Nitor Capital Management to withhold support for four Tejon Ranch directors

Nitor Capital Management, a significant stockholder of Tejon Ranch Company which beneficially owns approximately 1.75% of Tejon Ranch’s outstanding shares, issued a letter to the Company’s stockholders, which read in part, “We initially invested in Tejon Ranch in 2021 because we believed, as we do now, that the Company owns irreplaceable, one-of-a-kind assets, has exceptional growth potential and its shares are deeply undervalued. As a long-term stockholder of Tejon Ranch, we have spent a considerable amount of time learning the history of the Company and reviewing the Company’s financial statements, executive compensation practices and capital allocation decisions. We have attempted to engage constructively with the Company’s management and board of directors to better understand their overall strategy and offer potential solutions to the issues plaguing the Company, including by providing recommendations on how we believe the Company could dramatically improve its reporting of certain metrics to facilitate the market’s understanding of the business and more appropriately value the Company. Unfortunately, the Company’s management and Board have been unwilling to meaningfully engage with us and Tejon Ranch’s share price has continued to languish. During its early days, Tejon Ranch was a land company with nearly all of its value tied to its ownership of 270,000 acres of raw undeveloped ranch/farmland (equivalent to the size of Los Angeles). Over the past 25 years, Tejon Ranch has evolved into a highly valuable, cash flow generating, commercial and industrial real estate company with what we estimate to be $800 million worth of assets that are either fully approved for development or income producing.1 Notably, what was once 1,450 acres of raw undeveloped land has now transformed into a world-class commerce center, Tejon Ranch Commerce Center, that still has remarkable potential for further development. Despite this impressive growth, shares of Tejon Ranch are astoundingly worth less today than they were 5, 10, 20 and even 30+ years ago. Our diligence over the past several years has led us to the following conclusion: the Company’s failure to deliver value to stockholders is simply unjustifiable. We believe much of the Company’s inability to provide stockholders with a return on their investment is the result of severely misaligned compensation incentives for senior management, speculative deployment of capital and failure to effectively communicate the value of the Company’s assets to the market. Accepting the status quo at the Company is no longer tenable – stockholders have suffered long enough, and it is time for management and the Board to take immediate action to deliver value to stockholders. Due to the Company’s failure to present a clear and credible plan as to how stockholders will receive a return on their investment or how the Company plans to close the gap between its net asset value and its share price, we intend to WITHHOLD our votes for Compensation Committee Chair Steven A. Betts, Chairman of the Board Norman J. Metcalfe, Real Estate Committee Chair Geoffrey L. Stack and Nominating Committee Chair Michael H. Winer, and vote AGAINST approval of executive officer compensation at the Company’s upcoming 2024 Annual Meeting of Stockholders scheduled to be held on May 14, 2024…We firmly believe in the quality of the Company’s assets, their potential for continued appreciation and development, and that with the right leadership and strategy, substantial value can be unlocked for stockholders. Tejon Ranch owns a portfolio of highly valuable and sought after income producing assets. These assets are generating over $100 million of recurring annual revenues and $30 million of annual cash flows.6 As a result, we believe Tejon Ranch has reached a point where these assets are now worth $700 million, or $26 per share of value, not including the Company’s 270,000 surface acres. When adding the book value of the Company’s remaining 270,000 acres and the value of the Company’s water and farmland, we believe the total value of Tejon Ranch’s assets, net of all debt, presently exceeds $44 per share on a conservative basis. This represents nearly three times the value of the Company’s current stock price. Further, the $600 million Hard Rock Resort & Casino development that is currently under construction, which is projected to create approximately 5,000 jobs,8 should have a significant positive impact on the value of the Company’s land as the project is just several miles from the Tejon Ranch Commerce Center. Given the Company’s exceptional assets, robust balance sheet and growth potential, we simply cannot reconcile why management and the Board have not taken immediate action to remediate the large valuation disconnect.”