☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 56-1581761 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
155 Mineola Boulevard Mineola, NY | 11501 | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Class A Common Stock, $0.01 par value | SDI | NYSE American |
Large accelerated filer ☐ | Accelerated filer ☐ | |
Non-accelerated filer ☒ | Smaller reporting company ☒ | |
Emerging growth company ☐ |
Page No. | ||
PART I FINANCIAL INFORMATION | ||
ITEM 1 | Financial Statements | |
3 | ||
4 | ||
5 | ||
6 | ||
ITEM 2 | ||
ITEM 3 | 70 | |
ITEM 4 | ||
PART II OTHER INFORMATION | ||
ITEM 1 | ||
ITEM 1A | ||
ITEM 2 | ||
ITEM 3 | ||
ITEM 4 | ||
ITEM 5 | ||
ITEM 6 | ||
PART I | FINANCIAL INFORMATION |
Item 1. | Financial Statements |
June 30, 2019 | December 31, 2018 | |||||||||||||||
March 31, 2019 | December 31, 2018 | (Unaudited) | ||||||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | $ | 14,395 | $ | 21,201 | $ | 16,357 | $ | 21,201 | ||||||||
Fixed maturities available for sale, at fair value; amortized cost of $32,365 in 2019 and $32,474 in 2018 | 32,588 | 32,132 | ||||||||||||||
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 | 1,050 | 693 | ||||||||||||
Trade accounts receivable, net of allowances of $47 in 2019 and $42 in 2018 | 4,630 | 2,901 | ||||||||||||||
Trade accounts receivable, net of allowances of $49 in 2019 and $42 in 2018 | 6,604 | 2,901 | ||||||||||||||
Premiums receivable | 6,751 | 5,858 | 5,303 | 5,858 | ||||||||||||
Inventories | 90,871 | 91,237 | 94,583 | 91,237 | ||||||||||||
Other current assets | 11,936 | 15,045 | 18,694 | 15,045 | ||||||||||||
Property, plant and equipment, net | 27,788 | 27,741 | 28,586 | 27,741 | ||||||||||||
Right of use assets | 13,431 | - | 13,802 | - | ||||||||||||
Deferred financing costs, net | 818 | 870 | 797 | 870 | ||||||||||||
Intangible assets, net | 35,818 | 38,325 | 33,608 | 38,325 | ||||||||||||
Deferred policy acquisition costs | 2,520 | 2,279 | 2,135 | 2,279 | ||||||||||||
Goodwill | 145,961 | 146,696 | 147,846 | 146,696 | ||||||||||||
Master Settlement Agreement (MSA) escrow deposits | 31,045 | 30,550 | 31,724 | 30,550 | ||||||||||||
Other assets | 5,950 | 6,415 | 6,049 | 6,415 | ||||||||||||
Total assets | $ | 425,552 | $ | 421,943 | $ | 432,652 | $ | 421,943 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Reserves for losses and loss adjustment expenses | $ | 26,984 | $ | 27,330 | $ | 28,911 | $ | 27,330 | ||||||||
Unearned premiums | 14,153 | 12,707 | 11,861 | 12,707 | ||||||||||||
Advance premiums collected | 762 | 500 | 331 | 500 | ||||||||||||
Accounts payable | 17,262 | 9,225 | 21,132 | 9,225 | ||||||||||||
Accrued liabilities | 21,168 | 23,883 | 21,223 | 23,883 | ||||||||||||
Current portion of long-term debt | 13,674 | 9,431 | 14,696 | 9,431 | ||||||||||||
Revolving credit facility | 14,000 | 26,000 | 15,000 | 26,000 | ||||||||||||
Notes payable and long-term debt | 201,721 | 208,616 | 194,327 | 208,616 | ||||||||||||
Lease liabilities | 11,785 | - | 12,221 | - | ||||||||||||
Deferred income taxes | 2,172 | 2,711 | 1,949 | 2,711 | ||||||||||||
Postretirement benefits | 3,092 | 3,096 | 3,096 | 3,096 | ||||||||||||
Asset retirement obligations | 2,028 | 2,028 | 2,100 | 2,028 | ||||||||||||
Other long-term liabilities | 2,033 | 1,687 | 3,193 | 1,687 | ||||||||||||
Total liabilities | 330,834 | 327,214 | 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; 9,061,130 issued and outstanding at March 31, 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; 7,753,566 and 7,801,995 issued and outstanding at March 31, 2019 and December 31, 2018, respectively; convertible into Class A shares on a one-for-one basis | 78 | 78 | ||||||||||||||
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 | 79,686 | 81,260 | 79,958 | 81,260 | ||||||||||||
Class A Treasury stock, 103,492 common shares at cost as of December 31, 2018. | - | (1,440 | ) | |||||||||||||
Class A treasury stock, 103,492 common shares at cost as of December 31, 2018 | - | (1,440 | ) | |||||||||||||
Accumulated other comprehensive loss | (1,156 | ) | (1,683 | ) | (1,252 | ) | (1,683 | ) | ||||||||
Accumulated deficit | (28,156 | ) | (24,613 | ) | (27,194 | ) | (24,613 | ) | ||||||||
Total stockholders’ equity | 50,543 | 53,694 | 51,681 | 53,694 | ||||||||||||
Noncontrolling interests | 44,175 | 41,035 | 50,931 | 41,035 | ||||||||||||
Total equity | 94,718 | 94,729 | 102,612 | 94,729 | ||||||||||||
Total liabilities and equity | $ | 425,552 | $ | 421,943 | $ | 432,652 | $ | 421,943 |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net sales | $ | 92,309 | $ | 74,348 | $ | 94,053 | $ | 81,773 | $ | 186,362 | $ | 156,121 | ||||||||||||
Insurance premiums earned | 7,149 | 7,317 | 7,158 | 7,134 | 14,307 | 14,451 | ||||||||||||||||||
Net investment income | 335 | 194 | 222 | 176 | 557 | 370 | ||||||||||||||||||
Other income | 219 | 207 | 331 | 187 | 550 | 394 | ||||||||||||||||||
Total revenues | 100,012 | 82,066 | 101,764 | 89,270 | 201,776 | 171,336 | ||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||
Cost of sales | 51,784 | 42,456 | 52,803 | 45,950 | 104,580 | 88,406 | ||||||||||||||||||
Selling, general and administrative expenses | 30,733 | 23,470 | 22,438 | 22,275 | 53,178 | 45,745 | ||||||||||||||||||
Incurred losses and loss adjustment expenses | 6,564 | 5,812 | 9,152 | 5,405 | 15,716 | 11,217 | ||||||||||||||||||
Impairment loss on goodwill and other intangible assets | 2,826 | - | - | - | 2,826 | - | ||||||||||||||||||
Other operating expenses | 2,716 | 1,289 | 2,529 | 1,541 | 5,245 | 2,830 | ||||||||||||||||||
Total operating costs and expenses | 94,623 | 73,027 | 86,922 | 75,171 | 181,545 | 148,198 | ||||||||||||||||||
Operating income | 5,389 | 9,039 | 14,842 | 14,099 | 20,231 | 23,138 | ||||||||||||||||||
Interest expense | 4,491 | 3,992 | ||||||||||||||||||||||
Interest expense, net | 4,358 | 4,110 | 8,849 | 8,106 | ||||||||||||||||||||
Interest and investment income | (162 | ) | (103 | ) | (176 | ) | (270 | ) | (338 | ) | (377 | ) | ||||||||||||
Loss on extinguishment of debt | - | 2,384 | 150 | - | 150 | 2,384 | ||||||||||||||||||
Net periodic benefit income, excluding service cost | (11 | ) | (43 | ) | ||||||||||||||||||||
Net periodic benefit (income) expense, excluding service cost | (11 | ) | 264 | (22 | ) | 221 | ||||||||||||||||||
Income before income taxes | 1,071 | 2,809 | 10,521 | 9,995 | 11,592 | 12,804 | ||||||||||||||||||
Income tax expense | 1,354 | 809 | 2,979 | 1,908 | 4,333 | 2,717 | ||||||||||||||||||
Net (loss) income | (283 | ) | 2,000 | |||||||||||||||||||||
Net income | 7,542 | 8,087 | 7,259 | 10,087 | ||||||||||||||||||||
Net income attributable to noncontrolling interests | (3,260 | ) | (1,479 | ) | (6,580 | ) | (4,559 | ) | (9,840 | ) | (6,038 | ) | ||||||||||||
Net (loss) income attributable to Standard Diversified Inc. | $ | (3,543 | ) | $ | 521 | |||||||||||||||||||
Net income (loss) attributable to Standard Diversified Inc. | $ | 962 | $ | 3,528 | $ | (2,581 | ) | $ | 4,049 | |||||||||||||||
Net (loss) income attributable to SDI per Class A and Class B Common Share – Basic | $ | (0.21 | ) | $ | 0.03 | |||||||||||||||||||
Net (loss) income attributable to SDI per Class A and Class B Common Share – Diluted | $ | (0.21 | ) | $ | 0.03 | |||||||||||||||||||
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 | 16,863,621 | 16,559,432 | 16,819,824 | 16,609,828 | 16,839,456 | 16,795,815 | ||||||||||||||||||
Weighted Average Class A and Class B Common Shares Outstanding – Diluted | 16,863,621 | 16,603,228 | 16,862,337 | 16,610,654 | 16,839,456 | 16,829,326 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net (loss) income | $ | (283 | ) | $ | 2,000 | |||
Other comprehensive income (loss): | ||||||||
Amortization of unrealized pension and postretirement (loss) gain, net of tax of $1 and $10, respectively | (4 | ) | 30 | |||||
Unrealized gain (loss) on investments, net of tax of $93 and $135, respectively | 968 | (783 | ) | |||||
Unrealized loss on interest rate swaps, net of tax of $182 and $185, respectively | (476 | ) | (526 | ) | ||||
Other comprehensive income (loss) | 488 | (1,279 | ) | |||||
Comprehensive income | 205 | 721 | ||||||
Amounts attributable to noncontrolling interests | (3,221 | ) | (1,050 | ) | ||||
Comprehensive loss attributable to Standard Diversified Inc. | $ | (3,016 | ) | $ | (329 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | 7,542 | $ | 8,087 | $ | 7,259 | $ | 10,087 | ||||||||
Other comprehensive (loss) income: | ||||||||||||||||
