Tejon Ranch Co. Reports First Quarter 2018 Results of Operations
--Water Sales Contribute to Strong Revenues from Operations--
--Company Continues to Achieve Progress on Real Estate Development Projects--
“Our first quarter results are a testament to the strengths of our
diverse operating segments. Our mineral resources segment generated
First Quarter Financial Results
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Net income available to common stockholders for the first quarter of
2018 was
$1.5 million , or earnings per diluted common share of$0.06 , compared with a net loss of$1.9 million , or a loss per common share of$0.09 , for the first quarter of 2017. -
Revenues and other income, including equity in earnings of
unconsolidated joint ventures, for the first quarter of 2018 were
$13.9 million , an increase of$7.9 million , or 131%, compared with$6.0 million for the same period in 2017. Factors behind this increase include:-
Moderate drought conditions in
Kern County during the first quarter increased water sales opportunities. The Company sold 7,442 acre feet of water during the first quarter of 2018, generating$8.0 million in revenue. Water sales during the first of quarter of 2017 totaled 939 acre feet, generating$1.1 million . -
Farming revenues increased
$0.8 million as a result of the timing of carryover almond sales. The Company sold 330,000 pounds of its carryover crop in the first quarter of 2018, compared to no sales during the same period in 2017.
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Moderate drought conditions in
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Expenses totaled
$11.9 million and$9.3 million as ofMarch 31, 2018 and 2017, respectively. The$2.7 million increase is attributed to increased mineral resources expense of$2.9 million associated with the increased water sales discussed above. The Company also saw increased farming expenses of$0.5 million attributed to the increased almond sales discussed above. Offsetting these increases were reductions within our commercial and ranch operations segments along with our corporate division of$0.7 million primarily driven by reduced payroll and overhead costs.
2018 Operational Highlights
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In January, the Company obtained approval on the first phase of the
Farm Village site plan fromKern County .Farm Village will serve as the “front door” toMountain Village .Farm Village will include fresh culinary offerings, artisan markets, boutique lodging, and an array of trails, gardens, and agriculture that will be intertwined to create the most unique and relaxing experience while fulfilling the needs of residents ofMountain Village . -
In March, the Company successfully leased half of a 480,000 square
foot industrial building to
Dollar General . The building was constructed in 2017 through a joint venture formed withMajestic Realty Co.
2018 Outlook:
The Company’s capital structure provides a solid foundation for
continued investment in ongoing and future projects. As of March 31,
2018, total capital, including debt, was approximately
The Company will continue to aggressively pursue development, leasing,
and investment within
During 2018, the Company will continue to invest funds in master project
infrastructure, as well as vertical development within its active
commercial and industrial development.
The Company believes the variability of its quarterly and annual
operating results will continue during 2018 due to the nature of its
current farming and real estate activities. We may or may not have
additional water sales for the remainder of the year depending on final
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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
TEJON RANCH CO. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except earnings per share) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Revenues: | ||||||||
Real estate - commercial/industrial | $ | 2,154 | $ | 2,189 | ||||
Mineral resources | 9,131 | 2,001 | ||||||
Farming | 1,195 | 431 | ||||||
Ranch operations | 989 | 1,081 | ||||||
Total revenues from Operations | 13,469 | 5,702 | ||||||
Operating Profits: | ||||||||
Real estate - commercial/industrial | 835 | 446 | ||||||
Real estate - resort/residential | (415 | ) | (630 | ) | ||||
Mineral resources | 4,900 | 677 | ||||||
Farming | (643 | ) | (892 | ) | ||||
Ranch operations | (400 | ) | (412 | ) | ||||
Income (loss) from Operating Segments | 4,277 | (811 | ) | |||||
Investment income | 283 | 103 | ||||||
Other income | (14 | ) | (14 | ) | ||||
Corporate expense | (2,732 | ) | (2,751 | ) | ||||
Income (loss) from operations before equity in earnings of unconsolidated joint ventures | 1,814 | (3,473 | ) | |||||
Equity in earnings of unconsolidated joint ventures, net | 167 | 228 | ||||||
Income (loss) before income tax expense | 1,981 | (3,245 | ) | |||||
Income tax expense (benefit) | 526 | (1,332 | ) | |||||
Net income (loss) | 1,455 | (1,913 | ) | |||||
Net loss attributable to non-controlling interest | (2 | ) | (11 | ) | ||||
Net income (loss) attributable to common stockholders | $ | 1,457 | $ | (1,902 | ) | |||
Net income (loss) per share attributable to common stockholders, basic | $ | 0.06 | $ | (0.09 | ) | |||
Net income (loss) per share attributable to common stockholders, diluted | $ | 0.06 | $ | (0.09 | ) | |||
Weighted average number of shares outstanding: | ||||||||
Common stock | 25,912,819 | 20,827,993 | ||||||
Common stock equivalents | 28,509 | 47,052 | ||||||
Diluted shares outstanding | 25,941,328 | 20,875,045 | ||||||
Non-GAAP Financial Measure
This news release includes references to the Company’s non-GAAP financial measure “EBITDA.” EBITDA represents our share of consolidated net income in accordance with GAAP, before interest, taxes, depreciation, and amortization, plus the allocable portion of EBITDA of unconsolidated joint ventures accounted for under the equity method of accounting based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. EBITDA is a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance. We use Adjusted EBITDA to assess the performance of our core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as EBITDA, excluding stock compensation expense. We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from our operations on an unleveraged basis before the effects of taxes, depreciation and amortization, and stock compensation expense. By excluding interest expense and income, EBITDA and Adjusted EBITDA allow investors to measure our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries. We believe that excluding charges related to share-based compensation facilitates a comparison of our operations across periods and among other companies without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use. EBITDA and Adjusted EBITDA have limitations as measures of our performance. EBITDA and Adjusted EBITDA do not reflect our historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA and Adjusted EBITDA are relevant and widely used measures of performance, they do not represent net income or cash flows from operations as defined by GAAP, and they should not be considered as alternatives to those indicators in evaluating performance or liquidity. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.
TEJON RANCH CO. | ||||||||
Non-GAAP Financial Measures | ||||||||
(Unaudited) |
||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Net income | $ | 1,455 | $ | (1,913 | ) | |||
Net income (loss) attributed to non-controlling interest | (2 | ) | (11 | ) | ||||
Interest, net: | ||||||||
Consolidated | (283 | ) | (103 | ) | ||||
Our share of interest expense from unconsolidated joint ventures | 501 | 404 | ||||||
Total interest, net | 218 | 301 | ||||||
Income taxes | 526 | (1,332 | ) | |||||
Depreciation and amortization: | ||||||||
Consolidated | 1,071 | 1,150 | ||||||
Our share of depreciation and amortization from unconsolidated joint ventures | 919 | 1,316 | ||||||
Total depreciation and amortization | 1,990 | 2,466 | ||||||
EBITDA | 4,191 | (467 | ) | |||||
Stock compensation expense | 948 | 811 | ||||||
Adjusted EBITDA | $ | 5,139 | $ | 344 | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180507005269/en/
Source:
Tejon Ranch Co.
Allen Lyda, 661-248-3000
Executive Vice
President & Chief Financial Officer