TEJON RANCH, Calif.--(BUSINESS WIRE)--Aug. 8, 2016--
Tejon Ranch Co. (NYSE:TRC), a diversified real estate and agribusiness
company, which is in the process of developing three master plan
communities and a large scale commercial center, today released its
results of operations for the three- and six-months ended June 30, 2016.
“In the second quarter, we continued to see success executing our
strategy as we made great progress in our commercial real estate
ventures. We formed a limited liability company with Majestic Realty Co.
to purchase a fully-leased 651,909 square foot building at the Tejon
Ranch Commerce Center, and looking ahead to the second half of 2016, we
expect to finalize our operating agreement with Majestic on a new
480,480 square foot industrial building at TRCC,” said Gregory S.
Bielli, President and CEO. “We look forward to updating shareholders as
we achieve notable milestones and continue to unlock Tejon Ranch's
inherent value.”
Quarter Ended June 30, 2016 Financial Highlights
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Revenue from operations for the second quarter of 2016 was $6.8
million, a decrease of $0.2 million, or 2%, compared to $7.0 million
in revenue for the same period in 2015.
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Water sales increased $0.6 million as a result of the timing of
our water sales. Comparatively, with pricing relatively flat, we
sold 1,331 and 868 acre-feet of water during the quarter ended
June 30, 2016 and 2015, respectively.
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Pistachio revenues decreased $455,000 primarily a result of
reduced 2015 production which reduced carry forward inventory
levels in 2016 and the timing of the sale of inventory in 2015.
During 2015, the majority of the prior year carry forward
inventory was sold during the second quarter of 2015. Our
carryover pistachio crop was 9,500 and 305,000 pounds at the
beginning of 2016 and 2015, respectively.
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Almond revenues decreased $0.3 million during the quarter as a
result of a decrease in pricing and sales volume.
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Equity in earnings from unconsolidated joint ventures for the second
quarter of 2016 was $1.8 million, an increase of $0.1 million, or 11%,
compared to $1.7 million for the same period in 2015. The increase was
driven by higher fuel margins from our TA/Petro joint venture as a
result of lower inventory costs.
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Net loss attributable to common stockholders for the second quarter of
2016 was $0.7 million, representing a loss per common share of $0.03,
compared to net income of $0.4 million, or earnings per common share
of $0.02, for the same period in 2015. All per share numbers in this
release are diluted earnings per common share.
Year-to-Date Financial Highlights
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Revenues from operations for the six-months ended June 30, 2016 were
$19.8 million, a decrease of $3.8 million, or 16%, compared to
revenues of $23.6 million for the same period in 2015. The decrease in
revenues was mainly due to the following:
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Almond revenues decreased $2.0 million as a result of reduced 2015
almond inventory carryover when compared to the prior year, due to
higher sales of 2015 crop during 2015. Our carryover almond crop
was 430,000 and 916,000 pounds at the beginning of 2016 and 2015,
respectively.
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Oil royalty revenues decreased $0.9 million due to declines in
both the price per barrel of oil and production volume.
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Water sales decreased $0.6 million. Comparatively, we sold 7,285
and 7,922 acre-feet of water during the six-months ended June 30,
2016 and 2015, respectively. The average sales price was $1,317
and $1,283 per-acre foot during the six-months ended June 30, 2016
and 2015, respectively.
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Equity in earnings from unconsolidated joint ventures for the
six-months ended June 30, 2016 was $3.3 million, an increase of $0.5
million, or 17%, compared to $2.8 million for the same period in 2015.
The increase was driven by higher fuel margins from our TA/Petro joint
venture as a result of lower inventory costs.
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Net income attributable to common stockholders for the six months
ended June 30, 2016 was $0.5 million, representing earnings per common
share of $0.03, compared to net income of $2.0 million, or earnings
per common share of $0.10, for the same period in 2015.
2016 Operational Highlights
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In April 2016, we entered into a non-binding Letter of Intent with
Majestic Realty Co., a Los Angeles based commercial/industrial
developer, to negotiate a joint venture operating agreement to pursue
the development, construction, leasing, and management of a 480,480
square foot industrial building at the Tejon Ranch Commerce Center.
The agreement is structured so that each member has a 50% interest. We
are in the process of planning and designing the industrial building,
as we work towards finalizing the joint venture operating agreement.
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In May 2016, Kern County Planning Department released the Draft
Environmental Impact Report related to our Grapevine Specific and
Community Plan, for public comment. The comment period has since
closed and is currently under review by Kern County. We expect Kern
County's decision regarding the Grapevine Community by the end of 2016.
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On August 6, 2016, we entered into a limited liability company
agreement with Majestic Realty Co. to purchase, own, and manage a
fully-leased, 651,909 square foot industrial building located at the
Tejon Ranch Commerce Center. The agreement is structured such that
each member has a 50% interest.
