TRC

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET President and Chief Executive Officer - Matthew Walker Senior Vice President and Chief Financial Officer - Robert Velasquez Senior Vice President, Corporate Communications & Public Affairs - Nicholas Ortiz Operator: Greetings, and welcome to the Tejon Ranch Company Second Quarter 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Nick Ortiz. Please go ahead. Nicholas Ortiz: Good afternoon. Welcome to Tejon Ranch Company's second quarter 2026 earnings call. My name is Nick Ortiz. Joining me today are Matthew Walker, President and CEO; and Robert Velasquez, Senior Vice President and Chief Financial Officer. Today's press release, 10-Q, and the webcast are available on our investor relations website. A replay will be posted after we conclude. That site is ir.tejonranch.com. Today's remarks, including responses to questions, include forward-looking statements. These statements are made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Key factors are detailed in our SEC filings, including our most recent forms 10-Q and 10-K. We assume no obligation to update any forward-looking statements. We also reference non-GAAP measures. These measures should be considered in addition to, not as a substitute for, GAAP results. Reconciliations to the most directly comparable GAAP measures and reasons why we use non-GAAP measures are included in today's filings and are posted on our IR website. Again, ir.tejonranch.com. After prepared remarks, we'll address questions. Shareholders were invited to submit questions by email in advance. I'll now turn the call over to our CEO, Matthew Walker. Matthew Walker: Thank you, Nickn and good afternoon, everyone. Let me start off by saying we had a good quarter. Revenues were up across all segments. Adjusted EBITDA grew approximately 47% year-over-year, and we delivered net income of $2.6 million against a loss a year ago. Corporate expenses were down significantly. More than half of that reduction reflects the absence of last year's non-recurring costs. But setting those aside, core corporate expenses are still down 18% for the first 6 months of the year, highlighting the cost savings measures that we've put in place. This quarter's revenue growth was led by the Dedeaux Properties 1B land sale, which contributed $6.9 million in revenues. That transaction reinforces our commitment to Tejon Ranch Commerce Center as our nucleus of growth. With it, we are moving forward on our joint venture with Dedeaux on a 510,000 square foot Class A industrial building. Walls are being tilted up this week. It's a good illustration of our land monetization model, which is contributing our land to a joint venture, retaining an ongoing economic interest, and growing our income-producing portfolio with minimal net capital outlay. It's also worth noting that we committed to the project while much of the industrial market was sitting on the sidelines. The fundamentals in Southern California are now improving as we anticipated, positioning us well for an early 2027 delivery. We are also continuing to see traffic and sales increase at our outlets and revenues increase at our travel centers, due in part to the halo effect from the Hard Rock Casino Tejon. In addition, July produced the strongest new leasing performance in 9 months at our Terra Vista apartments. With that, I'm going to turn it over to Robert to walk through the financials, and then I'll offer my thoughts on some important topics. Robert Velasquez: Thank you, Matt. Net income attributable to common stockholders was $2.6 million, or $0.10 per share, versus a loss of $1.7 million a year ago, a $4.3 million improvement. The 10-Q provides details by segment. I'll focus on what the tables don't say: earnings quality, costs, and overall balance sheet. First, earnings quality. As Matt described, the company contributed land with a fair market value of $9.9 million to the Dedeaux Properties joint venture. As a result, we recognized $6.9 million of revenue and $2 million of profit during the quarter. The remaining $3 million of profit was deferred because it relates to our retained ownership interest in the joint venture. The recurring business performed as well. Multifamily swung to positive net operating income, with leasing at Terra Vista crossing 80% this month. Joint venture equity earnings rose 21% to $3.1 million, led by TA/Petro, improved results at the outlets, and steady contributions from our fully leased industrial portfolio. Second, costs. Excluding cost and sales on land and water, which fluctuate with transaction activity, expenses declined nearly 18% year-to-date. Outside of corporate and new Terra Vista operations, segment expenses were down roughly 8%. The discipline is evident across our operating segments. One 10-Q note, we now present farming before and after fixed water obligation, assessments we incur regardless of activity. Farming was profitable before those fixed costs this quarter. Third, the balance sheet. We ended the quarter with approximately $79 million of liquidity and debt to capital ratio of 16.3%. Let me close with the metric I watch most closely, trailing 12-months adjusted EBITDA of $29.8 million, up 21% from a year-ago. While land sales can significantly influence any single quarter, the trailing 12-month view provides a better measure of our underlying performance, and that performance continues to strengthen. I'll hand it back to Matt for some additional remarks. Matthew Walker: Thanks, Robert. I now want to take a step back and talk about 3 things that are on my mind. The first is about AI and how it's impacting our company. This spring, after evaluating several different options, we implemented a cost-effective rollout of a leading enterprise AI platform across the company. We started with a small group, not knowing exactly what the results would be. However, it became immediately clear to us that the combination of the AI technology overlaid on the accumulated knowledge base of a 183-year-old ranch could be incredibly powerful. This led us to extend AI to every desktop user, and we are now seeing meaningful improvements in performance and efficiency in multiple areas of the business. Each month seems to be a step function up in utilization and new use cases. We believe AI allows a relatively small company like ours to better compete in the marketplace, quickly testing new ideas, and researching new revenue opportunities, as well as automating manual processes to better focus on improving performance. AI is by no means perfect or the panacea to every challenge we face. It often gets you about 90% there, and you then have to constantly fact-check the conclusions. I want our shareholders to know that we're using every available tool to drive shareholder value. Next, I'd like to talk about water. I am pushing our management team to take a fresh look at every part of our business. That includes our fairly complex water story. In addition to the surface water and groundwater that comes from the ranch, we have multiple water contracts which provide for our current and future anticipated needs. The output from many of these contracts varies depending on how much water is available from the California State Water Project. We also bank excess water in one of two water banks. As I noted in May, too much of our balance sheet is generating too little of our bottom line. As it relates to water, we're working to change that. Water can't be a dormant asset for us. We have recently generated some opportunistic sales of our excess water to drive a higher current return on this valuable asset. We will continue to pursue both strategic and opportunistic water sales as market conditions permit. You will also notice that we have enhanced our water disclosures in this quarter's financials to more clearly tell our water story. Thinking more long term, we are looking at infrastructure investments that would make our considerable water assets even more liquid than they already are, and ways to do this which minimize capital outlays. Finally, I'd like to explain how we're looking at the future. Given our 183-year history, we often take a long-term outlook. As we survey our many opportunities and consider what to do next, I want you, the shareholder, to understand the rational process we are using to evaluate facts and make measured decisions. I've talked before about our investment criteria and hurdle rates. We look at our enterprise over multiple time horizons because many of our initiatives incubate over several years. Sometimes we use net present value as an evaluation tool, but NPV doesn't address the timing component or the realities that we face as a public company to deliver value sooner. What we're finding is a more valuable tool, particularly when you roll everything up to an entity level, is projected total shareholder return. TSR incorporates the entirety of our capital allocation strategy. As we compare different scenarios, we can see the compounding impact over both the near term and the long term. It's clear that we need to drive earnings commensurate with comparable companies. We need to return those earnings to our shareholders within a reasonable timeframe. We believe we