PICO Holdings, Inc. (NASDAQ:PICO) reported results for the third
quarter ended September 30, 2020. Our reported shareholders’ equity
was $170.0 million ($9.05 per share) at September 30, 2020,
compared to $178.3 million ($9.01 per share) at December 31,
2019.
Third Quarter Results of Operations
Our third quarter results of operations were as follows (in
thousands):
Three Months Ended September
30,
2020
2019
Total revenue
$
2,072
$
4,255
Total cost and expenses
2,220
2,876
Net income (loss) attributable to PICO
Holdings, Inc.
$
(148
)
$
1,379
Net income (loss) per share
$
(0.01
)
$
0.07
Nine Months Results of Operations
Our nine months results of operations were as follows (in
thousands):
Nine Months Ended September
30,
2020
2019
Total revenue
$
6,146
$
19,038
Total cost and expenses
6,241
12,093
Net income (loss) attributable to PICO
Holdings, Inc.
$
(95
)
$
6,945
Net income (loss) per share
$
—
$
0.34
PICO’s Chief Executive Officer, Dorothy Timian-Palmer,
commented:
“Our reported results of a small net loss of $148,000 and
$95,000 for the three and nine months ended September 30, 2020,
respectively, reflects that we did not generate significant water
resource asset sale transactions to date in 2020. The $5.8 million
in revenue generated from asset sales year to date is due, for the
most part, from the sale of 470 acre feet of water rights in Dodge
Flat, Nevada for $3.1 million and the sale of 62 acre feet of water
credits in the North Valleys region of Reno, Nevada by our
subsidiary, Fish Springs Ranch, LLC for $2.5 million. Our total
expenses, excluding all costs related to asset monetizations, for
the nine months ended September 30, 2020 was approximately $5
million. These costs include all project costs which tend to be
incurred on an irregular basis. As at September 30, 2020, we have
incurred approximately $275,000 of legal and associated costs
related to our legal appeals for our Kane Springs water rights in
southern Nevada and our Campbell Ranch project in New Mexico. In
addition, during 2020 we incurred approximately $285,000 for
non-refundable option payments to defer water rights acquisitions
in Lyon County, Nevada until the second quarter of 2021. We attempt
to offset our fixed costs and intermittent project costs with
operating and other income from our assets. In 2020 to date we
generated $385,000 of such revenue and we continue to seek ways to
increase recurring revenue. For example, in the fourth quarter of
2020 we expect to commence receiving annual income of approximately
$240,000 from leasing up to 600 acres at Fish Springs Ranch to a
solar developer with the potential for leasing a further 2,000
acres in future years.
“We continue to carefully monitor our liquidity and working
capital requirements during these uncertain times. We believe our
cash resources of $9.9 million as of September 30, 2020 provides us
sufficient liquidity for our ongoing operations and share
repurchase program. The Board continues to believe that at current
and recent market prices, our stock is undervalued from our
estimate of its intrinsic value, and we continued to repurchase our
common stock through open market purchases throughout the third
quarter of 2020 and year to date. In 2020, we have to date
repurchased a total of approximately 1,077,500 shares for
approximately $9.3 million ($8.63 per share). We will continue to
monitor our liquidity and forecast cash generation very carefully;
depending on the price of our shares, our cash position, and our
cash flow outlook, we will continue to evaluate our capital
allocation with respect to our share repurchase plan.”
About PICO Holdings, Inc.
As of September 30, 2020, our primary holding was Vidler Water
Company, Inc. (“Vidler”), a water resource and water storage
business, with assets and operations primarily in the Southwestern
U.S.
Currently, we believe the highest potential return to
shareholders is from a return of capital. As we monetize assets,
rather than reinvest the proceeds, we intend to return capital to
shareholders through a stock repurchase program or by other means
such as special dividends. Nonetheless, we may, from time to time,
reinvest a portion of proceeds from asset monetizations in further
development of existing assets, if we believe the returns on such
reinvestment outweigh the benefits of a return of capital.
OTHER INFORMATION
At September 30, 2020, we had a market capitalization of $168.3
million, and 18,789,021 shares outstanding.
We remind all of our stockholders that questions regarding our
operations may be submitted to info@picoholdings.com, and, if appropriate, we
will post on our website responses to these questions.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains statements that may constitute
forward-looking statements, which are based on information
currently available, usually identified by words such as
"anticipates," "believes," "estimates," "plans,'' "projects,"
"expects," "hopes," "intends," "strategy," ''focus," "outlook,"
"will," "could," "should," "may," "continue," or similar
expressions, which speak only as of the date the statement was
made. Such statements are forward-looking statements and are within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and such statements are subject to the safe harbor created
by those sections and the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical or
current fact, are statements that could be deemed forward-looking
statements, including without limitation statements regarding our
business objectives, our ability to monetize our water resources,
the future demand for our water resources, our ability to reduce
net operating cash use, our ability to preserve and utilize NOLs to
offset taxable income and reduce our federal income liability, and
our ability to monetize assets and return capital to shareholders
through stock repurchases or through other means. The
forward-looking statements are based on current expectations and
assumptions and are subject to risks and uncertainties.
A number of other factors may cause actual results to differ
materially from our expectations, such as: any slow down or
downturn in the housing or in the real estate markets in which
Vidler operates; fluctuations in the prices of water and water
rights; physical, governmental and legal restrictions on water and
water rights; a downturn in some sectors of the stock market;
general economic conditions; the impacts of the COVID-19 global
pandemic on the demand for real estate, real estate development,
and demand for water resources to support residential and
commercial real estate development; prolonged weakness in the
overall U.S. and global economies; the performance of the
businesses in which Vidler operates; the continued service and
availability of key management personnel; and potential capital
requirements and financing alternatives.
For further information regarding risks and uncertainties
associated with our business, please refer to the “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and “Risk Factors” sections of our SEC filings,
including our Annual Report on Form 10-K and our Quarterly Reports
on Form 10-Q, copies of which may be obtained by contacting us at
(775) 885-5000 or at http://picoholdings.com.
We undertake no obligation to (and we expressly disclaim any
obligation to) update our forward-looking statements, whether as a
result of new information, subsequent events, or otherwise, in
order to reflect any event or circumstance which may arise after
the date of this press release, except as may otherwise be required
by law. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201106005099/en/
Dorothy Timian-Palmer President and Chief Executive Officer
(775) 885-5000
PICO (NASDAQ:PICO)
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