Advertisement
Canada markets closed
  • S&P/TSX

    21,554.86
    -26.44 (-0.12%)
     
  • S&P 500

    5,464.62
    -8.55 (-0.16%)
     
  • DOW

    39,150.33
    +15.53 (+0.04%)
     
  • CAD/USD

    0.7304
    -0.0002 (-0.03%)
     
  • CRUDE OIL

    80.59
    -0.14 (-0.17%)
     
  • Bitcoin CAD

    87,270.89
    -713.49 (-0.81%)
     
  • CMC Crypto 200

    1,313.81
    -46.52 (-3.42%)
     
  • GOLD FUTURES

    2,334.70
    +3.50 (+0.15%)
     
  • RUSSELL 2000

    2,022.03
    +4.64 (+0.23%)
     
  • 10-Yr Bond

    4.2570
    +0.0030 (+0.07%)
     
  • NASDAQ

    17,689.36
    -32.24 (-0.18%)
     
  • VOLATILITY

    13.20
    -0.08 (-0.60%)
     
  • FTSE

    8,237.72
    -34.74 (-0.42%)
     
  • NIKKEI 225

    38,596.47
    -36.53 (-0.09%)
     
  • CAD/EUR

    0.6830
    +0.0009 (+0.13%)
     

Tejon Ranch Co. Announces Second Quarter 2022 Financial Results

Tejon Ranch Co
Tejon Ranch Co

TEJON RANCH, Calif., Aug. 03, 2022 (GLOBE NEWSWIRE) -- Tejon Ranch Co., or the Company, (NYSE:TRC), a diversified real estate development and agribusiness company, today announced financial results for the three- and six-months ended June 30, 2022.

“Activity at the Tejon Ranch Commerce Center (TRCC) continues to expand with construction, sales and leasing when compared to previous years,” said Gregory S. Bielli, President, and CEO of Tejon Ranch Co. “Following the close of the second quarter, in July 2022 we consummated a 58-acre land sale to a large multinational corporation for $22.0 million, which is our second largest industrial land sale to a third-party, in size, to date. This transaction further solidifies TRCC as a leading destination for large multinational users of commercial and industrial space.”

“In addition, we continue to monetize our land and its natural resources as we experience increases in oil and cement royalties as inflationary pressures and strong demand have increased the prices of those commodities,” added Mr. Bielli.

ADVERTISEMENT

Real Estate Commercial/Industrial Highlights

  • TRCC Industrial portfolio, through the Company's joint venture partnerships, consists of 1.7 million square feet of gross leasable area (GLA) and is 100% leased.

  • TRCC Commercial portfolio, wholly owned and through joint venture partnerships, consists of 575,401 square feet of GLA and is 89% leased.

  • Design and engineering are underway for a multi-family residential community adjacent to the Outlets at Tejon, consisting of up to 495 apartments.

  • 629,000 square foot industrial building currently under construction with completion scheduled in the third quarter of 2022.

  • New joint venture formation for the development, construction, lease-up, and management of an approximately 446,400 square foot industrial building located within TRCC-East.

Second Quarter Financial Results

  • GAAP net loss attributable to common stockholders for the second quarter of 2022 was $0.7 million, or net loss per share attributed to common stockholders, basic and diluted, of $0.03, compared with a net income attributable to common stockholders of $2.8 million, or net income per share attributed to common stockholders, basic and diluted, of $0.11, for the second quarter of 2021.

  • Revenues and other income, for the second quarter of 2022, including equity in earnings of unconsolidated joint ventures were $10.9 million, compared with $18.1 million for the second quarter of 2021. Factors affecting the quarterly results include:

    • Commercial/industrial real estate development segment revenues were $2.5 million for the quarter ended June 30, 2022, a decrease of $5.7 million, or 70%, from $8.1 million for the quarter ended June 30, 2021. The decrease reflects the absence of any land sales during the quarter ended June 30, 2022, whereas in 2021, the Company contributed land to its TRC-MRC 4 joint venture and recognized $5.7 million in land sales revenues.

    • Mineral resources segment revenues were $4.1 million for the quarter ended June 30, 2022, a decrease of $3.3 million, or 44%, from $7.4 million for the quarter ended June 30, 2021. The reduction in revenues is primarily attributed to the timing of water sales which were mostly completed during the first quarter of 2022. Comparatively, the Company sold 1,500 and 4,715 acre feet of water as of the three months ended June 30, 2022, and 2021, respectively. This decline was partially offset by an increase in oil and cement royalties driven by an increase in demand and pricing.