have a sound process in place to get us there. Our intention is to make rational decisions that are in our shareholders' best interests. I look forward to sharing more as this process unfolds. In closing, overall, it was a good quarter. Our plan continues to show positive results. We're just getting started. We have a long way to go. We're optimistic about the future. We'll keep reporting our progress each quarter. We'll now turn to questions that were submitted. Please give us a moment to pull those up. Nicholas Ortiz: All right. Matt, we received questions and comments from 4 investors via email, I'll start with the first one from Mr. Paul Ross. TRC stock is selling at its lowest price since it went public 40 years ago. Employees, which are too many, directors, which are also too many, get paid in dollars free stock are dedicated to destroying value. TRC did not have enough land that they deluded shareholders twice to buy the remainder of the mountain village for $70 million in 2014 and $20 million up front plus $5 million annually for the water in 2013. Sadly, the winners are D&D and the Nicol family, plus the short sellers, 1 million shares Management, which does not buy or own any share stock. My question is, when will this destruction of shareholder value stop? Matthew Walker: Hi, Paul. I'll respond to that in a couple of different ways. I'm going to be straightforward about the stock price. It's painful. I watch it. The board watches it. No one is satisfied. I'm not going to insult you by trying to explain it away. Here's what I do know. We've improved results for 2 consecutive quarters now. We're moving ahead, as I just mentioned a few minutes ago, on a joint venture industrial building, which is an area where many investors say we should focus. We've expanded our disclosures, including on water. We're communicating with shareholders more than we ever have. The business is getting better, and I think it's getting easier to see from an investor standpoint, and that's what we can control. We have a long way to go, please don't think that I'm okay with where we're at today. Next, you mentioned that we have too many employees and too many directors. That's something that we've been addressing. Last year, as you know, we completed a 20% reduction in force in our employee count. I believe we're right-sized for the business that we have today. We've gone from 13 directors to 10 directors, to 9 directors as of this past May, and as of next May, we'll be at 7 directors. We're heading in the right direction there. Our stock compensation for both employees and directors is market-based. On the employee side, as I've mentioned a couple times, we've made a number of different changes to our executive compensation plan beginning in January 1 of this year. Those changes increase the performance component of our compensation so that we're more aligned with shareholders like you and the share price appreciation. Again, I agree with you, the stock performance over the long term is simply just not acceptable. On your question of when will the destruction of shareholder value stop, you mentioned a JV partner buyout in 2014. You also mentioned the acquisition of a water contract, which was necessary for the approval of our Grapevine Master Plan community back in 2013. Those transactions occurred 12 and 13 years ago. On the Nickel Water contract, as I mentioned earlier on this call, we're actively pursuing opportunistic water sales so that we can better monetize our water assets. There are many features of the Nickel Water contract in particular that make it attractive to other potential users. I'll say again what I've told you in the past, what I've mentioned a couple of minutes ago in my opening remarks, I'm completely committed to driving shareholder value. To do that, we need to generate earnings per share on par with other similar companies, as I mentioned before, and shareholders need to receive the value of those earnings. To generate more earnings, we need to do more of the things which make money and less of the things which don't. I have a plan to get us there, I've got a process in place, we will be reporting on our progress as we execute it. I wish everything could go faster, I certainly have a sense of urgency. I know that you won't be satisfied until you see results, that's exactly how it should be. Nicholas Ortiz: All right. Our next question is from David Ross. Without the land sale this quarter to Dedeaux, TRC is still losing money. Cash is down sequentially, and debt has increased correspondingly. The problem is obvious. The farm operation and the ranching operations do not provide a positive return on investment. Water and corporate expenses further dilute returns. What is the plan to fix this, and when can we expect it to improve? Given the amount of recurring passive revenue, we cannot build shareholder value while continuing the non-income producing costs that are tied to the ranch, the farm, and Mountain Village and Centennial development. These assets generate no income and will require hundreds of millions of future capital investment to eventually generate income. Developing these assets will prevent the company from being able to return capital back to shareholders for at least another decade. If we are focused on shareholder value and long-term share price appreciation, how can you justify holding onto these assets and pursuing the same failed strategy? I think we can agree that the strategy has not worked for the last 30 years. Perhaps it is time to separate the real estate assets from the commercial assets since we agree the value of the commercial assets greatly exceed the value of the stock. Who on the board is against strategic review to improve value for the shareholders, and why hasn't it been explored? Matthew Walker: There's a lot in here, David, and honestly, a fair amount that I agree with. Let me try to take it in a couple different pieces. First, let me correct what you said about the quarter. Even if we set aside the $2 million of profit that we recognized on the Dedeaux land sale, we were still profitable. The income-producing components of our business, that includes our industrial joint ventures, the travel centers, the outlets, and our apartments, all those carried their weight this quarter. Second, on the farm and the ranch, you're right. They haven't earned an adequate return. I'm not pretending otherwise. We've changed our disclosure, as I mentioned before, this quarter to show farming results before and after fixed water obligations. That's a non-controllable infrastructure financing cost, and that's incurred regardless of whether we do any farming activity. Because those aren't tied to operating performance, we believe that measure provides a clearer picture of the underlying profitability and cash flow potential of the farming business. Using that measure, farming was profitable before those fixed costs this quarter. You also mentioned a strategic review. You know, I would characterize my first 18 months as CEO as an ongoing strategic review of the company. Coming in, there was a lot to learn, and my thought process is constantly evolving. I've taken a systematic approach to examining each of our existing business lines, and I've been reporting to our board where and how management believes we need to change the status quo. There's been no resistance from the board. On the contrary, I've received strong support. I've got a plan in place to get us where we need to go. I will be sharing aspects of that plan as I'm able to communicate them. Make no mistake, we're making decisions based on reality and facts and an objective view on creating shareholder value. That's it. Nicholas Ortiz: Our next question is from Steven Chess. What are the impediments to development of Centennial, what is the potential timeline to the resolution of these impediments? An estimate of a potential start date to begin construction with a partner. Matthew Walker: Thanks, Steven. It's a fair question. I'll give you the real answer, which has a part that I can date and a part that I can't. Here's where we are. Following the appellate court's ruling back in June of last year, we've been collaboratively working with L.A. County to refine Centennial's environmental analysis and the re-entitlement of the project. The recirculated partial draft EIR, I know that's a mouthful, is now out for public comment. Our objective is to bring Centennial back in front of the L.A. County Planning Commission, then onto the Board of Supervisors before the end of this year. That's the part of the schedule that I can quantify. We're driving squarely towards it. The honest part about what comes after, the impediments to Centennial aren't a mystery. They're a standard development gauntlet. We've been navigating this for several years. Here are some of the key steps. One, as I just described, we need to complete the environmental process and secure reapproval through the county. Two, there's a possibility of renewed litigation. This is California. Large projects like Centennial attract challenges. We prevailed on most of the substance before. We're building a record that we think is designed to prevail again. Three, once those entitlements