment Options
Upon enrollment in the Plan, participants may direct contributions into mutual
funds offered by Merrill Lynch Trust Company or into the TRC Stock Fund.
Participants may change their investment options at any time.
Payment of Benefits
If a participant's employment terminates before their account balances
become fully vested, the nonvested portion of their account is forfeited and
proportionately redistributed annually to remaining Plan participants. For the
years ended June 30, 1998 and 1997, forfeitures of $68,688 and $59,462,
respectfully, were redistributed. In the event of death or permanent disability,
the participant or beneficiary becomes fully vested in their account balances.
Because of the tax deferred status of the Plan, participants generally may not
withdraw, without incurring additional taxes and penalties, amounts from the
Plan until retirement, death, permanent disability or termination of employment
if such occurs prior to age 59 1/2. All distributions from the Plan are made in
a lump sum.
Loans and Other In-Service Withdrawals
A participant may obtain a loan from the Plan. The amount of any loan is limited
by government regulations to a portion of the participant's vested account
balance. A participant may qualify for an in-service withdrawal. Such
withdrawals are limited to a portion of their vested account balance and are
generally subject to taxes and penalties.
NOTE 2--SUMMARY OF ACCOUNTING POLICIES
The significant accounting and reporting policies followed by the Plan are
summarized as follows:
Method of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes therein, and
disclosures of contingent assets and liabilities. Actual results could differ
from those estimates.
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Investments
Investments of the Plan are stated at fair value, primarily by reference to
published market data. Employee loans are stated at cost which approximates fair
value.
Payment of Benefits
Benefits to participants are recorded when paid.
Administrative Expenses
Generally, all fees and expenses related to the administration of the Plan are
paid by the Company or its subsidiaries. Participants with loans from the Plan
are charged a monthly loan administrative fee.
NOTE 3--TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by letter
dated October 1, 1997 that the Plan, as amended, is designed in accordance with
applicable sections of the Internal Revenue Code. Accordingly, no provision for
income taxes has been included in the Plan's financial statements.
NOTE 4--PLAN TERMINATION
Although it has not expressed any interest to do so, the Company has the right
to discontinue contributions at any time and to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination, participants will
become fully vested in their accounts.
NOTE 5--INVESTMENTS COMPRISING 5% OR MORE OF PLAN ASSETS
Plan investments that represent 5% or more of the Plan's assets at June 30,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Money Market Fund $ 1,038,954 $ 918,537
International Equity Fund 1,629,104 1,632,468
Asset Allocation Fund 3,443,755 2,727,795
Growth Stock Fund 3,841,437 3,322,620
S&P 500 Stock Fund 6,484,891 4,805,809
U.S. Treasury Allocation Fund 933,972 875,287
TRC Stock Fund 1,445,317 1,216,646
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$18,817,430 $15,499,162
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</TABLE>
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NOTE 6--NET ASSETS AVAILABLE FOR BENEFITS
The net assets available for benefits applicable to each investment fund at
June 30, 1998 and the changes in net assets for the year then ended are
as follows:
<TABLE>
<CAPTION>
Money International Asset Growth
Market Equity Allocation Stock
Fund Fund Fund Fund
---------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Net assets available for benefits at
June 30, 1997 $ 918,537 $ 1,632,468 $ 2,727,795 $3,322,620
Contributions:
Employees 75,600 150,338 196,937 360,476
Employer match -- -- -- --
Rollovers 4,964 24,785 13,131 39,105
Net realized and unrealized
appreciation (depreciation) in
market value of investments -- 82,610 405,639 392,259
Interest and dividend income 53,145 -- 348,474 264,682
Benefits paid to participants (487,034) (146,179) (250,203) (412,418)
Administrative fees and expenses (673) (430) (885) (1,096)
Transfers (to) from other funds 474,415 (114,488) 2,867 (124,191)
---------- ------------- ---------- ----------
Net assets available for benefits at
June 30, 1998 $1,038,954 $ 1,629,104 $3,443,755 $3,841,437
---------- ------------- ---------- ----------
---------- ------------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
U.S.
S&P 500 Treasury TRC Employee
Stock Allocation Stock Loan
Fund Fund Fund Fund Total
---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at
June 30, 1997 $4,805,809 $ 875,287 $1,216,646 $485,927 $15,985,089
Contributions:
Employees 416,005 63,473 30,251 -- 1,293,080
Employer match -- -- 444,681 -- 444,681
Rollovers 26,643 1,332 332 -- 110,292
Net realized and unrealized
appreciation (depreciation) in
market value of investments 1,275,023 15,834 131,261 -- 2,302,626
Interest and dividend income 194,991 52,790 -- 46,196 960,278
Benefits paid to participants (306,808) (65,883) (87,483) (35,834) (1,791,842)
Administrative fees and expenses (1,557) (215) (139) -- (4,995)
Transfers (to) from other funds 74,785 (8,646) (290,232) (14,510) --
---------- ---------- ---------- -------- -----------
Net assets available for benefits at
June 30, 1998 $6,484,891 $ 933,972 $1,445,317 $481,779 $19,299,209
---------- ---------- ---------- -------- -----------
---------- ---------- ---------- -------- -----------
</TABLE>
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The net assets available for benefits applicable to each investment fund at
June 30, 1997 and the changes in net assets for the year then ended are
as follows:
<TABLE>
<CAPTION>
Money International Asset Growth
Market Equity Allocation Stock
Fund Fund Fund Fund
--------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Net assets available for benefits at
June 30, 1996 $ 884,985 $ 1,518,863 $2,463,403 $3,645,549
Contributions:
Employees 101,486 168,706 191,479 387,393
Employer match -- -- -- --
Rollovers -- 9,722 8,187 58,881
Net realized and unrealized
appreciation (depreciation) in
market value of investments -- 177,874 179,202 (279,374)
Interest and dividend income 47,540 -- 255,323 49,373
Benefits paid to participants (104,344) (153,128) (342,106) (338,917)
Administrative fees and expenses (1,001) (485) (765) (1,249)
Transfers (to) from other funds (10,129) (89,084) (26,928) (199,036)
--------- ------------- ---------- ----------
Net assets available for benefits at
June 30, 1997 $ 918,537 $ 1,632,468 $2,727,795 $3,322,620
--------- ------------- ---------- ----------
--------- ------------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
U.S.
