Montego maintains position as largest
discount brand in the U.S.
Fourth Quarter 2023 Highlights:
- Consolidated revenues of $360.4 million, down 0.9% or $3.4
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% in the current period.
- Montego wholesale market share increased to 3.8% from 3.0% in
the prior year period and retail market share increased to 3.8%
from 3.2% in the prior year period.
- Operating income of $91.6 million, up 2.6% or $2.3 million
compared to the prior year period.
- Tobacco segment operating income of $98.1 million, up 5.6% or
$5.2 million compared to the prior year period.
- Adjusted EBITDA of $96.0 million, up 3.6% or $3.3 million
compared to the prior year period.
- Tobacco Adjusted EBITDA of $99.6 million, up 5.4% or $5.1
million compared to the prior year period.
Full Year 2023 Highlights:
- Consolidated revenues of $1.42 billion, down 1.2% or $16.7
million compared to the prior year.
- Tobacco segment revenues of $1.42 billion, down 0.1% or $0.9
million compared to the prior year.
- Tobacco segment wholesale and retail market share increased to
5.5% and 5.8% from 5.4% and 5.5%, respectively, in the prior
year.
- Montego wholesale market share increased to 3.5% from 2.5% in
the prior year and retail market share increased to 3.6% from 2.6%
in the prior year.
- Operating income of $328.0 million, down 3.2% or $11.0
million compared to the prior year.
- Tobacco segment operating income of $346.7 million, down 0.1%
or $0.4 million compared to the prior year.
- Adjusted EBITDA of $363.2 million, up 3.1% or $11.0 million
compared to the prior year.
- Tobacco Adjusted EBITDA of $370.6 million, up 5.5% or $19.4
million compared to the prior year.
Vector Group Ltd. (NYSE: VGR) today announced financial results
for the three months and year ended December 31, 2023.
“Vector Group delivered a solid performance in 2023 amid a
dynamic operating environment, as the successful execution of our
targeted investment strategy enabled Montego’s continued growth as
the largest discount brand in the United States,” said Howard M.
Lorber, President and Chief Executive Officer of Vector Group Ltd.
“The Company is well positioned in 2024 and we are confident we
have the right strategy and team in place to continue optimizing
long-term profit and driving value for our stockholders.”
GAAP Financial Results
Three months ended December 31, 2023 and 2022. Fourth quarter
2023 revenues were $360.4 million, compared to $363.8 million in
the fourth quarter of 2022. The Company recorded operating income
of $91.6 million in the fourth quarter of 2023, compared to $89.3
million in the fourth quarter of 2022. Net income for the fourth
quarter of 2023 was $58.0 million, or $0.37 per diluted common
share, compared to $48.2 million, or $0.30 per diluted common
share, in the fourth quarter of 2022.
Year ended December 31, 2023 and 2022. For the year ended
December 31, 2023, revenues were $1.42 billion, compared to $1.44
billion for the year ended December 31, 2022. The Company recorded
operating income of $328.0 million for the year ended December 31,
2023, compared to $339.0 million for the year ended December 31,
2022. Net income for the year ended December 31, 2023 was $183.5
million, or $1.16 per diluted common share, compared to $158.7
million, or $1.01 per diluted common share, for the year ended
December 31, 2022.
Non-GAAP Financial Measures
Three months ended December 31, 2023 compared to the three
months ended December 31, 2022
Adjusted EBITDA (as described in Table 2 attached hereto) were
$96.0 million for the fourth quarter of 2023, compared to $92.7
million for the fourth quarter of 2022.
Adjusted Net Income (as described in Table 3 attached hereto)
was $57.5 million, or $0.36 per diluted share, for the fourth
quarter of 2023, compared to $48.9 million, or $0.31 per diluted
share, for the fourth quarter of 2022.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $91.6 million for the fourth quarter of 2023, compared
to $89.4 million for the fourth quarter of 2022.
Year ended December 31, 2023 compared to the year ended December
31, 2022
Adjusted EBITDA (as described in Table 2 attached hereto) were
$363.2 million for the year ended December 31, 2023, compared to
$352.2 million for the year ended December 31, 2022.
Adjusted Net Income (as described in Table 3 attached hereto)
was $194.3 million, or $1.23 per diluted share, for the year ended
December 31, 2023, compared to $153.4 million, or $0.97 per diluted
share, for the year ended December 31, 2022.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $346.1 million for the year ended December 31, 2023,
compared to $337.1 million for the year ended December 31,
2022.
Consolidated Balance Sheet
Vector Group maintained significant liquidity at December 31,
2023 with cash and cash equivalents of $268.6 million, including
$16.8 million of cash from the Tobacco segment, investment
securities of $110.9 million and long-term investments of $46.8
million.
