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DATE

Thursday, May 7, 2026, at 5 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Matthew Walker
  • Chief Financial Officer — Robert Velasquez
  • Corporate Secretary — Nicholas Ortiz
  • Operator

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TAKEAWAYS

  • Total Revenue and Other Income -- $10.8 million, a 13% increase, due to gains in several business segments and joint venture earnings.
  • Net Income -- Up $1.6 million, reflecting both higher revenues and a $2.4 million reduction in corporate expenses from lower headcount and the absence of proxy defense costs.
  • Operating Costs -- Fell 14%, with the reduction in corporate expenses as a primary driver.
  • Adjusted EBITDA -- Increased by $3.1 million; trailing 12-month adjusted EBITDA stands at $27.2 million.
  • Segment (12-Month Trailing) Adjusted EBITDA -- Commercial real estate: $7.5 million; Mineral Resources: $4.8 million; Farming: $2.2 million; Ranch operations: approximately $1 million; each reflecting unique operational contributions.
  • Commercial/Industrial Real Estate Revenue -- $2.8 million for the quarter, in line with the prior year period; the 2.8 million square foot TRCC industrial portfolio is fully leased.
  • Commercial/Retail Portfolio Occupancy -- 95% leased rate at quarter-end; Outlet to Tejon at 92% occupancy.
  • Terra Vista Lease-Up Status -- 228 units delivered, 71% leased, with Phase 1 expected to be stabilized by summer.
  • Outlet to Tejon Performance -- Outlet traffic rose 22%, and outlet sales grew nearly 12% year over year, with TA Petro Travel Center showing similar sales gains.
  • Mineral Resources Revenue -- $3.5 million, a 36% rise; operating profit over $1 million, attributable mainly to opportunistic water sales.
  • Farming Segment Revenue -- $900,000, down from $1.6 million, as carryover crop inventory for sale was diminished by accelerated sales in the prior quarter to capitalize on favorable pricing.
  • Equity Earnings from Unconsolidated JVs -- $1.3 million, up from $1.2 million, despite margin pressures in the TA Petro joint venture.
  • Liquidity Position -- Cash and marketable securities: $19.4 million; available revolver: $64.6 million; total liquidity: approximately $86 million.
  • New Development -- Broke ground on a 510,000 square foot Class A industrial facility in joint venture with Dedeaux Properties, with completion anticipated in the first quarter of next year.
  • CFO Velasquez -- "We believe our liquidity position provides sufficient flexibility to continue advancing development initiatives while maintaining balance sheet discipline."
  • Farming Expansion -- 150 new acres planted in April plus 150 new acres in 2025 as part of crop diversification efforts.
  • TRCC Portfolio Strategy -- Management described Tejon Ranch Commerce Center as the "nucleus of our growth," emphasizing the development and leasing of income-producing assets along the I-5 corridor.
  • Corporate Expense Savings Driver -- Savings of $2.4 million specifically attributed to lower headcount and no proxy defense costs.

SUMMARY

Management highlighted strategic capital allocation decisions in response to shareholder questions regarding the long-term master planned community model, citing a conscious evaluation of joint ventures and asset-light strategies. The Board reaffirmed its commitment to securing external capital for ongoing master planned development projects over coming quarters, with leadership stating, "we continue to believe that there's an immense amount of value to be earned from placing our master planned community project in development." Management indicated ongoing review of the farming segment’s capital allocation policy, stating that it is taking "an objective look at our farming business and its ongoing capital allocation." The new industrial building initiative was cited as an example of balancing growth objectives with a focus on earning high multiples on invested cash through joint venture structuring.

  • Management acknowledged shareholder concerns around capital allocation and return on invested capital; CEO Walker stated, "we will consider all alternatives and look to remain flexible going forward."
  • Leaders differentiated their mixed asset approach from public peers, emphasizing both the value of passive income operations and potential upside from master planned communities.
  • The company is leveraging JV partnerships to monetize land while preserving cash, adhering to "preserving cash" as stated in Walker’s comments.
  • Development projects, including Mountain Village and Centennial, will proceed with disciplined capital sourcing, aligning with prior commitments to shareholders regarding external funding for these ventures.

INDUSTRY GLOSSARY

  • MOIC: Multiple on invested capital; a performance metric that measures the return on invested equity by dividing total realized and unrealized gains by total invested capital.
  • TRCC: Tejon Ranch Commerce Center; a master-planned industrial and commercial development owned and operated by Tejon Ranch Co. along the I-5 corridor.
  • MPC: Master Planned Community; a large-scale, comprehensively designed residential development, often including mixed-use and commercial components.

Full Conference Call Transcript

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.