TEJON RANCH, Calif.--(BUSINESS WIRE)--Mar. 16, 2015--
Tejon Ranch Co. (NYSE:TRC) today released the results of operations for
the year ended December 31, 2014, with the Company showing net income
attributable to common stockholders of $5,655,000, or $0.27 per common
share, compared to net income attributable to common stockholders of
$4,165,000, or $0.20 per common share, for the same period in 2013,
which is a 37% increase year-over-year. Revenue from operations for the
year ended December 31, 2014 was $51,252,000, a 13% increase compared to
the $45,338,000 of revenue for the same period during 2013. All per
share references in this release are presented on a fully diluted basis.
For the fourth quarter of 2014, the Company had net income attributable
to common stockholders of $1,916,000, or $0.09 per common share,
compared to a net loss attributable to common stockholders of $826,000,
or ($0.04) per common share, for the fourth quarter of 2013. Revenue
from operations for the fourth quarter of 2014 was $14,544,000 compared
to $12,975,000 of revenue during the same period of 2013.
“Fiscal year 2014 demonstrated the importance of Tejon Ranch Co. being a
diversified company,” said Gregory S. Bielli, President and CEO. “Water
sales and revenue related to our varied operations including farming and
the Tejon Ranch Commerce Center led to both increased revenue and higher
net income for the year. 2014 was also important to us due to the
opening of the Outlets at Tejon. In 2015 we will continue to leverage
the opening of the outlet center to build additional
commercial/industrial revenue and take the next steps with our
residential real estate projects. The Company continues to be in a
strong position with regards to our water supply, with sufficient
resources for our current farming and real estate operations, and the
ability to sell excess supply until it’s fully needed internally.”
Results of Operations for the Year Ended December 31, 2014:
The improvement in net income attributable to common stockholders of
$1,490,000 is driven by an increase in operating revenue, primarily from
mineral resource revenues and improved equity in earnings of
unconsolidated joint ventures.
Mineral resource segment revenues increased $6,013,000, or 59% during
2014 compared to the same period in 2013, due primarily to water sales
totaling $7,702,000. During 2013, there were no water sales. In
addition, cement and rock and aggregate royalties increased $476,000 as
a result of expanded production driven by road construction in the
region. These improvements were partially offset by a $1,606,000
decrease in oil and natural gas royalty revenue stemming from a 7% drop
in production due to reduced production from older wells, the timing of
new wells coming on-line during the year, and the timing of completion
of the expansion of lessees’ production facilities. In addition, oil
prices began to decline during the fourth quarter of 2014 and they have
continued to decline during 2015. We also saw a decline in oil leasehold
payments of $586,000 when compared to 2013 due to a lessee entering the
drilling phase of their lease.
During 2014, farming revenues decreased $175,000 compared to 2013. The
decline in farming revenue was driven primarily by reduced almond
revenue of $821,000. The decline in almond revenue compared to the same
period in 2013, is primarily due to a decrease in production resulting
from various weather related conditions such as a mild winter, which
impacted tree and vine dormant time and very hot weather in early
summer. Drought conditions within California did not impact our
production levels because we had adequate water supplies for our farming
activities. The drop in almond production was partially offset by a 24%
increase in prices received for almonds. Wine grape revenue decreased
$116,000 largely due to a decline in price per ton for grapes sold
during the year compared to 2013. Pistachio revenue was flat during the
year; a 19% increase in pricing helped offset a decline in production.
Our farming activities also saw a $433,000 increase in hay sales due to
improved pricing levels.
Commercial/industrial revenues improved $231,000 when compared to the
same period in 2013. The increase is the result of the recognition of
$458,000, representing 40% of a gain on the sale of land to the TA/Petro
joint venture during the fourth quarter of 2014 for a new convenience
store and gas station. In addition, we recognized higher development and
management fees during the year as a result of the development of the
outlet center. These improvements were partially offset by lower
percentage rent from the Calpine power plant lease.
Adding to the improvement in revenues is an increase of $1,288,000 in
earnings from unconsolidated joint ventures due to $941,000 of higher
income from the TA/Petro joint venture as a result of higher gasoline
sales and fuel margins and improved leasing revenue from the Five West
Parcel joint venture that is in a partnership with the Rockefeller
Development Group.
As a partial offset to the above improved revenues was an increase in
operating costs of $4,964,000, primarily as a result of an increase in
water sales cost of sales of $4,523,000.
Results of Operations for the Fourth Quarter of 2014:
Revenue increased $1,569,000, or 12%, due primarily to higher farming
revenue and improved commercial/industrial revenues.
Farming revenues improved $1,842,000, or 23%, during the fourth quarter
of 2014 compared to the same period in 2013. The improvement is related
to the timing of the 2014 almond and pistachio harvests that were not
completed until November 2014. We recognized an increase of
approximately $500,000 in almond revenue and $1,500,000 in pistachio
revenue compared to the same period in 2013 due primarily to the timing
of the harvest despite lower production as described above. This
improvement was partially offset by reduced grape revenues due to lower
pricing.
Commercial/industrial revenue was $553,000, or 20% higher during the
fourth quarter of 2014 as compared to the same period in 2013 due
primarily to the sale of land as described above. We also saw an
increase of $915,000 in equity in earnings of joint ventures due to
growth within the TA/Petro joint venture as we saw a continued increase
in gasoline sales.
