TEJON RANCH, Calif.--(BUSINESS WIRE)--Mar. 3, 2016--
Tejon Ranch Co. (NYSE:TRC), a diversified real estate development and
agribusiness company, today released the results of operations for the
fourth quarter and year ended December 31, 2015.
“During fiscal 2015, we achieved several significant milestones and made
meaningful progress toward executing our overall strategic vision,” said
Gregory S. Bielli, President and CEO. “With the progress we’ve made with
our large-scale development projects, Mountain Village at Tejon Ranch,
Centennial at Tejon Ranch and Grapevine at Tejon Ranch, we have
established a strong foundation for future growth and long-term
shareholder value creation. In addition, our diversified operations,
including both our unique natural resources and commercial operations,
continue to support our strategic initiatives. Water sales continued
their strong momentum from the prior year and revenues related to our
farming operations were consistent with prior year; however, we
experienced lower than expected revenues from our mineral resources
segment. In line with our strategy, our diversification proved
beneficial as we offset the shortfall in revenues by increasing our
rentable square footage in our commercial segment by 6% in 2015.”
Fourth Quarter Financial Highlights
-
Revenue from operations for the fourth quarter of 2015 was $15.6
million, an increase of $1 million, or 7%, compared to $14.6 million
in revenue for the same period in 2014. The increase in revenues was
mainly due to greater almond sales within the farming segment during
the fourth quarter of 2015 compared to the same period in 2014.
-
Net income available to common stockholders for the fourth quarter of
2015 was $1.7 million, representing earnings per common share of
$0.08, compared to $1.9 million, or earnings per common share of
$0.09, for the same period in 2014. The decrease in net income was
partially due to a decrease in equity in earnings from unconsolidated
joint ventures, in addition to an increase in corporate general and
administrative expenses, as discussed below.
-
Corporate general and administrative expenses for the fourth quarter
of 2015 were $3.6 million, an increase of $1.2 million, or 52%,
compared to $2.4 million for the same period in 2014. The increase was
mainly due to a one-time non-cash pension settlement charge ($0.5
million) and other personnel related expenses ($0.4 million).
Fiscal 2015 Financial Highlights
-
Revenue from operations was $51.1 million in fiscal 2015 and 2014.
Commercial revenues increased 5% year over year as rentable square
footage increased by 6% during 2015. This increase was offset by a 7%
decrease in mineral resources attributed to declining oil prices
during 2015. Farming revenues were flat year over year, and included
the following:
-
Farming revenue
-
Increase in almond revenue of $2.2 million, or 22%
-
Decrease in pistachio revenue of $1.2 million, or 15%
-
Increase in wine grape revenue of $0.4 million, or 9%
-
Net income available to common stockholders for fiscal 2015 was $3.0
million, representing earnings per common share of $0.14, compared to
$5.7 million, or earnings per common share of $0.27, for fiscal 2014.
The year-over-year reduction in net income was mainly due an increase
in general and administrative expenses and in farming expenses. These
increases in expenses were partially offset by an improvement in
equity in earnings of $1.0 million when compared to 2014.
-
Corporate general and administrative expenses for fiscal 2015 were
$12.8 million, an increase of $2.2 million, or 20%, compared to $10.6
million for fiscal 2014. The increase was mainly due to increases in
payroll and benefit costs as follows:
-
Increase pension and retirement plan charges of $0.9 million
-
Included within the $0.9 million is a one-time non-cash
pension settlement charge of $0.5 million
-
The Company also changed its performance-based bonus payment
compensation from stock and cash to all cash triggering an
increase in bonus expense of $0.2 million.
-
Increase of $0.5 million in workers compensation and health
insurance costs.
-
One time charge related to employee severance of $0.6 million
-
Farming expenses increased $2.7 million, or 17%, during 2015 compared
to 2014. This is mainly attributed to increased cost of sales from
commodities of approximately $2.2 million as well as higher fixed
water costs of $0.5 million, resulting from the drought and related
increases in state water costs.
Fiscal 2015 Operational Highlights
-
In November 2015, the Board of Directors approved a detailed business
plan guiding the near-term development and marketing of Mountain
Villageat Tejon Ranch, the Company’s upcoming upscale mountain
residential/resort community located in the westernmost high country
of Tejon Ranch. The Board has also authorized the management team to
move forward with the creation of Tentative Tract Maps, the final step
in the regulatory process.
-
In June 2015, the Los Angeles County Board of Supervisors gave final
approval for the Antelope Valley Area Plan, or AVAP, providing land
use designations and zoning for the residential and commercial
development of Centennial at Tejon Ranch, or Centennial, our
large-scale community.
-
In November 2015, the Board of Directors approved the expansion of the
portfolio of industrial buildings at Tejon Ranch Commerce Center
(TRCC), authorizing the 2016 construction of a 250,000 square foot
building.
-
Board approval of additional 4,600 square foot multi-tenant building
in TRCC-East, which we completed and delivered to tenants in December
2015.
-
In February 2015, parties involved in a groundwater use adjudication
agreed to a settlement with respect to the rights to groundwater
within the Antelope Valley basin. The settlement includes the
groundwater underlying the Company’s land near the Centennial project.
In December 2015, the court approved the settlement, which is
currently under appeal. The Company’s water supply plan for the
Centennial project anticipated reliance on, among other sources, a
certain quantity of groundwater underlying the Company’s lands in the
Antelope Valley.
