8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report  (Date of earliest event reported):  April 4, 2008

TRC COMPANIES, INC.(Exact name of registrant as specified in its charter)

Delaware	1-9947	06-0853807
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

21 Griffin Road North, Windsor, Connecticut 06095

(Address of Principal Executive Offices) (Zip Code)

(860) 298-9692

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.  Entry into Material Definitive Agreement.

Effective as of April 4, 2008, TRC Companies, Inc. (the “Company”) and certain of its subsidiaries (together, “TRC”), the financial institutions named therein (the “Lenders”) and Wells Fargo Foothill, Inc., as arranger and administrative agent (the “Agent”), entered into a Tenth Amendment to, and Waiver Under, Credit Agreement (the “Amendment”). The Amendment modifies certain of the terms under the Credit Agreement by and among TRC, the Lenders and the Administrative Agent dated as of July 17, 2006, to amend the definition of EBITDA to exclude the charge for the impairment of goodwill and to extend the delivery date for certain required information and documents, with respect to the Company’s fiscal January and February 2008 periods until April 22, 2008.

The foregoing summary is not intended to be exhaustive and is qualified in its entirety by reference to the Amendment, a copy of which is attached to this report as Exhibit 10.11.10.

Item 2.02.  Results of Operations and Financial Condition.

On April 10, 2008, the Company is issuing a news release announcing its financial results for the three months ended September 28, 2007 and for the three and six months ended December 28, 2007. A copy of the news release is attached hereto as Exhibit 99.1 to this report.

The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

A copy of the press release dated April 10, 2008 announcing the results is attached hereto as Exhibit 99.1 which is incorporated herein by reference.

Item 2.06.  Material Impairments.

On April 8, 2008, the Company's management concluded and the Audit Committee concurred that the Company was required to take a charge related to the impairment of its goodwill. As of June 30, 2007 the Company had goodwill of approximately $131 million. The Company evaluates the recovery of goodwill annually and more frequently if events or circumstances indicate that the carrying value of the goodwill might be impaired. Given the significant decline in the Company's stock price since December 2007 and resultant decrease in market capitalization, the Company compared the fair value of its reporting unit with its carrying amount including goodwill and determined that goodwill was impaired. The Company then allocated the fair value of its reporting unit to all of the assets and liabilities including any unrecognized intangible assets as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The carrying amount of the goodwill exceeded the implied fair value of that goodwill.

Accordingly, the Company will be recording a non-cash goodwill impairment charge of $76.7 million in the quarter ended September 28, 2007. The Company does not anticipate the impairment charge to result in any future cash expenditures.

2

Item 9.01.  Financial Statements and Exhibits.

Exhibit 10.11.10	Tenth Amendment to, and Waiver Under, Credit Agreement, by and among TRC Companies, Inc., certain of its subsidiaries, the financial institutions named therein and Wells Fargo Foothill, Inc.
Exhibit 99.1	News release titled “TRC Announces First- and Second- Quarter Fiscal 2008 Financial Results.”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 10, 2008		TRC Companies, Inc.
	By:	/s/ Carl d. Paschetag, Jr.
		Carl d. Paschetag, Jr.
		Senior Vice President and Chief Financial Officer

3

EXHIBIT INDEX

Exhibit No.	Description
10.11.10	Tenth Amendment to, and Waiver Under, Credit Agreement, by and among TRC Companies, Inc., certain of its subsidiaries, the financial institutions named therein and Wells Fargo Foothill, Inc.
99.1	News release titled “TRC Announces First- and Second- Quarter Fiscal 2008 Financial Results.”

4

EX-10.11.10

Exhibit 10.11.10

EXECUTION VERSION

TENTH AMENDMENT TO, AND WAIVER UNDER, CREDIT AGREEMENT

THIS TENTH AMENDMENT TO, AND WAIVER UNDER, CREDIT AGREEMENT (this “Tenth Amendment”) is made and entered into as of April 4, 2008, by and among the financial institutions identified on the signature pages hereof (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a California corporation, as arranger and administrative agent for the Lenders (in such capacities, together with any successor arranger and administrative agent, “Agent”), and TRC COMPANIES, INC., a Delaware corporation (the “Administrative Borrower”), on behalf of all Borrowers.