are secured and defended, the real work on a new community begins. The mapping, the infrastructure design, the financing, finally, the implementation. It's that second step in the legal that's so uncertain and difficult to quantify. In terms of a construction start date, any date that I give you today would just be a guess. What I can commit to you instead is this, you will know the milestones when we hit them, starting with the hearings this year. When Centennial does move forward, it's likely going to proceed in the same way that our industrial parcel 1B did just a few months ago. That will be under a joint venture structure which leverages the value that we've created in the land, and our partner's new capital funding. That's the short answer. Nicholas Ortiz: We received 3 questions from Richard Rushley. They're all on separate subjects. I'm going to take them one at a time. First, we were pleased to see the announced JV with Dedeaux Properties, and we're glad it was a 60-40 rather than 50-50. Should we expect to see the company continuing to go in the direction of increased ownership of its projects? Matthew Walker: Hi, Richard. It's a good question. We're going to take things on a case-by-case basis. With Dedeaux, it was a unique opportunity and one where the numbers made sense. With the increased investment, given our contributed land price, we could go up to 60% ownership without making any additional net cash investment. We found that pretty attractive. It's industrial development, so the building goes up quickly, and we believe that the short timeframe from capital deployment to lease-up and then cash flow production, that provides for a good risk-adjusted return in an asset class that we believe in. We're squarely focused also on ROIC. That's something that we need to keep in mind in general as we think about our level of capital investment. Nicholas Ortiz: Okay. Next question is, has the company had any discussions about the locating of a data center at Tejon Ranch? Matthew Walker: Let me answer that by saying that we look at many different types of uses for our land. If you've imagined it, we've probably considered it. More generally, we evaluate every credible source of demand for our land and our infrastructure on an ongoing basis. That's literally the job. The analysis is typically the same, which is, how can we most efficiently convert our land into long-term, durable cash flow streams, and what are the risks and what are the returns? We're going to update you when we have new things to report on that. Nicholas Ortiz: Final question. Can you confirm that Mr. Bielli's consulting contract is now over, and that it is not in Q2 results? Matthew Walker: Yes, the contract was ended, and there's no related expense in the second quarter results. Okay. Thanks. Nick. It sounds like those were all the questions that we have for this quarter. Thank you to those who reached out, and we look forward to next quarter's earnings call. Thank you all very much. Have a good afternoon. Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day. Before you buy stock in Tejon Ranch, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tejon Ranch wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Tejon Ranch (TRC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Tejon Ranch Co? Here are five stocks we like better. Tejon Ranch returned to profitability in Q2: Net income was $2.6 million, or $0.10 per share, versus a $1.7 million loss a year earlier. Adjusted EBITDA rose about 47% year over year, supported by stronger operating results and lower corporate expenses. The Dedeaux Properties joint venture boosted results and advances the industrial strategy: Tejon recognized $6.9 million in revenue and $2 million in profit from contributing land to a venture developing a 510,000-square-foot industrial building, while retaining a 60% ownership stake and an additional $3 million of deferred profit. Management is pursuing asset monetization and strategic development while addressing shareholder returns: Tejon is evaluating water-asset sales and infrastructure investments, advancing the Centennial community through the regulatory process, and reviewing capital allocation. The company ended the quarter with about $79 million in liquidity and a 16.3% debt-to-capital ratio. Tejon Ranch (NYSE:TRC) reported second-quarter net income of $2.6 million, or $0.10 per share, compared with a $1.7 million loss in the prior-year period, as revenue increased across its operating segments and the company recorded income from a land contribution to a joint venture with Dedeaux Properties. President and CEO Matthew Walker said adjusted EBITDA increased approximately 47% year over year, while corporate expenses declined significantly. He said more than half of the reduction reflected the absence of nonrecurring costs from the prior year, but that core corporate expenses were still down 18% during the first six months of 2026. → No Hangover: Revisiting Microsoft One Week After Earnings The quarter's revenue growth was led by the contribution of land at Tejon Ranch Commerce Center to the Dedeaux Properties joint venture. The transaction generated $6.9 million in revenue, according to Walker. Chief Financial Officer Robert Velasquez said Tejon Ranch contributed land with a fair market value of $9.9 million to the venture, resulting in $6.9 million of revenue and $2 million of profit recognized in the quarter. Another $3 million of profit was deferred because it relates to the company's retained ownership interest in the joint venture. → MarketBeat Week in Review – 08/03 - 08/07 The joint venture is developing a 510,000-square-foot Class A industrial building. Walker said walls were being tilted up during the week of the call, and the company expects an early 2027 delivery. He described the venture as an example of Tejon Ranch's strategy of contributing land to projects, retaining an economic interest and expanding its income-producing portfolio with limited net capital spending. Walker said Southern California industrial-market fundamentals have been improving, while the company committed to the project during a period when much of the market was on the sidelines. → Why the Landlord of the AI Boom Could Outlast the Chipmakers In response to a shareholder question about whether Tejon Ranch would seek larger ownership stakes in future projects, Walker said the company would consider opportunities on a case-by-case basis. In the Dedeaux venture, Tejon Ranch was able to take a 60% stake without additional net cash investment because of the value of its contributed land, he said. The company is also focused on return on invested capital when assessing capital commitments. Velasquez said the company's recurring operations also improved during the quarter. Joint-venture equity earnings rose 21% to $3.1 million, driven by TA/Petro, better outlet-center results and steady contributions from the company's fully leased industrial portfolio. Tejon Ranch's multifamily segment turned to positive net operating income, according to Velasquez, with occupancy at the Terra Vista apartments exceeding 80% during the month of the call. Walker said July marked the strongest new leasing performance at Terra Vista in nine months. Walker also cited increasing traffic and sales at the company's outlet centers and higher travel-center revenue, which he attributed in part to a halo effect from the Hard Rock Casino Tejon. Excluding land and water sales costs, which vary with transaction activity, expenses declined nearly 18% year to date, Velasquez said. Excluding corporate expenses and new Terra Vista operations, segment expenses declined about 8%. The company changed its financial disclosure for farming operations to present results before and after fixed water obligations. Velasquez said those water assessments are incurred regardless of farming activity, and the farming operation was profitable before those fixed costs during the second quarter. Tejon Ranch ended the quarter with approximately $79 million of liquidity and a debt-to-capital ratio of 16.3%, Velasquez said. Trailing 12-month adjusted EBITDA was $29.8 million, up 21% from a year earlier. Walker said management is reviewing the company's water assets and looking to increase returns from them. Tejon Ranch holds surface water, groundwater, water contracts and excess water stored in two water banks. The company has recently made opportunistic sales of excess water and plans to continue pursuing strategic and opportunistic sales when market conditions permit, he said. The company is also considering infrastructure investments intended to make its water assets more liquid while minimizing capital outlays, Walker said. Tejon Ranch expanded its water-related disclosures in its quarterly financial statements. Separately, Walker said Tejon Ranch has rolled out an enterprise artificial-intelligence platform across desktop users after initially testing it with a smaller group. He said the company has seen improvements in efficiency and performance across multiple business areas, including research, testing new revenue opportunities and automating manual processes. Walker cautioned that AI output requires fact-checking and