Record Annual Tobacco Segment Revenues
Fueled by Continued Strong Volume
Fourth Quarter 2022
Highlights:
- Consolidated revenues of $363.8 million, up 16.0% or $50.1
million compared to the prior year period.
- Tobacco segment revenues of $363.8 million, up 18.6% or $57.2
million compared to the prior year period.
- Tobacco segment wholesale and retail market share increased to
5.5% and 5.8% from 4.4% and 4.4%, respectively, in the prior year
period.
- Reported operating income of $89.3 million, up $20.7 million
compared to the prior year period.
- Tobacco segment operating income of $93.0 million, up 11.0% or
$9.2 million compared to the prior year period, primarily
attributable to the transition of the Montego brand strategy from
volume-based to income-based.
- Adjusted EBITDA from Continuing Operations of $92.7 million,
up 10.0% or $8.4 million compared to the prior year period.
- Tobacco Adjusted EBITDA of $94.5 million, up 10.5% or $9.0
million compared to the prior year period.
Full Year 2022 Highlights:
- Record consolidated revenues of $1.44 billion, up 18.0% or
$220.3 million compared to the prior year.
- Tobacco segment revenues of $1.43 billion, up 18.5% or $222.6
million compared to the prior year.
- Tobacco segment wholesale and retail market share increased to
5.4% and 5.5% from 4.1% and 4.2%, respectively, in the prior
year.
- Reported operating income of $339.0 million, up $18.6
million compared to the prior year.
- Tobacco segment operating income of $347.0 million, down 3.7%
or $13.3 million compared to the prior year, primarily attributable
to the investment in Montego’s significant volume and market share
growth.
- Adjusted EBITDA from Continuing Operations of $352.2
million, up 0.7% or $2.3 million compared to the prior year.
- Tobacco Adjusted EBITDA of $351.1 million, down from $364.4
million in the prior year.
Vector Group Ltd. (NYSE:VGR) today announced financial results
for the three months and year ended December 31, 2022.
“Vector Group delivered record revenues in 2022 by capitalizing
on opportunities to substantially increase our market share, thus
driving value for stockholders,” said Howard M. Lorber, President
and Chief Executive Officer of Vector Group Ltd. “The 11% increase
in our Tobacco segment’s operating income in the fourth quarter
reflects the recent and ongoing transition of our Montego brand
strategy from volume-based to income-based. In 2023, we will
continue to focus on optimizing long-term profit by effectively
managing our volume, pricing, and market share.”
GAAP Financial Results
Three months ended December 31, 2022 and 2021. Fourth quarter
2022 revenues were $363.8 million, compared to revenues of $313.7
million in the fourth quarter of 2021. The Company recorded
operating income of $89.3 million in the fourth quarter of 2022,
compared to operating income of $68.6 million in the fourth quarter
of 2021. Net income for the fourth quarter of 2022 was $48.2
million, or $0.30 per diluted common share, compared to net income
of $45.3 million, or $0.29 per diluted common share, in the fourth
quarter of 2021. Net income from continuing operations for the
fourth quarter of 2022 was $48.2 million, or $0.30 per diluted
common share, compared to net income from continuing operations of
$30.7 million, or $0.20 per diluted common share, in the fourth
quarter of 2021.
Year ended December 31, 2022 and 2021. For the year ended
December 31, 2022, revenues were $1.4 billion, compared to revenues
of $1.2 billion for the year ended December 31, 2021. The Company
recorded operating income of $339.0 million for the year ended
December 31, 2022, compared to operating income of $320.4 million
for the year ended December 31, 2021. Net income attributed to
Vector Group Ltd. for the year ended December 31, 2022 was $158.7
million, or $1.01 per diluted common share, compared to net income
of $219.5 million, or $1.40 per diluted common share, for the year
ended December 31, 2021. Net income from continuing operations for
the year ended December 31, 2022 was $158.7 million, or $1.01 per
diluted common share, compared to net income from continuing
operations of $147.2 million, or $0.94 per diluted common share,
for the year ended December 31, 2021.
