UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2007
VECTOR GROUP LTD.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
(State or Other Jurisdiction of Incorporation)
| 1-5759 | 65-0949535 | |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
| 100 S.E. Second Street, Miami, Florida | 33131 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(305) 579-8000
(Registrant’s Telephone Number, Including Area Code)
(Registrant’s Telephone Number, Including Area Code)
(Not Applicable)
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
On November 8, 2007, Vector Group Ltd. announced its financial results for the nine months
ended September 30, 2007. The full text of the press release issued in connection with the
announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K and the Exhibit attached hereto is being
furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange
Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibit
(c) Exhibit.
| Exhibit No. | Exhibit | |||
| 99.1 | Press Release issued November 8, 2007 |
|||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| VECTOR GROUP LTD. |
||||
| By: | /s/ J. Bryant Kirkland III | |||
| J. Bryant Kirkland III | ||||
| Vice President and Chief Financial Officer | ||||
Date: November 8, 2007
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Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
|
Carrie Bloom/Jonathan Doorley | |
| Sard Verbinnen & Co | ||
| 212-687-8080 | ||
| cbloom@sardverb.com |
VECTOR GROUP REPORTS THIRD QUARTER 2007 FINANCIAL RESULTS
MIAMI, FL, November 8, 2007 — Vector Group Ltd. (NYSE: VGR) today announced
financial results for the three and nine months ended September 30, 2007.
Third quarter 2007 revenues were $136.1 million, compared to revenues of $137.7 million in the
third quarter of 2006. The Company recorded operating income of $33.7 million in the 2007 third
quarter, compared to operating income of $25.7 million in the third quarter of 2006. Net income
for the 2007 third quarter was $15.1 million, or $0.23 per diluted common share, compared to $19.6
million, or $0.30 per diluted common share, in the 2006 third quarter. The results for the three
months ended September 30, 2006 included an $11.5 million decrease in reported income tax expense
due to the reduction of the Company’s previously established reserves as a result of its July 2006
settlement with the Internal Revenue Service. Adjusting for the $11.5 million reduction in income
tax expense, the Company’s net income for the 2006 third quarter would have been $8.1 million, or
$0.13 per diluted common share.
For the nine months ended September 30, 2007, revenues were $410.3 million, compared to $368.7
million for the first nine months of 2006. The Company recorded operating income of $88.6 million
for the 2007 nine-month period, compared to operating income of $68.4 million for the 2006 period.
Net income for the 2007 nine-month period was $59.6 million, or $0.91 per diluted common share,
compared to net income of $26.9 million, or $0.43 per diluted common share, for the 2006 period.
The results for the nine months ended September 30, 2007 included a $19.6 million pre-tax gain
associated with the Company’s previously announced NASA litigation settlement and an $8.1 million
pre-tax gain related to the exchange of notes receivable from Ladenburg Thalmann Financial Services
Inc. Adjusting for these gains, the Company’s net income for the nine months ended September 30,
2007 would have been $43.2 million, or $0.66 per diluted common share. The results for the nine
months ended September 30, 2006 included the debt conversion expense of $14.9 million associated
with the issuance in June 2006 of
additional shares of common stock in connection with the conversion of $70 million of the Company’s
6.25% convertible notes due 2008 and the $11.5 million decrease in reported income tax expense as a
result of the Internal Revenue Service settlement. Adjusting for this debt conversion expense and
the adjustment to income tax expense, net income for the first nine months of 2006 would have been
$30.3 million or $0.49 per diluted common share.
For the three and nine months ended September 30, 2007, the Company’s conventional cigarette
business, which includes Liggett Group cigarettes and USA brand cigarettes, had revenues of $135.2
million and $407.3 million, respectively, compared to $135.9 million and $363.3 million for the
three and nine months ended September 30, 2006, respectively. Operating income was $40.4 million
for the third quarter of 2007 and $113.4 million for the first nine months of 2007, compared to
$34.6 million and $95.9 million for the three and nine months ended September 30, 2006,
respectively.
Conference Call To Discuss Third Quarter 2007 Results
As previously announced, the Company will host a conference call and webcast on
Friday, November 9, 2007 at 11:00 A.M. (ET) to discuss third quarter 2007 results. Investors can
access the call by dialing 800-859-8150 and entering 83856289 as the conference ID number. The
call will also be available via live webcast at www.vcall.com
A replay of the call will also be available shortly after the call ends on November 9, 2007
through November 23, 2007. To access the replay, dial 877-656-8905 and enter 83856289 as the
conference ID number. The archived webcast will also be available at www.vcall.com for 30
days.
Vector Group is a holding company that indirectly owns Liggett Group LLC, Vector Tobacco Inc.
and New Valley LLC. Additional information concerning the company is available on the company’s
website, www.VectorGroupLtd.com.
[Financial Table Follows]
# # #
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VECTOR GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenues* |
$ | 136,053 | $ | 137,665 | $ | 410,296 | $ | 368,724 | ||||||||
Expenses: |
||||||||||||||||
Cost of goods sold* |
80,182 | 88,329 | 252,089 | 230,974 | ||||||||||||
Operating, selling, administrative and general expenses |
22,164 | 23,635 | 69,597 | 69,362 | ||||||||||||
Operating income |
33,707 | 25,701 | 88,610 | 68,388 | ||||||||||||
Other income (expenses): |
||||||||||||||||
Interest and dividend income |
2,445 | 2,281 | 5,862 | 6,383 | ||||||||||||
Interest expense |
(12,113 | ) | (10,779 | ) | (30,767 | ) | (27,795 | ) | ||||||||
Changes in fair value of derivatives embedded within
convertible debt |
(6,331 | ) | (3,464 | ) | (4,215 | ) | (1,225 | ) | ||||||||
Loss on extinguishment of debt |
— | (1,306 | ) | — | (16,166 | ) | ||||||||||
Gain on sale of investments, net |
— | 1,433 | — | 1,386 | ||||||||||||
Provision for loss on investments |
(58 | ) | — | (1,216 | ) | — | ||||||||||
Gain from exchange of LTS notes |
— | — | 8,121 | — | ||||||||||||
Equity income from non-consolidated real
estate businesses |
6,589 | 2,121 | 15,926 | 9,726 | ||||||||||||
Income from lawsuit settlement |
— | — | 20,000 | — | ||||||||||||
Other, net |
(6 | ) | 81 | (42 | ) | 158 | ||||||||||
Income before provision for income taxes |
24,233 | 16,068 | 102,279 | 40,855 | ||||||||||||
Income tax expense (benefit) |
9,169 | (3,550 | ) | 42,707 | 13,934 | |||||||||||
Net income |
$ | 15,064 | $ | 19,618 | $ | 59,572 | $ | 26,921 | ||||||||
Per basic common share: |
||||||||||||||||
Net income applicable to common shares |
$ | 0.24 | $ | 0.31 | $ | 0.94 | $ | 0.45 | ||||||||
Per diluted common share: |
||||||||||||||||
Net income applicable to common shares |
$ | 0.23 | $ | 0.30 | $ | 0.91 | $ | 0.43 | ||||||||
Cash distributions and dividends declared per share |
$ | 0.38 | $ | 0.36 | $ | 1.14 | $ | 1.09 | ||||||||
| * | Revenues and cost of goods sold include excise taxes of $43,025, $48,153, $132,305 and $127,956, respectively. |
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