WITNESSETH:

WHEREAS, the Administrative Borrower, the Administrative Borrower’s Subsidiaries party thereto, the Lenders and Agent are parties to that certain Credit Agreement, dated as of July 17, 2006 (as amended as of October 31, 2006, as of November 29, 2006, as of December 29, 2006, as of January 31, 2007, as of July 30, 2007, as of September 25, 2007, as of November 28, 2007, as of December 14, 2007, and as of March 3, 2008, and as the same may be further amended, modified, supplemented or amended and restated from time to time, the “Credit Agreement”);

WHEREAS, pursuant to clauses (a) and (b) of Schedule 5.3 to the Credit Agreement, as amended, with respect to the month ended December 31, 2007, the Borrowers were required to deliver an unaudited consolidated balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period, together with a comparison to Projections for such monthly period and the corresponding monthly period of the prior fiscal year and a Compliance Certificate related thereto, in each case on or prior to February 29, 2008 (the “December 2007 Monthly Financial Statement Obligations”);

WHEREAS, the Borrowers complied with such December 2007 Monthly Financial Statement Obligations but failed to do so on a timely basis (the “December 2007 Monthly Financial Statement Default”);

WHEREAS, pursuant to clauses (a) and (b) of Schedule 5.3 to the Credit Agreement, as amended, with respect to the month ended January 31, 2008, the Borrowers were required to deliver an unaudited consolidated balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period, together with a comparison to Projections for such monthly period and the corresponding monthly period of the prior fiscal year and a Compliance Certificate related thereto, in each case on or prior to March 11, 2008 (the “January 2008 Monthly Financial Statement Obligations”);

WHEREAS, the Borrowers have failed to comply with such January 2008 Monthly Financial Statement Obligations (the “January 2008 Monthly Financial Statement Default”; and together with the December 2007 Monthly Financial Statement Default, the “Applicable Defaults”);

WHEREAS, the Administrative Borrower has requested Agent and the Lenders to waive the Applicable Defaults, and Agent and the Lenders have agreed to do so subject to the terms and conditions set forth herein; and

WHEREAS, Agent, the Lenders and the Borrowers have agreed to amend the Credit Agreement, all as herein provided subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the agreements and provisions herein contained, the parties hereto do hereby agree as follows:

Section 1.              Definitions.  Any capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.

Section 2.              Waivers Under Credit Agreement.  Subject to the satisfaction of the terms and conditions set forth herein, Agent and the Required Lenders hereby (a) waive the December 2007 Monthly Financial Statement Default and (b) waive the January 2008 Monthly Financial Statement Default; provided that the waiver under this clause (b) shall be rescinded and no longer effective as of April 22, 2008 if the Borrowers fail to comply with the January 2008 Monthly Financial Statement Obligations on or prior to April 22, 2008.

Section 3.              Amendments to the Credit Agreement.  Subject to the terms and conditions set forth herein, the Credit Agreement is hereby amended, as of the Effective Date (defined below), as follows:

3.01.       Definition of EBITDA in Schedule 1.1.  The definition of “EBITDA” in Schedule 1.1 to the Credit Agreement is hereby amended by deleting it in its entirety and inserting the following in lieu thereof:

“EBITDA” means, with respect to any fiscal period, Parent’s and its Subsidiaries’ consolidated net earnings (or loss), minus (a) without duplication and to the extent included in determining Parent’s and its Subsidiaries’ consolidated net earnings (or loss) for such period, the sum for such period of (i) extraordinary gains and (ii) interest income (excluding interest income related to any Exit Strategy Program), in the case of each of clauses (a)(i) and (a)(ii) above determined on a consolidated basis in accordance with GAAP, plus (b) without duplication and to the extent deducted in determining Parent’s and its Subsidiaries’ consolidated net earnings (or loss) for such period, the sum for such period of (i) interest expenses, (ii) income taxes, (iii) depreciation and amortization, (iv) restructuring charges incurred during the fiscal year ended June 30, 2008 in an aggregate amount not to exceed $2,750,000, (v) non-cash losses incurred in connection with the Exit Strategy Program solely to the extent such losses are reimbursable to Parent or one of its Subsidiaries under insurance policies with AIG (or another insurer), and (vi) non-cash goodwill impairment charges, in the case of each of clauses (b)(i) through and including (b)(vi) above, determined on a consolidated basis in accordance with GAAP.

