TEJON RANCH, Calif.--(BUSINESS WIRE)--Aug. 7, 2014--
Tejon Ranch Co. (NYSE:TRC) today released the results of operations for
the six months ended June 30, 2014, with the Company showing net income
attributable to common stockholders of $1,987,000, or $0.10 per common
share, compared to net income attributable to common stockholders of
$2,699,000, or $0.13 per common share, for the same period in 2013.
Revenue from operations for the six months ended June 30, 2014 was
$15,153,000, compared to $17,235,000 of revenue for the same period
during 2013. All per share references in this release are presented on a
fully diluted basis.
For the second quarter ended June 30, 2014, the Company had net income
attributable to common stockholders of $874,000, or $0.04 per common
share, compared to net income attributable to common stockholders of
$2,084,000, or $0.10 per common share, for the second quarter of 2013.
Revenue from operations for the second quarter of 2014 was $8,008,000
compared to $7,475,000 of revenue during the same period of 2013.
Results of Operations for the First Six Months of 2014:
The decline in net income attributable to common stockholders during the
first six months of 2014, when compared to the same period in 2013, is
primarily the result of lower farming net operating profits, a decline
in oil royalty revenue, and an increase in corporate expenses. These
unfavorable variances were partially offset by $3,179,000 in net income
received from water sales during the year. Revenue declined $2,082,000
during the first six months of 2014, as compared to the same period in
2013, largely due to a decrease in farming and mineral resources
revenues.
The decline in farming revenue of $1,220,000 during the first six months
of 2014, compared to the same period in 2013, is primarily due to a
$2,148,000 decrease in almond sales resulting from a 54% decrease in
pounds sold from the 2013 crop inventory carryover. The decline in sales
volume was partially offset by higher almond prices and an increase in
pistachio revenues due to higher prices.
Mineral resource revenues decreased $926,000 during the first six months
of 2014, compared to 2013, primarily due to an $896,000 decrease in oil
and gas royalty payments. The decrease stems from the timing of new
wells being put into production and reduced production due to the timing
of completion of the expansion of lessees’ production facilities. In
addition, we had a decline in leasehold payments resulting from a tenant
beginning a drill program during 2013, which eliminated their obligation
for continued leasehold payments. Improvements of $400,000 in rock and
aggregate royalties and in production at the National Cement lease
helped to offset the oil related revenue declines.
Operating expenses increased $1,371,000 during the period primarily due
to an increase in corporate expense of $1,543,000. The increase in
corporate expense is mainly due to higher stock compensation expense
during 2014, as compared to 2013, due to the reversal in 2013 of
$2,271,000 of previously recorded stock compensation expense related to
unvested awards that would not vest related to the retirement of the
Company’s then CEO at the end of 2013.
Results of Operations for the Second Quarter of 2014:
Revenue improved $533,000 due to an increase in farming revenue being
partially offset by lower oil royalty income and reduced
commercial/industrial revenues.
Farming revenues increased $1,135,000 during the quarter as higher
pistachio prices produced a $788,000 increase in revenues. Almond
revenues also improved by $242,000 during the quarter due to a 21%
increase in price and a 17% increase in pounds sold, when compared to
the second quarter of 2013.
Mineral resource revenues fell during the quarter due to the operational
factors described above. The decline in commercial/industrial revenues
is primarily due to a one time adjustment to reflect the reversal of an
overpayment of percentage rent related to the Calpine lease, which was
partially offset by an increase in development management fees tied to
the construction of the Outlets at Tejon that opened August 7, 2014.
The primary driver to the decline in net income for the quarter, as
compared to the same period of 2013, is the increase in corporate
expense that more than offset the improvement in revenue during the
quarter. The increase in expense during the second quarter of 2014, when
compared to 2013, is related to the reversal of previously recorded
stock compensation expense during the second quarter of 2013 as
described above.
2014 Outlook:
Management believes that the capital structure of the Company provides a
solid foundation for continued investment in our projects. At June 30,
2014, total capital, including long-term debt, was approximately
$328,000,000. As of June 30, 2014, the Company also had cash and
securities totaling approximately $54,742,000 and $19,800,000 of
availability on lines of credit to meet any short-term funding needs.