Amortization of unrealized pension and postretirement (loss) gain, net of tax of $1 and $72 for the three months ended June 30, 2019 and 2018, respectively, and $3 and $82 for the six months ended June 30, 2019 and 2018, respectively | (4 | ) | 274 | (8 | ) | 304 | ||||||||||
Unrealized gain (loss) on investments, net of tax of $170 and $31 for the three months ended June 30, 2019 and 2018, respectively, and $263 and $104 for the six months ended June 30, 2019 and 2018, respectively | 627 | (154 | ) | 1,595 | (937 | ) | ||||||||||
Unrealized (loss) gain on interest rate swaps, net of tax of $310 and $162 for the three months ended June 30, 2019 and 2018, respectively, and $493 and $22 for the six months ended June 30, 2019 and 2018, respectively | (931 | ) | 451 | (1,407 | ) | (75 | ) | |||||||||
Other comprehensive (loss) income | (308 | ) | 571 | 180 | (708 | ) | ||||||||||
Comprehensive income | 7,234 | 8,658 | 7,439 | 9,379 | ||||||||||||
Amounts attributable to noncontrolling interests | (6,368 | ) | (4,559 | ) | (9,589 | ) | (6,038 | ) | ||||||||
Comprehensive income (loss) attributable to Standard Diversified Inc. | $ | 866 | $ | 4,099 | $ | (2,150 | ) | $ | 3,341 |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Class A Common | Class B Common | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance March 31, 2019 | 9,061,130 | $ | 91 | 7,753,566 | $ | 78 | - | $ | - | $ | 79,686 | $ | (1,156 | ) | $ | (28,156 | ) | $ | 44,175 | $ | 94,718 | |||||||||||||||||||||||
Vesting of SDI restricted stock | 22,608 | - | - | - | - | - | (335 | ) | - | - | - | (335 | ) | |||||||||||||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 3,038 | - | (3,038 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $1 | - | - | - | - | - | - | - | (2 | ) | - | (2 | ) | (4 | ) | ||||||||||||||||||||||||||||||
Unrealized gain on investments, net of tax of $170 | - | - | - | - | - | - | - | 373 | - | 254 | 627 | |||||||||||||||||||||||||||||||||
Unrealized loss on interest rate swaps, net of tax of $310 | - | - | - | - | - | - | - | (467 | ) | - | (464 | ) | (931 | ) | ||||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 171 | - | - | - | 171 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 436 | - | - | 842 | 1,278 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (454 | ) | (454 | ) | |||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | 962 | 6,580 | 7,542 | |||||||||||||||||||||||||||||||||
Balance June 30, 2019 | 9,086,776 | $ | 91 | 7,750,528 | $ | 78 | - | $ | - | $ | 79,958 | $ | (1,252 | ) | $ | (27,194 | ) | $ | 50,931 | $ | 102,612 |
Standard Diversified Inc. Shareholders | ||||||||||||||||||||||||||||||||||||||||||||
Class A Common Shares | Class B Common Shares | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance December 31, 2018 | 9,156,293 | $ | 92 | 7,801,995 | $ | 78 | (103,492 | ) | $ | (1,440 | ) | $ | 81,260 | $ | (1,683 | ) | $ | (24,613 | ) | $ | 41,035 | $ | 94,729 | |||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 48,429 | - | (48,429 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Amortization of unrealized pension and postretirement loss, net of tax of $1 | - | - | - | - | - | - | - | (2 | ) | - | (2 | ) | (4 | ) | ||||||||||||||||||||||||||||||
Unrealized gain on investments, net of tax of $93 | - | - | - | - | - | - | - | 768 | - | 200 | 968 | |||||||||||||||||||||||||||||||||
Unrealized loss on interest rate swaps, net of tax of $182 | - | - | - | - | - | - | - | �� | (239 | ) | - | (237 | ) | (476 | ) | |||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 180 | - | - | - | 180 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 261 | - | - | 363 | 624 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (444 | ) | (444 | ) | |||||||||||||||||||||||||||||||
Share repurchases | - | - | - | - | (40,100 | ) | (576 | ) | - | - | - | - | (576 | ) | ||||||||||||||||||||||||||||||
Retirement of treasury stock | (143,592 | ) | (1 | ) | - | - | 143,592 | 2,016 | (2,015 | ) | - | - | - | - | ||||||||||||||||||||||||||||||
Net (loss) income | - | - | - | - | - | - | - | - | (3,543 | ) | 3,260 | (283 | ) | |||||||||||||||||||||||||||||||
Balance March 31, 2019 | 9,061,130 | $ | 91 | 7,753,566 | $ | 78 | - | $ | - | $ | 79,686 | $ | (1,156 | ) | $ | (28,156 | ) | $ | 44,175 | $ | 94,718 | |||||||||||||||||||||||
Balance December 31, 2017 | 8,347,123 | $ | 83 | 8,040,275 | $ | 81 | - | $ | - | $ | 70,813 | $ | (1,558 | ) | $ | (26,982 | ) | $ | 26,004 | $ | 68,441 | |||||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 11,001 | 1 | (11,001 | ) | (1 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Issuance of Class A common stock in private placement, net of issuance costs | 181,825 | 2 | - | - | - | - | 1,978 | - | - | - | 1,980 | |||||||||||||||||||||||||||||||||
Issuance of Class A common stock in asset purchase | 22,727 | - | - | - | - | - | 250 | - | - | - | 250 | |||||||||||||||||||||||||||||||||
Vesting of SDI restricted stock | 18,834 | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
Amortization of unrealized pension and postretirement gain, net of tax of $10 | - | - | - | - | - | - | - | 15 | - | 15 | 30 | |||||||||||||||||||||||||||||||||
Unrealized loss on investments, net of tax of $135 | - | - | - | - | - | - | - | (596 | ) | - | (187 | ) | (783 | ) | ||||||||||||||||||||||||||||||
Unrealized loss on interest rate swaps, net of tax of $185 | - | - | - | - | - | - | - | (269 | ) | - | (257 | ) | (526 | ) | ||||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 341 | - | - | - | 341 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 82 | - | - | 111 | 193 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (379 | ) | (379 | ) | |||||||||||||||||||||||||||||||
Impact of adoption of ASU 2018-02 | - | - | - | - | - | - | - | 12 | (12 | ) | - | - | ||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | 521 | 1,479 | 2,000 | |||||||||||||||||||||||||||||||||
Balance March 31, 2018 | 8,581,510 | $ | 86 | 8,029,274 | $ | 80 | - | $ | - | $ | 73,464 | $ | (2,396 | ) | $ | (26,473 | ) | $ | 26,786 | $ | 71,547 |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Class A Common | Class B Common | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance December 31, 2018 | 9,156,293 | $ | 92 | 7,801,995 | $ | 78 | (103,492 | ) | $ | (1,440 | ) | $ | 81,260 | $ | (1,683 | ) | $ | (24,613 | ) | $ | 41,035 | $ | 94,729 | |||||||||||||||||||||
Vesting of SDI restricted stock | 22,608 | - | - | - | - | - | (335 | ) | - | - | - | (335 | ) | |||||||||||||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 51,467 | - | (51,467 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $3 | - | - | - | - | - | - | - | (4 | ) | - | (4 | ) | (8 | ) | ||||||||||||||||||||||||||||||
Unrealized gain on investments, net of tax of $263 | - | - | - | - | - | - | - | 1,141 | - | 454 | 1,595 | |||||||||||||||||||||||||||||||||
Unrealized loss on interest rate swaps, net of tax of $493 | - | - | - | - | - | - | - | (706 | ) | - | (701 | ) | (1,407 | ) | ||||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 351 | - | - | - | 351 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 697 | - | - | 1,205 | 1,902 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (898 | ) | (898 | ) | |||||||||||||||||||||||||||||||
Share Repurchases | - | - | - | - | (40,100 | ) | (576 | ) | - | - | - | - | (576 | ) | ||||||||||||||||||||||||||||||
Retirement of treasury stock | (143,592 | ) | (1 | ) | - | - | 143,592 | 2,016 | (2,015 | ) | - | - | - | - | ||||||||||||||||||||||||||||||
Net (loss) income | - | - | - | - | - | - | - | - | (2,581 | ) | 9,840 | 7,259 | ||||||||||||||||||||||||||||||||
Balance June 30, 2019 | 9,086,776 | $ | 91 | 7,750,528 | $ | 78 | - | $ | - | $ | 79,958 | $ | (1,252 | ) | $ | (27,194 | ) | $ | 50,931 | $ | 102,612 |
Three Months Ended June 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||
Class A Common | Class B Common | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance March 31, 2018 | 8,582,760 | $ | 86 | 8,030,524 | $ | 80 | - | $ | - | $ | 73,464 | $ | (2,396 | ) | $ | (26,473 | ) | $ | 26,786 | $ | 71,547 | |||||||||||||||||||||||
SDI restricted stock vesting | 21,978 | - | - | - | - | - | (216 | ) | - | - | - | (216 | ) | |||||||||||||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 107,234 | 1 | (107,234 | ) | (1 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $72 | - | - | - | - | - | - | - | 140 | - | 134 | 274 | |||||||||||||||||||||||||||||||||
Unrealized loss on investments, net of tax of $31 | - | - | - | - | - | - | - | (93 | ) | - | (61 | ) | (154 | ) | ||||||||||||||||||||||||||||||
