<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT FILED
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
TRC COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9947 06-0853807
------------------------------- ---------------- ----------------------------
(State or other jurisdiction of (Commission File (IRS Employer Identification
incorporation) Number) Number)
5 Waterside Crossing
Windsor, Connecticut 06095
------------------------------------------------ ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860) 289-8631
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its current Report on Form 8-K, dated
June 2, 2000, as set forth in the pages attached hereto:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
TRC COMPANIES, INC.
Dated: August 3, 2000 By: /s/ Harold C. Elston, Jr.
--------------------------------
Harold C. Elston, Jr.
Senior Vice President and Chief Financial Officer
(Chief Accounting Officer)
<PAGE>
TRC COMPANIES, INC.
AMENDMENT NO. 1 TO CURRENT REPORT, DATED JUNE 2, 2000 ON FORM 8-K
On May 23, 2000, the registrant completed the acquisition of Lowney Associates,
a geotechnical and environmental services firm headquartered in Mountain View,
California. The acquisition has been accounted for using the purchase method of
accounting. This transaction was reported in Item 2 of the Current Report, dated
June 2, 2000, on Form 8-K. The purpose of the amendment is to provide the
financial statements of the business acquired and the pro forma financial
information required pursuant to Item 7.
<TABLE>
<S> <C>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Page
A. Financial statements of business acquired:
Lowney Associates for the year ended March 31, 2000
(with Independent Auditors' Report) 3
B. Unaudited pro forma financial information:
TRC Companies, Inc. unaudited pro forma consolidated
financial statements: 15
Unaudited Pro Forma Consolidated Statements of Operations
for the fiscal year ended June 30, 1999 16
Unaudited Pro Forma Consolidated Statements of Operations
for the nine months ended March 31, 2000 17
Unaudited Pro Forma Consolidated Balance Sheet at
March 31, 2000 18
Notes to Unaudited Pro Forma Financial Information 19
</TABLE>
2
<PAGE>
LOWNEY ASSOCIATES
FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 4
Balance Sheet 5
Statement of Income 6
Statement of Cash Flows 7
Statement of Changes in Shareholders' Equity 8
Notes to Financial Statements 9
</TABLE>
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
LOWNEY ASSOCIATES
We have audited the accompanying balance sheet of Lowney Associates as of March
31, 2000 and the related statements of income, cash flows and changes in
stockholders' equity for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lowney Associates as of March
31, 2000, and the results of its operations and its cash flow for the year then
ended in conformity with generally accepted accounting principles.
/s/ Seiler & Company, LLP
Redwood City, California
May 4, 2000, except for Note 1A,
as to which the date is July 27, 2000
4
<PAGE>
LOWNEY ASSOCIATES
BALANCE SHEET
MARCH 31, 2000
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 10,352
Accounts receivable, less allowance for doubtful accounts of $35,131 2,726,156
Work-in-process 853,149
Other assets 68,421
------------
Total current assets 3,658,078
PROPERTY AND EQUIPMENT, NET 482,627
NOTE RECEIVABLE 50,000
OTHER ASSETS 29,741
------------
Total assets $4,220,446
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 176,081
Cash overdraft 139,484
Accounts payable 165,524
Accrued expenses 179,010
Deferred income taxes 529,988
-----------
Total current liabilities 1,190,087
LONG-TERM LIABILITIES:
Notes payable 125,683
Deferred income taxes 818,989
-----------
Total liabilities 2,134,759
-----------
STOCKHOLDERS' EQUITY:
Common stock - par value $.01 per share;
750,000 authorized shares,
106,800 shares issued and outstanding 1,068
Retained earnings 2,084,619
-----------
Total stockholders' equity 2,085,687
-----------
Total liabilities and stockholders' equity $4,220,446
============
</TABLE>
See accompanying notes.
5
<PAGE>
LOWNEY ASSOCIATES
STATEMENT OF INCOME
FOR THE YEAR ENDING MARCH 31, 2000
<TABLE>
<S> <C>
REVENUE $9,056,946
------------
LESS DIRECT COSTS:
Salaries 1,662,956
Engineering and consulting services 1,397,967
Laboratories 790,358
Other costs 261,851
------------
TOTAL DIRECT COSTS 4,113,132
------------
GROSS PROFIT 4,943,814
GENERAL AND ADMINISTRATIVE EXPENSES 3,933,781
------------
INCOME FROM OPERATIONS 1,010,033
------------
OTHER INCOME AND (EXPENSE):
Interest income 24,307
Other income 12,872
Interest expense (24,210)
------------
TOTAL OTHER INCOME AND (EXPENSE) 12,969
------------
INCOME BEFORE PROVISION FOR TAXES ON INCOME 1,023,002
PROVISION FOR TAXES ON INCOME 422,366
------------
NET INCOME $ 600,636
============
</TABLE>
See accompanying notes.
