Vector Group Reports Second Quarter 2024 Financial Results
Montego maintains position as largest discount brand in the
Second Quarter 2024 Highlights:
-
Consolidated revenues of
$371.9 million , up 1.7% or$6.3 million compared to the prior year period.- Tobacco segment wholesale market share increased to 5.7% from 5.4% in the prior year period and retail market share remained at 5.8%, unchanged from the prior year period.
- Montego wholesale and retail market share both increased to 4.1% from 3.4% and 3.5%, respectively, in the prior year period.
-
Operating income of
$97.8 million , up 36.5% or$26.1 million compared to the prior year period.-
Tobacco segment operating income of
$102.9 million , up 37.0% or$27.8 million compared to the prior year period.
-
Tobacco segment operating income of
-
Adjusted EBITDA of
$103.3 million , up 9.7% or$9.2 million compared to the prior year period.-
Tobacco Adjusted EBITDA of
$104.4 million , up 10.2% or$9.7 million compared to the prior year period.
-
Tobacco Adjusted EBITDA of
First Half 2024 Highlights:
-
Consolidated revenues of
$696.5 million , down 0.5% or$3.3 million compared to the prior year period.-
Tobacco segment revenues of
$696.5 million , down 0.5% or$3.3 million compared to the prior year period. - Tobacco segment wholesale market share increased to 5.7% from 5.5% in the prior year period and retail market share remained at 5.8%.
- Montego wholesale and retail market share both increased to 4.0% from 3.4% in the prior year period.
-
Tobacco segment revenues of
-
Operating income of
$175.6 million , up 20.3% or$29.6 million compared to the prior year period.-
Tobacco segment operating income of
$185.9 million , up 21.0% or$32.2 million compared to the prior year period.
-
Tobacco segment operating income of
-
Adjusted EBITDA of
$186.0 million , up 8.1% or$13.9 million compared to the prior year period.-
Tobacco Adjusted EBITDA of
$188.8 million , up 8.1% or$14.1 million compared to the prior year period.
-
Tobacco Adjusted EBITDA of
“Vector Group delivered strong performance in the second quarter bolstered by the impressive growth of our Montego brand,” said
GAAP Financial Results
Three months ended
Six months ended
Non-GAAP Financial Measures
Three months ended
Adjusted EBITDA (as described in Table 2 attached hereto) were
Adjusted Net Income (as described in Table 3 attached hereto) was
Adjusted Operating Income (as described in Table 4 attached hereto) was
Six months ended
Adjusted EBITDA (as described in Table 2 attached hereto) were
Adjusted Net Income (as described in Table 3 attached hereto) was
Adjusted Operating Income (as described in Table 4 attached hereto) was
Consolidated Balance Sheet
Tobacco Segment Financial Results
For the second quarter of 2024, the Tobacco segment had revenues of
Operating Income from the Tobacco segment was
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5 attached hereto) for the second quarter of 2024 was
Operational Metrics
For the second quarter of 2024, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 2.39 billion units, compared to 2.52 billion units for the second quarter of 2023. For the six months ended
According to data from
According to data from
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 three and six months ended
Conference Call to Discuss Second Quarter 2024 Results
As previously announced, the Company will host a conference call and webcast on
A replay of the call will be available shortly after the call ends on
About
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, 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
[Financial Tables Follow]
|
TABLE 1
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in Thousands, Except Per Share Amounts) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