Unrealized gain on interest rate swaps, net of tax of $162 | - | - | - | - | - | - | - | 230 | - | 221 | 451 | |||||||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 160 | - | - | - | 160 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 386 | - | - | 674 | 1,060 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (391 | ) | (391 | ) | |||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | 3,528 | 4,559 | 8,087 | |||||||||||||||||||||||||||||||||
Balance June 30, 2018 | 8,711,972 | $ | 87 | 7,923,290 | $ | 79 | - | $ | - | $ | 73,794 | $ | (2,119 | ) | $ | (22,945 | ) | $ | 31,922 | $ | 80,818 |
Six Months Ended June 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||
Class A Common | Class B Common | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance December 31, 2017 | 8,348,373 | $ | 83 | 8,041,525 | $ | 81 | - | $ | - | $ | 70,813 | $ | (1,558 | ) | $ | (26,982 | ) | $ | 26,004 | $ | 68,441 | |||||||||||||||||||||||
SDI restricted stock vesting | 40,812 | - | - | - | - | - | (216 | ) | - | - | - | (216 | ) | |||||||||||||||||||||||||||||||
Conversion of Class B common stock into Class A common stock | 118,235 | 2 | (118,235 | ) | (2 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Issuance of Class A common stock in private placement, net of issuance costs | 181,825 | 2 | - | - | - | - | 1,978 | - | - | - | 1,980 | |||||||||||||||||||||||||||||||||
Issuance of Class A common stock in asset purchase | 22,727 | - | - | - | - | - | 250 | - | - | - | 250 | |||||||||||||||||||||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $82 | - | - | - | - | - | - | - | 155 | - | 149 | 304 | |||||||||||||||||||||||||||||||||
Unrealized loss on investments, net of tax of $104 | - | - | - | - | - | - | - | (689 | ) | - | (248 | ) | (937 | ) | ||||||||||||||||||||||||||||||
Unrealized loss on interest rate swaps, net of tax of $22 | - | - | - | - | - | - | - | (39 | ) | - | (36 | ) | (75 | ) | ||||||||||||||||||||||||||||||
SDI stock-based compensation | - | - | - | - | - | - | 501 | - | - | - | 501 | |||||||||||||||||||||||||||||||||
Impact of Turning Point equity transactions on APIC and NCI | - | - | - | - | - | - | 468 | - | - | 785 | 1,253 | |||||||||||||||||||||||||||||||||
Turning Point dividend payable to noncontrolling interests | - | - | - | - | - | - | - | - | - | (770 | ) | (770 | ) | |||||||||||||||||||||||||||||||
Impact of adoption of ASU 2018-02 | - | - | - | - | - | - | - | 12 | (12 | ) | - | - | ||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | 4,049 | 6,038 | 10,087 | |||||||||||||||||||||||||||||||||
Balance June 30, 2018 | 8,711,972 | $ | 87 | 7,923,290 | $ | 79 | - | $ | - | $ | 73,794 | $ | (2,119 | ) | $ | (22,945 | ) | $ | 31,922 | $ | 80,818 |
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (283 | ) | $ | 2,000 | |||||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||
Net income | $ | 7,259 | $ | 10,087 | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Loss on extinguishment of debt | - | 2,384 | 150 | 2,384 | ||||||||||||
Loss on disposal of property, plant and equipment | 23 | - | 22 | - | ||||||||||||
Depreciation expense | 871 | 768 | 1,851 | 1,671 | ||||||||||||
Amortization of deferred financing costs and debt discount | 373 | 336 | 753 | 748 | ||||||||||||
Amortization of other intangible assets | 437 | 219 | 874 | 472 | ||||||||||||
Deferred income taxes | (449 | ) | 793 | (529 | ) | 1,443 | ||||||||||
Impairment loss on goodwill and other intangible assets | 2,826 | - | 2,826 | - | ||||||||||||
Stock-based compensation expense | 646 | 385 | 1,764 | 1,042 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (1,735 | ) | 820 | (3,852 | ) | (2,607 | ) | |||||||||
Inventories | 366 | 5,237 | (3,346 | ) | (10,348 | ) | ||||||||||
Other current assets | 3,085 | (1,730 | ) | (3,499 | ) | (4,177 | ) | |||||||||
Other assets | (399 | ) | (120 | ) | (553 | ) | 59 | |||||||||
Accounts payable | 8,646 | 2,963 | 12,786 | 10,110 | ||||||||||||
Accrued postretirement liabilities | (9 | ) | (6,510 | ) | (83 | ) | (71 | ) | ||||||||
Accrued liabilities and other | (4,128 | ) | (751 | ) | (4,581 | ) | (6,744 | ) | ||||||||
Premiums receivable | (467 | ) | 745 | 1,018 | 804 | |||||||||||
Deferred policy acquisition costs | (242 | ) | (1,172 | ) | 144 | (2,392 | ) | |||||||||
Reserves for losses and loss adjustment expenses | (347 | ) | (2,371 | ) | 1,581 | (4,280 | ) | |||||||||
Unearned and advance premiums | 1,709 | 358 | (1,015 | ) | 563 | |||||||||||
Net cash provided by operating activities | 10,923 | 4,354 | ||||||||||||||
Net cash provided by (used in) operating activities | 13,570 | (1,236 | ) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Acquisitions, net of cash acquired | - | 2,918 | (620 | ) | (2,638 | ) | ||||||||||
Capital expenditures | (920 | ) | (383 | ) | (2,015 | ) | (1,046 | ) | ||||||||
Proceeds from sale and maturity of fixed maturity securities, available-for-sale | 2,050 | 2,205 | 9,381 | 2,694 | ||||||||||||
Payments for purchases of fixed maturity securities, available-for-sale | (1,941 | ) | - | (1,941 | ) | (4,288 | ) | |||||||||
Payments for purchases of equity securities | (306 | ) | - | (306 | ) | (753 | ) | |||||||||
Restricted cash, MSA escrow deposits | 1,702 | (530 | ) | 1,677 | (1,735 | ) | ||||||||||
Net cash provided by investing activities | 585 | 4,210 | ||||||||||||||
Issuance of note receivable | - | (6,500 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 6,176 | (14,266 | ) |
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Payments of 2018 first lien term loan | (2,000 | ) | - | (4,000 | ) | - | ||||||||||
Payments of 2018 second lien term loan | (4,489 | ) | - | |||||||||||||
Payments of 2018 revolving credit facility | (12,000 | ) | - | (11,000 | ) | - | ||||||||||
Payments of Standard Outdoor promissory note | (966 | ) | - | (1,165 | ) | - | ||||||||||
Proceeds from 2018 first lien term loan | - | 160,000 | - | 158,000 | ||||||||||||
Proceeds from 2018 second lien term loan | - | 40,000 | - | 40,000 | ||||||||||||
Proceeds from 2018 revolving credit facility | - | 16,000 | ||||||||||||||
Proceeds from borrowings under SDI credit facility, net | - | 9,114 | - | 9,114 | ||||||||||||
Payments of 2017 second lien term loans, net | - | (55,000 | ) | - | (55,000 | ) | ||||||||||
Payments of financing costs | - | (3,279 | ) | (179 | ) | (3,279 | ) | |||||||||
Payments of 2017 revolving credit facility, net | - | (8,000 | ) | - | (8,000 | ) | ||||||||||
Payments of 2017 first lien term loan | - | (140,613 | ) | - | (140,613 | ) | ||||||||||
Turning Point Brands exercise of stock options | 187 | 20 | 610 | 607 | ||||||||||||
Turning Point Brands redemption of options | (12 | ) | - | |||||||||||||
Turning Point Brands redemption of stock options | (12 | ) | - | |||||||||||||
Turning Point Brands surrender of restricted stock | (81 | ) | - | |||||||||||||
Proceeds from issuance of SDI stock | - | 1,980 | - | 1,982 | ||||||||||||
Turning Point Brands dividend to noncontrolling interests | (437 | ) | - | (876 | ) | - | ||||||||||
Repurchase of SDI common shares | (1,385 | ) | - | (1,385 | ) | - | ||||||||||
Payments of Vapor Beast Note Payable and Vapor Shark loans | - | (2,000 | ) | |||||||||||||
Proceeds from release of restricted funds | - | 1,107 | ||||||||||||||
Share repurchase for tax withholdings on vesting of restricted stock | (336 | ) | (216 | ) | ||||||||||||
Payment of cash dividends | - | (379 | ) | |||||||||||||
Net cash (used in) provided by financing activities | (16,613 | ) | 4,222 | (22,913 | ) | 17,323 | ||||||||||
Net (decrease) increase in cash | (5,105 | ) | 12,786 | (3,167 | ) | 1,821 | ||||||||||
Cash, beginning of period | ||||||||||||||||
Unrestricted | 21,201 | 18,219 | 21,201 | 18,219 | ||||||||||||
Restricted | 2,361 | 4,704 | 2,361 | 4,709 | ||||||||||||
Total cash at beginning of period | 23,562 | 22,923 | 23,562 | 22,928 | ||||||||||||
Cash, end of period | ||||||||||||||||
Unrestricted | 14,395 | 31,535 | 16,357 | 22,882 | ||||||||||||
Restricted | 4,062 | 4,179 | 4,038 | 1,867 | ||||||||||||
Total cash at end of period | $ | 18,457 | $ | 35,714 | $ | 20,395 | $ | 24,749 | ||||||||
Supplemental schedule of noncash investing and financing activities: | ||||||||||||||||
Supplemental schedule of noncash financing activities: | ||||||||||||||||
Turning Point Brands dividend to noncontrolling interests declared not paid | $ | 444 | $ | 379 | $ | 447 | $ | - | ||||||||
Accrued expenses incurred for financing costs | $ | - | $ | 154 | $ | - | $ | 43 | ||||||||
Issuance of SDI shares in asset purchase | $ | - | $ | 250 | $ | - | $ | 250 | ||||||||
Issuance of promissory notes in asset purchase | $ | - | $ | 8,810 | $ | - | $ | 8,810 |
