Exhibit 99.1
NEWS
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| Contact: | | Paul Caminiti/Brandy Bergman/Carrie Bloom
Citigate Sard Verbinnen
212/687 - 8080 |
VECTOR GROUP REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS MIAMI, FL, August 9, 2006— Vector Group Ltd. (NYSE: VGR) today announced financial results for the three and six months ended June 30, 2006.
Second quarter 2006 revenues were $113.4 million, compared to revenues of $113.1 million in the second quarter of 2005. The Company recorded operating income of $22.5 million in the 2006 second quarter, compared to operating income of $24.4 million in the second quarter of 2005. Loss from continuing operations for the 2006 second quarter was $3.3 million, or $0.07 per diluted common share, compared to income from continuing operations of $10.3 million, or $0.22 per diluted common share, in the 2005 second quarter. The results for the three months ended June 30, 2006 included a non-cash charge of $14.9 million associated with the issuance in June 2006 of additional shares of common stock in connection with the conversion of $70 million of the Company’s 6.25% convertible notes due 2008. Adjusting for this debt conversion expense, the Company’s income from continuing operations for the 2006 second quarter would have been $11.5 million, or $0.21 per diluted common share.
For the six months ended June 30, 2006, revenues were $231.1 million, compared to $217.3 million for the first six months of 2005. The Company recorded operating income of $42.7 million for the 2006 six-month period, compared to operating income of $43.0 million for the 2005 period. Income from continuing operations for the 2006 six-month period was $5.9 million, or $0.11 per diluted common share, compared to income from continuing operations of $18.7 million, or $0.40 per diluted common share, for the 2005 period. The results for the 2006 period included the debt conversion expense of $14.9 million. Adjusting for this debt conversion expense, income from continuing operations for the first six months of 2006 would have been $20.8 million, or $0.38 per diluted common share.
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For the three and six months ended June 30, 2006, the Company’s conventional cigarette business, which includes Liggett Group cigarettes and USA brand cigarettes, had revenues of $111.6 million and $227.4 million, respectively, compared to $110.2 million and $211.9 million for the three and six months ended June 30, 2005, respectively. Operating income was $30.9 million for the second quarter of 2006 and $61.3 million for the first six months of 2006, compared to $34.3 million and $66.2 million for the three and six months ended June 30, 2005, respectively.
Conference Call To Discuss Second Quarter 2006 Results
As previously announced, the Company will host a conference call and webcast on Thursday, August 10, 2006 at 11:00 A.M. (EDT) to discuss second quarter 2006 results. Investors can access the call by dialing 800-859-8150 and entering 84091160 as the conference ID number. The call will also be available via live webcast atwww.vcall.com
A replay of the call will also be available shortly after the call ends on August 10, 2006 through August 24, 2006. To access the replay, dial 877-656-8905 and enter 84091160 as the conference ID number. The archived webcast will also be available atwww.vcall.com for 30 days.
Vector Group is a holding company that indirectly owns Liggett Group LLC, Vector Tobacco Inc. and New Valley LLC. Additional information concerning the company is available on the company’s website,www.VectorGroupLtd.com.
[Financial Table Follows]
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VECTOR GROUP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
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| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
| Revenues* | | $ | 113,355 | | | $ | 113,113 | | | $ | 231,059 | | | $ | 217,286 | |
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| Expenses: | | | | | | | | | | | | | | | | |
| Cost of goods sold* | | | 69,304 | | | | 65,901 | | | | 142,645 | | | | 124,900 | |
| Operating, selling, administrative and general expenses | | | 21,591 | | | | 22,850 | | | | 45,727 | | | | 49,376 | |
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| Operating income | | | 22,460 | | | | 24,362 | | | | 42,687 | | | | 43,010 | |
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| Other income (expenses): | | | | | | | | | | | | | | | | |
| Interest and dividend income | | | 2,321 | | | | 1,170 | | | | 4,102 | | | | 1,880 | |
| Interest expense | | | (8,802 | ) | | | (9,242 | ) | | | (17,068 | ) | | | (15,889 | ) |
| Loss on conversion of debt | | | (14,860 | ) | | | — | | | | (14,860 | ) | | | — | |
| Loss on investments, net | | | (17 | ) | | | (5 | ) | | | (47 | ) | | | 1,425 | |
| Gain from conversion of LTS notes | | | — | | | | — | | | | — | | | | 9,461 | |
| Equity in loss on operations of LTS | | | — | | | | — | | | | — | | | | (299 | ) |
| Equity income from non-consolidated real estate businesses | | | 3,870 | | | | 2,324 | | | | 7,605 | | | | 2,018 | |
| Other, net | | | 31 | | | | 57 | | | | 77 | | | | 56 | |
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| Income from operations before provision for income taxes and minority interests | | | 5,003 | | | | 18,666 | | | | 22,496 | | | | 41,662 | |
| Income tax expense | | | 8,352 | | | | 8,781 | | | | 16,552 | | | | 21,299 | |
| Minority interests | | | — | | | | 392 | | | | — | | | | (1,624 | ) |
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| (Loss) income from continuing operations | | | (3,349 | ) | | | 10,277 | | | | 5,944 | | | | 18,739 | |
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| Discontinued operations: | | | | | | | | | | | | | | | | |
| Income from discontinued operations, net of minority interests and taxes | | | — | | | | — | | | | — | | | | 82 | |
| Gain on disposal of discontinued operations, net of minority interests and taxes | | | — | | | | — | | | | — | | | | 2,952 | |
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| Income from discontinued operations | | | — | | | | — | | | | — | | | | 3,034 | |
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| Net (loss) income | | $ | (3,349 | ) | | $ | 10,277 | | | $ | 5,944 | | | $ | 21,773 | |
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| Per basic common share: | | | | | | | | | | | | | | | | |
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| (Loss) income from continuing operations | | $ | (0.07 | ) | | $ | 0.23 | | | $ | 0.11 | | | $ | 0.43 | |
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| Income from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | 0.07 | |
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| Net (loss) income applicable to common shares | | $ | (0.07 | ) | | $ | 0.23 | | | $ | 0.11 | | | $ | 0.50 | |
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| Per diluted common share: | | | | | | | | | | | | | | | | |
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| (Loss) income from continuing operations | | $ | (0.07 | ) | | $ | 0.22 | | | $ | 0.11 | | | $ | 0.40 | |
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| Income from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | 0.07 | |
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| Net (loss) income applicable to common shares | | $ | (0.07 | ) | | $ | 0.22 | | | $ | 0.11 | | | $ | 0.47 | |
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| Cash distributions declared per share | | $ | 0.40 | | | $ | 0.38 | | | $ | 0.80 | | | $ | 0.76 | |
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| * | | Revenues and Cost of goods sold include excise taxes of $39,686, $37,011, $79,803 and $70,443, respectively. |
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