Continued Strong Earnings Growth in Tobacco
Segment
First Quarter 2024 Highlights:
- Consolidated revenues of $324.6 million, down 2.9% or $9.6
million compared to the prior year period.
- Tobacco segment revenues of $324.6 million, down 2.9% or $9.6
million compared to the prior year period.
- Tobacco segment wholesale market share declined to 5.6% from
5.7% in the prior year period and retail market share remained at
5.8%, unchanged from the prior year period.
- Montego wholesale market share increased to 3.9% from 3.3% in
the prior year period and retail market share increased to 4.0%
from 3.4% in the prior year period.
- Reported operating income of $77.8 million, up 4.7% or $3.5
million compared to the prior year period.
- Tobacco segment operating income of $83.0 million, up 5.6% or
$4.4 million compared to the prior year period, primarily
attributable to the continued transition of the Montego brand
strategy from volume-based to income-based.
- Adjusted EBITDA of $82.8 million, up 6.0% or $4.7 million
compared to the prior year period.
- Tobacco Adjusted EBITDA of $84.4 million, up 5.5% or $4.4
million compared to the prior year period.
Vector Group Ltd. (NYSE:VGR) today announced financial results
for the three months ended March 31, 2024.
“Vector Group delivered strong performance in the first quarter
driven by continued growth of our Montego brand,” said Howard M.
Lorber, President and Chief Executive Officer of Vector Group Ltd.
“Our proven ability to increase Montego’s market share and
profitability underscores the effectiveness of our brand strategy,
market analysis, broad-based distribution, and excellent retail
execution. We remain confident in our ability to continue driving
sustainable growth and creating long-term value for our
stockholders.”
GAAP Financial Results
Three months ended March 31, 2024 and 2023
For the three months ended March 31, 2024 revenues were $324.6
million, compared to revenues of $334.1 million for the first
quarter of 2023. The Company recorded operating income of $77.8
million for the first quarter of 2024 compared to $74.3 million for
the first quarter of 2023. Net income for the first quarter of 2024
was $34.8 million, or $0.22 per diluted common share, compared to
net income of $34.7 million, or $0.22 per diluted common share, for
the first quarter of 2023.
Non-GAAP Financial Measures
Three months ended March 31, 2024 compared to the three months
ended March 31, 2023
Adjusted EBITDA (as described in Table 2 attached hereto) were
$82.8 million for the first quarter of 2024, compared to $78.1
million for the first quarter of 2023.
Adjusted Net Income (as described in Table 3 attached hereto)
was $37.2 million, or $0.24 per diluted common share, for the first
quarter of 2024, compared to $34.0 million, or $0.22 per diluted
common share, for the first quarter of 2023.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $77.8 million for the first quarter of 2024, compared
to $74.3 million for the first quarter of 2023.
Consolidated Balance Sheet
Vector Group maintained significant liquidity at March 31, 2024
with cash and cash equivalents of $333 million, including $84
million of cash at Liggett. Vector Group also held investment
securities of $129 million and long-term investments of $50
million.
Vector Group continued its longstanding practice of paying a
quarterly cash dividend in the first quarter of 2024, returning $32
million to stockholders at a rate of $0.20 per common share.
Tobacco Segment Financial Results
For the first quarter of 2024, the Tobacco segment had revenues
of $324.6 million, compared to $334.1 million for the first quarter
of 2023.
Operating Income from the Tobacco segment was $83.0 million for
the first quarter of 2024, compared to $78.6 million for the first
quarter of 2023.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5
attached hereto) was $83.0 million for the first quarter of 2024,
compared to $78.6 million for the first quarter of 2023.
Operational Metrics
For the three months ended March 31, 2024, the Tobacco segment
had conventional cigarette (wholesale) shipments of approximately
2.10 billion units, compared to 2.35 billion units for the first
quarter of 2023.
According to data from Management Science Associates, Inc., for
the first quarter of 2024, the Tobacco segment’s wholesale market
share declined to 5.6% from 5.7% for the first quarter of 2023. The
Tobacco segment’s wholesale market share was 5.5% for the last
twelve months ended March 31, 2024. For the three months ended
March 31, 2024, Montego’s wholesale market share increased to 3.9%,
from 3.3% for the three months ended March 31, 2023. Compared to
the first quarter of 2023, the Tobacco segment’s wholesale
shipments in the first quarter of 2024 declined by 10.7%, while the
industry’s overall wholesale shipments declined by 9.8%.
According to data from Management Science Associates, for the
first quarter of 2024, the Tobacco segment’s retail market share
remained stable at 5.8% compared to the first quarter of 2024. The
Tobacco segment’s retail market share is 5.8% for the last twelve
months ended March 31, 2024. For the three months ended March 31,
2024, Montego’s retail market share increased to 4.0%, from 3.4%
for the three months ended March 31, 2023. Compared to the first
quarter of 2023, the Tobacco segment’s retail shipments in the
first quarter of 2024 declined by 8.7% while the industry’s overall
retail shipments declined by 8.9%.
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted Net Income, 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 last twelve months ended March 31,
2024 and the three months ended March 31, 2024 and 2023 are
included in Tables 2 through 6.
Conference Call to Discuss First Quarter 2024 Results
As previously announced, Vector Group will host a conference
call and webcast on Thursday, May 2, 2024 at 8:00AM (ET) to discuss
its first quarter 2024 results. Investors can access the call via
webcast at https://www.webcaster4.com/Webcast/Page/2271/50471.
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 May 2, 2024 through May 16, 2024 at
https://www.webcaster4.com/Webcast/Page/2271/50471.