March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Cost | Gross Unrealized | Gross Unrealized | Estimated Fair | Cost | Gross Unrealized | Gross Unrealized | Estimated Fair | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 4,062 | $ | - | $ | - | $ | 4,062 | $ | 2,361 | $ | - | $ | - | $ | 2,361 | $ | 4,038 | $ | - | $ | - | $ | 4,038 | $ | 2,361 | $ | - | $ | - | $ | 2,361 | ||||||||||||||||||||||||||||||||
Fair value level 2: U.S. Governmental agency obligations (unrealized gain position < 12 months) | 500 | 2 | - | 502 | 1,193 | 9 | - | 1,202 | 3,245 | 27 | - | 3,272 | 1,193 | 9 | - | 1,202 | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value level 2: U.S. Governmental agency obligations (unrealized loss position < 12 months) | - | - | - | - | 1,000 | - | (3 | ) | 997 | - | - | - | - | 1,000 | - | (3 | ) | 997 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value level 2: U.S. Governmental agency obligations (unrealized loss position > 12 months) | 27,511 | - | (1,030 | ) | 26,481 | 27,519 | - | (1,529 | ) | 25,990 | 24,790 | - | (376 | ) | 24,414 | 27,519 | - | (1,529 | ) | 25,990 | ||||||||||||||||||||||||||||||||||||||||||||
$ | 32,073 | $ | 2 | $ | (1,030 | ) | $ | 31,045 | $ | 32,073 | $ | 9 | $ | (1,532 | ) | $ | 30,550 | $ | 32,073 | $ | 27 | $ | (376 | ) | $ | 31,724 | $ | 32,073 | $ | 9 | $ | (1,532 | ) | $ | 30,550 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Less than one year | $ | 1,499 | $ | 1,499 | $ | 1,499 | $ | 1,499 | ||||||||
One to five years | 14,091 | 13,591 | 14,091 | 13,591 | ||||||||||||
Five to ten years | 9,453 | 11,152 | 9,469 | 11,152 | ||||||||||||
Greater than ten years | 2,968 | 3,470 | 2,976 | 3,470 | ||||||||||||
Total U.S. Governmental agency obligations | $ | 28,011 | $ | 29,712 | $ | 28,035 | $ | 29,712 |
(Dollar amounts in thousands) | Deposits as of | Deposits as of | ||||||||||||||
Sales Year | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
1999 | $ | 211 | $ | 211 | $ | 211 | $ | 211 | ||||||||
2000 | 1,017 | 1,017 | 1,017 | 1,017 | ||||||||||||
2001 | 1,673 | 1,673 | 1,673 | 1,673 | ||||||||||||
2002 | 2,271 | 2,271 | 2,271 | 2,271 | ||||||||||||
2003 | 4,249 | 4,249 | 4,249 | 4,249 | ||||||||||||
2004 | 3,714 | 3,714 | 3,714 | 3,714 | ||||||||||||
2005 | 4,552 | 4,552 | 4,552 | 4,552 | ||||||||||||
2006 | 3,847 | 3,847 | 3,847 | 3,847 | ||||||||||||
2007 | 4,167 | 4,167 | 4,167 | 4,167 | ||||||||||||
2008 | 3,364 | 3,364 | 3,364 | 3,364 | ||||||||||||
2009 | 1,619 | 1,619 | 1,619 | 1,619 | ||||||||||||
2010 | 406 | 406 | 406 | 406 | ||||||||||||
2011 | 193 | 193 | 193 | 193 | ||||||||||||
2012 | 199 | 199 | 199 | 199 | ||||||||||||
2013 | 173 | 173 | 173 | 173 | ||||||||||||
2014 | 143 | 143 | 143 | 143 | ||||||||||||
2015 | 101 | 101 | 101 | 101 | ||||||||||||
2016 | 91 | 91 | 91 | 91 | ||||||||||||
2017 | 83 | 83 | 83 | 83 | ||||||||||||
Total | $ | 32,073 | $ | 32,073 | $ | 32,073 | $ | 32,073 |
(In thousands) | Three Months Ended March 31, 2019 | Period from January 2, 2018 to March 31, 2018 | Six Months Ended June 30, 2019 | Period from January 2, 2018 to June 30, 2018 | ||||||||||||
DAC asset at beginning of period | $ | 2,279 | $ | - | $ | 2,279 | $ | - | ||||||||
Deferred expenses | 1,517 | 1,354 | 2,408 | 2,691 | ||||||||||||
Amortized expenses | | (1,276 | ) | | (182 | ) | (2,552 | ) | (299 | ) | ||||||
DAC asset at end of period | $ | 2,520 | $ | 1,172 | $ | 2,135 | $ | 2,392 |
(In thousands) | At January 2, 2018 (final) | |||
Fixed maturities available for sale | $ | 25,386 | ||
Cash and cash equivalents | 12,795 | |||
Investment income due and accrued | 203 | |||
Premiums receivable | 7,158 | |||
Property, plant and equipment | 408 | |||
Intangible assets | 2,100 | |||
Other assets | 615 | |||
Reserves for losses and loss adjustment expenses | (30,672 | ) | ||
Unearned premiums | (12,784 | ) | ||
Advance premium collected | (651 | ) | ||
Deferred tax liability | (420 | ) | ||
Other liabilities | (2,395 | ) | ||
Total net assets acquired | 1,743 | |||
Consideration exchanged | 2,500 | |||
Goodwill | $ | 757 |
(In thousands) | As of March 31, 2019 (preliminary) | As of June 30, 2019 (preliminary) | ||||||
Total consideration transferred | $ | 24,292 | $ | 24,292 | ||||
Adjustments to consideration: | ||||||||
Cash acquired, net of debt assumed | (221 | ) | (221 | ) | ||||
Working capital | (245 | ) | (245 | ) | ||||
Adjusted consideration transferred | 23,826 | 23,826 | ||||||
- | ||||||||
Assets acquired: | - | |||||||
Working capital (primarily inventory) | 3,331 | 3,218 | ||||||
Fixed assets | 1,274 | 1,274 | ||||||
Intangible assets | 7,880 | 7,880 | ||||||
Net assets acquired | 12,485 | 12,372 | ||||||
Goodwill | $ | 11,341 | $ | 11,454 |
(In thousands) | At April 30, 2018 (final) | |||
Total consideration transferred | $ | 4,800 | ||
Assets acquired: | ||||
Working capital (primarily inventory) | 2,500 | |||
Fixed assets | 272 | |||
Intangible assets | 256 | |||
Net assets acquired | 3,028 | |||
Goodwill | $ | 1,772 |
(In thousands) | Fair Value | |||
Working capital | $ | 2,500 | ||
Fixed assets | 272 | |||
Trade name | 2,028 | |||
Total consideration transferred | $ | 4,800 |
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||
March 31, 2019 | ||||||||||||||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||||||||||||||
U.S. Treasury and U.S. Government | $ | 5,542 | $ | - | $ | (15 | ) | $ | 5,527 | $ | 5,547 | $ | 25 | $ | (3 | ) | $ | 5,569 | ||||||||||||||
U.S. Tax-exempt municipal | 4,619 | 70 | - | 4,689 | 4,593 | 131 | - | 4,724 | ||||||||||||||||||||||||
Corporate | 14,281 | 205 | (32 | ) | 14,454 | 8,955 | 159 | - | 9,114 | |||||||||||||||||||||||
Mortgage and asset-backed securities | 7,923 | 41 | (46 | ) | 7,918 | 6,078 | 33 | (4 | ) | 6,107 | ||||||||||||||||||||||
Total Fixed Maturity Securities | $ | 32,365 | $ | 316 | $ | (93 | ) | $ | 32,588 | $ | 25,173 | $ | 348 | $ | (7 | ) | $ | 25,514 | ||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||||||||||
U.S. Treasury and U.S. Government | $ | 4,338 | $ | - | $ | (34 | ) | $ | 4,304 | $ | 4,338 | $ | - | $ | (34 | ) | $ | 4,304 | ||||||||||||||
U.S. Tax-exempt municipal | 4,645 | 4 | (25 | ) | 4,624 | 4,645 | 4 | (25 | ) | 4,624 | ||||||||||||||||||||||
Corporate | 14,858 | 16 | (193 | ) | 14,681 | 14,858 | 16 | (193 | ) | 14,681 | ||||||||||||||||||||||
Mortgage and asset-backed securities | 8,633 | 10 | (120 | ) | 8,523 | 8,633 | 10 | (120 | ) | 8,523 | ||||||||||||||||||||||
Total Fixed Maturity Securities | $ | 32,474 | $ | 30 | $ | (372 | ) | $ | 32,132 | $ | 32,474 | $ | 30 | $ | (372 | ) | $ | 32,132 |
March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||
(In thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||
Due in one year or less | $ | 499 | $ | 498 | $ | 748 | $ | 745 | $ | 999 | $ | 999 | $ | 748 | $ | 745 | ||||||||||||||||
Due after one year through five years | 14,664 | 14,712 | 13,719 | 13,600 | 12,907 | 13,040 | 13,719 | 13,600 | ||||||||||||||||||||||||
Due after five years through ten years | 9,044 | 9,220 | 9,027 | 8,917 | 5,189 | 5,367 | 9,027 | 8,917 | ||||||||||||||||||||||||
Due after ten years | 235 | 240 | 347 | 347 | - | - | 347 | 347 | ||||||||||||||||||||||||
Mortgage and asset-backed securities | 7,923 | 7,918 | 8,633 | 8,523 | 6,078 | 6,108 | 8,633 | 8,523 | ||||||||||||||||||||||||
Total | $ | 32,365 | $ | 32,588 | $ | 32,474 | $ | 32,132 | $ | 25,173 | $ | 25,514 | $ | 32,474 | $ | 32,132 |
Less Than 12 Months | 12 Months or More | Total | Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||
March 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and U.S. Government | $ | 2,692 | $ | (4 | ) | $ | 1,870 | $ | (10 | ) | $ | 4,562 | $ | (14 | ) | $ | 2,496 | $ | (3 | ) | $ | - | $ | - | $ | 2,496 | $ | (3 | ) | |||||||||||||||||||
U.S. Tax-exempt municipal | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 366 | (13 | ) | 4,474 | (19 | ) | 4,840 | (32 | ) | |||||||||||||||||||||||||||||||||||||||
Mortgage and asset-backed securities | 218 | (1 | ) | 5,141 | (45 | ) | 5,359 | (46 | ) | 9 | - | 1,463 | (4 | ) | 1,472 | (4 | ) | |||||||||||||||||||||||||||||||
Total Fixed maturities available for sale | $ | 3,276 | $ | (18 | ) | $ | 11,485 | $ | (74 | ) | $ | 14,761 | $ | (92 | ) | $ | 2,505 | $ | (3 | ) | $ | 1,463 | $ | (4 | ) | $ | 3,968 | $ | (7 | ) | ||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and U.S. Government | $ | 4,304 | $ | (34 | ) | $ | - | $ | - | $ | 4,304 | $ | (34 | ) | $ | 4,304 | $ | (34 | ) | $ | - | $ | - | $ | 4,304 | $ | (34 | ) | ||||||||||||||||||||