As was previously reported, the Company purchased the interest of its
partner in Tejon Mountain Village for $70,000,000, with an initial
payment of $10,000,000 and the remaining $60,000,000 payable on or
before October 13, 2004, unless extended by 30 days. The Company is in
the final stages of completing a long-term debt facility to fully fund
the $70,000,000 purchase price. Once the financing documents are
complete the Company will provide the information through a Current
Report on Form 8-K.
The Company will continue to aggressively pursue development, leasing,
and investment within the Tejon Ranch Commerce Center and in our joint
ventures, which include the completion and opening of the Outlets at
Tejon on August 7, 2014. The Company is continuing to invest in its
residential projects to complete the entitlements for the Centennial and
Grapevine projects and begin pre-development investment for Tejon
Mountain Village.
The Company believes the variability of its quarterly and annual
operating results will continue during 2014 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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SECOND QUARTER ENDED JUNE 30
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(In thousands, except earnings per share)
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(Unaudited)
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Three Months Ended June 30
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Six Months Ended June 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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Real estate - commercial/industrial
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$
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2,553
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$
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2,825
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$
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5,495
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|
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$
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5,547
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Real estate - resort/residential
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228
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234
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587
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|
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|
|
471
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Mineral resources
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2,441
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2,765
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4,705
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5,631
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Farming
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2,786
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1,651
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4,366
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5,586
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Total revenues
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8,008
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7,475
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15,153
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17,235
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Costs and Expenses:
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Real estate - commercial/industrial
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3,336
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3,141
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|
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6,647
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|
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6,254
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Real estate - resort/residential
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918
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1,265
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|
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1,573
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1,574
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Mineral resources
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152
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65
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227
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|
|
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225
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Farming
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1,197
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1,179
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2,870
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3,436
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Corporate expenses
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2,608
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658
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6,032
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4,489
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Total expenses
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8,211
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6,308
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17,349
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15,978
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Operating income (loss)
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(203
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)
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1,167
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(2,196
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)
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1,257
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Other income
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|
|
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Income from water sales, net
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177
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-
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3,179
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-
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Investment income
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|
185
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|
238
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|
383
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|
|
|
|
513
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Other income
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20
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14
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47
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17
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Total other income
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382
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252
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3,609
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|
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|
|
530
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|
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Income from operations before equity in earnings of unconsolidated
joint ventures
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|
|
|
|
179
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|
|
|
|
|
1,419
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|
|
|
|
1,413
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|
|
|
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1,787
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Equity in earnings of unconsolidated joint ventures, net
|
|
|
|
|
1,148
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|
|
|
|
|
1,270
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|
|
|
|
|
1,586
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|
|
|
|
|
1,679
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Income before income tax expense
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1,327
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|
|
|
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2,689
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|
|
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2,999
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|
|
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3,466
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Income tax expense
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|
|
479
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|
|
|
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|
686
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|
|
|
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1,020
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|
|
|
|
833
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Net income
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|
|
|
848
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|
|
|
|
|
2,003
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|
|
|
|
|
1,979
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|
|
|
|
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2,633
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Net loss attributable to non-controlling interest
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|
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(26
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)
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|
|
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(81
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)
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(8
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)
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|
|
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(66
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)
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Net income attributable to common stockholders
|
|
|
|
|
874
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|
|
|
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2,084
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1,987
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|
|
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2,699
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Net income per share to common stockholders, basic
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$
|
0.04
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$
|
0.10
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$
|
0.10
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|
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$
|
0.13
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Net income per share to common stockholders, diluted
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$
|
0.04
|
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|
|
|
$
|
0.10
|
|
|
|
|
$
|
0.10
|
|
|
|
|
$
|
0.13
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Weighted average number of shares outstanding:
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|
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Common stock
|
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|
|
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20,586,190
|
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|
|
|
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20,136,188
|
|
|
|
|
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20,577,280
|
|
|
|
|
|
20,118,152
|
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|
Common stock equivalents – stock options
|
|
|
|
|
35,406
|
|
|
|
|
|
16,323
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|
|
|
|
|
40,323
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|
|
|
|
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17,039
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Diluted shares outstanding
|
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|
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20,621,596
|
|
|
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20,152,511
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20,617,603
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|
|
|
|
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20,135,191
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Source: Tejon Ranch Co.
Tejon Ranch Co.
Allen Lyda, 661-248-3000
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