Form 8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20509

 


 

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)    November 7, 2003

 

Tejon Ranch Co.

(Exact Name of Registrant as Specified in Charter)

 

Delaware

  1-7183   77-0196136

(State or Other Jurisdiction of Incorporation)

  (Commission File Number)   (IRS Employer Identification No.)

 

P.O. Box 1000, Lebec, California 93243

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code    661 248-3000

 

(Former Name or Former Address, if Changed Since Last Report)

 

Not applicable

 



TABLE OF CONTENTS

 

Item 7.

  Financial Statements, Pro Forma Financial Information and Exhibits.

Item 12.

  Results of Operations and Financial Condition.

SIGNATURES

   

 


Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

 

(c)   Exhibits (Furnished Pursuant to Item 12).

 

  99.1   Press Release of the Company date November 7, 2003, announcing the Company’s results of operations for the quarter and the nine months ending September 30, 2003.

 

Item 12. Results of Operations and Financial Condition.

 

On November 7, 2003, the Company issued a press release announcing its earnings for the quarter ended September 30, 2003. A copy of this press release is attached as Exhibit 99.1. The information contained in this report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise.

 

1


SIGNATURES

 

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.

 

Date: November 7, 2003

 

TEJON RANCH CO.

       

By:

 

/s/ ALLEN E. LYDA


        Name:   Allen E. Lyda
        Title:   Vice President, and Chief Financial Officer

 

2

Press Release

Exhibit 99.1

 

TEJON RANCH CO. REPORTS

THIRD QUARTER RESULTS OF OPERATIONS – 2003

 

TEJON RANCH, Calif., November 7, 2003 – Tejon Ranch Company (NYSE:TRC), today announced a net loss of $660,000 or $0.05 per common share, diluted, for the third quarter of 2003 and a loss of $1,608,000 or $0.11 per common share, diluted, for the nine months ending September 30, 2003. The loss for the quarter and year-to-date is largely due to a reduction in farming revenues and profits during the third quarter of 2003 due to the timing of completion of the 2003 almond and pistachio crop harvests. The loss for the third quarter of 2003 is compared to net income of $382,000 or $0.03 per common share, diluted, during the third quarter of 2002. The year-to-date loss through September 30, 2003, is compared to net income of $20,000, or $0.00 per common share, diluted, for the same period in 2002.

 

The net loss for the third quarter of 2003 is comprised of a loss from continuing operations (commercial/industrial real estate, residential real estate, and farming) of $660,000 or $.05 per common share, diluted. This is compared to income from continuing operations of $378,000 or $0.03 per share, diluted, and income from discontinued operations (livestock operations) of $4,000 or $0.00 per common share, diluted, for the third quarter of 2002.

 

The net loss for the first nine months of 2003 is comprised of a loss from continuing operations $1,608,000 or $0.11 per common share, diluted. This is compared to income from continuing operations of $291,000, or $0.02 per common share, diluted, and a loss from discontinued operations of $271,000 or $0.02 per common share, diluted, for the same period in 2002.

 

Total revenues for the first nine months of 2003 were $10,704,000 compared to $13,547,000 for the same period in 2002. The decrease in revenues during the first nine months of 2003 is due to a decline in farming revenues of $2,096,000, reduced real estate revenues of $448,000, and lower interest income of $299,000. The decline in farming revenues is primarily attributable to the recognition of $2,510,000 of revenue from our almond and pistachio crop during this period in 2002, while in 2003 the revenue from these crops will not be earned until the fourth quarter of 2003 due to the timing of completion of the 2003 crop harvests. This decline in farming was partially offset by $651,000 of increased processing revenue from our


2-2-2 TEJON RANCH CO. REPORTS

THIRD QUARTER RESULTS OF OPERATIONS – 2003

 

almond processing plant in 2003 that was due to the processing of almonds related to the 2002 crop. The decrease in real estate revenues during 2003 is primarily due to $1,375,000 in revenue earned in 2002 related to the sale of an easement and to reduced revenue from the power plant lease of $300,000. The reduction in real estate revenue when compared to 2002 is partially offset by increased rental revenues of $294,000, a gain from the sale of land of $138,000, an improvement in service and amenity revenues of $235,000, an improvement in oil and mineral revenues of $493,000, and an improvement of $79,000 in equity in earnings from the Petro Travel Plaza joint venture. Lease revenues increased due to revenues from a McDonalds, Starbucks, and a Best Western Motel that were opened in late 2002. Service and amenity revenues increased primarily due to an increase in game management revenues. Oil and mineral revenues improved due to an increase in oil production and cement production at comparable prices. Interest income declined due to low investment rates and a reduction in investment securities owned.

 

The loss from continuing operations for the first nine months of 2003 is due to the decline in revenues as described above and to an increase in real estate expenses. Real estate expense increased $998,000 during 2003 due primarily to an increase in public relations and marketing costs, higher insurance costs, higher operating and property tax costs, and increased staffing costs. The increase in real estate costs is partially offset by a reduction in farming expenses of $944,000. This decline in farming costs is due to the recognition of pistachio and almond crop revenues and expenses in the third quarter of 2002, while in 2003 the relative revenue and expense will not be earned until the fourth quarter of 2003 due to the timing of completion of the 2003 crop harvest.

 

Total revenues for the third quarter of 2003 were $4,133,000 compared to $6,312,000 for the same period in 2002. The decline in revenues during the third quarter of 2003 is primarily attributable to farming revenues decreasing $2,123,000 as compared to the same period in 2002. This decline is due to the timing of recognition of pistachio and almond crop revenue in 2003 because of the later 2003 crop harvest. The decline was partially offset by increased revenue from our almond processing operations because of the processing of almonds related to the 2002 almond harvest. There was no significant change in real estate revenue for the third quarter of 2003 when compared to the prior period.