Vector Group continued its longstanding history of paying a
quarterly cash dividend in the fourth quarter of 2023. For the year
ended December 31, 2023, Vector Group returned a total of $127.0
million to stockholders at a quarterly rate of $0.20 per common
share.
Tobacco Segment Financial Results
For the fourth quarter of 2023, the Tobacco segment had revenues
of $360.4 million, compared to $363.8 million for the fourth
quarter of 2022. For the year ended December 31, 2023, the Tobacco
segment had revenues of $1.42 billion, compared to $1.43 billion
for the year ended December 31, 2022.
Operating Income from the Tobacco segment was $98.1 million and
$346.7 million for the three months and year ended December 31,
2023, respectively, compared to $93.0 million and $347.0 million
for the three months and the year ended December 31, 2022,
respectively.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5
attached hereto) for the fourth quarter of 2023 was $98.1 million
compared to $93.0 million for the fourth quarter of 2022. Tobacco
Adjusted Operating Income for the year ended December 31, 2023 was
$364.7 million, compared to $345.2 million for the year ended
December 31, 2022.
Operational Metrics
For the fourth quarter of 2023, the Tobacco segment had
conventional cigarette (wholesale) shipments of approximately 2.37
billion units, compared to 2.56 billion units for the fourth
quarter of 2022. For the year ended December 31, 2023, the Tobacco
segment had conventional cigarette (wholesale) shipments of
approximately 9.69 billion units, compared to 10.35 billion units
for the year ended December 31, 2022.
According to data from Management Science Associates, Inc., for
the fourth quarter of 2023, the Tobacco segment’s wholesale market
share increased to 5.7%, from 5.5% for the fourth quarter of 2022.
For the year ended December 31, 2023, the Tobacco segment’s
wholesale market share increased to 5.5%, from 5.4% for the year
ended December 31, 2022. For the fourth quarter of 2023, Montego’s
wholesale market share increased to 3.8%, from 3.0% for the fourth
quarter of 2022. For the year ended December 31, 2023, Montego’s
wholesale market share increased to 3.5%, from 2.5% for the year
ended December 31, 2022. The Tobacco segment’s wholesale shipments
in the fourth quarter of 2023 declined by 7.4% compared to the
fourth quarter of 2022, while the industry’s overall wholesale
shipments declined by 9.5%. The Tobacco segment’s wholesale
shipments for the year ended December 31, 2023 declined by 6.2%
compared to the year ended December 31, 2022, while the industry’s
overall wholesale shipments declined by 7.5%.
According to data from Management Science Associates, Inc., for
the fourth quarter of 2023, the Tobacco segment’s retail market
share remained at 5.8% compared to the fourth quarter of 2022. For
the year ended December 31, 2023, the Tobacco segment’s retail
market share increased to 5.8%, from 5.5% for the year ended
December 31, 2022. For the fourth quarter of 2023, Montego’s retail
market share increased to 3.8%, from 3.2% for the fourth quarter of
2022. For the year ended December 31, 2023, Montego’s retail market
share increased to 3.6%, from 2.6% for the year ended December 31,
2022. The Tobacco segment’s retail shipments in the fourth quarter
of 2023 declined by 8.4% compared to the fourth quarter of 2022,
while the industry’s overall retail shipments declined by 8.5%. The
Tobacco segment’s retail shipments for the year ended December 31,
2023 declined by 3.4% compared to the year ended December 31, 2022,
while the industry’s overall retail shipments declined by 8.3%.
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 fourth quarter and full year ended
December 31, 2023 and 2022 are included in Tables 2 through 5.
Conference Call to Discuss Fourth Quarter and Full Year 2023
Results
As previously announced, the Company will host a conference call
and webcast on Wednesday, February 14, 2024 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/2271/49823. 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 February 14, 2024 through February 28, 2024 at
https://www.webcaster4.com/Webcast/Page/2271/49823.
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, 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, 2022
and, when filed, in our Annual Report on Form 10-K for the year
ended December 31, 2023. 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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues:
Tobacco*
$
360,350
$
363,770
$
1,424,268
$
1,425,125
Real estate
—
—
—
15,884
Total revenues
360,350
363,770
1,424,268
1,441,009
Expenses:
Cost of sales:
Tobacco*
238,398
247,582
965,348
991,331
Real estate
—
—
—
7,327
Total cost of sales
238,398
247,582
965,348
998,658
Operating, selling, administrative and
general expenses
30,352
26,837
112,086
103,102
Litigation settlement and judgment
expense
10
79
18,799
239
Operating income
91,590
89,272
328,035
339,010
Other income (expenses):
Interest expense
(26,763
)
(27,245
)
(108,617
)
(110,665
)
(Loss) gain on extinguishment of debt
(368
)
—
(549
)
412
Equity in earnings (losses) from
investments
1,403
177
1,262
(4,995
)
Equity in (losses) earnings from real
estate ventures
(2,598
)
(1,706
)
2,202
(5,946
)
Other, net
10,601
7,789
26,119
2,746
Income before provision for income
taxes
73,865
68,287
248,452
220,562
Income tax expense
15,868
20,137
64,926
61,861
Net income
$
57,997
$
48,150
$
183,526
$
158,701
Per basic common share:
Net income applicable to common shares
$
0.37
$
0.30
$
1.17
$
1.01
Per diluted common share:
Net income applicable to common shares
$
0.37
$
0.30
$
1.16
$
1.01
* Revenues and cost of sales include federal excise taxes of
$118,752, $128,756, $486,263 and $520,760 for the three months and
year ended December 31, 2023 and 2022, respectively.
