Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Entity Information [Line Items] | ||
Entity Registrant Name | STANDARD DIVERSIFIED INC. | |
Entity Central Index Key | 0000911649 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,063,922 | |
Class B Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,750,774 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 14,395 | $ 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 |
Equity securities, at fair value; cost: $1,099 in 2019 and $794 in 2018 | 1,050 | 693 |
Trade accounts receivable, net of allowances of $47 in 2019 and $42 in 2018 | 4,630 | 2,901 |
Premiums receivable | 6,751 | 5,858 |
Inventories | 90,871 | 91,237 |
Other current assets | 11,936 | 15,045 |
Property, plant and equipment, net | 27,788 | 27,741 |
Right of use assets | 13,431 | 0 |
Deferred financing costs, net | 818 | 870 |
Intangible assets, net | 35,818 | 38,325 |
Deferred policy acquisition costs | 2,520 | 2,279 |
Goodwill | 145,961 | 146,696 |
Master Settlement Agreement (MSA) escrow deposits | 31,045 | 30,550 |
Other assets | 5,950 | 6,415 |
Total assets | 425,552 | 421,943 |
LIABILITIES AND EQUITY | ||
Reserves for losses and loss adjustment expenses | 26,984 | 27,330 |
Unearned premiums | 14,153 | 12,707 |
Advance premiums collected | 762 | 500 |
Accounts payable | 17,262 | 9,225 |
Accrued liabilities | 21,168 | 23,883 |
Current portion of long-term debt | 13,674 | 9,431 |
Revolving credit facility | 14,000 | 26,000 |
Notes payable and long-term debt | 201,721 | 208,616 |
Lease liabilities | 11,785 | 0 |
Deferred income taxes | 2,172 | 2,711 |
Postretirement benefits | 3,092 | 3,096 |
Asset retirement obligations | 2,028 | 2,028 |
Other long-term liabilities | 2,033 | 1,687 |
Total liabilities | 330,834 | 327,214 |
Commitments and Contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value; authorized shares 50,000,000; -0- issued and outstanding shares | 0 | 0 |
Additional paid-in capital | 79,686 | 81,260 |
Class A Treasury stock, 103,492 common shares at cost as of December 31, 2018 | 0 | (1,440) |
Accumulated other comprehensive loss | (1,156) | (1,683) |
Accumulated deficit | (28,156) | (24,613) |
Total stockholders' equity | 50,543 | 53,694 |
Noncontrolling interests | 44,175 | 41,035 |
Total equity | 94,718 | 94,729 |
Total liabilities and equity | 425,552 | 421,943 |
Class A Common Stock [Member] | ||
Equity: | ||
Common stock | 91 | 92 |
Class B Common Stock [Member] | ||
Equity: | ||
Common stock | $ 78 | $ 78 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Fixed maturities available for sale, amortized cost | $ 32,365 | $ 32,474 |
Equity securities, at cost | 1,099 | 794 |
Trade Accounts receivable, allowances | $ 47 | $ 42 |
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Treasury stock, common shares (in shares) | 103,492 | |
Class A Common Stock [Member] | ||
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 9,061,130 | 9,156,293 |
Common stock, shares outstanding (in shares) | 9,061,130 | 9,052,801 |
Class B Common Stock [Member] | ||
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 7,753,566 | 7,801,995 |
Common stock, shares outstanding (in shares) | 7,753,566 | 7,801,995 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of (Loss) Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Net sales | $ 92,309 | $ 74,348 |
Insurance premiums earned | 7,149 | 7,317 |
Net investment income | 335 | 194 |
Other income | 219 | 207 |
Total revenues | 100,012 | 82,066 |
Operating costs and expenses: | ||
Cost of sales | 51,784 | 42,456 |
Selling, general and administrative expenses | 30,733 | 23,470 |
Incurred losses and loss adjustment expenses | 6,564 | 5,812 |
Impairment loss on goodwill and other intangible assets | 2,826 | 0 |
Other operating expenses | 2,716 | 1,289 |
Total operating costs and expenses | 94,623 | 73,027 |
Operating income | 5,389 | 9,039 |
Interest expense | 4,491 | 3,992 |
Interest and investment income | (162) | (103) |
Loss on extinguishment of debt | 0 | 2,384 |
Net periodic benefit income, excluding service cost | (11) | (43) |
Income before income taxes | 1,071 | 2,809 |
Income tax expense | 1,354 | 809 |
Net (loss) income | (283) | 2,000 |
Net income attributable to noncontrolling interests | (3,260) | (1,479) |
Net (loss) income attributable to Standard Diversified Inc. | $ (3,543) | $ 521 |
Net (loss) income attributable to SDI per Class A and Class B Common Share - Basic (in dollars per share) | $ (0.21) | $ 0.03 |
Net (loss) income attributable to SDI per Class A and Class B Common Share - Diluted (in dollars per share) | $ (0.21) | $ 0.03 |
Weighted Average Class A and Class B Common Shares Outstanding - Basic (in shares) | 16,863,621 | 16,559,432 |
Weighted Average Class A and Class B Common Shares Outstanding - Diluted (in shares) | 16,863,621 | 16,603,228 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Comprehensive Loss (unaudited) [Abstract] | ||
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) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other comprehensive income (loss): | ||
Amortization of unrealized pension and postretirement (loss) gain, tax | $ 1 | $ 10 |
Unrealized investment gain (loss) on investments, tax | 93 | 135 |
Unrealized loss on interest rate swaps, tax | $ 182 | $ 185 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Equity (unaudited) - USD ($) $ in Thousands | Common Shares [Member]Class A [Member] | Common Shares [Member]Class B [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Noncontrolling Interests [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 83 | $ 81 | $ 0 | $ 70,813 | $ (1,558) | $ (26,982) | $ 26,004 | $ 68,441 |
Beginning balance (in shares) at Dec. 31, 2017 | 8,347,123 | 8,040,275 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Class B common stock into Class A common stock | $ 1 | $ (1) | $ 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Class B common stock into Class A common stock (in shares) | 11,001 | (11,001) | 0 | |||||
Issuance of Class A common stock in private placement, net of issuance costs | $ 2 | $ 0 | $ 0 | 1,978 | 0 | 0 | 0 | 1,980 |
Issuance of Class A common stock in private placement, net of issuance costs (in shares) | 181,825 | 0 | 0 | |||||
Issuance of Class A common stock in asset purchase | $ 0 | $ 0 | $ 0 | 250 | 0 | 0 | 0 | 250 |
Issuance of Class A common stock in asset purchase (in shares) | 22,727 | 0 | 0 | |||||
Vesting of SDI restricted stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Vesting of SDI restricted stock (in shares) | 18,834 | 0 | 0 | |||||
Amortization of unrealized pension and postretirement gain (loss), net of tax | $ 0 | $ 0 | $ 0 | 0 | 15 | 0 | 15 | 30 |
Unrealized gain (loss) on investments, net of tax | 0 | 0 | 0 | 0 | (596) | 0 | (187) | (783) |
Unrealized loss on interest rate swaps, net of tax | 0 | 0 | 0 | 0 | (269) | 0 | (257) | (526) |
SDI stock-based compensation | 0 | 0 | 0 | 341 | 0 | 0 | 0 | 341 |
Impact of Turning Point equity transactions on APIC and NCI | 0 | 0 | 0 | 82 | 0 | 0 | 111 | 193 |
Turning Point dividend paid to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (379) | (379) |
Impact of adoption of ASU 2018-02 | ASU 2018-02 [Member] | 0 | 0 | 0 | 0 | 12 | (12) | 0 | $ 0 |
Share repurchases (in shares) | 0 | |||||||
Net (loss) income | 0 | 0 | 0 | 0 | 0 | 521 | 1,479 | $ 2,000 |
Ending balance at Mar. 31, 2018 | $ 86 | $ 80 | $ 0 | 73,464 | (2,396) | (26,473) | 26,786 | 71,547 |
Ending balance (in shares) at Mar. 31, 2018 | 8,581,510 | 8,029,274 | 0 | |||||
Beginning balance at Dec. 31, 2018 | $ 92 | $ 78 | $ (1,440) | 81,260 | (1,683) | (24,613) | 41,035 | 94,729 |
Beginning balance (in shares) at Dec. 31, 2018 | 9,156,293 | 7,801,995 | (103,492) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Class B common stock into Class A common stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Class B common stock into Class A common stock (in shares) | 48,429 | (48,429) | 0 | |||||
Amortization of unrealized pension and postretirement gain (loss), net of tax | $ 0 | $ 0 | $ 0 | 0 | (2) | 0 | (2) | (4) |
Unrealized gain (loss) on investments, net of tax | 0 | 0 | 0 | 0 | 768 | 0 | 200 | 968 |
Unrealized loss on interest rate swaps, net of tax | 0 | 0 | 0 | 0 | (239) | 0 | (237) | (476) |
SDI stock-based compensation | 0 | 0 | 0 | 180 | 0 | 0 | 0 | 180 |
Impact of Turning Point equity transactions on APIC and NCI | 0 | 0 | 0 | 261 | 0 | 0 | 363 | 624 |
Turning Point dividend paid to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | (444) | (444) |
Share repurchases | $ 0 | $ 0 | $ (576) | 0 | 0 | 0 | 0 | $ (576) |
Share repurchases (in shares) | 0 | 0 | (40,100) | (40,100) | ||||
Retirement of treasury stock | $ (1) | $ 0 | $ 2,016 | (2,015) | 0 | 0 | 0 | $ 0 |
Retirement of treasury stock (in shares) | (143,592) | 0 | 143,592 | |||||
Net (loss) income | $ 0 | $ 0 | $ 0 | 0 | 0 | (3,543) | 3,260 | (283) |
Ending balance at Mar. 31, 2019 | $ 91 | $ 78 | $ 0 | $ 79,686 | $ (1,156) | $ (28,156) | $ 44,175 | $ 94,718 |
Ending balance (in shares) at Mar. 31, 2019 | 9,061,130 | 7,753,566 | 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Equity (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Consolidated Statement of Equity (unaudited) [Abstract] | ||
Amortization of unrealized pension and postretirement gain (loss), tax | $ 1 | $ 10 |
Unrealized gain (loss) on investments, tax | 93 | 135 |
Unrealized loss on interest rate swaps, tax | $ 182 | $ 185 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 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: | ||
Loss on extinguishment of debt | 0 | 2,384 |
Loss on disposal of property, plant and equipment | 23 | 0 |
Depreciation expense | 871 | 768 |
Amortization of deferred financing costs and debt discount | 373 | 336 |
Amortization of other intangible assets | 437 | 219 |
Deferred income taxes | (449) | 793 |
Impairment loss on goodwill and other intangible assets | 2,826 | 0 |
Stock-based compensation expense | 646 | 385 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,735) | 820 |
Inventories | 366 | 5,237 |
Other current assets | 3,085 | (1,730) |
Other assets | (399) | (120) |
Accounts payable | 8,646 | 2,963 |
Accrued postretirement liabilities | (9) | (6,510) |
Accrued liabilities and other | (4,128) | (751) |
Premiums receivable | (467) | 745 |
Deferred policy acquisition costs | (242) | (1,172) |
Reserves for losses and loss adjustment expenses | (347) | (2,371) |
Unearned and advance premiums | 1,709 | 358 |
Net cash provided by operating activities | 10,923 | 4,354 |
Cash flows from investing activities: | ||
Acquisitions, net of cash acquired | 0 | 2,918 |
Capital expenditures | (920) | (383) |
Proceeds from sale and maturity of fixed maturity securities, available-for-sale | 2,050 | 2,205 |
Payments for purchases of fixed maturity securities, available-for-sale | (1,941) | 0 |
Payments for purchases of equity securities | (306) | 0 |
Restricted cash, MSA escrow deposits | 1,702 | (530) |
Net cash provided by investing activities | 585 | 4,210 |
Cash flows from financing activities: | ||
Payments of Standard Outdoor promissory note | (966) | 0 |
Payments of financing costs | 0 | (3,279) |
Turning Point Brands exercise of options | 187 | 20 |
Turning Point Brands redemption of options | (12) | 0 |
Proceeds from issuance of SDI stock | 0 | 1,980 |
Turning Point Brands dividend to noncontrolling interests | (437) | 0 |
Repurchase of SDI common shares | (1,385) | 0 |
Net cash (used in) provided by financing activities | (16,613) | 4,222 |
Net (decrease) increase in cash | (5,105) | 12,786 |
Cash, beginning of period: | ||
Unrestricted | 21,201 | 18,219 |
Restricted | 2,361 | 4,704 |
Total cash at beginning of period | 23,562 | 22,923 |
Cash, end of period: | ||
Unrestricted | 14,395 | 31,535 |
Restricted | 4,062 | 4,179 |
Total cash at end of period | 18,457 | 35,714 |
Supplemental schedule of noncash investing and financing activities: | ||
Turning Point Brands dividend to noncontrolling interests declared not paid | 444 | 379 |
Accrued expenses incurred for financing costs | 0 | 154 |
Issuance of SDI shares in asset purchase | 0 | 250 |
Issuance of promissory notes in asset purchases | 0 | 8,810 |
2018 First Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Payment of term loan | (2,000) | 0 |
Proceeds from term loan | 0 | 160,000 |
2018 Revolving Credit Facility [Member] | ||
Cash flows from financing activities: | ||
Proceeds from (payments of ) credit facility, net | (12,000) | 0 |
2018 Second Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Proceeds from term loan | 0 | 40,000 |
SDI Credit Facility [Member] | ||
Cash flows from financing activities: | ||
Proceeds from (payments of ) credit facility, net | 0 | 9,114 |
2017 Second Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Payment of term loan | 0 | (55,000) |
2017 Revolving Credit Facility [Member] | ||
Cash flows from financing activities: | ||
Proceeds from (payments of ) credit facility, net | 0 | (8,000) |
2017 First Lien Term Loans [Member] | ||
Cash flows from financing activities: | ||
Payment of term loan | $ 0 | $ (140,613) |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Description of Business [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business The accompanying condensed consolidated financial statements include the results of operations of Standard Diversified Inc. (“SDI”), a holding company, and its consolidated subsidiaries (collectively, “the Company”). SDI (f/k/a Standard Diversified Opportunities Inc., Special Diversified Opportunities Inc. and Strategic Diagnostics Inc.) was incorporated in the State of Delaware in 1990, and, until 2013, engaged in bio-services and industrial bio-detection (collectively, the “Life Sciences Business”). On July 12, 2013, SDI sold substantially all of its rights, title and interest in substantially all of its non-cash assets related to the Life Sciences Business and became a “shell company,” as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended. On June 1, 2017, SDI consummated a Contribution and Exchange Transaction (the “Contribution and Exchange”) to acquire a 52.1% controlling interest in Turning Point Brands, Inc. (“Turning Point”). The transaction was accounted for as a recapitalization or reverse acquisition. As of March 31, 2019, SDI has a 50.3% ownership interest in Turning Point. As a result of the consummation of the Contribution and Exchange, SDI is no longer a shell company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation SDI is a holding company and its condensed consolidated financial statements include Turning Point and its subsidiaries, Pillar General Inc. (“Pillar General”) and its subsidiaries, and Standard Outdoor LLC (“Standard Outdoor”) and its subsidiaries Turning Point is also a holding company which owns North Atlantic Trading Company, Inc. (“NATC”), and its subsidiaries and Turning Point Brands, LLC (“TPLLC”), and its subsidiaries. Except where the context indicates otherwise, references to Turning Point include Turning Point; NATC and its subsidiaries National Tobacco Company, L.P. (“NTC”), National Tobacco Finance, LLC (“NTFLLC”), North Atlantic Operating Company, Inc. (“NAOC”), North Atlantic Cigarette Company, Inc. (“NACC”), and RBJ Sales, Inc. (“RBJ”); and TPLLC and its subsidiaries Intrepid Brands, LLC (“Intrepid”), Vapor Beast, LLC (“VaporBeast,” f/k/a Smoke Free Technologies, Inc.), and Vapor Shark, LLC, and its subsidiaries (collectively, “Vapor Shark,” f/k/a The Hand Media), Vapor Acquisitions Company, LLC (“Vapor Supply”), Vapor Finance, LLC (“VFIN”), International Vapor Group, LLC and its subsidiaries (collectively, “IVG”) and as of January 15, 2019, Nu-X Ventures, LLC (“Nu-X”), a subsidiary of TPLLC. Pillar General, a wholly-owned subsidiary of the Company as of January 2, 2018, owns 100% of Interboro Holdings, Inc. which is a holding company and includes the accounts of its wholly-owned subsidiaries (collectively, “Interboro”) which consist of Interboro Management, Inc., Maidstone Insurance Company (“Maidstone”), formerly known as AutoOne Insurance Company and AIM Insurance Agency Inc. Maidstone is domiciled in the State of New York and is a property and casualty insurance company which provides automobile insurance . Standard Outdoor, a wholly-owned subsidiary of the Company, and its subsidiaries, consists of Standard Outdoor Southeast I LLC, Standard Outdoor Southeast II LLC and Standard Outdoor Southwest LLC. Standard Outdoor is an billboard structures located in Texas, Alabama, Georgia and Florida. The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiaries. All significant intercompany transactions have been eliminated. Certain prior years’ amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated results of operations or cash flows in any of the periods presented. Noncontrolling Interests These condensed consolidated financial statements reflect the application of Accounting Standards Codification Topic 810, Consolidations SDI acquired a 52.1% interest in Turning Point on June 1, 2017 through the Contribution and Exchange. Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Company are reported as noncontrolling interests in the accompanying condensed consolidated financial statements. Use of Estimates The preparation of the condensed consolidated financial statements requires the management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the period. The Company’s significant estimates include but are not limited to those affecting the valuation of goodwill and other intangible assets, the adequacy of the Company’s insurance reserves, assumptions used in determining pension and postretirement benefit obligations and deferred income tax valuation allowances. Actual results could differ from those estimates. Revenue Recognition Turning Point Turning Point recognizes revenues, net of sales incentives and sales returns, including shipping and handling charges billed to customers, upon delivery of goods to the customer at an amount that Turning Point expects to be entitled to in exchange for those goods in accordance with the five-step analysis outlined in Revenue from Contracts with Customers (Topic 606): (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Topic 606 requires entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Turning Point’s management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of Turning Point’s contract revenue for the decision-making purposes is the disaggregation by segment which can be found in Note 21 of Notes to Consolidated Financial Statements, along with an additional disaggregation of contract revenue by sales channel. Standard Outdoor The Company’s out-of-home advertising revenues are primarily derived from providing advertising space to customers on its physical billboards or other outdoor structures. Standard Outdoor generally (i) owns the physical structures on which it displays advertising copy for customers, (ii) holds the legal permits to display advertising thereon, and (iii) leases the underlying sites. As of January 1, 2019, billboard display revenues are recognized under ASC 842, the lease accounting standard, as rental income on a straight-line basis over the customer lease term. Maidstone Maidstone recognizes revenues from insurance contracts, including premiums and fees, under the guidance in ASC 944, Financial Services-Insurance Premiums Shipping Costs The Company records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $4.3 million and $3.2 million for the three months ended March 31, 2019 and 2018, respectively. Fair Value GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under GAAP are described below: Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Derivative Instruments Foreign Currency Forward Contracts Derivatives and Hedging Interest Rate Swap Agreements: Risks and Uncertainties Manufacturers and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The tobacco industry has experienced, and is experiencing, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes for injuries allegedly caused by smoking or exposure to smoke. However, several lawsuits have been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically, such claims assert that use of smokeless products is addictive and causes oral cancer. Additionally, several lawsuits have been brought against manufacturers and distributors of NewGen products due to malfunctioning devices. There can be no assurance the Company will not sustain losses in connection with such lawsuits and that such losses will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Master Settlement Agreement Escrow Account Pursuant to the Master Settlement Agreement (the “MSA”) entered into in November 1998 by most states (represented by their attorneys general acting through the National Association of Attorneys General) and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to include a manufacturer of make-your-own (“MYO”) cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account to have funds available for certain potential tobacco-related liabilities, with sub-accounts on behalf of each settling state. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statue to pay a final judgement to that state’s plaintiffs in the event of such a final judgement against the company. The Company chose to open and fund an escrow account as its method of compliance. It is the Company’s policy to record amounts on deposit in the escrow account for prior years as a non-current asset. Each year’s annual obligation is required to be deposited in the escrow account by April 15 of the following year. In addition to the annual deposit, many states have elected to require quarterly deposits for the previous quarter’s sales. As of March 31, 2019, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $31.0 million. At December 31, 2018, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $30.6 million. Effective in the third quarter of 2017, the Company no longer sells any product covered under the MSA. Thus, absent a change in legislation, the Company will no longer be required to make deposits to the MSA escrow account. The Company has chosen to invest a portion of the MSA escrow deposits in U.S. Government securities including Treasury Inflation-Protected Securities, Treasury Notes, and Treasury Bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA; any investment in an unrealized loss position will be held until the value is recovered, or until maturity. The following shows the fair value of the MSA escrow account as of: March 31, 2019 December 31, 2018 (In thousands) 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 Fair value level 2: U.S. Governmental agency obligations 500 2 - 502 1,193 9 - 1,202 Fair value level 2: U.S. Governmental agency obligations - - - - 1,000 - (3 ) 997 Fair value level 2: U.S. Governmental agency obligations 27,511 - (1,030 ) 26,481 27,519 - (1,529 ) 25,990 $ 32,073 $ 2 $ (1,030 ) $ 31,045 $ 32,073 $ 9 $ (1,532 ) $ 30,550 The following schedule shows the maturities of the U.S. Governmental agency obligations as of: (In thousands) March 31, 2019 December 31, 2018 Less than one year $ 1,499 $ 1,499 One to five years 14,091 13,591 Five to ten years 9,453 11,152 Greater than ten years 2,968 3,470 Total U.S. Governmental agency obligations $ 28,011 $ 29,712 The following shows the amount of deposits by sales year for the MSA escrow account: (Dollar amounts in thousands) Deposits as of Sales Year March 31, 2019 December 31, 2018 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 83 83 Total $ 32,073 $ 32,073 Food and Drug Administration (“FDA”) On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the FDA to immediately regulate the manufacturing, sale, and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to additionally regulate cigars, pipe tobacco, electronic cigarettes (“e-cigarettes”), vaporizers, and e-liquids as “deemed” tobacco products under the FSPTCA. The FDA assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S. Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP,” also known as the “Tobacco Buyout”) assessment. First, the total, annual, congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers. Prior to October 1, 2016, these FDA user fees applied only to those products then regulated by the FDA. Effective October 1, 2016, the FDA began additionally applying FDA user fees to newly deemed tobacco products subject to FDA user fees as described above, i.e. On July 28, 2017, the FDA announced a new direction in regulating tobacco products, including the newly “deemed” markets such as cigars and vapor products. The FDA stated it intends to begin several new rulemaking processes, some of which will outline foundational rules governing the premarket application process for the deemed products, including Substantial Equivalence Applications and Premarket Tobacco Applications. Compliance and related costs could be significant and could increase the costs of operating in Turning Point’s NewGen segment. The original filing deadlines for newly “deemed” products on the market as of August 8, 2016, have been postponed until August 8, 2021, for “combustible” products ( e.g. e.g. i.e. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires that compensation costs related to employee share-based payment transactions are measured in the financial statements at the fair value on the date of grant and are recognized over the vesting period of the award. Fixed Maturity Securities Investments in fixed maturity securities including bonds, loan-backed and structured securities are classified as available-for-sale and reported at fair value. Significant changes in prevailing interest rates and other economic conditions may adversely affect the timing and amount of cash flows on fixed income investments, as well as their related fair values. Fixed maturities are recorded on a trade date basis. Amortization of bond premium and accretion of bond discount are calculated using the scientific method. Changes in fair values of these securities, after deferred income tax effects, are reflected as unrealized gains or losses in accumulated other comprehensive income (loss). Realized gains and losses from the sale of investments are calculated as of the trade date in the consolidated statements of operations and comprehensive loss and are based upon the specific identification of securities sold. Investment income consists of interest and is reported net of investment expenses. Prepayment assumptions are considered when determining the amortization of discount or premium for loan-backed and structured securities. An investment is considered impaired when the fair value of the investment is less than its cost or amortized cost. When an investment is impaired, the Company must make a determination as to whether the impairment is other than temporary (“OTTI”). With respect to an investment in an impaired fixed maturity security, OTTI occurs if the Company (a) intends to sell the fixed maturity security, (b) more likely than not will be required to sell the fixed maturity security before its anticipated recovery, or (c) it is probable that the Company will be unable to collect all amounts due to the recovery of the entire cost basis of the security. The Company conducts a periodic review to identify and evaluate securities having OTTI, which include the above factors as well as the following: (1) the likelihood of the recoverability of principal and interest for fixed maturity securities (i.e., whether there is a credit loss); (2) the length of time and extent to which the fair value has been less than amortized cost for fixed maturity securities; and (3) the financial condition, near term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. If the Company intends to sell the fixed maturity security or will more likely than not be required to sell the fixed maturity security before the anticipated recovery, a loss in the entire amount of the impairment is reflected in net investment gains (losses) in net income (loss). If the Company determines that it is probable it will be unable to collect all amounts and the Company has no intent to sell the fixed maturity security, a credit loss is recognized in net investment gains (losses) in net income (loss) to the extent that the present value of expected cash flows is less than the amortized cost basis; any difference between fair value and the new amortized cost basis (net of the credit loss) is reflected in other comprehensive income (losses), net of applicable income taxes. Upon recognizing an OTTI, the new cost basis of the security is the previous amortized cost basis less the OTTI recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair value; however, for fixed maturity securities, the difference between the new cost basis and expected cash flows is accreted to net investment gains (losses) over the remaining expected life of the investment. Deferred Policy Acquisition Costs (“DAC”) Policy acquisition costs, which vary with and are directly related to the production of successful new business, are deferred. The costs deferred consist principally of commissions and policy issuance costs and are amortized into expense as the related premiums are earned. (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 DAC asset at beginning of period $ 2,279 $ - Deferred expenses 1,517 1,354 Amortized expenses (1,276 ) (182 ) DAC asset at end of period $ 2,520 $ 1,172 The Company, utilizing assumptions for future expected claims, premium rate increases and interest rates, reviews the recoverability of its deferred policy acquisition costs (“DAC”) on a periodic basis. If the Company determines that the future gross profits of its in-force policies are not sufficient to recover its DAC, the Company recognizes a premium deficiency by charging any unamortized acquisition costs to expense to the extent required in order to eliminate the deficiency. If the premium deficiency exceeds the unamortized acquisition costs, then a liability is accrued for the excess deficiency. The Company anticipates investment income as a factor in its premium deficiency reserve calculation. Incurred Losses and Loss Adjustment Expenses Incurred losses and loss adjustment expenses (“LAE”) are charged to operations as incurred. The liability for losses and LAE is based upon individual case estimates for reported claims and a factor for incurred but not reported (“IBNR”) claims. Losses, LAE and related liabilities are reported net of estimated salvage and subrogation. Inherent in the estimate of ultimate losses and LAE are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled; however, management believes that its aggregate provision for losses and LAE as of March 31, 2019 and December 31, 2018 are reasonable and adequate to meet the ultimate net cost of covered losses, but such provision is necessarily based on estimates and the ultimate net cost may vary significantly from such estimates. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. Recent Accounting Pronouncements Adopted Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases.” This ASU requires substantially all leases be recorded on the balance sheet as right of use assets and lease obligations. The Company adopted the ASU using a retrospective adoption method at January 1, 2019, as outlined in ASU No. 2018-11, “Leases - Targeted Improvements.” Under this method of adoption, there is no impact to the comparative consolidated statement of income and consolidated balance sheet. The Company determined that there was no cumulative-effect adjustment to beginning retained earnings on the consolidated balance sheet. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, “Leases”. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed carry forward of historical lease classifications. Adoption of this standard did not materially impact the Company’s income before income taxes and had no impact on the statement of cash flows. See Note 14, “Leases” for further details. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies certain disclosure requirements on fair value measurements in ASC 820. This ASU is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the effect that ASU 2018-13 will have on its consolidated financial statement disclosures. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | Note 3. Acquisitions Acquisitions by SDI Maidstone Acquisition On January 2, 2018, the Company acquired all the outstanding capital stock of Interboro for cash consideration of $2.5 million. Under the name Maidstone Insurance Company, Maidstone offers personal automobile insurance, primarily in the state of New York. (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 Standard Outdoor On January 18, 2018, the Company, through Standard Outdoor, completed an asset acquisition consisting of 83 billboard structures located in Alabama, as well as the ground leases and advertising contracts relating to such billboard structures for consideration with a fair value of approximately $9.7 million, of which $4.0 million was paid in cash and the remainder is payable under a promissory note with a face value of $6.5 million, net of a fair value discount of $0.9 million. A principal payment of $1.0 million on the promissory note is payable January 1 of each year, beginning January 1, 2020 and ending January 1, 2022, with a $3.5 million final principal payment on January 1, 2023. The promissory note has a 5% fixed interest rate and interest is payable quarterly. The purchase price was primarily attributed to property, plant and equipment consisting of the billboard structures. In conjunction with the asset acquisition, the Company established an asset retirement obligation of $1.0 million. On February 20, 2018, the Company, through Standard Outdoor, completed an asset acquisition consisting of 86 billboard structures located in Georgia and Florida, as well as the ground leases and advertising contracts relating to such billboard structures for consideration with a fair value of approximately $6.8 million, of which $3.2 million was paid in cash, $0.2 million was paid with the Company’s Class A common shares and the remainder is payable under a promissory note with a face value of $3.5 million, net of a fair value discount of $0.3 million. A principal payment of $0.9 million on the promissory note was paid on March 1, 2019, with the remaining principal paid down monthly through March 1, 2022. The promissory note has a 5% fixed interest rate and interest is payable monthly, starting March 1, 2019. The purchase price was primarily attributed to property, plant and equipment consisting of the billboard structures. In conjunction with the asset acquisition, the Company established an asset retirement obligation of $1.0 million. Acquisitions by Turning Point IVG In September 2018, Turning Point acquired 100% of the equity interest of IVG for total consideration of $23.8 million satisfied through $14.5 million paid in cash, 153,079 shares of common stock with a fair value of $5.3 million, and a $4.0 million note payable to IVG’s former owners (“IVG Note”) which matures 18 months from the acquisition date. All principal and accrued and unpaid interest under the IVG Note is subject to indemnification obligations of the sellers pursuant to the International Vapor Group Stock Purchase Agreement dated as of September 5, 2018. The arrangement includes an additional $4.5 million of earnouts with both performance-based and service-based conditions payable to former IVG owners who became employees of Turning Point as a result of the acquisition. Such amounts will be considered compensation and not a component of the IVG purchase price. The portion of earnout payments a recipient will receive will be calculated by reference to certain performance metrics not to exceed a two-year period as specified within the acquisition agreement. Turning Point recorded earnout expense of approximately $0.4 million within the condensed consolidated statement of income for the three months ended March 31, 2019, based on the probability of achieving the performance conditions. IVG markets and sells a broad array of proprietary and third-party vapor products directly to adult consumers through an online platform under brand names such as VaporFi, South Beach Smoke, and Direct-Vapor. IVG operates company-owned stores under the VaporFi brand and also operates as a franchisor to franchisee-owned stores. The acquisition of IVG adds a significant business-to-consumer distribution platform to Turning Point’s NewGen portfolio. As of March 31, 2019, Turning Point had not completed the accounting for the acquisition. The following purchase price and goodwill are based on the excess of the acquisition price over the estimated fair value of the tangible and intangible assets acquired and are based on management’s preliminary estimates. (In thousands) As of March 31, 2019 (preliminary) Total consideration transferred $ 24,292 Adjustments to consideration: Cash acquired, net of debt assumed (221 ) Working capital (245 ) Adjusted consideration transferred 23,826 - Assets acquired: - Working capital (primarily inventory) 3,331 Fixed assets 1,274 Intangible assets 7,880 Net assets acquired 12,485 Goodwill $ 11,341 The goodwill of $11.3 million consists of the synergies and scale expected from combining the operations and is currently deductible for tax purposes. Vapor Supply On April 30, 2018, Turning Point purchased the assets of Vapor Supply LLC, vaporsupply.com, and some of its affiliates including the Ecig.com domain through its subsidiary Vapor Acquisitions Company, LLC, for total consideration of $4.8 million paid in cash to strengthen its presence within the NewGen segment. Vapor Supply is a business-to-business e-commerce distribution platform servicing independent retail vape shops. Additionally, Vapor Supply manufactures and markets proprietary e-liquids under the DripCo brand and operates company-owned stores. As of March 31, 2019, Turning Point had not completed the accounting for the acquisition of these assets. The following fair value for working capital (primarily inventory), fixed assets, and trade name are based on management’s preliminary estimates: (In thousands) Fair Value Working capital $ 2,500 Fixed assets 272 Trade name 2,028 Total consideration transferred $ 4,800 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | Note 4. Derivative Instruments Foreign Currency The Company’s policy is to manage the risks associated with foreign exchange rate movements. The policy allows hedging up to 100% of its anticipated purchases of inventory over a forward period that will not exceed 12 rolling and consecutive months. The Company may, from time to time, hedge currency for non-inventory purchases, e.g. Interest Rate Swaps The Company’s policy is to manage interest rate risk by reducing the volatility of future cash flows associated with debt instruments bearing interest at variable rates. In March 2018, the Company executed various interest rate swap agreements for a notional amount of $70 million with an expiration of December 2022. The swap agreements fix LIBOR at 2.755%. The swap agreements met the hedge accounting requirements; thus, any change in fair value is recorded to other comprehensive income. The Company uses the shortcut method to account for the swap agreements. The shortcut method assumes the hedge to be perfectly effective; thus, there is no ineffectiveness to be recorded in earnings. The swap agreements’ fair values at March 31, 2019, and December 31, 2018, resulted in a liability of $1.5 million and $0.9 million, respectively, included in other long-term liabilities in the Company’s condensed consolidated balance sheets. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Investments | Note 5. Investments Debt Securities The Company currently classifies all of its investments in fixed maturity debt securities held by Maidstone as available-for-sale and, accordingly, they are carried at estimated fair value. The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2019 U.S. Treasury and U.S. Government $ 5,542 $ - $ (15 ) $ 5,527 U.S. Tax-exempt municipal 4,619 70 - 4,689 Corporate 14,281 205 (32 ) 14,454 Mortgage and asset-backed securities 7,923 41 (46 ) 7,918 Total Fixed Maturity Securities $ 32,365 $ 316 $ (93 ) $ 32,588 December 31, 2018 U.S. Treasury and U.S. Government $ 4,338 $ - $ (34 ) $ 4,304 U.S. Tax-exempt municipal 4,645 4 (25 ) 4,624 Corporate 14,858 16 (193 ) 14,681 Mortgage and asset-backed securities 8,633 10 (120 ) 8,523 Total Fixed Maturity Securities $ 32,474 $ 30 $ (372 ) $ 32,132 Amortized cost and fair value of fixed maturity securities as of March 31, 2019 and December 31, 2018 by contractual maturity are shown below. The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2019 December 31, 2018 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 499 $ 498 $ 748 $ 745 Due after one year through five years 14,664 14,712 13,719 13,600 Due after five years through ten years 9,044 9,220 9,027 8,917 Due after ten years 235 240 347 347 Mortgage and asset-backed securities 7,923 7,918 8,633 8,523 Total $ 32,365 $ 32,588 $ 32,474 $ 32,132 The Company uses the services of its investment manager, which uses a proprietary model for loss assumptions and widely accepted models for prepayment assumptions in valuing mortgage-backed and asset-backed securities with inputs from major third-party data providers. The models combine the effects of interest rates, volatility, and prepayment speeds based on various scenarios (Monte Carlo simulations) with resulting effective analytics (spreads, duration, convexity) and cash flows on a monthly basis. Credit sensitive cash flows are calculated using proprietary models, which estimate future loan defaults in terms of timing and severity. Model assumptions are specific to asset class and collateral types and are regularly evaluated and adjusted where appropriate. Fixed maturity securities that were in an unrealized loss position and the length of time that such securities have been in an unrealized loss position, as measured by their prior 12-month fair values, are as follows as of: 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 March 31, 2019 Bonds: U.S. Treasury and U.S. Government $ 2,692 $ (4 ) $ 1,870 $ (10 ) $ 4,562 $ (14 ) 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 ) Total Fixed maturities available for sale $ 3,276 $ (18 ) $ 11,485 $ (74 ) $ 14,761 $ (92 ) December 31, 2018 Bonds: U.S. Treasury and U.S. Government $ 4,304 $ (34 ) $ - $ - $ 4,304 $ (34 ) U.S. Tax-exempt municipal 4,285 (25 ) - - 4,285 (25 ) Corporate bonds 10,306 (193 ) - - 10,306 (193 ) Mortgage and asset-backed securities 6,717 (120 ) - - 6,717 (120 ) Total Fixed maturities available for sale $ 25,612 $ (372 ) $ - $ - $ 25,612 $ (372 ) The Company has evaluated the unrealized losses on the fixed maturity securities and determined that they are not attributable to credit risk factors. For fixed maturity securities, losses in fair value are viewed as temporary if the fixed maturity security can be held to maturity and it is reasonable to assume that the issuer will be able to service the debt, both as to principal and interest. The Company did not recognize OTTI losses during the three months ended March 31, 2019 or for the period from January 2, 2018 to March 31, 2018 . Equity Securities The Company’s equity investments are carried at fair value with changes in fair value recognized in income. Net investment income The components of net investment income for the three months ended March 31, 2019 and the period from January 2, 2018 to March 31, 2018 are as follows: (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 Investment income: Bonds $ 261 $ 153 Common stocks 26 - Preferred stocks 6 - Cash and cash equivalents 55 60 Total investment income 348 213 Less: Investment expenses (13 ) (19 ) Net investment income $ 335 $ 194 For the three months ended March 31, 2019 Maidstone realized less than $10,000 of capital gains. For the period from January 2, 2019 to March 31, 2018, Maidstone realized no capital gains or losses. Fair value disclosures The following tables show how Maidstone’s investments are categorized in the fair value hierarchy as of: (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 There were no transfers between levels during the three months ended March 31, 2019 or the period from January 2, 2018 to March 31, 2018 . Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis Level 1 inputs- Level 2 inputs- Restricted Assets The Company is required to maintain assets on deposit, which primarily consist of cash or fixed maturities, with various regulatory authorities to support its insurance operations. The Company’s insurance subsidiaries maintain assets in trust accounts as collateral for or guarantees for letters of credit to third parties. As of March 31, 2019 and December 31, 2018, the Company had deposits with U.S. regulatory authorities of $2.8 million and $2.7 million, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 6. Fair Value of Financial Instruments The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of ASC 825, Financial Instruments. The estimated fair value amounts have been determined by the Company using the methods and assumptions described below. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and Cash Equivalents The Company used Level 1 inputs to determine the fair value of its cash equivalents. As of March 31, 2019 and 2018, cost represented fair value of the Company’s cash and cash equivalents. Accounts Receivable The fair value of accounts receivable approximates their carrying value due to their short-term nature. 2018 Revolving Credit Facility The fair value of Turning Point’s revolving credit facility approximates its carrying value as the interest rate fluctuates with changes in market rates. Note Payable – IVG The fair value of the IVG Note approximates its carrying value of $4.0 million due to the recency of the note’s issuance, relative to the end of the quarter, March 31, 2019. Long-Term Debt As Turning Point’s long-term debt bears interest at variable rates that fluctuate with market rates, the carrying values of the long-term debt instruments approximate their respective fair values. As of March 31, 2019, the fair values of the 2018 First Lien Term Loan and the 2018 Second Lien Term Loan approximated $152.0 million and $40.0 million, respectively. As of December 31, 2018, the fair values of the 2018 First Lien Term Loan and the 2018 Second Lien Term Loan approximated $154.0 million and $40.0 million, respectively. See Note 13 of Notes to Consolidated Financial Statements for information regarding Turning Point’s credit facilities. The fair value of Standard Outdoor’s promissory notes issued as partial consideration in the January and February 2018 asset acquisitions approximated $8.2 million as of March 31, 2019. The fair value of SDI’s term loan debt issued in January 2018 and the additional amount issued in August 2018 approximates its carrying value as the interest rate fluctuates with changes in market rates. Foreign Exchange Turning Point did not have any open forward contracts at March 31, 2019. Turning Point had forward contracts for the purchase of €1.5 million as of December 31, 2018. The fair values of the foreign exchange contracts are based upon quoted market prices and resulted in a gain of approximately $0.1 million for the three months ended March 31, 2019. As there were no open contracts as of March 31, 2019, there is no resulting balance sheet position related to the fair value. Interest Rate Swaps Turning Point had swap contracts for a total notional amount of $70 million as of March 31, 2019 and December 31, 2018. The fair values of the swap contracts are based upon quoted market prices and resulted in a liability of $1.5 million and $0.9 million as of March 31, 2019 and December 31, 2018, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Note 7. Inventories The components of inventories are as follows as of: (In thousands) March 31, 2019 December 31, 2018 Raw materials and work in process $ 3,967 $ 2,722 Leaf tobacco 35,929 34,977 Finished goods - Smokeless products 6,540 6,321 Finished goods - Smoking products 15,079 14,666 Finished goods - NewGen products 33,810 37,194 Other 903 738 96,228 96,618 LIFO reserve (5,357 ) (5,381 ) $ 90,871 $ 91,237 The inventory valuation allowance was $1.5 million and $2.5 million as of March 31, 2019 and December 31, 2018, respectively |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 8. Property, Plant and Equipment Property, plant and equipment consist of as of: (In thousands) March 31, 2019 December 31, 2018 Land $ 22 $ 22 Building and improvements 2,320 2,320 Leasehold improvements 2,101 2,101 Machinery and equipment 14,229 13,307 Advertising structures 17,928 17,913 Furniture and fixtures 5,434 5,453 42,034 41,116 Accumulated depreciation (14,246 ) (13,375 ) $ 27,788 $ 27,741 |
Other Current Assets
Other Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Other Current Assets [Abstract] | |
Other Current Assets | Note 9. Other Current Assets Other current assets consist of the following as of: (In thousands) March 31, 2019 December 31, 2018 Inventory deposits $ 7,134 $ 9,739 Other 4,802 5,306 $ 11,936 $ 15,045 |
Goodwill and Intangible Asset I
Goodwill and Intangible Asset Impairments | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Asset Impairments [Abstract] | |
Goodwill and Intangible Asset Impairments | Note 10. Goodwill and Intangible Asset Impairments The Company tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. The Company’s annual assessment is performed as of December 31. During the three months ended March 31, 2019, the Company recorded impairment charges of $0.8 million and $2.0 million related to the full impairment of the goodwill and intangible asset balances, respectively, in its Insurance segment. This impairment was a result of changes in the future plans for the Insurance segment and certain other factors impacting recoverability. As a result of the above, there are no goodwill or intangible assets balances remaining in the Company’s Insurance segment as of March 31, 2019. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Note 11. Accrued Liabilities Accrued liabilities consist of as of: (In thousands) March 31, 2019 December 31, 2018 Accrued payroll and related items $ 3,093 $ 6,063 Customer returns and allowances 3,082 2,895 Taxes payable 3,758 - Lease liabilities 2,039 - Other 9,196 14,925 $ 21,168 $ 23,883 |
Liability for Losses and Loss A
Liability for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Liability for Losses and Loss Adjustment Expenses [Abstract] | |
Liability for Losses and Loss Adjustment Expenses | Note 12. Liability for Losses and Loss Adjustment Expenses The liability for unpaid losses and LAE is determined from individual case estimates for reported claims and a factor for IBNR claims. The methods for making such estimates and establishing claim reserves are continually reviewed and adjustments are reflected in the current period. While management believes the liability for unpaid losses and LAE is adequate, the ultimate liability may vary from the amount recorded and the variance may be material to the Company’s financial position and results of operations. Activity in the liability for losses and LAE is summarized as follows: (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 Reserve for losses and LAE at beginning of period $ 27,330 $ 29,366 Provision for claims, net of insurance: Incurred related to: Prior year 622 - Current year 5,871 5,812 Total incurred 6,493 5,812 Deduct payment of claims, net of reinsurance: Paid related to: Prior year 4,743 5,478 Current year 2,096 2,704 Total paid 6,839 8,182 Reserve for losses and LAE at end of period $ 26,984 $ 26,996 The components of the net liability for losses and LAE are as follows as of: (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 |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Note 13. Notes Payable and Long-Term Debt Notes payable and long-term debt consist of the following as of: (In thousands) March 31, 2019 December 31, 2018 2018 First Lien Term Loan $ 152,000 $ 154,000 2018 Second Lien Term Loan 40,000 40,000 SDI Crystal Term Loan 15,000 15,000 Standard Outdoor Promissory Notes 8,984 9,950 Note payable - IVG 4,000 4,000 Total Notes Payable and Long-Term Debt 219,984 222,950 Less deferred finance charges and debt discount (4,589 ) (4,903 ) Less current maturities (13,674 ) (9,431 ) $ 201,721 $ 208,616 Turning Point 2018 Credit Facility On March 7, 2018, Turning Point entered into a $250 million credit facility consisting of a $160 million 2018 First Lien Term Loan with Fifth Third Bank, as administrative agent, and other lenders, and a $50 million 2018 Revolving Credit Facility (collectively, the “2018 First Lien Credit Facility”) in addition to a $40 million 2018 Second Lien Term Loan (together with the 2018 First Lien Credit Facility, the “2018 Credit Facility”) with Prospect Capital Corporation, as administrative agent, and other lenders. The 2018 Credit Facility contains customary events of default including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain other material indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, and change in control defaults. The 2018 Credit Facility also contains certain negative covenants customary for facilities of these types including covenants that, subject to exceptions described in the 2018 Credit Facility, restrict the ability of Turning Point and its subsidiary guarantors: (i) to pledge assets, (ii) to incur additional indebtedness, (iii) to pay dividends, (iv) to make distributions, (v) to sell assets, and (vi) to make investments. 2018 First Lien Credit Facility The 2018 First Lien Term Loan and the 2018 Revolving Credit Facility bear interest at LIBOR plus a spread of 2.75% to 3.50% based on Turning Point’s senior leverage ratio. The 2018 First Lien Term Loan has quarterly required payments of $2.0 million beginning June 30, 2018, increasing to $3.0 million on June 30, 2020, and increasing to $4.0 million on June 30, 2022. The 2018 First Lien Credit Facility has a maturity date of March 7, 2023. The 2018 First Lien Term Loan is secured by a first priority lien on substantially all of the assets of the borrowers and the guarantors thereunder, including a pledge of Turning Point’s capital stock, other than certain excluded assets (the “Collateral”). The 2018 First Lien Credit Facility contains certain financial covenants including maximum senior leverage ratio of 3.50x with step-downs to 3.00x, a maximum total leverage ratio of 4.50x with step-downs to 4.00x, and a minimum fixed charge coverage ratio of 1.20x. The weighted average interest rate of the 2018 First Lien Term Loan was 5.75% and 5.13% as of March 31, 2019 and December 31, 2018, respectively. The weighted average interest rate of the 2018 Revolving Credit Facility was 6.61% and 5.79% as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019 and December 31, 2018, Turning Point had $14.0 million and $26.0 million of borrowings outstanding under the 2018 Revolving Credit Facility, respectively. The $36.0 million unused portion of the 2018 Revolving Credit Facility is reduced by a $1.3 million letter of credit with Fifth Third Bank, resulting in $34.7 million of availability under the 2018 Revolving Credit Facility as of March 31, 2019. 2018 Second Lien Credit Facility The 2018 Second Lien Credit Facility bears interest at a rate of LIBOR plus 7.00% and has a maturity date of March 7, 2024. The 2018 Second Lien Term Loan is secured by a second priority interest in the Collateral and is guaranteed by the same entities as the 2018 First Lien Term Loan. The 2018 Second Lien Credit Facility contains certain financial covenants including a maximum senior leverage ratio of 3.75x with step-downs to 3.50x, a maximum total leverage ratio of 4.75x with step-downs to 4.50x, and a minimum fixed charge coverage ratio of 1.10x. The weighted average interest rate of the 2018 Second Lien Term Loan was 9.48% and 8.70% as of March 31, 2019 and December 31, 2018, respectively. Note Payable – IVG In September 2018, Turning Point issued a note payable to IVG’s former shareholders (“IVG Note”). The IVG Note is $4.0 million principal with 6.0% interest compounding annually and matures on March 5, 2020. All principal and accrued and unpaid interest under the IVG Note is subject to indemnification obligations of the sellers pursuant to the International Vapor Group Stock Purchase Agreement dated as of September 5, 2018. SDI and Standard Outdoor SDI On February 2, 2018, SDI and its Standard Outdoor advertising subsidiaries (the “Borrowers”) entered into a term loan agreement with Crystal Financial LLC (“Crystal Term Loan”). The Crystal Term Loan provides for an initial term loan of $10.0 million and a commitment to provide additional term loans of up to $15.0 million. Subject to the satisfaction of certain conditions, the Company may request an additional increase in the commitment of up to $25.0 million. The Crystal Term Loan bears interest at a rate equal to the three-month “Libor Rate” as published in The Wall Street Journal plus 7.25%. Interest under the Crystal Term Loan agreement is payable monthly and is also subject to an agency fee of $50,000, payable upon execution of the agreement, and annually thereafter. In addition, the Crystal Term Loan was subject to a one-time commitment fee of $350,000, which was paid upon execution of the agreement. The principal balance is payable at maturity, on February 2, 2023. In August 2018, the Company borrowed an additional $5.0 million under the Crystal Term Loan. This borrowing is subject to the same terms as the initial borrowing. The obligations of the Borrowers under the Crystal Term Loan agreement are secured by all the assets of the Borrowers, subject to certain exceptions and exclusions as set forth in the Crystal Term Loan agreement and other loan documents. The Crystal Term Loan agreement contains certain affirmative and negative covenants that are binding on the Borrowers, including, but not limited to, restrictions (subject to specified exceptions and qualifications) on the ability of the Borrowers to incur indebtedness, to create liens, to merge or consolidate, to make dispositions, to pay dividends or make distributions, to make investments, to pay any subordinated indebtedness, to enter into certain transactions with affiliates or to make capital expenditures. The Crystal Term Loan agreement contains customary events of default (which are in some cases subject to certain exceptions, thresholds, notice requirements and grace periods). The Term Loan Agreement also contains certain representations, warranties and conditions, in each case as set forth in the Term Loan Agreement. With respect to the maintenance of at least $3.0 million in unrestricted cash and cash equivalents in accounts subject to control agreements in favor of the Agent, the Company had approximately $8.2 million in unrestricted cash and cash equivalents as of March 31, 2019 in those accounts. Interest expense related to the Crystal Term Loan of $0.4 million and less than $0.1 million, including amortization of the discount, was recorded for the three months ended March 31, 2019 and 2018, respectively. Standard Outdoor On January 18, 2018, as partial consideration for an asset purchase of 83 billboard structures located in Alabama, as well as the ground leases and advertising contracts relating to such billboard structures, the Company issued a promissory note with a face value of $6.5 million. The promissory note was recorded net of a discount of $0.9 million, representing the difference between the face value and fair value at issuance. This discount will be amortized into interest expense using the effective interest rate method over the term of the promissory note. A principal payment of $1.0 million on the promissory note is payable January 1 of each year, beginning January 1, 2020 and ending January 1, 2022, with a $3.5 million final principal payment on January 1, 2023. The promissory note has a 5% fixed coupon interest rate and interest is payable quarterly. On February 20, 2018, as partial consideration for an asset purchase of 86 billboard structures located in Georgia and Florida, as well as the ground leases and advertising contracts relating to such billboard structures, the Company issued a promissory note with a face value of $3.5 million. The promissory note was recorded net of a discount of $0.3 million, representing the difference between the face value and fair value at issuance. This discount will be amortized into interest expense using the effective interest rate method over the term of the promissory note. A principal payment of $1.0 million on the promissory note was paid on March 1, 2019, with the remaining principal paid down monthly through March 1, 2022. The promissory note has a 5% fixed coupon interest rate and interest is payable monthly. Interest expense related to the Standard Outdoor loans of $0.2 million and $0.1 million, including amortization of the discount, was recorded for the three months ended March 31, 2019 and 2018, respectively. The following table summarizes the consolidated scheduled principal repayments subsequent to March 31, 2019: Future Minimum Principal Payments April 1, 2019 - December 31, 2019 $ 6,536 2020 16,839 2021 13,882 2022 16,227 2023 126,500 thereafter 40,000 Total $ 219,984 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 14. Leases As of January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . The main impact to the financial statements is the recognition of lease liabilities and right of use assets. Turning Point Turning Point’s leases consist primarily of leased property for its manufacturing warehouse, head offices and retail space as well as vehicle leases. In general, Turning Point does not recognize any renewal periods within the lease terms as there are not significant barriers to ending the lease at the initial term. Lease and non-lease components are accounted for as a single lease component. Standard Outdoor Standard Outdoor leases land and constructs a billboard that it owns, or leases an existing billboard owned by a third party . Standard Outdoor does recognize certain renewal periods to match the remaining useful life of its billboard structures. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense consisted of the following: (In thousands) Three Months Ended March 31, 2019 Operating lease cost: Cost of sales $ 192 Selling, general and administrative 702 Variable lease cost (1) 298 Short-term lease cost 54 Sublease income (30 ) Total operating lease cost $ 1,216 (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. Supplemental balance sheet information related to leases was as follows as of: (In thousands) March 31, 2019 Assets: Right of use assets $ 13,431 Total leased assets $ 13,431 Liabilities: Current lease liabilities (1) $ 2,039 Long-term lease liabilities 11,785 Total lease liabilities $ 13,824 (1) Reported within accrued liabilities on the condensed consolidated balance sheet 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 % Nearly all the lease contracts for the Company do not provide a readily determinable implicit rate. For these contracts, the Company estimated the incremental borrowing rate based on information available upon the adoption of ASU 2016-02. Future maturities of lease liabilities consisted of the following: Year Payments April 1, 2019 - December 31, 2019 $ 2,349 2020 2,792 2021 2,246 2022 1,561 2023 1,354 Thereafter 9,396 Total lease payments 19,698 Less: Imputed interest 5,874 Present value of lease liability $ 13,824 |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2019 | |
Pension and Postretirement Benefit Plans [Abstract] | |
