UNITED STATES
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
Date of Report (Date of earliest event reported): February 23, 2012
VECTOR GROUP LTD.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(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 | 33,131 | |
(Address of Principal Executive Offices) | (Zip Code) | |
(305) 579-8000
(Registrant’s Telephone Number, Including Area Code)
(Not Applicable)
(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 February 23, 2012, Vector Group Ltd. announced its financial results for the year ended December 31, 2011. 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 February 23, 2012 | ||
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, Treasurer and Chief Financial Officer | ||||
Date: February 23, 2012
Exhibit 99.1
FOR IMMEDIATE RELEASE | ||||
Contact: | Paul Caminiti/Carrie Bloom/Jonathan Doorley | |||
Sard Verbinnen & Co | ||||
212-687-8080 | ||||
VECTOR GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2011
FINANCIAL RESULTS
MIAMI, FL, February 23, 2012 — Vector Group Ltd. (NYSE: VGR) today announced financial results for the fourth quarter and year ended December 31, 2011.
For the year ended December 31, 2011, revenues were $1.133 billion, compared to $1.063 billion for 2010. The increase in revenues in 2011 was primarily due to increased unit sales of approximately 2.7% in 2011 compared to 2010 and increased prices in 2011. The Company recorded operating income of $143.3 million for 2011, compared to operating income of $111.3 million for 2010. Net income for 2011 was $75.0 million, or $0.93 per diluted common share, compared to net income of $54.1 million, or $0.67 per diluted common share, for 2010. The results for 2011 included pre-tax gains from the liquidation of long-term investments of $25.8 million, changes in the fair value of derivatives embedded within convertible debt of $8.0 million and the sales of townhomes of $3.8 million offset by a loss on extinguishment of debt of $1.2 million. Adjusting for these items, net income for the year ended December 31, 2011 was $53.3 million or $0.66 per diluted share. The results for 2010 included pre-tax charges of $16.2 million related to litigation judgment expense and another $3.0 million settlement charge and $11.5 million of pre-tax gains from changes in fair value of derivatives embedded within convertible debt. Adjusting for these items, the Company’s operating income for 2010 would have been $130.5 million and the Company’s net income for 2010 would have been $58.7 million, or $0.73 per diluted common share.
Fourth quarter 2011 revenues were $292.8 million, compared to fourth quarter 2010 revenues of $277.6 million. The increase in revenues in 2011 was primarily due to increased prices in 2011 as unit sales declined by 0.4%. The Company recorded operating income of $36.0 million in the 2011 fourth quarter, compared to operating income of $29.3 million in the fourth quarter of 2010. Net income for the 2011 fourth quarter was $7.8 million, or $0.10 per diluted common share, compared to net income of $12.0 million, or $0.15 per diluted common share, in the 2010 fourth quarter. The results for the three months ended December 31, 2011 included pre-tax charges from changes in the fair value of derivatives embedded within convertible debt of $5.3 million. Adjusting for these items, net income for the three months ended December 31, 2011 was $11.1 million or $0.14 per diluted share. The results for the three months ended December 31, 2010 included a $1.8 million pre-tax settlement charge and $1.2 million of pre-tax charges from changes in fair value of derivatives embedded within convertible debt. Adjusting for these items, the Company’s operating income for the 2010 fourth quarter would have been $31.1 million and the Company’s net income for the 2010 fourth quarter would have been $13.9 million, or $0.17 per diluted common share.
For the three months and year ended December 31, 2011, the Company’s tobacco segment had revenues of $292.8 million and $1.133 billion, respectively, compared to $277.6 million and $1.063 billion for the three months and full year ended December 31, 2010, respectively. Operating income was $43.1 million and $164.6 million for the three and twelve months ended December 31, 2011, compared to $33.7 million and $130.2 million for the three and twelve months ended December 31, 2010, respectively. Adjusting for the litigation judgment and settlement charges, operating income for the three and twelve months ended December 31, 2010 was $35.5 million and $149.3 million, respectively.
Conference Call to Discuss Fourth Quarter and Full Year 2011 Results
As previously announced, the Company will host a conference call and webcast on Friday, February 24, 2012 at 11:00 A.M. (ET) to discuss fourth quarter and full year 2011 results. Investors can access the call by dialing 800-859-8150 and entering 96930932 as the conference ID number. The call will also be available via live webcast at www.investorcalendar.com.
A replay of the call will be available shortly after the call ends on February 24, 2012 through March 9, 2012. To access the replay, dial 877-656-8905 and enter 96930932 as the conference ID number. The archived webcast will also be available at www.investorcalendar.com for 30 days.
Vector Group is a holding company that indirectly owns Liggett Group LLC and Vector Tobacco Inc. and directly owns New Valley LLC. Additional information concerning the company is available on the company’s website, www.VectorGroupLtd.com.
[Financial Table Follows]
# # #
VECTOR GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Three Months ended December 31, | Twelve Months ended December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues* | $ | 292,827 | $ | 277,618 | $ | 1,133,380 | $ | 1,063,289 | ||||||||
Expenses: | ||||||||||||||||
Cost of goods sold* | 228,770 | 225,041 | 892,883 | 845,106 | ||||||||||||
Operating, selling, administrative and general expenses | 28,034 | 21,435 | 97,176 | 90,709 | ||||||||||||
Litigation judgment expense | — | 1,800 | — | 16,161 | ||||||||||||
Operating income | 36,023 | 29,342 | 143,321 | 111,313 | ||||||||||||
Other income (expenses): | ||||||||||||||||
Interest expense | (25,275 | ) | (23,010 | ) | (100,706 | ) | (84,096 | ) | ||||||||
Changes in fair value of derivatives embedded within convertible debt | (5,264 | ) | (1,211 | ) | 7,984 | 11,524 | ||||||||||
Loss on extinguishment of debt | — | — | (1,217 | ) | — | |||||||||||
Gain on liquidation of long-term investments | — | — | 25,832 | — | ||||||||||||
Equity (loss) income on long-term investments | 231 | (845 | ) | (859 | ) | 1,489 | ||||||||||
Gain on sales of investment securities available for sale | 2,699 | 8,050 | 23,257 | 19,869 | ||||||||||||
Equity income from non-consolidated real estate businesses | 2,369 | 5,125 | 19,966 | 23,963 | ||||||||||||
Gain on townhomes | 121 | — | 3,843 | — | ||||||||||||
Other, net | 1,385 | 1,121 | 1,736 | 1,508 | ||||||||||||
Income before provision for income taxes | 12,289 | 18,572 | 123,157 | 85,570 | ||||||||||||
Income tax expense | (4,492 | ) | (6,556 | ) | (48,137 | ) | (31,486 | ) | ||||||||
Net income | $ | 7,797 | $ | 12,016 | $ | 75,020 | $ | 54,084 | ||||||||
Per basic common share: | ||||||||||||||||
Net income applicable to common shares | $ | 0.10 | $ | 0.16 | $ | 0.93 | $ | 0.68 | ||||||||
Per diluted common share: | ||||||||||||||||
Net income applicable to common shares | $ | 0.10 | $ | 0.15 | $ | 0.93 | $ | 0.67 | ||||||||
Cash distributions declared per share | $ | 0.40 | $ | 0.38 | $ | 1.54 | $ | 1.47 | ||||||||
* | Revenues and cost of goods sold include federal excise taxes of $140,924, $141,505, $552,965 and $538,328, respectively. | |