    • Farming revenues were $1.9 million for the quarter ended June 30, 2022, an increase of $1.6 million, or 589%, from $0.3 million for the quarter ended June 30, 2021. The improvement is primarily attributed to the timing of 2021 almond crop sales. Comparatively the Company sold 722,032 and 44,000 pounds of almonds as of the three months ended June 30, 2022, and 2021, respectively.

  • Adjusted EBITDA, a non-GAAP measure, was $2.9 million for the quarter ended June 30, 2022, a decrease from $7.7 million during the quarter ended June 30, 2021.

Tejon Ranch Co. provides Adjusted EBITDA, a non-GAAP financial measure, because it offers additional information for monitoring the Company's cash flow performance. A table providing a reconciliation of Adjusted EBITDA to its most comparable GAAP measure, as well as an explanation of, and important disclosures about, this non-GAAP measure, is included in the tables at the end of this press release.

Year-to-Date Financial Results

  • Net income attributable to common stockholders for the first six months of 2022 was $3.6 million, or net income per share attributed to common stockholders, basic and diluted, of $0.14, compared with a net income attributable to common stockholders of $1.8 million, or net income per share attributed to common stockholders, basic and diluted, of $0.07, for the first six months of 2021.

  • Revenues and other income, for the first six months of 2022, including equity in earnings of unconsolidated joint ventures, totaled $34.1 million, compared with $29.1 million for the first six months of 2021. Factors impacting the year-to-date results include:

    • Farming revenues were $2.6 million for the first six months of 2022, an increase of $1.7 million, or 191%, from $0.9 million for the first six months of 2021. The improvement is primarily attributed to the timing of the 2021 almond crop sales. Comparatively we sold 991,392 and 204,996 pounds of almonds as of the six months ended June 30, 2022, and 2021, respectively.

    • Mineral resources segment revenues were $16.1 million for the first six months of 2022, an increase of $1.5 million, or 10%, from $14.6 million for the first six months of 2021. The dry 2021/2022 winter diminished water availability in California and eventually resulted in a SWP allocation of 5%. As a result, the Company generated $545,000 in additional water sales revenues in 2022, as a result of improved pricing. Comparatively the Company sold 8,470 and 10,596 acre-feet of water as of June 30, 2022, and 2021, respectively. The remainder of the increase is attributed to the timing of property tax reimbursements from our mineral leases and increased production in the Company's oil and mineral leases as well as higher oil prices.

    • Equity in earnings of unconsolidated joint ventures were $2.9 million for the first six months of 2022, an increase of $1.6 million, or 120%, from $1.3 million for the first six months of 2021. The improvement is primarily attributed to the Company's Petro joint venture that saw improvements in both fuel and non-fuel operating margins. Additionally, the joint venture's full service restaurants were open during the first quarter of 2022 but were closed due to COVID-19 mandates during the same period in 2021.

  • Adjusted EBITDA, a non-GAAP measure, was $14.2 million as of June 30, 2022, an increase from $10.7 million as of June 30, 2021.

Liquidity and Capital Resources

As of June 30, 2022, total capital, including debt, was approximately $515.2 million. As of June 30, 2022, the Company had cash and securities totaling approximately $45.5 million and $45.0 million available on its line of credit.

2022 Outlook:

The Company will continue to aggressively pursue commercial/industrial development, multi-family development, leasing, sales, and investment within TRCC and its joint ventures. The Company will continue to invest in its residential projects, including Mountain Village at Tejon Ranch, Centennial at Tejon Ranch and Grapevine at Tejon Ranch.

California is one of the most highly regulated states in which to engage in real estate development and, as such, natural delays, including those resulting from litigation, can be reasonably anticipated. Accordingly, throughout the next few years, the Company expects net income to fluctuate from year-to-year based on commodity prices, production within its farming segment and mineral resources segment, and the timing of sales of land and the leasing of land within its industrial developments.

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.

The Company operates in a variety of land-based business segments, including farming, mineral resources, and ranch operations, as well as a commercial/industrial mixed use master plan known as the Tejon Ranch Commerce Center, that is currently in operation focusing on leasing, commercial/industrial development, multi-family development, and sales. The Company also is in the process of developing three additional mixed-use master planned residential developments in southern California. When all four master planned developments are fully built out, Tejon Ranch will be home to 35,278 housing units, more than 35 million square feet of commercial/industrial space and 750 lodging units.

More information about Tejon Ranch Co. can be found on the Company's website at 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. Some of 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, the impact of COVID-19, 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.

