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Tejon Ranch Co. Announces Third Quarter 2024 Financial Results

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Tejon Ranch Co. (NYSE:TRC) reported Q3 2024 financial results with a net loss of $1.8 million ($0.07 per share), compared to a $0.3 million loss in Q3 2023. Revenue increased to $14.6 million from $12.0 million year-over-year. The company's Tejon Ranch Commerce Center maintains 100% occupancy of its 2.8 million square feet industrial portfolio. Notable developments include the upcoming Terra Vista at Tejon residential project, a new 510,500 square foot joint venture with Dedeaux Properties, and a Nestlé USA distribution facility under construction. The Outlets at Tejon achieved over 90% occupancy in its 10th anniversary year.

Tejon Ranch Co. (NYSE:TRC) ha riportato i risultati finanziari del terzo trimestre 2024 con una perdita netta di $1,8 milioni ($0,07 per azione), rispetto a una perdita di $0,3 milioni nel terzo trimestre 2023. I ricavi sono aumentati a $14,6 milioni rispetto ai $12,0 milioni dell'anno precedente. Il Tejon Ranch Commerce Center mantiene un'occupazione del 100% del suo portafoglio industriale di 2,8 milioni di piedi quadrati. Sviluppi notevoli includono il prossimo progetto residenziale Terra Vista at Tejon, una nuova joint venture di 510.500 piedi quadrati con Dedeaux Properties, e un impianto di distribuzione Nestlé USA in fase di costruzione. Gli Outlets at Tejon hanno raggiunto oltre il 90% di occupazione nel suo decimo anno di attività.

Tejon Ranch Co. (NYSE:TRC) reportó los resultados financieros del tercer trimestre de 2024 con una pérdida neta de $1.8 millones ($0.07 por acción), en comparación con una pérdida de $0.3 millones en el tercer trimestre de 2023. Los ingresos aumentaron a $14.6 millones desde $12.0 millones en el mismo período del año anterior. El Tejon Ranch Commerce Center mantiene una ocupación del 100% de su cartera industrial de 2.8 millones de pies cuadrados. Los desarrollos notables incluyen el próximo proyecto residencial Terra Vista at Tejon, una nueva empresa conjunta de 510,500 pies cuadrados con Dedeaux Properties, y una instalación de distribución de Nestlé USA en construcción. Los Outlets at Tejon lograron más del 90% de ocupación en su décimo año de aniversario.

Tejon Ranch Co. (NYSE:TRC)는 2024년 3분기 재무 결과를 발표했으며, 이는 180만 달러(주당 0.07달러)의 순손실을 기록했습니다. 이는 2023년 3분기 30만 달러의 손실에서 증가한 수치입니다. 수익은 전년 대비 1,460만 달러에서 1,200만 달러로 증가했습니다. Tejon Ranch Commerce Center는 280만 평방 피트의 산업 포트폴리오에서 100%의 점유율을 유지하고 있습니다. 눈여겨볼 만한 개발에는 곧 시작될 Terra Vista at Tejon 주거 프로젝트, Dedeaux Properties와의 51만 평방 피트 합작 투자, Nestlé USA 유통 시설 건설이 포함됩니다. Tejon의 아울렛들은 10주년 기념해 90% 이상의 점유율을 달성했습니다.

Tejon Ranch Co. (NYSE:TRC) a annoncé ses résultats financiers pour le troisième trimestre 2024, avec une perte nette de 1,8 million de dollars (0,07 dollar par action), contre une perte de 0,3 million de dollars au troisième trimestre 2023. Le chiffre d'affaires a augmenté pour atteindre 14,6 millions de dollars, contre 12,0 millions de dollars l'année précédente. Le Tejon Ranch Commerce Center maintient un taux d'occupation de 100% de son portefeuille industriel de 2,8 millions de pieds carrés. Parmi les développements notables figurent le prochain projet résidentiel Terra Vista at Tejon, un nouveau partenariat de 510 500 pieds carrés avec Dedeaux Properties, et un centre de distribution de Nestlé USA en cours de construction. Les Outlets at Tejon ont atteint plus de 90 % d'occupation lors de sa dixième année d'anniversaire.

