The decrease was attributed to a cut in oil production as the company temporarily closed producing wells for maintenance while it expands production storage facilities.
Tejon Ranch, whose property straddles the L.A.-Kern County border along the Grapevine, is planning a major housing development just north of Gorman in Los Angeles County, but for now, the company derives most of its revenue from farming, oil production, commercial property development and management, hunting and related activities.
In the agriculture column, pistachios and grapes were off, due in part to a summer windstorm, but those declines were partially offset by higher almond prices.
Overall third-quarter revenues stood at $15.128 million, down from last year’s third-quarter revenues of $16.114 million.
The company offered the following outlook for the rest of 2013:
Management believes that the capital structure of the Company provides a solid foundation for continued investment in our projects to set the stage for the future growth of the Company. On September 30, 2013, total capital was approximately $317,000,000, with debt accounting for approximately 1.5% of total capital. As of September 30, 2013, we also had cash and securities totaling approximately $73,569,000 and $30,000,000 of availability on lines of credit to meet any short-term funding needs. During the quarter the Company completed a distribution of warrants to shareholders. The warrants entitle the holder to purchase one share of common stock at an initial exercise price of $40.00 per share and are exercisable through August 31, 2016. The Company issued an aggregate amount of 3,000,000 warrants. Proceeds received from the exercise of warrants will be used to provide additional working capital for general corporate purposes, including development activities within the Company’s industrial and residential projects and to continue its investments into water assets and water facilities.
During the remainder of 2013, the Company will continue to pursue water investment and management activities, farming, land entitlement activities and investment within the Tejon Ranch Commerce Center and in our joint ventures, including the development of The Outlets at Tejon Ranch. The Company believes the variability of its quarterly and annual operating results will continue during 2013 due to its farming and real estate activities. 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.
Lower Oil Production Cuts Into Tejon's 3Q Profits