Pension and Postretirement Benefit Plans | Note 15. Pension and Postretirement Benefit Plans Turning Point has a defined benefit pension plan. Benefits for hourly employees were based on a stated benefit per year of service, reduced by amounts earned in a previous plan. Benefits for salaried employees were based on years of service and the employees’ final compensation. The defined benefit pension plan is frozen. Turning Point’s policy is to make the minimum amount of contributions that can be deducted for federal income taxes. Turning Point expects to make no contributions to the pension plan in 2019. In the second quarter of 2018, Turning Point made mutually agreed upon lump-sum payments to certain individuals covered by the defined benefit pension plan which resulted in a curtailment loss of approximately $0.3 million during the second quarter of 2018. Turning Point sponsored a defined benefit postretirement plan that covered hourly employees. This plan provides medical and dental benefits. This plan is contributory with retiree contributions adjusted annually. Turning Point’s policy is to make contributions equal to benefits paid during the year. Turning Point expects to contribute approximately $0.2 million to its postretirement plan in 2019 for the payment of benefits. The following table provides the components of net periodic pension and postretirement benefit costs and total costs for the plans: Three months ended March 31, Pension Benefits Post-Retirement Benefits (In thousands) 2019 2018 2019 2018 Service cost $ 26 $ 26 $ - $ - Interest cost 130 142 25 29 Expected return on plan assets (161 ) (254 ) - - Amortization of losses (gains) 37 60 (42 ) (20 ) Net periodic benefit expense (income) $ 32 $ (26 ) $ (17 ) $ 9 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 16. Stockholders’ Equity Common Stock At the consummation of the Contribution and Exchange, the Company issued 7,335,018 shares of its Class A Common Stock to Turning Point shareholders, in exchange for 9,842,373 shares of Turning Point stock, and 857,714 shares of its Class A Common Stock, in exchange for the Company’s outstanding common stock. The Company also issued 13,700 shares of Class A Common Stock to holders of the Company’s restricted stock, which vested at the time of the Contribution and Exchange. Following the consummation of the Contribution and Exchange, the Company distributed a dividend of one share of Class B Common Stock for each outstanding share of Class A Common Stock, for a total issuance of 8,190,166 shares of Class B Common Stock. In addition, under the Fifth Amended and Restated Certificate of Incorporation, which became effective at the time of the Contribution and Exchange, the number of authorized shares of the Company’s Common Stock, $0.01 par value per share, was increased from 50,000,000 to 330,000,000, of which 300,000,000 are Class A Common Stock and 30,000,000 are Class B Common Stock. The was approved by the Company’s stockholders by partial written consent on July 14, 2017, and in accordance with the rules of the Securities and Exchange Commission and Delaware corporation law regarding approval by partial written consent, became effective when filed with the Secretary of State of the State of Delaware on August 18, 2017. Common Stock Repurchase Program On June 29, 2017, the Company’s Board of Directors (the “Board”) authorized a program, effective immediately, to repurchase over a period of twelve months shares of the Company’s Class A Common Stock or Class B Common Stock, par value $0.01 per share, constituting, in the aggregate, up to 5% of the outstanding shares of Common Stock. Shares of the Common Stock may be repurchased in the open market or through negotiated transactions. The program may be terminated or suspended at any time at the discretion of the Company. The time of purchases and the exact number of shares to be purchased, if any, will depend on market conditions. The repurchase program does not include specific price targets or timetables. The Company intends to finance the purchases using available working capital. The Crystal Term Loan, as described in Note 13, Notes Payable and Long-Term Debt, generally prohibits such repurchases of the Company’s Common Stock. Repurchases of 40,100 shares of common stock were made pursuant to this program during the three months ended March 31, 2019 for a cost of $0.6 million. No shares of common stock were repurchased in the three months ended March 31, 2018. Approval for these repurchases was received from Crystal. As of December 31, 2018, $0.8 million was included in accrued liabilities on the condensed consolidated balance sheets for unsettled repurchases. Equity Issuance In January 2018, the Company issued 181,825 shares of its Class A common stock in a private placement for gross proceeds of $2.0 million. In March 2018, the Company granted 18,834 shares of restricted stock with immediate vesting to individuals for services performed. These shares were granted outside of the Company’s 2017 Omnibus Equity Compensation Plan. Dividends paid by Turning Point On November 9, 2017, the Board of Directors of Turning Point approved the initiation of a cash dividend to its shareholders. During the three months ended March 31, 2019, Turning Point paid or accrued dividends of $0.4 million to its shareholders other than SDI. The most recent dividend was paid on April 12, 2019 to shareholders of record at the close of business on March 22, 2019. Dividends are classified as restricted payments within the 2018 Credit Facility. Turning Point is generally permitted to make restricted payments provided that, at the time of payment, or as a result of payment, Turning Point is not in default on its debt covenants. Additional restrictions limit the aggregate amount of restricted, quarterly dividends during a fiscal year to the aggregate amount of mandatory and voluntary principal payments made on the priority term loans during the fiscal year. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 17. Share-Based Compensation On June 9, 2017, the Company’s Board adopted the 2017 Omnibus Equity Compensation Plan (the “2017 Plan”) in order to provide employees of the Company and its subsidiaries, certain consultants and advisors who perform services for the Company or its subsidiaries, and non-employee members of the Board of the Company with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, and other stock-based awards. The Board authorized 1,000,000 shares of the Class A Common Stock of the Company to be issued under the Plan. The Plan was approved by the Company’s stockholders by partial written consent on July 14, 2017, and in accordance with the rules of the Securities and Exchange Commission and Delaware corporation law regarding approval by partial written consent, became effective on August 17, 2017. As of March 31, 2019, the Company had 988,930 shares available for grant under the 2017 Plan. The Company also has an Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible full-time employees to purchase shares of common stock at 90 percent of the lower of the fair market value of a share of common stock on the first or last day of the quarter. Eligible employees are provided the opportunity to acquire Company common stock during each quarter. No more than 26,447 shares of common stock may be issued under the ESPP. Such stock may be unissued shares or treasury shares of the Company or may be outstanding shares purchased in the open market or otherwise on behalf of the ESPP. The Company’s ESPP is compensatory and therefore, the Company is required to recognize compensation expense related to the discount from market value of shares sold under the ESPP. The Company issues new shares to satisfy shares purchased under the ESPP. Including the share-based compensation expense of SDI’s subsidiaries, the Company recorded share-based compensation expense of $0.6 million and $0.4 million recorded for the three months ended March 31, 2019 and 2018, respectively. This expense is a component of selling, general and administrative expense. No options of SDI were exercised during the three months ended March 31, 2019 or 2018. Information with respect to the adjusted activity of outstanding stock options is summarized as follows: (In thousands, except per share amounts) Number of Shares Price Range Weighted Average Remaining Contractual term Balance, January 1, 2019 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 The following table provides additional information about the Company’s stock options outstanding and exercisable as of March 31, 2019: 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 The Company grants restricted stock awards (“RSA”) which is the right to receive shares. The fair value of RSAs is based on the market price for the stock at the date of grant. The following table summarizes the changes in non-vested RSAs for the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Non-vested RSAs at January 1, 2019 127,005 $ 10.96 Granted - - Vested - - Non-vested RSAs at March 31, 2019 127,005 $ 10.96 As of March 31, 2019, there was $0.9 million of total unrecognized stock-based compensation expense, related to restricted stock awards, which will be recognized over the weighted-average remaining vesting period of 1.4 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 18. Income Taxes In December 2017, the U.S. Congress passed the Tax Cuts and Jobs Act (“TCJA”) which the President signed in the same month. The TCJA reduced the corporate income tax rate to 21%, effective January 1, 2018. Other significant changes accompanying the corporate income tax rate reduction include eliminating the corporate alternative minimum tax, limiting the interest expense deduction to 30% of adjusted taxable income, and limiting net operating losses to 80% of taxable income for losses arising in tax years beginning after 2017. The TCJA required the Company to remeasure its deferred tax assets and liabilities at the newly enacted tax rate in December 2017, the period of enactment. SDI has recorded a full valuation allowance as of March 31, 2019, offsetting its U.S. federal and state net deferred tax assets which primarily represent net operating loss carry forwards (“NOLs”). At March 31, 2019, the Company’s management concluded, based upon the evaluation of all available evidence, that it is more likely than not that the U.S. federal and state net deferred tax assets will not be realized. Due to the reverse acquisition transaction with Turning Point, the Company determined that SDI has experienced a “change in control” as defined in Internal Revenue Code Section 382, which will result in an annual limitation on SDI’s utilization of NOLs in future periods. The Company is currently evaluating the effects of Section 382 on SDI’s future utilization of its NOLs. The Company’s income tax expense for the three months ended March 31, 2019 and 2018 was $1.4 million and $0.8 million, respectively. Turning Point’s effective income tax rate for the three months ended March 31, 2019, was 21.3% which includes a discrete tax deduction of $0.9 million for the three months ended March 31, 2019, relating to stock option exercises. Turning Point The Company follows the provisions of ASC 740-10-25, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company has determined that the Company did not have any uncertain tax positions requiring recognition under the provisions of ASC 740-10-25. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of interest expense. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In general, the Company is no longer subject to U.S. federal and state tax examinations for years prior to 2014. As a part of the Company’s impairment of other indefinite lived intangible assets as described more fully in Note 10, the Company reversed its deferred tax liability recorded as a part of the purchase of Maidstone, during the three months ended March 31, 2019. The reversal decreased deferred income taxes by $0.4 million on the condensed consolidated balance sheet as of March 31, 2019 and provided an income tax benefit of $0.4 million to the condensed consolidated statements of operations for the three months ended March 31, 2019. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Contingencies [Abstract] | |
Contingencies | Note 19. Contingencies The Company is a party from time to time to various proceedings in the ordinary course of business. For a description of the Master Settlement Agreement, to which the Company is a party, see Note 2 Summary of Significant Accounting Policies. Other than the proceedings mentioned below, there is no material litigation, arbitration or governmental proceeding currently pending against the Company or any of its officers or directors in their capacity as such, and the Company and its officers and directors have not been subject to any such proceeding. Other major tobacco companies are defendants in product liability claims. In a number of these cases, the amounts of punitive and compensatory damages sought are significant and could have a material adverse effect on Turning Point’s business and results of operations. Turning Point is a defendant in certain cases which have been dormant for many years, which cases have now been dismissed with prejudice. Turning Point is subject to several lawsuits alleging personal injuries resulting from malfunctioning vaporizer devices and may be subject to claims in the future relating to other NewGen products. Turning Point is still evaluating these claims and the potential defenses to them. For example, Turning Point did not design or manufacture the products at issue; rather, they were merely the distributor. Nonetheless, there can be no assurance that Turning Point will prevail in these cases, and they could have a material adverse effect on the financial position, results of operations, or cash flows of Turning Point. Maidstone is a party to lawsuits arising in the normal course of its business. These lawsuits generally seek to establish liability under insurance policies and occasionally seek punitive damages. In the opinion of the Company’s management, none of the cases, individually or collectively, are likely to result in judgments for amounts, after considering established loss reserves and reinsurance, which would have a material adverse effect on the Company’s financial condition or results of operations. Concentrations Maidstone writes primarily personal automobile and homeowners insurance in New York. Maidstone’s financial position, results of operations and cash flows are susceptible to risks as a result of these concentrations. In addition, Maidstone writes a significant amount of business through brokers and a credit risk exists should any of these brokers be unable to fulfill their obligations with respect to the payment of insurance balances. The creditworthiness of the counterparty is evaluated by Maidstone, taking into account credit ratings assigned by independent agencies. The credit approval process involves an assessment of factors, including, among others, the counterparty, country and industry credit exposure limits. Collateral may be required, at the discretion of the Company, on certain transactions based on the creditworthiness of the counterparty. Maidstone’s fixed income investment portfolio is managed in accordance with guidelines that have been tailored to meet specific investment strategies, including standard of diversification, which limit the allowable holdings to any single issue. Maidstone reported no investment in excess of 10% of the Company’s surplus as of March 31, 2019 or December 31, 2018, other than investments issued or guaranteed by the United States government or its agencies. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 20. Earnings Per Share The Company has two classes of common stock, Class A and Class B; shares of Class B Common Stock are convertible into shares of Class A Common Stock at any time, on a one-for-one basis. S hares of Class A Common Stock and Class B Common Stock have the same rights and powers, rank equally, share ratably and are identical in all respects and as to all matters, except that (i) each share of Class B Common Stock shall have the right to 10 votes per share and (ii) the shares of Class B Common Stock shall be convertible into shares of Class A Common Stock automatically upon the transfer of such shares of Class B Common Stock, with certain exceptions, or upon the affirmative vote of holders of two-thirds of the then-outstanding shares of Class B Common Stock or voluntarily by the holder of such shares of Class B Common Stock. Diluted earnings per share is calculated similarly to basic earnings per share, except that the calculation includes the dilutive effect of the assumed exercise of options issuable under the Company’s stock incentive plans and the Company’s unvested restricted stock awards. Basic net (loss) income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net (loss) income per share is computed using the weighted-average number of common shares and the weighted average effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options and restricted stock awards and the dilutive effect of such awards is reflected in diluted earnings per share by application of the treasury stock method. The following tables set forth the computation of basic and diluted net (loss) income per share of Class A and Class B common stock. For the three months ended March 31, 2019 and 2018, the basic weighted average shares outstanding has been calculated using the number of common shares outstanding of SDI from January 1, 2018 through March 31, 2018. Three Months Ended March 31, (In thousands, except share and per share amounts) 2019 2018 Basic net (loss) income per common share calculation: Net (loss) income attributable to SDI $ (3,543 ) $ 521 Weighted average Class A common shares outstanding – basic 9,070,542 8,521,404 Weighted average Class B common shares outstanding – basic 7,793,079 8,038,028 Weighted average common shares outstanding – basic 16,863,621 16,559,432 Net (loss) income attributable to SDI per share of common stock – basic $ (0.21 ) $ 0.03 Three Months Ended March 31, (In thousands, except share and per share amounts) 2019 2018 Diluted net (loss) income attributable to SDI per common share calculation: Net (loss) income attributable to SDI $ (3,543 ) $ 521 Impact of subsidiary dilutive securities (1) (80 ) (43 ) Net (loss) income attributable to SDI - diluted $ (3,623 ) $ 478 Weighted average Class A common shares outstanding – basic 9,070,542 8,521,404 Weighted average Class B common shares outstanding – basic 7,793,079 8,038,028 Dilutive impact of stock options and restricted stock awards - 43,796 Weighted average common shares outstanding – diluted 16,863,621 16,603,228 Net (loss) income attributable to SDI per share of common stock – diluted $ (0.21 ) $ 0.03 (1) The Company records an adjustment to net income in the relevant period for the dilutive impact of subsidiary stock-based awards on the Company’s reported net income for purposes of calculating income per share. As of March 31, 2018, 5,063 of stock options have been excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive. Due to the net loss, there was no adjustment for anti-dilutive stock options as of March 31, 2019. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information [Abstract] | |
Segment Information | Note 21. Segment Information In accordance with ASC 280, Segment Reporting Beginning in the first quarter of 2018, as a result of the acquisition of an insurance company, the Company has an additional segment, Insurance. The Insurance segment represents the Company’s property and casualty insurance business, operated through Maidstone, a New York domiciled seller of auto and personal lines. The Company also reports an Other segment, which includes the results of operations of SDI and Standard Outdoor and assets of the consolidated Company not assigned to the five reportable segments, including Turning Point deferred taxes and deferred financing fees for the Revolving Credit Facility. Elimination includes the elimination of intercompany accounts between segments. Accounting policies of these segments are the same as those of the Company. Corporate costs of Turning Point are not directly charged to the three reportable segments in the ordinary course of operations. The Company evaluates the performance of its segments and allocates resources to them based on operating income. In 2018, corporate costs were allocated to the segments based on net sales. Management believes this allocation does not reflect the operations of the business. Prior periods have been adjusted to conform to the current year presentation. The tables below present financial information about reported segments: Three Months Ended March 31, 2019 2018 Revenues Smokeless Products $ 22,544 $ 20,747 Smoking Products 25,519 26,996 NewGen Products 43,565 26,199 Insurance 7,703 7,718 Other (1) 681 406 100,012 82,066 Operating Income Smokeless Products 7,487 4,486 Smoking Products 9,946 6,894 NewGen Products 2,838 (1,496 ) Insurance (4,403 ) 617 Other (1) (10,479 ) (1,462 ) 5,389 9,039 Interest expense 4,491 3,992 Interest and investment income (162 ) (103 ) Loss on extinguishment of debt - 2,384 Net periodic benefit income, excluding service cost (11 ) (43 ) Income before income taxes $ 1,071 $ 2,809 Capital Expenditures Smokeless products $ 577 $ 349 Smoking products - - NewGen products 309 14 Insurance 19 20 Other (1) 15 - $ 920 $ 383 Depreciation and amortization Smokeless products $ 357 $ 339 Smoking products - - NewGen Products 533 396 Insurance 47 57 Other (1) 371 195 $ 1,308 $ 987 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 (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. Revenue Disaggregation- Sales Channel Revenues of the Smokeless and Smoking segments are comprised of sales made to wholesalers while NewGen sales are made to wholesalers, retailers, and ultimate end-customers. NewGen net sales are broken out by sales channel below. NewGen Segment Three Months Ended March 31, 2019 2018 Wholesalers $ 2,197 $ 2,330 Retail outlets 28,645 20,884 End-customers 12,673 2,935 Other 50 50 $ 43,565 $ 26,199 Net Sales – Domestic and Foreign The following table shows a breakdown of consolidated net sales between domestic and foreign. Three Months Ended March 31, 2019 2018 Domestic $ 89,450 $ 71,264 Foreign 2,859 3,084 Net Sales $ 92,309 $ 74,348 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 22. Related Party Transactions SDI has engaged the services of CFGI, formerly Pine Hill Group, and Edward J. Sweeney to serve as interim Chief Financial Officer effective May 31, 2017. Mr. Sweeney carries out his role as interim Chief Financial Officer of the Company pursuant to an agreement between the Company and CFGI. Mr. Sweeney is a partner at CFGI. The agreement outlines the scope of responsibilities of CFGI, as well as Mr. Sweeney’s role. These include, but are not limited to, services provided to the Company as interim Chief Financial Officer, controllership services, technical accounting and financial reporting services, and risk, valuation and transaction advisory services. CFGI is compensated at an hourly rate for performing services pursuant to the agreement. CFGI is responsible for all payments to Mr. Sweeney. As a result, Mr. Sweeney has received no direct compensation from the Company and the amount of aggregate payments made to CFGI is based on the amount of work performed on the Company’s behalf by all CFGI resources. During the three months ended March 31, 2019 and 2018, the Company incurred expenses of $0.3 million and $0.5 million, respectively, related to services provided by CFGI. |
