Standard Diversified Inc. (the “Company”) (NYSE American: SDI) today announced its financial results for the second quarter and six months ended June 30, 2019. In addition to its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, the Company will also make available an updated Investor Presentation on its corporate website at www.standarddiversified.com.
2019 Second Quarter Highlights
- Total revenues increased 14.0% to $101.8 million as a result of strong growth at Turning Point Brands, Inc. (NYSE: TPB).
- Net income attributable to SDI was $1.0 million or $0.05 per diluted share.
2019 First Half Highlights
- Total revenues increased 17.8% to $201.8 million as a result of strong growth at Turning Point Brands, Inc.
- Net loss attributable to SDI was $(2.6) million or $(0.16) per diluted share.
About Standard Diversified Inc.
Standard Diversified Inc. is a holding company that owns and operates subsidiaries in a variety of industries, including insurance, other tobacco products and outdoor advertising. For more information about the Company, please visit the Company’s website at www.standarddiversified.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, are forward-looking statements. These forward-looking statements address, among other things activities, events or developments that the Company expects, believes or anticipates will or may occur in the future. These forward-looking statements are subject to a number of risks that could cause actual results to differ materially from those contained in the forward-looking statements, including those risks described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Except as required by law, the Company assumes no obligation to update publicly any such forward-looking statements.
Standard Diversified Inc. and Subsidiaries | |||||||||||||||
Consolidated Statements of Income (Loss) | |||||||||||||||
(dollars in thousands except share and per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
| Revenues: | |||||||||||||||
| Net sales | $ | 94,053 | $ | 81,773 | $ | 186,362 | $ | 156,121 | |||||||
| Insurance premiums earned | 7,158 | 7,134 | 14,307 | 14,451 | |||||||||||
| Net investment income | 222 | 176 | 557 | 370 | |||||||||||
| Other income | 331 | 187 | 550 | 394 | |||||||||||
| Total revenues | 101,764 | 89,270 | 201,776 | 171,336 | |||||||||||
| Operating costs and expenses: | |||||||||||||||
| Cost of sales | 52,803 | 45,950 | 104,580 | 88,406 | |||||||||||
| Selling, general and administrative expenses | 22,438 | 22,275 | 53,178 | 45,745 | |||||||||||
| Incurred losses and loss adjustment expenses | 9,152 | 5,405 | 15,716 | 11,217 | |||||||||||
| Impairment loss on goodwill and other intangible assets | - | - | 2,826 | - | |||||||||||
| Other operating expenses | 2,529 | 1,541 | 5,245 | 2,830 | |||||||||||
| Total operating costs and expenses | 86,922 | 75,171 | 181,545 | 148,198 | |||||||||||
| Operating income | 14,842 | 14,099 | 20,231 | 23,138 | |||||||||||
| Interest expense, net | 4,358 | 4,110 | 8,849 | 8,106 | |||||||||||
| Interest and investment income | (176) | (270) | (338) | (377) | |||||||||||
| Loss on extinguishment of debt | 150 | - | 150 | 2,384 | |||||||||||
| Net periodic benefit (income) expense, excluding service cost | (11) | 264 | (22) | 221 | |||||||||||
| Income before income taxes | 10,521 | 9,995 | 11,592 | 12,804 | |||||||||||
| Income tax expense | 2,979 | 1,908 | 4,333 | 2,717 | |||||||||||
| Net income | 7,542 | 8,087 | 7,259 | 10,087 | |||||||||||
| Net income attributable to noncontrolling interests | (6,580) | (4,559) | (9,840) | (6,038) | |||||||||||
| Net income (loss) attributable to Standard Diversified Inc. | $ | 962 | $ | 3,528 | $ | (2,581) | $ | 4,049 | |||||||