Tejon Ranch Co. (NYSE:TRC) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem Nettoverlust von 1,8 Millionen Dollar (0,07 Dollar pro Aktie), verglichen mit einem Verlust von 0,3 Millionen Dollar im 3. Quartal 2023. Der Umsatz stieg auf 14,6 Millionen Dollar im Vergleich zu 12,0 Millionen Dollar im Jahresvergleich. Das Tejon Ranch Commerce Center hat eine 100%ige Auslastung seines 2,8 Millionen Quadratfuß großen Industrieportfolios. Zu den bemerkenswerten Entwicklungen gehören das bevorstehende Wohnprojekt Terra Vista at Tejon, ein neues Joint Venture mit Dedeaux Properties über 510.500 Quadratfuß und eine im Bau befindliche Vertriebsstelle von Nestlé USA. Die Outlets at Tejon erreichten im zehnten Jubiläumsjahr über 90% Auslastung.

Positive
  • Revenue increased 21.7% YoY to $14.6 million in Q3 2024
  • Industrial portfolio maintains 100% occupancy rate
  • Commercial portfolio maintains 95% lease rate
  • Outlets at Tejon achieves over 90% occupancy
  • $141.3 million in total liquidity available
Negative
  • Q3 2024 net loss increased to $1.8 million from $0.3 million YoY
  • Mineral resources revenue decreased 34% to $7.7 million
  • Farming operations impacted by higher production costs
  • Poor pistachio crop yield due to insufficient chilling hours
  • Debt to trailing twelve months adjusted EBITDA ratio at 7.4x

Insights

The Q3 2024 results reveal mixed performance with notable headwinds in agricultural operations. The $1.8 million net loss ($0.07 per share) marks a decline from the previous year's $0.3 million loss, primarily due to poor pistachio yields. However, the real estate segment shows promise with 100% occupancy in industrial space and 95% occupancy in commercial areas.

Key positives include the 90%+ occupied Outlets at Tejon and strategic expansion through the new Dedeaux Properties joint venture for a 510,500 sq ft industrial building. The company maintains strong liquidity with $141.3 million available, though the debt-to-EBITDA ratio of 7.4x is relatively high. The diversified business model helps offset agricultural volatility, with promising developments in real estate potentially driving future growth.

The agricultural segment faces significant challenges in 2024, with insufficient chilling hours severely impacting pistachio production. The timing shift in harvest patterns and increased operational costs (fuel, fertilizer, pest control and labor) are pressuring margins. The grape segment suffered from poorly timed spring rains during bloom, leading to higher mildew control expenses.

However, there's a silver lining in the almond market, with industry estimates of 2.6 billion pounds for 2024 crop and reduced inventory supporting better pricing. The agricultural outlook remains cautious due to ongoing cost pressures and weather-related uncertainties, though improved water allocation at 40% of contract amounts provides some operational stability.

TEJON RANCH, Calif., Nov. 07, 2024 (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, 2024.

“In the third quarter of 2024, we continued the momentum in key areas of the company's real estate portfolio. The company continues to make progress toward the opening of our first multi-family apartment community, Terra Vista at Tejon, during the first half of 2025. The company also announced a new joint-venture with Dedeaux Properties to develop a 510,500 square foot building in Tejon Ranch Commerce Center. The Outlets at Tejon celebrated their 10th anniversary and currently is over 90% occupied.” said Gregory S. Bielli, President & CEO of Tejon Ranch Co.

Commercial/Industrial Real Estate Highlights

  • The Tejon Ranch Commerce Center, or TRCC, industrial portfolio, through the Company's joint venture partnerships, consists of 2.8 million square feet of gross leasable area (GLA), and is 100% leased. In total, TRCC comprises 7.1 million square feet of GLA.
  • TRCC commercial portfolio, wholly owned and through joint venture partnerships, comprises 620,907 square feet of GLA and is 95% leased.
  • Construction of Terra Vista at Tejon Phase 1, the Company's multi-family residential development located in TRCC, is underway. Phase 1 includes 228 of the planned 495 residential units, with the first units becoming available in the first half of 2025 and the remaining units in this phase coming online soon thereafter. See www.tejonranchliving.com for further information.
  • Construction of a new distribution facility for Nestlé USA is underway on the east side of TRCC, which will total more than 700,000 square feet.
  • Outlets at Tejon is celebrating its 10-year anniversary in 2024, with occupancy over 90% as of September 30, 2024.
  • On October 4, 2024, a new joint venture with Dedeaux Properties was formed to develop, manage, and operate an industrial building of 510,500 square feet of space at TRCC-East.