U.S. Tax-exempt municipal | 4,285 | (25 | ) | - | - | 4,285 | (25 | ) | 4,285 | (25 | ) | - | - | 4,285 | (25 | ) | ||||||||||||||||||||||||||||||||
Corporate bonds | 10,306 | (193 | ) | - | - | 10,306 | (193 | ) | 10,306 | (193 | ) | - | - | 10,306 | (193 | ) | ||||||||||||||||||||||||||||||||
Mortgage and asset-backed securities | 6,717 | (120 | ) | - | - | 6,717 | (120 | ) | 6,717 | (120 | ) | - | - | 6,717 | (120 | ) | ||||||||||||||||||||||||||||||||
Total Fixed maturities available for sale | $ | 25,612 | $ | (372 | ) | $ | - | $ | - | $ | 25,612 | $ | (372 | ) | $ | 25,612 | $ | (372 | ) | $ | - | $ | - | $ | 25,612 | $ | (372 | ) |
(In thousands) | Three Months Ended March 31, 2019 | Period from January 2, 2018 to March 31, 2018 | Six Months Ended June 30, 2019 | Period from January 2, 2018 to June 30, 2018 | ||||||||||||
Investment income: | ||||||||||||||||
Bonds | $ | 261 | $ | 153 | $ | 434 | $ | 303 | ||||||||
Common stocks | 26 | - | 39 | - | ||||||||||||
Preferred stocks | 6 | - | 20 | 6 | ||||||||||||
Cash and cash equivalents | 55 | 60 | 67 | 98 | ||||||||||||
Other asset investments | 27 | 11 | ||||||||||||||
Total investment income | 348 | 213 | 587 | 418 | ||||||||||||
Less: Investment expenses | (13 | ) | (19 | ) | (30 | ) | (48 | ) | ||||||||
Net investment income | $ | 335 | $ | 194 | $ | 557 | $ | 370 |
(In thousands) | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||
March 31 ,2019 | ||||||||||||||||
Common Stock | $ | 247 | $ | - | $ | - | $ | 247 | ||||||||
Preferred Stocks | - | 803 | - | 803 | ||||||||||||
Total Equities: | $ | 247 | $ | 803 | $ | - | $ | 1,050 | ||||||||
Fixed Maturities: | ||||||||||||||||
U.S. Treasury and U.S. Government | $ | 5,527 | $ | - | $ | - | $ | 5,527 | ||||||||
U.S. Tax-exempt municipal | - | 4,689 | - | 4,689 | ||||||||||||
Corporate | - | 14,454 | - | 14,454 | ||||||||||||
Mortgage and asset-backed securities | - | 7,918 | - | 7,918 | ||||||||||||
Total Fixed Maturities | $ | 5,527 | $ | 27,061 | $ | - | $ | 32,588 | ||||||||
December 31, 2018 | ||||||||||||||||
Common Stock | $ | 227 | $ | - | $ | - | $ | 227 | ||||||||
Preferred Stocks | - | 466 | - | 466 | ||||||||||||
Total Equities: | $ | 227 | $ | 466 | $ | - | $ | 693 | ||||||||
Fixed Maturities: | ||||||||||||||||
U.S. Treasury and U.S. Government | $ | 4,304 | $ | - | $ | - | $ | 4,304 | ||||||||
U.S. Tax-exempt municipal | - | 4,624 | - | 4,624 | ||||||||||||
Corporate | - | 14,681 | - | 14,681 | ||||||||||||
Mortgage and asset-backed securities | - | 8,523 | - | 8,523 | ||||||||||||
Total Fixed Maturities | $ | 4,304 | $ | 27,828 | $ | - | $ | 32,132 |
(In thousands) | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||
June 30, 2019 | ||||||||||||||||
Common stock | $ | 230 | $ | - | $ | - | $ | 230 | ||||||||
Preferred stocks | - | 820 | - | 820 | ||||||||||||
Total equities: | $ | 230 | $ | 820 | $ | - | $ | 1,050 | ||||||||
Fixed maturities: | ||||||||||||||||
U.S. treasury and U.S. government | $ | 5,569 | $ | - | $ | - | $ | 5,569 | ||||||||
U.S. tax-exempt municipal | - | 4,724 | - | 4,724 | ||||||||||||
Corporate | - | 9,114 | - | 9,114 | ||||||||||||
Mortgage and asset-backed securities | - | 6,108 | - | 6,108 | ||||||||||||
Total fixed maturities | $ | 5,569 | $ | 19,946 | $ | - | $ | 25,515 | ||||||||
December 31, 2018 | ||||||||||||||||
Common stock | $ | 227 | $ | - | $ | - | $ | 227 | ||||||||
Preferred stocks | - | 466 | - | 466 | ||||||||||||
Total equities: | $ | 227 | $ | 466 | $ | - | $ | 693 | ||||||||
Fixed maturities: | ||||||||||||||||
U.S. treasury and U.S. government | $ | 4,304 | $ | - | $ | - | $ | 4,304 | ||||||||
U.S. tax-exempt municipal | - | 4,624 | - | 4,624 | ||||||||||||
Corporate | - | 14,681 | - | 14,681 | ||||||||||||
Mortgage and asset-backed securities | - | 8,523 | - | 8,523 | ||||||||||||
Total fixed maturities | $ | 4,304 | $ | 27,828 | $ | - | $ | 32,132 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Raw materials and work in process | $ | 3,967 | $ | 2,722 | $ | 4,924 | $ | 2,722 | ||||||||
Leaf tobacco | 35,929 | 34,977 | 37,110 | 34,977 | ||||||||||||
Finished goods - Smokeless products | 6,540 | 6,321 | 6,403 | 6,321 | ||||||||||||
Finished goods - Smoking products | 15,079 | 14,666 | 15,125 | 14,666 | ||||||||||||
Finished goods - NewGen products | 33,810 | 37,194 | 35,194 | 37,194 | ||||||||||||
Other | 903 | 738 | 1,072 | 738 | ||||||||||||
96,228 | 96,618 | 99,828 | 96,618 | |||||||||||||
LIFO reserve | (5,357 | ) | (5,381 | ) | (5,245 | ) | (5,381 | ) | ||||||||
$ | 90,871 | $ | 91,237 | $ | 94,583 | $ | 91,237 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Land | $ | 22 | $ | 22 | $ | 22 | $ | 22 | ||||||||
Building and improvements | 2,320 | 2,320 | 2,444 | 2,320 | ||||||||||||
Leasehold improvements | 2,101 | 2,101 | 2,108 | 2,101 | ||||||||||||
Machinery and equipment | 14,229 | 13,307 | 13,944 | 13,307 | ||||||||||||
Advertising structures | 17,928 | 17,913 | 18,609 | 17,913 | ||||||||||||
Furniture and fixtures | 5,434 | 5,453 | 6,685 | 5,453 | ||||||||||||
42,034 | 41,116 | 43,812 | 41,116 | |||||||||||||
Accumulated depreciation | (14,246 | ) | (13,375 | ) | (15,226 | ) | (13,375 | ) | ||||||||
$ | 27,788 | $ | 27,741 | $ | 28,586 | $ | 27,741 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Inventory deposits | $ | 7,134 | $ | 9,739 | $ | 10,583 | $ | 9,739 | ||||||||
Other | 4,802 | 5,306 | 8,111 | 5,306 | ||||||||||||
$ | 11,936 | $ | 15,045 | $ | 18,694 | $ | 15,045 |
(In thousands) | June 30, 2019 | December 31, 2018 | ||||||
Investment in Canadian American Standard Hemp | $ | 2,000 | $ | 2,000 | ||||
Investment in General Wireless Operations | 421 | 421 | ||||||
Pension assets | 1,233 | 1,223 | ||||||
Other | 2,395 | 2,771 | ||||||
$ | 6,049 | $ | 6,415 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Accrued payroll and related items | $ | 3,093 | $ | 6,063 | $ | 4,876 | $ | 6,063 | ||||||||
Customer returns and allowances | 3,082 | 2,895 | 3,456 | 2,895 | ||||||||||||
Taxes payable | 3,758 | - | 1,953 | - | ||||||||||||
Lease liabilities | 2,039 | - | 2,023 | - | ||||||||||||
Other | 9,196 | 14,925 | 8,915 | 14,925 | ||||||||||||
$ | 21,168 | $ | 23,883 | $ | 21,223 | $ | 23,883 |
(In thousands) | Three Months Ended March 31, 2019 | Period from January 2, 2018 to March 31, 2018 | Six Months Ended June 30, 2019 | Period from January 2, 2018 to June 30, 2018 | ||||||||||||
Reserve for losses and LAE at beginning of period | $ | 27,330 | $ | 29,366 | $ | 27,330 | $ | 29,801 | ||||||||
Provision for claims, net of insurance: | ||||||||||||||||
Incurred related to: | ||||||||||||||||
Prior year | 622 | - | 3,524 | - | ||||||||||||
Current year | 5,871 | 5,812 | 10,302 | 11,217 | ||||||||||||
Total incurred | 6,493 | 5,812 | 13,826 | 11,217 | ||||||||||||
Deduct payment of claims, net of reinsurance: | ||||||||||||||||
Paid related to: | ||||||||||||||||
Prior year | 4,743 | 5,478 | 8,995 | 9,220 | ||||||||||||
Current year | 2,096 | 2,704 | 3,250 | 6,277 | ||||||||||||
Total paid | 6,839 | 8,182 | 12,245 | 15,497 | ||||||||||||
Reserve for losses and LAE at end of period | $ | 26,984 | $ | 26,996 | $ | 28,911 | $ | 25,521 |
(In thousands) | March 31, 2019 | December 31, 2018 | ||||||
Case basis reserves | $ | 15,797 | $ | 15,863 | ||||
Incurred but not reported reserves | 11,187 | 11,467 | ||||||
Total | $ | 26,984 | $ | 27,330 |
(In thousands) | June 30, 2019 | December 31, 2018 | ||||||
Case basis reserves | $ | 15,423 | $ | 15,863 | ||||
Incurred but not reported reserves | 13,488 | 11,467 | ||||||
Total | $ | 28,911 | $ | 27,330 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
2018 First Lien Term Loan | $ | 152,000 | $ | 154,000 | $ | 150,000 | $ | 154,000 | ||||||||
2018 Second Lien Term Loan | 40,000 | 40,000 | 35,511 | 40,000 | ||||||||||||
SDI Crystal Term Loan | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||
Standard Outdoor Promissory Notes | 8,984 | 9,950 | 8,785 | 9,950 | ||||||||||||
Note payable - IVG | 4,000 | 4,000 | 4,000 | 4,000 | ||||||||||||
Total Notes Payable and Long-Term Debt | 219,984 | 222,950 | 213,296 | 222,950 | ||||||||||||
Less deferred finance charges and debt discount | (4,589 | ) | (4,903 | ) | (4,273 | ) | (4,903 | ) | ||||||||
Less current maturities | (13,674 | ) | (9,431 | ) | (14,696 | ) | (9,431 | ) | ||||||||
$ | 201,721 | $ | 208,616 | $ | 194,327 | $ | 208,616 |
Future Minimum Principal Payments | Future Minimum Principal Payments | |||||||
April 1, 2019 - December 31, 2019 | $ | 6,536 | ||||||
July 1, 2019 - December 31, 2019 | $ | 4,337 | ||||||
2020 | 16,839 | 16,839 | ||||||
2021 | 13,882 | 13,882 | ||||||
2022 | 16,227 | 16,227 | ||||||
2023 | 126,500 | 126,500 | ||||||