3.02.       Schedule 5.3.  Schedule 5.3 to the Credit Agreement is hereby amended as follows: the left hand column in the first row of the table in Schedule 5.3 to the Credit Agreement relating to monthly financial statements is hereby deleted in its entirety and replaced with the following: “as soon as available, but in any event within 40 days (45 days in the case of a month that is the end of one of Parent’s fiscal quarters) after the end of each month during each of Parent’s fiscal years; provided, that (x) with respect to the month ended January 31, 2008, Borrowers shall deliver the required information and documents to Agent on or prior to April 22,

2

2008, and (y) with respect to the month ended February 29, 2008, Borrowers shall deliver the required information and documents to Agent on or prior to April 22, 2008.”

Section 4.              Representations and Warranties.  In order to induce Agent and the Lenders to enter into this Tenth Amendment, the Administrative Borrower, for itself and on behalf of all of the other Borrowers, hereby represents and warrants that:

4.01.       No Default.  At and as of the date of this Tenth Amendment and at and as of the Effective Date and both prior to (other than with respect to the Applicable Defaults) and after giving effect to this Tenth Amendment, no Default or Event of Default exists and is continuing.

4.02.       Representations and Warranties True and Correct.  At and as of the date of this Tenth Amendment and both prior to (other than with respect to the Applicable Defaults) and after giving effect to this Tenth Amendment, each of the representations and warranties contained in the Credit Agreement and other Loan Documents is true and correct in all material respects.

4.03.       Corporate Power, Etc.  Administrative Borrower (a) has all requisite corporate power and authority to execute and deliver this Tenth Amendment and to consummate the transactions contemplated hereby for itself and, in the case of Administrative Borrower, on behalf of all of the other Borrowers, and (b) has taken all action, corporate or otherwise, necessary to authorize the execution and delivery of this Tenth Amendment and the consummation of the transactions contemplated hereby for itself and, in the case of Administrative Borrower, on behalf of all of the other Borrowers.

4.04.       No Conflict.  The execution, delivery and performance by Administrative Borrower (on behalf of itself and all of the other Borrowers) of this Tenth Amendment will not (a) violate any provision of federal, state, or local law or regulation applicable to any Borrower, the Governing Documents of any Borrower, or any order, judgment or decree of any court or other Governmental Authority binding on any Borrower, (b) conflict with or result in any breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of any Borrower, (c) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of any Borrower, other than Permitted Liens, or (d) require any approval of any Borrower’s interestholders or any approval or consent of any Person under any material contractual obligation of any Borrower, other than consents or approvals that have been obtained and that are still in force and effect.

4.05.       Binding Effect.  This Tenth Amendment has been duly executed and delivered by the Administrative Borrower (on behalf of itself and all of the other Borrowers) and constitutes the legal, valid and binding obligation of the Administrative Borrower (on behalf of itself and all of the other Borrowers), enforceable against the Administrative Borrower (on behalf of itself and all of the other Borrowers) in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or affecting the enforcement of creditors’ rights generally, and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3

Section 5.              Conditions.  This Tenth Amendment shall be effective upon the fulfillment by the Borrowers, in a manner satisfactory to Agent and the Lenders, of all of the following conditions precedent set forth in this Section 5 (such date, the “Effective Date”):

5.01.       Execution of the Tenth Amendment.  Each of the parties hereto shall have executed an original counterpart of this Tenth Amendment and shall have delivered (including by way of telefacsimile or electronic mail) the same to Agent.

5.02.       Amendment Fee.  Borrowers shall have paid to Agent, for the ratable benefit of the Lenders, in immediately available funds an amendment fee equal to $30,000.

5.03.       Representations and Warranties.  As of the Effective Date, the representations and warranties set forth in Section 4 hereof shall be true and correct.

5.04.       Compliance with Terms.  Borrowers shall have complied in all respects with the terms hereof and of any other agreement, document, instrument or other writing to be delivered by Borrowers in connection herewith.

