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, 1998
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, 1998 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
incorporation or organization) No.)
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, 1998, were 12,685,994.
TEJON RANCH CO.
INDEX
Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Statements of 3
Operations for the Three Months
Ended March 31, 1998 and March 31, 1997
Unaudited Consolidated Balance Sheets 4
as of December 31, 1997 and March 31, 1998
Unaudited Consolidated Statements of 5
Cash Flows for the Three Months Ended
March 31, 1998 and 1997
Notes to Unaudited Consolidated Financial 6
Statements
Item 2. Management's Discussion and Analysis of 13
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
PART III EXHIBIT INDEX 19
PART I FINANCIAL INFORMATION
<TABLE>
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED
March 31
<S> <C> <C>
1998 1997
Revenues:
Livestock $ 7,111 $ 1,480
Farming 265 452
Resource Management 348 476
Real Estate 324 307
Interest Income 273 323
8,321 3,038
Costs and Expenses:
Livestock 7,334 1,500
Farming 390 444
Resource Management 336 259
Real Estate 777 607
Corporate Expense 543 614
Interest Expense 202 71
9,582 3,495
Operating Loss (1,261) (457)
Income Tax Benefit (480) (171)
Net Loss $ (781) $ (286)
Net Loss Per Share, diluted $ (0.06) $ (0.02)
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<TABLE>
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
March 31,1998 DECEMBER 31, 1997*
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 581 $ 976
Marketable Securities 16,062 17,189
Accounts & Notes Receivable 8,216 8,448
Inventories:
Cattle 12,065 11,737
Farming 1,323 --
Other 499 485
Prepaid Expenses and Other 1,167 1,659
Total Current Assets 39,913 40,494
PROPERTY AND EQUIPMENT-NET 22,584 21,778
OTHER ASSETS 1,738 1,421
TOTAL ASSETS $ 64,235 $ 63,693
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade Accounts Payable $ 1,995 $ 2,889
Other Accrued Liabilities -- 390
Short-term Borrowings 14,773 11,955
Other Current Liabilities 567 742
Total Current Liabilities 17,335 15,976
LONG-TERM DEBT 3,925 3,925
DEFERRED INCOME TAXES 3,317 3,304
Total Liabilities 24,577 23,205
STOCKHOLDERS' EQUITY
Common Stock 6,343 6,343
Additional Paid-In Capital 385 385
Retained Earnings 32,870 33,651
Marketable Securities -
Unrealized Gains - Net 60 109
Total Stockholders' Equity 39,658 40,488
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 64,235 $ 63,693
See Notes to Consolidated Condensed Financial Statements.
* The Balance Sheet at December 31, 1997 has been derived
from the audited financial statements at that date.
</TABLE>
<TABLE>
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
THREE MONTHS ENDED
March 31
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net Loss $ (781) $ (286)
Items Not Affecting Cash:
Depreciation and Amortization 470 355
Deferred Income Taxes 45 --
Gain on Sale of Investments -- (4)
Changes in Operating Assets and
Liabilities:
Receivables, Inventories and
Other Assets, Net (941) (876)
Current Liabilities, Net (1,459) (43)
NET CASH USED BY
OPERATING ACTIVITIES (2,666) (854)
INVESTING ACTIVITIES
Acquisition of Champion Feeders -- (3,874)
Maturities and Sales of Marketable
Securities 1,316 1,916
Funds Invested in Marketable
Securities (271) (928)
Property and Equipment
Expenditures (1,250) (1,278)
Change in Breeding Herds (26) (1)
Other (317) (43)
NET CASH USED IN
INVESTING ACTIVITIES (548) (4,208)
FINANCING ACTIVITIES
Proceeds From Revolving Line of Credit 5,253 10,041
Payments of Revolving Line of Credit (2,434) (4,914)
NET CASH PROVIDED BY FINANCING
ACTIVITIES 2,819 5,127
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (395) 65
Cash and Cash Equivalents at
Beginning of Year 976 693
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 581 $ 758
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
TEJON RANCH CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1998
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 third and fourth quarters.
