TEJON RANCH, Calif.--(BUSINESS WIRE)--Nov. 6, 2013--
Tejon Ranch Co. (NYSE:TRC) today released the results of operations for
the nine months ended September 30, 2013, with the Company showing net
income attributable to common stockholders of $4,991,000, or $0.25 per
common share, compared to net income attributable to common stockholders
of $4,414,000, or $0.22 per common share, for the same period in 2012.
Revenue from operations for the nine months ended September 30, 2013 was
$32,363,000, compared to $33,542,000 of revenue for the same period
during 2012. All per share references in this release are presented on a
fully diluted basis.
For the third quarter ended September 30, 2013, the Company had net
income attributable to common stockholders of $2,292,000, or $0.11 per
common share, compared to net income attributable to common stockholders
of $4,021,000, or $0.20 per common share, for the third quarter of 2012.
Revenue from operations for the third quarter of 2013 was $15,128,000
compared to $16,114,000 of revenue during the same period of 2012.
Results of Operations for the First Nine Months of 2013:
The improvement in net income attributable to common stockholders during
the first nine months of 2013, when compared to the same period in 2012,
is primarily the result of improved equity in earnings of unconsolidated
joint ventures and a reduction in operating expenses.
Revenue from operations declined $1,179,000, or 4%, during the first
nine months of 2013, as compared to the same period in 2012, due to a
decrease in mineral resources revenues, which were partially offset by
improved revenues from the other operating segments.
Commercial/industrial revenue improved $880,000 over the first nine
months of 2013, compared to the same period in 2012, thanks to a
$1,036,000 increase in hunting and grazing revenues. Our hunting program
was closed during the first eight months of 2012. Additionally,
percentage rent from our Calpine lease increased $477,000 due to
increases in power prices. These improvements were somewhat offset by a
$648,000 decrease in land sale revenue recognized in 2012 related to a
deferred gain from the sale of land to Caterpillar that occurred in 2011.
Farming revenues rose $504,000 during the first nine months of 2013, a
result of increased almond revenues coming from higher prices for both
the 2012 almond crop inventory sales and 2013 almond crop sales.
Partially offsetting this improvement in almond revenue has been a
decline in pistachio revenues, when compared to the same period in 2012,
due to lower production stemming from the alternate bearing cycle of
pistachios. We also saw a decrease in grape revenues, as compared to the
same period in 2012, due to the removal of older vines at the beginning
of 2013 and also to damage the grapes suffered from a summer windstorm.
Mineral resources revenues declined $3,177,000 during the first nine
months of 2013 compared to 2012. The comparative decrease is due to a
29% decline in production due to temporary closures of producing wells
for maintenance and expansion of production storage facilities, and
timing of new wells due to regulatory permitting.
Total operating expenses declined $1,069,000 during the period, largely
due to the reversal of previously recorded stock compensation expense
($2,605,000) related to unvested awards of an executive that left the
Company during the first quarter, and to awards that will not vest due
to the retirement of the Company’s CEO at the beginning of 2014, a
retirement which was announced during the second quarter. This
improvement was partially offset by an increase of $1,436,000 in farming
expense tied to the timing of the beginning of the 2013 harvest.
An important component of our real estate activities are our various
joint ventures. Our share of earnings from our joint ventures increased
by $1,272,000 during the first nine months of 2013 largely due to a
$988,000 increase in income from our TA/Petro joint venture as a result
of improved operating margins and lower operating expenses.
Results of Operations for the Third Quarter of 2013:
Reduced mineral resource revenues due to the operational factors
described above and lower third quarter farm revenues drive the decline
in revenue for the third quarter of 2013. Improved commercial/industrial
revenues helped to partially offset the decline. The reduction in
farming revenue during the quarter is largely due to the decline in
pistachio and grape production, as described above, all of which was
somewhat offset by higher almond prices. The improvements in
commercial/industrial revenues are described above.
The decline in third quarter 2013 net income attributable to common
stockholders is due to lower revenues, as described, and to higher
farming expenses during the quarter as compared to the same period in
2012. Farming expense increased due to an early harvest and the timing
of sales thus far in 2013.