Non-GAAP Financial Measures
Three months ended December 31, 2022 compared to the three
months ended December 31, 2021
Adjusted EBITDA from Continuing Operations (as described in
Table 2 attached hereto) were $92.7 million for the fourth quarter
of 2022, compared to $84.3 million for the fourth quarter of
2021.
Adjusted Net Income from Continuing Operations (as described in
Table 3 attached hereto) was $48.9 million, or $0.31 per diluted
share, for the fourth quarter of 2022, compared to $41.4 million,
or $0.26 per diluted share, for the fourth quarter of 2021.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $89.4 million for the fourth quarter of 2022, compared
to $80.1 million for the fourth quarter of 2021.
Year ended December 31, 2022 compared to the year ended December
31, 2021
Adjusted EBITDA from Continuing Operations (as described in
Table 2 attached hereto) were $352.2 million for the year ended
December 31, 2022, compared to $349.9 million for the year ended
December 31, 2021.
Adjusted Net Income from Continuing Operations (as described in
Table 3 attached hereto) was $153.4 million, or $0.97 per diluted
share, for the year ended December 31, 2022, compared to $174.8
million, or $1.12 per diluted share, for the year ended December
31, 2021.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $337.1 million for the year ended December 31, 2022,
compared to $331.8 million for the year ended December 31,
2021.
Consolidated Balance Sheet
Vector Group Ltd. maintained significant liquidity at December
31, 2022 with cash and cash equivalents of $224.6 million,
including $10.1 million of cash at its Tobacco segment, investment
securities of $116.4 million and long-term investments of $45.0
million.
Vector Group Ltd. continued its longstanding history of paying a
quarterly cash dividend in the fourth quarter of 2022. For the year
ended December 31, 2022, Vector Group Ltd. returned a total of $127
million to stockholders at a quarterly rate of $0.20 per common
share.
Tobacco Segment Financial Results
For the fourth quarter of 2022, the Tobacco segment had revenues
of $363.8 million, compared to $306.6 million for the fourth
quarter of 2021. For the year ended December 31, 2022, the Tobacco
segment had revenues of $1.4 billion, compared to $1.2 billion for
the year ended December 31, 2021.
Operating Income from the Tobacco segment was $93.0 million and
$347.0 million for the three months and the year ended December 31,
2022, respectively, compared to $83.8 million and $360.3 million
for the three months and the year ended December 31, 2021,
respectively.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5
attached hereto) for the fourth quarter of 2022 was $93.0 million
compared to $84.0 million for the fourth quarter of 2021. Tobacco
Adjusted Operating Income for the year ended December 31, 2022 was
$345.2 million, compared to $357.8 million for the year ended
December 31, 2021.
Operational Metrics
For the fourth quarter of 2022, the Tobacco segment had
conventional cigarette (wholesale) shipments of approximately 2.56
billion units, compared to 2.22 billion units for the fourth
quarter of 2021. For the year ended December 31, 2022, the Tobacco
segment had conventional cigarette (wholesale) shipments of
approximately 10.35 billion units, compared to 8.63 billion units
for the year ended December 31, 2021.
According to data from Management Science Associates, Inc., for
the fourth quarter of 2022, the Tobacco segment’s wholesale market
share increased to 5.5% compared to 4.4% for the fourth quarter of
2021. For the year ended December 31, 2022, the Tobacco segment’s
wholesale market share increased to 5.4%, compared to 4.1% for the
year ended December 31, 2021. The Tobacco segment’s wholesale
shipments in the fourth quarter of 2022 increased by 15.3% compared
to the fourth quarter of 2021, while the overall industry’s
wholesale shipments declined by 9.0%. The Tobacco segment’s
wholesale shipments for the year ended December 31, 2022 increased
by 19.9% compared to the year ended December 31, 2021, while the
overall industry’s wholesale shipments declined by 9.9%.