is not a solution to every business challenge. Addressing shareholder concerns about the company's stock performance and development strategy, Walker said he was not satisfied with the share price and acknowledged that long-term performance “is simply just not acceptable.” He said Tejon Ranch reduced its employee count by 20% last year and has reduced its board size from 13 directors to nine, with plans to reach seven directors by next May. Walker said his first 18 months as CEO have involved an ongoing strategic review of the company and that the board has supported management's efforts to assess each business line. He said management is evaluating capital allocation using projected total shareholder return, in addition to measures such as net present value, to weigh the timing and long-term effects of investment decisions. On Centennial, the company's planned community development in Los Angeles County, Walker said the recirculated partial draft environmental impact report is open for public comment. Tejon Ranch aims to bring the project before the Los Angeles County Planning Commission and then the Board of Supervisors before the end of 2026. He said potential renewed litigation remains an uncertain factor after the entitlement process, followed by mapping, infrastructure design, financing and implementation. Walker declined to provide a construction start date, saying any estimate would be speculative. If Centennial advances, he said it would likely use a joint-venture structure similar to the industrial Parcel 1B project, leveraging Tejon Ranch land and a partner's capital. Walker also said Tejon Ranch evaluates a range of potential land uses, including data centers, but did not disclose any specific data-center discussions or plans. He confirmed that a consulting contract with Mr. Bielli had ended and that no related expense was included in second-quarter results. Tejon Ranch Corporation (NYSE: TRC) is one of California's largest private landowners, with a diversified portfolio spanning agriculture, real estate development and natural resource operations. Headquartered in Lebec, California, the company's holdings encompass approximately 270,000 acres in Kern and Los Angeles counties. Established in 1937 on the historic Rancho Tejon land grant, Tejon Ranch has leveraged its strategic location along Interstate 5 to build a multifaceted enterprise serving both local and regional markets. In agriculture, Tejon Ranch grows a variety of row crops and permanent plantings, including almonds, pistachios, table grapes and citrus. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tejon Ranch Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Tejon Ranch Co. swung to a profit during the second quarter as its revenues jumped from a year prior, the Lebec-based agribusiness and real estate development company reported this week. The results were buoyed by a sizable land sale, though management emphasized the company would have ended the quarter in the black regardless because of improvement in earnings attributed to corporate partnerships, residential leasing progress and corporate expense cuts. The company’s stock price responded modestly and remains near the lower end of its range during the past 12 months. On Thursday, President and CEO Matthew “Matt” Walker took shareholders’ pointed questions during an earnings conference call that was part of the company’s pledge to be more open with investors. Walker touted progress on initiatives including a new artificial-intelligence administrative initiative, new transparency on Tejon Ranch’s water business and plans to return to the Los Angeles County Board of Supervisors later this year with a new environmental report addressing concerns with its plans for a master-planned community near Gorman called Centennial. But he acknowledged frustrations with the company’s stock price. “I’m going to be straightforward about the stock price. It’s painful,” he said during the call. “I watch it. The board watches it. No one’s satisfied. I’m not going to insult you by trying to explain it away. Here’s what I do know: We’ve improved results for two consecutive quarters now.” Tejon Ranch, the only company in Kern County trading on the New York Stock Exchange and the owner of California’s largest contiguous private property, reported earning $2.6 million during the three months ended June 30, compared with a $1.7 million loss during the second quarter of 2025. Its revenues and other income increased almost 57% to reach $17.4 million. The company said this year’s corporate expenses through the end of the second quarter came to $4.7 million, a little more than half their total during the same period last year. A highlight of the quarter was the sale of land to Santa Monica-based Dedeaux Properties for $6.9 million. Tejon Ranch recognized only $2 million of the proceeds during the second quarter. It deferred the rest, noting the deal was a joint partnership with the Lebec company. Another bright spot was the performance of Tejon Ranch’s multi-phase rental housing development near the foot of the Grapevine, Terra Vista, which the company said is more than 80% leased. Other positives were high foot traffic and sales at the nearby Outlets at Tejon and rising revenue at the nearby travel center the company co-owns.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by the Dedeaux Properties 1B land sale, which serves as a model for the company's strategy of contributing land to joint ventures to grow income-producing portfolios with minimal capital outlay. Management is pivoting from a 'dormant asset' approach to active monetization of water rights, pursuing opportunistic sales of excess water to improve current returns on the balance sheet. Operational efficiency improved through a 20% reduction in force and a significant decrease in core corporate expenses, which were down 18% for the first half of the year. The company is integrating enterprise AI to automate manual processes and research new revenue opportunities, aiming to allow a small team to compete more effectively in complex markets. Real estate fundamentals in Southern California are reportedly improving, supporting the decision to proceed with a 510,000 square foot industrial building despite broader market hesitation. Management is transitioning its evaluation framework to 'Projected Total Shareholder Return' (TSR) to better account for the timing of value delivery and the compounding impact of capital allocation. The Dedeaux joint venture industrial project is positioned for an early 2027 delivery, with construction currently underway to capitalize on anticipated market recovery. Centennial development goals include bringing the project before the L.A. County Planning Commission and Board of Supervisors before the end of 2026. Future large-scale developments like Centennial are expected to follow a joint venture structure to leverage land value while utilizing partner capital for funding. The company plans to explore infrastructure investments that would increase the liquidity of its water assets while continuing to minimize direct capital outlays. Board size is being systematically reduced from 9 directors to 7 by May 2027 to further streamline governance and reduce costs. A change in financial reporting now presents farming results before and after fixed water obligations to better isolate underlying operational profitability from non-controllable infrastructure costs. The company recognized $6.9 million in revenue from the Dedeaux land contribution but deferred $3 million of profit related to its retained ownership interest in the joint venture. Management acknowledged significant historical shareholder value destruction and is implementing new executive compensation plans tied more closely to share price performance. Ongoing litigation risks in California remain a primary impediment to the timeline for major master-planned community projects like Centennial. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management admitted the long-term stock performance is unacceptable and is focusing on generating earnings per share comparable to peers to reverse the trend. The CEO highlighted that the company is now 'right-sized' following a 20% headcount reduction and is actively reducing the number of directors. The CEO characterized his first 18 months as an ongoing strategic review, receiving board support to challenge the status quo of underperforming business lines. Management argued that even excluding one-time land sale profits, the recurring income-producing segments like travel centers and industrial JVs were profitable this quarter. The immediate focus is securing re-entitlement through L.A. County by the end of the year, though a construction start date remains impossible to quantify due to potential litigation. The project will likely use a joint venture structure to minimize Tejon Ranch's capital exposure during the infrastructure phase. Management confirmed they evaluate every credible source of demand for land and infrastructure, including data centers, based on risk-adjusted returns and cash flow durability. No specific deals were announced, but the company is actively analyzing how to convert land into long-term streams.

