Tejon Ranch Co. Reports Second Quarter Results of Operations – 2010

Tejon Ranch Co. (NYSE:TRC) today announced a net loss from operations for the second quarter ended June 30, 2010, and a net loss from operations for the first six months of 2010. For the second quarter of 2010, the Company had a net loss attributable to common stockholders of $1,149,000, or $0.06 per common share, compared to a net loss of $1,487,000, or $0.09 per common share during the second quarter of 2009. Revenue from operations for the second quarter of 2010 was $4,263,000 compared to $4,282,000 of revenue during the same period in 2009. All per share references in this release are presented on a fully-diluted basis.

For the first six months of 2010, the Company had a net loss attributable to common stockholders of $2,482,000, or $0.14 per common share, compared to a net loss of $2,826,000, or $0.16 per common share for the first six months of 2009. Revenue from operations for the six months ending June 30, 2010 was up slightly at $8,351,000, compared to $8,173,000 of revenue during the same period of 2009.

Results of Operations for the First Six Months of 2010:

The small increase in revenue during the first six months of 2010 is attributable to an increase in commercial/industrial revenues of $446,000 and an increase in resort/residential revenue of $50,000, which combined, more than offset a decline in farming revenues of $318,000. Commercial/industrial revenues increased in the first six months of 2010 compared to the same period of 2009 due to improved oil royalties of $527,000, which were partially offset by declines, when compared to the same period in 2009, in cement and sand and rock royalties of $224,000 and reduced percentage revenues from our Calpine lease of $54,000. Oil royalties improved as they are tied directly to the market price of oil, which has increased compared to the same period of 2009. Continued limited construction activity resulted in a decrease in production from mining activities in the first six months of 2010, and resulted in lower sand and rock mining royalties. The resort/residential segment increase in revenues was due to the consolidation of the results of Centennial Founders LLC operations. No revenues were reported for the first six months of 2009 as those operations were accounted for as joint venture earnings during that period. Farming revenues fell during the first six months of 2010 because of fewer prior-year crop almonds being sold. The decline in prior-year crop almond revenue during 2010 is due to lower crop inventory at the beginning of 2010 as compared to 2009. Investment income declined during the first six months of 2010 compared to the same period in 2009 due primarily to a lower average balance of funds invested.

The slight improvement in the loss for the first six months of 2010 compared to 2009 is due to the net improvement in revenues, as described above, which when combined with a net decrease in expenses, more than offset the reductions in investment income and equity in earnings from joint ventures. Expenses within our commercial/industrial segment decreased $745,000 during the first six months of 2010 compared to the same period in 2009 due primarily to reduced compensation expense. Within our resort/residential real estate segment, expenses increased $196,000 during 2010 due to the inclusion, through consolidation, of $363,000 of expenses related to our Centennial Founders LLC joint venture. Farming expenses declined $166,000 during the first six months of 2010 due to a decrease of $324,000 in cost of sales of prior year crop almonds, which more than offset higher water and fuel costs. Our joint ventures generated net earnings in the first six months of 2010 but fell short of 2009 levels primarily due to a decline in earnings from our TA/Petro joint venture. First year operating activities of the new East Side Travel Plaza and lower fuel margins reduced overall profitability within the TA/Petro joint venture.

Results of Operations for the Second Quarter of 2010:

Revenues from operations during the second quarter of 2010 were comparable to the same period of 2009. The small overall decline in revenues was due to decreased farming revenue, which was partially offset by a $623,000 improvement in commercial/industrial revenues. Farming revenue fell due to lower almond sales when compared to the same period of 2009 and commercial/industrial revenues improved during the quarter due primarily to higher oil and gas royalties.

The net loss for the period improved $250,000 during the second quarter of 2010 as compared to the same period of 2009 due to reductions in commercial/industrial and farming expenses. Commercial/industrial costs declined due to lower compensation costs and farming costs fell due to lower cost of goods sold related to reduced almond sales. Offsetting these improvements was an increase in resort/residential costs due to the consolidation of Centennial Founders LLC, which as noted above was not consolidated during the second quarter of 2009.

2010 Outlook:

On June 30, 2010, the Company had cash and marketable securities of approximately $74,500,000 and $30,000,000 of availability on a line of credit to meet future investment objectives and short-term working capital needs. The increase in cash and securities was due to, as previously reported, the completion during June 2010 of a very successful rights offering that raised $60,000,000. During the remainder of 2010 the Company anticipates continued investment in infrastructure at the Tejon Industrial Complex, investments in our joint ventures, and possible water purchases. Our strong financial position will allow us to continue to pursue these investments as well as our long-term strategies of land entitlement, development, and conservation.

While the Company continues to aggressively pursue our land entitlement process, we expect the remainder of 2010 to be difficult for our real estate operations as the sluggish economy continues to impact commercial/industrial users. The Company continues to expect that the variability of its quarterly and annual operating results will continue during the remainder of 2010. 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.

TEJON RANCH CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

SECOND QUARTER ENDED JUNE 30

(In thousands, except earnings per share)

(Unaudited)

Three Months Ended
June 30

Six Months Ended
June 30

2010200920102009
Revenues:
Real estate - commercial/industrial $ 4,071 $ 3,448 $ 7,644 $ 7,198
Real estate - resort/residential 4 - 50 -
Farming 188 834 657 975
Total revenues 4,263 4,282 8,351 8,173
Costs and Expenses:
Real estate - commercial/industrial 2,827 3,099 5,487 6,232
Real estate - resort/residential 1,136 962 2,127 1,931
Farming 718 1,050 1,491 1,657
Corporate expenses 2,085 2,020 4,122 4,065
Total expenses 6,766 7,131 13,227 13,885
Operating loss (2,503 ) (2,849 ) (4,876 ) (5,712 )
Other income (expense)
Investment income 221 336 462 910
Interest expense (70 ) (70 ) (70 ) (70 )
Other income 15 9 26 19
Total other income 166 275 418 859
Loss from operations before equity in earnings
of unconsolidated joint ventures (2,337 ) (2,574 ) (4,458 ) (4,853 )
Equity in earnings of unconsolidated
joint ventures, net 245 129 13 92
Operating loss, before income tax benefit (2,092 ) (2,445 ) (4,445 ) (4,761 )
Income tax benefit (855 ) (958 ) (1,838 ) (1,935 )
Net loss (1,237 ) (1,487 ) (2,607 ) (2,826 )
Net loss attributable to non-controlling interest 88 - 125 -
Net loss attributable to common stockholders (1,149 ) (1,487 ) (2,482 ) (2,826 )
Net loss per share to common stockholders, basic $ (0.06 ) $ (0.09 ) $ (0.14 ) $ (0.16 )
Net loss per share to common stockholders, diluted $ (0.06 ) $ (0.09 ) $ (0.14 ) $ (0.16 )
Weighted average number of shares outstanding:
Common stock 17,925,205 17,457,359 17,763,277 17,455,661
Common stock equivalents – stock options 459,899 510,175 477,630 510,126
Diluted shares outstanding 18,385,104 17,967,534 18,240,907 17,965,787

For the three and six months ended June 30, 2010 and June 30, 2009, diluted net loss per share is based on the weighted average number of shares of common stock outstanding, because the impact of common stock equivalents is antidilutive.

Contacts:

Tejon Ranch Co.
Allen Lyda
661-243-3000

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.