6
<PAGE>
LOWNEY ASSOCIATES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 600,636
Noncash items included in net income:
Depreciation and amortization 173,570
Deferred income taxes 395,107
Gain on retirement of property (1,127)
Net (increase) decrease in assets:
Accounts receivable (1,141,210)
Work-in-process 107,782
Other current assets (19,822)
Other noncurrent assets 201
Net increase (decrease) in liabilities:
Cash overdraft 139,484
Accounts payable 72,558
Accrued expenses 35
--------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 327,214
--------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (134,231)
Proceeds from sale of property and equipment 2,400
--------------
NET CASH USED IN INVESTING ACTIVITIES (131,831)
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under line of credit (176,000)
Proceeds from long-term debt 34,053
Repayments of long term debt (75,024)
--------------
NET CASH USED IN FINANCING ACTIVITIES (216,971)
--------------
NET DECREASE IN CASH (21,588)
Cash, beginning of year 31,940
--------------
CASH, END OF YEAR $ 10,352
==============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 26,621
==============
Taxes $ 29,604
==============
</TABLE>
See accompanying notes.
7
<PAGE>
LOWNEY ASSOCIATES
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
------------------ ------------------ ------------------
<S> <C> <C> <C>
Balance, March 31, 1999 $1,068 $1,483,983 $1,485,051
Net income - 600,636 600,636
------------------ ------------------ ------------------
Balance, March 31, 2000 $1,068 $2,084,619 $2,085,687
================== ================== ==================
</TABLE>
See accompanying notes.
8
<PAGE>
LOWNEY ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1. ACCOUNTING POLICIES
A. NATURE OF BUSINESS
Lowney Associates is an environmental and geotechnical engineering consulting
firm, founded in Santa Clara County in 1969 and incorporated in 1971. The
Corporation provides environmental engineering, hydrogeologic, hazardous
waste, asbestos and geotechnical consulting services to clients in
California. On May 23, 2000, all of the issued and outstanding shares of
stock were acquired by TRC Companies, Inc.
B. 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 and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
C. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Major improvements that
significantly add to the productive capacity or extend the life of an asset
are capitalized. Maintenance and repair costs are charged to income
currently. Depreciation and amortization are computed on the straight-line or
declining balance methods over the useful lives of the assets which range
from three to thirty-nine years.
D. INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes.
Deferred taxes are recognized for differences between the basis of assets and
liabilities for financial statement and income tax purposes. The Company uses
the accrual method of accounting for financial reporting purposes and the
cash method for income tax reporting purposes. The differences relate
primarily to accounts receivable, accounts payable, prepaid and accrued
expenses. The deferred tax assets and liabilities represent the future tax
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled.
Effective May 1, 2000, the Company will be required to change to the accrual
method of accounting for tax reporting purposes.
9
<PAGE>
E. CONCENTRATION OF CREDIT RISK
The Company's bank accounts are insured up to $100,000. The Company had balances
in excess of the insurance amount during the period ended March 31, 2000.
Financial instruments which potentially expose the Company to concentrations of
credit risk include accounts receivable. The Company performs ongoing
evaluations of customers' financial condition and generally does not require
collateral.
F. REVENUE AND COST RECOGNITION
The Company recognizes revenue from fixed-fee and modified fixed-fee
construction contracts on the percentage-of-completion method.
Contract costs include all direct material and labor costs, related payroll and
employee costs, and proposal expense. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and estimated
profitability may result in revisions to costs and income which are recognized
in the period in which the revisions are determined.
The asset "work-in-process" represents revenue recognized in excess of amounts
billed on uncompleted contracts.
NOTE 2. UNCOMPLETED PROJECTS
Costs, estimated gross profit, and billings on uncompleted contracts are
summarized as follows:
Costs incurred on uncompleted contracts $3,587,939
Estimated gross profit 4,297,641
----------
7,885,580
Less billings to date 7,032,431
----------
Work in process $ 853,149
==========
NOTE 3. NOTE RECEIVABLE
The Company loaned an employee $50,000 in August 1996. The note bears interest
at prime plus 1%. Interest only is due each year for five years on August 29,
the anniversary of the note. Thereafter, principal of $16,667, plus interest on
the note, is due each year for 3 years. All accrued interest and principal is
due by August 29, 2004. The employee resigned effective July 17, 1998.