TEJON RANCH, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Tejon Ranch Co. (NYSE:TRC), ("Tejon" or the "Company"), a diversified real estate, land and agribusiness company, today announced financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Net income attributable to common stockholders increased by $4.3 million to $2.6 million ($0.10/share basic and diluted), compared to a loss of $1.7 million, ($0.06/share) in the second quarter of 2025. Revenues and other income, including equity in earnings of unconsolidated joint ventures increased by $6.3 million to $17.4 million, compared to $11.1 million, in the second quarter of 2025, while overall results also benefited from disciplined cost management, with year-to-date corporate expenses of $4.7 million compared to $9.1 million in the prior-year period. The prior-year period included $3.4 million of non-recurring corporate expenses. Adjusted EBITDA, a non-GAAP measure, increased by $2.7 million to $8.4 million compared to $5.7 million in the second quarter of 2025. Executive Summary “Last year we committed to a clear strategy of cost discipline and capital efficiency, and this quarter's improved performance reflects a company executing its plan," said Matthew Walker, President and Chief Executive Officer of Tejon Ranch Company. “Compared to the prior year, we’ve cut corporate expenses and grown Adjusted EBITDA approximately 47%. Revenue benefited from the Dedeaux land sale, a transaction that also launches a new industrial joint venture at Tejon Ranch Commerce Center in which we hold a 60% economic interest, while our multifamily, mineral resources, and ranch operations segments all grew.” “Terra Vista continues to stabilize, with leasing now surpassing 80%, and our TRCC industrial portfolio remains fully leased. The discipline we’ve imposed and momentum we’re seeing position the Company to accelerate, as our investments mature and new opportunities emerge across the Ranch.” Commercial/Industrial Real Estate Update Segment revenues increased $4.6 million to $9.7 million, compared to $5.1 million in the second quarter of 2025, driven primarily by the $6.9 million land sale associated with the Dedeaux Properties joint venture. Leasing and occupancy as of June 30, 2026: Farming Highlights Farming segment revenues were $0.8 million, compared to $0.6 million in the second quarter of 2025. For the first six months of 2026, farming revenues were $1.6 million, compared to $2.2 million in the prior-year period. The year-over-year decline reflects lower carryover crop available for sale in the first half of 2026, as the Company strategically accelerated sales of carryover inventory during the fourth quarter of 2025 to capitalize on stronger-than-anticipated pricing. The Company planted 150 acres of olives in 2025 and an additional 150 acres in 2026 as part of its ongoing crop diversification strategy. Mineral Resources Highlights Mineral resources segment revenues increased 20% to $1.8 million, compared to $1.5 million in the second quarter of 2025, with segment operating profit increasing 25% to $0.9 million. For the first six months of 2026, segment revenues increased 30% to $5.3 million, driven primarily by opportunistic water sales executed in the first quarter. Underlying royalty streams across rock and aggregate, cement, and oil and gas continued to contribute stable cash flow during the quarter. Liquidity and Capital Resources As of June 30, 2026, total capital, including debt, was $588.9 million. The Company had total liquidity of approximately $79.2 million, consisting of cash and securities totaling approximately $15.1 million and $64.1 million available on its line of credit. 2026 Outlook: The Tejon Ranch Commerce Center remains the Company’s primary mixed-use development platform, with the new industrial Building 1B on track for an early 2027 delivery. The Company expects to continue to pursue commercial and industrial development both directly and through joint ventures, including opportunistic land sales. The Company continues to advance its proposed residential communities. Across the Ranch, the Company’s recurring revenue streams continue to perform, and management remains focused on leveraging the full breadth of its landholdings to drive value. Net income will fluctuate with the timing of land sales, leasing activity, and commodity prices. In farming, winter conditions generally provided adequate chill accumulation for the Company’s almond and pistachio orchards. Significant rainfall during the February bloom created less favorable pollination conditions, although the impact on crop yields is not expected to be known until harvest. California's spot water market is impacted by a higher State Water Project allocation this year, however the Company continues to look for opportunities to execute water sales when market conditions are favorable. Earnings Conference Call Information The Company will host a conference call to discuss its second quarter 2026 financial results: Date: Thursday, August 6, 2026 Time: 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time Dial-In: (877) 704-4453 (U.S.) or +1 (201) 389-0920 (International) Conference Call Playback: (844) 512-2921 (U.S.) or +1 (412) 317-6671 (International) Passcode: 13759630 The full playback can be accessed through Thursday, September 3, 2026. About Tejon Ranch Co. Tejon Ranch Co. (NYSE: TRC) is a California-based company whose 270,000-acre landholding in Los Angeles and Kern Counties supports a diversified portfolio of real estate and land-based businesses. Strategically located 60 miles north of downtown Los Angeles at its southern boundary and to an area approximately 15 miles southeast of Bakersfield at its northern boundary, the Company’s operations include the development and operations of commercial and industrial real estate, master planned communities, as well as farming, grazing and game management. Tejon Ranch Co. also generates revenue through ground leases, royalty agreements, and rights-of-way easements supporting infrastructure, energy, telecommunications and utility uses. For more information, please visit www.tejonranch.com. Forward Looking Statements: This release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include, among others, statements regarding the Company’s business plans, strategies, prospects, objectives, future operating results, financial condition, capital allocation, cost structure, development and entitlement timelines, partnerships, and other future events or circumstances. Forward-looking statements reflect the Company’s current expectations and beliefs and are not guarantees of future performance. These statements speak only as of the date of this release. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “may,” “will,” “could,” “should,” “would,” “likely,” and similar expressions are intended to identify forward-looking statements. These statements are based on current assumptions and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others, market, economic, geopolitical, and weather conditions; the availability and cost of financing; competition; commodity prices and agricultural yields; the ability to obtain and maintain governmental entitlements and permits; the timing and outcome of regulatory and litigation matters; demand for commercial, industrial, residential, and retail real estate; and other risks inherent in the Company’s real estate and agricultural operations. There can be no assurance that actual results will not differ materially from these forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements. Investors are cautioned not to place undue reliance on these statements. For additional information regarding risks and uncertainties, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent filings with the U.S. Securities and Exchange Commission. (Financial tables follow) Non-GAAP Financial Measures This press release includes references to the Company’s non-GAAP financial measures “EBITDA”, and Adjusted EBITDA. EBITDA represents the Company's share of consolidated net income in accordance with U.S. generally accepted accounting principles (“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 also 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 and certain identified non-recurring items that are not indicative of our on-going operations or that may obscure our underlying results and trends. The Company believes EBITDA and Adjusted EBITDA provide investors relevant and useful information, when reconciled to their most comparable GAAP financial measure, because they permit 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. In addition, the Company excludes certain items impacting comparability, such as shareholder activism advisory costs and legal expenses associated with the Centennial litigation, to provide investors with a clearer understanding of the Company’s core operating performance across periods. 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. Adjusted Farming EBITDA before fixed water obligations is not a measure of financial performance prepared in accordance with GAAP and should not be considered in isolation or as a substitute for net income, operating income, or other performance measures prepared in accordance with GAAP. The Company defines Adjusted Farming EBITDA before fixed water obligations as net income (loss) before interest, taxes, depreciation, and amortization, further adjusted to exclude non-recurring items such as gains or losses on asset sales, impairments, share-based compensation, and other non-cash charges, and before deducting the Company’s fixed water obligations. Management uses this measure to evaluate the core operating performance of its farming operations and to facilitate period-to-period comparisons by isolating the impact of variable farming costs from the fixed water infrastructure costs. The Company believes this measure provides investors with additional insight into the underlying cash flow potential of its agricultural operations. A reconciliation of Adjusted Farming EBITDA before fixed water obligations to the most directly comparable GAAP measure, Operating loss from farming, is provided below. Quarterly information is not indicative of full year results due to seasonality. Quarterly information is not indicative of full year results due to seasonality. Reconciliation of Adjusted Farming EBITDA before Fixed Water Obligations(Unaudited) The Company evaluates the performance of its farming operations using Adjusted Farming EBITDA before fixed water obligations, a non-GAAP financial measure. Management believes this measure provides a meaningful representation of the underlying profitability and cash flow potential of its agricultural operations by excluding both non-operating items and the fixed water obligation, which represents a non-controllable infrastructure cost incurred regardless of the level of farming activity in this segment. The fixed water obligations reflect the Company’s allocated share of infrastructure and financing costs associated with the transmission and delivery of water to the Company’s property. These obligations primarily consist of annual assessments levied to repay bonds issued by the State of California to finance the construction and on-going maintenance of the state water project system and local water districts water systems. The landowners who hold water rights, including the Company, are responsible for repaying these bonds through fixed annual payments. Unlike variable water costs which are included in farming expenses, management views the fixed water obligation as an infrastructure cost that supports long-term access to water resources, rather than an essential operating cost of farming. Accordingly, Adjusted Farming EBITDA before fixed water obligations allows management and investors to evaluate the operating performance of the Company’s farming segment independent of the fixed costs associated with water infrastructure.

