SDI Standard Diversified Inc

Standard Diversified Inc. (the “Company”) (NYSE American: SDI) today announced its financial results for the second quarter and six months ended June 30, 2019. In addition to its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, the Company will also make available an updated Investor Presentation on its corporate website at www.standarddiversified.com.

2019 Second Quarter Highlights

• Total revenues increased 14.0% to $101.8 million as a result of strong growth at Turning Point Brands, Inc. (NYSE: TPB).
• Net income attributable to SDI was $1.0 million or $0.05 per diluted share.

2019 First Half Highlights

• Total revenues increased 17.8% to $201.8 million as a result of strong growth at Turning Point Brands, Inc.
• Net loss attributable to SDI was $(2.6) million or $(0.16) per diluted share.

About Standard Diversified Inc.

Standard Diversified Inc. is a holding company that owns and operates subsidiaries in a variety of industries, including insurance, other tobacco products and outdoor advertising. For more information about the Company, please visit the Company’s website at www.standarddiversified.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, are forward-looking statements. These forward-looking statements address, among other things activities, events or developments that the Company expects, believes or anticipates will or may occur in the future. These forward-looking statements are subject to a number of risks that could cause actual results to differ materially from those contained in the forward-looking statements, including those risks described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Except as required by law, the Company assumes no obligation to update publicly any such forward-looking statements.

 

Standard Diversified Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

(dollars in thousands except share and per share data)

(unaudited)

  Three Months Ended June 30, Six Months Ended June 30,

2019

2018

2019

2018

Revenues: Net sales

$

94,053

$

81,773

$

186,362

$

156,121

Insurance premiums earned

7,158

7,134

14,307

14,451

Net investment income

222

176

557

370

Other income

331

187

550

394

Total revenues

101,764

89,270

201,776

171,336

  Operating costs and expenses: Cost of sales

52,803

45,950

104,580

88,406

Selling, general and administrative expenses

22,438

22,275

53,178

45,745

Incurred losses and loss adjustment expenses

9,152

5,405

15,716

11,217

Impairment loss on goodwill and other intangible assets

-

-

2,826

-

Other operating expenses

2,529

1,541

5,245

2,830

Total operating costs and expenses

86,922

75,171

181,545

148,198

Operating income

14,842

14,099

20,231

23,138

    Interest expense, net

4,358

4,110

8,849

8,106

Interest and investment income

(176)

(270)

(338)

(377)

Loss on extinguishment of debt

150

-

150

2,384

Net periodic benefit (income) expense, excluding service cost

(11)

264

(22)

221

Income before income taxes

10,521

9,995

11,592

12,804

Income tax expense

2,979

1,908

4,333

2,717

Net income

7,542

8,087

7,259

10,087

Net income attributable to noncontrolling interests

(6,580)

(4,559)

(9,840)

(6,038)

Net income (loss) attributable to Standard Diversified Inc.

$

962

$

3,528

$

(2,581)

$

4,049

    Net income (loss) attributable to SDI per Class A and Class B Common Share – Basic

$

0.06

$

0.21

$

(0.15)

$

0.24

Net income (loss) attributable to SDI per Class A and Class B Common Share – Diluted

$

0.05

$

0.20

$

(0.16)

$

0.23

Weighted Average Class A and Class B Common Shares Outstanding – Basic

16,819,824

16,609,828

16,839,456

16,795,815

Weighted Average Class A and Class B Common Shares Outstanding – Diluted

16,862,337

16,610,654

16,839,456

16,829,326

Standard Diversified Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands except share and per share data)

June 30, December 31,

2019

2018

(Unaudited) ASSETS Cash and cash equivalents

$

16,357

$

21,201

Fixed maturities available for sale, at fair value; amortized cost of $25,173 in 2019 and $32,474 in 2018

25,514

32,132

Equity securities, at fair value; cost: $1,099 in 2019 and $794 in 2018

1,050

693

Trade accounts receivable, net of allowances of $49 in 2019 and $42 in 2018

6,604

2,901

Premiums receivable

5,303

5,858

Inventories

94,583

91,237

Other current assets

18,694

15,045

Property, plant and equipment, net

28,586

27,741

Right of use assets

13,802

-

Deferred financing costs, net

797

870

Intangible assets, net

33,608

38,325

Deferred policy acquisition costs

2,135

2,279

Goodwill

147,846

146,696

Master Settlement Agreement (MSA) escrow deposits

31,724

30,550

Other assets

6,049

6,415

Total assets

$

432,652

$

421,943

  LIABILITIES AND EQUITY Reserves for losses and loss adjustment expenses

$

28,911

$

27,330

Unearned premiums

11,861

12,707

Advance premiums collected

331

500

Accounts payable

21,132

9,225

Accrued liabilities

21,223

23,883

Current portion of long-term debt

14,696

9,431

Revolving credit facility

15,000

26,000

Notes payable and long-term debt

194,327

208,616

Lease liabilities

12,221

-

Deferred income taxes

1,949

2,711

Postretirement benefits

3,096

3,096

Asset retirement obligations

2,100

2,028

Other long-term liabilities

3,193

1,687

Total liabilities

330,040

327,214

  Commitments and contingencies   Equity: Preferred stock, $0.01 par value; authorized shares 50,000,000; -0- issued and outstanding shares

-

-

Class A common stock, $0.01 par value; authorized shares, 300,000,000; 9,086,776 issued and outstanding at June 30, 2019 and 9,156,293 issued and 9,052,801 outstanding at December 31, 2018

91

92

Class B common stock, $0.01 par value; authorized shares, 30,000,000; 7,750,528 and 7,801,995 issued and outstanding at June 30, 2019 and December 31, 2018, respectively; convertible into Class A shares on a one-for-one basis

78

78

Additional paid-in capital

79,958

81,260

Class A treasury stock, 103,492 common shares at cost as of December 31, 2018

-

(1,440)

Accumulated other comprehensive loss

(1,252)

(1,683)

Accumulated deficit

(27,194)

(24,613)

Total stockholders' equity

51,681

53,694

Noncontrolling interests

50,931

41,035

Total equity

102,612

94,729

Total liabilities and equity

$

432,652

$

421,943

 

 

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Adam Prior The Equity Group Inc. Phone: (212) 836-9606 aprior@equityny.com