Vector Group Reports First Quarter 2021 Financial Results
Vector Group Ltd. (NYSE:VGR) reported strong financial results for Q1 2021, with revenues of $543.8 million, up from $454.5 million in Q1 2020. The company achieved an operating income of $90.2 million, compared to an operating loss last year. Net income reached $32.0 million, or $0.20 per diluted share, reversing a net loss of $3.2 million in Q1 2020. The tobacco segment saw revenues drop to $268.5 million, while the real estate segment surged to $275.3 million, with Douglas Elliman alone generating $272.8 million. The company maintained solid liquidity with $382 million in cash.
- Revenues increased by 19.6% year-over-year to $543.8 million.
- Operating income turned positive at $90.2 million compared to an operating loss last year.
- Net income was $32.0 million, or $0.20 per diluted share, compared to a loss in Q1 2020.
- Real estate segment revenues surged to $275.3 million, showing strong growth.
- Tobacco segment revenues declined to $268.5 million from $287.1 million year-over-year.
- Liggett's retail market share decreased to 4.18% from 4.28% in Q1 2020.
- Tobacco segment wholesale shipments fell by 13.9% compared to the prior year.
Vector Group Ltd. (NYSE:VGR) today announced financial results for the three months ended March 31, 2021.
“Vector achieved strong earnings performance in the first quarter in our tobacco and real estate businesses, a testament to our team’s hard work and our commitment to creating long-term stockholder value,” said Howard M. Lorber, President and Chief Executive Officer of Vector Group Ltd.
“Our Liggett subsidiary continues to successfully execute its market strategy and our Douglas Elliman real estate business saw continued and robust closed sales activity. We are encouraged by Douglas Elliman’s
GAAP Financial Results
First quarter 2021 revenues were
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
Three months ended March 31, 2021 compared to the three months ended March 31, 2020
Adjusted EBITDA attributed to Vector (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
Vector maintained significant liquidity at March 31, 2021 with cash and cash equivalents of
Vector continued its longstanding history of paying a quarterly cash dividend in the first quarter of 2021. Vector returned
Tobacco Segment Financial Results
For the first quarter of 2021, 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 first quarter of 2021 was
For the three months ended March 31, 2021, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 1.94 billion units, compared to 2.25 billion units for the first quarter of 2020.
Liggett’s retail market share declined to
Real Estate Segment Financial Results
For the first quarter of 2021, the Real Estate segment had revenues of
Douglas Elliman’s results are included in Vector’s Real Estate segment. For the first quarter of 2021, Douglas Elliman had revenues of
Results for the first quarter of 2020 for the Real Estate segment and Douglas Elliman included non-cash impairment charges of
Non-GAAP Financial Measures
For the first quarter of 2021, Real Estate Adjusted EBITDA attributed to Vector (as described in Table 6 attached hereto) were
For the first quarter of 2021, Douglas Elliman’s Adjusted EBITDA (as described in Table 7 attached hereto) were
For the three months ended March 31, 2021, Douglas Elliman achieved closed sales of approximately
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, Tobacco Adjusted Operating Income, Tobacco Adjusted EBITDA, New Valley Adjusted EBITDA and Douglas Elliman 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 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 7 is information relating to the Company’s Non-GAAP Financial Measures for the three months ended March 31, 2021 and 2020.
Conference Call to Discuss First Quarter 2021 Results
As previously announced, Vector will host a conference call and webcast on Thursday, May 6, 2021 at 8:30AM (ET) to discuss its first quarter 2021 results. Investors can access the call by dialing 877-271-1828 and entering 67447259 as the conference ID number. The call will also be available via live webcast at https://www.webcaster4.com/Webcast/Page/2271/40796. 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 May 6, 2021 through May 20, 2021. To access the replay, dial 877-656-8905 and enter 67447259 as the conference ID number. The archived webcast will also be available at https://www.webcaster4.com/Webcast/Page/2271/40796 for one year.
About Vector Group Ltd.
Vector Group Ltd. 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 at 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 our 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,” “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 March 31, 2021. We undertake no responsibility to publicly update or revise any forward-looking statement except as required by applicable law.