thereafter | 40,000 | 35,511 | ||||||
Total | $ | 219,984 | $ | 213,296 |
(In thousands) | Three Months Ended March 31, 2019 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||||||
Operating lease cost: | ||||||||||||
Cost of sales | $ | 192 | $ | 232 | $ | 424 | ||||||
Selling, general and administrative | 702 | 755 | 1,457 | |||||||||
Variable lease cost (1) | 298 | 184 | 482 | |||||||||
Short-term lease cost | 54 | 35 | 89 | |||||||||
Sublease income | (30 | ) | (20 | ) | (50 | ) | ||||||
Total operating lease cost | $ | 1,216 | $ | 1,186 | $ | 2,402 |
(1) | Variable lease expense primarily includes elements of a contract that do not represent a good or service, but for which the lessee is responsible for paying. |
(In thousands) | March 31, 2019 | June 30, 2019 | ||||||
Assets: | ||||||||
Right of use assets | $ | 13,431 | $ | 13,802 | ||||
Total leased assets | $ | 13,431 | $ | 13,802 | ||||
Liabilities: | ||||||||
Current lease liabilities (1) | $ | 2,039 | $ | 2,023 | ||||
Long-term lease liabilities | 11,785 | 12,221 | ||||||
Total lease liabilities | $ | 13,824 | $ | 14,244 |
(1) | Reported within accrued liabilities on the condensed consolidated balance |
March 31, 2019 | ||||||||
Turning Point | SDI, Standard Outdoor and Maidstone | |||||||
Weighted average remaining lease term - operating leases | 9.0 years | 11.7 years | ||||||
Weighted average discount rate - operating leases | 6.49 | % | 9.57 | % |
June 30, 2019 | ||||
Consolidated weighted average remaining lease term - operating leases | 9.0 years | |||
Consolidated weighted average discount rate - operating leases | 7.03 | % |
Year | Payments | Payments | ||||||
April 1, 2019 - December 31, 2019 | $ | 2,349 | ||||||
July 1, 2019 - December 31, 2019 | $ | 1,542 | ||||||
2020 | 2,792 | 3,109 | ||||||
2021 | 2,246 | 2,580 | ||||||
2022 | 1,561 | 1,860 | ||||||
2023 | 1,354 | 1,498 | ||||||
Thereafter | 9,396 | 9,553 | ||||||
Total lease payments | 19,698 | 20,142 | ||||||
Less: Imputed interest | 5,874 | 5,898 | ||||||
Present value of lease liability | $ | 13,824 | $ | 14,244 |
Three months ended March 31, | Three months ended June 30, | |||||||||||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | Pension Benefits | Post-Retirement Benefits | |||||||||||||||||||||||||||||
(In thousands) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||
Service cost | $ | 26 | $ | 26 | $ | - | $ | - | $ | 26 | $ | 26 | $ | - | $ | - | ||||||||||||||||
Interest cost | 130 | 142 | 25 | 29 | 130 | 142 | 25 | 29 | ||||||||||||||||||||||||
Expected return on plan assets | (161 | ) | (254 | ) | - | - | (161 | ) | (253 | ) | - | - | ||||||||||||||||||||
Amortization of losses (gains) | 37 | 60 | (42 | ) | (20 | ) | 36 | 60 | (41 | ) | (20 | ) | ||||||||||||||||||||
Curtailment loss | - | 306 | - | - | ||||||||||||||||||||||||||||
Net periodic benefit expense (income) | $ | 32 | $ | (26 | ) | $ | (17 | ) | $ | 9 | $ | 31 | $ | 281 | $ | (16 | ) | $ | 9 |
Six months ended June 30, | ||||||||||||||||
Pension Benefits | Post-Retirement Benefits | |||||||||||||||
(In thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Service cost | $ | 52 | $ | 52 | $ | - | $ | - | ||||||||
Interest cost | 260 | 284 | 51 | 58 | ||||||||||||
Expected return on plan assets | (323 | ) | (507 | ) | - | - | ||||||||||
Amortization of losses (gains) | 73 | 120 | (83 | ) | (40 | ) | ||||||||||
Curtailment loss | - | 306 | - | - | ||||||||||||
Net periodic benefit expense (income) | $ | 62 | $ | 255 | $ | (32 | ) | $ | 18 |
(In thousands, except per share amounts) | Number of Shares | Price Range | Weighted Average Remaining Contractual term | Number of Shares | Price Range | Weighted Average Remaining Contractual term | |||||||||||||||||||||
Balance, January 1, 2019 | 2,463 | $ | 31.00 | $ | 46.25 | 2,463 | $ | 31.00 | $ | 46.25 | |||||||||||||||||
Cancelled | - | - | - | - | - | - | |||||||||||||||||||||
Balance, March 31, 2019 | 2,463 | $ | 31.00 | $ | 46.25 | 1.5 years | |||||||||||||||||||||
Vested and exercisable at March 31, 2019 | 2,463 | $ | 31.00 | $ | 46.25 | 1.5 years | |||||||||||||||||||||
Balance, June 30, 2019 | 2,463 | $ | 31.00 | $ | 46.25 | 1.2 years | |||||||||||||||||||||
Vested and exercisable at June 30, 2019 | 2,463 | $ | 31.00 | $ | 46.25 | 1.2 years |
Options Outstanding and Exercisable | |||||||||||||||
Weighted Average | |||||||||||||||
Range of Exercise Prices | Number of Shares | Remaining Contractual Life | Exercise Price | ||||||||||||
$ | 31.00 - $31.25 | 1,400 | 2.1 | Years | $ | 31.18 | |||||||||
$ | 45.25 - $46.25 | 1,063 | 0.6 | Years | 45.63 | ||||||||||
$ | 31.00 - $46.25 | 2,463 | 1.5 | Years | $ | 37.41 |
Options Outstanding and Exercisable | ||||||||||||||
Weighted Average | ||||||||||||||
Range of Exercise Prices | Number of Shares | Remaining Contractual Life | Exercise Price | |||||||||||
$31.00 - $31.25 | 1,400 | 1.9 | years | $ | 31.18 | |||||||||
$45.25 - $46.25 | 1,063 | 0.4 | years | 45.63 | ||||||||||
$31.00 - $46.25 | 2,463 | 1.2 | years | $ | 37.41 |
| Shares | Weighted Average Grant Date Fair Value | ||||||||||||||
Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
Non-vested RSAs at January 1, 2019 | 127,005 | $ | 10.96 | 127,005 | $ | 10.96 | ||||||||||
Granted | - | - | - | - | ||||||||||||
Vested | - | - | (37,816 | ) | 10.58 | |||||||||||
Non-vested RSAs at March 31, 2019 | 127,005 | $ | 10.96 | |||||||||||||
Cancelled/Forfeited | (4,779 | ) | 13.34 | |||||||||||||
Non-vested RSAs at June 30, 2019 | 84,410 | $ | 11.00 |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands, except share and per share amounts) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Basic net (loss) income per common share calculation: | ||||||||||||||||||||||||
Net (loss) income attributable to SDI | $ | (3,543 | ) | $ | 521 | |||||||||||||||||||
Basic net income (loss) per common share calculation: | ||||||||||||||||||||||||
Net income (loss) attributable to SDI | $ | 962 | $ | 3,528 | $ | (2,581 | ) | $ | 4,049 | |||||||||||||||
Weighted average Class A common shares outstanding – basic | 9,070,542 | 8,521,404 | 9,068,639 | 8,632,350 | 9,078,272 | 8,788,230 | ||||||||||||||||||
Weighted average Class B common shares outstanding – basic | 7,793,079 | 8,038,028 | 7,751,185 | 7,977,478 | 7,761,184 | 8,007,585 | ||||||||||||||||||
Weighted average common shares outstanding – basic | 16,863,621 | 16,559,432 | 16,819,824 | 16,609,828 | 16,839,456 | 16,795,815 | ||||||||||||||||||
Net (loss) income attributable to SDI per share of common stock – basic | $ | (0.21 | ) | $ | 0.03 | |||||||||||||||||||
Net income (loss) attributable to SDI per share of common stock – basic | $ | 0.06 | $ | 0.21 | $ | (0.15 | ) | $ | 0.24 |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands, except share and per share amounts) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Diluted net (loss) income attributable to SDI per common share calculation: | ||||||||||||||||||||||||
Net (loss) income attributable to SDI | $ | (3,543 | ) | $ | 521 | |||||||||||||||||||
Diluted net income (loss) attributable to SDI per common share calculation: | ||||||||||||||||||||||||
Net income (loss) attributable to SDI | $ | 962 | $ | 3,528 | $ | (2,581 | ) | $ | 4,049 | |||||||||||||||
Impact of subsidiary dilutive securities (1) | (80 | ) | (43 | ) | (129 | ) | (125 | ) | (181 | ) | (170 | ) | ||||||||||||
Net (loss) income attributable to SDI - diluted | $ | (3,623 | ) | $ | 478 | |||||||||||||||||||
Net income (loss) attributable to SDI - diluted | $ | 833 | $ | 3,403 | $ | (2,762 | ) | $ | 3,879 | |||||||||||||||
Weighted average Class A common shares outstanding – basic | 9,070,542 | 8,521,404 | 9,068,639 | 8,632,350 | 9,078,272 | 8,788,230 | ||||||||||||||||||
Weighted average Class B common shares outstanding – basic | 7,793,079 | 8,038,028 | 7,751,185 | 7,977,478 | 7,761,184 | 8,007,585 | ||||||||||||||||||
Dilutive impact of stock options and restricted stock awards | - | 43,796 | 42,513 | 826 | - | 33,511 | ||||||||||||||||||
Weighted average common shares outstanding – diluted | 16,863,621 | 16,603,228 | 16,862,337 | 16,610,654 | 16,839,456 | 16,829,326 | ||||||||||||||||||
Net (loss) income attributable to SDI per share of common stock – diluted | $ | (0.21 | ) | $ | 0.03 | |||||||||||||||||||
Net income (loss) attributable to SDI per share of common stock – diluted | $ | 0.05 | $ | 0.20 | $ | (0.16 | ) | $ | 0.23 |
(1) | The Company records an adjustment to net income (loss) in the relevant period for the dilutive impact of subsidiary stock-based awards on the Company’s reported net income (loss) for purposes of calculating net income (loss) per share. |