10
<PAGE>
NOTE 4. NOTES PAYABLE
Notes payable consist of the following:
<TABLE>
<CAPTION>
Due Date Interest Rate Collateral Current Long-term Total
-------- ------------- ---------- ------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Secured notes:
Line of credit 09/14/00(1) Prime + 1.250% All assets $100,000 $ - $100,000
Note payable 06/01/00(2) Prime + 1.5% Fixed assets 882 - 882
Note payable Various Prime + 1.5% All assets 18,416 8,109 26,525
--------- --------- ---------
Total secured notes 119,298 8,109 127,407
--------- --------- ---------
Unsecured notes:
Note payable 04/29/01 Prime + 1.5% 13,867 216 14,083
Note payable 02/22/03 10.0% 11,361 22,692 34,053
Note payable 08/21/03(3) Prime + 1.0% 31,555 94,666 126,221
--------- --------- ---------
Total unsecured notes 56,783 117,574 174,357
--------- --------- ---------
Total notes payable $176,081 $125,683 $301,764
========= ========= =========
</TABLE>
(1) The total line of credit available is $750,000.
(2) The loan is with an entity which is owned by two shareholders of the
Company.
(3) Note payable to purchase stock. (Note 10)
Maturities of notes payable for each of the next five years consist of the
following:
Fiscal Year Ending March 31, Amount
---------------------------- ------
2001 $176,081
2002 51,243
2003 42,885
2004 31,555
2005 -
11
<PAGE>
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
Office equipment $ 453,887
Furniture and fixtures 247,806
Automobiles and trucks 466,783
Equipment 249,678
Leasehold improvements 187,985
----------
Total 1,606,139
Less accumulated depreciation 1,123,512
----------
Net book value $ 482,627
==========
Certain property and equipment are pledged as collateral for notes payable (Note
4). Depreciation and amortization expense was $173,570 for the year ended March
31, 2000.
NOTE 6. COMMITMENTS
The Company leases office facilities located in Mountain View and San Ramon,
California from an entity in which certain shareholders and officers have an
equity ownership. Effective May 1, 2000, the Company renegotiated the terms of
both leases. The addenda to the leases provide for a four-year lease period
which expires on April 30, 2004 and an option for one three-year extension. Rent
expense for these facilities for the year ended March 31, 2000 was $298,173.
In addition, the Company leases office space in Oakland and Pasadena,
California. The leases expire on October 31, 2000 and January 31, 2001,
respectively. Rent expense for these offices for the year ended March 31, 2000
was $38,007.
The following is a schedule of future minimum payments of the real property
leases discussed above, exclusive of maintenance, insurance, property taxes and
cost of living increases:
Real property
Fiscal year ending March 31, leases
------------------------------------- ---------------
2001 $ 320,368
2002 345,371
2003 404,124
2004 462,882
2005 38,981
-----------
Total $1,571,726
===========
12
<PAGE>
The Company leases certain equipment under various operating leases. Rent
expense for this equipment for the year ended March 31, 2000 was $54,991. The
following is a schedule of the future commitments under the operating leases:
Fiscal year ending March 31, Amount
------------------------------------- ---------------
2001 $ 55,886
2002 48,511
2003 10,854
NOTE 7. EMPLOYEE BENEFIT PLANS
All full-time employees are eligible to contribute up to 15% of their salary to
the Company's 401(k) plan, subject to certain Internal Revenue Code limitations.
The Company matches 100% of an employee's contribution up to 2% of annual
salary. The 401(k) matching contribution for the year ended March 31, 2000 was
$43,272.
NOTE 8. PROVISION FOR TAXES ON INCOME
The provision for taxes on income consists of the following:
Current taxes $ 27,259
Deferred 395,107
------------
Total provision for income taxes $ 422,366
============
The Company's total deferred tax assets, deferred tax liabilities, and deferred
tax asset valuation allowances are as follows:
Total deferred tax liabilities $1,348,977
Less valuation allowance -
------------
Net deferred tax liabilities $1,348,977
============
Those amounts have been presented in the Company's financial statements as
follows:
Deferred income taxes - current $ 529,988
Deferred income taxes - noncurrent 818,989
------------
Net deferred tax liabilities $1,348,977
============
The Company's provision for income taxes differs from applying the statutory
U.S. and state income tax rates to income before income taxes. The following
reconciles income taxes reported in the financial statements to taxes that would
be obtained by applying regular tax rates to income before taxes:
Expected tax provision $419,606
Tax effect of nondeductible expenses 2,760
------------
Tax provision $422,366
============
13
<PAGE>
NOTE 9. MAJOR CUSTOMER
The Company entered into contracts representing a substantial portion of its
sales with one customer. During the year ended March 31, 2000, sales to this
customer aggregated approximately $974,443. At March 31, 2000, the amount due
from this customer, included in trade accounts receivable, was approximately
$270,473.
