Montego maintains position as largest
discount brand in the U.S.
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.
- 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.
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.
- 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.
- 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.
Vector Group Ltd. (NYSE: VGR) today announced financial results
for the three and six months ended June 30, 2024.
“Vector Group delivered strong performance in the second quarter
bolstered by the impressive growth of our Montego brand,” said
Howard M. Lorber, President and Chief Executive Officer of Vector
Group Ltd. “Montego’s continued expansion as the largest discount
brand in the U.S. highlights the effectiveness of our strategic
approach, expert market analysis, and proven execution. We are
confident in our ability to sustain our momentum in the second half
of the year and to drive long-term value for our stockholders.”
GAAP Financial Results
Three months ended June 30, 2024 and 2023. Second quarter 2024
revenues were $371.9 million, compared to $365.7 million in the
second quarter of 2023. The Company recorded operating income of
$97.8 million in the second quarter of 2024, compared to $71.6
million in the second quarter of 2023. Net income for the second
quarter of 2024 was $54.2 million, or $0.34 per diluted common
share, compared to $38.1 million, or $0.24 per diluted common
share, in the second quarter of 2023.
Six months ended June 30, 2024 and 2023. For the six months
ended June 30, 2024, revenues were $696.5 million, compared to
$699.8 million for the six months ended June 30, 2023. The Company
recorded operating income of $175.6 million for the six months
ended June 30, 2024, compared to $145.9 million for the six months
ended June 30, 2023. Net income for the six months ended June 30,
2024 was $89.0 million, or $0.56 per diluted common share, compared
to $72.8 million, or $0.46 per diluted common share, for the six
months ended June 30, 2023.
Non-GAAP Financial Measures
Three months ended June 30, 2024 compared to the three months
ended June 30, 2023
Adjusted EBITDA (as described in Table 2 attached hereto) were
$103.3 million for the second quarter of 2024, compared to $94.1
million for the second quarter of 2023.
Adjusted Net Income (as described in Table 3 attached hereto)
was $53.3 million, or $0.34 per diluted share, for the second
quarter of 2024, compared to $50.8 million, or $0.32 per diluted
share, for the second quarter of 2023.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $97.9 million for the second quarter of 2024, compared
to $89.7 million for the second quarter of 2023.
Six months ended June 30, 2024 compared to the six months ended
June 30, 2023
Adjusted EBITDA (as described in Table 2 attached hereto) were
$186.0 million for the six months ended June 30, 2024, compared to
$172.2 million for the six months ended June 30, 2023.
Adjusted Net Income (as described in Table 3 attached hereto)
was $90.5 million, or $0.57 per diluted share, for the six months
ended June 30, 2024, compared to $84.8 million, or $0.54 per
diluted share, for the six months ended June 30, 2023.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $175.7 million for the six months ended June 30, 2024,
compared to $164.0 million for the six months ended June 30,
2023.
Consolidated Balance Sheet
Vector Group maintained significant liquidity at June 30, 2024
with cash and cash equivalents of $390.8 million, including $149.2
million of cash from the Tobacco segment, investment securities of
$141.0 million and long-term investments of $46.8 million.
Vector Group continued its longstanding history of paying a
quarterly cash dividend in the second quarter of 2024. For the six
months ended June 30, 2024, Vector Group returned a total of $63.9
million to stockholders at a quarterly rate of $0.20 per share of
common stock.
Tobacco Segment Financial Results
For the second quarter of 2024, the Tobacco segment had revenues
of $371.9 million, compared to $365.7 million for the second
quarter of 2023. For the six months ended June 30, 2024, the
Tobacco segment had revenues of $696.5 million, compared to $699.8
million for the six months ended June 30, 2023.
Operating Income from the Tobacco segment was $102.9 million and
$185.9 million for the three and six months ended June 30, 2024,
respectively, compared to $75.1 million and $153.7 million for the
three and six months ended June 30, 2023, respectively.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5
attached hereto) for the second quarter of 2024 was $103.0 million
compared to $93.2 million for the second quarter of 2023. Tobacco
Adjusted Operating Income for the six months ended June 30, 2024
was $186.0 million, compared to $171.8 million for the six months
ended June 30, 2023.