A lackluster earnings announcement from TRC Synergy Berhad (KLSE:TRC) last week didn't sink the stock price. We think that investors are worried about some weaknesses underlying the earnings. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. For the year to March 2026, TRC Synergy Berhad had an accrual ratio of 0.23. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. In the last twelve months it actually had negative free cash flow, with an outflow of RM53m despite its profit of RM11.8m, mentioned above. We saw that FCF was RM1.6m a year ago though, so TRC Synergy Berhad has at least been able to generate positive FCF in the past. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio. Check out our latest analysis for TRC Synergy Berhad That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. The fact that the company had unusual items boosting profit by RM2.6m, in the last year, probably goes some way to explain why its accrual ratio was so weak. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. TRC Synergy Berhad had a rather significant contribution from unusual items relative to its profit to March 2026. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be. TRC Synergy Berhad had a weak accrual ratio, but its profit did receive a boost from unusual items. For the reasons mentioned above, we think that a perfunctory glance at TRC Synergy Berhad's statutory profits might make it look better than it really is on an underlying level. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 3 warning signs for TRC Synergy Berhad you should be mindful of and 1 of them is concerning. Our examination of TRC Synergy Berhad has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Image source: The Motley Fool. Thursday, May 7, 2026, at 5 p.m. ET Chief Executive Officer — Matthew Walker Chief Financial Officer — Robert Velasquez Corporate Secretary — Nicholas Ortiz Operator Need a quote from a Motley Fool analyst? Email [email protected] Matthew Walker: Thank you, Nick. Good afternoon, and thank you all for joining us. Today, I'm going to share my perspective on recent performance, then turn it over to our CFO, Robert Velasquez, who will cover our financials, and then we will answer questions from shareholders. Let me start off by saying we had a good first quarter. Revenues were up 16% from the first quarter of 2025, while operating costs were down 14%, including a $2.4 million reduction in corporate costs. As a result, net income was up $1.6 million and adjusted EBITDA was up $3.1 million with a 12-month trailing adjusted EBITDA of $27.2 million. Looking at adjusted EBITDA by segment on a 12-month trailing basis, Commercial real estate contributed $7.5 million, reflecting steady performance from our income-producing portfolio. Mineral Resources delivered $4.8 million, supported by the strength in water sales and farming contributed $2.2 million. Branch operations added approximately $1 million, benefiting from the increased membership activity. The headline number there is the $2.4 million reduction in corporate expenses, driven by lower headcount and the absence of proxy defense costs. Our first quarter results demonstrate our continued progress against our strategic goals over the past year, in particular, driving stronger cash flows. At the Tejon Ranch Commerce Center, we are especially pleased to report the groundbreaking of a new 510,000 square foot Class A industrial facility developed in partnership with Dedeaux Properties. TRCC is the nucleus of our growth, so we are excited to be moving forward, leveraging our land and our balance sheet to develop an income-producing property, which we expect to complete in the first quarter of next year. With our 2.8 million square foot TRCC industrial portfolio 100% leased, this project further capitalizes on the demand we continue to see along the I-5 corridor. In addition, as of the end of the quarter, our commercial and retail portfolio was 95% leased and the outlet to Tejon was 92% occupied. Terra Vista with 228 units now delivered, ended the quarter 71% leased and is on track for Phase 1 to be stabilized this summer. TRCC's momentum is accelerating. Outlet traffic was up 22% and sales were up nearly 12% in the first quarter compared to last year, with similar gains at our TA Petro Travel Center. We're seeing that the lease-up of Terra Vista and the opening of Hard Rock Casino Tejon are driving greater commercial activity across the center. As we approach our annual meeting next week, I'm looking forward to opening our dates to you and sharing more about the progress we've made and where we're headed. The meeting will be held on site at the ranch with options for virtual attendance. Registration details are in the proxy statement. We hope to see you there. I also want to thank our shareholders for their continued engagement and our Board for their leadership over the past year. With that, I'll turn the call over to our Chief Financial Officer, Robert Velasquez, to walk through the financials. Robert? Robert Velasquez: Thank you, Matt, and good afternoon, everyone. I will begin with a review of our first quarter results, provide some additional detail on segment performance and then summarize our current liquidity. For the first quarter of 2026, revenues and other income, including equity and earnings from unconsolidated joint ventures increased 13% to $10.8 million compared to $9.6 million in the same quarter last year. Turning to segment performance. Commercial and industrial real estate generated $2.8 million in revenue for the quarter, in line with the prior year period. Operationally, the portfolio remains strong. Equity and earnings from unconsolidated joint ventures totaled $1.3 million in the first quarter compared to $1.2 million in the prior year period, reflecting continued earnings growth despite diesel fuel margin pressure within our TA Petro joint venture. Farming segment revenues were approximately $900,000 in the first quarter of 2026 compared to $1.6 million in the same quarter last year. The year-over-year decline was due to lower carryover crop available for sale as we strategically accelerate sales of carryover inventory last quarter to capitalize on stronger-than-anticipated pricing. In addition, we planted 150 new acres of wins in April on top of the 150 acres planted in 2025 as part of our ongoing crop diversification strategy. Mineral resource revenues increased 36% to $3.5 million in the first quarter of 2026, with segment operating profit more than doubling to $1 million. Year-over-year improvement was driven primarily by opportunistic water sales executed during the quarter. Underlying royalty streams across rock and aggregate, cement and oil and gas continued to contribute stable cash flows during the quarter. Turning to liquidity. I'll look at the balance sheet. As of March 31, 2026, cash and marketable securities totaled approximately $19.4 million. Available capacity on our revolving credit facility was approximately $64.6 million. Total liquidity was therefore approximately $86 million. We believe our liquidity position provides sufficient flexibility to continue advancing development initiatives while maintaining balance sheet discipline. With that overview, I'll turn it back to Matt. Matthew Walker: Thanks, Robert. In summary, the first quarter marked a solid start to the year for us. We returned to profitability, demonstrated the value of our diversified business model and continued executing on our long-term strategic initiatives. Looking ahead, we remain focused on several key priorities, including the successful lease-up of Terra Vista, maintaining momentum at TRCC as a premier logistics and distribution hub and leveraging our diversified revenue base to deliver consistent results. With that, we will now respond to the questions that have been submitted. Please just give us a moment to get those pulled up. Nicholas Ortiz: We have received questions from shareholders. I'll start by reading the person who submitted the question and the question itself before turning it over to Matt. So our first question comes from Justin Levo. Matt, thank you for this call, and we greatly appreciate your efforts to date. In prior calls and presentations, the company cited Five Point Holdings as a positive example of the long-term master planned community entitlement and development strategy. As I am sure you know, it took five years to get their Valencia MPC across the line. Valencia has been selling lots for a few years now, yet Five Point stock is significantly lower than it was prior to Valencia's development. Overall, Five Point has been a terrible long-term investment for shareholders, and they've developed some of their NPC projects using the JV structure touted by management. Five Point stock is down 60% over the past 10 years. Howard Hughes is another publicly traded NPC developer, which has also been a terrible long-term investment for shareholders. Their stock is down 35% over the past 10 years. How are these two examples not indictment on the publicly traded master planned community development model? And how can you expect shareholders to buy into the idea of continuing to pursue Mountain Village and Centennial and continue to absorb the millions of costs related to these assets? -- knowing that even if we are able to get these assets across the finish line, the market will not reward this business model or the future cash flows generated by these assets of the question. Matthew Walker: Justin, thanks for your question. This is a humbling job. I thought a lot about some of the comments that I made during last quarter's call with respect to the public master planned community companies. And I'd like to refine my thoughts to some extent. You're right in a lot of what you said in as much as the fact of the fact in terms of investment returns. I don't believe that a joint venture structure is what's driving the other companies' poor performances. For us, I do believe that JVs are a positive tool because they allow us to monetize our land by contributing it to a joint venture