For 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,
1997.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation -- The consolidated financial
statements include the accounts of Registrant and its wholly-
owned subsidiaries. All intercompany transactions have been
eliminated in consolidation.
Cash Equivalents -- Registrant considers all highly liquid
investments, with a maturity of three months or less when
purchased, to be cash equivalents. The carrying amount for
cash equivalents approximates fair value.
Marketable Securities - Registrant considers those investments
not qualifying as cash equivalents, but which are readily
marketable, to be marketable securities. The Registrant
classifies all marketable securities as available-for-sale,
which are stated at fair value with the unrealized gains
(losses), net of tax, reported in a separate component of
stockholders' equity and comprehensive income.
Credit Risk -- Registrant grants credit to customers,
principally large cattle purchasers, feedlot customers, co-
ops, wineries, nut marketing companies, and lessees of
Registrant facilities located in California. Registrant
performs periodic credit evaluations of its customers'
financial condition and generally does not require collateral.
Farm Inventories -- Costs of bringing crops to harvest are
capitalized when incurred. Such costs are expensed when the
crops are sold. Farm inventories held for sale are valued at
the lower of cost (first-in, first-out method) or market.
Cattle Inventories and Breeding Herd -- Cattle raised on the
Ranch are stated at the accumulated cost of developing such
animals for sale or transfer to a productive function and
purchased cattle are stated at cost plus development costs.
All cattle held for sale are valued at the lower of cost
(first-in, first-out method) or market and are included in the
caption inventories. Purchased bulls and cows included in the
breeding herd and used for breeding are depreciated using the
straight-line method over five to seven years.
Commodity Contracts Used to Hedge Price Fluctuations --
Registrant enters into futures and option contracts to hedge
its exposure to price fluctuations on its stocker cattle and
its cattle feed costs. The goal of Registrant is to protect
or create a future price for its cattle and feed that will
provide a profit once the cattle are sold and all costs are
deducted. Realized gains, losses, and costs associated with
closed contracts are included in prepaid assets and are
recognized in cost of sales expense at the time the hedged
cattle are sold or feed is used.
Property and Equipment --Property and equipment accounts are
stated on the basis of cost, except for land acquired upon
organization in 1936 which is stated on the basis (presumed to
be at cost) carried by Registrant's predecessor. Depreciation
is computed using the straight-line method over the estimated
useful lives of the various assets. Buildings and
improvements are depreciated over a 10 year to 27.5 year life.
Machinery and equipment is depreciated over a three year to 10
year life depending on the type of equipment. Vineyards and
orchards are generally depreciated over a 20 year life with
irrigation systems over a 10 year life. Oil, gas and mineral
reserves have not been appraised, so no value has been
assigned to them.
Vineyards and Orchards -- Costs of planting and developing
vineyards and orchards are capitalized until the crops become
commercially productive. Interest costs and depreciation of
irrigation systems and trellis installations during the
development stage are also capitalized. Revenue from crops
earned during the development stage are credited against
development costs. Depreciation commences when the crops
become commercially productive.
At the time crops are harvested and delivered to buyers and
revenues are estimable, revenues and related costs are
recognized, which traditionally occurs during the third and
fourth quarters of each year. Orchard revenues are based upon
estimated selling prices, whereas vineyard revenues are
recognized at the contracted selling price. Estimated prices
for orchard crops are based upon the quoted estimate of what
the final market price will be by marketers and handlers of
the orchard crops. Actual final orchard crop selling prices
are not determined for several months following the close of
Registrant's fiscal year due to supply and demand fluctuations
within the orchard crop markets. Adjustments for differences
between original estimated and actual revenues received are
recorded during the period in which such amounts become known.
