TEJON RANCH, Calif., Nov. 04, 2021 (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 nine-months ended September 30, 2021.
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, development, and sales. The Company is also 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.
“The Company is maintaining positive momentum even in the face of challenges in the current economic and business environment,” said Gregory S. Bielli, President and CEO. “On the industrial real estate front, all 4.8 million square feet of leasable space has been leased and occupied at Tejon Ranch Commerce Center and we have started construction on another 630,000 square-foot industrial spec building to provide additional opportunities for growth and reoccurring revenues. On the residential side, we are advancing our projects and have submitted for approval the final map for the initial phases of our Mountain Village community.”
Third Quarter Financial Results
Year-to-Date Financial Results
2021 Outlook:
TRCC has seen an increase in traffic as evidenced by a 24% increase in fuel sales volumes at the Petro Travel Plaza joint venture when compared to the same prior year period. The Company's other segments continue to operate without restrictions as they are and continue to be deemed essential.
As it relates to COVID-19, the Company will continue to prioritize employee health and provide work safety guidelines prescribed by Cal/OSHA. The Company is adhering to the applicable COVID-19 safety requirements as prescribed by the Federal Government.
Uncertainty remains over long-term vaccine efficacy, global vaccine adoption and availability, and the possibility of reinstating pandemic restrictions arising from future mutations such as the Delta variant.
Labor shortages are increasing the Company's cost of labor in its farming segment, while supply chain disruptions are impacting the ability to deliver our farm production to customers. We expect almond sales for 2021 to be affected by these two factors, however the total impact is not known at this time. The long-term impact of such uncertainties on the Company's business are currently unknown and may vary in scope and severity from the impacts to-date.
The actions taken by governments, other businesses, and individuals in response to the supply chain disruptions and the pandemic will continue to have an impact on results of operations and overall financial performance.
The Company's capital structure provides a solid foundation for continued investment in ongoing and future projects during this time of uncertainty. As of September 30, 2021, total capital, including debt, was approximately $505.3 million. As of September 30, 2021, Company had cash and securities totaling approximately $45.5 million and $35.0 million available on its line of credit.
The Company will continue to aggressively pursue commercial/industrial development, multi-family development opportunities, leasing, sales, and investment within TRCC and its joint ventures. The Company will also continue to invest in its residential projects, including Mountain Village at Tejon Ranch, Centennial at Tejon Ranch and Grapevine at Tejon Ranch.
For the remainder of 2021, the Company will continue to invest in master project infrastructure, defending currently held entitlements, and vertical development within its 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, natural delays, including those resulting from litigation, can be reasonably anticipated. Throughout the next few years, the Company expects net income to fluctuate from year-to-year based on commodity prices, production within its farming and mineral resources segments, and the timing of sales and 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.
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.
TEJON RANCH CO.CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except earnings per share)(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues: | |||||||||||||||
Real estate - commercial/industrial | $ | 2,466 | $ | 2,710 | $ | 12,820 | $ | 7,144 | |||||||
Mineral resources | 4,774 | 1,322 | 19,354 | 9,276 | |||||||||||
Farming | 6,726 | 8,537 | 7,612 | 9,698 | |||||||||||
Ranch operations | 996 | 944 | 2,868 | 2,483 | |||||||||||
Total revenues | 14,962 | 13,513 | 42,654 | 28,601 | |||||||||||
Cost and Expenses: | |||||||||||||||
Real estate - commercial/industrial | 2,331 | 2,026 | 8,595 | 5,704 | |||||||||||
Real estate - resort/residential | 322 | 273 | 1,314 | 1,225 | |||||||||||
Mineral resources | 3,025 | 648 | 12,325 | 5,240 | |||||||||||
Farming | 7,296 | 8,108 | 9,977 | 10,909 | |||||||||||
Ranch operations | 1,182 | 1,164 | 3,511 | 3,748 | |||||||||||
Corporate expenses | 2,021 | 2,121 | 6,676 | 7,148 | |||||||||||
Total expenses | 16,177 | 14,340 | 42,398 | 33,974 | |||||||||||
Operating (loss) income | (1,215 | ) | (827 | ) | 256 | (5,373 | ) | ||||||||
Other Income: | |||||||||||||||
Investment income | 5 | 455 | 21 | 834 | |||||||||||
(Loss) gain on sale of real estate | — | (2 | ) | — | 1,331 | ||||||||||
Other income, net | 24 | 68 | 131 | 64 | |||||||||||
Total other income | 29 | 521 | 152 | 2,229 | |||||||||||
(Loss) income from operations before equity in earnings of unconsolidated joint ventures | (1,186 | ) | (306 | ) | 408 | (3,144 | ) | ||||||||
Equity in earnings of unconsolidated joint ventures, net | 1,510 | 1,093 | 2,816 | 3,629 | |||||||||||
