-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, OMnwvwHoNCzaje1OkL8C9IK+EKI0r0nvaLqAQ7llJQ0qOA/lqW994byU4B5ZMTT1 CLxPqh2HyRNrg5aOe5Yt7Q== 0000096869-95-000013.txt : 19950512 0000096869-95-000013.hdr.sgml : 19950512 ACCESSION NUMBER: 0000096869-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEJON RANCH CO CENTRAL INDEX KEY: 0000096869 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 770196136 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07183 FILM NUMBER: 95536532 BUSINESS ADDRESS: STREET 1: 4436 LEBEC ROAD STREET 2: PO BOX 1000 CITY: LEBEC STATE: CA ZIP: 93243 BUSINESS PHONE: 8053278481 MAIL ADDRESS: STREET 1: 4436 LEBEC RD STREET 2: PO BOX 1000 CITY: LEBEC STATE: CA ZIP: 93243 10-Q 1 FORM 10Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to For Quarter Ended Commission File Number March 31, 1995 1-7183 TEJON RANCH CO. (Exact name of Registrant as specified in its charter) Delaware 77-0196136 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) P.O. Box 1000, Lebec, California 93243 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code...(805) 248-6774 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Total Shares of Common Stock issued and outstanding on March 31, 1995, were 12,682,244. 1 PART I FINANCIAL INFORMATION TEJON RANCH CO. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED March 31 1995 1994 Revenues: Livestock $ 328 $ 260 Farming 122 84 Oil and Minerals 263 294 Commercial and Land Use 326 349 Interest Income 370 396 1,409 1,383 Costs and expenses: Livestock 598 451 Farming 802 355 Oil and Minerals 11 36 Commercial and Land Use 446 391 Corporate Expenses 575 500 Interest Expense 79 95 2,511 1,828 Operating Loss (1,102) (445) Income Tax Benefit (441) (178) Net Income (Loss) $ (661) $ (267) Net Income (Loss) Per Share $ (.05) $ (.02) See Notes to Consolidated Condensed Financial Statements. 2 TEJON RANCH CO. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) MARCH 31, 1995 DECEMBER 31, 1994* (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 479 $ 68 Marketable Securities 21,362 23,718 Accounts & Notes Receivable 953 2,125 Inventories: Cattle 3,513 3,020 Farming 1,055 39 Other 84 69 Prepaid Expenses and Other 1,082 1,223 Total Current Assets 28,528 30,262 PROPERTY AND EQUIPMENT-NET 14,478 13,284 OTHER ASSETS 1,300 1,374 TOTAL ASSETS $ 44,306 $ 44,920 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade Accounts Payable $ 1,362 $ 1,061 Other Accrued Liabilities 93 465 Other Current Liabilities 1,884 1,950 Total Current Liabilities 3,339 3,476 LONG-TERM DEBT 1,950 1,950 DEFERRED CREDITS 2,736 2,736 Total Liabilities 8,025 8,162 STOCKHOLDERS' EQUITY Common Stock 6,341 6,341 Additional Paid-In Capital 387 387 Retained Earnings 29,741 30,402 Marketable Securities - Unrealized Gains (Losses), Net (188) (372) Total Stockholders' Equity 36,281 36,758 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,306 $ 44,920 See Notes to Consolidated Condensed Financial Statements. * The Balance Sheet at December 31, 1994 has been derived from the audited financial statements at that date. 3 TEJON RANCH CO. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (In thousands) (Unaudited) THREE MONTHS ENDED March 31 1995 1994 OPERATING ACTIVITIES Net Income (Loss) $ (661) $ (267) Items Not Effecting Cash: Depreciation and Amortization 238 222 Decrease in Deferred Items -0- (29) Gain on Sale of Investments 2 (41) Changes in Operating Assets and Liabilities: Receivables, Inventories and Other Assets, Net (279) 694 Current Liabilities, Net (137) (2,376) NET CASH USED IN OPERATING ACTIVITIES (837) (1,797) INVESTING ACTIVITIES Maturities and Sales of Marketable Securities 3,124 7,534 Funds Invested in Marketable Securities (518) (5,373) Property and Equipment Expenditures (1,414) (561) Net Change in Breeding Herds 49 (1) Other 7 (29) NET CASH PROVIDED BY INVESTING ACTIVITIES 1,248 1,570 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 411 (227) Cash and Cash Equivalents at Beginning of Year 68 247 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 479 $ 20 See Notes to Consolidated Condensed Financial Statements. 