According to data from Management Science Associates, Inc., for
the fourth quarter of 2022, the Tobacco segment’s retail market
share increased to 5.8% compared to 4.4% for the fourth quarter of
2021. For the year ended December 31, 2022, the Tobacco segment’s
retail market share increased to 5.5%, compared to 4.2% for the
year ended December 31, 2021. The Tobacco segment’s retail
shipments in the fourth quarter of 2022 increased by 19.5% compared
to the fourth quarter of 2021, while the overall industry’s retail
shipments declined by 9.3%. The Tobacco segment’s retail shipments
for the year ended December 31, 2022 increased by 19.7% compared to
the year ended December 31, 2021, while the overall industry’s
retail shipments declined by 8.7%.
Non-GAAP Financial Measures
Adjusted EBITDA from Continuing Operations, Adjusted Net Income
from Continuing Operations, Adjusted Operating Income, Tobacco
Adjusted Operating Income, and Tobacco Adjusted EBITDA (the
“Non-GAAP Financial Measures”) are financial measures not prepared
in accordance with generally accepted accounting principles
(“GAAP”). The Company believes that the Non-GAAP Financial Measures
are important measures that supplement discussions and analysis of
its results of operations and enhance an understanding of its
operating performance. The Company believes the Non-GAAP Financial
Measures provide investors and analysts with a useful measure of
operating results unaffected by differences in capital structures
and ages of related assets among otherwise comparable
companies.
Management uses the Non-GAAP Financial Measures as measures to
review and assess operating performance of the Company’s business,
and management does and investors should review both the overall
performance (GAAP net income) and the operating performance (the
Non-GAAP Financial Measures) of the Company’s business. While
management considers the Non-GAAP Financial Measures to be
important, they should be considered in addition to, but not as
substitutes for or superior to, other measures of financial
performance prepared in accordance with GAAP, such as operating
income, net income and cash flows from operations. In addition, the
Non-GAAP Financial Measures are susceptible to varying calculations
and the Company’s measurement of the Non-GAAP Financial Measures
may not be comparable to those of other companies.
Reconciliations of Non-GAAP Financial Measures to the comparable
GAAP financial results for the fourth quarter and full year ended
December 31, 2022 and 2021 are included in Tables 2 through 5.
Conference Call to Discuss Fourth Quarter and Full Year 2022
Results
As previously announced, the Company will host a conference call
and webcast on Thursday, February 16, 2023 at 8:00 AM (ET) to
discuss its fourth quarter and full year results. Investors may
access the call via live webcast at
https://www.webcaster4.com/Webcast/Page/2271/47624. Please join the
webcast at least 10 minutes prior to the start time.
A replay of the call will be available shortly after the call
ends on February 16, 2023 through March 2, 2023 at
https://www.webcaster4.com/Webcast/Page/2271/47624.
About Vector Group Ltd.
Vector Group is a holding company for Liggett Group LLC, Vector
Tobacco LLC, and New Valley LLC. Additional information concerning
the Company is available on the Company’s website,
www.VectorGroupLtd.com.
Investors and others should note that we may post information
about the Company or its subsidiaries on our website at
www.VectorGroupLtd.com and/or at the websites of those subsidiaries
or, if applicable, on their accounts on LinkedIn, TikTok, Twitter
or other social media platforms. It is possible that the postings
or releases could include information deemed to be material
information. Therefore, we encourage investors, the media and
others interested in the Company to review the information we post
on our website at www.VectorGroupLtd.com, on the websites of our
subsidiaries and on their social media accounts.
Forward-Looking and Cautionary Statements
This press release includes forward-looking statements within
the meaning of the federal securities law. All statements other
than statements of historical or current facts made in this
document are forward-looking. We identify forward-looking
statements in this document by using words or phrases such as
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may be,”
“continue,” “could,” “potential,” “objective,” “plan,” “seek,”
“predict,” “project” and “will be” and similar words or phrases or
their negatives. Forward-looking statements reflect our current
expectations and are inherently uncertain. Actual results could
differ materially for a variety of reasons.