Net Income Per Share -- Effective December 31, 1997,
Registrant adopted SFAS No. 128, "Earnings Per Share" which
replaced primary and fully diluted earnings per share with
basic and diluted earnings per share. Basic net income per
share is based upon the weighted average number of shares of
common stock outstanding, which at March 31, 1998 was
12,685,994 and at March 31, 1997 was 12,682,244. Diluted net
income per share is based upon the weighted average number of
shares of common stock outstanding and the average shares
outstanding assuming the issuance of common stock for stock
options using the treasury stock method (12,758,599 at March
31, 1998 and 12,683,497 at March 31, 1997).
In March 1992, Registrant's Board of Directors adopted the
1992 Stock Option Plan providing for the granting of options
to purchase a maximum of 230,000 shares of the Registrant's
common stock to employees, advisors, and consultants of the
Registrant. Since the adoption of the Plan, Registrant has
granted options to purchase 179,000 shares at a price equal to
fair market value at date of grant. At March 31, 1998,
options to purchase 172,178 shares were outstanding.
On January 26, 1998, the Board of Directors adopted the 1998
Stock Incentive Plan. The Incentive Plan provides for the
making of awards to employees, consultants, and advisors of
Registrant with respect to 800,000 shares of common stock.
Since the adoption of the Incentive Plan, Registrant has
granted options to purchase 100,000 shares at a price equal to
the fair market value at date of grant.
Also, on January 26, 1998, the Board of Directors adopted the
Non-Employee Director Stock Incentive Plan. This plan is
intended to enable Registrant to attract, retain, and motivate
its non-employee directors by providing for or increasing the
proprietary interests of such persons by Registrant. The plan
provides for the granting of 200,000 shares of common stock.
Since the adoption of the plan, Registrant has granted options
to purchase 20,000 shares at a price equal to the fair market
value at date of grant.
The 1998 Stock Incentive Plan and the Non-Employee Director
Stock Incentive Plan were approved by stockholders at
Registrant's Annual Meeting on May 11, 1998.
Long-Lived Assets -- In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," Registrant records impairment losses on long-
lived assets held and used in operations when indicators of
impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than their
related carrying amounts. SFAS No. 121 had no impact on
Registrant's consolidated financial position and results of
operations in the current year.
Environmental -- Environmental expenditures that relate to
current operations are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by
past operations and which do not contribute to current or
future revenue generation are expensed. Liabilities are
recorded when environmental assessments and/or remedial
efforts are probable and the costs can be reasonably
estimated. Generally, the timing of these accruals coincides
with the completion of a feasibility study or Registrant's
commitment to a formal plan of action. No liabilities for
environmental costs have been recorded at
March 31, 1998 or 1997.
Use of Estimates -- The financial statements have been
prepared in conformity with generally accepted accounting
principles and, as such, include amounts based on informed
estimates and judgments of management. Actual results could
differ from these estimates.
New Accounting Pronouncements -- In June 1997, the FASB issued
SFAS No. 131 "Disclosure about Segments of an Enterprise and
Related Information" which is effective for fiscal years
beginning after December 15, 1997. Accordingly, Registrant
plans to adopt SFAS No. 131 with the fiscal year beginning
January 1, 1998. SFAS No. 131 will not have any impact on the
financial results or financial condition of Registrant.
NOTE C - MARKETABLE SECURITIES
Statement of Financial Accounting Standard ("SFAS") No. 115,
Accounting for Certain Investments in Debt and Equity
Securities, requires that an enterprise classify all debt
securities as either held-to-maturity, trading, or available-
for-sale. The Registrant has elected to classify its securities as
available-for-sale and therefore is required to adjust
securities to fair value at each reporting date.
The following is a summary of available-for-sale securities at
December 31, 1997 and March 31, 1998:
<TABLE>
March 31 December 31
1998 1997
Estimated Estimated
Fair Fair
Cost Value Cost Value
<S> <C> <C> <C> <C>
Marketable securities:
(in thousands)
U.S. Treasury and
agency notes $ 9,097 $ 9,192 $ 9,770 $ 9,947
Corporate notes 6,865 6,870 7,237 7,242
$15,962 $16,062 $17,007 $17,189
</TABLE>
As of March 31, 1998, the cumulative fair value adjustment is
a $100,000 unrealized gain. The cumulative fair value
adjustment to stockholders' equity, net of a deferred tax of
$40,000, is an unrealized gain of $60,000. Registrant's gross
unrealized holding gains equal $180,000, while gross
unrealized holding losses equal $80,000. On March 31, 1998,
the average maturity of U.S. Treasury and agency securities
was 1.2 years and corporate notes was 1.6 years. Currently,
Registrant has no securities with a remaining term to maturity
of greater than five years.
