• Tejon Ranch Co. Announces Second Quarter 2022 Financial Results

    المصدر: Nasdaq GlobeNewswire / 03 أغسطس 2022 09:15:00   America/New_York

    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.

    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


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