Statutory Information
Statutory Information | 3 Months Ended |
Mar. 31, 2019 | |
Statutory Information [Abstract] | |
Statutory Information | Note 23. Statutory Information The Company’s insurance subsidiary, Maidstone, is subject to insurance laws and regulations in the jurisdictions in which it operates. These regulations include certain restrictions on the amount of dividends or other distributions available to unitholders. Under the insurance laws of New York State, Maidstone is restricted (on a basis of the lower of 10% of Maidstone’s statutory surplus at the end of the preceding twelve-month period or 100% of Maidstone’s adjusted net investment income for the preceding twelve-month period) as to the amount of dividends that Maidstone may declare or pay in any twelve-month period without prior approval of the New York State Department of Financial Services (the “NYSDFS”). As of March 31, 2019, the maximum amount of dividends that may be paid by Maidstone without approval of the NYSDFS is $-0-. Further, under New York State law, companies may pay cash dividends only from earned surplus on a statutory basis. No dividends were declared or paid by Maidstone during the three months ended March 31, 2019. Maidstone is subject to certain risk-based capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under such requirements, the amount of capital and surplus maintained by a property and casualty insurance company is to be determined on various risk factors including risk-based capital ratios. As of March 31, 2019, the capital and surplus of Maidstone did not exceed the RBC requirements. Maidstone’s RBC ratio is between 150% and 100% which requires it to submit a corrective action plan. Maidstone is in the process of developing a plan to increase the RBC. As part of that plan, Maidstone has ceased writing new automobile policies in New York. If the plan is not satisfactory, Maidstone may face business restrictions, which could potentially impact the Company’s ability to recover its investment in Maidstone in the future. Similar regulations apply in other states in which Maidstone holds licenses. Statutory combined capital and surplus and net loss of Maidstone was as follows as of: (In thousands) March 31, 2019 December 31, 2018 Statutory capital and surplus $ 2,915 $ 4,769 Statutory net loss $ (1,983 ) $ (9,559 ) Maidstone files financial statements prepared in accordance with statutory accounting practices prescribed or permitted by insurance regulators. Statutory net income (loss) and statutory surplus, as reported to the insurance regulatory authorities, differ in certain respects from the amounts prepared in accordance with GAAP. The main differences between statutory net income (loss) and GAAP net income (loss) relate to deferred acquisition costs, deferred income taxes, unrealized appreciation or decline in value of investments and non-admitted assets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 24. Subsequent Events Turning Point engaged in discussions and mediation with VMR Products LLC (“VMR”), which was acquired in 2018. Pursuant to a Distribution and Supply agreement (“VMR Agreement”), VMR was providing Turning Point with V2 e-cigarettes for the exclusive distribution in bricks-and-mortar stores in the United States. Under the terms of the VMR Agreement, in the event of termination following a change in control, the acquirer was required to make a payment to Turning Point under a formula designed to provide them with a fair share of the value created by Turning Point’s performance under the VMR Agreement. The discussions have been completed and Turning Point received $6.7 million in April 2019 to settle the issue. Turning Point On May 7, 2019, the Company through Standard Outdoor, completed an asset acquisition consisting of for total consideration of $0.6 million. |
Organization and Description _2
Organization and Description of Business (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Description of Business [Abstract] | |
Contribution and Exchange Transaction | On June 1, 2017, SDI consummated a Contribution and Exchange Transaction (the “Contribution and Exchange”) to acquire a 52.1% controlling interest in Turning Point Brands, Inc. (“Turning Point”). The transaction was accounted for as a recapitalization or reverse acquisition. As of March 31, 2019, SDI has a 50.3% ownership interest in Turning Point. As a result of the consummation of the Contribution and Exchange, SDI is no longer a shell company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | SDI is a holding company and its condensed consolidated financial statements include Turning Point and its subsidiaries, Pillar General Inc. (“Pillar General”) and its subsidiaries, and Standard Outdoor LLC (“Standard Outdoor”) and its subsidiaries Turning Point is also a holding company which owns North Atlantic Trading Company, Inc. (“NATC”), and its subsidiaries and Turning Point Brands, LLC (“TPLLC”), and its subsidiaries. Except where the context indicates otherwise, references to Turning Point include Turning Point; NATC and its subsidiaries National Tobacco Company, L.P. (“NTC”), National Tobacco Finance, LLC (“NTFLLC”), North Atlantic Operating Company, Inc. (“NAOC”), North Atlantic Cigarette Company, Inc. (“NACC”), and RBJ Sales, Inc. (“RBJ”); and TPLLC and its subsidiaries Intrepid Brands, LLC (“Intrepid”), Vapor Beast, LLC (“VaporBeast,” f/k/a Smoke Free Technologies, Inc.), and Vapor Shark, LLC, and its subsidiaries (collectively, “Vapor Shark,” f/k/a The Hand Media), Vapor Acquisitions Company, LLC (“Vapor Supply”), Vapor Finance, LLC (“VFIN”), International Vapor Group, LLC and its subsidiaries (collectively, “IVG”) and as of January 15, 2019, Nu-X Ventures, LLC (“Nu-X”), a subsidiary of TPLLC. Pillar General, a wholly-owned subsidiary of the Company as of January 2, 2018, owns 100% of Interboro Holdings, Inc. which is a holding company and includes the accounts of its wholly-owned subsidiaries (collectively, “Interboro”) which consist of Interboro Management, Inc., Maidstone Insurance Company (“Maidstone”), formerly known as AutoOne Insurance Company and AIM Insurance Agency Inc. Maidstone is domiciled in the State of New York and is a property and casualty insurance company which provides automobile insurance . Standard Outdoor, a wholly-owned subsidiary of the Company, and its subsidiaries, consists of Standard Outdoor Southeast I LLC, Standard Outdoor Southeast II LLC and Standard Outdoor Southwest LLC. Standard Outdoor is an billboard structures located in Texas, Alabama, Georgia and Florida. |
Basis of Presentation | The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiaries. All significant intercompany transactions have been eliminated. |
Reclassifications | Certain prior years’ amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated results of operations or cash flows in any of the periods presented. |
Noncontrolling Interests | Noncontrolling Interests These condensed consolidated financial statements reflect the application of Accounting Standards Codification Topic 810, Consolidations SDI acquired a 52.1% interest in Turning Point on June 1, 2017 through the Contribution and Exchange. Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Company are reported as noncontrolling interests in the accompanying condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements requires the management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the period. The Company’s significant estimates include but are not limited to those affecting the valuation of goodwill and other intangible assets, the adequacy of the Company’s insurance reserves, assumptions used in determining pension and postretirement benefit obligations and deferred income tax valuation allowances. Actual results could differ from those estimates. |
Revenue Recognition - Turning Point | Turning Point Turning Point recognizes revenues, net of sales incentives and sales returns, including shipping and handling charges billed to customers, upon delivery of goods to the customer at an amount that Turning Point expects to be entitled to in exchange for those goods in accordance with the five-step analysis outlined in Revenue from Contracts with Customers (Topic 606): (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Topic 606 requires entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Turning Point’s management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of Turning Point’s contract revenue for the decision-making purposes is the disaggregation by segment which can be found in Note 21 of Notes to Consolidated Financial Statements, along with an additional disaggregation of contract revenue by sales channel. |
Revenue Recognition - Standard Outdoor | Standard Outdoor The Company’s out-of-home advertising revenues are primarily derived from providing advertising space to customers on its physical billboards or other outdoor structures. Standard Outdoor generally (i) owns the physical structures on which it displays advertising copy for customers, (ii) holds the legal permits to display advertising thereon, and (iii) leases the underlying sites. As of January 1, 2019, billboard display revenues are recognized under ASC 842, the lease accounting standard, as rental income on a straight-line basis over the customer lease term. |
Revenue Recognition - Maidstone | Maidstone Maidstone recognizes revenues from insurance contracts, including premiums and fees, under the guidance in ASC 944, Financial Services-Insurance Premiums |
Shipping Costs | Shipping Costs The Company records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $4.3 million and $3.2 million for the three months ended March 31, 2019 and 2018, respectively. |
Fair Value | Fair Value GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under GAAP are described below: Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Derivative Instruments | Derivative Instruments Foreign Currency Forward Contracts Derivatives and Hedging Interest Rate Swap Agreements: |
Risks and Uncertainties | Risks and Uncertainties Manufacturers and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The tobacco industry has experienced, and is experiencing, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes for injuries allegedly caused by smoking or exposure to smoke. However, several lawsuits have been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically, such claims assert that use of smokeless products is addictive and causes oral cancer. Additionally, several lawsuits have been brought against manufacturers and distributors of NewGen products due to malfunctioning devices. There can be no assurance the Company will not sustain losses in connection with such lawsuits and that such losses will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Master Settlement Agreement Escrow Account Pursuant to the Master Settlement Agreement (the “MSA”) entered into in November 1998 by most states (represented by their attorneys general acting through the National Association of Attorneys General) and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to include a manufacturer of make-your-own (“MYO”) cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account to have funds available for certain potential tobacco-related liabilities, with sub-accounts on behalf of each settling state. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statue to pay a final judgement to that state’s plaintiffs in the event of such a final judgement against the company. The Company chose to open and fund an escrow account as its method of compliance. It is the Company’s policy to record amounts on deposit in the escrow account for prior years as a non-current asset. Each year’s annual obligation is required to be deposited in the escrow account by April 15 of the following year. In addition to the annual deposit, many states have elected to require quarterly deposits for the previous quarter’s sales. As of March 31, 2019, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $31.0 million. At December 31, 2018, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $30.6 million. Effective in the third quarter of 2017, the Company no longer sells any product covered under the MSA. Thus, absent a change in legislation, the Company will no longer be required to make deposits to the MSA escrow account. The Company has chosen to invest a portion of the MSA escrow deposits in U.S. Government securities including Treasury Inflation-Protected Securities, Treasury Notes, and Treasury Bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA; any investment in an unrealized loss position will be held until the value is recovered, or until maturity. The following shows the fair value of the MSA escrow account as of: March 31, 2019 December 31, 2018 (In thousands) 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 Fair value level 2: U.S. Governmental agency obligations 500 2 - 502 1,193 9 - 1,202 Fair value level 2: U.S. Governmental agency obligations - - - - 1,000 - (3 ) 997 Fair value level 2: U.S. Governmental agency obligations 27,511 - (1,030 ) 26,481 27,519 - (1,529 ) 25,990 $ 32,073 $ 2 $ (1,030 ) $ 31,045 $ 32,073 $ 9 $ (1,532 ) $ 30,550 The following schedule shows the maturities of the U.S. Governmental agency obligations as of: (In thousands) March 31, 2019 December 31, 2018 Less than one year $ 1,499 $ 1,499 One to five years 14,091 13,591 Five to ten years 9,453 11,152 Greater than ten years 2,968 3,470 Total U.S. Governmental agency obligations $ 28,011 $ 29,712 The following shows the amount of deposits by sales year for the MSA escrow account: (Dollar amounts in thousands) Deposits as of Sales Year March 31, 2019 December 31, 2018 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 83 83 Total $ 32,073 $ 32,073 Food and Drug Administration (“FDA”) On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the FDA to immediately regulate the manufacturing, sale, and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to additionally regulate cigars, pipe tobacco, electronic cigarettes (“e-cigarettes”), vaporizers, and e-liquids as “deemed” tobacco products under the FSPTCA. The FDA assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S. Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP,” also known as the “Tobacco Buyout”) assessment. First, the total, annual, congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers. Prior to October 1, 2016, these FDA user fees applied only to those products then regulated by the FDA. Effective October 1, 2016, the FDA began additionally applying FDA user fees to newly deemed tobacco products subject to FDA user fees as described above, i.e. On July 28, 2017, the FDA announced a new direction in regulating tobacco products, including the newly “deemed” markets such as cigars and vapor products. The FDA stated it intends to begin several new rulemaking processes, some of which will outline foundational rules governing the premarket application process for the deemed products, including Substantial Equivalence Applications and Premarket Tobacco Applications. Compliance and related costs could be significant and could increase the costs of operating in Turning Point’s NewGen segment. The original filing deadlines for newly “deemed” products on the market as of August 8, 2016, have been postponed until August 8, 2021, for “combustible” products ( e.g. e.g. i.e. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires that compensation costs related to employee share-based payment transactions are measured in the financial statements at the fair value on the date of grant and are recognized over the vesting period of the award. |
Fixed Maturity Securities | Fixed Maturity Securities Investments in fixed maturity securities including bonds, loan-backed and structured securities are classified as available-for-sale and reported at fair value. Significant changes in prevailing interest rates and other economic conditions may adversely affect the timing and amount of cash flows on fixed income investments, as well as their related fair values. Fixed maturities are recorded on a trade date basis. Amortization of bond premium and accretion of bond discount are calculated using the scientific method. Changes in fair values of these securities, after deferred income tax effects, are reflected as unrealized gains or losses in accumulated other comprehensive income (loss). Realized gains and losses from the sale of investments are calculated as of the trade date in the consolidated statements of operations and comprehensive loss and are based upon the specific identification of securities sold. Investment income consists of interest and is reported net of investment expenses. Prepayment assumptions are considered when determining the amortization of discount or premium for loan-backed and structured securities. An investment is considered impaired when the fair value of the investment is less than its cost or amortized cost. When an investment is impaired, the Company must make a determination as to whether the impairment is other than temporary (“OTTI”). With respect to an investment in an impaired fixed maturity security, OTTI occurs if the Company (a) intends to sell the fixed maturity security, (b) more likely than not will be required to sell the fixed maturity security before its anticipated recovery, or (c) it is probable that the Company will be unable to collect all amounts due to the recovery of the entire cost basis of the security. The Company conducts a periodic review to identify and evaluate securities having OTTI, which include the above factors as well as the following: (1) the likelihood of the recoverability of principal and interest for fixed maturity securities (i.e., whether there is a credit loss); (2) the length of time and extent to which the fair value has been less than amortized cost for fixed maturity securities; and (3) the financial condition, near term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. If the Company intends to sell the fixed maturity security or will more likely than not be required to sell the fixed maturity security before the anticipated recovery, a loss in the entire amount of the impairment is reflected in net investment gains (losses) in net income (loss). If the Company determines that it is probable it will be unable to collect all amounts and the Company has no intent to sell the fixed maturity security, a credit loss is recognized in net investment gains (losses) in net income (loss) to the extent that the present value of expected cash flows is less than the amortized cost basis; any difference between fair value and the new amortized cost basis (net of the credit loss) is reflected in other comprehensive income (losses), net of applicable income taxes. Upon recognizing an OTTI, the new cost basis of the security is the previous amortized cost basis less the OTTI recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair value; however, for fixed maturity securities, the difference between the new cost basis and expected cash flows is accreted to net investment gains (losses) over the remaining expected life of the investment. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs (“DAC”) Policy acquisition costs, which vary with and are directly related to the production of successful new business, are deferred. The costs deferred consist principally of commissions and policy issuance costs and are amortized into expense as the related premiums are earned. (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 DAC asset at beginning of period $ 2,279 $ - Deferred expenses 1,517 1,354 Amortized expenses (1,276 ) (182 ) DAC asset at end of period $ 2,520 $ 1,172 The Company, utilizing assumptions for future expected claims, premium rate increases and interest rates, reviews the recoverability of its deferred policy acquisition costs (“DAC”) on a periodic basis. If the Company determines that the future gross profits of its in-force policies are not sufficient to recover its DAC, the Company recognizes a premium deficiency by charging any unamortized acquisition costs to expense to the extent required in order to eliminate the deficiency. If the premium deficiency exceeds the unamortized acquisition costs, then a liability is accrued for the excess deficiency. The Company anticipates investment income as a factor in its premium deficiency reserve calculation. |
