Tejon Ranch Co. (NYSE:TRC) today released the results of operations for the three months ended March 31, 2012, with the Company showing net income attributable to common stockholders of $275,000, or $0.01 per common share, compared to net income attributable to common stockholders of $8,736,000, or $.44 per common share, for the same period in 2011. Revenue from operations for the three months ended March 31, 2012 was $9,579,000, compared to $22,646,000 of revenue for the same period during 2011. All per share references in this release are presented on a fully diluted basis.
Results of Operations for the Quarter Ended March 31, 2012:
The decline in net income attributable to common stockholders, and revenue from operations, during the first three months of 2012, when compared to the same period of 2011, is primarily due to the recognition of $15,750,000 in income during the first quarter of 2011 that came from the closing of conservation easement sales. On a comparison basis, excluding the sale of conservation easements during the first quarter of 2011, revenue from operations increased during the first quarter of 2012. Commercial/industrial revenue increased $1,751,000 during the first quarter of 2012, when compared to the same period in 2011, due to growth in oil and gas revenue resulting from an increase in production and pricing. Farming revenues also increased during the first quarter of 2012, when compared to 2011, due to an increase in pistachio revenues related to the sale of 2011 crop pistachios during the first quarter of 2012. Contributing to the decline in net income during the first quarter of 2012 was an overall increase in operating expense of $383,000. This increase in expense was driven by higher compensation cost due to the timing of hiring employees in 2011 and early 2012, higher professional service costs, and an increase in property taxes related to reassessments.
2012 Outlook and Information:
Management believes that the capital structure of the Company provides a solid foundation for future growth of the Company. On March 31, 2012, total capital was approximately $301,000,000, with debt accounting for less than one percent of total capital. On March 31, 2012, we also had cash and securities totaling approximately $75,508,000 and $30,000,000 of availability on lines of credit to meet any short-term funding needs.
On April 25, 2012, the Company and its partner in Tejon Mountain Village, DMB Pacific Ventures, received notice that the 5th District Court of Appeals in Fresno, California affirmed in its entirety the ruling of Kern County Superior Court Judge Kenneth Twisselman that the County of Kern properly analyzed and evaluated the environmental effects of Tejon Mountain Village. In its unanimous ruling, the court again rejected each claim by the opponents, ruling that the environmental impact report for Tejon Mountain Village was adequate.
During 2012, the Company will continue to aggressively pursue land entitlement activities and investment within the Tejon Ranch Commerce Center and in our joint ventures. The Company believes the variability of its quarterly and annual operating results will continue during 2012. 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|
|FIRST QUARTER ENDED MARCH 31|
|(In thousands, except earnings per share)|
|Real estate - commercial/industrial||$||6,054||$||4,286|
|Real estate - resort/residential||41||15,750|
|Revenue from operations||9,579||22,646|
|Operating income (loss)|
|Real estate - commercial/industrial||2,912||1,207|
|Real estate - resort/residential||(977||)||14,802|
|Income from operating segments||3,158||16,276|
|Other income (expense)||22||27|
|Operating income (loss) from operations before equity in losses of unconsolidated joint ventures||364||13,797|
|Equity in earnings (losses) of unconsolidated joint ventures||(359||)||(442||)|
Operating income before income tax expense (benefit)
|Income tax expense (benefit)||(228||)||4,660|
|Net loss attributable to non-controlling interest||(42||)||(41||)|
|Net income attributable to common stockholders||$||275||$||8,736|
|Net income per share, basic||$||0.01||$||0.44|
|Net income per share, diluted||$||0.01||$||0.44|
|Weighted average number of shares outstanding:|
|Common stock equivalents||32,744||27,246|
|Diluted shares outstanding||20,023,302||19,798,819|