5.05.       Delivery of Other Documents.  Agent shall have received all other instruments, documents and agreements as Agent may reasonably request, in form and substance reasonably satisfactory to Agent.

Section 6.              Miscellaneous.

6.01.       Continuing Effect.  Except as specifically provided herein, the Credit Agreement and the other Loan Documents shall remain in full force and effect in accordance with their respective terms and are hereby ratified and confirmed in all respects.

6.02.       No Waiver; Reservation of Rights.  This Tenth Amendment is limited as specified and the execution, delivery and effectiveness of this Tenth Amendment shall not operate as a modification, acceptance or waiver of any provision of the Credit Agreement, or any other Loan Document, except as specifically set forth herein.  Notwithstanding anything contained in this Tenth Amendment to the contrary, Agent and the Lenders expressly reserve the right to exercise any and all of their rights and remedies under the Credit Agreement, any other Loan Document and applicable law in respect of any Default or Event of Default (except to the extent set forth in Section 2 with respect to the Applicable Defaults).

6.03.       References.

(a)           From and after the Effective Date, (i) the Credit Agreement, the other Loan Documents and all agreements, instruments and documents executed and delivered in connection with any of the foregoing shall each be deemed amended hereby to the extent necessary, if any, to give effect to the provisions of this Tenth Amendment and (ii) all of the terms and provisions of this Tenth Amendment are hereby incorporated by reference into the Credit Agreement, as applicable, as if such terms and provisions were set forth in full therein, as applicable.

(b)           From and after the Effective Date, (i) all references in the Credit Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended hereby and (ii) all references in the Credit

4

Agreement, the other Loan Documents or any other agreement, instrument or document executed and delivered in connection therewith to  “Credit Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended hereby.

6.04.       Governing Law.  THIS TENTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

6.05.       Severability.  The provisions of this Tenth Amendment are severable, and if any clause or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Tenth Amendment in any jurisdiction.

6.06.       Counterparts.  This Tenth Amendment may be executed in any number of counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  Delivery of an executed counterpart of this Tenth Amendment by telefacsimile or electronic mail shall be equally effective as delivery of a manually executed counterpart.  A complete set of counterparts shall be lodged with the Administrative Borrower, Agent and each Lender.

6.07.       Headings.  Section headings in this Tenth Amendment are included herein for convenience of reference only and shall not constitute a part of this Tenth Amendment for any other purpose.

6.08.       Binding Effect; Assignment.  This Tenth Amendment shall be binding upon and inure to the benefit of Borrowers, Agent and the Lenders and their respective successors and assigns; provided, however, that the rights and obligations of Borrowers under this Tenth Amendment shall not be assigned or delegated without the prior written consent of Agent and the Lenders.

6.09.       Expenses.  Borrowers agree to pay Agent upon demand, for all reasonable expenses, including reasonable fees of attorneys and paralegals for Agent and the Lenders (who may be employees of Agent or the Lenders), incurred by Agent and the Lenders in connection with the preparation, negotiation and execution of this Tenth Amendment and any document required to be furnished herewith.

6.10.       Integration.  This Tenth Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

[Signature page follows]

5

IN WITNESS WHEREOF, the parties hereto have caused this Tenth Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

ADMINISTRATIVE BORROWER:
TRC COMPANIES, INC., a Delaware corporation, as Administrative Borrower, on behalf of itself and all other Borrowers
By:	/S/ Carl Paschetag, Jr.
Name:	Carl Paschetag, Jr.
Title:	Chief Financial Officer
AGENT AND LENDERS:
WELLS FARGO FOOTHILL, INC., as Agent and as a Lender
By:	/S/ Jason P. Shanahan
Name:	Jason P. Shanahan
Title:	Vice President
TEXTRON FINANCIAL CORPORATION, as a Lender
By:	/S/ Chris Grivakis
Name:	Chris Grivakis
Title:	Senior Account Executive

[SIGNATURE PAGE OF TENTH AMENDMENT]

EX-99.1

Exhibit 99.1

Investor Contact:
Sharon Merrill Associates
(617) 542-5300
trr@investorrelations.com Company Contact:
Carl Paschetag, CFO
(978) 970-5600
cpaschetag@trcsolutions.com

TRC ANNOUNCES FIRST- AND SECOND-QUARTER FISCAL 2008 FINANCIAL RESULTS

Company Reaches Mid-point of Turnaround Plan; Announces Two Major Non-Cash Charges; Increases Net Service Revenue by 7.5%

Lowell, MA, April 10, 2008 - TRC (NYSE: TRR), a recognized leader in engineering, consulting and construction management, today announced financial results for the first and second quarters of fiscal 2008.