Risks and uncertainties that could cause our actual results to
differ significantly from our current expectations are described in
our Annual Report on Form 10-K for the year ended December 31, 2021
and, when filed, in our Annual Report on Form 10-K for the year
ended December 31, 2022. We undertake no responsibility to publicly
update or revise any forward-looking statement except as required
by applicable law.
[Financial Tables Follow]
TABLE 1 VECTOR GROUP LTD. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share
Amounts)
On December 29, 2021, Vector Group Ltd. completed the
distribution of its real estate brokerage, services and PropTech
investment business into a new stand-alone public company, Douglas
Elliman Inc. (NYSE:DOUG) through a distribution of Douglas
Elliman’s common stock to Vector Group Ltd. stockholders. The
historical results of the real estate brokerage, services and
PropTech investment business owned by Douglas Elliman Inc. are
excluded from revenues and expenses below and reflected as income
from discontinued operations, net of income taxes, in Vector Group
Ltd.’s Consolidated Statements of Operations below.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
Revenues:
Tobacco*
$
363,770
$
306,596
$
1,425,125
$
1,202,497
Real estate
—
7,077
15,884
18,203
Total revenues
363,770
313,673
1,441,009
1,220,700
Expenses:
Cost of sales:
Tobacco*
247,582
201,441
991,331
758,015
Real estate
—
1,859
7,327
11,527
Total cost of sales
247,582
203,300
998,658
769,542
Operating, selling, administrative and
general expenses
26,837
41,623
103,102
131,418
Litigation settlement and judgment
expense
79
194
239
211
Net gains on sales of assets
—
—
—
(910
)
Operating income
89,272
68,556
339,010
320,439
Other income (expenses):
Interest expense
(27,245
)
(27,709
)
(110,665
)
(112,728
)
Gain (loss) on extinguishment of debt
—
—
412
(21,362
)
Equity in earnings (losses) from
investments
177
1,113
(4,995
)
2,675
Equity in (losses) earnings from real
estate ventures
(1,706
)
(2,255
)
(5,946
)
10,250
Other, net
7,789
819
2,746
10,687
Income before provision for income
taxes
68,287
40,524
220,562
209,961
Income tax expense
20,137
9,813
61,861
62,807
Income from continuing operations
48,150
30,711
158,701
147,154
Income from discontinued operations, net
of income taxes
—
14,531
—
72,119
Net income
$
48,150
$
45,242
$
158,701
$
219,273
Net loss from discontinued operations
attributed to non-controlling interest
—
70
—
190
Net income attributed to Vector Group Ltd.
from continuing operations
48,150
30,711
158,701
147,154
Net income attributed to Vector Group Ltd.
from discontinued operations
—
14,601
—
72,309
Net income attributed to Vector Group
Ltd.
$
48,150
$
45,312
$
158,701
$
219,463
Per basic common share:
Net income from continuing operations
applicable to common shares
$
0.30
$
0.20
$
1.01
$
0.94
Net income from discontinued operations
applicable to common shares
—
0.09
—
0.46
Net income applicable to common shares
$
0.30
$
0.29
$
1.01
$
1.40
Per diluted common share:
Net income from continuing operations
applicable to common shares
$
0.30
$
0.20
$
1.01
$
0.94
Net income from discontinued operations
applicable to common shares
—
0.09
—
0.46
Net income applicable to common shares
$
0.30
$
0.29
$
1.01
$
1.40
* Revenues and cost of sales include federal excise taxes of
$128,756, $111,838, $520,760 and $434,695 for the three months and
year ended December 31, 2022 and 2021, respectively.
