TRC Companies, Inc.
Address:
5 Waterside Crossing
Windsor, Connecticut 06095
U.S.A.
Telephone: (860) 289-8631
Fax: (860) 298-6380
http://www.trcec.com
Statistics:
Public Company
Incorporated: 1969 as Travelers Research Corporation
Employees: 650
Sales: $78.22 million (1999)
Stock Exchanges: New York
Ticker Symbol: TRR
NAIC: 541620 Environmental Consulting Services; 541330 Engineering Consulting Services
Company Perspectives:
TRC is a national environmental services company of more than 650 professionals with expertise in all areas of air quality and hazardous waste management, regulatory compliance and permitting, water resources engineering, air pollution engineering, risk assessment, and environmental liability consulting.
TRC is a multidisciplinary environmental consulting and engineering firm with proven experience. For over 30 years, we have been solving problems associated with regulatory and liability issues. The quality of our work has earned TRC a repeat business of over 80%. TRC's national network of offices allows us to respond quickly and effectively.
Key Dates:
1969: Travelers Research Corporation is spun off as a subsidiary of Travelers Insurance Company.
1971: Travelers Research Corporation dissolves, with its engineering and technical consulting services arm reforming as TRC-The Research Corporation of New England.
1979: Vincent Rocco is appointed president of TRC.
1983: TRC becomes one of the few firms in the country to use mobile air testing equipment called the Trace Atmospheric Gas Analyzer, or TAGA.
1992: TRC acquires North American Weather Consultants and Raymond Keyes Associates.
1994: TRC buys Environmental Solutions, Inc. and Mariah Associates, Inc.
1996: TRC enters the global market by forming the first U.S. public-private partnership in Poland's history.
1997: Vincent Rocco resigns and Richard Ellison becomes TRC president and CEO.
Company History:
TRC Companies, Inc. is one of the oldest and largest environmental engineering and consulting companies in the United States, begun just as such sweeping anti-pollution laws as the Clean Air Act and Clean Water Act were being passed by Congress. With regional offices in 20 U.S. cities as well as Lima, Peru, and Santiago, Chile, TRC offers a wide range of environmental services, from cleanup of Superfund sites to archaeological assessment. TRC and its five subsidiaries focus on air pollution control, solid and hazardous waste management, risk assessment, and natural and cultural resource management. TRC was the first air pollution engineering company to be listed on the New York Stock Exchange. The company's client base includes 300 companies in the Fortune 500. Federal government contracts account for about 20 percent of the company's work.
Origins: 1960s-70s
TRC has its roots in the Travelers Insurance Company of Hartford, Connecticut, which became concerned about environmentally related problems as it began to lose money on severe storm damage claims and noticed a shortage of weather forecasting facilities. They established two weather- and industrial hygiene-oriented research services in the 1950s, which in the early 1960s evolved into the Travelers Research Center, Inc.
By 1969, the research center went through another change, splitting into two new groups: a nonprofit, independent research organization, the Center for the Environment and Man, which focused on such fields as population growth, and the subsidiary Travelers Research Corporation, which concentrated on applied research and services. Within two years, however, Travelers decided to divest itself of its research arms. Management decided that Travelers Research Corporation would dissolve, and the Center for the Environment and Man would retain its assets and then affiliate with the University of Connecticut. However, 22 members of the Environmental Quality and Waste Management Department protested the move to academia, opting to remain in a profit-oriented organization serving governmental and industrial clients. With Traveler's approval, this small group struck out on its own as TRC--The Research Corporation of New England.
In an effort to locate capital, TRC became a subsidiary of VAST, Inc., an oceanographic research firm, headquartered in Boothbay Harbor, Maine, until VAST went bankrupt in 1974.
From the beginning, TRC grappled with how much work to pursue with the government. 'We started with the mandate of serving industry,' chief consulting scientist Richard A. Duffee, one of the founders of TRC, told Inc. magazine reporter Craig R. Waters in a long profile of the company published in 1984. 'We wanted to be free of auditing, of government interference ... and we preferred working with industry.'
Buffeted by Politics: 1970s-80s
But TRC soon discovered, whether its clients were industry- or government-based, the political winds in Washington would shape the company's bottom line. From the Clean Air Act of 1969 through Superfund legislation in 1980, the five largest pieces of environmental legislation in U.S. history were passed in little more than a decade.
'It was a euphoric time when many companies concluded that what they had to sell, the client had to buy. ... The government was a major forcing factor,' recalled Vincent A. Rocco, who was president and later CEO and chairman of TRC from 1979 to 1997, in the Inc. article.
During the 1970s, TRC built up its client base, expanding air pollution and waste management services to help companies comply with the numerous new environmental regulations. The company prospered: TRC began with $600,000 in public utility contracts deeded to it by Travelers. A decade later it had annual revenues of $6.5 million, the bulk of which came through government contracts.
However, the flush times came to an abrupt halt after the election of President Ronald Reagan in 1980. No new environmental laws were passed, and enforcement of existing regulations grew more lax. Suddenly, there was less need for the company's services--either by industry or government. Revenues dropped from $9 million in 1980 to $7 million in 1984.