Income before income tax expense | 324 | 787 | 3,224 | 485 | |||||||||||
Income tax (benefit) expense | 98 | 403 | 1,237 | 1,111 | |||||||||||
Net income (loss) | 226 | 384 | 1,987 | (626 | ) | ||||||||||
Net income (loss) attributable to non-controlling interest | 7 | (14 | ) | 1 | (9 | ) | |||||||||
Net income (loss) attributable to common stockholders | $ | 219 | $ | 398 | $ | 1,986 | $ | (617 | ) | ||||||
Net income (loss) per share attributable to common stockholders, basic | $ | 0.01 | $ | 0.02 | $ | 0.08 | $ | (0.02 | ) | ||||||
Net income (loss) per share attributable to common stockholders, diluted | $ | 0.01 | $ | 0.02 | $ | 0.08 | $ | (0.02 | ) | ||||||
Weighted average number of shares outstanding: | |||||||||||||||
Common stock | 26,351,254 | 26,229,226 | 26,336,247 | 26,193,058 | |||||||||||
Common stock equivalents | 163,689 | 57,484 | 135,264 | 157,579 | |||||||||||
Diluted shares outstanding | 26,514,943 | 26,286,710 | 26,471,511 | 26,350,637 |
TEJON RANCH CO. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except per share data)
September 30, 2021 | December 31, 2020 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 37,660 | $ | 54,919 | |||
Marketable securities - available-for-sale | 7,791 | 2,771 | |||||
Accounts receivable | 5,974 | 4,592 | |||||
Inventories | 5,703 | 2,990 | |||||
Prepaid expenses and other current assets | 4,636 | 3,243 | |||||
Total current assets | 61,764 | 68,515 | |||||
Real estate and improvements - held for lease, net | 17,391 | 17,660 | |||||
Real estate development (includes $110,668 at September 30, 2021 and $108,600 at December 31, 2020, attributable to Centennial Founders, LLC, Note 15) | 316,143 | 310,439 | |||||
Property and equipment, net | 50,252 | 46,246 | |||||
Investments in unconsolidated joint ventures | 42,517 | 33,524 | |||||
Net investment in water assets | 51,710 | 56,698 | |||||
Other assets | 2,314 | 3,267 | |||||
TOTAL ASSETS | $ | 542,091 | $ | 536,349 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 4,006 | $ | 3,367 | |||
Accrued liabilities and other | 4,325 | 3,305 | |||||
Deferred income | 2,057 | 1,972 | |||||
Current maturities of long-term debt | 4,424 | 4,295 | |||||
Total current liabilities | 14,812 | 12,939 | |||||
Long-term debt, less current portion | 49,290 | 52,587 | |||||
Long-term deferred gains | 8,334 | 5,550 | |||||
Deferred tax liability | 1,703 | 925 | |||||
Other liabilities | 16,503 | 19,017 | |||||
Total liabilities | 90,642 | 91,018 | |||||
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 - 26,352,193 at September 30, 2021 and 26,276,830 at December 31, 2020 | 13,175 | 13,137 | |||||
Additional paid-in capital | 344,547 | 342,059 | |||||
Accumulated other comprehensive loss | (8,115 | ) | (9,720 | ) | |||
Retained earnings | 86,473 | 84,487 | |||||
Total Tejon Ranch Co. Stockholders’ Equity | 436,080 | 429,963 | |||||
Non-controlling interest | 15,369 | 15,368 | |||||
Total equity | 451,449 | 445,331 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 542,091 | $ | 536,349 |
Non-GAAP Financial Measure
This news release includes references to the Company’s non-GAAP financial measure “EBITDA.” EBITDA represents our 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 us and others as a supplemental measure of performance. We use Adjusted EBITDA to assess the performance of our 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. We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from our 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 our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries. We believe that excluding charges related to share-based compensation facilitates a comparison of our 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 our control), and the assumptions and the variety of award types that a company can use. EBITDA and Adjusted EBITDA have limitations as measures of our performance. EBITDA and Adjusted EBITDA do not reflect our 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, our 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 September 30, | Nine Months Ended September 30, | ||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Net income (loss) | $ | 226 | $ | 384 | $ | 1,987 | $ | (626 | ) | ||||||
Net income (loss) attributable to non-controlling interest | 7 | (14 | ) | 1 | (9 | ) | |||||||||
Net income (loss) attributable to common stockholders | 219 | 398 | 1,986 | (617 | ) | ||||||||||
Interest, net | |||||||||||||||
Consolidated | (5 | ) | (455 | ) | (21 | ) | (834 | ) | |||||||
Our share of interest expense from unconsolidated joint ventures | 621 | 653 | 1,874 | 1,971 | |||||||||||
Total interest, net | 616 | 198 | 1,853 | 1,137 | |||||||||||
Income taxes | 98 | 403 | 1,237 | 1,111 | |||||||||||
Depreciation and amortization: | |||||||||||||||
Consolidated | 1,476 | 1,455 | 3,408 | 3,635 | |||||||||||
Our share of depreciation and amortization from unconsolidated joint ventures | 1,105 | 1,167 | 3,461 | 3,222 | |||||||||||
Total depreciation and amortization | 2,581 | 2,622 | 6,869 | 6,857 | |||||||||||
EBITDA | 3,514 | 3,621 | 11,945 | 8,488 | |||||||||||
Stock compensation expense | 937 | 1,167 | 3,162 | 3,566 | |||||||||||
Adjusted EBITDA | $ | 4,451 | $ | 4,788 | $ | 15,107 | $ | 12,054 |
Tejon Ranch Co. |
Robert D. Velasquez, 661-248-3000 |
Senior Vice President and Chief Financial Officer |