TABLE 1 |
|||||||
VECTOR GROUP LTD. AND SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Dollars in Thousands, Except Per Share Amounts) |
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
|
(Unaudited) |
||||||
Revenues: |
|
|
|
||||
Tobacco* |
$ |
268,463 |
|
|
$ |
287,069 |
|
Real estate |
275,301 |
|
|
167,419 |
|
||
Total revenues |
543,764 |
|
|
454,488 |
|
||
|
|
|
|
||||
Expenses: |
|
|
|
||||
Cost of sales: |
|
|
|
||||
Tobacco* |
164,031 |
|
|
197,290 |
|
||
Real estate |
199,511 |
|
|
113,333 |
|
||
Total cost of sales |
363,542 |
|
|
310,623 |
|
||
|
|
|
|
||||
Operating, selling, administrative and general expenses |
90,014 |
|
|
90,517 |
|
||
Litigation settlement and judgment expense |
5 |
|
|
— |
|
||
Impairments of goodwill and other intangible assets |
— |
|
|
58,252 |
|
||
Operating income (loss) |
90,203 |
|
|
(4,904 |
) |
||
|
|
|
|
||||
Other income (expenses): |
|
|
|
||||
Interest expense |
(28,751 |
) |
|
(35,627 |
) |
||
Loss on extinguishment of debt |
(21,362 |
) |
|
— |
|
||
Change in fair value of derivatives embedded within convertible debt |
— |
|
|
3,330 |
|
||
Equity in earnings from investments |
577 |
|
|
50,152 |
|
||
Equity in earnings (losses) from real estate ventures |
1,589 |
|
|
(6,505 |
) |
||
Other, net |
2,754 |
|
|
(10,655 |
) |
||
Income (loss) before provision for income taxes |
45,010 |
|
|
(4,209 |
) |
||
Income tax expense (benefit) |
13,053 |
|
|
(978 |
) |
||
|
|
|
|
||||
Net income (loss) |
31,957 |
|
|
(3,231 |
) |
||
|
|
|
|
||||
Net loss (income) attributed to non-controlling interest |
— |
|
|
— |
|
||
|
|
|
|
||||
Net income (loss) attributed to Vector Group Ltd. |
$ |
31,957 |
|
|
$ |
(3,231 |
) |
|
|
|
|
||||
Per basic common share: |
|
|
|
||||
|
|
|
|
||||
Net income (loss) applicable to common share attributed to Vector Group Ltd. |
$ |
0.20 |
|
|
$ |
(0.03 |
) |
|
|
|
|
||||
Per diluted common share: |
|
|
|
||||
|
|
|
|
||||
Net income (loss) applicable to common share attributed to Vector Group Ltd. |
$ |
0.20 |
|
|
$ |
(0.03 |
) |
* Revenues and cost of sales include federal excise taxes of
TABLE 2 |
|||||||||||
VECTOR GROUP LTD. AND SUBSIDIARIES |
|||||||||||
RECONCILIATION OF ADJUSTED EBITDA |
|||||||||||
(Unaudited) |
|||||||||||
(Dollars in Thousands) |
|||||||||||
|
LTM |
|
Three Months Ended |
||||||||
|
March 31, |
|
March 31, |
||||||||
|
2021 |
|
2021 |
|
2020 |
||||||
|
|
|
|
||||||||
Net income (loss) attributed to Vector Group Ltd. |
$ |
128,126 |
|
|
$ |
31,957 |
|
|
$ |
(3,231 |
) |
Interest expense |
114,665 |
|
|
28,751 |
|
|
35,627 |
|
|||
Income tax expense (benefit) |
55,808 |
|
|
13,053 |
|
|
(978 |
) |
|||
Depreciation and amortization |
17,233 |
|
|
4,179 |
|
|
4,575 |
|
|||
EBITDA |
$ |
315,832 |
|
|
$ |
77,940 |
|
|
$ |
35,993 |
|
Change in fair value of derivatives embedded within convertible debt (a) |
(1,669 |
) |
|
— |
|
|
(3,330 |
) |
|||
Equity in earnings from investments (b) |
(6,693 |
) |
|
(577 |
) |
|
(50,152 |
) |
|||
Equity in losses (earnings) from real estate ventures (c) |
36,604 |
|
|
(1,589 |
) |
|
6,505 |
|
|||
Loss on extinguishment of debt |
21,362 |
|
|
21,362 |
|
|
— |
|
|||
Stock-based compensation expense (d) |
9,885 |
|
|
2,660 |
|
|
2,258 |
|
|||
Litigation settlement and judgment expense (e) |