2016 Outlook:
The Company believes its capital structure provides a solid foundation
for continued investment in ongoing and future projects. As of December
31, 2015, total capital, including long-term debt, was approximately
$406.1 million. The Company also had cash and securities totaling
approximately $34.7 million and full availability on its $30 million
line of credit.
The Company will continue to aggressively pursue development, leasing,
and investment within TRCC and in its joint ventures. The Company
continues to invest in its residential projects, including the
completion of entitlements for Centennial and Grapevine at Tejon Ranch
and in the pre-development investment for Mountain Village at Tejon
Ranch.
During 2016, the Company will continue to invest funds toward obtaining
entitlements for our land and for master project infrastructure and
vertical development within our active commercial and industrial
developments. California is one of the most highly regulated states in
which to engage in real estate development and, as such, natural 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 industrial developments.
The Company believes the variability of its quarterly and annual
operating results will continue during 2016 due to the nature of its
current farming and real estate activities. Mineral resource revenue
from oil royalties is expected to be negatively impacted in 2016 due to
the expectation of lower average prices for oil during 2016 as compared
to 2015. Farm revenues may be adversely impacted in 2016, compared to
2015, due to recent declines in almond prices. As the spring bloom in
the orchards has just begun, it is too early to make any estimate as to
farm production for 2016.
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 online at http://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.
|
TEJON RANCH CO.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
YEAR ENDED DECEMBER 31, 2015
|
(In thousands, except earnings per share)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Real estate - commercial/industrial
|
|
$
|
2,552
|
|
|
$
|
2,550
|
|
|
|
$
|
8,272
|
|
|
$
|
7,845
|
|
|
Mineral resources
|
|
|
942
|
|
|
|
1,454
|
|
|
|
|
15,116
|
|
|
|
16,255
|
|
|
Farming
|
|
|
11,366
|
|
|
|
9,793
|
|
|
|
|
23,836
|
|
|
|
23,435
|
|
|
Ranch operations
|
|
|
708
|
|
|
|
762
|
|
|
|
|
3,923
|
|
|
|
3,534
|
|
Total revenues from Operations
|
|
|
15,568
|
|
|
|
14,559
|
|
|
|
|
51,147
|
|
|
|
51,069
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profits:
|
|
|
|
|
|
|
|
|
|
|
Real estate - commercial/industrial
|
|
|
45
|
|
|
|
821
|
|
|
|
|
1,578
|
|
|
|
639
|
|
|
Real estate - resort/residential
|
|
|
(464
|
)
|
|
|
(907
|
)
|
|
|
|
(2,349
|
)
|
|
|
(2,608
|
)
|
|
Mineral resources
|
|
|
569
|
|
|
|
969
|
|
|
|
|
7,720
|
|
|
|
9,837
|
|
|
Farming
|
|
|
4,092
|
|
|
|
2,924
|
|
|
|
|
4,852
|
|
|
|
7,185
|
|
|
Ranch operations
|
|
|
(21
|
)
|
|
|
(678
|
)
|
|
|
|
(2,189
|
)
|
|
|
(2,464
|
)
|
Income from Operating Segments
|
|
|
4,221
|
|
|
|
3,129
|
|
|
|
|
9,612
|
|
|
|
12,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
115
|
|
|
|
175
|
|
|
|
|
528
|
|
|
|
696
|
|
|
Other income
|
|
|
201
|
|
|
|
215
|
|
|
|
|
381
|
|
|
|
526
|
|
|
Corporate expense
|
|
|
(3,594
|
)
|
|
|
(2,358
|
)
|
|
|
|
(12,808
|
)
|
|
|
(10,646
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations before equity in earnings of unconsolidated
joint ventures
|
|
|
943
|
|
|
|
1,161
|
|
|
|
|
(2,287
|
)
|
|
|
3,165
|
|
Equity in earnings of unconsolidated joint ventures, net
|
|
|
1,463
|
|
|
|
2,001
|
|
|
|
|
6,324
|
|
|
|
5,294
|
|
Income before income tax expense
|
|
|
2,406
|
|
|
|
3,162
|
|
|
|
|
4,037
|
|
|
|
8,459
|
|
Income tax expense
|
|
|
661
|
|
|
|
1,050
|
|
|
|
|
1,125
|
|
|
|
2,697
|
|
Net income
|
|
|
1,745
|
|
|
|
2,112
|
|
|
|
|
2,912
|
|
|
|
5,762
|
|
Net income (loss) attributable to non-controlling interest
|
|
|
30
|
|
|
|
196
|
|
|
|
|
(38
|
)
|
|
|
107
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
1,715
|
|
|
$
|
1,916
|
|
|
|
$
|
2,950
|
|
|
$
|
5,655
|
|
Net income (loss) per share to common stockholders, basic
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
|
$
|
0.14
|
|
|
$
|
0.27
|
|
Net income (loss) per share to common stockholders, diluted
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
|
$
|
0.14
|
|
|
$
|
0.27
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
20,686,689
|
|
|
|
20,635,008
|
|
|
|
|
20,665,792
|
|
|
|
20,595,422
|
|
|
Common stock equivalents – stock options
|
|
|
73,728
|
|
|
|
42,904
|
|
|
|
|
71,879
|
|
|
|
37,033
|
|
|
Diluted shares outstanding
|
|
|
20,760,417
|
|
|
|
20,677,912
|
|
|
|
|
20,737,671
|
|
|
|
20,632,455
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160303006636/en/
Source: Tejon Ranch Co.
Tejon Ranch Co. Allen Lyda Executive Vice President & Chief
Financial Officer 661-248-3000
|