while leveraging our partners' capital so that we can preserve cash. And that applies to our strategy on income-producing properties such as the new industrial building that we've just taken underway or for our MPCs. There are many lessons to be learned from looking at other companies, including things that we would do differently. What I can tell you is that I'm very much aware of the issues related to master planned community development, such as the lengthy duration and the capital requirements and the capital reinvestment on top of market cyclicality. But I also see the opportunity with the MOIC and with recurring cash flow. So for me, the takeaway is if we're going to pursue master planned community development as a public company, we need to do it in certain ways that might be different than how a private developer would approach. Nicholas Ortiz: Our next question is from David Spear. Matt, thank you for this call and your continued efforts. According to the trailing 12-month EBITDA table in the release, the company's JV investments, commercial real estate operations and Mineral Resource segment generate $33 million of EBITDA and $26 million of cash flow. These are passive investments in operations that investors typically ascribe immense value to as they can be managed at low costs while generating high returns on invested capital. Companies with similar passive operations such as Landbridge and Texas Pacific Land Trust trade at EV/EBITDA multiples over 30x and have multiple billion-dollar market caps. Companies with smaller market caps such as Aztec Land Company and [indiscernible] Land Association trade at even higher multiples. These have also been highly successful investments for shareholders. Applying 25x to 30x EBITDA multiple would result in a valuation between $800 million to $1 billion for just our income-producing assets. How can we justify pursuing master planned development projects when one could argue that selling them and focusing on our more highly valued assets and operations would result in a stock price that is 3 to 4x the current price? How can we ignore this passive capital-light option, especially considering the real estate development model has historically been punished by the stock market? That's the end of the question. Robert Velasquez: Okay. Thanks. Matthew Walker: Thanks, David. Good comments. You cited some great companies with good business models, and they performed really well in the market. I was planning to cover some of your topics at next week's Annual Shareholder Meeting, but let me give it a shot right now. You're right. Tejon Ranch Company has several business lines and segments that generate significant EBITDA through passive investments. And those businesses share many similarities with the companies that you've mentioned, all of which we've looked at to try to better understand. I should also note that there are certain characteristics of our land that are different than the land owned by the companies that you mentioned. but we also have plenty of opportunity as well. And I'm focused on growing this asset-light part of the business, as you mentioned. I'd rather place an aspirational multiple on some more conservative assumptions, but I think I understand your math. I might also add that our new industrial building is entirely consistent with the strategy that you're advocating and specifically that our JV structure allows us to earn an extremely high MOIC, especially when you look on our multiple on net invested cash. Nonetheless, we continue to believe that there's an immense amount of value to be earned from placing our master planned community project in development. And as I've reported before, this requires external capital, which I committed to shareholders last November that I would seek out, and we're going through that process over the next several quarters. Nicholas Ortiz: Our next question is from David Ross. We applaud the considerable improvements in the cost structure of the company and this effort is appreciated. Yet even with these changes, the company generated just $200,000 or $0.01 per share of earnings. If you add back the interest expense that the company continues to capitalize, GRC is still losing money each quarter and generating negative free cash flow. Given the amount of recurring passive income, we cannot build shareholder value while continuing the non-income-producing costs that are tied to the Mountain Village and Centennial development. These assets generate no income and will require hundreds of millions of future capital investment to eventually generate income. Developing these assets will prevent the company from being able to return capital back to shareholders for at least another decade. If we are focused on shareholder value and long-term share price appreciation, how can you justify holding on to these assets and pursuing the same build strategy? I think we can agree that the strategy has not worked for the last 30 years. On an adjusted basis, farming EBITDA was $185,000. But every year, the company continues to invest in CapEx towards the farming operation. While we understand the nature of fixed water obligations, this is still a cash expense. The farming operation continues to cost shareholders millions per year while factoring in PP&E CapEx and water. Why would we continue to accept these losses? Is there no better alternative for shareholders? The two questions point to the issue of capital allocation. We have been subsidizing these dream projects for decades. At what point does the leadership at TRC consider shareholder return on capital? Matthew Walker: So David, there's a lot there to consider. You've seen me present an economic case for farming in which we back out the cost of water, which we think is the right way to look at the business given our water contracts, which will ultimately support our residential and commercial development. And if you look at the remaining adjusted EBITDA, excluding the water holding cost, the picture for farming is more positive. There are also a lot of ancillary benefits that the company receives from our farming, water is part of it, access to debt capital is another. With that said, we're taking an objective look at our farming business and its ongoing capital allocation. With respect to your other comments and questions, I tried to provide an explanation of that when I was addressing Justin and David's earlier questions on the same topic. Right now, we're continuing to pursue our business plan, as I've discussed, but we will consider all alternatives and look to remain flexible going forward. Nick, do you have any other questions? Nicholas Ortiz: That concludes our questions. Robert Velasquez: Great. Thanks. Nicholas Ortiz: All right. Thank you very much for joining us. Operator, you can conclude the call. Operator: Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines. Before you buy stock in Tejon Ranch, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tejon Ranch wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Tejon Ranch (TRC) Q1 2026 Earnings Transcript was originally published by The Motley Fool

TEJON RANCH, Calif., May 07, 2026 (GLOBE NEWSWIRE) -- Tejon Ranch Co. (NYSE:TRC), ("Tejon" or the "Company"), a diversified real estate development and agribusiness company, today announced financial results for the first quarter ended March 31, 2026. First Quarter 2026 Financial Highlights Net income attributable to common stockholders increased by $1.6 million to $0.2 million ($0.01/share basic and diluted), compared to a loss of $1.5 million, ($0.05/share) in the first quarter of 2025. Revenues and other income, including equity in earnings of unconsolidated joint ventures increased by $1.3 million to $10.8 million, compared to $9.6 million, while overall results also benefited from lower operating expenses compared to the first quarter of 2025. Adjusted EBITDA, a non-GAAP measure, increased by $2.0 million to $4.8 million compared to $2.8 million in the first quarter of 2025. Tejon Ranch Co. provides Adjusted EBITDA, a non-GAAP financial measure, because 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. Executive Summary "We delivered a solid first quarter, with revenue up 16% and expenses down 14%, the kind of operating progress to which we committed to a year ago," said Matthew Walker, President and Chief Executive Officer of Tejon Ranch Company. "Revenue growth was led by our mineral resources and ranch operations segments and was partially offset by farming. The expense improvement reflects our focus on cost reductions and enhanced efficiencies and is translating directly into increased Adjusted EBITDA and stronger cash flow. "We are continuing to grow our commercial real estate portfolio. The recent commencement of construction on Building 1B through our joint venture with Dedeaux Properties is a tangible example of that growth, adding 510,500 square feet of Class A space to an industrial portfolio that remains fully leased. The anticipated stabilization of Terra Vista, along with the recent opening of the Hard Rock Casino Tejon, should continue to drive increased traffic and commercial activity across the Ranch. Looking ahead, we believe Tejon Ranch is well-positioned to capitalize on a compelling set of opportunities." Commercial/Industrial Real Estate Update Segment revenues of $2.8 million were consistent with the first quarter of 2025, reflecting stability at Tejon Ranch Commerce Center (“TRCC”). Leasing and occupancy as of March 31, 2026: The TRCC industrial portfolio, through the Company's joint venture partnerships, consists of 2.8 million square feet of GLA and remains 100% leased. The TRCC commercial portfolio, wholly owned and through joint venture partnerships, consists of approximately 584,000 square feet of GLA and is 95% leased. Occupancy at the Outlets at Tejon was 92% as of March 31, 2026. Subsequent to quarter end, construction commenced on Building 1B at TRCC through the Company's joint venture with Dedeaux Properties. Once complete, this will add approximately 510,500 square