By the mid-1980s, however, more government money was being earmarked for environmental problems, such as acid rain, and TRC bounced back. The company enlarged its hazardous waste staff and began to expand a high-tech toxics measurement division.
In 1983, TRC became one of the few firms in the country to use mobile air testing equipment called the Trace Atmospheric Gas Analyzer, or TAGA. Mounted in two vans, TAGA was used to pinpoint pollutants inside office buildings as well as at hazardous waste sites. With the advent of TAGA, TRC's stock briefly more than doubled, and the Boston Globe designated the company as the fifth best-performing New England stock of 1983.
Through the rest of the 1980s and into the 1990s, the company continued to grow, adding subsidiaries, expanding into the global market, and working in such new fields as environmental database development. But success had its price tag, and the wild swings of the environmental market throughout the 1990s kept TRC on its toes.
The Tumultuous 1990s
TRC saw steady growth in revenue in the first half of the decade, from $51 million in 1991 to a record $93 million in 1995. This record growth came at a time when other environmental services firms were having a difficult time raising sales and profits. According to a 1993 Chemical Week article, the hazardous waste remediation industry was hit hard by the recession in the early 1990s as companies cut back on hiring outside firms to haul waste offsite for disposal and started incinerating it themselves.
In the article, Rocco looked ahead for ways the industry could prosper: 'The timely issues for the next decade are process related--efficiency and pollution prevention,' he said.
According to TRC's 1995 annual report, 'The environmental services market in the United Sates is changing dramatically. The `roar' of the environmental industry heard in the 1980s has been significantly muffled during the 1990s. Just five years ago, the environmental services industry was riding the crest of a steep growth curve that exceeded 15 percent per year. Those who claimed that the business was `recession proof' have been proven wrong in the 1990s. Today the industry is facing increasingly fierce competition, overcapacity in many market segments, eroding profit margins and uncertainty from a new Congress with new priorities.'
The report went on to say that 'companies who were smart enough to prepare for the changes and quick enough off the mark to respond to new market needs' would nonetheless succeed, concluding: 'we are happy to report that TRC is one of those forward thinking, quick-acting companies and therefore we continue to experience growth and profitability.'
The early 1990s saw numerous new initiatives and acquisitions for TRC. In 1992, TRC acquired North American Weather Consultants, one of the oldest private meteorological consulting firms in the country, which worked in a variety of fields from cloud seeding to air quality measurement to long-range precipitation forecasts.
In 1994 TRC bought Irvine, California-based Environmental Solutions, Inc., the company's largest acquisition to date. The addition of Environmental Solutions allowed TRC to move into designing and building municipal and hazardous waste landfills and perform site cleanup work.
That year, TRC also acquired Mariah Associates, Inc. The company, begun in 1976, had offices in Laramie, Wyoming; Albuquerque, New Mexico; El Paso, Texas; and Austin, Texas. Mariah served industrial and governmental clients throughout the western United States. Projects ranged from fossil fuel extraction to power transmission to waste management.
TRC's acquisition of Garrow Associates, headquartered in Atlanta, Georgia, added professional cultural resource management to TRC's roster of services. Working throughout the United States and the Caribbean, TRC Garrow performed archaeology and historic preservation studies, along with protected species surveys and wetland evaluations. TRC Garrow had branch offices in Nashville, Tennessee, and Chapel Hill, North Carolina.
In 1996, TRC entered the global market by forming the first U.S. public-private partnership in Poland's post-communist history, a company called PATKO, S.A., with two of Poland's environmental funding agencies. PATKO was chartered by the Polish government to facilitate the importation of U.S. environmental technology and services into the Polish market. TRC worked on both air pollution and industrial water and wastewater plants there.
During the period, TRC also faced a legal challenge. In 1993, TRC paid $2.4 million to settle allegations that tests at toxic waste sites performed by a subsidiary, MetaTrace, for the U.S. Environmental Protection Agency (EPA) and for the Defense Department were done improperly. According to American Metal Market, MetaTrace, which went out of business in the early 1990s, had also previously pled guilty to making false certifications to the EPA. The company paid a $423,000 fine for this criminal charge.
The economic problems plaguing other environmental services firms soon caught up to TRC. TRC had been a little too hasty in painting a rosy future in its 1995 annual report. The next year, its revenues shrank by more than $16 million.
According to a 1996 interview in Wall Street Transcript Digest, Rocco said that the environmental consulting and engineering market was 'flat to down' over prior years. 'Most of the stocks in the environmental sector, particularly the consulting/engineering sector, are at all-time lows,' the digest reported. Rocco said that there was 'a lack of definition by either party on their environmental initiatives, no new regulations and a real lack of focus in enforcing existing regulations.'