S&P 500 Treasury TRC Employee
Stock Allocation Stock Loan
Fund Fund Fund Fund Total
---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at
June 30, 1996 $3,292,175 $ 901,192 $1,206,720 $436,338 $14,349,225
Contributions:
Employees 349,750 71,322 28,284 -- 1,298,420
Employer match -- -- 459,028 -- 459,028
Rollovers 12,268 -- -- -- 89,058
Net realized and unrealized
appreciation (depreciation) in
market value of investments 1,045,550 7,778 (355,085) -- 775,945
Interest and dividend income 128,032 55,624 -- 45,356 581,248
Benefits paid to participants (449,373) (87,457) (64,605) (22,955) (1,562,885)
Administrative fees and expenses (1,142) (225) (83) -- (4,950)
Transfers (to) from other funds 428,549 (72,947) (57,613) 27,188 --
---------- ---------- ---------- -------- -----------
Net assets available for benefits at
June 30, 1997 $4,805,809 $ 875,287 $1,216,646 $485,927 $15,985,089
---------- ---------- ---------- -------- -----------
---------- ---------- ---------- -------- -----------
</TABLE>
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SCHEDULE I
TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT JUNE 30, 1998
<TABLE>
<CAPTION>
Identity of Party Number Market
Involved Description of Asset of Units Cost Value
- --------------------------- ------------------------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
Merrill Lynch Trust Company Money Market Fund 1,038,954 $ 1,038,954 $ 1,038,954
Merrill Lynch Trust Company International Equity Fund 98,853 1,262,002 1,629,104
Merrill Lynch Trust Company Asset Allocation Fund 238,322 2,709,398 3,443,755
Merrill Lynch Trust Company Growth Stock Fund 230,164 3,043,780 3,841,437
Merrill Lynch Trust Company S&P 500 Stock Fund 272,589 3,993,340 6,484,891
Merrill Lynch Trust Company U.S. Treasury Allocation Fund 99,359 948,044 933,972
Merrill Lynch Trust Company TRC Stock Fund 358,639 1,755,735 1,445,317
Merrill Lynch Trust Company Employee Loan Fund, bearing
interest at 7 1/4% to 10%
repayable over one to ten years 69 481,779 481,779
------------ -----------
$15,233,032 $19,299,209
----------- -----------
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</TABLE>
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SCHEDULE II
TRC COMPANIES, INC. 401(k) RETIREMENT AND SAVINGS PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED JUNE 30, 1998
Transactions with the same person or the same issue aggregating 5% or more of
the current value of Plan assets as of the beginning of the year:
<TABLE>
<CAPTION>
Purchase Transactions:
Identity of Party Number Purchase
Involved Description of Asset of Units Price
- --------------------------- -------------------- -------- ----------
<S> <C> <C> <C>
Merrill Lynch Trust Company Money Market Fund 52 $1,332,345
Merrill Lynch Trust Company Asset Allocation Fund 75 833,637
Merrill Lynch Trust Company Growth Stock Fund 77 774,241
Merrill Lynch Trust Company S&P 500 Stock Fund 89 1,660,530
Merrill Lynch Trust Company TRC Stock Fund 54 575,041
</TABLE>
<TABLE>
<CAPTION>
Sales transactions:
Identity of Party Number Sales Realized
Involved Description of Asset of Units Cost Price Gain/(Loss)
- --------------------------- --------------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Merrill Lynch Trust Company Money Market Fund 52 $1,190,973 $1,190,973 $ --
Merrill Lynch Trust Company Asset Allocation Fund 59 425,013 523,316 98,303
Merrill Lynch Trust Company Growth Stock Fund 64 521,168 647,683 126,515
Merrill Lynch Trust Company S&P 500 Stock Fund 56 796,031 1,256,469 460,438
Merrill Lynch Trust Company TRC Stock Fund 92 624,841 477,632 (147,209)
</TABLE>
The purchase and selling price for each reportable transaction represents its
current value at the time of acquisition or disposition. Gains and losses are
calculated based upon historical cost whereas gains and losses in the financial
statements are calculated based upon revalued cost in accordance with ERISA.
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Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-70662) of our report dated December 19, 1998
appearing on page 3 of the TRC Companies, Inc. 401(k) Retirement and Savings
Plan's Annual Report on Form 11-K for the year ended June 30, 1998. We also
consent to the reference to us under the caption "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Hartford, Connecticut
December 28, 1998
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1993, the
Trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
TRC COMPANIES, INC. 401(k)
RETIREMENT AND SAVINGS PLAN
December 28, 1998 By /s/ Harold C. Elston, Jr.
---------------------------------
Harold C. Elston, Jr.
Senior Vice President,
Secretary and Treasurer
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