TEJON RANCH, Calif.--(BUSINESS WIRE)--May 6, 2016--
Tejon Ranch Co. (NYSE:TRC), a diversified real estate development and
agribusiness company, today released the results of operations for the
first quarter ended March 31, 2016.
“During the first quarter of 2016, we continued to make progress
executing our real estate strategy - particularly our efforts to grow
our commercial real estate portfolio,” said Gregory S. Bielli, President
and CEO. "As previously reported, we entered into a non-binding Letter
of Intent with Majestic Realty Co. to develop a 480,000 square foot
industrial building at Tejon Ranch Commerce Center-East. This
opportunity will synergize well with our current offerings and is
another step in Tejon Ranch Commerce Center's journey to becoming a
strong employment center for the region. We also completed development
and delivered a multi-tenant building leased to two fast-casual
restaurant offerings, Habit Burger and Baja Fresh.”
Mr. Bielli continued, “For Tejon Ranch’s other business segments,
revenues from our diversified operations, including farming, mineral
resources, and commercial real-estate, continue to support our
large-scale development projects, funding future growth and positioning
Tejon Ranch for long-term shareholder value creation. For the remainder
of 2016, we will continue to move forward with our large-scale
development projects: Mountain Village at Tejon Ranch, Centennial at
Tejon Ranch and Grapevine at Tejon Ranch. We look forward to updating
our shareholders as we achieve new milestones along the way.”
First Quarter Financial Highlights
-
Revenue from operations for the first quarter of 2016 was $13.0
million, a decrease of $3.6 million, or 22%, compared to $16.6 million
in revenue for the same period in 2015. The decrease in revenues was
mainly due to the following:
-
Almond revenues decreased $1.6 million as a result of reduced 2015
almond inventory carryover as compared to the prior year. Our
carryover almond crop was 430,000 and 916,000 pounds at the
beginning of 2016 and 2015, respectively.
-
Water sales decreased $1.2 million as a result of the timing of
our water sales. Comparatively, water sales were 5,954 and 7,054
acre feet of water during the three months ended March 31, 2016
and 2015, respectively.
-
Oil royalty revenues decreased $357,000 due to declines in both
the price per barrel of oil and production volume.
-
Net income attributable to common stockholders for the first quarter
of 2016 was $1.2 million, representing earnings per common share of
$0.06, compared to $1.6 million, or earnings per common share of
$0.08, for the same period in 2015.
-
Equity in earnings from unconsolidated joint ventures for the first
quarter of 2016 was $1.5 million, an increase of $0.3 million, or 27%,
compared to $1.2 million for the same period in 2015. The increase is
driven by increased fuel sales from our TA/Petro joint venture as a
result of the continued traffic growth within Tejon Ranch Commerce
Center-East.
2016 Operational Highlights
-
In January 2016, we delivered a multi-tenant building located at Tejon
Ranch Commerce Center-East to Habit Burger and Baja Fresh. Habit
Burger began operations in April and Baja Fresh will be opening for
business during the latter part of the second quarter.
-
In April 2016, we entered into a non-binding Letter of Intent with
Majestic Realty Co., a Los Angeles based commercial/industrial
developer, to negotiate a joint venture operating agreement to pursue
the development, construction, leasing, and management of an
approximately 480,000 square foot industrial building on the Company’s
property at Tejon Ranch Commerce Center-East.
2016 Outlook:
The Company believes its capital structure provides a solid foundation
for continued investment in ongoing and future projects. As of March 31,
2016, total capital, including long-term debt, was approximately $405.8
million. The Company also had cash and securities totaling approximately
$34.0 million and full availability on its $28.0 million line of credit.
The Company will continue to aggressively pursue development, leasing,
and investment within the Tejon Ranch Commerce Center 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, 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 commercial/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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2016
|
|
March 31, 2015
|
|
Revenues:
|
|
|
|
|
|
Real estate - commercial/industrial
|
|
$
|
2,154
|
|
|
$
|
2,279
|
|
|
Mineral resources
|
|
8,740
|
|
|
10,200
|
|
|
Farming
|
|
1,221
|
|
|
3,071
|
|
|
Ranch operations
|
|
838
|
|
|
1,083
|
|
|
Total revenues from Operations
|
|
12,953
|
|
|
16,633
|
|
|
Operating Profits:
|
|
|
|
|
|
Real estate - commercial/industrial
|
|
475
|
|
|
670
|
|
|
Real estate - resort/residential
|
|
(542
|
)
|
|
(751
|
)
|
|
Mineral resources
|
|
4,047
|
|
|
4,426
|
|
|
Farming
|
|
(285
|
)
|
|
728
|
|
|
Ranch operations
|
|
(509
|
)
|
|
(510
|
)
|
|
Income from Operating Segments
|
|
3,186
|
|
|
4,563
|
|
|
Investment income
|
|
118
|
|
|
155
|
|
|
Other income
|
|
51
|
|
|
38
|
|
|
Corporate expense
|
|
3,003
|
|
|
3,443
|
|
|
Income from operations before equity in earnings of unconsolidated
joint ventures
|
|
352
|
|
|
1,313
|
|
|
Equity in earnings of unconsolidated joint ventures, net
|
|
1,455
|
|
|
1,150
|
|
|
Income before income tax expense
|
|
1,807
|
|
|
2,463
|
|
|
Income tax expense
|
|
612
|
|
|
862
|
|
|
Net income
|
|
1,195
|
|
|
1,601
|
|
|
Net loss attributable to non-controlling interest
|
|
(14
|
)
|
|
(16
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
1,209
|
|
|
$
|
1,617
|
|
|
Net income per share to common stockholders, basic
|
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
Net income per share to common stockholders, diluted
|
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
Common stock
|
|
20,702,103
|
|
|
20,645,846
|
|
|
Common stock equivalents – stock options
|
|
71,364
|
|
|
60,737
|
|
|
Diluted shares outstanding
|
|
20,773,467
|
|
|
20,706,583
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160506005729/en/
Source: Tejon Ranch Co.
Tejon Ranch Co.
Allen Lyda, 661-248-3000
Executive Vice
President & Chief Financial Officer
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