|
|
|
|
|||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
Revenues: |
|
|
|
|
|
|
|
|||||||||
|
Tobacco* |
$ |
371,914 |
|
|
$ |
365,662 |
|
|
$ |
696,481 |
|
|
$ |
699,807 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Expenses: |
|
|
|
|
|
|
|
|||||||||
|
Cost of sales: |
|
|
|
|
|
|
|
|||||||||
|
Tobacco* |
|
244,594 |
|
|
|
248,984 |
|
|
|
462,495 |
|
|
|
481,270 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating, selling, administrative and general expenses |
|
29,461 |
|
|
|
26,930 |
|
|
|
58,155 |
|
|
|
54,222 |
|
|
|
Litigation settlement and judgment expense |
|
73 |
|
|
|
18,105 |
|
|
|
264 |
|
|
|
18,375 |
|
|
|
Operating income |
|
97,786 |
|
|
|
71,643 |
|
|
|
175,567 |
|
|
|
145,940 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Other income (expenses): |
|
|
|
|
|
|
|
|||||||||
|
Interest expense |
|
(26,583 |
) |
|
|
(27,124 |
) |
|
|
(54,032 |
) |
|
|
(54,598 |
) |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
(40 |
) |
|
|
— |
|
|
|
(181 |
) |
|
|
Equity in (losses) earnings from investments |
|
(641 |
) |
|
|
959 |
|
|
|
1,497 |
|
|
|
800 |
|
|
|
Equity in (losses) earnings from real estate ventures |
|
(1,213 |
) |
|
|
2,954 |
|
|
|
(11,934 |
) |
|
|
1,061 |
|
|
|
Other, net |
|
5,585 |
|
|
|
4,791 |
|
|
|
11,970 |
|
|
|
8,411 |
|
|
|
Income before provision for income taxes |
|
74,934 |
|
|
|
53,183 |
|
|
|
123,068 |
|
|
|
101,433 |
|
|
|
Income tax expense |
|
20,756 |
|
|
|
15,094 |
|
|
|
34,090 |
|
|
|
28,603 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income |
$ |
54,178 |
|
|
$ |
38,089 |
|
|
$ |
88,978 |
|
|
$ |
72,830 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Per basic common share: |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income applicable to common shares |
$ |
0.34 |
|
|
$ |
0.24 |
|
|
$ |
0.56 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Per diluted common share: |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income applicable to common shares |
$ |
0.34 |
|
|
$ |
0.24 |
|
|
$ |
0.56 |
|
|
$ |
0.46 |
|
|
* Revenues and cost of sales include federal excise taxes of
|
TABLE 2
RECONCILIATION OF ADJUSTED EBITDA (Unaudited) (Dollars in Thousands) |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
LTM |
|
Year Ended |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net income |
$ |
199,674 |
|
|
$ |
183,526 |
|
|
$ |
54,178 |
|
|
$ |
38,089 |
|
|
$ |
88,978 |
|
|
$ |
72,830 |
|
|
|
Interest expense |
|
108,051 |
|
|
|
108,617 |
|
|
|
26,583 |
|
|
|
27,124 |
|
|
|
54,032 |
|
|
|
54,598 |
|
|
|
Income tax expense |
|
70,413 |
|
|
|
64,926 |
|
|
|
20,756 |
|
|
|
15,094 |
|
|
|
34,090 |
|
|
|
28,603 |
|
|
|
Depreciation and amortization |
|
6,780 |
|
|
|
6,941 |
|
|
|
1,629 |
|
|
|
1,731 |
|
|
|
3,262 |
|
|
|
3,423 |
|
|
|
EBITDA |
$ |
384,918 |
|
|
$ |
364,010 |
|
|
$ |
103,146 |
|
|
$ |
82,038 |
|
|
$ |
180,362 |
|
|
$ |
159,454 |
|
|
|
Equity in (earnings) losses from investments (a) |
|
(1,959 |
) |
|
|
(1,262 |
) |
|
|
641 |
|
|
|
(959 |
) |
|
|
(1,497 |
) |
|
|
(800 |
) |
|
|
Equity in losses (earnings) from real estate ventures (b) |
|
10,793 |
|
|
|
(2,202 |
) |
|
|
1,213 |
|
|
|
(2,954 |
) |
|
|
11,934 |
|
|
|
(1,061 |
) |
|
|
Loss on extinguishment of debt |
|
368 |
|
|
|
549 |
|
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
181 |
|
|
|
Stock-based compensation expense (c) |
|
12,482 |
|
|
|
10,111 |
|
|
|
3,807 |
|
|
|
2,644 |
|
|
|
7,121 |
|
|
|
4,750 |
|
|
|
Litigation settlement and judgment expense (d) |
|
688 |
|
|
|
18,799 |
|
|
|
73 |
|
|
|
18,105 |
|
|
|
264 |
|
|
|
18,375 |
|
|
|
Impact of MSA settlement (e) |
|
(592 |
) |
|
|
(734 |
) |
|
|
— |
|
|
|
— |
|
|
|
(169 |
) |
|
|
(311 |
) |
|
|