4 TEJON RANCH CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) March 31, 1995 NOTE A - BASIS OF PRESENTATION The summarized information furnished by Registrant pursuant to the instructions to Part I of Form 10-Q is unaudited and reflects all adjustments which are, in the opinion of Registrant's Management, necessary for a fair statement of the results for the interim period. All such adjustments are of a normal recurring nature. The results of the period reported herein are not indicative of the results to be expected for the full year due to the seasonal nature of Registrant's agricultural activities. Historically, the largest percentage of revenues are recognized during the fourth quarter. F o r further information, refer to the Consolidated Financial Statements and footnotes thereto included in Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. NOTE B - CALCULATIONS OF EARNINGS PER SHARE Earnings per share are calculated using the weighted average number of c o m mon shares outstanding during the period. Common shares outstanding for the three month period ended March 31, 1995 and 1994 were 12,682,244. Registrant has a Stock Option Plan providing for the granting of options to purchase a maximum of 230,000 shares of Registrant's Common Stock to employees, advisors and consultants of Registrant. Currently, options to purchase 130,000 shares are outstanding at prices equal to the fair market value at date of grant (96,000 shares at $20.00, 20,000 shares at $15.00, and 14,000 shares at $11.88). Stock options granted will be treated as common stock equivalents in accordance with the treasury method when such amounts would be dilutive. At March 31, 1995, fully diluted common shares outstanding are 12,682,763. At March 31, 1994, common stock equivalents were antidilutive. NOTE C - MARKETABLE SECURITIES Registrant has elected to classify its securities as available-for- s a le per Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities, and therefore is required to adjust securities to fair value at each reporting date. 5 Marketable securities consist of the following at: March 31 December 31 1995 1994 -------------------------------------------- Estimated Fair Estimated Fair Cost Value Cost Value -------------------------------------------- Marketable securities: U.S. Treasury and agency notes $16,221 $15,964 $18,837 $18,409 Corporate notes 5,453 5,398 5,445 5,309 -------------------------------------------- $21,674 $21,362 $24,282 $23,718 ============================================ As of March 31, 1995, the cumulative fair value adjustment is a $312,000 unrealized loss. The cumulative fair value adjustment to stockholders' equity, net of tax benefit of $124,000, is an unrealized loss of $188,000. Registrant's gross unrealized holding gains equals $84,000, while gross unrealized holding losses equals $396,000. On March 31, 1995, the average maturity of U.S. Treasury and agency securities was 2.3 years and corporate notes was 1.5 years. Currently, Registrant has no securities with a weighted average life of greater than five years. During 1995, Registrant has recognized losses of $2,000 on the sale of $2.4 million of securities, carried at historical cost adjusted for amortization and accretion. Market value equals quoted market price, if available. If a quoted market price is not available, market value is estimated using quoted market prices for similar securities. Registrant's investments in Corporate notes are with companies with a credit rating of A or better. NOTE D - CONTINGENCIES Registrant leases land to National Cement Company of California, Inc. ("National") for the purpose of manufacturing portland cement from limestone deposits found on the leased acreage. National, LaFarge Corporation (the parent company of the previous operator) and Registrant have been ordered to cleanup and abate an old industrial waste landfill site on the leased premises. Under the lease agreements with National and LaFarge, both companies are required to indemnify Registrant for any costs and liabilities incurred in connection with the cleanup order. Due to the financial strength of National and LaFarge, Registrant believes that a material effect on its financial condition is remote at this time. NOTE E - PAYMENT OF DIVIDEND On March 3, 1995, the Board of Directors voted to declare a cash dividend of two and one-half cents ($0.025) per share. The dividend will apply to stockholders of record as of the close of business on May 17, 1995 with payment to be made on June 19, 1995. 