Three Months Ended March 31, | Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | |||||||||||||||
(In thousands) | 2019 | 2018 | ||||||||||||||
Revenues | ||||||||||||||||
Smokeless Products | $ | 22,544 | $ | 20,747 | $ | 26,176 | $ | 24,410 | ||||||||
Smoking Products | 25,519 | 26,996 | 25,363 | 29,328 | ||||||||||||
NewGen Products | 43,565 | 26,199 | 41,800 | 27,363 | ||||||||||||
Insurance | 7,703 | 7,718 | 7,711 | 7,497 | ||||||||||||
Other(1) | 681 | 406 | 714 | 672 | ||||||||||||
100,012 | 82,066 | 101,764 | 89,270 | |||||||||||||
Operating Income | ||||||||||||||||
Smokeless Products | 7,487 | 4,486 | 9,731 | 8,383 | ||||||||||||
Smoking Products | 9,946 | 6,894 | 10,374 | 11,450 | ||||||||||||
NewGen Products | 2,838 | (1,496 | ) | 7,451 | 1,962 | |||||||||||
Insurance | (4,403 | ) | 617 | (3,970 | ) | 551 | ||||||||||
Other(1) | (10,479 | ) | (1,462 | ) | (8,744 | ) | (8,247 | ) | ||||||||
5,389 | 9,039 | 14,842 | 14,099 | |||||||||||||
Interest expense | 4,491 | 3,992 | 4,358 | 4,110 | ||||||||||||
Interest and investment income | (162 | ) | (103 | ) | (176 | ) | (270 | ) | ||||||||
Loss on extinguishment of debt | - | 2,384 | 150 | - | ||||||||||||
Net periodic benefit income, excluding service cost | (11 | ) | (43 | ) | ||||||||||||
Net periodic benefit (income) expense, excluding service cost | (11 | ) | 264 | |||||||||||||
Income before income taxes | $ | 1,071 | $ | 2,809 | $ | 10,521 | $ | 9,995 | ||||||||
Capital Expenditures | ||||||||||||||||
Smokeless products | $ | 577 | $ | 349 | $ | 525 | $ | 540 | ||||||||
Smoking products | - | - | - | - | ||||||||||||
NewGen products | 309 | 14 | 553 | 100 | ||||||||||||
Insurance | 19 | 20 | 17 | 23 | ||||||||||||
Other(1) | 15 | - | - | - | ||||||||||||
$ | 920 | $ | 383 | $ | 1,095 | $ | 663 | |||||||||
Depreciation and amortization | ||||||||||||||||
Smokeless products | $ | 357 | $ | 339 | $ | 365 | $ | 333 | ||||||||
Smoking products | - | - | - | - | ||||||||||||
NewGen Products | 533 | 396 | 631 | 400 | ||||||||||||
Insurance | 47 | 57 | 38 | 55 | ||||||||||||
Other(1) | 371 | 195 | 383 | 368 | ||||||||||||
$ | 1,308 | $ | 987 | $ | 1,417 | $ | 1,156 |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Revenues | ||||||||
Smokeless Products | $ | 48,720 | $ | 45,157 | ||||
Smoking Products | 50,882 | 56,324 | ||||||
NewGen Products | 85,365 | 53,562 | ||||||
Insurance | 15,414 | 15,215 | ||||||
Other(1) | 1,395 | 1,078 | ||||||
201,776 | 171,336 | |||||||
Operating Income | ||||||||
Smokeless Products | 17,218 | 15,188 | ||||||
Smoking Products | 20,320 | 20,994 | ||||||
NewGen Products | 10,289 | 2,972 | ||||||
Insurance | (8,373 | ) | 1,168 | |||||
Other(1) | (19,223 | ) | (17,184 | ) | ||||
20,231 | 23,138 | |||||||
Interest expense | 8,849 | 8,106 | ||||||
Interest and investment income | (338 | ) | (377 | ) | ||||
Loss on extinguishment of debt | 150 | 2,384 | ||||||
Net periodic benefit (income) expense, excluding service cost | (22 | ) | 221 | |||||
Income before income taxes | $ | 11,592 | $ | 12,804 | ||||
Capital Expenditures | ||||||||
Smokeless products | $ | 1,102 | $ | 889 | ||||
Smoking products | - | - | ||||||
NewGen products | 862 | 114 | ||||||
Insurance | 36 | 43 | ||||||
Other(1) | 15 | - | ||||||
$ | 2,015 | $ | 1,046 | |||||
Depreciation and amortization | ||||||||
Smokeless products | $ | 722 | $ | 672 | ||||
Smoking products | - | - | ||||||
NewGen Products | 1,164 | 796 | ||||||
Insurance | 85 | 112 | ||||||
Other(1) | 754 | 563 | ||||||
$ | 2,725 | $ | 2,143 |
March 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Smokeless Products | $ | 108,762 | $ | 99,441 | ||||
Smoking Products | 143,108 | 142,520 | ||||||
NewGen Products | 93,990 | 95,397 | ||||||
Insurance | 49,776 | 52,169 | ||||||
Other (1) | 29,916 | 32,416 | ||||||
$ | 425,552 | $ | 421,943 |
(In thousands) | June 30, 2019 | December 31, 2018 | ||||||
Assets | ||||||||
Smokeless Products | $ | 113,487 | $ | 99,441 | ||||
Smoking Products | 144,065 | 142,520 | ||||||
NewGen Products | 100,915 | 95,397 | ||||||
Insurance | 47,573 | 52,169 | ||||||
Other (1) | 26,612 | 32,416 | ||||||
$ | 432,652 | $ | 421,943 |
(1) | “Other” includes sales, operating income or assets that are not assigned to the other four reportable segments, such as sales, operating income or assets of SDI and Standard Outdoor, and Turning Point deferred taxes. All goodwill has been allocated to reportable segments. |
NewGen Segment Three Months Ended March 31, | NewGen Segment | |||||||||||||||||||||||
2019 | 2018 | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Wholesalers | $ | 2,197 | $ | 2,330 | $ | 3,843 | $ | 2,350 | $ | 6,040 | $ | 4,680 | ||||||||||||
Retail outlets | 28,645 | 20,884 | 28,516 | 19,904 | 57,161 | 40,624 | ||||||||||||||||||
End-customers | 12,673 | 2,935 | 9,376 | 5,069 | 22,049 | 8,168 | ||||||||||||||||||
Other | 50 | 50 | 65 | 40 | 115 | 90 | ||||||||||||||||||
$ | 43,565 | $ | 26,199 | $ | 41,800 | $ | 27,363 | $ | 85,365 | $ | 53,562 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
Domestic | $ | 89,450 | $ | 71,264 | $ | 92,230 | $ | 78,111 | $ | 181,680 | $ | 149,375 | ||||||||||||
Foreign | 2,859 | 3,084 | 1,823 | 3,662 | 4,682 | 6,746 | ||||||||||||||||||
Net Sales | $ | 92,309 | $ | 74,348 | $ | 94,053 | $ | 81,773 | $ | 186,362 | $ | 156,121 |
(In thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
Statutory capital and surplus | $ | 2,915 | $ | 4,769 | ||||||||||||
Statutory capital and (deficit) surplus | $ | (983 | ) | $ | 4,769 | |||||||||||
Statutory net loss | $ | (1,983 | ) | $ | (9,559 | ) | $ | (5,686 | ) | $ | (9,559 | ) |
(in thousands) | Three Months Ended June 30, | % Change | ||||||||||
2019 | 2018 | |||||||||||
Revenues | ||||||||||||
Smokeless Products | $ | 26,176 | $ | 24,410 | 7.2 | % | ||||||
Smoking Products | 25,363 | 29,328 | -13.5 | % | ||||||||
NewGen Products | 41,800 | 27,363 | 52.8 | % | ||||||||
Insurance | 7,711 | 7,497 | 2.9 | % | ||||||||
Other | 714 | 672 | 6.3 | % | ||||||||
Total revenues | $ | 101,764 | $ | 89,270 | 14.0 | % | ||||||
Operating Income | ||||||||||||
Smokeless Products | $ | 9,731 | $ | 8,383 | 16.1 | % | ||||||
Smoking Products | 10,374 | 11,450 | -9.4 | % | ||||||||
NewGen Products | 7,451 | 1,962 | 279.8 | % | ||||||||
Insurance | (3,970 | ) | 551 | -820.5 | % | |||||||
Other | (8,744 | ) | (8,247 | ) | 6.0 | % | ||||||
Total operating income | 14,842 | 14,099 | 5.3 | % | ||||||||
Interest expense | 4,358 | 4,110 | 6.0 | % | ||||||||
Interest and investment income | (176 | ) | (270 | ) | -34.8 | % | ||||||
Loss on extinguishment of debt | 150 | - | 100 | % | ||||||||
Net periodic benefit (income) expense, excluding service cost | (11 | ) | 264 | -104.2 | % | |||||||
Income before income taxes | 10,521 | 9,995 | 5.3 | % | ||||||||
Income tax expense | 2,979 | 1,908 | 56.1 | % | ||||||||
Net income | 7,542 | 8,087 | -6.7 | % | ||||||||
Amounts attributable to noncontrolling interests | (6,580 | ) | (4,559 | ) | 44.3 | % | ||||||
Net income attributable to SDI | $ | 962 | $ | 3,528 | -72.7 | % |
Three Months Ended March 31, | ||||||||||||
(in thousands) | 2019 | 2018 | % Change | |||||||||
Revenues | ||||||||||||
Smokeless Products | $ | 22,544 | $ | 20,747 | 8.7 | % | ||||||
Smoking Products | 25,519 | 26,996 | -5.5 | % | ||||||||
NewGen Products | 43,565 | 26,199 | 66.3 | % | ||||||||
Insurance | 7,703 | 7,718 | -0.2 | % | ||||||||
Other | 681 | 406 | 67.7 | % | ||||||||
Total revenues | $ | 100,012 | $ | 82,066 | 21.9 | % | ||||||
Operating Income | ||||||||||||
Smokeless Products | $ | 7,487 | $ | 4,486 | 66.9 | % | ||||||
Smoking Products | 9,946 | 6,894 | 44.3 | % | ||||||||
NewGen Products | 2,838 | (1,496 | ) | -289.7 | % | |||||||
Insurance | (4,403 | ) | 617 | -813.6 | % | |||||||
Other | (10,479 | ) | (1,462 | ) | 616.8 | % | ||||||
Total operating income | 5,389 | 9,039 | -40.4 | % | ||||||||
Interest expense | 4,491 | 3,992 | 12.5 | % | ||||||||
Interest and investment income | (162 | ) | (103 | ) | 57.3 | % | ||||||
Loss on extinguishment of debt | - | 2,384 | -100.0 | % | ||||||||
Net periodic benefit income, excluding service cost | (11 | ) | (43 | ) | -74.4 | % | ||||||
Income before income taxes | 1,071 | 2,809 | -61.9 | % | ||||||||
Income tax expense | 1,354 | 809 | 67.4 | % | ||||||||
Net (loss) income | (283 | ) | 2,000 | -114.2 | % | |||||||
Amounts attributable to noncontrolling interests | (3,260 | ) | (1,479 | ) | 120.4 | % | ||||||
Net (loss) income attributable to SDI | $ | (3,543 | ) | $ | 521 | -780.0 | % |
(in thousands) | Six Months Ended June 30, | % Change | ||||||||||