Other, net |
|
(29,678 |
) |
|
|
(26,119 |
) |
|
|
(5,585 |
) |
|
|
(4,791 |
) |
|
|
(11,970 |
) |
|
|
(8,411 |
) |
|
|
Adjusted EBITDA |
$ |
377,020 |
|
|
$ |
363,152 |
|
|
$ |
103,295 |
|
|
$ |
94,123 |
|
|
$ |
186,045 |
|
|
$ |
172,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Adjusted EBITDA by Segment |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Tobacco |
$ |
384,680 |
|
|
$ |
370,575 |
|
|
$ |
104,364 |
|
|
$ |
94,687 |
|
|
$ |
188,754 |
|
|
$ |
174,649 |
|
|
|
Real Estate |
|
18 |
|
|
|
313 |
|
|
|
(56 |
) |
|
|
148 |
|
|
|
(85 |
) |
|
|
210 |
|
|
|
Corporate and Other |
|
(7,678 |
) |
|
|
(7,736 |
) |
|
|
(1,013 |
) |
|
|
(712 |
) |
|
|
(2,624 |
) |
|
|
(2,682 |
) |
|
|
Total |
$ |
377,020 |
|
|
$ |
363,152 |
|
|
$ |
103,295 |
|
|
$ |
94,123 |
|
|
$ |
186,045 |
|
|
$ |
172,177 |
|
|
____________________
- Represents equity in (earnings) losses recognized from investments that the Company accounts for under the equity method.
- 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.
- Represents amortization of stock-based compensation.
- Represents accruals for litigation in the Tobacco segment.
- Represents the Tobacco segment’s settlement of long-standing disputes related to the Master Settlement Agreement.
|
TABLE 3
RECONCILIATION OF ADJUSTED NET INCOME (Unaudited) (Dollars in Thousands, Except Per Share Amounts) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|||||||||||||
|
Net income |
$ |
54,178 |
|
|
$ |
38,089 |
|
|
$ |
88,978 |
|
|
$ |
72,830 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Loss on extinguishment of debt |
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
181 |
|
|
|
Litigation settlement and judgment expense (a) |
|
73 |
|
|
|
18,105 |
|
|
|
264 |
|
|
|
18,375 |
|
|
|
Impact of MSA settlement (b) |
|
— |
|
|
|
— |
|
|
|
(169 |
) |
|
|
(311 |
) |
|
|
Impact of net interest expense capitalized to real estate ventures |
|
(1,233 |
) |
|
|
(1,072 |
) |
|
|
1,985 |
|
|
|
(2,113 |
) |
|
|
Total adjustments |
|
(1,160 |
) |
|
|
17,073 |
|
|
|
2,080 |
|
|
|
16,132 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Tax expense (benefit) related to adjustments |
|
293 |
|
|
|
(4,407 |
) |
|
|
(525 |
) |
|
|
(4,164 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Adjusted Net Income |
$ |
53,311 |
|
|
$ |
50,755 |
|
|
$ |
90,533 |
|
|
$ |
84,798 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Per diluted common share: |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Adjusted Net Income applicable to common shares |
$ |
0.34 |
|
|
$ |
0.32 |
|
|
$ |
0.57 |
|
|
$ |
0.54 |
|
|
____________________
- Represents accruals for litigation in the Tobacco segment.
- Represents the Tobacco segment’s settlement of long-standing disputes related to the Master Settlement Agreement.
|
TABLE 4
RECONCILIATION OF ADJUSTED OPERATING INCOME (Unaudited) (Dollars in Thousands) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
LTM |
|
Year Ended |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Operating income |
$ |
357,662 |
|
|
$ |
328,035 |
|
|
$ |
97,786 |
|
$ |
71,643 |
|
$ |
175,567 |
|
|
$ |
145,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Litigation settlement and judgment expense (a) |
|
688 |
|
|
|
18,799 |
|
|
|
73 |
|
|
18,105 |
|
|
264 |
|
|
|
18,375 |
|
|
|
Impact of MSA settlement (b) |
|
(592 |
) |
|
|
(734 |
) |
|
|
— |
|
|
— |
|
|
(169 |
) |
|
|
(311 |
) |
|
|
Total adjustments |
|
96 |
|
|
|
18,065 |
|
|
|
73 |
|
|
18,105 |
|
|
95 |
|
|
|
18,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Adjusted Operating Income |
$ |
357,758 |
|
|
$ |
346,100 |
|
|
$ |
97,859 |
|
$ |
89,748 |
|
$ |
175,662 |
|
|
$ |
164,004 |
|
|
____________________
- Represents accruals for litigation in the Tobacco segment.