NOTE 10. STOCK PURCHASE
Due to the resignation of an employee-shareholder effective July 17, 1998, the
Company redeemed 5,700 shares held by the shareholder according to the terms of
the Agreement among Shareholders of Lowney Associates, dated December 5, 1997.
The related note payable in the amount of $157,776 is to be paid in five equal
annual installments plus accrued interest at prime plus 1% on August 21, 1999
and each August 21st thereafter.
14
<PAGE>
TRC COMPANIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENT INFORMATION
The accompanying unaudited pro forma consolidated statements of operations for
the fiscal year ended June 30, 1999 and for the nine months ended March 31,
2000, and the balance sheet at March 31, 2000, reflect the historical results of
operations and financial position of TRC Companies, Inc. (TRC) adjusted to
reflect the acquisition of Lowney Associates (Lowney) using the purchase method
of accounting, as if the acquisition had occurred at the beginning of the most
recent fiscal year presented. The pro forma adjustments are described in the
notes following the unaudited pro forma consolidated financial statement
information.
The unaudited pro forma consolidated financial statement information is
presented for informational purposes only. The pro forma results from operations
and financial position are not necessarily indicative of what would have
resulted had the acquisition occurred on the dates indicated, nor does the pro
forma financial information purport to be indicative of results of operations or
the financial position which may occur in the future. The Company believes that
it has used reasonable methods in the preparation of this financial statement
information.
15
<PAGE>
TRC COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED JUNE 30, 1999
(unaudited)
<TABLE>
<CAPTION>
As reported Pro forma
------------------------ --------------------------------
TRC Lowney Adjustments Notes Combined
---------- ----------- ------------- ----- ---------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share data)
GROSS REVENUE $ 78,223 $ 7,531 $ - $ 85,754
Less subcontractor costs
and direct charges 20,890 1,372 - 22,262
---------- ----------- ------------- ---------
NET SERVICE REVENUE 57,333 6,159 - 63,492
---------- ----------- ------------- ---------
OPERATING COSTS AND EXPENSES:
Direct labor and fringe benefit costs 26,075 1,514 - 27,589
Indirect costs and expenses 21,998 3,651 (900) (a) 24,749
General and administrative expenses 2,462 - - 2,462
Depreciation and amortization 2,468 148 181 (b) 2,797
---------- ----------- ------------- ---------
53,003 5,313 (719) 57,597
---------- ----------- ------------- ---------
INCOME FROM OPERATIONS 4,330 846 719 5,895
Interest expense 507 30 308 (c) 845
---------- ----------- ------------- ---------
INCOME BEFORE TAXES 3,823 816 411 5,050
Federal and state income tax provision 1,376 333 109 (d) 1,818
---------- ----------- ------------- ---------
NET INCOME $ 2,447 $ 483 $ 302 $ 3,232
========== =========== ============= =========
EARNINGS PER SHARE:
Basic $ .36 $ .47
Diluted .36 .46
========== =========
AVERAGE SHARES OUTSTANDING:
Basic 6,782 165 (e) 6,947
Diluted 6,839 165 (e) 7,004
========== ============= =========
</TABLE>
See accompanying pro forma notes.
16
<PAGE>
TRC COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 2000
(unaudited)
<TABLE>
<CAPTION>
As reported Pro forma
------------------------ --------------------------------
TRC Lowney Adjustments Notes Combined
---------- ----------- ------------- ----- ---------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share data)
GROSS REVENUE $ 81,635 $ 7,277 $ - $ 88,912
Less subcontractor costs
and direct charges 23,443 2,099 - 25,542
---------- ----------- ------------- ---------
NET SERVICE REVENUE 58,192 5,178 - 63,370
---------- ----------- ------------- ---------
OPERATING COSTS AND EXPENSES:
Direct labor and fringe benefit costs 26,079 1,228 - 27,307
Indirect costs and expenses 22,311 3,163 (715) (a) 24,759
General and administrative expenses 2,162 - - 2,162
Depreciation and amortization 1,984 141 135 (b) 2,260
---------- ----------- ------------- ---------
52,536 4,532 (580) 56,488
---------- ----------- ------------- ---------
INCOME FROM OPERATIONS 5,656 646 580 6,882
Interest expense 686 15 231 (c) 932
---------- ----------- ------------- ---------
INCOME BEFORE TAXES 4,970 631 349 5,950
Federal and state income tax provision 1,789 261 92 (d) 2,142
---------- ----------- ------------- ---------
NET INCOME $ 3,181 $ 370 $ 257 $ 3,808
========== =========== ============= =========
EARNINGS PER SHARE:
Basic $ .47 $ .55
Diluted .45 .52
========== =========
AVERAGE SHARES OUTSTANDING:
Basic 6,800 165 (e) 6,965
Diluted 7,116 165 (e) 7,281
========== ============ =========
</TABLE>
See accompanying pro forma notes.