2013 Outlook:
Management believes that the capital structure of the Company provides a
solid foundation for continued investment in our projects to set the
stage for the future growth of the Company. On September 30, 2013, total
capital was approximately $317,000,000, with debt accounting for
approximately 1.5% of total capital. As of September 30, 2013, we also
had cash and securities totaling approximately $73,569,000 and
$30,000,000 of availability on lines of credit to meet any short-term
funding needs. During the quarter the Company completed a distribution
of warrants to shareholders. The warrants entitle the holder to purchase
one share of common stock at an initial exercise price of $40.00 per
share and are exercisable through August 31, 2016. The Company issued an
aggregate amount of 3,000,000 warrants. Proceeds received from the
exercise of warrants will be used to provide additional working capital
for general corporate purposes, including development activities within
the Company’s industrial and residential projects and to continue its
investments into water assets and water facilities.
During the remainder of 2013, the Company will continue to pursue water
investment and management activities, farming, land entitlement
activities and investment within the Tejon Ranch Commerce Center and in
our joint ventures, including the development of The Outlets at Tejon
Ranch. The Company believes the variability of its quarterly and annual
operating results will continue during 2013 due to its farming and real
estate activities. Prices received by the Company for many of its
products are dependent upon the prevailing market conditions and
commodity prices. Many of the Company’s projects, especially in real
estate, require a lengthy process to complete the entitlement and
development phases before revenue can begin to be recognized. The timing
of projects and sales of both real estate inventory and non-strategic
assets can vary from year-to-year; therefore, it is difficult for the
Company to accurately predict quarterly and annual revenues and results
of operations.
Tejon Ranch Co. 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.
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TEJON RANCH CO.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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THIRD QUARTER ENDED SEPTEMBER 30
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(In thousands, except earnings per share)
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(Unaudited)
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Three Months Ended
September 30
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Nine Months Ended
September 30
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2013
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2012
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2013
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2012
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Revenues:
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Real estate - commercial/industrial
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$
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2,842
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$
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2,738
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$
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8,389
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$
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7,509
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Real estate - resort/residential
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410
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132
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881
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267
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Mineral resources
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2,424
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3,447
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8,055
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11,232
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Farming
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9,452
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9,797
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15,038
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14,534
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Total revenues
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15,128
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16,114
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32,363
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33,542
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Costs and Expenses:
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Real estate - commercial/industrial
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3,290
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3,056
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9,544
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8,994
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Real estate - resort/residential
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804
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1,430
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2,378
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3,585
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Mineral resources
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152
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33
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377
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190
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Farming
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6,224
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5,003
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9,660
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8,224
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Corporate expenses
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2,913
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2,590
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7,402
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9,437
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Total expenses
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13,383
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12,112
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29,361
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30,430
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Operating income
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1,745
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4,002
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3,002
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3,112
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Other income (expense)
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Investment income
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216
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313
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729
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948
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Interest expense
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-
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33
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-
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(2
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Other income
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20
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15
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37
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50
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Total other income
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236
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361
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766
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996
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Income from operations before equity in earnings of unconsolidated
joint ventures
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1,981
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4,363
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3,768
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4,108
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Equity in earnings of unconsolidated joint ventures, net
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1,241
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1,114
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2,920
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1,648
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Income before income tax expense
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3,222
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5,477
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6,688
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5,756
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Income tax expense
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919
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1,525
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1,752
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1,461
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Net income
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2,303
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3,952
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4,936
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4,295
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Net income (loss) attributable to non-controlling interest
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11
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(69
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)
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(55
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(119
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Net income attributable to common stockholders
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2,292
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4,021
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4,991
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4,414
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Net income per share to common stockholders, basic
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$
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0.11
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$
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0.20
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$
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0.25
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$
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0.22
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Net income per share to common stockholders, diluted
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$
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0.11
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$
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0.20
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$
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0.25
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$
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0.22
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Weighted average number of shares outstanding:
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Common stock
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20,140,473
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20,074,233
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20,125,792
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20,030,396
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Common stock equivalents – stock options
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45,489
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18,821
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40,864
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58,695
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Diluted shares outstanding
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20,185,962
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20,093,054
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20,166,656
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20,089,091
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Source: Tejon Ranch Co.
Tejon Ranch Co.
Allen Lyda, 661-248-3000
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