First-Quarter Results

For the three months ended September 28, 2007, gross revenue increased 21% to $123.7 million from $101.8 million for the three months ended September 30, 2006.  Net service revenue for the first quarter of fiscal 2008 grew 13% to $71.3 million from $63.1 million for the first quarter of fiscal 2007.  The Company believes net service revenue rather than gross revenue best reflects the value of services provided to its customers.

As of June 30, 2007, TRC’s goodwill totaled $131 million, mostly related to companies acquired during the prior ten years.  The Company evaluates goodwill on an annual basis and more often if indicators of impairment are present.  The Company recorded an impairment charge of $76.7 million in the first quarter of fiscal 2008 primarily based on an evaluation of its market capitalization and discounted projected cash flows.  In addition, due to losses over the past three years and current year performance, TRC also recorded as a component of its tax provision a full valuation allowance against its deferred tax assets in the amount of $12.1 million.   Accordingly, the Company’s results for the first half of fiscal 2008 reflect the effect of the $88.8 million in non-cash charges related to the goodwill impairment charge and valuation allowance on deferred tax assets that were not previously reserved.

Net loss applicable to common shareholders for the three months ended September 28, 2007 was $87.7 million, or $4.75 per share, compared with net income applicable to common shareholders of $0.2 million, or $0.01 per diluted share, for the comparable period in fiscal 2007.  Net loss for the first quarter of fiscal 2008 includes the aforementioned $88.8 million in non-cash charges for goodwill impairment and provision of a full valuation allowance against net deferred tax assets.  Excluding the effect of those items, TRC would have generated net income of $1.1 million for the first quarter of fiscal 2008.

TRC

650 Suffolk Street  •  Lowell, Massachusetts 01854

Telephone 978-970-5600   •  Fax 978-453-1995

Second-Quarter Results

For the three months ended December 28, 2007, gross revenue was $110.9 million, compared with $113.4 million for the second quarter of fiscal 2007.  Net service revenue for the second quarter of fiscal 2008 grew 2% to $66.3 million from $64.9 million for the same period in fiscal 2007.

Net loss applicable to common shareholders for the three months ended December 28, 2007 was $0.4 million, or $0.02 per share, compared with a net loss applicable to common shareholders of $1.1 million, or $0.06 per share, for the comparable period a year earlier.

Six Months Ended December 28, 2007

For the six months ended December 28, 2007, gross revenue increased 9% to $234.6 million from $215.2 million for the six months ended December 31, 2006.  Net service revenue for the six months ended December 28, 2007 grew 7.5% to $137.6 million from $128.0 million for the comparable period in 2006.

Net loss applicable to common shareholders for the first six months of fiscal 2008 was $88.1 million, or $4.74 per share, compared with a net loss applicable to common shareholders of $0.9 million, or $0.05 per share, for the comparable year-earlier period.  Net loss for the first six months of fiscal 2008 included $88.8 million related to the previously mentioned goodwill impairment charge and a tax provision to provide a full valuation allowance against net deferred tax assets.  Excluding the effect of those non-cash charges, TRC would have generated net income of $0.7 million for the first six months of fiscal 2008.

Comments on Results

“Our results in the first half of fiscal 2008 reflect the ongoing effects of a company in transition,” said Chris Vincze, TRC’s Chairman and Chief Executive Officer.  “While we continue to make considerable progress, our financial results were hampered by the implementation of turnaround activities and compounded by a company-wide system conversion.  Excluding the two non-cash charges, TRC’s operations were at breakeven for the first half of fiscal 2008.”