(Financial tables follow)

TEJON RANCH CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except earnings per share)
(Unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

Real estate - commercial/industrial

$

2,462

 

 

$

8,126

 

$

9,811

 

$

10,354

 

Mineral resources

 

4,131

 

 

 

7,404

 

 

16,099

 

 

14,580

 

Farming

 

1,921

 

 

 

279

 

 

2,576

 

 

886

 

Ranch operations

 

755

 

 

 

829

 

 

1,803

 

 

1,872

 

Total revenues

 

9,269

 

 

 

16,638

 

 

30,289

 

 

27,692

 

Cost and Expenses:

 

 

 

 

 

 

 

Real estate - commercial/industrial

 

1,822

 

 

 

4,712

 

 

4,558

 

 

6,264

 

Real estate - resort/residential

 

423

 

 

 

439

 

 

846

 

 

992

 

Mineral resources

 

2,445

 

 

 

4,253

 

 

9,602

 

 

9,300

 

Farming

 

3,462

 

 

 

1,203

 

 

5,224

 

 

2,681

 

Ranch operations

 

1,250

 

 

 

1,142

 

 

2,565

 

 

2,329

 

Corporate expenses

 

2,185

 

 

 

2,364

 

 

4,600

 

 

4,655

 

Total expenses

 

11,587

 

 

 

14,113

 

 

27,395

 

 

26,221

 

Operating (loss) income

 

(2,318

)

 

 

2,525

 

 

2,894

 

 

1,471

 

Other Income:

 

 

 

 

 

 

 

Investment income

 

79

 

 

 

9

 

 

96

 

 

16

 

Other income, net

 

(91

)

 

 

43

 

 

827

 

 

107

 

Total other income

 

(12

)

 

 

52

 

 

923

 

 

123

 

(Loss) income from operations before equity in earnings of unconsolidated joint ventures

 

(2,330

)

 

 

2,577

 

 

3,817

 

 

1,594

 

Equity in earnings of unconsolidated joint ventures, net

 

1,663

 

 

 

1,365

 

 

2,876

 

 

1,306

 

(Loss) income before income tax expense

 

(667

)

 

 

3,942

 

 

6,693

 

 

2,900

 

Income tax (benefit) expense

 

(5

)

 

 

1,118

 

 

3,041

 

 

1,139

 

Net (loss) income

 

(662

)

 

 

2,824

 

 

3,652

 

 

1,761

 

Net income (loss) attributable to non-controlling interest

 

5

 

 

 

2

 

 

12

 

 

(6

)

Net (loss) income attributable to common stockholders

$

(667

)

 

$

2,822

 

$

3,640

 

$

1,767

 

Net (loss) income per share attributable to common stockholders, basic

$

(0.03

)

 

$

0.11

 

$

0.14

 

$

0.07

 

Net (loss) income per share attributable to common stockholders, diluted

$

(0.03

)

 

$

0.11

 

$

0.14

 

$

0.07

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

Common stock

 

26,480,405

 

 

 

26,343,353

 

 

26,456,330

 

 

26,328,620

 

Common stock equivalents

 

47,507

 

 

 

68,177

 

 

57,665

 

 

63,930

 

Diluted shares outstanding

 

26,527,912

 

 

 

26,411,530

 

 

26,513,995

 

 

26,392,550

 


TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

 

June 30, 2022

 

December 31, 2021

 

(unaudited)

 

 

ASSETS

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

18,364

 

 

$

36,195

 

Marketable securities - available-for-sale

 

27,185

 

 

 

10,983

 

Accounts receivable

 

2,751

 

 

 

6,473

 

Inventories

 

9,435

 

 

 

5,702

 

Prepaid expenses and other current assets

 

4,323

 

 

 

3,619

 

Total current assets

 

62,058

 

 

 

62,972

 

Real estate and improvements - held for lease, net

 

17,117

 

 

 

17,301

 

Real estate development (includes $113,627 at June 30, 2022, and $112,063 at December 31, 2021, attributable to Centennial Founders, LLC, Note 15)

 

326,835

 

 

 

319,030

 

Property and equipment, net

 

52,794

 

 

 

50,699

 

Investments in unconsolidated joint ventures

 

38,632

 

 

 

43,418

 

Net investment in water assets

 

49,295

 

 

 

50,997

 

Other assets

 

1,574

 

 

 

1,619

 

TOTAL ASSETS

$

548,305

 

 

$

546,036

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities:

 

 

 

Trade accounts payable

$

4,437

 

 

$

4,545

 

Accrued liabilities and other

 

2,228

 

 

 

3,451

 

Deferred income

 

1,657

 

 

 

1,907

 

Income Taxes Payable

 

2,176

 

 

 

1,217

 

Current maturities of long-term debt

 

1,619

 

 

 

4,475

 

Total current liabilities

 