feet of Class-A industrial capacity. Management continues to see elevated activity at TRCC tied to the lease-up of Terra Vista and the opening of the Hard Rock Casino Tejon, with outlet traffic increasing approximately 22%, year over year, and outlet sales per square foot rising 12%, as the positive trends that emerged at the end of 2025 extended into the first quarter. Farming Highlights Farming segment revenues were $0.9 million in the first quarter of 2026, compared to $1.6 million in the first quarter of 2025. The year-over-year decline reflects lower carryover crop available for sale in the first quarter of 2026, as the Company strategically accelerated sales of carryover inventory during the fourth quarter of 2025 to capitalize on stronger-than-anticipated pricing. The Company planted 150 acres of olives in 2025 and an additional 150 acres in 2026 as part of its ongoing crop diversification strategy. Mineral Resources Highlights Mineral resources segment revenues increased 36% to $3.5 million in the first quarter of 2026, compared to $2.6 million in the first quarter of 2025, with segment operating profit more than doubling to $1.0 million. The year-over-year improvement was driven primarily by opportunistic water sales executed during the quarter. Underlying royalty streams across rock and aggregate, cement, and oil and gas continued to contribute stable cash flow during the quarter. Liquidity and Capital Resources As of March 31, 2026, total capital, including debt, was $585.3 million. The Company had total liquidity of approximately $83.9 million, consisting of cash and securities totaling approximately $19.4 million and $64.6 million available on its line of credit. 2026 Outlook: The Company remains focused on TRCC as its primary development platform and long-term value driver. The Company expects to continue pursuing commercial and industrial development, multifamily development, leasing and investment activity, both directly and through joint ventures. In addition, the Company may also pursue selective land sales on an opportunistic basis and continues to advance its residential projects, including Mountain Village, Grapevine and Centennial. California remains a highly regulated environment for real estate development, and project timelines may be impacted by entitlement processes and potential litigation. As a result, the Company expects net income to fluctuate from period to period, driven primarily by the timing and level of development activity, land sales, and leasing, as well as commodity prices and production levels within its farming and mineral resources segments. For 2026, California’s agricultural regions experienced a more typical winter cooling cycle compared to the prior year, providing pistachio and almond crops with adequate chilling hour accumulation to support normal dormancy break. During February 2026, rainfall occurred during the almond bloom period, necessitating timely fungicide applications. These weather conditions did not materially impact crop management schedules or expected productivity. Earnings Conference Call Information The Company will host a conference call to discuss its first quarter 2026 financial results: Date: Thursday, May 7, 2026 Time: 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time Dial-In: (877) 704-4453 (U.S.) or +1 (201) 389-0920 (International) Conference Call Playback: (844) 512-2921 (U.S.) or +1 (412) 317-6671 (International) Passcode: 13759630 The full playback can be accessed through Thursday, June 4, 2026. About Tejon Ranch Co. Tejon Ranch Co. (NYSE: TRC) is a California-based company whose 270,000-acre landholding in Los Angeles and Kern Counties supports a diversified portfolio of real estate and land-based businesses. Strategically located approximately 60 miles north of Los Angeles and 30 miles south of Bakersfield, the Company’s operations include the development and operations of commercial and industrial real estate, master planned communities, as well as farming, grazing and game management. Tejon Ranch Co. also generates revenue through ground leases, royalty agreements, and rights-of-way easements supporting infrastructure, energy, telecommunications and utility uses. For more information, please visit www.tejonranch.com. Forward Looking Statements: This release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include, among others, statements regarding the Company’s business plans, strategies, prospects, objectives, future operating results, financial condition, capital allocation, cost structure, development and entitlement timelines, partnerships, and other future events or circumstances. Forward-looking statements reflect the Company’s current expectations and beliefs and are not guarantees of future performance. These statements speak only as of the date of this release. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “may,” “will,” “could,” “should,” “would,” “likely,” and similar expressions are intended to identify forward-looking statements. These statements are based on current assumptions and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others, market, economic, geopolitical, and weather conditions; the availability and cost of financing; competition; commodity prices and agricultural yields; the ability to obtain and maintain governmental entitlements and permits; the timing and outcome of regulatory and litigation matters; demand for commercial, industrial, residential, and retail real estate; and other risks inherent in the Company’s real estate and agricultural operations. There can be no assurance that actual results will not differ materially from these forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements. Investors are cautioned not to place undue reliance on these statements. For additional information regarding risks and uncertainties, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent filings with the U.S. Securities and Exchange Commission. (Financial tables follow) Non-GAAP Financial Measures This press release includes references to the Company’s non-GAAP financial measures “EBITDA”, and Adjusted EBITDA. EBITDA represents the Company's share of consolidated net income in accordance with U.S. generally accepted accounting principles (“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 also 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 and certain identified non-recurring items that are not indicative of our on-going operations or that may obscure our underlying results and trends. The Company believes EBITDA and Adjusted EBITDA provide investors relevant and useful information, when reconciled to their most comparable GAAP financial measure, because they permit 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. In addition, the Company excludes certain items impacting comparability, such as shareholder activism advisory costs and legal expenses associated with the Centennial litigation, to provide investors with a clearer understanding of the Company’s core operating performance across periods. 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. Adjusted Farming EBITDA before fixed water obligations is not a measure of financial performance prepared in accordance with GAAP and should not be considered in isolation or as a substitute for net income, operating income, or other performance measures prepared in accordance with GAAP. The Company defines Adjusted Farming EBITDA before fixed water obligations as net income (loss) before interest, taxes, depreciation, and amortization, further adjusted to exclude non-recurring items such as gains or losses on asset sales, impairments, share-based compensation, and other non-cash charges, and before deducting the Company’s fixed water obligations. Management uses this measure to evaluate the core operating performance of its farming operations and to facilitate period-to-period comparisons by isolating the impact of variable farming costs from the fixed water infrastructure costs. The Company believes this measure provides investors with additional insight into the underlying cash flow potential of its agricultural operations. A reconciliation of Adjusted Farming EBITDA before fixed water obligations to the most directly comparable GAAP measure, Operating loss from farming, is provided below. Quarterly information is not indicative of full year results due to seasonality. Quarterly information is not indicative of full year results due to seasonality. Reconciliation of Adjusted Farming EBITDA before Fixed Water Obligations (Unaudited) The Company evaluates the performance of its farming operations using Adjusted Farming EBITDA before fixed water obligations, a non-GAAP financial measure. Management believes this measure provides a meaningful representation of the underlying profitability and cash flow potential of its agricultural operations by excluding both non-operating items and the fixed water obligation, which represents a non-controllable infrastructure cost incurred regardless of the level of farming activity in this segment. The fixed water obligations reflect the Company’s allocated share of infrastructure and financing costs associated with the transmission and delivery of water to the Company’s property. These obligations primarily consist of annual assessments levied to repay bonds issued by the State of California to finance the construction and on-going maintenance of the state water project system and local water districts water systems. The landowners who hold water rights, including the Company, are responsible for repaying these bonds through fixed annual payments. Unlike variable water costs which are included in farming expenses, management views the fixed water obligation as an infrastructure cost that supports long-term access to water resources, rather than an essential operating cost of farming. Accordingly, Adjusted Farming EBITDA before fixed water obligations allows management and investors to evaluate the operating performance of the Company’s farming segment independent of the fixed costs associated with water infrastructure. Contacts