“Net service revenue increased 7.5% from the first half of fiscal 2007 — a strong rate of growth given our internal focus on improving the results of operations,” Vincze said.  “Equally as important, we continued to work on reducing our cost structure across the organization.  Our ability to produce substantial revenue gains while extensively restructuring the Company’s operations demonstrates the strength of the TRC brand and the vibrancy of the markets in which we compete.”

Carl Paschetag, TRC’s Chief Financial Officer said, “In the first half of fiscal 2008, we incurred approximately $1 million in restructuring expense primarily related to severance and small office closings.  We expect to record additional restructuring charges in future quarters as we continue to rationalize our cost structure.  During the first half of fiscal 2008, we transitioned to a new healthcare provider.  This transition will be beneficial to the Company long-term, but it resulted in nearly $1.5 million in unanticipated costs for the six-month period that are not expected to recur.  In addition, our results for the first six months of the fiscal year included nearly $1 million in unanticipated costs related to implementing Vision — our new enterprise-wide accounting software system — that we also do not expect to recur.”

“With Vision, the Company now has, for the first time, a unified platform from which to operate,” Paschetag said.  “While the protracted Vision implementation significantly delayed our financial reporting in recent quarters, the system’s encouraging early results suggest that our start-up issues are essentially behind us.  With the Vision system almost fully implemented, we will be able to report on a timelier basis, further decrease our cost structure, improve pricing and increase employee utilization.”

Outlook

“As we reach the mid-point of our three-year turnaround plan, industry trends continue to work in our favor,” said Vincze.  “Despite the slower U.S. economy, the majority of our target markets, particularly energy, remain well-funded and afford us numerous opportunities.  During recent months, it has been encouraging that TRC has won major contracts across several business lines.  We continue to expand our team of top-quality engineers to accommodate demand.”

“While the third quarter is typically our weakest due to seasonality, our backlog remains strong,” Vincze said.  “We also will continue working aggressively to achieve further reductions in our cost structure.  Our goal for fiscal 2008 is to permanently eliminate costs totaling $7 million on an annualized basis.  We appreciate the continued patience and support of our shareholders as we move toward completion of TRC’s turnaround in fiscal 2009.”

Reporting Schedule

The Company changed to a fiscal quarter end from a calendar quarter end financial reporting schedule beginning with the fiscal period ended September 28, 2007.  The Company is changing its financial quarter end to the last Friday of each quarter. The Company will continue to close its fiscal year end on June 30. The Company believes that reporting on a quarterly fiscal period basis is more consistent with its operating cycle and will improve the efficiency of the financial close process. The Company believes that the change to a fiscal quarter end did not materially impact the reported results of operations.

Conference Call Information

The Company will broadcast its first-quarter and second-quarter financial results conference call this morning at 9:00 a.m. ET.  Those who wish to listen to the conference call should visit the “Investor Center” section of TRC’s website at www.TRCsolutions.com.  The call also may be accessed by dialing (877) 407-5790 or (201) 689-8328 prior to the start of the call.  For interested individuals unable to join the live conference call, a webcast replay will be available on the Company’s website.

About TRC

TRC creates and implements sophisticated and innovative solutions to the challenges facing America’s real estate, environmental, energy, and infrastructure markets. The Company also is a leading provider of technical, financial, risk management, and construction services to commercial and government customers across the country. For more information, visit TRC’s website at www.TRCsolutions.com.

Forward-Looking Statements

Certain statements in this press release may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these statements by forward-looking words such as “may,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” or other words of similar import. You should consider statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial condition, or state other “forward-looking” information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and actual results may differ materially from those discussed as a

result of various factors, including, but not limited to, the availability and adequacy of insurance; the uncertainty of our operational and growth strategies; regulatory uncertainty; the availability of funding for government projects; the level of demand for our services; product acceptance; industry-wide competitive factors; the ability to continue to attract and retain highly skilled and qualified personnel; recent changes in our  senior management; the results of outstanding litigation; risks arising from either failure to identify, or from identified material weaknesses in our internal controls over financial reporting or our inability to effectively remedy such weaknesses; our inability to comply with the terms of our credit facility and our lenders’ future unwillingness to waive our noncompliance; and general political or economic conditions.  Furthermore, market trends are subject to changes, which could adversely affect future results. See additional discussion in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007, and other factors detailed from time to time in our other filings with the Securities and Exchange Commission.