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 - COMMODITY CONTRACTS USED TO HEDGE PRICE FLUCTUATIONS
Registrant used commodity derivatives to hedge its exposure to
price fluctuations on its purchased stocker cattle and its
cattle feed costs. The objective is to protect or create a
future price for stocker cattle that will protect a profit or
minimize a loss once the cattle are sold and all costs are
deducted and protect the Registrant against a disastrous
cattle market decline. To help achieve this objective the
Registrant used both the futures commodity markets and options
commodity markets. A futures contract is an obligation to
make or take delivery at a specific future time of a
specifically defined, standardized unit of a commodity at a
price determined when the contract is executed. Options are
contracts that give their owners the right, but not the
obligation, to buy or sell a specified item at a set price on
or before a specified date.
Registrant continually monitors any open futures and options
contracts to determine the appropriate hedge based on market
movement of the underlying asset. The options and futures
contracts used typically expire on a quarterly or semi-annual
basis and are structured to expire close to or during the
month the stocker cattle and feed are scheduled to be sold or
purchased. The risk associated with hedging for the
Registrant is that hedging limits or caps the potential
profits if cattle or feed prices begin to increase
dramatically or can add additional costs if cattle or grain
prices fall dramatically.
Payments received and paid related to outstanding options
contracts are deferred in prepaid and other current assets and
were approximately $43,000 at March 31, 1998. Futures
contracts are carried off-balance sheet until the contracts
are settled because there is no exchange of cash until
settlement. Realized gains, losses, and costs associated with
closed contracts are included in prepaid and other assets and
will be recognized in cost of sales expense at the time the
hedged stocker cattle are sold. At March 31, 1998 there was
$230,000 of hedging costs associated with closed contracts
included in prepaid and other assets.
The following table identifies the cattle futures contract
amounts outstanding at March 31, 1998 (in thousands, except
number of contracts):
<TABLE>
Cattle Hedging Estimated
Activity Original Fair Value Estimated
Commodity Contract At Gain
Future/Option No. (Bought) Settlement (Loss) at
Description Contracts Sold (Buy) Sell Settlement
<S> <C> <C> <C> <C>
Corn futures bought,
1,000 bushels per 915 $ (2,744) $2,445 $(299)
contract
Cattle futures bought,
50,000 lbs. per 20 (639) 600 (39)
contract
Cattle options
bought, 40,000 90 (43) 45 2
lbs. per contract
</TABLE>
Estimated fair value at settlement is based upon quoted market
prices at March 31, 1998.
NOTE E - COMPREHENSIVE INCOME
As of January 1, 1998, Registrant adopted Statement 130,
Reporting Comprehensive Income. Statement 130 establishes new
rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement
had no impact on Registrant's net income or shareholders'
equity. Statement 130 requires unrealized gains or losses on
Registrant's available-for-sale securities, which prior to
adoption were reported separately in shareholders' equity to
be included in other comprehensive income.