3-3-3 TEJON RANCH CO. REPORTS

THIRD QUARTER RESULTS OF OPERATIONS – 2003

 

The loss from continuing operations during the third quarter of 2003 is due to the reduction in revenues described above and to higher real estate expenses. Real estate expenses increased due to higher public relations costs, insurance costs, and property taxes. Farming costs decreased due to the timing of the 2003 crop harvest, which will result in the later recognition of inventoried crop costs as an expense during the fourth quarter of 2003.

 

As we move forward in the achievement of our real estate vision, we will continue to see an increase in costs related to professional service fees, planning costs, entitlement costs, and staffing costs. These types of real estate activities and costs could continue over several years as we entitle and develop a modest percentage of our land holdings. The actual timing and completion of entitlement and any development related activities are difficult to predict due to the uncertainties of the approval process and market factors.

 

The results of the first nine months of each fiscal year are generally not indicative of the results to be expected for the full year due to the nature of the Company’s business segments. Future real estate sales and leasing activity are dependent on market circumstances and specific opportunities and therefore are difficult to predict from period to period. The Company also recognizes a significant amount of revenues in the fall of each year due to the nature of the agribusiness activities within its farming segment.

 

Tejon Ranch Co. is a growth-oriented, 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.

 

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 process 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, which could affect the Company, the reader should refer to the Company’s filings with the Securities and Exchange Commission.


4-4-4 TEJON RANCH CO. REPORTS

THIRD QUARTER RESULTS OF OPERATIONS – 2003

 

TEJON RANCH CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except earnings per share)

(Unaudited)

 

     Three Months Ended
September 30


    Nine Months Ended
September 30


 
     2003

    2002

    2003

    2002

 

Revenues:

                                

Real estate

     2,561       2,569       8,138       8,586  

Farming

     1,478       3,601       2,212       4,308  

Interest income

     94       142       354       653  
    


 


 


 


       4,133       6,312       10,704       13,547  

Cost and Expenses:

                                

Real estate

     2,421       2,084       7,141       6,143  

Farming

     2,060       3,217       3,668       4,612  

Corporate expense

     865       862       2,740       2,820  

Interest expense

     25       (20 )     70       —    
    


 


 


 


       5,371       6,143       13,619       13,575  
    


 


 


 


Operating income (loss) before equity in earnings of unconsolidated joint ventures and minority interest

     (1,238 )     169       (2,915 )     (28 )

Equity in earnings of unconsolidated joint ventures

     6       255       52       178  

Minority interest

     134       174       183       308  
    


 


 


 


Operating income (loss) before income tax expense (benefit)

     (1,098 )     598       (2,680 )     458  

Income tax expense (benefit)

     (438 )     220       (1,072 )     167  
    


 


 


 


Income (loss) from operations

     (660 )     378       (1,608 )     291  

Income/(loss) from discontinued operations, net of applicable income taxes

     —         4       —         (271 )
    


 


 


 


Net income (loss)

   $ (660 )   $ 382     $ (1,608 )   $ 20  
    


 


 


 


Net income (loss) per share, basic

     (0.05 )     0.03       (0.11 )     —    

Net income (loss) per share, diluted

     (0.05 )     0.03       (0.11 )     —    

Weighted average number of shares outstanding:

                                

Common stock

     14,505,051       14,381,043       14,467,420       14,366,475  

Common stock equivalents – stock options

     354,438       148,441       270,181       239,346  
    


 


 


 


Diluted shares outstanding

     14,859,489       14,529,484       14,737,601       14,605,821  

 

For the quarter ended and nine months ended September 30, 2003 diluted net loss per share is based on the weighted average number of shares of common stock outstanding, because the impact of common stock equivalents is antidilutive.


5-5-5 TEJON RANCH CO. REPORTS

THIRD QUARTER RESULTS OF OPERATIONS – 2003

 

TEJON RANCH CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

     September 30, 2003

    December 31, 2002*

 
     (Unaudited)        

ASSETS

                

Current Assets:

                

Cash and cash equivalents

   $ 10,073     $ 12,935  

Marketable securities

     11,404       12,305  

Accounts & notes receivable

     3,566       7,843  

Farming inventories

     4,583       1,172  

Prepaid expenses and other

     2,183       2,002  
    


 


Total Current Assets

     31,809       36,257  

Property and equipment—net

     65,864       62,323  

Other assets

     2,512       2,216  
    


 


TOTAL ASSETS

   $ 100,185     $ 100,796  
    


 


LIABILITIES AND STOCKHOLDERS’ EQUITY

                

Current Liabilities:

                

Trade accounts payable

   $ 832     $ 2,507  

Other accrued liabilities

     561       222  

Current deferred income

     1,265       1,035  

Short-term borrowings

     159       240  

Current portion of long-term debt

     263       1,731  

Income taxes payable

     —         7  
    


 


Total Current Liabilities

     3,080       5,742  

Long-term debt

     16,137       14,336  

Minimum pension liability

     2,200       2,200  

Deferred income taxes

     3,765       3,740  

Other liabilities

     583       583  
    


 


Total Liabilities

     25,765       26,601  

Minority interest in equity of consolidated joint venture

     417       601  

Commitments and contingencies

                

Stockholders’ equity:

                

Common stock

     7,260       7,206  

Additional paid-in capital

     33,615       31,690  

Retained earnings

     35,085       36,693  

Accumulated other comprehensive loss

     (1,957 )     (1,995 )
    


 


Total Stockholders’ Equity

     74,003       73,594  
    


 


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 100,185     $ 100,796  
    


 


 

*   The Balance Sheet at December 31, 2002 has been derived from the audited financial statements at that date and reclassified for comparison purposes