TABLE 2 VECTOR GROUP LTD. AND
SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA FROM
CONTINUING OPERATIONS (Unaudited) (Dollars in Thousands)
Table 2 reflects a reconciliation of GAAP to non-GAAP financial
information on a continuing operations basis. Because Douglas
Elliman Inc.’s results are reflected within discontinued
operations, they are excluded from the financial information
provided below.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net income
$
48,150
$
45,312
$
158,701
$
219,463
Net income from discontinued
operations
—
(14,601
)
—
(72,309
)
Interest expense
27,245
27,709
110,665
112,728
Income tax expense
20,137
9,813
61,861
62,807
Net loss attributed to non-controlling
interest
—
(70
)
—
(190
)
Depreciation and amortization
1,788
1,895
7,218
7,816
EBITDA
$
97,320
$
70,058
$
338,445
$
330,315
Equity in (earnings) losses from
investments (a)
(177
)
(1,113
)
4,995
(2,675
)
Equity in losses (earnings) from real
estate ventures (b)
1,706
2,255
5,946
(10,250
)
(Gain) loss on extinguishment of debt
—
—
(412
)
21,362
Stock-based compensation expense (c)
1,573
6,684
7,848
14,799
Litigation settlement and judgment expense
(d)
79
194
239
211
Impact of MSA settlement (e)
—
—
(2,123
)
(2,722
)
Transaction expenses (f)
—
7,042
—
10,468
Net gains on sales of assets
—
—
—
(910
)
Other, net
(7,789
)
(819
)
(2,746
)
(10,687
)
Adjusted EBITDA from Continuing
Operations
$
92,712
$
84,301
$
352,192
$
349,911
Adjusted EBITDA from Continuing
Operations by Segment
Tobacco
$
94,540
$
85,519
$
351,131
$
364,399
Real Estate
177
4,661
8,082
4,125
Corporate and Other
(2,005
)
(5,879
)
(7,021
)
(18,613
)
Total
$
92,712
$
84,301
$
352,192
$
349,911
___________________________________________ a.
Represents equity in (earnings) losses
recognized from investments that the Company accounts for under the
equity method.
b.
Represents equity in losses (earnings)
recognized from the Company’s investment in certain real estate
ventures that are accounted for under the equity method and are not
consolidated in the Company’s financial results.
c.
Represents amortization of stock-based
compensation. Included in the year ended December 31, 2021 are
expenses associated with the acceleration of stock compensation in
connection with the Company’s spin-off of Douglas Elliman Inc. into
a standalone public company.
d.
Represents accruals for product liability
litigation in the Tobacco segment.
e.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
f.
Represents expenses incurred in connection
with the Company’s spin-off of Douglas Elliman Inc. into a
standalone public company.
TABLE 3 VECTOR GROUP LTD. AND
SUBSIDIARIES RECONCILIATION OF ADJUSTED NET INCOME FROM
CONTINUING OPERATIONS (Unaudited) (Dollars in Thousands, Except Per Share
Amounts)
Table 3 reflects a reconciliation of GAAP to non-GAAP financial
information on a continuing operations basis. Because Douglas
Elliman Inc.’s results are reflected within discontinued
operations, they are excluded from the financial information
provided below.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net income
$
48,150
$
45,312
$
158,701
$
219,463
Net income from discontinued
operations
—
(14,601
)
—
(72,309
)
(Gain) loss on extinguishment of debt
—
—
(412
)
21,362
Litigation settlement and judgment expense
(a)
79
194
239
211
Impact of MSA settlement (b)
—
—
(2,123
)
(2,722
)
Impact of net interest expense capitalized
to real estate ventures
955
(1,013
)
(2,137
)
(1,180
)
Expense related to Tax Disaffiliation
indemnification (c)
8
—
589
—
Transaction expenses (d)
—
7,042
—
10,468
Acceleration of stock compensation expense
(e)
—
4,317
—
4,317
Adjustment for derivative associated with
guarantee
—
—
(2,646
)
—
Total adjustments
1,042
(4,061
)
(6,490
)
(39,853
)
Tax (expense) benefit related to
adjustments
(267
)
130
1,144
(4,860
)
Adjusted Net Income from Continuing
Operations
$
48,925
$
41,381
$
153,355
$
174,750
Per diluted common share:
Adjusted Net Income from Continuing
Operations applicable to common shares
$
0.31
$
0.26
$
0.97
$
1.12
_______________________________________ a.
Represents accruals for product liability
litigation in the Tobacco segment.
b.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
c.