The components of comprehensive income, net of related tax,
for the three-month periods ended March 31, 1998 and 1997 are
as follows:
<TABLE>
1998 1997
<S> <C> <C>
Net loss $(781) $(286)
Unrealized loss on securities ( 49) (67)
Comprehensive loss $(830) $(353)
</TABLE>
The Components of accumulated other comprehensive income, net
of related tax, at March 31, 1998 and December 31, 1997 are as
follows:
<TABLE>
1998 1997
<S> <C> <C>
Unrealized gains on securities $60 $109
Accumulated comprehensive income $60 $109
</TABLE>
NOTE F - CONTINGENCIES
Registrant leases land to National Cement Company of
California, Inc. ("National") for the purpose of manufacturing
portland cement from limestone deposits on the leased acreage,
National and Lafarge Corporation (the previous operator and
referred to herein as "Lafarge") have been ordered to clean up
and abate certain hazardous waste sites on the leased
premises. Under existing lease agreements either National or
Lafarge is required to indemnify Registrant for costs and
liabilities incurred in connection with the orders, depending
on when the obligation arises. Due to the financial strength
of National and its parent company, which guaranteed
National's obligations, and the financial strength of Lafarge,
Registrant believes that it is remote there will be a material
effect on Registrant.
For a further discussion refer to Registrant's 1997 Form 10-K,
Part I, Item 3, - "Legal Proceedings". There have been no
changes since the filing of the 1997 Form 10-K.
NOTE G - PAYMENT OF DIVIDEND
On March 23, 1998, 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 15, 1998, with payment to be made on
June 19, 1998.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Results of Operations
This Management's discussion and Analysis of Financial
Condition and Results of Operations includes forward-looking
statements that are subject to many uncertainties and may turn
out not to be accurate. These forward looking statements are
subject to factors beyond the control of Registrant (such as
weather and market forces) and with respect to Registrant's
future development of its land, the availability of financing
and the ability to obtain various governmental entitlements.
No assurance can be given that any such projections will turn
out to be accurate.
Total revenues, including interest income for the first
quarter of 1998 were $8,321,000 compared to $3,038,000 for the
first quarter of 1997. The growth in revenues during the
first quarter of 1998 is primarily attributable to increases
in livestock division revenues. This increase in revenues was
partially offset by reduced resource management division
revenues and reduced farming revenues. When compared to the
same period of 1997, livestock revenues grew due to increases
in livestock sales of $2,679,000 and to an increase in feedlot
revenues of $2,947,000. Livestock sales increased due to
4,267 additional head of cattle being sold during the first
quarter of 1998 than in the first quarter of 1997. The
increase in cattle sold is the result of Registrant increasing
its cattle herd throughout 1997. Registrant's cattle herd at
the end of the first quarter of 1998 was approximately 32,000
head compared to 17,420 head at March 31, 1997. Feedlot
revenues increased when compared to the first quarter of 1997
due to owning the feedlot for a11 of the first quarter in
1998. The feedlot was purchased March 10, 1997. Resource
management revenues declined $128,000 in 1998 due to reduced
oil royalties and film location fees. Farming revenues
declined $187,000 during the first quarter of 1998 due to the
receipt in 1997 of revenues related to 1996 grape and walnut
crops.
Operating activities during the first quarter of 1998 resulted
in a net loss of $781,000, or $0.06 per share diluted,
compared to a net loss of $286,000, or $0.02 per share
diluted, for the same period of 1997. The decrease in
earnings when compared to 1997 is primarily attributable to
increased costs within the livestock division and lower market
prices on cattle sold. Cost of sales on cattle increased
$3,021,000 when compared to 1997 due to the sale of additional
cattle as described above. During the first quarter of 1998,
Registrant recognized a net loss of $155,000 on the sale of
cattle due the dramatic drop in market prices due to the Asian
economic crisis and to the large number of cattle in feedlots
during the first quarter of 1998. Feedlot expenses increased
$2,790,000 when compared to 1997 due to the timing of
purchasing the feedlot during 1997.
Cattle prices during April 1998 have begun to improve as the
large supply of cattle held in feedlots during the first
quarter of 1998 have been sold to packing houses. However,
prices are still below normal levels due to the continuing
impact of the Asian economic crisis on the beef market. Of the
United States' trading partners, Asia is the largest importer
of U.S. beef, so any decline in purchasing power within that
region can hold down prices within the beef market. It is a
little early in the crop year to make production estimates for
grapes and nuts, but winter storms and rain during the
pollination period for almonds could negatively impact 1998
production.