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, X 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 2023 Annual Report on Form 10-K and, when filed, in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
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
(Unaudited)
(Dollars
in Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
2024
2023
Revenues:
Tobacco*
$
324,567
$
334,145
Expenses:
Cost of sales:
Tobacco*
217,901
232,286
Operating, selling, administrative and
general expenses
28,694
27,292
Litigation settlement and judgment
expense
191
270
Operating income
77,781
74,297
Other income (expenses):
Interest expense
(27,449
)
(27,474
)
Loss on extinguishment of debt
—
(141
)
Equity in earnings (losses) from
investments
2,138
(159
)
Equity in losses from real estate
ventures
(10,721
)
(1,893
)
Other, net
6,385
3,620
Income before provision for income
taxes
48,134
48,250
Income tax expense
13,334
13,509
Net income
$
34,800
$
34,741
Per basic common share:
Net income applicable to common shares
$
0.22
$
0.22
Per diluted common share:
Net income applicable to common shares
$
0.22
$
0.22
* Revenues and cost of sales include
federal excise taxes of $105,823 and $117,818 for the three months
ended March 31, 2024 and 2023, respectively.
TABLE 2
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2024
2023
Net income
$
183,585
$
183,526
$
34,800
$
34,741
Interest expense
108,592
108,617
27,449
27,474
Income tax expense
64,751
64,926
13,334
13,509
Depreciation and amortization
6,882
6,941
1,633
1,692
EBITDA
$
363,810
$
364,010
$
77,216
$
77,416
Equity in (earnings) losses from
investments (a)
(3,559
)
(1,262
)
(2,138
)
159
Equity in losses (earnings) from real
estate ventures (b)
6,626
(2,202
)
10,721
1,893
Loss on extinguishment of debt
408
549
—
141
Stock-based compensation expense (c)
11,319
10,111
3,314
2,106
Litigation settlement and judgment expense
(d)
18,720
18,799
191
270
Impact of MSA settlement (e)
(592
)
(734
)
(169
)
(311
)
Other, net
(28,884
)
(26,119
)
(6,385
)
(3,620
)
Adjusted EBITDA
$
367,848
$
363,152
$
82,750
$
78,054
Adjusted EBITDA by Segment
Tobacco
$
375,003
$
370,575
$
84,390
$
79,962
Real Estate
222
313
(29
)
62
Corporate and Other
(7,377
)
(7,736
)
(1,611
)
(1,970
)
Total
$
367,848
$
363,152
$
82,750
$
78,054
____________
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.
d.
Represents accruals for litigation in the
Tobacco segment.
e.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
TABLE 3
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET
INCOME
(Unaudited)
(Dollars
in Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
2024
2023
Net income
$
34,800
$
34,741
Loss on extinguishment of debt
—
141
Litigation settlement and judgment expense
(a)
191
270
Impact of MSA settlement (b)
(169
)
(311
)
Impact of net interest expense capitalized
to real estate ventures
3,218
(1,041
)
Total adjustments
3,240
(941
)
Tax expense (benefit) related to
adjustments
(818
)
243
Adjusted Net Income
$
37,222
$
34,043
Per diluted common share:
Adjusted Net Income applicable to common
shares
$
0.24
$
0.22
____________
a.
Represents accruals for litigation in the
Tobacco segment.
b.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
TABLE 4
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2024
2023
Operating income
$
331,519
$
328,035
$
77,781
$
74,297
Litigation settlement and judgment expense
(a)
18,720
18,799
191
270
Impact of MSA settlement (b)
(592
)
(734
)
(169
)
(311
)
Total adjustments
18,128
18,065
22
(41
)
Adjusted Operating Income
$
349,647
$
346,100
$
77,803
$
74,256
____________
a.
Represents accruals for litigation in the
Tobacco segment.
b.
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)
LTM
Year Ended
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2024
2023
Tobacco Adjusted Operating
Income:
Operating income from Tobacco segment
$
351,073
$
346,673
$
82,999
$
78,599
Litigation settlement and judgment expense
(a)
18,720
18,799
191
270
Impact of MSA settlement (b)
(592
)
(734
)
(169
)
(311
)
Total adjustments
18,128
18,065
22
(41
)
Tobacco Adjusted Operating Income
$
369,201
$
364,738
$
83,021
$
78,558
LTM
Year Ended
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2024
2023
Tobacco Adjusted EBITDA:
Operating income from Tobacco segment
$
351,073
$
346,673
$
82,999
$
78,599
Litigation settlement and judgment expense
(a)
18,720
18,799
191
270
Impact of MSA settlement (b)
(592
)
(734
)
(169
)
(311
)
Total adjustments
18,128
18,065
22
(41
)
Tobacco Adjusted Operating Income
369,201
364,738
83,021
78,558
Depreciation and amortization
5,621
5,686
1,312
1,377
Stock-based compensation expense
181
151
57
27
Total adjustments
5,802
5,837
1,369
1,404
Tobacco Adjusted EBITDA
$
375,003
$
370,575
$
84,390
$
79,962
____________
a.
Represents accruals for litigation in the
Tobacco segment.
b.
Represents the Tobacco segment’s
settlement of long-standing disputes related to the Master
Settlement Agreement.
TABLE 6
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF
REVENUES
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2024
2023
Revenues:
Tobacco (a)
$
1,414,690
$
1,424,268
$
324,567
$
334,145
____________
a.
Tobacco segment revenues include federal
excise taxes of $474,268 for the last twelve months ended March 31,
2024, $486,263 for the year ended December 31, 2023, and $105,823,
and $117,818 for the three months ended March 31, 2024 and 2023,
respectively.
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version on businesswire.com: https://www.businesswire.com/news/home/20240501852371/en/
Columbia Clancy/Catherine Livingston FGS Global 212-687-8080
(U.S.) VectorGroupIR@fgsglobal.com 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