Incurred Losses and Loss Adjustment Expenses | Incurred Losses and Loss Adjustment Expenses Incurred losses and loss adjustment expenses (“LAE”) are charged to operations as incurred. The liability for losses and LAE is based upon individual case estimates for reported claims and a factor for incurred but not reported (“IBNR”) claims. Losses, LAE and related liabilities are reported net of estimated salvage and subrogation. Inherent in the estimate of ultimate losses and LAE are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled; however, management believes that its aggregate provision for losses and LAE as of March 31, 2019 and December 31, 2018 are reasonable and adequate to meet the ultimate net cost of covered losses, but such provision is necessarily based on estimates and the ultimate net cost may vary significantly from such estimates. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases.” This ASU requires substantially all leases be recorded on the balance sheet as right of use assets and lease obligations. The Company adopted the ASU using a retrospective adoption method at January 1, 2019, as outlined in ASU No. 2018-11, “Leases - Targeted Improvements.” Under this method of adoption, there is no impact to the comparative consolidated statement of income and consolidated balance sheet. The Company determined that there was no cumulative-effect adjustment to beginning retained earnings on the consolidated balance sheet. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, “Leases”. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed carry forward of historical lease classifications. Adoption of this standard did not materially impact the Company’s income before income taxes and had no impact on the statement of cash flows. See Note 14, “Leases” for further details. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies certain disclosure requirements on fair value measurements in ASC 820. This ASU is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the effect that ASU 2018-13 will have on its consolidated financial statement disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Deposits by Sales Year for MSA Escrow Account | The following shows the amount of deposits by sales year for the MSA escrow account: (Dollar amounts in thousands) Deposits as of Sales Year March 31, 2019 December 31, 2018 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 83 83 Total $ 32,073 $ 32,073 |
Deferred Policy Acquisition Costs | The costs deferred consist principally of commissions and policy issuance costs and are amortized into expense as the related premiums are earned. (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 DAC asset at beginning of period $ 2,279 $ - Deferred expenses 1,517 1,354 Amortized expenses (1,276 ) (182 ) DAC asset at end of period $ 2,520 $ 1,172 |
Turning Point [Member] | |
Summary of Significant Accounting Policies [Abstract] | |
Fair Value of MSA Escrow Account | The following shows the fair value of the MSA escrow account as of: March 31, 2019 December 31, 2018 (In thousands) 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 Fair value level 2: U.S. Governmental agency obligations 500 2 - 502 1,193 9 - 1,202 Fair value level 2: U.S. Governmental agency obligations - - - - 1,000 - (3 ) 997 Fair value level 2: U.S. Governmental agency obligations 27,511 - (1,030 ) 26,481 27,519 - (1,529 ) 25,990 $ 32,073 $ 2 $ (1,030 ) $ 31,045 $ 32,073 $ 9 $ (1,532 ) $ 30,550 |
Maturities of U.S. Governmental Agency Obligations | The following schedule shows the maturities of the U.S. Governmental agency obligations as of: (In thousands) March 31, 2019 December 31, 2018 Less than one year $ 1,499 $ 1,499 One to five years 14,091 13,591 Five to ten years 9,453 11,152 Greater than ten years 2,968 3,470 Total U.S. Governmental agency obligations $ 28,011 $ 29,712 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Maidstone [Member] | |
Acquisitions [Abstract] | |
Acquisition | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition: (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 |
IVG [Member] | |
Acquisitions [Abstract] | |
Acquisition | The following purchase price and goodwill are based on the excess of the acquisition price over the estimated fair value of the tangible and intangible assets acquired and are based on management’s preliminary estimates. (In thousands) As of March 31, 2019 (preliminary) Total consideration transferred $ 24,292 Adjustments to consideration: Cash acquired, net of debt assumed (221 ) Working capital (245 ) Adjusted consideration transferred 23,826 - Assets acquired: - Working capital (primarily inventory) 3,331 Fixed assets 1,274 Intangible assets 7,880 Net assets acquired 12,485 Goodwill $ 11,341 |
Vapor Supply [Member] | |
Acquisitions [Abstract] | |
Acquisition | The following fair value for working capital (primarily inventory), fixed assets, and trade name are based on management’s preliminary estimates: (In thousands) Fair Value Working capital $ 2,500 Fixed assets 272 Trade name 2,028 Total consideration transferred $ 4,800 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Fixed Maturity Securities in Unrealized Loss Position | Fixed maturity securities that were in an unrealized loss position and the length of time that such securities have been in an unrealized loss position, as measured by their prior 12-month fair values, are as follows as of: 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 March 31, 2019 Bonds: U.S. Treasury and U.S. Government $ 2,692 $ (4 ) $ 1,870 $ (10 ) $ 4,562 $ (14 ) 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 ) Total Fixed maturities available for sale $ 3,276 $ (18 ) $ 11,485 $ (74 ) $ 14,761 $ (92 ) December 31, 2018 Bonds: U.S. Treasury and U.S. Government $ 4,304 $ (34 ) $ - $ - $ 4,304 $ (34 ) U.S. Tax-exempt municipal 4,285 (25 ) - - 4,285 (25 ) Corporate bonds 10,306 (193 ) - - 10,306 (193 ) Mortgage and asset-backed securities 6,717 (120 ) - - 6,717 (120 ) Total Fixed maturities available for sale $ 25,612 $ (372 ) $ - $ - $ 25,612 $ (372 ) |
Net Investment Income | The components of net investment income for the three months ended March 31, 2019 and the period from January 2, 2018 to March 31, 2018 are as follows: (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 Investment income: Bonds $ 261 $ 153 Common stocks 26 - Preferred stocks 6 - Cash and cash equivalents 55 60 Total investment income 348 213 Less: Investment expenses (13 ) (19 ) Net investment income $ 335 $ 194 |
Fair Value Disclosures | The following tables show how Maidstone’s investments are categorized in the fair value hierarchy as of: (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 |
Maidstone [Member] | |
Investments [Abstract] | |
Investments in Fixed Maturity Securities | The amortized cost, gross unrealized gains and losses, and fair value of investments in fixed maturity securities are as follows as of: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2019 U.S. Treasury and U.S. Government $ 5,542 $ - $ (15 ) $ 5,527 U.S. Tax-exempt municipal 4,619 70 - 4,689 Corporate 14,281 205 (32 ) 14,454 Mortgage and asset-backed securities 7,923 41 (46 ) 7,918 Total Fixed Maturity Securities $ 32,365 $ 316 $ (93 ) $ 32,588 December 31, 2018 U.S. Treasury and U.S. Government $ 4,338 $ - $ (34 ) $ 4,304 U.S. Tax-exempt municipal 4,645 4 (25 ) 4,624 Corporate 14,858 16 (193 ) 14,681 Mortgage and asset-backed securities 8,633 10 (120 ) 8,523 Total Fixed Maturity Securities $ 32,474 $ 30 $ (372 ) $ 32,132 |
Contractual Maturities of Investments in Fixed Maturity Securities | Amortized cost and fair value of fixed maturity securities as of March 31, 2019 and December 31, 2018 by contractual maturity are shown below. The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2019 December 31, 2018 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 499 $ 498 $ 748 $ 745 Due after one year through five years 14,664 14,712 13,719 13,600 Due after five years through ten years 9,044 9,220 9,027 8,917 Due after ten years 235 240 347 347 Mortgage and asset-backed securities 7,923 7,918 8,633 8,523 Total $ 32,365 $ 32,588 $ 32,474 $ 32,132 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Inventories | The components of inventories are as follows as of: (In thousands) March 31, 2019 December 31, 2018 Raw materials and work in process $ 3,967 $ 2,722 Leaf tobacco 35,929 34,977 Finished goods - Smokeless products 6,540 6,321 Finished goods - Smoking products 15,079 14,666 Finished goods - NewGen products 33,810 37,194 Other 903 738 96,228 96,618 LIFO reserve (5,357 ) (5,381 ) $ 90,871 $ 91,237 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consist of as of: (In thousands) March 31, 2019 December 31, 2018 Land $ 22 $ 22 Building and improvements 2,320 2,320 Leasehold improvements 2,101 2,101 Machinery and equipment 14,229 13,307 Advertising structures 17,928 17,913 Furniture and fixtures 5,434 5,453 42,034 41,116 Accumulated depreciation (14,246 ) (13,375 ) $ 27,788 $ 27,741 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Current Assets [Abstract] | |
Other Current Assets | Other current assets consist of the following as of: (In thousands) March 31, 2019 December 31, 2018 Inventory deposits $ 7,134 $ 9,739 Other 4,802 5,306 $ 11,936 $ 15,045 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of as of: (In thousands) March 31, 2019 December 31, 2018 Accrued payroll and related items $ 3,093 $ 6,063 Customer returns and allowances 3,082 2,895 Taxes payable 3,758 - Lease liabilities 2,039 - Other 9,196 14,925 $ 21,168 $ 23,883 |
Liability for Losses and Loss_2
Liability for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Liability for Losses and Loss Adjustment Expenses [Abstract] | |
Activity in Liability for Losses and LAE | Activity in the liability for losses and LAE is summarized as follows: (In thousands) Three Months Ended March 31, 2019 Period from January 2, 2018 to March 31, 2018 Reserve for losses and LAE at beginning of period $ 27,330 $ 29,366 Provision for claims, net of insurance: Incurred related to: Prior year 622 - Current year 5,871 5,812 Total incurred 6,493 5,812 Deduct payment of claims, net of reinsurance: Paid related to: Prior year 4,743 5,478 Current year 2,096 2,704 Total paid 6,839 8,182 Reserve for losses and LAE at end of period $ 26,984 $ 26,996 The components of the net liability for losses and LAE are as follows as of: (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 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Notes payable and long-term debt consist of the following as of: (In thousands) March 31, 2019 December 31, 2018 2018 First Lien Term Loan $ 152,000 $ 154,000 2018 Second Lien Term Loan 40,000 40,000 SDI Crystal Term Loan 15,000 15,000 Standard Outdoor Promissory Notes 8,984 9,950 Note payable - IVG 4,000 4,000 Total Notes Payable and Long-Term Debt 219,984 222,950 Less deferred finance charges and debt discount (4,589 ) (4,903 ) Less current maturities (13,674 ) (9,431 ) $ 201,721 $ 208,616 |
Scheduled Principal Repayments | The following table summarizes the consolidated scheduled principal repayments subsequent to March 31, 2019: Future Minimum Principal Payments April 1, 2019 - December 31, 2019 $ 6,536 2020 16,839 2021 13,882 2022 16,227 2023 126,500 thereafter 40,000 Total $ 219,984 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense consisted of the following: (In thousands) Three Months Ended March 31, 2019 Operating lease cost: Cost of sales $ 192 Selling, general and administrative 702 Variable lease cost (1) 298 Short-term lease cost 54 Sublease income (30 ) Total operating lease cost $ 1,216 (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. |
Operating Lease Assets and Liabilities | Supplemental balance sheet information related to leases was as follows as of: (In thousands) March 31, 2019 Assets: Right of use assets $ 13,431 Total leased assets $ 13,431 Liabilities: Current lease liabilities (1) $ 2,039 Long-term lease liabilities 11,785 Total lease liabilities $ 13,824 (1) Reported within accrued liabilities on the condensed consolidated balance sheet |
Operating Lease Weighted-Average Remaining Lease Term and Discount Rate | 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 % |
Maturities of Lease Liabilities | Future maturities of lease liabilities consisted of the following: Year Payments April 1, 2019 - December 31, 2019 $ 2,349 2020 2,792 2021 2,246 2022 1,561 2023 1,354 Thereafter 9,396 Total lease payments 19,698 Less: Imputed interest 5,874 Present value of lease liability $ 13,824 |
Pension and Postretirement Be_2
Pension and Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Pension and Postretirement Benefit Plans [Abstract] | |
Net Periodic Benefit Costs | The following table provides the components of net periodic pension and postretirement benefit costs and total costs for the plans: Three months ended March 31, Pension Benefits Post-Retirement Benefits (In thousands) 2019 2018 2019 2018 Service cost $ 26 $ 26 $ - $ - Interest cost 130 142 25 29 Expected return on plan assets (161 ) (254 ) - - Amortization of losses (gains) 37 60 (42 ) (20 ) Net periodic benefit expense (income) $ 32 $ (26 ) $ (17 ) $ 9 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Compensation [Abstract] | |
Stock Option Activity | Information with respect to the adjusted activity of outstanding stock options is summarized as follows: (In thousands, except per share amounts) Number of Shares Price Range Weighted Average Remaining Contractual term Balance, January 1, 2019 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 |
Stock Options Outstanding and Exercisable | The following table provides additional information about the Company’s stock options outstanding and exercisable as of March 31, 2019: 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 |
Non-Vested Restricted Stock Awards | The following table summarizes the changes in non-vested RSAs for the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Non-vested RSAs at January 1, 2019 127,005 $ 10.96 Granted - - Vested - - Non-vested RSAs at March 31, 2019 127,005 $ 10.96 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | The following tables set forth the computation of basic and diluted net (loss) income per share of Class A and Class B common stock. For the three months ended March 31, 2019 and 2018, the basic weighted average shares outstanding has been calculated using the number of common shares outstanding of SDI from January 1, 2018 through March 31, 2018. Three Months Ended March 31, (In thousands, except share and per share amounts) 2019 2018 Basic net (loss) income per common share calculation: Net (loss) income attributable to SDI $ (3,543 ) $ 521 Weighted average Class A common shares outstanding – basic 9,070,542 8,521,404 Weighted average Class B common shares outstanding – basic 7,793,079 8,038,028 Weighted average common shares outstanding – basic 16,863,621 16,559,432 Net (loss) income attributable to SDI per share of common stock – basic $ (0.21 ) $ 0.03 Three Months Ended March 31, (In thousands, except share and per share amounts) 2019 2018 Diluted net (loss) income attributable to SDI per common share calculation: Net (loss) income attributable to SDI $ (3,543 ) $ 521 Impact of subsidiary dilutive securities (1) (80 ) (43 ) Net (loss) income attributable to SDI - diluted $ (3,623 ) $ 478 Weighted average Class A common shares outstanding – basic 9,070,542 8,521,404 Weighted average Class B common shares outstanding – basic 7,793,079 8,038,028 Dilutive impact of stock options and restricted stock awards - 43,796 Weighted average common shares outstanding – diluted 16,863,621 16,603,228 Net (loss) income attributable to SDI per share of common stock – diluted $ (0.21 ) $ 0.03 (1) The Company records an adjustment to net income in the relevant period for the dilutive impact of subsidiary stock-based awards on the Company’s reported net income for purposes of calculating income per share. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information [Abstract] | |
Financial Information of Reportable Segments | The tables below present financial information about reported segments: Three Months Ended March 31, 2019 2018 Revenues Smokeless Products $ 22,544 $ 20,747 Smoking Products 25,519 26,996 NewGen Products 43,565 26,199 Insurance 7,703 7,718 Other (1) 681 406 100,012 82,066 Operating Income Smokeless Products 7,487 4,486 Smoking Products 9,946 6,894 NewGen Products 2,838 (1,496 ) Insurance (4,403 ) 617 Other (1) (10,479 ) (1,462 ) 5,389 9,039 Interest expense 4,491 3,992 Interest and investment income (162 ) (103 ) Loss on extinguishment of debt - 2,384 Net periodic benefit income, excluding service cost (11 ) (43 ) Income before income taxes $ 1,071 $ 2,809 Capital Expenditures Smokeless products $ 577 $ 349 Smoking products - - NewGen products 309 14 Insurance 19 20 Other (1) 15 - $ 920 $ 383 Depreciation and amortization Smokeless products $ 357 $ 339 Smoking products - - NewGen Products 533 396 Insurance 47 57 Other (1) 371 195 $ 1,308 $ 987 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 (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. |
Revenue Disaggregation - Sales Channel | Revenues of the Smokeless and Smoking segments are comprised of sales made to wholesalers while NewGen sales are made to wholesalers, retailers, and ultimate end-customers. NewGen net sales are broken out by sales channel below. NewGen Segment Three Months Ended March 31, 2019 2018 Wholesalers $ 2,197 $ 2,330 Retail outlets 28,645 20,884 End-customers 12,673 2,935 Other 50 50 $ 43,565 $ 26,199 |
Net Sales - Domestic and Foreign | The following table shows a breakdown of consolidated net sales between domestic and foreign. Three Months Ended March 31, 2019 2018 Domestic $ 89,450 $ 71,264 Foreign 2,859 3,084 Net Sales $ 92,309 $ 74,348 |
Statutory Information (Tables)
Statutory Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Statutory Information [Abstract] | |
Statutory Information | Statutory combined capital and surplus and net loss of Maidstone was as follows as of: (In thousands) March 31, 2019 December 31, 2018 Statutory capital and surplus $ 2,915 $ 4,769 Statutory net loss $ (1,983 ) $ (9,559 ) |
Organization and Description _3
Organization and Description of Business (Details) | Mar. 31, 2019 | Jun. 01, 2017 |
Turning Point [Member] | ||
Organization and Description of Business [Abstract] | ||
Percentage of ownership interest | 50.30% | 52.10% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Basis of Presentation and Principles of Consolidation (Details) | 3 Months Ended | ||
Mar. 31, 2019DistributorsWholesaler | Jan. 02, 2018 | Jun. 01, 2017 | |
Turning Point [Member] | |||
Basis of Presentation and Principles of Consolidation [Abstract] | |||
Number of distributors | Distributors | 800 | ||
Number of secondary indirect wholesalers | Wholesaler | 100 | ||
Percentage of ownership interest | 50.30% | 52.10% | |
Interboro [Member] | |||
Basis of Presentation and Principles of Consolidation [Abstract] | |||
Percentage of ownership interest | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Noncontrolling Interests (Details) | Mar. 31, 2019 | Jun. 01, 2017 |
Turning Point [Member] | ||
Noncontrolling Interests [Abstract] | ||
Percentage of ownership interest | 50.30% | 52.10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Shipping Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shipping Costs [Abstract] | ||
Shipping costs | $ 4.3 | $ 3.2 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Derivative Instruments (Details) - Maximum [Member] | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments [Abstract] | |
Percentage of anticipated purchases of inventory that may be hedged | 100.00% |
Term of hedge | 12 months |
Percentage of non-inventory purchases that may be hedged | 90.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Master Settlement Agreement Escrow Account (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | ||
Term for restricted withdrawal of principal from MSA escrow account | 25 years | |
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | $ 32,073 | $ 32,073 |
Gross unrealized gains | 2 | 9 |
Gross unrealized losses | (1,030) | (1,532) |
Estimated fair value | 31,045 | 30,550 |
Maturities of U.S. Governmental Agency Obligations [Abstract] | ||