Registrant continues to be involved in various environmental
proceedings related to leased acreage. For a further
discussion, refer to Note F - Contingencies.
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
Registrant's cash, cash equivalents and short-term investments
totaled approximately $16,643,000 at March 31, 1998, compared
to $19,790,000 on March 31, 1997, a decrease of 16%. Working
capital as of March 31, 1998 was $22,578,000 compared to
$24,518,000 on December 31,1997. The decrease in working
capital during the first quarter of 1998 is due primarily to
capital expenditures.The use of short-term credit has grown
when compared to 1997 due to increases in accounts receivable
and inventories due to the growth of Registrant's core
business lines.
Registrant has a revolving line of credit of $8,000,000 that
as of March 31, 1998 had a balance outstanding of $7,630,000
at an interest rate of 8.25%. Registrant also has a short-
term line of credit outstanding of $6,227,000 from an
investment banking firm at an interest rate of 6.00%.
Registrant also maintains a short-term line of credit for its
feedlot operations for $4,000,000. The outstanding balance at
March 31, 1998 was $916,000 with the interest rate
approximating the bank's prime lending rate of 8.25%. The
lines of credit are expected to be paid down throughout the
year from the proceeds of cattle and crop sales. The
revolving lines of credit are used as a short-term cash
management tool.
The accurate forecasting of cash flows by Registrant is made
difficult due to the fact that commodity markets set the
prices for the majority of Registrant's products and the fact
that the cost of water changes significantly from year-to-year
as a result of changes in its availability.
Registrant is currently evaluating the possibility of new
farming developments, continued expansion of the cattle herd,
and additional commercial development along the Interstate 5
corridor. These potential new projects would be funded from
current cash resources, from additional borrowings, and
possibly funds provided by joint venture partners involved in
particular projects.
Registrant has traditionally funded its growth and capital
additions from internally generated funds. Management
believes that the combination of net earnings, short-term
investments and borrowing capacity will be sufficient for its
near term operations.
Item 8. Financial Statements and Supplementary Data.
The response to this Item is submitted in a separate section
of this report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable.
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 -
3.1 Restated Certificate of Incorporation *
3.2 Bylaws **
27.1 Financial Data Schedule (Edgar),
March 31, 1998
27.2 Restated Financial Data Schedule (Edgar),
September 30, 1997
27.3 Restated Financial Data Schedule (Edgar),
June 30, 1997
27.4 Restated Financial Data Schedule (Edgar),
March 31, 1997
27.5 Restated Financial Data Schedule (Edgar),
December 31 1996
27.6 Restated Financial Data Schedule (Edgar),
September 30, 1996
27.7 Restated Financial Data Schedule (Edgar),
June 30, 1996
27.8 Restated Financial Data Schedule (Edgar),
March 31, 1996
27.9 Restated Financial Data Schedule (Edgar),
December 31, 1995
(b) Reports - None
* This document, filed with the Securities Exchange
Commission in Washington D.C. (file number 1-7183) under
Item 14 to Registrant's Annual Report on Form 10-K for
year ended December 31, 1987, is incorporated herein by
reference.
** This document, filed with the Securities Exchange
Commission in Washington D.C. (file number 1-7183) under
Item 14 to Registrant's Annual Report on Form 10-K for
year ended December 31, 1994, is incorporated herein by
reference.
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 /S/ ALLEN E. LYDA
Date Allen E. Lyda
Vice President, Finance
& Treasurer
EXHIBIT INDEX
Exhibit No. Exhibit Description
3.1 Restated Certificate of Incorporation *
3.2 By-Laws **
27.1 Financial Data Schedule (Edgar), 20
March 31, 1998
27.2 Restated Financial Data Schedule (Edgar), 21
September 30, 1997
27.3 Restated Financial Data Schedule (Edgar), 22
June 30, 1997
27.4 Restated Financial Data Schedule (Edgar), 23
March 31, 1997
27.5 Restated Financial Data Schedule (Edgar), 24
December 31 1996
27.6 Restated Financial Data Schedule (Edgar), 25
September 30, 1996
27.7 Restated Financial Data Schedule (Edgar), 26
June 30, 1996
27.8 Restated Financial Data Schedule (Edgar), 27
March 31, 1996
27.9 Restated Financial Data Schedule (Edgar), 28
December 31, 1995
* This document, filed with the Securities Exchange
Commission in Washington D.C. (file number 1-7183) under
Item 14 to Registrant's Annual Report on Form 10-K for
year ended December 31, 1987, is incorporated herein by
reference.