6 MANAGEMENT'S ANALYSIS OF QUARTERLY INCOME STATEMENTS Results of Operations Total revenues, including interest income, for the first quarter of 1995 were $1,409,000 compared to $1,383,000 for the first quarter of 1994. The increase in revenues during 1995 is attributable to increased cattle sales, quarter horse sales, and higher farm management fees. These increases were partially offset by reduced oil and mineral revenues and the absence of any firewood sales revenues during 1995 due to the elimination of the firewood program in 1993 and 1994. Cattle and quarter horse sales revenues are higher due to the volume of cattle and horses sold. Oil and mineral revenues are down due to reductions in oil production and sand and rock production. Operating activities during the first quarter of 1995 resulted in a net loss of $661,000, or $.05 per share, compared to a net loss of $267,000, or $.02 per share, for the same period in 1994. The decrease in net income compared to 1994 is primarily due to the $400,000 pre tax charge-off ($240,000, or $.02, after tax) of almond trees destroyed by wind during a winter storm in January 1995. In addition to the charge-off of trees, cost of sales on cattle increased due to a higher number of cattle being sold and to the higher cost of the purchased cattle being sold. Partially offsetting these unfavorable variances was the increase in revenues as described above and reductions in firewood expenses due to the elimination of the firewood program. As explained in Management's Discussion and Analysis of Financial Condition and Results of Operations of Registrant's 1994 Form 10-K, Registrant's farming operations suffered damages as a result of high winds that were associated with a series of winter storms. Nearly all of the loss occurred in Registrant's producing almond orchards. Approximately 200 acres of trees were uprooted by a combination of high winds and saturated soil conditions due to heavy rainfall. The loss of these trees resulted in the charge-off described above. Registrant is currently replanting the damaged acreage with new almond trees. The loss of mature trees will affect future revenues until the replanted crops begin full production which could take three to five years. Registrant's farming revenues are likely to be significantly lower than in 1994 due to the loss of trees as described above and expectations of a smaller nut crop. Partially offsetting the reduction in production is the expectation of higher almond prices due to the estimated small nut crop statewide. As described in Part I, Item 1 - "Business - Farming Operations" of Registrant's 1994 Form 10-K Laval Farms Limited Partnership (Laval), formerly named Tejon Agricultural Partners, entered into an agreement for the sale of its farmland and eventual dissolution of the partnership. As of April 20, 1995 all of the 13,000 acres that existed at the start of the sale program have been sold. Laval is continuing to utilize Registrant's management services until the partnership is dissolved. Registrant is currently receiving $10,000 per month for management services and is expected to receive this fee for the remainder of 1995. 7 Registrant is involved in various environmental proceedings related to leased acreage. For a further discussion refer to Registrant's 1994 Form 10-K, Part I, Item 3, - "Legal Proceedings". There have been no changes since the filing of the 1994 Form 10-K. Prices received by Registrant for many of its products are dependent upon prevailing market conditions and commodity prices. Therefore, Registrant is unable to accurately predict revenue, just as it cannot pass on any cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices. The operations of the Registrant are seasonal and results of operations cannot be predicted based on quarterly results. Liquidity and Capital Resources Cash and short-term investments on March 31, 1995 were $21.8 million compared to $23.8 million on December 31, 1994. Working capital on March 31, 1995 was $25.2 million compared to $26.8 million on December 31, 1994. The decrease in working capital at March 31, 1995 as compared to December 31, 1994 is primarily due to the purchase of property and capital improvement expenditures. Cash provided from operations and cash and short-term investments on hand are expected to be sufficient to satisfy all anticipated working capital and capital expenditure needs in the near term. Impact of Accounting Change None PART II - OTHER INFORMATION Item 1. Legal Proceedings Not Applicable Item 2. Changes in Securities Not Applicable Item 3. Defaults upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports - None 8 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TEJON RANCH CO. (Registrant) BY Date Allen E. Lyda Vice President, Finance & Treasurer 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET, INCOME STATEMENT, AND FOOTNOTES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 3-MOS DEC-31-1995 MAR-31-1995 479 21,632 953 0 4,652 28,528 27,433 (12,955) 44,306 3,339 0 6,341 0 0 29,940 44,306 1,409 1,409 1,857 1,857 575 0 79 (1,102) (441) (661) 0 0 0 (661) (.05) (.05)
-----END PRIVACY-ENHANCED MESSAGE-----