Amortized cost | 32,365 | 32,474 |
Master Settlement Agreement Escrow Account by Sales Year [Abstract] | ||
1999 | 211 | 211 |
2000 | 1,017 | 1,017 |
2001 | 1,673 | 1,673 |
2002 | 2,271 | 2,271 |
2003 | 4,249 | 4,249 |
2004 | 3,714 | 3,714 |
2005 | 4,552 | 4,552 |
2006 | 3,847 | 3,847 |
2007 | 4,167 | 4,167 |
2008 | 3,364 | 3,364 |
2009 | 1,619 | 1,619 |
2010 | 406 | 406 |
2011 | 193 | 193 |
2012 | 199 | 199 |
2013 | 173 | 173 |
2014 | 143 | 143 |
2015 | 101 | 101 |
2016 | 91 | 91 |
2017 | 83 | 83 |
Total | 32,073 | 32,073 |
Cash and Cash Equivalents [Member] | ||
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 4,062 | 2,361 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 4,062 | 2,361 |
U. S. Governmental Agency Obligations (Unrealized Gain Position less than 12 Months) [Member] | ||
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 500 | 1,193 |
Gross unrealized gains | 2 | 9 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 502 | 1,202 |
U.S. Governmental Agency Obligations (Unrealized Loss Position less than 12 Months) [Member] | ||
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 0 | 1,000 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | (3) |
Estimated fair value | 0 | 997 |
U.S. Governmental Agency Obligations (Unrealized Loss Position more than 12 Months) [Member] | ||
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 27,511 | 27,519 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (1,030) | (1,529) |
Estimated fair value | 26,481 | 25,990 |
Turning Point [Member] | ||
Maturities of U.S. Governmental Agency Obligations [Abstract] | ||
Less than one year | 1,499 | 1,499 |
One to five years | 14,091 | 13,591 |
Five to ten years | 9,453 | 11,152 |
Greater than ten years | 2,968 | 3,470 |
Amortized cost | $ 28,011 | $ 29,712 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Food and Drug Administration (Details) | 3 Months Ended |
Mar. 31, 2019CategoryClass | |
Food and Drug Administration [Abstract] | |
Number of categories of tobacco products regulated by the FDA | Category | 4 |
Number of classes of regulated tobacco products on which user fees are assessed by the FDA | Class | 6 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies, Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Deferred Policy Acquisition Costs [Roll Forward] | ||
DAC asset at beginning of period | $ 2,279 | $ 0 |
Deferred expenses | 1,517 | 1,354 |
Amortized expenses | (1,276) | (182) |
DAC asset at end of period | $ 2,520 | $ 1,172 |
Acquisitions, Maidstone Acquisi
Acquisitions, Maidstone Acquisition (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Purchase Price Allocation [Abstract] | |||
Goodwill | $ 145,961 | $ 146,696 | |
Interboro [Member] | |||
Purchase Price Allocation [Abstract] | |||
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) | ||
Net assets acquired | 1,743 | ||
Consideration exchanged | 2,500 | ||
Goodwill | $ 757 |
Acquisitions, Standard Outdoor
Acquisitions, Standard Outdoor (Details) $ in Thousands | Feb. 20, 2018USD ($)Billboard | Jan. 18, 2018USD ($)Billboard | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Acquisitions [Abstract] | ||||
Asset retirement obligation | $ 2,028 | $ 2,028 | ||
Standard Outdoor [Member] | ||||
Acquisitions [Abstract] | ||||
Number of billboards acquired | Billboard | 86 | 83 | ||
Consideration paid to acquire billboards | $ 6,800 | $ 9,700 | ||
Cash paid to acquire billboards | 3,200 | 4,000 | ||
Face amount of promissory note | 3,500 | 6,500 | ||
Fair value discount on promissory note | 300 | 900 | ||
Principal payment | $ 900 | 1,000 | ||
Final principal payment | $ 3,500 | |||
Interest rate | 5.00% | 5.00% | ||
Asset retirement obligation | $ 1,000 | $ 1,000 | ||
Standard Outdoor [Member] | Class A Common Stock [Member] | ||||
Acquisitions [Abstract] | ||||
Shares issued to acquire billboards | $ 200 |
Acquisitions, IVG (Details)
Acquisitions, IVG (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Acquisitions [Abstract] | ||||
Note payable issued for acquisition | $ 219,984 | $ 219,984 | $ 222,950 | |
Assets Acquired [Abstract] | ||||
Goodwill | 145,961 | $ 145,961 | $ 146,696 | |
Turning Point [Member] | IVG [Member] | ||||
Acquisitions [Abstract] | ||||
Equity interest acquired | 100.00% | |||
Cash paid for acquisition | $ 14,500 | |||
Common stock issued for acquisition (in shares) | 153,079 | |||
Fair value of common stock issued for acquisition | $ 5,300 | |||
Note payable issued for acquisition | 4,000 | |||
Maturity period of note payable | 18 months | |||
Earnouts payable to former IVG owners | 4,500 | |||
Term for payment of performance-based earnouts | 2 years | |||
Earnout expense | $ 400 | |||
Purchase Price [Abstract] | ||||
Total consideration transferred | 24,292 | |||
Adjustments to consideration [Abstract] | ||||
Cash acquired, net of debt assumed | (221) | |||
Working capital | (245) | |||
Adjusted consideration transferred | 23,826 | $ 23,800 | ||
Assets Acquired [Abstract] | ||||
Working capital (primarily inventory) | 3,331 | 3,331 | ||
Fixed assets | 1,274 | 1,274 | ||
Intangible assets | 7,880 | 7,880 | ||
Net assets acquired | 12,485 | 12,485 | ||
Goodwill | $ 11,341 | $ 11,341 |
Acquisitions, Vapor Supply (Det
Acquisitions, Vapor Supply (Details) - Turning Point [Member] - Vapor Supply [Member] $ in Thousands | Apr. 30, 2018USD ($) |
Acquisitions [Abstract] | |
Cash paid at closing | $ 4,800 |
Working capital | 2,500 |
Fixed assets | 272 |
Trade name | 2,028 |
Net assets acquired | $ 4,800 |
Derivative Instruments (Details
Derivative Instruments (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Mar. 31, 2019USD ($) | Mar. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | |
Maximum [Member] | |||||||
Derivative Instruments [Abstract] | |||||||
Percentage of anticipated purchases of inventory that may be hedged | 100.00% | ||||||
Term of hedge | 12 months | ||||||
Percentage of non-inventory purchases that may be hedged | 90.00% | ||||||
Foreign Exchange Contracts [Member] | |||||||
Derivative Instruments [Abstract] | |||||||
Notional amount of contracts purchased | € | € 0 | € 14.5 | |||||
Notional amount | € | € 0 | € 1.5 | |||||
Interest Rate Swaps [Member] | |||||||
Derivative Instruments [Abstract] | |||||||
Notional amount | $ | $ 70 | $ 70 | $ 70 | ||||
Fair value | $ | $ 1.5 | $ 0.9 | |||||
Interest Rate Swaps [Member] | LIBOR [Member] | |||||||
Derivative Instruments [Abstract] | |||||||
Interest rate percentage | 2.755% | 2.755% |
Investments, Investments in Fix
Investments, Investments in Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities [Abstract] | ||
Amortized cost | $ 32,365 | $ 32,474 |
Fair value | 32,588 | 32,132 |
Maidstone [Member] | ||
Debt Securities [Abstract] | ||
Amortized cost | 32,365 | 32,474 |
Gross unrealized gains | 316 | 30 |
Gross unrealized losses | (93) | (372) |
Fair value | 32,588 | 32,132 |
Maidstone [Member] | U.S. Treasury and U.S. Government [Member] | ||
Debt Securities [Abstract] | ||
Amortized cost | 5,542 | 4,338 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (15) | (34) |
Fair value | 5,527 | 4,304 |
Maidstone [Member] | U.S. Tax-Exempt Municipal [Member] | ||
Debt Securities [Abstract] | ||
Amortized cost | 4,619 | 4,645 |
Gross unrealized gains | 70 | 4 |
Gross unrealized losses | 0 | (25) |
Fair value | 4,689 | 4,624 |
Maidstone [Member] | Corporate [Member] | ||
Debt Securities [Abstract] | ||
Amortized cost | 14,281 | 14,858 |
Gross unrealized gains | 205 | 16 |
Gross unrealized losses | (32) | (193) |
Fair value | 14,454 | 14,681 |
Maidstone [Member] | Mortgage and Asset-backed Securities [Member] | ||
Debt Securities [Abstract] | ||
Amortized cost | 7,923 | 8,633 |
Gross unrealized gains | 41 | 10 |
Gross unrealized losses | (46) | (120) |
Fair value | $ 7,918 | $ 8,523 |
Investments, Contractual Maturi
Investments, Contractual Maturities of Investments in Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost [Abstract] | ||
Amortized cost | $ 32,365 | $ 32,474 |
Fair Value [Abstract] | ||
Fair value | 32,588 | 32,132 |
Maidstone [Member] | ||
Amortized Cost [Abstract] | ||
Due in one year or less | 499 | 748 |
Due after one year through five years | 14,664 | 13,719 |
Due after five years through ten years | 9,044 | 9,027 |
Due after ten years | 235 | 347 |
Mortgage and asset-backed securities | 7,923 | 8,633 |
Amortized cost | 32,365 | 32,474 |
Fair Value [Abstract] | ||
Due in one year or less | 498 | 745 |
Due after one year through five years | 14,712 | 13,600 |
Due after five years through ten years | 9,220 | 8,917 |
Due after ten years | 240 | 347 |
Mortgage and asset-backed securities | 7,918 | 8,523 |
Fair value | $ 32,588 | $ 32,132 |
Investments, Fixed Maturity Sec
Investments, Fixed Maturity Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Investments [Abstract] | |||
Recognized OTTI losses | $ 0 | $ 0 | |
Maidstone [Member] | |||
Investments [Abstract] | |||
Fair value, less than 12 months | 3,276 | $ 25,612 | |
Gross unrealized losses, less than 12 months | (18) | (372) | |
Fair value, 12 months or more | 11,485 | 0 | |
Gross unrealized losses, 12 months or more | (74) | 0 | |
Fair value, total | 14,761 | 25,612 | |
Gross realized losses, total | (92) | (372) | |
Maidstone [Member] | U.S. Treasury and U.S. Government [Member] | |||
Investments [Abstract] | |||
Fair value, less than 12 months | 2,692 | 4,304 | |
Gross unrealized losses, less than 12 months | (4) | (34) | |
Fair value, 12 months or more | 1,870 | 0 | |
Gross unrealized losses, 12 months or more | (10) | 0 | |
Fair value, total | 4,562 | 4,304 | |
Gross realized losses, total | (14) | (34) | |
Maidstone [Member] | U.S. Tax-Exempt Municipal [Member] | |||
Investments [Abstract] | |||
Fair value, less than 12 months | 0 | 4,285 | |
Gross unrealized losses, less than 12 months | 0 | (25) | |
Fair value, 12 months or more | 0 | 0 | |
Gross unrealized losses, 12 months or more | 0 | 0 | |
Fair value, total | 0 | 4,285 | |
Gross realized losses, total | 0 | (25) | |
Maidstone [Member] | Corporate Bonds [Member] | |||
Investments [Abstract] | |||
Fair value, less than 12 months | 366 | 10,306 | |
Gross unrealized losses, less than 12 months | (13) | (193) | |
Fair value, 12 months or more | 4,474 | 0 | |
Gross unrealized losses, 12 months or more | (19) | 0 | |
Fair value, total | 4,840 | 10,306 | |
Gross realized losses, total | (32) | (193) | |
Maidstone [Member] | Mortgage and Asset-backed Securities [Member] | |||
Investments [Abstract] | |||
Fair value, less than 12 months | 218 | 6,717 | |
Gross unrealized losses, less than 12 months | (1) | (120) | |
Fair value, 12 months or more | 5,141 | 0 | |
Gross unrealized losses, 12 months or more | (45) | 0 | |
Fair value, total | 5,359 | 6,717 | |
Gross realized losses, total | $ (46) | $ (120) |
Investments, Net Investment Inc
Investments, Net Investment Income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Investment Income [Abstract] | ||
Investment income | $ 348,000 | $ 213,000 |
Less: investment expenses | (13,000) | (19,000) |
Net investment income | 335,000 | 194,000 |
Bonds [Member] | ||
Net Investment Income [Abstract] | ||
Investment income | 261,000 | 153,000 |
Common Stock [Member] | ||
Net Investment Income [Abstract] | ||
Investment income | 26,000 | 0 |
Preferred Stocks [Member] | ||
Net Investment Income [Abstract] | ||
Investment income | 6,000 | 0 |
Cash and Cash Equivalents [Member] | ||
Net Investment Income [Abstract] | ||
Investment income | 55,000 | 60,000 |
Maidstone [Member] | Bonds [Member] | ||
Net Investment Income [Abstract] | ||
Capital losses on bond securities | 0 | |
Maidstone [Member] | Equity Securities [Member] | ||
Net Investment Income [Abstract] | ||
Capital gains on equity securities | $ 10,000 | $ 0 |
Investments, Fair Value of Inve
Investments, Fair Value of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | $ 1,050 | $ 693 | |
Fair value of fixed maturities | 32,588 | 32,132 | |
Transfers from Level 1 to level 2 | 0 | $ 0 | |
Transfers from Level 2 to Level 1 | 0 | $ 0 | |
Fair Value [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 1,050 | 693 | |
Fair value of fixed maturities | 32,588 | 32,132 | |
Fair Value [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 247 | 227 | |
Fair value of fixed maturities | 5,527 | 4,304 | |
Fair Value [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 803 | 466 | |
Fair value of fixed maturities | 27,061 | 27,828 | |
Fair Value [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 0 | 0 | |
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | Common Stock [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 247 | 227 | |
Fair Value [Member] | Common Stock [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 247 | 227 | |
Fair Value [Member] | Common Stock [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 0 | 0 | |
Fair Value [Member] | Common Stock [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 0 | 0 | |
Fair Value [Member] | Preferred Stocks [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 803 | 466 | |
Fair Value [Member] | Preferred Stocks [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 0 | 0 | |
Fair Value [Member] | Preferred Stocks [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 803 | 466 | |
Fair Value [Member] | Preferred Stocks [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of equity securities | 0 | 0 | |
Fair Value [Member] | U.S. Treasury and U.S. Government [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 5,527 | 4,304 | |
Fair Value [Member] | U.S. Treasury and U.S. Government [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 5,527 | 4,304 | |
Fair Value [Member] | U.S. Treasury and U.S. Government [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | U.S. Treasury and U.S. Government [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | U.S. Tax-Exempt Municipal [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 4,689 | 4,624 | |
Fair Value [Member] | U.S. Tax-Exempt Municipal [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | U.S. Tax-Exempt Municipal [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 4,689 | 4,624 | |
Fair Value [Member] | U.S. Tax-Exempt Municipal [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | Corporate [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 14,454 | 14,681 | |
Fair Value [Member] | Corporate [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | Corporate [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 14,454 | 14,681 | |
Fair Value [Member] | Corporate [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | Mortgage and Asset-backed Securities [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 7,918 | 8,523 | |
Fair Value [Member] | Mortgage and Asset-backed Securities [Member] | Level 1 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 0 | 0 | |
Fair Value [Member] | Mortgage and Asset-backed Securities [Member] | Level 2 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | 7,918 | 8,523 | |
Fair Value [Member] | Mortgage and Asset-backed Securities [Member] | Level 3 [Member] | |||
Fair Value of Investments [Abstract] | |||
Fair value of fixed maturities | $ 0 | $ 0 |
Investments, Restricted Assets
Investments, Restricted Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Investments [Abstract] | ||
Deposits with U.S. Regulatory Authorities | $ 2.8 | $ 2.7 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) $ in Thousands, € in Millions | 3 Months Ended | ||||
Mar. 31, 2019USD ($) | Mar. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | |
Fair Value of Financial Instruments [Abstract] | |||||
Note payable | $ 219,984 | $ 222,950 | |||
Foreign Exchange Contracts [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Notional amount | € | € 0 | € 1.5 | |||
Interest Rate Swap [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Notional amount | 70,000 | 70,000 | $ 70,000 | ||
Fair value liability | 1,500 | 900 | |||
Note Payable - IVG [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Note payable | 4,000 | 4,000 | |||
2018 First Lien Term Loan [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Note payable | 152,000 | 154,000 | |||
Turning Point [Member] | Foreign Exchange Contracts [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Notional amount | 0 | € 1.5 | |||
Gain on derivatives | 100 | ||||
Fair value liability | 0 | ||||
Turning Point [Member] | Interest Rate Swap [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Notional amount | 70,000 | 70,000 | |||
Fair value liability | 1,500 | 900 | |||
Turning Point [Member] | Fair Value [Member] | 2018 First Lien Term Loan [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Long-term debt | 152,000 | 154,000 | |||
Turning Point [Member] | Fair Value [Member] | 2018 Second Lien Term Loan [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Long-term debt | 40,000 | $ 40,000 | |||
Standard Outdoor [Member] | |||||
Fair Value of Financial Instruments [Abstract] | |||||
Fair value of promissory note issued | $ 8,200 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Raw materials and work in process | $ 3,967 | $ 2,722 |
Leaf tobacco | 35,929 | 34,977 |
Other | 903 | 738 |
Inventory | 96,228 | 96,618 |
LIFO reserve | (5,357) | (5,381) |
Inventory, net | 90,871 | 91,237 |
Inventory valuation allowance | 1,500 | 2,500 |
Smokeless Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | 6,540 | 6,321 |
Smoking Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | 15,079 | 14,666 |
NewGen Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | $ 33,810 | $ 37,194 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 42,034 | $ 41,116 |
Accumulated depreciation | (14,246) | (13,375) |
Property, plant and equipment, net | 27,788 | 27,741 |
Land [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 22 | 22 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 2,320 | 2,320 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 2,101 | 2,101 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 14,229 | 13,307 |
Advertising Structures [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 17,928 | 17,913 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 5,434 | $ 5,453 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Current Assets [Abstract] | ||
Inventory deposits | $ 7,134 | $ 9,739 |
Other | 4,802 | 5,306 |
Other current assets | $ 11,936 | $ 15,045 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Asset Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Abstract] | ||
Goodwill | $ 145,961 | $ 146,696 |
Insurance [Member] | ||
Goodwill [Abstract] | ||
Goodwill impairment charge | 800 | |
Goodwill | 0 | |
Intangible Assets [Abstract] | ||
Intangible assets impairment charge | 2,000 | |
Intangible assets | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |||
Accrued payroll and related items | $ 3,093 | $ 6,063 | |
Customer returns and allowances | 3,082 | 2,895 | |
Taxes payable | 3,758 | 0 | |
Lease liabilities | 2,039 | [1] | 0 |
Other | 9,196 | 14,925 | |
Total accrued liabilities | $ 21,168 | $ 23,883 | |
[1] | Reported within accrued liabilities on the condensed consolidated balance sheet |
Liability for Losses and Loss_3
Liability for Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Liability for Losses and Loss Adjustment Expenses [Abstract] | |||
Reserve for losses and LAE at beginning of period | $ 27,330 | $ 29,366 | |
Incurred Related to [Abstract] | |||
Prior year | 622 | 0 | |
Current year | 5,871 | 5,812 | |
Total incurred | 6,493 | 5,812 | |
Paid Related to [Abstract] | |||
Prior year | 4,743 | 5,478 | |
Current year | 2,096 | 2,704 | |
Total paid | 6,839 | 8,182 | |
Reserve for losses and LAE at end of period | 26,984 | $ 26,996 | |
Case basis reserves | 15,797 | $ 15,863 | |
Incurred but not reported reserves | 11,187 | 11,467 | |
Total | $ 26,984 | $ 27,330 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt, Summary of Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | $ 219,984 | $ 222,950 |
Less deferred finance charges and debt discount | (4,589) | (4,903) |
Less current maturities | (13,674) | (9,431) |
Long-term debt | 201,721 | 208,616 |
2018 First Lien Term Loan [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | 152,000 | 154,000 |
2018 Second Lien Term Loan [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | 40,000 | 40,000 |
SDI Crystal Term Loan [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | 15,000 | 15,000 |
Standard Outdoor Promissory Notes [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | 8,984 | 9,950 |
Note Payable - IVG [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Notes payable and long-term debt | $ 4,000 | $ 4,000 |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt, 2018 Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 07, 2018 | |
Notes Payable and Long-Term Debt [Abstract] | |||
Loss on extinguishment of debt | $ 0 | $ (2,384) | |
Turning Point [Member] | 2018 Credit Facility [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Secured credit facility | $ 250,000 | ||
Additional borrowing capacity under accordion feature | 40,000 | ||
Turning Point [Member] | 2018 First Lien Term Loan [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Face amount | 160,000 | ||
Turning Point [Member] | 2018 Revolving Credit Facility [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Maximum borrowing capacity | 50,000 | ||