Through the late 1990s, TRC worked to recoup its losses and to remediate its own internal problems. In 1997, longtime Chairman and CEO Vincent Rocco resigned along with TRC President Bruce Cowen. Their resignations came during an investigation about stock options that Rocco and Cowen exercised, and that TRC's board had not authorized. Richard Ellison, who had served for 13 years as president of TRC Environmental Solutions, was named president and CEO.
The company soon bounced back, winning in 1998 a bid for a five-year, $10 million contract with the Federal Aviation Administration for performing environmental investigations and the preparation of remedial designs at FAA's William J. Hughes Technical Center, a research and development facility in Atlantic City, New Jersey.
That year, TRC also pioneered the concept of environmental liability transfer, taking over responsibility for the parties originally held liable for cleanup of Superfund and less contaminated sites. Traditionally, cleanup of Superfund sites could drag on for years as lawsuit after lawsuit was filed over liability for cleanup costs. TRC dubbed its innovative program Exit Strategy.
In 1999, TRC began cleanup of Maine's largest Superfund site, the Portland-Bangor Waste Oil site. TRC assumed the liability of nearly 400 of the major companies in the case, many of whom sent their used motor oil to the dump.
A 1998 Wall Street Journal article called the project a 'radical experiment.' According to the article, the basic cleanup costs were between $10 million and $15 million, but the actual numbers had not been released. The article quoted EPA Administrator Carol Browner on the project, saying it 'sounds like good old American ingenuity to me.'
TRC's work on the project was backed up by a $30 million insurance policy from American International Group. The policy provided protection against unexpected cost increases due to newly discovered contamination or changed conditions.
In a 1999 company press release, Mike Salmon, TRC's senior vice-president responsible for the Exit Strategy program, said that, 'The potentially responsible parties pay a lower overall cost and receive a full release of their liability without litigation. ... Most importantly, the community will have the site closed much quicker. We plan to have the basic remediation work completed by the end of 2000.'
In October 1999, TRC announced the award of another Exit Strategy project. The $47 million project, contracted with Duke Energy Field Services, would restore 14 natural gas plants and more than 350 ancillary facilities. Year-end also saw a number of other new projects and acquisitions by the company.
In January 1999, TRC acquired Alton Geoscience, which was headquartered adjacent to TRC's largest West Coast office, in Irvine, California. Alton's main activities included site investigations, remediation, and monitoring services for major oil and pipeline companies.
In April 1999, TRC acquired New Jersey-based Vectre Corporation, expanding TRC's brownfields remediation work. Brownfields sites are previously used industrial properties that have not been redeveloped because of concerns about liabilities associated with contamination.
In June, TRC went on to buy A & H Engineers, a transportation consulting and engineering firm headquartered in New York City. 'Together with our recent acquisition of Vectre Corporation in northern New Jersey, TRC has completed its 1999 goal to establish a solid and comprehensive platform to support substantial public and private sector growth in the New York/New Jersey area,' CEO and President Richard Ellison said in a press release.
To ensure the company would be a player in the Information Age, TRC acquired a start-up environmental compliance software firm, DMR Data, Include, based in New York. DMR's software enabled users to file pollution discharge reports electronically.
The company's 1999 annual report made a few projections for the company's future. A letter from Ellison to shareholders predicted that the company's greatest fiscal 2000 growth would occur with the startup of several new Exit Strategy projects. Ellison predicted 'triple digit' growth in the field. However, he said growth in environmental services 'will be modest as a reflection of the maturity of the business, although growth in energy deregulatory areas may be substantial.'
Long-term growth in information management was also expected to be high, he said. The company planned to focus on the Sun Belt and West Coast, where 'projected population growth rates will require the continuous development of infrastructure.'
Principal Subsidiaries: TRC Environmental Corporation; TRC Environmental Solutions, Inc.; TRC Garrow Associates; TRC Mariah Associates; TRC North American Weather Consultants; TRC Raymond Keyes Associates.
Principal Competitors: CH2M Hill Ltd.; Dames & Moore, Inc.; EMCON; Environmental Elements; Environmental Resources Management; Harding Lawson Associates Group, Inc.; ICF Kaiser International, Inc.; IDM Environmental; IT Group; Roy F. Weston; Safety-Kleen Corp.; Thermo Terra Tech; Thermo Retec; Waste Management, Inc.
Further Reading:
'CEO Interview, Vincent A. Rocco, Chairman and CEO, Discusses the Outlook for TRC,' Wall Street Transcript Digest, September 9, 1996.
Fialka, John J., 'Maine Experiment May Point the Way to Ending Tangle of Litigation Around U.S. Superfund Law,' Wall Street Journal, April 29, 1998.
Mullin, Rick, 'New Direction on Hazwaste,' Chemical Week, January 20, 1993, p. 26.
'TRC Pays $2.4 Million to Settle Toxic Waste Allegations Dispute,' American Metal Market, September 14, 1993, p. 4.
Waters, Craig R., 'When Uncle Sam Sneezes: Environmental Consulting Firm Survives the Whim of Washington,' Inc., May 1984, p. 127.
Source: International Directory of Company Histories, Vol. 32. St. James Press, 2000.