Third Quarter 2024 Financial Results

  • GAAP net loss attributable to common stockholders for the third quarter of 2024 was $1.8 million, or net loss per share attributable to common stockholders, basic and diluted, of $0.07. For the third quarter of 2023, the Company had net loss attributable to common stockholders of $0.3 million, or net loss per share attributable to common stockholders, basic and diluted, of $0.01.
    • The primary driver of this decrease of $1.5 million was the lack of pistachio crop yield in 2024, primarily due to insufficient chilling hours, coupled with 2024 being the down-production year following a substantial harvest last season. Historically, the pistachio harvest begins in the third quarter, but in 2023, the harvest was delayed due to unusual weather conditions. This delay impacted the timing of cost recognition, resulting in lower overall farming costs for the third quarter of 2023.
    • The above decrease was partially offset by the increase of $2.2 million in Equity in earnings of unconsolidated joint ventures mainly related to improved fuel margins at the Company's TA/Petro joint venture.
  • Revenues and other income, including equity in earnings of unconsolidated joint ventures, for the third quarter of 2024 were $14.6 million, compared with $12.0 million for the third quarter of 2023.
    • The primary driver of this increase was a $2.2 million increase of equity in earnings of unconsolidated joint ventures, due to the improved fuel margins at the Company's TA/Petro joint venture.
  • Adjusted EBITDA, a non-GAAP measure, was $5.6 million for the third quarter ended September 30, 2024, compared with $5.7 million for the same period in 2023.

Tejon Ranch Co. provides Adjusted EBITDA, a non-GAAP financial measure, because management believes 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 loss attributable to common stockholders for the first nine months of 2024 was $1.8 million, or net loss per share attributed to common stockholders, basic and diluted, of $0.07, compared with net income attributable to common stockholders of $1.7 million, or net income per share attributed to common stockholders, basic and diluted, of $0.06, for the first nine months of 2023.
    • The primary factor driving this change was the reduction in operating profits within the farming segment of $4,365,000 mainly due to 2024 being a down production year for pistachio crops as stated above.
  • Revenues and other income, for the first nine months of 2024, including equity in earnings of unconsolidated joint ventures, totaled $33.2 million, compared with $35.2 million for the first nine months of 2023. Factors impacting the year-to-date results include:
    • Mineral resources segment revenues were $7.7 million for the first nine months of 2024, a decrease of $3.9 million, or 34%, from $11.6 million for the first nine months of 2023. The reduction in revenues is primarily attributed to a decline in water sales revenue of $3.4 million due to back-to-back strong rainfall years in California, which severely limited water sales opportunities.
    • The above decrease was partially offset by an increase in equity in earnings of unconsolidated joint ventures, and the main driver of the improved results was related to higher fuel margins at the TA/Petro joint venture.

Liquidity and Capital Resources

  • As of September 30, 2024, total capitalization, including pro rata share (PRS) of unconsolidated joint venture debt, was approximately $643.1 million, consisting of an equity market capitalization of $470.6 million and $172.5 million of debt, and our debt to total capitalization was 26.8%. As of September 30, 2024, the Company had cash and securities totaling approximately $41.3 million and $100.1 million available on its line of credit, for total liquidity of $141.3 million. The ratio of total debt including pro rata share of unconsolidated joint venture debt, net of cash and securities, of $131.2 million, to trailing twelve months adjusted EBITDA of $17.8 million was 7.4x.