17
<PAGE>
TRC COMPANIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(unaudited)
<TABLE>
<CAPTION>
As reported Pro forma
------------------------ --------------------------------
TRC Lowney Adjustments Notes Combined
---------- ----------- ------------- ----- ---------
<S> <C> <C> <C> <C> <C>
(in thousands)
ASSETS
CURRENT ASSETS:
Cash $ 399 $ 10 $ - $ 409
Accounts receivable, less allowance
for doubtful accounts 37,375 3,579 - $ 40,954
Deferred income tax benefits 1,438 - - 1,438
Prepaid expenses and other current assets 1,107 69 - 1,176
--------- --------- ----------- -----------
40,319 3,658 - 43,977
--------- --------- ----------- -----------
PROPERTY AND EQUIPMENT, AT COST 21,735 1,606 (1,106) (f) 22,235
Less accumulated depreciation and amortization 16,806 1,123 (1,123) (f) 16,806
--------- --------- ----------- -----------
4,929 483 17 5,429
--------- --------- ----------- -----------
COSTS IN EXCESS OF NET ASSETS OF ACQUIRED
BUSINESSES, NET OF ACCUMULATED AMORTIZATION 29,044 - 3,563 (g) 32,607
--------- --------- ----------- -----------
OTHER ASSETS 1,351 80 - 1,431
--------- --------- ----------- -----------
$ 75,643 $ 4,221 $ 3,580 $ 83,444
========= ========= =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of debt and borrowings
under line of credit $ 12,700 $ 316 $ 3,850 (h) $ 16,866
Accounts payable 4,745 166 - 4,911
Accrued compensation and benefits 3,736 76 100 (i) 3,912
Other accrued liabilities 2,500 632 (193) (j) 2,939
--------- --------- ----------- -----------
23,681 1,190 3,757 28,628
--------- --------- ----------- -----------
NONCURRENT LIABILITIES:
Long-term debt 200 126 - 326
Deferred income taxes 1,224 819 193 (j) 2,236
--------- --------- ----------- -----------
1,424 945 193 2,562
--------- --------- ----------- -----------
SHAREHOLDERS' EQUITY
Common Stock 747 1 (1) (k) 764
17 (l)
Additional paid-in capital 39,084 - 1,699 (l) 40,783
Retained earnings 13,604 2,085 (2,085) (k) 13,604
--------- --------- ----------- -----------
53,435 2,086 (370) 55,151
Less treasury stock, at cost 2,897 - - 2,897
--------- --------- ----------- -----------
50,538 2,086 (370) 52,254
--------- --------- ----------- -----------
$ 75,643 $ 4,221 $ 3,580 $ 83,444
========= ========= =========== ===========
</TABLE>
See accompanying pro forma notes.
18
<PAGE>
TRC COMPANIES, INC.
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS:
a. Adjustment to reflect elimination of non-recurring indirect costs and
expenses in connection with the acquisition.
b. Adjustment to reflect amortization of costs in excess of the fair value
of the net assets acquired on a straight-line basis over twenty years
and additional depreciation expense related to the write-up of certain
assets to estimated fair value using estimated lives of five to seven
years.
c. Adjustment to record additional interest expense resulting from
additional bank borrowings in connection with the acquisition.
d. Adjustment to income tax provision to reflect tax effect of foregoing
adjustments and reduction in effective income tax rate.
e. Adjustment to record issuance of 165,000 shares of TRC common stock in
connection with the acquisition.
PRO FORMA CONSOLIDATED BALANCE SHEET:
f. Adjustment to record assets at estimated fair value.
g. Adjustment to record incremental costs in excess of the fair value of
the net assets acquired.
h. Adjustment to record additional bank borrowings in connection with the
acquisition.
i. Adjustment to record costs associated with the acquisition.
j. Adjustment to reclassify long-term portion of deferred income taxes.
k. Adjustment to eliminate Lowney's shareholders' equity account.
l. Adjustment to record issuance of 165,000 shares of TRC common stock in
connection with the acquisition.
19