TABLE 2
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA
(Unaudited)
(Dollars
in Thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net income
$
57,997
$
48,150
$
183,526
$
158,701
Interest expense
26,763
27,245
108,617
110,665
Income tax expense
15,868
20,137
64,926
61,861
Depreciation and amortization
1,756
1,788
6,941
7,218
EBITDA
$
102,384
$
97,320
$
364,010
$
338,445
Equity in (earnings) losses from
investments (a)
(1,403
)
(177
)
(1,262
)
4,995
Equity in losses (earnings) from real
estate ventures (b)
2,598
1,706
(2,202
)
5,946
Loss (gain) on extinguishment of debt
368
—
549
(412
)
Stock-based compensation expense (c)
2,687
1,573
10,111
7,848
Litigation settlement and judgment expense
(d)
10
79
18,799
239
Impact of MSA settlement (e)
—
—
(734
)
(2,123
)
Other, net
(10,601
)
(7,789
)
(26,119
)
(2,746
)
Adjusted EBITDA
$
96,043
$
92,712
$
363,152
$
352,192
Adjusted EBITDA by Segment
Tobacco
$
99,625
$
94,540
$
370,575
$
351,131
Real Estate
19
177
313
8,082
Corporate and Other
(3,601
)
(2,005
)
(7,736
)
(7,021
)
Total
$
96,043
$
92,712
$
363,152
$
352,192
__________________
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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net income
$
57,997
$
48,150
$
183,526
$
158,701
Loss (gain) on extinguishment of debt
368
—
549
(412
)
Litigation settlement and judgment expense
(a)
10
79
18,799
239
Impact of MSA settlement (b)
—
—
(734
)
(2,123
)
Impact of net interest expense capitalized
to real estate ventures
(1,161
)
955
(4,204
)
(2,137
)
Expense related to Tax Disaffiliation
indemnification (c)
—
8
—
589
Adjustment for derivative associated with
guarantee
—
—
—
(2,646
)
Total adjustments
(783
)
1,042
14,410
(6,490
)
Tax expense (benefit) related to
adjustments
284
(267
)
(3,637
)
1,144
Adjusted Net Income
$
57,498
$
48,925
$
194,299
$
153,355
Per diluted common share:
Adjusted Net Income applicable to common
shares
$
0.36
$
0.31
$
1.23
$
0.97
__________________
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.
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.
TABLE 4
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars
in Thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Operating income
$
91,590
$
89,272
$
328,035
$
339,010
Litigation settlement and judgment expense
(a)
10
79
18,799
239
Impact of MSA settlement (b)
—
—
(734
)
(2,123
)
Total adjustments
10
79
18,065
(1,884
)
Adjusted Operating Income
$
91,600
$
89,351
$
346,100
$
337,126
__________________
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)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Tobacco Adjusted Operating
Income:
Operating income from Tobacco segment
$
98,131
$
92,966
$
346,673
$
347,044
Litigation settlement and judgment expense
(a)
10
79
18,799
239
Impact of MSA settlement (b)
—
—
(734
)
(2,123
)
Total adjustments
10
79
18,065
(1,884
)
Tobacco Adjusted Operating Income
$
98,141
$
93,045
$
364,738
$
345,160
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Tobacco Adjusted EBITDA:
Operating income from Tobacco segment
$
98,131
$
92,966
$
346,673
$
347,044
Litigation settlement and judgment expense
(a)
10
79
18,799
239
Impact of MSA settlement (b)
—
—
(734
)
(2,123
)
Total adjustments
10
79
18,065
(1,884
)
Tobacco Adjusted Operating Income
98,141
93,045
364,738
345,160
Depreciation and amortization
1,443
1,475
5,686
5,901
Stock-based compensation expense
41
20
151
70
Total adjustments
1,484
1,495
5,837
5,971
Tobacco Adjusted EBITDA
$
99,625
$
94,540
$
370,575
$
351,131
__________________
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213665895/en/
FGS Global 212-687-8080 (U.S.) VectorGroupIR@fgsglobal.com J.
Bryant Kirkland III, Vector Group Ltd. 305-579-8000
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