2024 Outlook:

The Company will continue to strategically pursue commercial/industrial development, multi-family development, leasing, sales, and investment within TRCC and its joint ventures. The Company also will continue to invest in advancing 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 the above-mentioned activity, along with commodity prices, production within its farming and mineral resources segments, and the timing of land sales and leasing of land within its industrial developments.

Water sales opportunities each year are impacted by the total precipitation and snowpack runoff in Northern California from winter storms, as well as State Water Project, or SWP, allocations. The current SWP allocation is at 40% of contract amounts.

The Company's farming operations in 2024 continue to be impacted by higher costs of production, such as fuel costs, fertilizer costs, pest control costs, and labor costs. The almond industry is estimating the 2024 almond crop at 2.6 billion pounds. This estimate along with a lower inventory carry forward has helped to improve pricing. The late spring rains negatively impacted 2024 grape production as the rains occurred during the grape bloom. The timing of the rains also increased cultural costs within grapes to fight higher levels of mildew in the vineyards.

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 15 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. 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, external 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.

(Financial tables follow)

TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
 September 30, 2024 December 31, 2023
 (unaudited)  
ASSETS   
Current Assets:   
Cash and cash equivalents$27,369  $31,907 
Marketable securities - available-for-sale 13,892   32,556 
Accounts receivable 2,783   8,352 
Inventories 7,550   3,493 
Prepaid expenses and other current assets 4,053   3,502 
Total current assets 55,647   79,810 
Real estate and improvements - held for lease, net 16,340   16,609 
Real estate development (includes $123,302 at September 30, 2024 and $119,788 at December 31, 2023, attributable to CFL) 374,341   337,257 
Property and equipment, net 56,760   53,985 
Investments in unconsolidated joint ventures 34,429   33,648 
Net investment in water assets 56,024   52,130 
Other assets 4,496   4,084 
TOTAL ASSETS$598,037  $577,523 
    
LIABILITIES AND EQUITY   
Current Liabilities:   
Trade accounts payable$11,283  $6,457 
Accrued liabilities and other 6,565   3,214 
Deferred income 1,721   1,891 
Total current liabilities 19,569   11,562 
Revolving line of credit 59,942   47,942 
Long-term deferred gains 11,447   11,447 
Deferred tax liability 8,282   8,269 
Other liabilities 15,114   15,207 
Total liabilities 114,354   94,427 
Commitments and contingencies   
Equity:   
Tejon Ranch Co. Stockholders’ Equity   
Common stock, $0.50 par value per share:   
Authorized shares - 50,000,000   
Issued and outstanding shares - 26,814,680 at September 30, 2024 and 26,770,545 at December 31, 2023 13,408   13,386 
Additional paid-in capital 347,939   345,609 
Accumulated other comprehensive loss (142)  (171)
Retained earnings 107,115   108,908 
Total Tejon Ranch Co. Stockholders’ Equity 468,320   467,732 
Non-controlling interest 15,363   15,364 
Total equity 483,683   483,096 
TOTAL LIABILITIES AND EQUITY$598,037  $577,523 
 


TEJON RANCH CO. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
 
 Three Months Ended September 30, Nine Months Ended September 30,
  2024   2023   2024   2023 
Revenues:       
Real estate - commercial/industrial$3,002  $3,397  $8,497  $8,706 
Mineral resources 3,166   3,118   7,687   11,630 
Farming 3,242   2,642   4,249   4,852 
Ranch operations 1,446   1,052   3,518   3,384 
Total revenues 10,856   10,209   23,951   28,572 
Costs and Expenses:       
Real estate - commercial/industrial 2,088   2,137   6,005   5,517 
Real estate - resort/residential 328   367   2,316   1,079 
Mineral resources 1,812   2,000   5,043   6,991 
Farming 6,252   2,157   9,406   5,644 
Ranch operations 1,223   1,196   3,711   3,864 
Corporate expenses 2,945   2,315   8,794   6,824 
Total expenses 14,648   10,172   35,275   29,919 
Operating (loss) income (3,792)  37   (11,324)  (1,347)
Other Income:       
Investment income 528   700   1,843   1,775 
Other (loss) income, net (69)  (30)  (210)  272 
Total other income, net 459   670   1,633   2,047 
(Loss) income from operations before equity in earnings of unconsolidated joint ventures and income tax (3,333)  707   (9,691)  700 
Equity in earnings of unconsolidated joint ventures, net 3,329   1,161   7,611   4,616 
(Loss) income before income tax (4)  1,868   (2,080)  5,316 
Income tax expense (benefit) 1,832   2,215   (286)  3,619 
Net (loss) income (1,836)  (347)  (1,794)  1,697 
Net loss attributable to non-controlling interest    (6)  (1)  (3)
Net (loss) income attributable to common stockholders$(1,836) $(341) $(1,793) $1,700 
Net (loss) income per share attributable to common stockholders, basic$(0.07) $(0.01) $(0.07) $0.06 
Net (loss) income per share attributable to common stockholders, diluted$(0.07) $(0.01) $(0.07) $0.06 
 