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 June 30, 2024, the
Tobacco segment had conventional cigarette (wholesale) shipments of
approximately 4.50 billion units, compared to 4.87 billion units
for the six months ended June 30, 2023.
According to data from Management Science Associates, Inc., for
the second quarter of 2024, the Tobacco segment’s wholesale market
share increased to 5.7%, from 5.4% for the second quarter of 2023.
For the six months ended June 30, 2024, the Tobacco segment’s
wholesale market share increased to 5.7%, from 5.5% for the six
months ended June 30, 2023. For the second quarter of 2024,
Montego’s wholesale market share increased to 4.1%, from 3.4% for
the second quarter of 2023. For the six months ended June 30, 2024,
Montego’s wholesale market share increased to 4.0%, from 3.4% for
the six months ended June 30, 2023. The Tobacco segment’s wholesale
shipments in the second quarter of 2024 declined by 5.1% compared
to the second quarter of 2023, while the industry’s overall
wholesale shipments declined by 10.5%. The Tobacco segment’s
wholesale shipments for the six months ended June 30, 2024 declined
by 7.8% compared to the six months ended June 30, 2023, while the
industry’s overall wholesale shipments declined by 10.1%.
According to data from Management Science Associates, Inc., for
the second quarter of 2024, the Tobacco segment’s retail market
share remained at 5.8% compared to the second quarter of 2023. For
the six months ended June 30, 2024, the Tobacco segment’s retail
market share remained at 5.8%, compared to the six months ended
June 30, 2023. For the second quarter of 2024, Montego’s retail
market share increased to 4.1%, from 3.5% for the second quarter of
2023. For the six months ended June 30, 2024, Montego’s retail
market share increased to 4%, from 3.4% for the six months ended
June 30, 2023. The Tobacco segment’s retail shipments in the second
quarter of 2024 declined by 9.6% compared to the second quarter of
2023, while the industry’s overall retail shipments declined by
10.0%. The Tobacco segment’s retail shipments for the six months
ended June 30, 2024 declined by 9.1% compared to the six months
ended June 30, 2023, while the industry’s overall retail shipments
declined by 9.5%.
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 June 30,
2024 and 2023 are included in Tables 2 through 6.
Conference Call to Discuss Second Quarter 2024
Results
As previously announced, the Company will host a conference call
and webcast on Thursday, August 1, 2024 at 8:00 AM (ET) to discuss
its quarterly period and six months results. Investors may access
the call via live webcast at
https://www.webcaster4.com/Webcast/Page/2271/50954. Please join the
webcast at least ten minutes prior to the start time.
A replay of the call will be available shortly after the call
ends on August 1, 2024 through August 15, 2024 at
https://www.webcaster4.com/Webcast/Page/2271/50954.
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, 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 June 30, 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
Six Months Ended
June 30,
June 30,
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 $120,452, $126,750, $226,275 and $244,568 for the
three and six months ended June 30, 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
Six Months Ended
June 30,
December 31,
June 30,
June 30,
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
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET
INCOME
(Unaudited)
(Dollars
in Thousands, Except Per Share Amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
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
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Six Months Ended
June 30,
December 31,
June 30,
June 30,
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
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
Six Months Ended
June 30,
December 31,
June 30,
June 30,
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
June 30,
December 31,
June 30,
June 30,
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
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF
REVENUES
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Six Months Ended
June 30,
December 31,
June 30,
June 30,
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 ended June 30, 2024, $486,263
for the year ended December 31, 2023, and $120,452, $226,275,
$126,750, and $244,568 for the three and six months ended June 30,
2024 and 2023, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731592504/en/
FGS Global 212-687-8080 (U.S.) VectorGroupIR@fgsglobal.com J.
Bryant Kirkland III, Vector Group Ltd. 305-579-8000
Vector (NYSE:VGR)
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