| Net income (loss) attributable to SDI per Class A and Class B Common Share – Basic | $ | 0.06 | $ | 0.21 | $ | (0.15) | $ | 0.24 | |||||||
| Net income (loss) attributable to SDI per Class A and Class B Common Share – Diluted | $ | 0.05 | $ | 0.20 | $ | (0.16) | $ | 0.23 | |||||||
| Weighted Average Class A and Class B Common Shares Outstanding – Basic | 16,819,824 | 16,609,828 | 16,839,456 | 16,795,815 | |||||||||||
| Weighted Average Class A and Class B Common Shares Outstanding – Diluted | 16,862,337 | 16,610,654 | 16,839,456 | 16,829,326 | |||||||||||
Standard Diversified Inc. and Subsidiaries | ||||||
Consolidated Balance Sheets | ||||||
(dollars in thousands except share and per share data) | ||||||
| June 30, | December 31, | |||||
2019 | 2018 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Cash and cash equivalents | $ | 16,357 | $ | 21,201 | ||
| Fixed maturities available for sale, at fair value; amortized cost of $25,173 in 2019 and $32,474 in 2018 | 25,514 | 32,132 | ||||
| Equity securities, at fair value; cost: $1,099 in 2019 and $794 in 2018 | 1,050 | 693 | ||||
| Trade accounts receivable, net of allowances of $49 in 2019 and $42 in 2018 | 6,604 | 2,901 | ||||
| Premiums receivable | 5,303 | 5,858 | ||||
| Inventories | 94,583 | 91,237 | ||||
| Other current assets | 18,694 | 15,045 | ||||
| Property, plant and equipment, net | 28,586 | 27,741 | ||||
| Right of use assets | 13,802 | - | ||||
| Deferred financing costs, net | 797 | 870 | ||||
| Intangible assets, net | 33,608 | 38,325 | ||||
| Deferred policy acquisition costs | 2,135 | 2,279 | ||||
| Goodwill | 147,846 | 146,696 | ||||
| Master Settlement Agreement (MSA) escrow deposits | 31,724 | 30,550 | ||||
| Other assets | 6,049 | 6,415 | ||||
| Total assets | $ | 432,652 | $ | 421,943 | ||
| LIABILITIES AND EQUITY | ||||||
| Reserves for losses and loss adjustment expenses | $ | 28,911 | $ | 27,330 | ||
| Unearned premiums | 11,861 | 12,707 | ||||
| Advance premiums collected | 331 | 500 | ||||
| Accounts payable | 21,132 | 9,225 | ||||
| Accrued liabilities | 21,223 | 23,883 | ||||
| Current portion of long-term debt | 14,696 | 9,431 | ||||
| Revolving credit facility | 15,000 | 26,000 | ||||
| Notes payable and long-term debt | 194,327 | 208,616 | ||||
| Lease liabilities | 12,221 | - | ||||
| Deferred income taxes | 1,949 | 2,711 | ||||
| Postretirement benefits | 3,096 | 3,096 | ||||
| Asset retirement obligations | 2,100 | 2,028 | ||||
| Other long-term liabilities | 3,193 | 1,687 | ||||
| Total liabilities | 330,040 | 327,214 | ||||
| Commitments and contingencies | ||||||
| Equity: | ||||||
| Preferred stock, $0.01 par value; authorized shares 50,000,000; -0- issued and outstanding shares | - | - | ||||
| Class A common stock, $0.01 par value; authorized shares, 300,000,000; 9,086,776 issued and outstanding at June 30, 2019 and 9,156,293 issued and 9,052,801 outstanding at December 31, 2018 | 91 | 92 | ||||
| Class B common stock, $0.01 par value; authorized shares, 30,000,000; 7,750,528 and 7,801,995 issued and outstanding at June 30, 2019 and December 31, 2018, respectively; convertible into Class A shares on a one-for-one basis | 78 | 78 | ||||
| Additional paid-in capital | 79,958 | 81,260 | ||||
| Class A treasury stock, 103,492 common shares at cost as of December 31, 2018 | - | (1,440) | ||||
| Accumulated other comprehensive loss | (1,252) | (1,683) | ||||
| Accumulated deficit | (27,194) | (24,613) | ||||
| Total stockholders' equity | 51,681 | 53,694 | ||||
| Noncontrolling interests | 50,931 | 41,035 | ||||
| Total equity | 102,612 | 94,729 | ||||
| Total liabilities and equity | $ | 432,652 | $ | 421,943 | ||
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