342 |
|
|
5 |
|
|
— |
|
|||
Impact of MSA settlement (f) |
(2,423 |
) |
|
(2,722 |
) |
|
— |
|
|||
Restructuring charges (g) |
3,382 |
|
|
— |
|
|
— |
|
|||
Net gains on sales of assets |
(1,114 |
) |
|
— |
|
|
— |
|
|||
Impairments of goodwill and other intangible assets (h) |
— |
|
|
— |
|
|
58,252 |
|
|||
Other, net |
(7,953 |
) |
|
(2,754 |
) |
|
10,655 |
|
|||
Adjusted EBITDA attributed to Vector Group Ltd. |
$ |
367,555 |
|
|
$ |
94,325 |
|
|
$ |
60,181 |
|
|
|
|
|
|
|
||||||
Adjusted EBITDA Attributed to Vector Group Ltd. by Segment |
|
|
|
|
|
||||||
Tobacco |
$ |
337,466 |
|
|
$ |
80,645 |
|
|
$ |
71,228 |
|
Real Estate (i) |
46,174 |
|
|
17,482 |
|
|
(6,910 |
) |
|||
Corporate and Other |
(16,085 |
) |
|
(3,802 |
) |
|
(4,137 |
) |
|||
Total |
$ |
367,555 |
|
|
$ |
94,325 |
|
|
$ |
60,181 |
|
| ____________________ | ||||
a. |
Represents income recognized from changes in the fair value of the derivatives embedded in the Company’s convertible debt. |
|||
b. |
Represents equity in earnings recognized from investments that the Company accounts for under the equity method. Included in the amount are equity in earnings of |
|||
c. |
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. |
|||
d. |
Represents amortization of stock-based compensation. |
|||
e. |
Represents accruals for product liability litigation in the Company’s tobacco segment. |
|||
f. |
Represents the Company’s tobacco segment’s settlement of long-standing disputes related to the Master Settlement Agreement. |
|||
g. |
Represents restructuring charges related to Douglas Elliman Realty, LLC’s realignment of administrative support functions, office locations and business model. |
|||
h. |
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. |
|||
i. |
Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of |
|||
TABLE 3 |
|||||||
VECTOR GROUP LTD. AND SUBSIDIARIES |
|||||||
RECONCILIATION OF ADJUSTED NET INCOME |
|||||||
(Unaudited) |
|||||||
(Dollars in Thousands, Except Per Share Amounts) |
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
|
|
||||||
Net income (loss) attributed to Vector Group Ltd. |
$ |
31,957 |
|
|
$ |
(3,231 |
) |
|
|
|
|
||||
Change in fair value of derivatives embedded within convertible debt |
— |
|
|
(3,330 |
) |
||
Non-cash amortization of debt discount on convertible debt |
— |
|
|
4,517 |
|
||
Loss on extinguishment of debt |
21,362 |
|
|
— |
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FAQ
What were Vector Group's financial results for Q1 2021?
Vector Group reported revenues of $543.8 million in Q1 2021, showing a 19.6% increase from $454.5 million in Q1 2020.
How much net income did Vector Group achieve in Q1 2021?
Vector Group posted a net income of $32.0 million, or $0.20 per diluted share, in Q1 2021.
What were the tobacco segment revenues for Vector Group in Q1 2021?
The tobacco segment's revenues were $268.5 million in Q1 2021, down from $287.1 million a year prior.
How did Douglas Elliman perform in Q1 2021?
Douglas Elliman generated $272.8 million in revenues for Q1 2021, compared to $165.6 million in the same period last year.
What is Vector Group's stock symbol?
Vector Group trades under the stock symbol 'VGR' on the NYSE.
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