12,117

 

 

 

15,595

 

Long-term debt, less current portion

 

49,055

 

 

 

48,155

 

Long-term deferred gains

 

7,839

 

 

 

8,409

 

Deferred tax liability

 

4,029

 

 

 

2,898

 

Other liabilities

 

10,956

 

 

 

14,468

 

Total liabilities

 

83,996

 

 

 

89,525

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Tejon Ranch Co. Stockholders’ Equity

 

 

 

Common stock, $0.50 par value per share:

 

 

 

Authorized shares - 30,000,000

 

 

 

Issued and outstanding shares - 26,484,947 at June 30, 2022, and 26,400,921 at December 31, 2021

 

13,242

 

 

 

13,200

 

Additional paid-in capital

 

346,137

 

 

 

344,936

 

Accumulated other comprehensive loss

 

(3,919

)

 

 

(6,822

)

Retained earnings

 

93,475

 

 

 

89,835

 

Total Tejon Ranch Co. Stockholders’ Equity

 

448,935

 

 

 

441,149

 

Non-controlling interest

 

15,374

 

 

 

15,362

 

Total equity

 

464,309

 

 

 

456,511

 

TOTAL LIABILITIES AND EQUITY

$

548,305

 

 

$

546,036

 


Non-GAAP Financial Measure

This news release includes references to the Company’s non-GAAP financial measure “EBITDA.” EBITDA represents the Company's share of consolidated net income in accordance with GAAP, before interest, taxes, depreciation, and amortization, plus the allocable portion of EBITDA of unconsolidated joint ventures accounted for under the equity method of accounting based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. EBITDA is a non-GAAP financial measure and is used by the Company and others as a supplemental measure of performance. Tejon Ranch uses Adjusted EBITDA to assess the performance of the Company's core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as EBITDA, excluding stock compensation expense. The Company believes Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from operations on an unlevered basis before the effects of taxes, depreciation and amortization, and stock compensation expense. By excluding interest expense and income, EBITDA and Adjusted EBITDA allow investors to measure the Company’s performance independent of its capital structure and indebtedness and, therefore, allow for a more meaningful comparison of the Company's performance to that of other companies, both in the real estate industry and in other industries. The Company believes that excluding charges related to share-based compensation facilitates a comparison of its operations across periods and among other companies without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside the Company's control), and the assumptions and the variety of award types that a company can use. EBITDA and Adjusted EBITDA have limitations as measures of the Company's performance. EBITDA and Adjusted EBITDA do not reflect Tejon Ranch's historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA and Adjusted EBITDA are relevant and widely used measures of performance, they do not represent net income or cash flows from operations as defined by GAAP, and they should not be considered as alternatives to those indicators in evaluating performance or liquidity. Further, the Company's computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.

TEJON RANCH CO.
Non-GAAP Financial Measures
(Unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

($ in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

(662

)

 

$

2,824

 

 

$

3,652

 

 

$

1,761

 

Net income (loss) attributable to non-controlling interest

 

5

 

 

 

2

 

 

 

12

 

 

 

(6

)

Net income (loss) attributable to common stockholders

 

(667

)

 

 

2,822

 

 

 

3,640

 

 

 

1,767

 

Interest, net

 

 

 

 

 

 

 

Consolidated

 

(79

)

 

 

(9

)

 

 

(96

)

 

 

(16

)

Our share of interest expense from unconsolidated joint ventures

 

640

 

 

 

629

 

 

 

1,231

 

 

 

1,253

 

Total interest, net

 

561

 

 

 

620

 

 

 

1,135

 

 

 

1,237

 

Income taxes

 

(5

)

 

 

1,118

 

 

 

3,041

 

 

 

1,139

 

Depreciation and amortization:

 

 

 

 

 

 

 

Consolidated

 

1,081

 

 

 

967

 

 

 

2,048

 

 

 

1,932

 

Our share of depreciation and amortization from unconsolidated joint ventures

 

1,093

 

 

 

1,181

 

 

 

2,242

 

 

 

2,356

 

Total depreciation and amortization

 

2,174

 

 

 

2,148

 

 

 

4,290

 

 

 

4,288

 

EBITDA

 

2,063

 

 

 

6,708

 

 

 

12,106

 

 

 

8,431

 

Stock compensation expense

 

868

 

 

 

949

 

 

 

2,087

 

 

 

2,225

 

Adjusted EBITDA

$

2,931

 

 

$

7,657

 

 

$

14,193

 

 

$

10,656

 


Tejon Ranch Co.
Allen E. Lyda, 661-248-3000
Chief Operating Officer/Chief Financial Officer