** This document, filed with the Securities Exchange
Commission in Washington D.C. (file number 1-7183) under
Item 14 to Registrant's Annual Report on Form 10-K for
year ended December 31, 1994, is incorporated herein by
reference.
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This schedule contains summary financial information extracted from the balance
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</LEGEND>
<MULTIPLIER> 1,000
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 581
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<CURRENT-ASSETS> 39,913
<PP&E> 39,130
<DEPRECIATION> (16,546)
<TOTAL-ASSETS> 64,235
<CURRENT-LIABILITIES> 17,335
<BONDS> 0
0
0
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<OTHER-SE> 33,315
<TOTAL-LIABILITY-AND-EQUITY> 64,235
<SALES> 8,321
<TOTAL-REVENUES> 8,321
<CGS> 8,837
<TOTAL-COSTS> 8,837
<OTHER-EXPENSES> 543
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<INTEREST-EXPENSE> 202
<INCOME-PRETAX> (1,261)
<INCOME-TAX> (480)
<INCOME-CONTINUING> (781)
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<NET-INCOME> (781)
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 62
<SECURITIES> 17,138
<RECEIVABLES> 13,112
<ALLOWANCES> 0
<INVENTORY> 6,449
<CURRENT-ASSETS> 38,257
<PP&E> 36,451
<DEPRECIATION> (15,489)
<TOTAL-ASSETS> 60,359
<CURRENT-LIABILITIES> 14,687
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 32,301
<TOTAL-LIABILITY-AND-EQUITY> 60,359
<SALES> 25,466
<TOTAL-REVENUES> 25,466
<CGS> 21,440
<TOTAL-COSTS> 21,440
<OTHER-EXPENSES> 1,693
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 510
<INCOME-PRETAX> 1,823
<INCOME-TAX> 683
<INCOME-CONTINUING> 1,140
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,140
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
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This schedule contains summary financial information extracted from the balance
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<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 89
<SECURITIES> 17,654
<RECEIVABLES> 4,430
<ALLOWANCES> 0
<INVENTORY> 9,384
<CURRENT-ASSETS> 32,885
<PP&E> 35,969
<DEPRECIATION> (15,127)
<TOTAL-ASSETS> 54,883
<CURRENT-LIABILITIES> 10,660
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 30,869
<TOTAL-LIABILITY-AND-EQUITY> 54,883
<SALES> 9,304
<TOTAL-REVENUES> 9,304
<CGS> 8,476
<TOTAL-COSTS> 8,476
<OTHER-EXPENSES> 1,045
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 263
<INCOME-PRETAX> (480)
<INCOME-TAX> (188)
<INCOME-CONTINUING> (292)
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<EXTRAORDINARY> 0
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<NET-INCOME> (292)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 758
<SECURITIES> 19,032
<RECEIVABLES> 2,771
<ALLOWANCES> 0
<INVENTORY> 6,337
<CURRENT-ASSETS> 30,116
<PP&E> 35,506
<DEPRECIATION> (14,814)
<TOTAL-ASSETS> 52,056
<CURRENT-LIABILITIES> 10,270
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 31,038
<TOTAL-LIABILITY-AND-EQUITY> 52,056
<SALES> 3,038
<TOTAL-REVENUES> 3,038
<CGS> 2,810
<TOTAL-COSTS> 2,810
<OTHER-EXPENSES> 614
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71
<INCOME-PRETAX> (457)
<INCOME-TAX> (171)
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<DISCONTINUED> 0
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<NET-INCOME> (286)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financialinformation extracted from the balance
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reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 693
<SECURITIES> 20,127
<RECEIVABLES> 4,303
<ALLOWANCES> 0