2019 | 2018 | |||||||||||
Revenues | ||||||||||||
Smokeless Products | $ | 48,720 | $ | 45,157 | 7.9 | % | ||||||
Smoking Products | 50,882 | 56,324 | -9.7 | % | ||||||||
NewGen Products | 85,365 | 53,562 | 59.4 | % | ||||||||
Insurance | 15,414 | 15,215 | 1.3 | % | ||||||||
Other | 1,395 | 1,078 | 29.4 | % | ||||||||
Total revenues | $ | 201,776 | $ | 171,336 | 17.8 | % | ||||||
Operating Income | ||||||||||||
Smokeless Products | $ | 17,218 | $ | 15,188 | 13.4 | % | ||||||
Smoking Products | 20,320 | 20,994 | -3.2 | % | ||||||||
NewGen Products | 10,289 | 2,972 | 246.2 | % | ||||||||
Insurance | (8,373 | ) | 1,168 | -816.9 | % | |||||||
Other | (19,223 | ) | (17,184 | ) | 11.9 | % | ||||||
Total operating income | 20,231 | 23,138 | -12.6 | % | ||||||||
Interest expense | 8,849 | 8,106 | 9.2 | % | ||||||||
Interest and investment income | (338 | ) | (377 | ) | -10.3 | % | ||||||
Loss on extinguishment of debt | 150 | 2,384 | -93.7 | % | ||||||||
Net periodic benefit (income) expense, excluding service cost | (22 | ) | 221 | -110.0 | % | |||||||
Income before income taxes | 11,592 | 12,804 | -9.5 | % | ||||||||
Income tax expense | 4,333 | 2,717 | 59.5 | % | ||||||||
Net income | 7,259 | 10,087 | -28.0 | % | ||||||||
Amounts attributable to noncontrolling interests | (9,840 | ) | (6,038 | ) | 63.0 | % | ||||||
Net (loss) income attributable to SDI | $ | (2,581 | ) | $ | 4,049 | -163.7 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||
(in thousands) | Three Months Ended June 30, | % Change | ||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | ||||||||||||||||||||
Net sales | ||||||||||||||||||||||||
Smokeless products | $ | 22,544 | $ | 20,747 | 8.7 | % | $ | 26,176 | $ | 24,410 | 7.2 | % | ||||||||||||
Smoking products | 25,519 | 26,996 | -5.5 | % | 25,363 | 29,328 | -13.5 | % | ||||||||||||||||
NewGen products | 43,565 | 26,199 | 66.3 | % | 41,800 | 27,363 | 52.8 | % | ||||||||||||||||
Other | 681 | 406 | 67.7 | % | 714 | 672 | 6.3 | % | ||||||||||||||||
Total net sales | 92,309 | 74,348 | 24.2 | % | 94,053 | 81,773 | 15.0 | % | ||||||||||||||||
Cost of sales | 51,784 | 42,456 | 22.0 | % | 52,803 | 45,950 | 14.9 | % | ||||||||||||||||
Gross profit | ||||||||||||||||||||||||
Smokeless products | 12,073 | 10,993 | 9.8 | % | 14,063 | 12,533 | 12.2 | % | ||||||||||||||||
Smoking products | 13,484 | 13,164 | 2.4 | % | 13,738 | 15,180 | -9.5 | % | ||||||||||||||||
NewGen products | 14,907 | 7,652 | 94.8 | % | 13,382 | 8,082 | 65.6 | % | ||||||||||||||||
Other | 61 | 83 | -26.5 | % | 67 | 28 | 139.3 | % | ||||||||||||||||
Total gross profit | 40,525 | 31,892 | 27.1 | % | 41,250 | 35,823 | 15.1 | % | ||||||||||||||||
Selling, general and administrative expenses | 30,733 | 23,470 | 30.9 | % | 22,438 | 22,275 | 0.7 | % | ||||||||||||||||
Operating income | $ | 9,792 | $ | 8,422 | 16.3 | % | $ | 18,812 | $ | 13,548 | 38.9 | % |
(in thousands) | Six Months Ended June 30, | % Change | ||||||||||
2019 | 2018 | |||||||||||
Net sales | ||||||||||||
Smokeless products | $ | 48,720 | $ | 45,157 | 7.9 | % | ||||||
Smoking products | 50,882 | 56,324 | -9.7 | % | ||||||||
NewGen products | 85,365 | 53,562 | 59.4 | % | ||||||||
Other | 1,395 | 1,078 | 29.4 | % | ||||||||
Total net sales | 186,362 | 156,121 | 19.4 | % | ||||||||
Cost of sales | 104,580 | 88,406 | 18.3 | % | ||||||||
Gross profit | ||||||||||||
Smokeless products | 26,136 | 23,526 | 11.1 | % | ||||||||
Smoking products | 27,222 | 28,344 | -4.0 | % | ||||||||
NewGen products | 28,289 | 15,734 | 79.8 | % | ||||||||
Other | 135 | 111 | 21.6 | % | ||||||||
Total gross profit | 81,782 | 67,715 | 20.8 | % | ||||||||
Selling, general and administrative expenses | 50,057 | 45,745 | 9.4 | % | ||||||||
Operating income | $ | 31,725 | $ | 21,970 | 44.4 | % |
(in thousands) | For the Three Months Ended March 31, 2019 | For the Period January 2, 2018 to March 31, 2018 | % Change | |||||||||
Insurance premiums earned | $ | 7,149 | $ | 7,317 | -2.3 | % | ||||||
Net investment income | 335 | 194 | 72.7 | % | ||||||||
Other income | 219 | 207 | 5.8 | % | ||||||||
Total revenues | 7,703 | 7,718 | -0.2 | % | ||||||||
Incurred losses and loss adjustment expenses | 6,564 | 5,812 | 12.9 | % | ||||||||
Impairment loss on goodwill and other intangible assets | 2,826 | - | 100.0 | % | ||||||||
Other operating expenses | 2,716 | 1,289 | 110.7 | % | ||||||||
Total operating costs and expenses | 12,106 | 7,101 | 70.5 | % | ||||||||
(Loss) income before income taxes | (4,403 | ) | 617 | -813.6 | % | |||||||
Income tax benefit | (420 | ) | - | 0.0 | % | |||||||
Net (loss) income | $ | (3,983 | ) | $ | 617 | -745.5 | % |
(in thousands) | For the Three Months Ended | % Change | ||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||
Insurance premiums earned | $ | 7,158 | $ | 7,134 | 0.3 | % | ||||||
Net investment income | 222 | 176 | 26.1 | % | ||||||||
Other income | 331 | 187 | 77.0 | % | ||||||||
Total revenues | 7,711 | 7,497 | 2.9 | % | ||||||||
Incurred losses and loss adjustment expenses | 9,152 | 5,405 | 69.3 | % | ||||||||
Other operating expenses | 2,529 | 1,541 | 64.1 | % | ||||||||
Total operating costs and expenses | 11,681 | 6,946 | 68.2 | % | ||||||||
(Loss) income before income taxes | (3,970 | ) | 551 | -820.5 | % | |||||||
Net (loss) income | $ | (3,970 | ) | $ | 551 | -820.5 | % |
(in thousands) | For the Six Months Ended June 30, 2019 | For the Period from January 2, 2018 to June 30, 2018 | % Change | |||||||||
Insurance premiums earned | $ | 14,307 | $ | 14,451 | -1.0 | % | ||||||
Net investment income | 557 | 370 | 50.5 | % | ||||||||
Other income | 550 | 394 | 39.6 | % | ||||||||
Total revenues | 15,414 | 15,215 | 1.3 | % | ||||||||
Incurred losses and loss adjustment expenses | 15,716 | 11,217 | 40.1 | % | ||||||||
Impairment loss on goodwill and other intangible assets | 2,826 | - | 100 | % | ||||||||
Other operating expenses | 5,245 | 2,830 | 85.3 | % | ||||||||
Total operating costs and expenses | 23,787 | 14,047 | 69.3 | % | ||||||||
(Loss) income before income taxes | (8,373 | ) | 1,168 | -816.9 | % | |||||||
Income tax benefit | (420 | ) | - | 100 | % | |||||||
Net (loss) income | $ | (7,953 | ) | $ | 1,168 | -780.9 | % |
(In thousands) | Six months ended June 30, | |||||||
2019 | 2018 | |||||||
Net cash flow provided by (used in): | ||||||||
Operating activities | $ | 13,570 | $ | (1,236 | ) | |||
Investing activities | 6,176 | (14,266 | ) | |||||
Financing activities | (22,913 | ) | 17,323 | |||||
Net (decrease) increase in cash | $ | (3,167 | ) | $ | 1,821 |
Three months ended March 31, | ||||||||
(In thousands) | 2019 | 2018 | ||||||
Net cash flow provided by (used in): | ||||||||
Operating activities | $ | 10,923 | $ | 4,354 | ||||
Investing activities | 585 | 4,210 | ||||||
Financing activities | (16,613 | ) | 4,222 | |||||
Net (decrease) increase in cash | $ | (5,105 | ) | $ | 12,786 |
(in thousands) | March 31, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | ||||||||||||
2018 First Lien Term Loan | $ | 152,000 | $ | 154,000 | $ | 150,000 | $ | 154,000 | ||||||||
2018 Second Lien Term Loan | 40,000 | 40,000 | 35,511 | 40,000 | ||||||||||||
SDI Crystal Term Loan | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||
Standard Outdoor Promissory Notes | 8,984 | 9,950 | 8,785 | 9,950 | ||||||||||||
Note payable - IVG | 4,000 | 4,000 | 4,000 | 4,000 | ||||||||||||
Total Notes Payable and Long-Term Debt | 219,984 | 222,950 | 213,296 | 222,950 | ||||||||||||
Less deferred finance charges and debt discount | (4,589 | ) | (4,903 | ) | (4,273 | ) | (4,903 | ) | ||||||||
Less current maturities | (13,674 | ) | (9,431 | ) | (14,696 | ) | (9,431 | ) | ||||||||
$ | 201,721 | $ | 208,616 | $ | 194,327 | $ | 208,616 |
PART II | OTHER INFORMATION |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||
January 1 – January 31 | - | $ | - | - | (1) | |||||||||||
February 1 – February 28 | - | - | - | (1) | ||||||||||||
March 1 – March 31 | 40,100 | 14.02 | 143,592 | (1) | ||||||||||||
Total | 40,100 | $ | 14.02 | 143,592 | (1) |
STANDARD DIVERSIFIED INC. | |||
By: /s/ Gregory H.A. Baxter | |||
Name: Gregory H.A. Baxter | |||
Title: Executive Chairman of the Board and Interim Chief Executive Officer | |||
/s/ Edward J. Sweeney | |||
Name: Edward J. Sweeney | |||
Title: Interim Chief Financial Officer | |||
Dated: |
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | |
Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | |
101 | XBRL (eXtensible Business Reporting language). The following materials from SDI’s Quarterly Report on Form 10-Q for the quarter ended |
* | Filed or furnished herewith. |
** | Furnished herewith. |