Tejon Ranch Q2 Earnings Call Highlights

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.

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. 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. 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 ...