TRC COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended
	September 28, 2007			September 30, 2006
Gross revenue	$	123,654		$	101,794
Less subcontractor costs and other direct reimbursable charges	52,331			38,741
Net service revenue	71,323			63,053
Interest income from contractual arrangements	1,071			1,201
Insurance recoverables and other income	1,528			4,745
Operating costs and expenses:
Cost of services	59,921			57,274
General and administrative expenses	8,821			6,892
Provision for doubtful accounts	810			885
Goodwill impairment charge	76,678			—
Depreciation and amortization	2,102			1,999
	148,332			67,050
Operating (loss) income	(74,410		)	1,949
Interest expense	1,023			1,133
(Loss) income from continuing operations before taxes, minority interest and equity (losses) earnings	(75,433		)	816
Federal and state income tax provision	12,237			414
Minority interest	27			—
(Loss) income from continuing operations before equity (losses) earnings	(87,643		)	402
Equity in (losses) earnings from unconsolidated affiliates	(12		)	19
(Loss) income from continuing operations	(87,655		)	421
Discontinued operations, net of taxes	—			(77		)
Net (loss) income	(87,655		)	344
Dividends and accretion charges on preferred stock	—			147
Net (loss) income applicable to common shareholders	$	(87,655	)	$	197
Basic and diluted (loss) earnings per common share:
Continuing operations	$	(4.75	)	$	0.02
Discontinued operations, net of taxes	—			(0.01		)
	$	(4.75	)	$	0.01
Average shares outstanding:
Basic	18,447			16,729
Diluted	18,447			17,194

TRC COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)

	September 28, 2007			June 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	239		$	430
Accounts receivable, less allowances for doubtful accounts	149,149			132,879
Insurance recoverable - environmental remediation	7,843			6,381
Deferred income tax assets	—			13,894
Income taxes refundable	548			587
Restricted investment	19,706			20,830
Prepaid expenses and other current assets	8,687			11,911
Total current assets	186,172			186,912
Property and equipment, at cost	57,672			57,569
Less accumulated depreciation and amortization	36,918			36,126
	20,754			21,443
Goodwill	54,265			130,935
Investments in and advances to unconsolidated affiliates and construction joint ventures	1,423			5,245
Long-term restricted investment	67,762			72,651
Long-term prepaid insurance	53,567			54,395
Other assets	14,601			14,401
Total assets	$	398,544		$	485,982
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	30,669		$	31,618
Accounts payable	65,821			54,976
Accrued compensation and benefits	24,174			22,134
Deferred revenue	26,585			31,494
Environmental remediation liabilities	3,402			4,629
Other accrued liabilities	22,075			24,007
Total current liabilities	172,726			168,858
Non-current liabilities:
Long-term debt, net of current portion	11,450			11,052
Long-term income taxes payable	698			—
Deferred income tax liabilities	—			1,519
Long-term deferred revenue	129,016			134,901
Long-term environmental remediation liabilities	8,186			7,861
Total liabilities	322,076			324,191
Minority interest in subsidiary	35			62
Commitments and contingencies
Shareholders’ equity:
Capital stock:
Preferred, $.10 par value; 500,000 shares authorized, no shares issued and outstanding	—			—
Common, $.10 par value; 30,000,000 shares authorized, 18,676,535 and 18,673,053 shares issued and outstanding, respectively, at September 30, 2007, and 18,240,509 and 18,237,027 shares issued and outstanding, respectively, at June 30, 2007	1,868			1,824
Additional paid-in capital	150,402			147,229
(Accumulated deficit) retained earnings	(76,032		)	12,453
Accumulated other comprehensive income	228			256
Treasury stock, at cost	(33		)	(33		)
Total shareholders’ equity	76,433			161,729
Total liabilities and shareholders’ equity	$	398,544		$	485,982