<INVENTORY> 3,430
<CURRENT-ASSETS> 29,872
<PP&E> 30,838
<DEPRECIATION> (14,568)
<TOTAL-ASSETS> 47,369
<CURRENT-LIABILITIES> 5,186
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 31,391
<TOTAL-LIABILITY-AND-EQUITY> 47,369
<SALES> 18,960
<TOTAL-REVENUES> 18,960
<CGS> 13,591
<TOTAL-COSTS> 13,591
<OTHER-EXPENSES> 2,266
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 295
<INCOME-PRETAX> 2,808
<INCOME-TAX> 1,123
<INCOME-CONTINUING> 1,685
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,685
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
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<LEGEND>
This schedule contains summary financial information extracted from the balance
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 123
<SECURITIES> 20,140
<RECEIVABLES> 4,615
<ALLOWANCES> 0
<INVENTORY> 4,187
<CURRENT-ASSETS> 30,218
<PP&E> 29,919
<DEPRECIATION> (14,256)
<TOTAL-ASSETS> 47,385
<CURRENT-LIABILITIES> 5,701
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 30,883
<TOTAL-LIABILITY-AND-EQUITY> 47,385
<SALES> 11,703
<TOTAL-REVENUES> 11,703
<CGS> 9,075
<TOTAL-COSTS> 9,075
<OTHER-EXPENSES> 1,427
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> 1,019
<INCOME-TAX> 407
<INCOME-CONTINUING> 612
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 612
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
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This schedule contains summary financial information extracted from the balance
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
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<SECURITIES> 20,139
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<PP&E> 29,581
<DEPRECIATION> (14,065)
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<CURRENT-LIABILITIES> 2,561
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0
0
<COMMON> 6,341
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<TOTAL-LIABILITY-AND-EQUITY> 43,243
<SALES> 5,863
<TOTAL-REVENUES> 5,863
<CGS> 5,386
<TOTAL-COSTS> 5,386
<OTHER-EXPENSES> 884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104
<INCOME-PRETAX> (511)
<INCOME-TAX> (204)
<INCOME-CONTINUING> (307)
<DISCONTINUED> 0
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<NET-INCOME> (307)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 78
<SECURITIES> 20,315
<RECEIVABLES> 1,036
<ALLOWANCES> 0
<INVENTORY> 4,519
<CURRENT-ASSETS> 27,362
<PP&E> 29,087
<DEPRECIATION> (13,814)
<TOTAL-ASSETS> 44,169
<CURRENT-LIABILITIES> 3,126
<BONDS> 0
0
0
<COMMON> 6,341
<OTHER-SE> 30,628
<TOTAL-LIABILITY-AND-EQUITY> 44,169
<SALES> 1,535
<TOTAL-REVENUES> 1,535
<CGS> 1,677
<TOTAL-COSTS> 1,677
<OTHER-EXPENSES> 414
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50
<INCOME-PRETAX> (606)
<INCOME-TAX> (242)
<INCOME-CONTINUING> (364)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (364)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
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</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 44
<SECURITIES> 20,257
<RECEIVABLES> 4,487
<ALLOWANCES> 0
<INVENTORY> 2,827
<CURRENT-ASSETS> 28,678
<PP&E> 28,675
<DEPRECIATION> (13,602)
<TOTAL-ASSETS> 45,203
<CURRENT-LIABILITIES> 3,894
<BONDS> 0
0
0
<COMMON> 6,341
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<TOTAL-LIABILITY-AND-EQUITY> 45,203
<SALES> 19,554
<TOTAL-REVENUES> 19,554
<CGS> 16,349
<TOTAL-COSTS> 16,349
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 436
<INCOME-PRETAX> 723
<INCOME-TAX> 289
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 434
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