2016 Outlook:
We believe our capital structure provides a solid foundation for
continued investment in ongoing and future projects. As of June 30,
2016, total capital, including long-term debt, was approximately $405.7
million. We also have cash and securities totaling approximately $33.5
million and $19.0 million available on our line of credit.
We will continue to, either independently or through joint ventures,
aggressively pursue development, leasing, and investment within the
Tejon Ranch Commerce Center. We continue to invest in our master plan
communities, including the completion of entitlements for Centennial and
Grapevine and in pre-development investment for Mountain Village at
Tejon Ranch. California is one of the most highly regulated states to
engage in real estate development and, as such, delays, including those
resulting from litigation, can be reasonably anticipated. Accordingly,
throughout the next few years, we expect net income to fluctuate from
year-to-year based upon commodity prices, production within our farming
segment, and the timing of sales of land and the leasing of land within
our commercial/industrial developments.
We believe the variability of our quarterly and annual operating results
will continue during 2016 due to the seasonal nature of our farming and
real estate activities. Mineral resource revenue from oil royalties is
expected to be negatively impacted in 2016 due to lower average prices
for oil and reduced production tied to lower prices. It is still too
early to have an accurate estimate as to the 2016 crop, but almond and
grape production appears to be comparable to 2015 and pistachio
production appears to be comparable to an off production year, which
will be an improvement over 2015.
About Tejon Ranch Co.
Tejon Ranch Co. (NYSE: TRC) is a diversified real estate development and
agribusiness company, whose principal asset is its 270,000-acre land
holding located approximately 60 miles north of Los Angeles and 30 miles
south of Bakersfield.
More information about Tejon Ranch Co. can be found on our website at www.tejonranch.com.
Forward Looking Statements:
The statements contained herein, which are not historical facts, are
forward-looking statements based on economic forecasts, strategic plans
and other factors, which by their nature involve risk and uncertainties.
In particular, among the factors that could cause actual results to
differ materially are the following: business conditions and the general
economy, future commodity prices and yields, market forces, the ability
to obtain various governmental entitlements and permits, interest rates
and other risks inherent in real estate and agriculture businesses. For
further information on factors that could affect the Company, the reader
should refer to the Company’s filings with the Securities and Exchange
Commission.
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TEJON RANCH CO.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except earnings per share)
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(Unaudited)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2016
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2015
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2016
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2015
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Revenues:
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Real estate - commercial/industrial
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$
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2,159
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$
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1,810
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$
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4,313
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$
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4,089
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Mineral resources
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3,187
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2,652
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11,927
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12,852
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Farming
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502
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1,323
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1,723
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4,394
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Ranch operations
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1,001
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1,215
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1,839
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2,298
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Total revenues from Operations
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6,849
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7,000
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19,802
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23,633
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Operating Profits:
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Real estate - commercial/industrial
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445
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134
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920
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804
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Real estate - resort/residential
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(387
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)
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(576
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)
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(929
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)
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(1,327
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)
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Mineral resources
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1,387
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1,929
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5,434
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6,435
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Farming
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(848
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)
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79
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(1,133
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)
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807
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Ranch operations
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(541
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)
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(204
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)
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(1,050
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)
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(714
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Income from Operating Segments
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56
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1,362
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3,242
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6,005
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Investment income
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120
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142
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238
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297
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Other income
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37
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17
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88
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55
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Corporate expense
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3,163
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2,764
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6,166
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6,287
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(Loss) income from operations before equity in earnings of
unconsolidated joint ventures
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(2,950
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)
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(1,243
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)
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(2,598
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)
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70
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Equity in earnings of unconsolidated joint ventures, net
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1,842
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1,656
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3,297
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2,806
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(Loss) income before income tax (benefit) expense
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(1,108
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)
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413
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699
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2,876
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Income tax (benefit) expense
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(380
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)
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36
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232
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898
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Net (loss) income
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(728
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)
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377
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467
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1,978
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Net loss attributable to non-controlling interest
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(40
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)
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(29
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)
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(54
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)
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(45
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)
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Net (loss) income attributable to common stockholders
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$
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(688
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)
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$
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406
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$
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521
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$
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2,023
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Net (loss) income per share to common stockholders, basic
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(0.03
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)
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0.02
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0.03
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0.10
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Net (loss) income per share to common stockholders, diluted
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(0.03
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0.02
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0.03
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0.10
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Weighted average number of shares outstanding:
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Common stock
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20,724,689
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20,660,797
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20,713,396
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20,653,363
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Common stock equivalents – stock options
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115,693
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69,701
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103,664
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64,554
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Diluted shares outstanding
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20,840,382
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20,730,498
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20,817,060
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20,717,917
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160808006164/en/
Source: Tejon Ranch Co.
Tejon Ranch Co.
Allen Lyda, 661-248-3000
Executive Vice
President & Chief Financial Officer
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