Represents amounts accrued under the
Company’s Tax Disaffiliation Agreement related to certain tax
liabilities of Douglas Elliman Inc. prior to its distribution on
December 29, 2021.
d.
Represents expenses incurred in connection
with the Company’s spin-off of Douglas Elliman Inc. into a
standalone, publicly traded company.
e.
Represents expense related to the
acceleration of stock compensation in connection with the Company’s
spin-off of Douglas Elliman Inc. into a standalone, publicly traded
company.
TABLE 4 VECTOR GROUP LTD. AND
SUBSIDIARIES RECONCILIATION OF ADJUSTED OPERATING INCOME
(Unaudited) (Dollars in
Thousands)
Table 4 reflects a reconciliation of GAAP to non-GAAP financial
information on a continuing operations basis. Because Douglas
Elliman Inc.’s results are reflected within discontinued
operations, they are excluded from the financial information
provided below.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Operating income
$
89,272
$
68,556
$
339,010
$
320,439
Litigation settlement and judgment expense
(a)
79
194
239
211
Transaction expenses (b)
—
7,042
—
10,468
Acceleration of stock compensation expense
(c)
—
4,317
—
4,317
Impact of MSA settlement (d)
—
—
(2,123
)
(2,722
)
Net gains on sales of assets
—
—
—
(910
)
Total adjustments
79
11,553
(1,884
)
11,364
Adjusted Operating Income
$
89,351
$
80,109
$
337,126
$
331,803
________________________________________
a.
Represents accruals for product liability
litigation in the Tobacco segment.
b.
Represents expenses incurred in connection
with the Company’s spin-off of Douglas Elliman Inc. into a
standalone public company.
c.
Represents expense related to the
acceleration of stock compensation in connection with the Company’s
spin-off of Douglas Elliman Inc. into a standalone public
company.
d.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
TABLE 5 VECTOR GROUP LTD. AND
SUBSIDIARIES RECONCILIATION OF TOBACCO ADJUSTED OPERATING
INCOME AND TOBACCO ADJUSTED EBITDA (Unaudited)
(Dollars in Thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Tobacco Adjusted Operating
Income:
Operating income from Tobacco segment
$
92,966
$
83,760
$
347,044
$
360,317
Litigation settlement and judgment expense
(a)
79
194
239
211
Impact of MSA settlement (b)
—
—
(2,123
)
(2,722
)
Total adjustments
79
194
(1,884
)
(2,511
)
Tobacco Adjusted Operating Income
$
93,045
$
83,954
$
345,160
$
357,806
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Tobacco Adjusted EBITDA:
Operating income from Tobacco segment
$
92,966
$
83,760
$
347,044
$
360,317
Litigation settlement and judgment expense
(a)
79
194
239
211
Impact of MSA settlement (b)
—
—
(2,123
)
(2,722
)
Total adjustments
79
194
(1,884
)
(2,511
)
Tobacco Adjusted Operating Income
93,045
83,954
345,160
357,806
Depreciation and amortization
1,475
1,518
5,901
6,525
Stock-based compensation expense
20
47
70
68
Total adjustments
1,495
1,565
5,971
6,593
Tobacco Adjusted EBITDA
$
94,540
$
85,519
$
351,131
$
364,399
_________________________________
a.
Represents accruals for product liability
litigation in the Tobacco segment.
b.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
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version on businesswire.com: https://www.businesswire.com/news/home/20230215005727/en/
Columbia Clancy/Catherine Livingston FGS Global 212-687-8080
(U.S.) +44 (0)20 3178 8914 (Europe) J. Bryant Kirkland III, Vector
Group Ltd. 305-579-8000
Grafico Azioni Vector (NYSE:VGR)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Vector (NYSE:VGR)
Storico
Da Set 2023 a Set 2024