Non-GAAP Financial Measure

This press 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 September 30, Nine Months Ended September 30,
($ in thousands) 2024   2023   2024   2023 
Net (loss) income$(1,836) $(347) $(1,794) $1,697 
Net loss attributable to non-controlling interest    (6)  (1)  (3)
Interest, net       
Consolidated (528)  (700)  (1,843)  (1,775)
Our share of interest expense from unconsolidated joint ventures 1,532   1,216   4,625   3,618 
Total interest, net 1,004   516   2,782   1,843 
Income tax expense (benefit) 1,832   2,215   (286)  3,619 
Depreciation and amortization:       
Consolidated 1,216   1,028   3,137   3,003 
Our share of depreciation and amortization from unconsolidated joint ventures 1,695   1,393   4,989   4,005 
Total depreciation and amortization 2,911   2,421   8,126   7,008 
EBITDA 3,911   4,811   8,829   14,170 
Stock compensation expense 1,732   864   4,086   2,369 
Adjusted EBITDA$5,643  $5,675  $12,915  $16,539 
 


 
 
Summary of Outstanding Debt as of September 30, 2024
(Unaudited)
 
 
 
Entity/BorrowingAmount% SharePRS Debt
Revolving line-of-credit$59,942100% $59,942 
Petro Travel Plaza Holdings, LLC 11,98460%  7,190 
TRCC/Rock Outlet Center, LLC 20,62650%  10,313 
TRC-MRC 1, LLC 21,64250%  10,821 
TRC-MRC 2, LLC 21,41450%  10,707 
TRC-MRC 3, LLC 32,95250%  16,476 
TRC-MRC 4, LLC 61,14450%  30,572 
TRC-MRC 5, LLC 52,98450%  26,492 
Total$282,688 $172,513 
 


Capitalization and Debt Ratios
(Unaudited)
 
 September 30, 2024
Period End Share Price$17.55 
Outstanding Shares 26,814,680 
Equity Market Capitalization as of Reporting Date$470,598 
Total Debt including PRS Unconsolidated Joint Venture Debt$172,513 
Total Capitalization$643,111 
Debt to total capitalization 26.8%
Net debt, including PRS unconsolidated joint venture debt, to TTM adjusted EBITDA 7.4 
    

Tejon Ranch Co.
Brett A. Brown, 661-248-3000
Executive Vice President, Chief Financial Officer

Tejon Ranch Co.
Nicholas Ortiz 661-663-4212
Senior Vice President, Corporate Communications & Public Affairs


FAQ

What was Tejon Ranch's (TRC) net loss in Q3 2024?

Tejon Ranch reported a net loss of $1.8 million, or $0.07 per share, in Q3 2024.

What is the occupancy rate of TRC's industrial portfolio in Q3 2024?

The Tejon Ranch Commerce Center industrial portfolio is 100% leased, comprising 2.8 million square feet of gross leasable area.

When will Terra Vista at Tejon's first units be available?

The first units of Terra Vista at Tejon Phase 1 are expected to become available in the first half of 2025.

What is TRC's total liquidity as of September 30, 2024?

Tejon Ranch had total liquidity of $141.3 million, consisting of $41.3 million in cash and securities and $100.1 million available on its line of credit.

Tejon Ranch Co.

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