- Represents the Tobacco segment’s settlement of long-standing disputes related to the Master Settlement Agreement.
|
TABLE 5
RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME AND TOBACCO ADJUSTED EBITDA (Unaudited) (Dollars in Thousands) |
||||||||||||||||||||||
|
|
LTM |
|
Year Ended |
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Tobacco Adjusted Operating Income: |
|
|
|
|
|
|
||||||||||||||||
|
Operating income from Tobacco segment |
$ |
378,878 |
|
$ |
346,673 |
|
$ |
102,927 |
$ |
75,122 |
$ |
185,926 |
|
$ |
153,721 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Litigation settlement and judgment expense (a) |
|
688 |
|
|
18,799 |
|
|
73 |
|
18,105 |
|
264 |
|
|
18,375 |
|
||||||
|
Impact of MSA settlement (b) |
|
(592 |
) |
|
(734 |
) |
|
— |
|
— |
|
(169 |
) |
|
(311 |
) |
||||||
|
Total adjustments |
|
96 |
|
|
18,065 |
|
|
73 |
|
18,105 |
|
95 |
|
|
18,064 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tobacco Adjusted Operating Income |
$ |
378,974 |
|
$ |
364,738 |
|
$ |
103,000 |
$ |
93,227 |
$ |
186,021 |
|
$ |
171,785 |
|
||||||
|
|
LTM |
|
Year Ended |
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tobacco Adjusted EBITDA: |
|
|
|
|
|
|
||||||||||||||||
|
Operating income from Tobacco segment |
$ |
378,878 |
|
$ |
346,673 |
|
$ |
102,927 |
$ |
75,122 |
$ |
185,926 |
|
$ |
153,721 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Litigation settlement and judgment expense (a) |
|
688 |
|
|
18,799 |
|
|
73 |
|
18,105 |
|
264 |
|
|
18,375 |
|
||||||
|
Impact of MSA settlement (b) |
|
(592 |
) |
|
(734 |
) |
|
— |
|
— |
|
(169 |
) |
|
(311 |
) |
||||||
|
Total adjustments |
|
96 |
|
|
18,065 |
|
|
73 |
|
18,105 |
|
95 |
|
|
18,064 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tobacco Adjusted Operating Income |
|
378,974 |
|
|
364,738 |
|
|
103,000 |
|
93,227 |
|
186,021 |
|
|
171,785 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Depreciation and amortization |
|
5,500 |
|
|
5,686 |
|
|
1,298 |
|
1,419 |
|
2,610 |
|
|
2,796 |
|
||||||
|
Stock-based compensation expense |
|
206 |
|
|
151 |
|
|
66 |
|
41 |
|
123 |
|
|
68 |
|
||||||
|
Total adjustments |
|
5,706 |
|
|
5,837 |
|
|
1,364 |
|
1,460 |
|
2,733 |
|
|
2,864 |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tobacco Adjusted EBITDA |
$ |
384,680 |
|
$ |
370,575 |
|
$ |
104,364 |
$ |
94,687 |
$ |
188,754 |
|
$ |
174,649 |
|
||||||
____________________
- Represents accruals for litigation in the Tobacco segment.
- Represents the Tobacco segment’s settlement of long-standing disputes related to the Master Settlement Agreement.
|
TABLE 6
RECONCILIATION OF REVENUES (Unaudited) (Dollars in Thousands) |
||||||||||||||||||
|
|
|
LTM |
|
Year Ended |
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Tobacco (a) |
|
$ |
1,420,942 |
|
$ |
1,424,268 |
|
$ |
371,914 |
|
$ |
365,662 |
|
$ |
696,481 |
|
$ |
699,807 |
____________________
-
Tobacco segment revenues include federal excise taxes of
$467,970 for the last twelve months endedJune 30, 2024 ,$486,263 for the year endedDecember 31, 2023 , and$120,452 ,$226,275 ,$126,750 , and$244,568 for the three and six months endedJune 30, 2024 and 2023, respectively.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731592504/en/
FGS Global
212-687-8080 (
VectorGroupIR@fgsglobal.com
J. Bryant Kirkland III,
305-579-8000
Source: