Record High Quarterly Revenues and Robust
Operating Income
Continued Strong Earnings Momentum in
Tobacco and Real Estate Segments
Company Separately Announces Plan to
Spin-Off Douglas Elliman
Third Quarter 2021 Highlights:
- Consolidated revenues of $652.6 million, up 19% or $104.8
million compared to the prior year period
- Real Estate segment revenues of $354.7 million, up 55% or
$125.7 million compared to the prior year period
- Douglas Elliman’s closed sales volume of $12.6 billion, up 62%
or $4.8 billion compared to the prior year period
- Reported net income attributed to Vector Group of $48.9
million or $0.32 per diluted share, up $10.8 million compared to
the prior year period; Adjusted Net Income of $52.6 million or
$0.34 per diluted share, up $14.3 million compared to the prior
year period
- Reported operating income of $107.5 million, up $11.6
million compared to the prior year period
- Tobacco segment operating income of $91.8 million, up $0.5
million compared to the prior year period
- Real Estate segment operating income of $24.7 million, up $13.9
million compared to the prior year period
- Adjusted EBITDA of $116.5 million, up 13% or $13.2 million
compared to the prior year period
- Tobacco segment Adjusted EBITDA of $93.4 million, down $0.2
million compared to the prior year period
- Real Estate segment Adjusted EBITDA of $27.1 million, up $13.8
million compared to the prior year period
Year-to-date 2021 Highlights:
- Consolidated revenues of $1.93 billion, up 33% or $477.9
million compared to the prior year period
- Real Estate segment revenues of $1.0 billion, up 94% or $500.4
million compared to the prior year period
- Douglas Elliman’s closed sales volume of $37.2 billion, up 100%
or $18.6 billion compared to the prior year period
- Reported net income attributed to Vector Group of $174.2
million or $1.13 per diluted share, up $113.5 million compared to
the prior year period; Adjusted Net Income of $194.3 million or
$1.26 per diluted share, up $87.4 million compared to the prior
year period
- Reported operating income of $334.8 million, up $177.0
million compared to the prior year period
- Tobacco segment operating income of $276.6 million, up 15% or
$36.7 million compared to the prior year period
- Real Estate segment operating income of $82.3 million, up
$145.8 million compared to the prior year period
- Adjusted EBITDA of $355.1 million, up 48% or $115.0 million
compared to the prior year period
- Tobacco segment Adjusted EBITDA of $278.9 million, up 13% or
$32.7 million compared to the prior year period
- Real Estate segment Adjusted EBITDA of $89.2 million, up $84.5
million compared to the prior year period
- Strong liquidity with cash and cash equivalents of $524
million and investment securities and long-term investments of $214
million at September 30, 2021
- Cash dividends of $95 million returned to stockholders at a
rate of $0.60 per common share
Last Twelve Months ended September 30, 2021
Highlights:
- Consolidated revenues of $2.5 billion
- Tobacco segment revenues of $1.2 billion
- Real Estate segment revenues of $1.3 billion
- Douglas Elliman’s closed sales volume of $47.7 billion
- Net income of $206.4 million
- Real Estate segment net income of $61.9 million
- Operating income of $422.1 million
- Tobacco segment operating income of $356.3 million
- Adjusted EBITDA of $448.4 million
- Tobacco segment Adjusted EBITDA of $360.8 million
- Real Estate segment Adjusted EBITDA of $106.2 million
Vector Group Ltd. (NYSE:VGR) today announced third quarter 2021
financial results.
“Vector had another outstanding quarter, achieving all-time high
quarterly revenues and significantly increased operating income,”
said Howard M. Lorber, President and Chief Executive Officer of
Vector Group.
“We are excited by the continued strong performance of our
tobacco business which validates our market strategy and reflects
the competitive advantages we have in the deep discount segment.
Our Douglas Elliman subsidiary also delivered record revenues up
70% during the quarter compared to the year ago period, and closed
sales volume was up 62% over the same time frame. Combined with
expense reductions, Douglas Elliman achieved record quarterly
Adjusted EBITDA during the third quarter.”
In a separate press release issued today, Vector Group announced
that Douglas Elliman plans to file a Form 10 registration statement
with the Securities and Exchange Commission in connection with its
intended spin-off into a standalone, publicly traded company.
GAAP Financial Results
Three months ended September 30, 2021 and 2020. Third quarter
2021 revenues were $652.6 million, compared to revenues of $547.8
million in the third quarter of 2020. The Company recorded
operating income of $107.5 million in the third quarter of 2021,
compared to operating income of $95.9 million in the third quarter
of 2020. Net income attributed to Vector Group Ltd. for the third
quarter of 2021 was $48.9 million, or $0.32 per diluted common
share, compared to net income of $38.1 million, or $0.25 per
diluted common share, in the third quarter of 2020. Operating
income and net income for the third quarter of 2020 included
pre-tax restructuring charges of $0.3 million in the Company’s Real
Estate segment.
Nine months ended September 30, 2021 and 2020. For the nine
months ended September 30, 2021, revenues were $1.93 billion,
compared to revenues of $1.45 billion for the nine months ended
September 30, 2020. The Company recorded operating income of $334.8
million for the nine months ended September 30, 2021, compared to
operating income of $157.8 million for the nine months ended
September 30, 2020. Net income attributed to Vector Group Ltd. for
the nine months ended September 30, 2021 was $174.2 million, or
$1.13 per diluted common share, compared to net income of $60.7
million, or $0.39 per diluted common share, for the nine months
ended September 30, 2020. Operating income and net income for the
nine months ended September 30, 2020 included pre-tax and non-cash
impairment charges of $58.3 million and pre-tax restructuring
charges of $3.3 million in the Company’s Real Estate segment.
Non-GAAP Financial Measures
Non-GAAP financial measures include adjustments for change in
fair value of derivatives embedded within convertible debt, loss on
extinguishment of debt, litigation settlements and judgment
expense, impact of Master Settlement Agreement settlements,
restructuring charges, net gains on sales of assets (for purposes
of Adjusted EBITDA and Adjusted Operating Income only), and
impairments of goodwill and other intangible assets. For purposes
of Adjusted EBITDA only, adjustments include equity in earnings
from investments, equity in (earnings) losses from real estate
ventures, stock-based compensation expense, and other, net. For
purposes of Adjusted Net Income only, adjustments include non-cash
amortization of debt discount on convertible debt, net interest
expense capitalized to real estate ventures, and the derivative
associated with the 2018 acquisition of 29.41% of Douglas Elliman.
Reconciliations of non-GAAP financial measures to the comparable
GAAP financial results for the last twelve months ended September
30, 2021 and the three and nine months ended September 30, 2021 and
2020 are included in Tables 2 through 8.
Three months ended September 30, 2021 compared to the three
months ended September 30, 2020
Adjusted EBITDA attributed to Vector (as described in Table 2
attached hereto) were $116.5 million for the third quarter of 2021,
compared to $103.3 million for the third quarter of 2020.
Adjusted Net Income (as described in Table 3 attached hereto)
was $52.6 million, or $0.34 per diluted share, for the third
quarter of 2021, and $38.3 million or $0.25 per diluted share, for
the third quarter of 2020.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $110.1 million for the third quarter of 2021, compared
to $96.5 million for the third quarter of 2020.
Nine months ended September 30, 2021 compared to the nine months
ended September 30, 2020
Adjusted EBITDA attributed to Vector (as described in Table 2
attached hereto) were $355.1 million for the nine months ended
September 30, 2021, compared to $240.0 million for the nine months
ended September 30, 2020.
Adjusted Net Income (as described in Table 3 attached hereto)
was $194.3 million, or $1.26 per diluted share, for the nine months
ended September 30, 2021, compared to $106.9 million, or $0.70 per
diluted share, for the nine months ended September 30, 2020.
Adjusted Operating Income (as described in Table 4 attached
hereto) was $334.6 million for the nine months ended September 30,
2021, compared to $219.7 million for the nine months ended
September 30, 2020.
Last twelve months ended September 30, 2021
For the last twelve months ended September 30, 2021, revenues
were $2.5 billion. The Company recorded operating income of $422.1
million for the last twelve months ended September 30, 2021. Net
income attributed to Vector Group Ltd. for the last twelve months
ended September 30, 2021 was $206.4 million.
For the last twelve months ended September 30, 2021, Adjusted
EBITDA attributed to Vector (as described in Table 2 attached
hereto) were $448.4 million. Adjusted Operating Income (as
described in Table 4 attached hereto) was $421.2 million for the
last twelve months ended September 30, 2021.
Consolidated Balance Sheet
Vector maintained significant liquidity at September 30, 2021
with cash and cash equivalents of $524 million, including $133
million of cash at Liggett and $159 million of cash at Douglas
Elliman. Vector also held investment securities of $155 million and
long-term investments of $58 million.
Vector continued its longstanding history of paying a quarterly
cash dividend in the third quarter of 2021. For the nine months
ended September 30, 2021, Vector returned a total of $95 million to
stockholders at a quarterly rate of $0.20 per common share.
Tobacco Segment Financial Results
For the third quarter of 2021, the Tobacco segment had revenues
of $297.9 million, compared to $318.9 million for the third quarter
of 2020. For the nine months ended September 30, 2021, the Tobacco
segment had revenues of $895.9 million, compared to $918.4 million
for the nine months ended September 30, 2020. For the last twelve
months ended September 30, 2021, the Tobacco segment had revenues
of $1.2 billion.
Operating Income from the Tobacco segment was $91.8 million and
$276.6 million for the three and nine months ended September 30,
2021, respectively, compared to $91.3 million and $239.8 million
for the three and nine months ended September 30, 2020,
respectively. Operating Income from the Tobacco segment was $356.3
million for the last twelve months ended September 30, 2021.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5
attached hereto) for the third quarter of 2021 and 2020 was $91.8
million and $91.6 million, respectively. Tobacco Adjusted Operating
Income for the nine months ended September 30, 2021 was $273.9
million, compared to $240.2 million for the nine months ended
September 30, 2020. Tobacco Adjusted Operating Income for the last
twelve months ended September 30, 2021 was $353.9 million.
For the third quarter of 2021, the Tobacco segment had
conventional cigarette (wholesale) shipments of approximately 2.11
billion units, compared to 2.39 billion units for the third quarter
of 2020. For the nine months ended September 30, 2021, the Tobacco
segment had conventional cigarette (wholesale) shipments of
approximately 6.41 billion units, compared to 7.04 billion units
for the nine months ended September 30, 2020.
According to data from Management Science Associates, for the
third quarter of 2021, Liggett’s retail market share increased to
4.22% compared to 4.18% for the third quarter of 2020. For the nine
months ended September 30, 2021, Liggett’s retail market share
declined to 4.16%, compared to 4.25% for the nine months ended
September 30, 2020. Compared to the third quarter of 2020,
Liggett’s retail shipments in the third quarter of 2021 declined by
6.1% while the overall industry’s retail shipments declined by
7.0%. Compared to the nine months ended September 30, 2020,
Liggett’s retail shipments for nine months ended September 30, 2021
declined by 6.3% while the overall industry’s retail shipments
declined by 4.2%.
Real Estate Segment Financial Results
For the third quarter of 2021, the Real Estate segment had
revenues of $354.7 million compared to $229.0 million for the third
quarter of 2020. For the nine months ended September 30, 2021, the
Real Estate segment had revenues of $1.0 billion, compared to
$529.7 million for the nine months ended September 30, 2020. For
the last twelve months ended September 30, 2021, the Real Estate
segment had revenues of $1.3 billion. For the third quarter of
2021, the Real Estate segment reported net income of $15.5 million,
compared to a net loss of $4.1 million for the third quarter of
2020. For the nine months ended September 30, 2021, the Real Estate
segment reported net income of $67.0 million, compared to a net
loss of $70.9 million for the nine months ended September 30,
2020.
Douglas Elliman’s results are included in the Company’s Real
Estate segment. For the third quarter of 2021, Douglas Elliman had
revenues of $354.2 million, compared to $208.0 million for the
third quarter of 2020. For the nine months ended September 30,
2021, Douglas Elliman had revenues of $1.0 billion, compared to
$506.5 million for the nine months ended September 30, 2020. For
the last twelve months ended September 30, 2021, Douglas Elliman
had revenues of $1.3 billion. For the third quarter of 2021,
Douglas Elliman reported net income of $25.1 million, compared to
$11.8 million for the third quarter of 2020. For the nine months
ended September 30, 2021, Douglas Elliman reported net income of
$82.2 million, compared to a net loss of $62.2 million for the nine
months ended September 30, 2020.
Results for the third quarter of 2020 for the Real Estate
segment and Douglas Elliman included pre-tax restructuring charges
of $0.3 million and the Real Estate segment’s and Douglas Elliman’s
net loss for the nine months ended September 30, 2020 included
pre-tax and non-cash impairment charges of $58.3 million and
pre-tax restructuring charges of $3.3 million.
Non-GAAP Financial Measures
For the third quarter of 2021, Real Estate Adjusted EBITDA
attributed to Vector (as described in Table 6 attached hereto) were
$27.1 million, compared to $13.3 million for the third quarter of
2020.
For the nine months ended September 30, 2021, Real Estate
Adjusted EBITDA attributed to Vector were $89.2 million, compared
to $4.7 million for the nine months ended September 30, 2020.
For the last twelve months ended September 30, 2021, Real Estate
net income was $61.9 million and Real Estate Adjusted EBITDA were
$106.2 million.
For the third quarter of 2021, Douglas Elliman’s Adjusted EBITDA
(as described in Table 7 attached hereto) were $27.8 million,
compared to $14.1 million for the third quarter of 2020.
For the nine months ended September 30, 2021, Douglas Elliman’s
Adjusted EBITDA were $89.5 million, compared to $5.3 million for
the nine months ended September 30, 2020.
For the last twelve months ended September 30, 2021, Douglas
Elliman’s net income was $96.2 million and Douglas Elliman’s
Adjusted EBITDA were $106.2 million.
For the three and nine months ended September 30, 2021, Douglas
Elliman achieved closed sales of approximately $12.6 billion and
$37.2 billion, respectively, compared to $7.8 billion and $18.6
billion for the three and nine months ended September 30, 2020,
respectively. For the last twelve months ended September 30, 2021
and the year ended December 31, 2020, Douglas Elliman achieved
closed sales of approximately $47.7 billion and $29.1 billion,
respectively.
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income,
Tobacco Adjusted Operating Income, Tobacco Adjusted EBITDA, Real
Estate Segment (New Valley LLC) Adjusted EBITDA, Douglas Elliman
Adjusted EBITDA and financial measures for the last twelve months
(“LTM”) ended September 30, 2021 (“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 enhances 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 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. Attached hereto
as Tables 2 through 8 is information relating to the Company’s
Non-GAAP Financial Measures for the last twelve months ended
September 30, 2021 and the three and nine months ended September
30, 2021 and 2020.
Conference Call to Discuss Third Quarter 2021 Results
As previously announced, the Company will host a conference call
and webcast on Monday, November 8, 2021 at 5:00 PM (ET) to discuss
its third quarter 2021 results. Investors can access the call by
dialing 877-271-1828 and entering 43234619 as the conference ID
number. The call will also be available via live webcast at
https://www.webcaster4.com/Webcast/Page/2271/43402. Webcast
participants should allot extra time to register before the webcast
begins.
A replay of the call will be available shortly after the call
ends on November 8, 2021 through November 22, 2021. To access the
replay, dial 877-656-8905 and enter 43234619 as the conference ID
number. The archived webcast will also be available at
https://www.webcaster4.com/Webcast/Page/2271/43402 for one
year.
About Vector Group Ltd.
Vector Group is a holding company for Liggett Group LLC, Vector
Tobacco Inc., New Valley LLC, and Douglas Elliman Realty, 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 Facebook, Instagram,
LinkedIn, TikTok, Twitter, YouTube 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, including
statements regarding the current or anticipated impact of the
COVID-19 pandemic on our business, 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. In particular, the extent, duration and
severity of the spread of the COVID-19 pandemic and economic
consequences stemming from the COVID-19 crisis (including a
potential significant economic contraction) as well as related
risks and the impact of any of the foregoing on our business,
results of operations and liquidity could affect our future results
and cause actual results to differ materially from those expressed
in forward-looking statements.
Risks and uncertainties that could cause our actual results to
differ significantly from our current expectations are described in
our 2020 Annual Report on Form 10-K and in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2021. 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
(Dollars
in Thousands, Except Per Share Amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
(Unaudited)
(Unaudited)
Revenues:
Tobacco*
$
297,942
$
318,850
$
895,901
$
918,429
Real estate
354,704
228,981
1,030,038
529,650
Total revenues
652,646
547,831
1,925,939
1,448,079
Expenses:
Cost of sales:
Tobacco*
186,398
204,101
556,574
615,458
Real estate
260,692
170,474
754,468
374,625
Total cost of sales
447,090
374,575
1,311,042
990,083
Operating, selling, administrative and
general expenses
98,925
77,019
280,982
238,600
Litigation settlement and judgment
expense
12
—
17
53
Net gains on sales of assets
(910
)
—
(910
)
—
Impairments of goodwill and other
intangible assets
—
—
—
58,252
Restructuring charges
—
320
—
3,281
Operating income
107,529
95,917
334,808
157,810
Other income (expenses):
Interest expense
(28,287
)
(28,163
)
(85,153
)
(93,148
)
Loss on extinguishment of debt
—
—
(21,362
)
—
Change in fair value of derivatives
embedded within convertible debt
—
—
—
4,999
Equity in earnings from investments
44
1,840
1,562
54,199
Equity in (losses) earnings from real
estate ventures
(5,869
)
(8,536
)
12,405
(27,301
)
Other, net
(969
)
(5,096
)
7,363
(8,116
)
Income before provision for income
taxes
72,448
55,962
249,623
88,443
Income tax expense
23,679
17,823
75,592
27,761
Net income
48,769
38,139
174,031
60,682
Net loss attributed to non-controlling
interest
120
—
120
—
Net income attributed to Vector Group
Ltd.
$
48,889
$
38,139
$
174,151
$
60,682
Per basic common share:
Net income applicable to common share
attributed to Vector Group Ltd.
$
0.32
$
0.25
$
1.13
$
0.39
Per diluted common share:
Net income applicable to common share
attributed to Vector Group Ltd.
$
0.32
$
0.25
$
1.13
$
0.39
* Revenues and cost of sales include federal
excise taxes of $106,408, $120,320, $322,857 and $354,629 for the
three and nine months ended September 30, 2021 and 2020,
respectively.
TABLE 2
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Net income attributed to Vector Group
Ltd.
$
206,407
$
92,938
$
48,889
$
38,139
$
174,151
$
60,682
Interest expense
113,546
121,541
28,287
28,163
85,153
93,148
Income tax expense
89,608
41,777
23,679
17,823
75,592
27,761
Net loss attributed to non-controlling
interest
(120
)
—
(120
)
—
(120
)
—
Depreciation and amortization
16,626
17,629
4,062
4,346
12,330
13,333
EBITDA
$
426,067
$
273,885
$
104,797
$
88,471
$
347,106
$
194,924
Change in fair value of derivatives
embedded within convertible debt (a)
—
(4,999
)
—
—
—
(4,999
)
Equity in earnings from investments
(b)
(3,631
)
(56,268
)
(44
)
(1,840
)
(1,562
)
(54,199
)
Equity in losses (earnings) from real
estate ventures (c)
4,992
44,698
5,869
8,536
(12,405
)
27,301
Loss on extinguishment of debt
21,362
—
—
—
21,362
—
Stock-based compensation expense (d)
10,586
9,483
2,375
2,471
8,115
7,012
Litigation settlement and judgment expense
(e)
301
337
12
—
17
53
Impact of MSA settlement (f)
(2,709
)
299
—
286
(2,722
)
286
Restructuring charges (g)
101
3,382
—
320
—
3,281
Transaction expenses (h)
3,426
—
3,426
—
3,426
—
Net gains on sales of assets
(2,024
)
(1,114
)
(910
)
—
(910
)
—
Impairments of goodwill and other
intangible assets (i)
—
58,252
—
—
—
58,252
Other, net
(10,023
)
5,456
969
5,096
(7,363
)
8,116
Adjusted EBITDA attributed to Vector Group
Ltd.
$
448,448
$
333,411
$
116,494
$
103,340
$
355,064
$
240,027
Adjusted EBITDA Attributed to Vector
Group Ltd. by Segment
Tobacco
$
360,769
$
328,049
$
93,350
$
93,570
$
278,880
$
246,160
Real Estate (j)
106,239
21,782
27,098
13,337
89,168
4,711
Corporate and Other
(18,560
)
(16,420
)
(3,954
)
(3,567
)
(12,984
)
(10,844
)
Total
$
448,448
$
333,411
$
116,494
$
103,340
$
355,064
$
240,027
- Represents income recognized from changes in the fair value of
the derivatives embedded in the Company’s convertible debt.
- Represents equity in earnings recognized from investments that
the Company accounts for under the equity method. Included in the
amount are equity in earnings from Ladenburg Thalmann Financial
Services of $0 for the last twelve months ended September 30, 2021,
$53,424 for the year ended December 31, 2020, $372 for the three
months ended September 30, 2020 and $53,424 for the nine months
ended September 30, 2020.
- Represents equity in losses (earnings) recognized from the
Company’s investment in certain real estate businesses 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 product liability litigation in the
Company’s Tobacco segment.
- Represents the Company’s Tobacco segment’s settlement of
long-standing disputes related to the Master Settlement
Agreement.
- Represents restructuring charges related to Douglas Elliman
Realty, LLC’s realignment of administrative support functions,
office locations and business model.
- Transaction expenses include expenses incurred in connection
with the Company’s intended spin-off of its real estate brokerage
business and related property technology (“PropTech”) investments
into a standalone, publicly traded company.
- Represents non-cash intangible asset impairment charges in the
Company’s Real Estate segment related to the goodwill and trademark
of the Douglas Elliman Realty, LLC reporting unit.
- Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of
$106,178 for the last twelve months ended September 30, 2021,
$22,054 for the year ended December 31, 2020, $27,824, $14,089,
$89,455 and $5,331 for the three and nine months ended September
30, 2021 and 2020, respectively.
TABLE 3
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET
INCOME
(Unaudited)
(Dollars
in Thousands, Except Per Share Amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net income attributed to Vector Group
Ltd.
$
48,889
$
38,139
$
174,151
$
60,682
Change in fair value of derivatives
embedded within convertible debt
—
—
—
(4,999
)
Non-cash amortization of debt discount on
convertible debt
—
—
—
5,276
Loss on extinguishment of debt
—
—
21,362
—
Litigation settlement and judgment expense
(a)
12
—
17
53
Impact of MSA settlement (b)
—
286
(2,722
)
286
Impact of net interest expense capitalized
to real estate ventures
702
(35
)
(167
)
3,015
Adjustment for derivative associated with
acquisition of 29.41% of Douglas Elliman Realty, LLC
(271
)
(252
)
3,252
(2,083
)
Restructuring charges (c)
—
320
—
3,281
Transaction expenses (d)
3,426
—
3,426
—
Impairments of goodwill and other
intangible assets (e)
—
—
—
58,252
Total adjustments
3,869
319
25,168
63,081
Tax benefit (expense) related to
adjustments
(192
)
(154
)
(4,990
)
(16,848
)
Adjusted Net Income attributed to Vector
Group Ltd.
$
52,566
$
38,304
$
194,329
$
106,915
Per diluted common share:
Adjusted Net Income applicable to common
shares attributed to Vector Group Ltd.
$
0.34
$
0.25
$
1.26
$
0.70
- Represents accruals for product liability litigation in the
Company’s Tobacco segment.
- Represents the Company’s Tobacco segment’s settlement of
long-standing disputes related to the Master Settlement
Agreement.
- Represents restructuring charges related to Douglas Elliman
Realty, LLC’s realignment of administrative support functions,
office locations and business model.
- Transaction expenses include expenses incurred in connection
with the Company’s intended spin-off of its real estate brokerage
business and related PropTech investments into a standalone,
publicly traded company.
- Represents non-cash intangible asset impairment charges in the
Company’s Real Estate segment related to the goodwill and trademark
of the Douglas Elliman Realty, LLC reporting unit.
TABLE 4
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Operating income
$
422,141
$
245,143
$
107,529
$
95,917
$
334,808
$
157,810
Litigation settlement and judgment expense
(a)
301
337
12
—
17
53
Restructuring charges (b)
101
3,382
—
320
—
3,281
Transaction expenses (c)
3,426
—
3,426
—
3,426
—
Impact of MSA settlement (d)
(2,709
)
299
—
286
(2,722
)
286
Net gains on sales of assets
(2,024
)
(1,114
)
(910
)
—
(910
)
—
Impairments of goodwill and other
intangible assets (e)
—
58,252
—
—
—
58,252
Total adjustments
(905
)
61,156
2,528
606
(189
)
61,872
Adjusted Operating Income
$
421,236
$
306,299
$
110,057
$
96,523
$
334,619
$
219,682
- Represents accruals for product liability litigation in the
Company’s Tobacco segment.
- Represents restructuring charges related to Douglas Elliman
Realty, LLC’s realignment of administrative support functions,
office locations and business model.
- Transaction expenses include expenses incurred in connection
with the Company’s intended spin-off of its real estate brokerage
business and related PropTech investments into a standalone,
publicly traded company.
- Represents the Company’s Tobacco segment’s settlement of
long-standing disputes related to the Master Settlement
Agreement.
- Represents non-cash intangible asset impairment charges in the
Company’s Real Estate segment related to the goodwill and trademark
of the Douglas Elliman Realty, LLC reporting unit.
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
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Tobacco Adjusted Operating
Income:
Operating income from Tobacco
segment
$
356,279
$
319,536
$
91,779
$
91,319
$
276,557
$
239,814
Litigation settlement and
judgment expense (a)
301
337
12
—
17
53
Impact of MSA settlement (b)
(2,709
)
299
—
286
(2,722
)
286
Total adjustments
(2,408
)
636
12
286
(2,705
)
339
Tobacco Adjusted Operating
Income
$
353,871
$
320,172
$
91,791
$
91,605
$
273,852
$
240,153
LTM
Year Ended
Three Months Ended
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Tobacco Adjusted
EBITDA:
Operating income from Tobacco
segment
$
356,279
$
319,536
$
91,779
$
91,319
$
276,557
$
239,814
Litigation settlement and
judgment expense (a)
301
337
12
—
17
53
Impact of MSA settlement (b)
(2,709
)
299
—
286
(2,722
)
286
Total adjustments
(2,408
)
636
12
286
(2,705
)
339
Tobacco Adjusted Operating
Income
353,871
320,172
91,791
91,605
273,852
240,153
Depreciation and amortization
6,877
7,877
1,550
1,965
5,007
6,007
Stock-based compensation
expense
21
—
9
—
21
—
Total adjustments
6,898
7,877
1,559
1,965
5,028
6,007
Tobacco Adjusted EBITDA
$
360,769
$
328,049
$
93,350
$
93,570
$
278,880
$
246,160
- Represents accruals for product liability litigation in the
Company’s Tobacco segment.
- Represents the Company’s Tobacco segment’s settlement of
long-standing disputes related to the Master Settlement
Agreement.
TABLE 6
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF REAL ESTATE
SEGMENT (NEW VALLEY LLC) ADJUSTED EBITDA
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Net income (loss) attributed to Vector
Group Ltd. from subsidiary non-guarantors (a)
$
61,942
$
(75,910
)
$
15,486
$
(4,053
)
$
66,950
$
(70,902
)
Interest expense (a)
165
268
61
17
136
239
Income tax expense (benefit) (a)
23,313
(27,674
)
3,800
(1,634
)
25,015
(25,972
)
Net loss attributed to non-controlling
interest (a)
(120
)
—
(120
)
—
(120
)
—
Depreciation and amortization
9,465
8,874
2,493
2,167
7,269
6,678
EBITDA
$
94,765
$
(94,442
)
$
21,720
$
(3,503
)
$
99,250
$
(89,957
)
(Income) loss from non-guarantors other
than New Valley LLC
(549
)
45
(200
)
17
(533
)
61
Equity in losses (earnings) from real
estate ventures (b)
4,992
44,698
5,869
8,536
(12,405
)
27,301
Restructuring charges (c)
101
3,382
—
320
—
3,281
Loss on sale of asset
1,169
1,169
—
—
—
—
Impairments of goodwill and other
intangible assets (d)
—
58,252
—
—
—
58,252
Other, net
5,701
8,575
(314
)
7,967
2,811
5,685
Adjusted EBITDA attributed to New Valley
LLC
$
106,179
$
21,679
$
27,075
$
13,337
$
89,123
$
4,623
Adjusted EBITDA Attributed to New Valley
LLC by Segment
Real Estate (e)
$
106,239
$
21,782
$
27,098
$
13,337
$
89,168
$
4,711
Corporate and Other
(60
)
(103
)
(23
)
—
(45
)
(88
)
Total (f)
$
106,179
$
21,679
$
27,075
$
13,337
$
89,123
$
4,623
- Amounts are derived from Vector Group Ltd.’s Condensed
Consolidated Financial Statements. See Exhibit 99.2 “Condensed
Consolidating Financial Information” contained in Vector Group
Ltd.’s Form 10-K for the period ended December 31, 2020, Form 10-Q
for the period ended September 30, 2021 and Form 10-Q for the
period ended September 30, 2020.
- Represents equity in losses (earnings) recognized from the
Company’s investment in certain real estate businesses that are
accounted for under the equity method and are not consolidated in
the Company’s financial results.
- Represents restructuring charges related to Douglas Elliman
Realty, LLC’s realignment of administrative support functions,
office locations and business model.
- Represents non-cash intangible asset impairment charges in the
Company’s Real Estate segment related to the goodwill and trademark
of the Douglas Elliman Realty, LLC reporting unit.
- Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of
$106,178 for the last twelve months ended September 30, 2021,
$22,054 for the year ended December 31, 2020, $27,824, $14,089,
$89,455 and $5,331 for the three and nine months ended September
30, 2021 and 2020, respectively.
- New Valley’s Adjusted EBITDA does not include an allocation of
Vector Group Ltd.’s “Corporate and Other” segment expenses (for
purposes of computing Adjusted EBITDA contained in Table 2 of this
press release) of $18,560 for the last twelve months ended
September 30, 2021, $16,420 for the year ended December 31, 2020,
$3,954, $3,567, $12,984 and $10,844 for the three and nine months
ended September 30, 2021 and 2020, respectively.
TABLE 7
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF DOUGLAS
ELLIMAN REALTY, LLC ADJUSTED EBITDA
ATTRIBUTED TO REAL ESTATE
SEGMENT
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Three Months Ended
Nine Months Ended
September 30,
December 31,
September 30,
September 30,
2021
2020
2021
2020
2021
2020
Net income (loss) attributed to Douglas
Elliman Realty, LLC
$
96,196
$
(48,210
)
$
25,078
$
11,838
$
82,162
$
(62,244
)
Interest expense
25
1
22
—
25
1
Income tax expense (benefit)
1,602
(5
)
597
(179
)
1,430
(177
)
Depreciation and amortization
8,541
8,537
2,189
2,093
6,409
6,405
Douglas Elliman Realty, LLC EBITDA
$
106,364
$
(39,677
)
$
27,886
$
13,752
$
90,026
$
(56,015
)
Equity in earnings from real estate
ventures (a)
(79
)
(30
)
—
(3
)
(75
)
(26
)
Restructuring charges (b)
101
3,382
—
320
—
3,281
Loss on sale of asset
1,169
1,169
—
—
—
—
Impairments of goodwill and other
intangible assets (c)
—
58,252
—
—
—
58,252
Other, net
(1,377
)
(1,042
)
(62
)
20
(496
)
(161
)
Douglas Elliman Realty, LLC Adjusted
EBITDA attributed to Real Estate Segment
$
106,178
$
22,054
$
27,824
$
14,089
$
89,455
$
5,331
- Represents equity in earnings recognized from the Company’s
investment in certain real estate businesses that are accounted for
under the equity method and are not consolidated in the Company’s
financial results.
- Represents restructuring charges related to Douglas Elliman
Realty, LLC’s realignment of administrative support functions,
office locations and business model.
- Represents non-cash intangible asset impairment charges related
to the goodwill and trademark of Douglas Elliman Realty, LLC.
TABLE 8
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF
REVENUES
(Unaudited)
(Dollars
in Thousands)
LTM
Year Ended
Nine Months Ended
September 30,
December 31,
September 30,
2021
2020
2021
2020
Revenues:
Tobacco (a)
$
1,181,973
$
1,204,501
$
895,901
$
918,429
Real estate (b)
1,298,556
798,168
1,030,038
529,650
Total revenues
$
2,480,529
$
2,002,669
$
1,925,939
$
1,448,079
- Tobacco segment revenues include federal excise taxes of
$429,760, $461,532, $322,857 and $354,629 for the last twelve
months ended September 30, 2021, the year ended December 31, 2020
and the nine months ended September 30, 2021 and 2020,
respectively.
- Real Estate segment revenues include revenues from Douglas
Elliman of $1,286,373, $773,987, $1,018,912 and $506,526 for the
last twelve months ended September 30, 2021, the year ended
December 31, 2020 and the nine months ended September 30, 2021 and
2020, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108006103/en/
Emily Claffey/Benjamin Spicehandler Sard Verbinnen & Co
212-687-8080
Eve Young Sard Verbinnen & Co - Europe +44 (0)20 3178
8914
J. Bryant Kirkland III, Vector Group Ltd. 305-579-8000
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