The Company also saw a decline in operating costs, including corporate
costs, during the fourth quarter of 2014. Overall, costs declined
$1,013,000 during the quarter as compared to the same period in 2013.
This decline in cost was led by reduced staffing costs and professional
service expense within corporate general and administrative expense.
These improvements were partially offset by higher farming cost of sales
and higher farm water costs.
Partially offsetting the improvements above during the fourth quarter of
2014 was a reduction in mineral resource revenue of $733,000. This
decline was led by a $784,000 decline in oil and gas royalty income as a
result of reduced production and lower pricing.
2015 Outlook:
Management believes that the capital structure of the Company provides a
solid foundation for continued investment in our projects. At December
31, 2014, total capital, including long-term debt, was approximately
$399,000,000. As of December 31, 2014, the Company also had cash and
securities totaling approximately $48,000,000.
The Company will continue to aggressively pursue development, leasing,
and investment within the Tejon Ranch Commerce Center and in our joint
ventures. The Company is continuing to invest in its residential
projects to complete the entitlements for the Centennial and Grapevine
projects and pre-development investment for Tejon Mountain Village.
As we move into 2015, we expect our mineral resource revenue from oil
royalties to be negatively impacted compared to 2014 due to the
expectation of lower average prices for oil during 2015 as compared to
2014. The Company believes the variability of its quarterly and annual
operating results will continue during 2015 due to its farming and real
estate activities. 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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YEAR ENDED DECEMBER 31, 2014
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(In thousands, except earnings per share)
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(Unaudited)
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|
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Three Months Ended
December 31
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Year Ended
December 30
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2014
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2013
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2014
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2013
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Revenues:
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|
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Real estate - commercial/industrial
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$
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3,312
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$
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2,759
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$
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11,379
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$
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11,148
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Real estate - resort/residential
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(15
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)
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78
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183
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|
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|
338
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Mineral resources
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1,454
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2,187
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16,255
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10,242
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Farming
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9,793
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|
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7,951
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23,435
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|
|
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23,610
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Total revenues from Operations
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14,544
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12,975
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51,252
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45,338
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Operating Profits:
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Real estate - commercial/industrial
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|
|
129
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|
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(599
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)
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(1,825
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)
|
|
|
(1,754
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)
|
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|
Real estate - resort/residential
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(907
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)
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(574
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)
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|
|
(2,425
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)
|
|
|
(1,893
|
)
|
|
|
Mineral resources
|
|
|
968
|
|
|
|
1,818
|
|
|
|
9,837
|
|
|
|
8,965
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|
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Farming
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2,924
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|
|
|
2,484
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|
|
|
7,185
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|
|
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7,684
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Income from Operating Segments
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|
|
3,114
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|
|
|
3,129
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|
|
|
12,772
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|
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13,002
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|
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|
|
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|
|
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|
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Investment income
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175
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|
|
|
212
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|
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696
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|
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|
941
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|
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Other income
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|
|
230
|
|
|
|
29
|
|
|
|
343
|
|
|
|
66
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|
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Corporate expense
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(2,358
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)
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(4,955
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)
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(10,646
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)
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(11,826
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)
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Income from operations before equity in earnings of unconsolidated
joint ventures
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1,161
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|
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(1,585
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)
|
|
|
3,165
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|
|
|
2,183
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Equity in earnings of unconsolidated joint ventures, net
|
|
|
2,001
|
|
|
|
1,086
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|
|
|
5,294
|
|
|
|
4,006
|
|
|
Income before income tax expense
|
|
|
3,162
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|
|
|
(499
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)
|
|
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8,459
|
|
|
|
6,189
|
|
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Income tax expense
|
|
|
1,050
|
|
|
|
334
|
|
|
|
2,697
|
|
|
|
2,086
|
|
|
Net income
|
|
|
2,112
|
|
|
|
(833
|
)
|
|
|
5,762
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|
|
|
4,103
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Net income (loss) attributable to non-controlling interest
|
|
|
196
|
|
|
|
(7
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)
|
|
|
107
|
|
|
|
(62
|
)
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Net income (loss) attributable to common stockholders
|
|
|
1,916
|
|
|
|
(826
|
)
|
|
|
5,655
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|
|
|
4,165
|
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Net income (loss) per share to common stockholders, basic
|
|
$
|
0.09
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.27
|
|
|
$
|
0.21
|
|
|
Net income (loss) per share to common stockholders, diluted
|
|
$
|
0.09
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.27
|
|
|
$
|
0.20
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
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Common stock
|
|
|
20,635,008
|
|
|
|
20,381,501
|
|
|
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20,595,422
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|
|
|
20,190,245
|
|
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|
Common stock equivalents – stock options
|
|
|
42,904
|
|
|
|
124,288
|
|
|
|
37,033
|
|
|
|
195,310
|
|
|
|
Diluted shares outstanding
|
|
|
20,677,912
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|
|
|
20,505,789
|
|
|
|
20,632,455
|
|
|
|
20,385,555
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Source: Tejon Ranch Co.
Tejon Ranch Co.
Allen Lyda, Executive VP/CFO
661-248-3000
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