TRC COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended						Six Months Ended
	December 28, 2007			December 31, 2006			December 28, 2007			December 31, 2006
				(As restated)						(As restated)
Gross revenue	$	110,932		$	113,412		$	234,586		$	215,206
Less subcontractor costs and other direct reimbursable charges	44,675			48,515			97,006			87,256
Net service revenue	66,257			64,897			137,580			127,950
Interest income from contractual arrangements	1,007			1,250			2,078			2,451
Insurance recoverables and other income	17			71			1,545			4,816
Operating costs and expenses:
Cost of services	56,137			55,626			116,058			112,900
General and administrative expenses	7,830			4,624			16,651			11,516
Provision for doubtful accounts	695			925			1,505			1,810
Goodwill impairment charge	—			—			76,678			—
Depreciation and amortization	2,024			2,023			4,126			4,022
	66,686			63,198			215,018			130,248
Operating income (loss)	595			3,020			(73,815		)	4,969
Interest expense	971			1,147			1,994			2,280
(Loss) income from continuing operations before taxes, minority interest and equity earnings (losses)	(376		)	1,873			(75,809		)	2,689
Federal and state income tax provision	101			947			12,338			1,361
Minority interest	30			—			57			—
(Loss) income from continuing operations before equity earnings (losses)	(447		)	926			(88,090		)	1,328
Equity in earnings (losses) from unconsolidated affiliates	—			18			(12		)	37
(Loss) income from continuing operations	(447		)	944			(88,102		)	1,365
Discontinued operations, net of taxes	—			47			—			(30		)
Net (loss) income	(447		)	991			(88,102		)	1,335
Dividends and accretion charges on preferred stock	—			2,086			—			2,233
Net loss applicable to common shareholders	$	(447	)	$	(1,095	)	$	(88,102	)	$	(898	)
Basic and diluted (loss) earnings per common share:
Continuing operations	$	(0.02	)	$	(0.07	)	$	(4.74	)	$	(0.05	)
Discontinued operations, net of taxes	—			0.01			—			—
	$	(0.02	)	$	(0.06	)	$	(4.74	)	$	(0.05	)
Average shares outstanding:
Basic	18,706			17,117			18,577			16,923
Diluted	18,706			17,117			18,577			16,923

TRC COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)

	December 28, 2007			June 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	212		$	430
Accounts receivable, less allowances for doubtful accounts	136,946			132,879
Insurance recoverable - environmental remediation	7,779			6,381
Deferred income tax assets	—			13,894
Income taxes refundable	383			587
Restricted investment	14,654			20,830
Prepaid expenses and other current assets	8,069			11,911
Total current assets	168,043			186,912
Property and equipment, at cost	58,563			57,569
Less accumulated depreciation and amortization	38,361			36,126
	20,202			21,443
Goodwill	54,452			130,935
Investments in and advances to unconsolidated affiliates and construction joint ventures	1,545			5,245
Long-term restricted investment	67,644			72,651
Long-term prepaid insurance	52,738			54,395
Other assets	15,032			14,401
Total assets	$	379,656		$	485,982
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	26,357		$	31,618
Accounts payable	60,139			54,976
Accrued compensation and benefits	22,211			22,134
Income taxes payable	—			—
Deferred revenue	22,648			31,494
Environmental remediation liabilities	1,919			4,629
Other accrued liabilities	18,364			24,007
Total current liabilities	151,638			168,858
Non-current liabilities:
Long-term debt, net of current portion	11,414			11,052
Long-term income taxes payable	698			—
Deferred income tax liabilities	—			1,519
Long-term deferred revenue	130,853			134,901
Long-term environmental remediation liabilities	8,204			7,861
Total liabilities	302,807			324,191
Minority interest in subsidiary	5			62
Commitments and contingencies
Shareholders’ equity:
Capital stock:
Preferred, $.10 par value; 500,000 shares authorized, no shares issued and outstanding	—			—
Common, $.10 par value; 30,000,000 shares authorized, 18,772,957 and 18,769,475 shares issued and outstanding, respectively, at December 31, 2007, and 18,240,509 and 18,237,027 shares issued and outstanding, respectively, at June 30, 2007	1,877			1,824
Additional paid-in capital	151,271			147,229
(Accumulated deficit) retained earnings	(76,479		)	12,453
Accumulated other comprehensive income	208			256
Treasury stock, at cost	(33		)	(33		)
Total shareholders’ equity	76,844			161,729
Total liabilities and shareholders’ equity	$	379,656		$	485,982