Turning Point [Member] | 2018 Second Lien Term Loan [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Face amount | $ 40,000 | ||
Turning Point [Member] | 2017 Credit Facility [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Loss on extinguishment of debt | $ (2,400) |
Notes Payable and Long-Term D_5
Notes Payable and Long-Term Debt, 2018 First Lien Credit Facility (Details) - Turning Point [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 07, 2018 | |
Letter of Credit [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Maximum borrowing capacity | $ 1.3 | ||
2018 First Lien Credit Facility [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Maturity date | Mar. 7, 2023 | ||
2018 First Lien Credit Facility [Member] | Minimum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Senior leverage ratio | 3 | ||
Total leverage ratio | 4 | ||
Fixed charge coverage ratio | 1.20 | ||
2018 First Lien Credit Facility [Member] | Maximum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Senior leverage ratio | 3.50 | ||
Total leverage ratio | 4.50 | ||
2018 First Lien Term Loan [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Frequency of principal payment | Quarterly | ||
Weighted average interest rate | 5.75% | 5.13% | |
2018 First Lien Term Loan [Member] | June 30, 2018 through March 31, 2020 [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Required payment | $ 2 | ||
2018 First Lien Term Loan [Member] | June 30, 2020 through March 31, 2022 [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Required payment | 3 | ||
2018 First Lien Term Loan [Member] | June 30, 2022 and after [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Required payment | $ 4 | ||
2018 First Lien Term Loan [Member] | LIBOR [Member] | Minimum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Margin on variable rate | 2.75% | ||
2018 First Lien Term Loan [Member] | LIBOR [Member] | Maximum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Margin on variable rate | 3.50% | ||
2018 Revolving Credit Facility [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Weighted average interest rate | 6.61% | 5.79% | |
Outstanding borrowings | $ 14 | $ 26 | |
Unused portion of credit facility | 36 | ||
Maximum borrowing capacity | $ 50 | ||
Availability under credit facility | $ 34.7 | ||
2018 Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Margin on variable rate | 2.75% | ||
2018 Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |||
Notes Payable and Long-Term Debt [Abstract] | |||
Margin on variable rate | 3.50% |
Notes Payable and Long-Term D_6
Notes Payable and Long-Term Debt, 2018 Second Lien Credit Facility (Details) - Turning Point [Member] | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
2018 Second Lien Credit Facility [Member] | Minimum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Senior leverage ratio | 3.50 | |
Total leverage ratio | 4.50 | |
Fixed charge coverage ratio | 1.10 | |
2018 Second Lien Credit Facility [Member] | Maximum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Senior leverage ratio | 3.75 | |
Total leverage ratio | 4.75 | |
2018 Second Lien Term Loan [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Maturity date | Mar. 7, 2024 | |
Weighted average interest rate | 9.48% | 8.70% |
2018 Second Lien Term Loan [Member] | LIBOR [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Margin on variable rate | 7.00% |
Notes Payable and Long-Term D_7
Notes Payable and Long-Term Debt, Note Payable - IVG (Details) - Turning Point [Member] - Note Payable - IVG [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Notes Payable and Long-Term Debt [Abstract] | ||
Face amount | $ 4 | |
Interest rate | 6.00% | |
Maturity date | Mar. 5, 2020 |
Notes Payable and Long-Term D_8
Notes Payable and Long-Term Debt, SDI and Standard Outdoor (Details) $ in Thousands | Feb. 20, 2018USD ($)Billboard | Feb. 02, 2018USD ($) | Jan. 18, 2018USD ($)Billboard | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Aug. 10, 2018USD ($) |
Standard Outdoor [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Face amount | $ 3,500 | $ 6,500 | ||||
Number of billboards acquired | Billboard | 86 | 83 | ||||
Discount on promissory note | $ 300 | $ 900 | ||||
Principal payment | $ 1,000 | 1,000 | ||||
Frequency of principal payment | Annually | |||||
Final principal payment | $ 3,500 | |||||
Fixed coupon interest rate | 5.00% | 5.00% | ||||
Interest expense | $ 200 | $ 100 | ||||
Crystal Term Loan [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Face amount | $ 10,000 | $ 5,000 | ||||
Agency fee | 50 | |||||
One-time commitment fee | 350 | |||||
Maturity date | Feb. 2, 2023 | |||||
Unrestricted cash and cash equivalents | $ 3,000 | $ 8,200 | ||||
Interest expense | $ 400 | |||||
Crystal Term Loan [Member] | LIBOR [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Term of variable rate | 3 months | |||||
Margin on variable rate | 7.25% | |||||
Crystal Term Loan [Member] | Maximum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Commitment for additional term loans | $ 15,000 | |||||
Additional increase in commitment that can be requested | $ 25,000 | |||||
Interest expense | $ 100 |
Notes Payable and Long-Term D_9
Notes Payable and Long-Term Debt, Scheduled Principal Repayments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Scheduled Principal Repayments [Abstract] | ||
April 1, 2019 - December 31, 2019 | $ 6,536 | |
2020 | 16,839 | |
2021 | 13,882 | |
2022 | 16,227 | |
2023 | 126,500 | |
Thereafter | 40,000 | |
Notes payable and long-term debt | $ 219,984 | $ 222,950 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | |||
Components of Lease Expense [Abstract] | ||||
Variable lease cost | [1] | $ 298 | ||
Short-term lease cost | 54 | |||
Sublease income | (30) | |||
Total operating lease cost | 1,216 | |||
Assets [Abstract] | ||||
Right of use assets | 13,431 | $ 0 | ||
Liabilities [Abstract] | ||||
Current lease liabilities | 2,039 | [2] | 0 | |
Long-term lease liabilities | 11,785 | $ 0 | ||
Total lease liabilities | $ 13,824 | |||
Weighted-Average Remaining Lease Term and Discount Rate [Abstract] | ||||
Weighted average remaining lease term - operating leases | 11 years 8 months 12 days | |||
Weighted average discount rate - operating leases | 9.57% | |||
Maturities of Lease Liabilities [Abstract] | ||||
April 1, 2019 - December 31, 2019 | $ 2,349 | |||
2020 | 2,792 | |||
2021 | 2,246 | |||
2022 | 1,561 | |||
2023 | 1,354 | |||
Thereafter | 9,396 | |||
Total lease payments | 19,698 | |||
Less: Imputed interest | 5,874 | |||
Present value of lease liability | $ 13,824 | |||
Turning Point [Member] | ||||
Weighted-Average Remaining Lease Term and Discount Rate [Abstract] | ||||
Weighted average remaining lease term - operating leases | 9 years | |||
Weighted average discount rate - operating leases | 6.49% | |||
Cost of Sales [Member] | ||||
Components of Lease Expense [Abstract] | ||||
Operating lease cost | $ 192 | |||
Selling, General and Administrative Expenses [Member] | ||||
Components of Lease Expense [Abstract] | ||||
Operating lease cost | $ 702 | |||
[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. | |||
[2] | Reported within accrued liabilities on the condensed consolidated balance sheet |
Pension and Postretirement Be_3
Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Pension Benefits [Member] | |||
Net Periodic Benefit Costs [Abstract] | |||
Service cost | $ 26 | $ 26 | |
Interest cost | 130 | 142 | |
Expected return on plan assets | (161) | (254) | |
Amortization of losses (gains) | 37 | 60 | |
Net periodic benefit expense (income) | 32 | (26) | |
Post-Retirement Benefits [Member] | |||
Net Periodic Benefit Costs [Abstract] | |||
Service cost | 0 | 0 | |
Interest cost | 25 | 29 | |
Expected return on plan assets | 0 | 0 | |
Amortization of losses (gains) | (42) | (20) | |
Net periodic benefit expense (income) | (17) | $ 9 | |
Turning Point [Member] | Pension Benefits [Member] | |||
Pension and Postretirement Benefit Plans [Abstract] | |||
Expected contributions in 2019 | 0 | ||
Curtailment loss | $ 300 | ||
Turning Point [Member] | Post-Retirement Benefits [Member] | |||
Pension and Postretirement Benefit Plans [Abstract] | |||
Expected contributions in 2019 | $ 200 |
Stockholders' Equity, Common St
Stockholders' Equity, Common Stock (Details) - $ / shares | Jun. 01, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 29, 2017 | May 31, 2017 |
Common Stock, [Abstract] | |||||
Common stock, shares outstanding (in shares) | 857,714 | ||||
Shares distributed as a dividend (in shares) | 1 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 330,000,000 | 50,000,000 | |||
Class A Common Stock [Member] | |||||
Common Stock, [Abstract] | |||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | 7,335,018 | ||||
Common stock, shares outstanding (in shares) | 9,061,130 | 9,052,801 | |||
Issuance of shares for restricted stock (in shares) | 13,700 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | ||
Class B Common Stock [Member] | |||||
Common Stock, [Abstract] | |||||
Common stock, shares outstanding (in shares) | 7,753,566 | 7,801,995 | |||
Shares distributed as a dividend (in shares) | 8,190,166 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 | 30,000,000 | ||
Turning Point [Member] | |||||
Common Stock, [Abstract] | |||||
Common stock, shares outstanding (in shares) | 9,842,373 |
Stockholders' Equity, Common _2
Stockholders' Equity, Common Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jun. 29, 2017 | Jun. 01, 2017 | |
Common Stock Repurchase Program [Abstract] | |||||
Period stock repurchase program is in effect | 12 months | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Percentage of outstanding shares of commons stock authorized for repurchase | 5.00% | ||||
Repurchase of common shares (in shares) | 40,100 | 0 | |||
Repurchase of common shares | $ 576 | ||||
Accrued liabilities for unsettled repurchases | $ 800 |
Stockholders' Equity, Equity Is
Stockholders' Equity, Equity Issuance (Details) - USD ($) $ in Millions | 1 Months Ended | |
Mar. 31, 2018 | Jan. 31, 2018 | |
Restricted Stock [Member] | ||
Equity Issuance [Abstract] | ||
Restricted stock granted to individuals for services performed (in shares) | 18,834 | |
Class A Common Stock [Member] | ||
Equity Issuance [Abstract] | ||
Shares issued in private placement (in shares) | 181,825 | |
Proceeds from issuance of stock in private placement | $ 2 |
Stockholders' Equity, Dividends
Stockholders' Equity, Dividends paid by Turning Point (Details) - Turning Point [Member] - USD ($) $ in Thousands | Apr. 12, 2019 | Mar. 31, 2019 |
Dividend Declared Q4-2017 [Member] | ||
Dividends Paid by Turning Point [Abstract] | ||
Dividend payable, date declared | Nov. 9, 2017 | |
Dividends paid or accrued | $ 40 | |
Dividend Declared Q1-2019 [Member] | Subsequent Event [Member] | ||
Dividends Paid by Turning Point [Abstract] | ||
Dividend payable, date to be paid | Apr. 12, 2019 | |
Dividend payable, date of record | Mar. 22, 2019 |
Share-Based Compensation, 2017
Share-Based Compensation, 2017 Plan and ESPP (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Jun. 09, 2017 | |
2017 Plan [Member] | ||
Share-Based Compensation [Abstract] | ||
Number of shares available for grant (in shares) | 988,930 | |
2017 Plan [Member] | Class A Common Stock [Member] | ||
Share-Based Compensation [Abstract] | ||
Maximum number of shares issuable (in shares) | 1,000,000 | |
ESPP [Member] | ||
Share-Based Compensation [Abstract] | ||
Maximum number of shares issuable (in shares) | 26,447 | |
Purchase price of common stock as percentage of fair market value | 90.00% |
Share-Based Compensation, Compe
Share-Based Compensation, Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Selling, General and Administrative Expense [Member] | ||
Share-Based Compensation [Abstract] | ||
Share-based compensation expense | $ 0.6 | $ 0.4 |
Share-Based Compensation, Stock
Share-Based Compensation, Stock Option Activity (Details) - 2000 Plan [Member] - Stock Options [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-Based Compensation [Abstract] | ||
Options exercised (in shares) | 0 | 0 |
Number of Shares [Roll Forward] | ||
Balance at beginning of period (in shares) | 2,463 | |
Cancelled (in shares) | 0 | |
Balance at end of period (in shares) | 2,463 | |
Vested and exercisable at end of period (in shares) | 2,463 | |
Weighted Average Remaining Contractual Term [Abstract] | ||
Weighted average remaining contractual term, balance outstanding at end of period | 1 year 6 months | |
Weighted average remaining contractual term, vested and exercisable at end of period | 1 year 6 months | |
Minimum [Member] | ||
Weighted Average Exercise Price [Abstract] | ||
Balance outstanding at beginning of period (in dollars per share) | $ 31 | |
Cancelled (in dollars per share) | 0 | |
Balance outstanding at end of period (in dollars per share) | 31 | |
Vested and exercisable at end of period (in dollars per share) | 31 | |
Maximum [Member] | ||
Weighted Average Exercise Price [Abstract] | ||
Balance outstanding at beginning of period (in dollars per share) | 46.25 | |
Cancelled (in dollars per share) | 0 | |
Balance outstanding at end of period (in dollars per share) | 46.25 | |
Vested and exercisable at end of period (in dollars per share) | $ 46.25 |
Share-Based Compensation, Sto_2
Share-Based Compensation, Stock Options Outstanding and Exercisable (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
$31.00 - $31.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | $ 31 |
Exercise price, upper range limit (in dollars per share) | $ 31.25 |
Options outstanding, number of shares (in shares) | shares | 1,400 |
Options outstanding, weighted average remaining contractual life | 2 years 1 month 6 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 31.18 |
Options exercisable, number of shares (in shares) | shares | 1,400 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 31.18 |
$45.25 - $46.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | 45.25 |
Exercise price, upper range limit (in dollars per share) | $ 46.25 |
Options outstanding, number of shares (in shares) | shares | 1,063 |
Options outstanding, weighted average remaining contractual life | 7 months 6 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 45.63 |
Options exercisable, number of shares (in shares) | shares | 1,063 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 45.63 |
$31.00 - $46.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | 31 |
Exercise price, upper range limit (in dollars per share) | $ 46.25 |
Options outstanding, number of shares (in shares) | shares | 2,463 |
Options outstanding, weighted average remaining contractual life | 1 year 6 months |
Options outstanding, weighted average exercise price (in dollars per share) | $ 37.41 |
Options exercisable, number of shares (in shares) | shares | 2,463 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 37.41 |
Share-Based Compensation, Non-V
Share-Based Compensation, Non-Vested Restricted Stock Awards (Details) - Restricted Stock Awards [Member] - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended |
Mar. 31, 2018 | Mar. 31, 2019 | |
Shares [Roll Forward] | ||
Granted (in shares) | 18,834 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Unrecognized stock-based compensation expense | $ 0.9 | |
Weighted-average remaining vesting period for recognition | 1 year 4 months 24 days | |
2000 Plan [Member] | ||
Shares [Roll Forward] | ||
Non-vested balance at beginning of period (in shares) | 127,005 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Non-vested balance at end of period (in shares) | 127,005 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Non-vested balance at beginning of period (in dollars per share) | $ 10.96 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 0 | |
Non-vested balance at end of period (in dollars per share) | $ 10.96 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes [Abstract] | ||
Federal corporate tax rate | 21.00% | |
Income tax expense | $ 1,354 | $ 809 |
Decrease in deferred income taxes due to impairment of other indefinite lived intangible assets | (400) | |
Income tax benefit due to impairment of other indefinite lived intangible assets | $ (400) | |
Turning Point [Member] | ||
Income Taxes [Abstract] | ||
Effective income tax rate | 21.30% | 21.00% |
Discrete tax deduction related to stock option exercises | $ 900 | $ 300 |
Earnings Per Share (Details)
Earnings Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)Vote / sharesClass$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | ||
Earnings per Share [Abstract] | |||
Number of classes of common stock | Class | 2 | ||
Basic Net (Loss) Income per Common Share Calculation [Abstract] | |||
Net (loss) income attributable to SDI | $ | $ (3,543) | $ 521 | |
Weighted average common shares outstanding - basic (in shares) | 16,863,621 | 16,559,432 | |
Net (loss) income attributable to SDI per share of common stock - basic (in dollars per share) | $ / shares | $ (0.21) | $ 0.03 | |
Diluted net (loss) income attributable to SDI per common share calculation [Abstract] | |||
Net (loss) income attributable to SDI | $ | $ (3,543) | $ 521 | |
Impact of subsidiary dilutive securities | $ | [1] | (80) | (43) |
Net (loss) income attributable to SDI - diluted | $ | $ (3,623) | $ 478 | |
Weighted average common shares outstanding - basic (in shares) | 16,863,621 | 16,559,432 | |
Dilutive impact of stock options and restricted stock awards (in shares) | 0 | 43,796 | |
Weighted average common shares outstanding - diluted (in shares) | 16,863,621 | 16,603,228 | |
Net (loss) income attributable to SDI per share of common stock - diluted (in dollars per share) | $ / shares | $ (0.21) | $ 0.03 | |
Class A Common Stock [Member] | |||
Basic Net (Loss) Income per Common Share Calculation [Abstract] | |||
Weighted average common shares outstanding - basic (in shares) | 9,070,542 | 8,521,404 | |
Diluted net (loss) income attributable to SDI per common share calculation [Abstract] | |||
Weighted average common shares outstanding - basic (in shares) | 9,070,542 | 8,521,404 | |
Class B Common Stock [Member] | |||
Earnings per Share [Abstract] | |||
Number of votes per share | Vote / shares | 10 | ||
Percentage of outstanding shares that can approve conversion of Class B to Class A common stock | 66.67% | ||
Basic Net (Loss) Income per Common Share Calculation [Abstract] | |||
Weighted average common shares outstanding - basic (in shares) | 7,793,079 | 8,038,028 | |
Diluted net (loss) income attributable to SDI per common share calculation [Abstract] | |||
Weighted average common shares outstanding - basic (in shares) | 7,793,079 | 8,038,028 | |
Stock Options [Member] | |||
Earnings per Share [Abstract] | |||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 0 | 5,063 | |
[1] | The Company records an adjustment to net income in the relevant period for the dilutive impact of subsidiary stock-based awards on the Company's reported net income for purposes of calculating income per share. |
Segment Information, Financial
Segment Information, Financial Information of Reportable Segments (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | ||
Segment Information [Abstract] | ||||
Number of reportable segments | Segment | 5 | |||
Segment Information [Abstract] | ||||
Revenues | $ 100,012 | $ 82,066 | ||
Operating income | 5,389 | 9,039 | ||
Interest expense | 4,491 | 3,992 | ||
Interest and investment income | (162) | (103) | ||
Loss on extinguishment of debt | 0 | 2,384 | ||
Net periodic benefit income, excluding service cost | (11) | (43) | ||
Income before income taxes | 1,071 | 2,809 | ||
Capital expenditures | 920 | 383 | ||
Depreciation and amortization | 1,308 | 987 | ||
Assets | 425,552 | $ 421,943 | ||
Reportable Segments [Member] | Smokeless Products [Member] | ||||
Segment Information [Abstract] | ||||
Revenues | 22,544 | 20,747 | ||
Operating income | 7,487 | 4,486 | ||
Capital expenditures | 577 | 349 | ||
Depreciation and amortization | 357 | 339 | ||
Assets | 108,762 | 99,441 | ||
Reportable Segments [Member] | Smoking Products [Member] | ||||
Segment Information [Abstract] | ||||
Revenues | 25,519 | 26,996 | ||
Operating income | 9,946 | 6,894 | ||
Capital expenditures | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Assets | 143,108 | 142,520 | ||
Reportable Segments [Member] | NewGen Products [Member] | ||||
Segment Information [Abstract] | ||||
Revenues | 43,565 | 26,199 | ||
Operating income | 2,838 | (1,496) | ||
Capital expenditures | 309 | 14 | ||
Depreciation and amortization | 533 | 396 | ||
Assets | 93,990 | 95,397 | ||
Reportable Segments [Member] | Insurance [Member] | ||||
Segment Information [Abstract] | ||||
Revenues | 7,703 | 7,718 | ||
Operating income | (4,403) | 617 | ||
Capital expenditures | 19 | 20 | ||
Depreciation and amortization | 47 | 57 | ||
Assets | 49,776 | 52,169 | ||
Reportable Segments [Member] | Other [Member] | ||||
Segment Information [Abstract] | ||||
Revenues | [1] | 681 | 406 | |
Operating income | [1] | (10,479) | (1,462) | |
Capital expenditures | [1] | 15 | 0 | |
Depreciation and amortization | [1] | 371 | $ 195 | |
Assets | [1] | $ 29,916 | $ 32,416 | |
[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. |
Segment Information, Revenue Di
Segment Information, Revenue Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Sales by Sales Channel [Abstract] | ||
Net sales | $ 92,309 | $ 74,348 |
NewGen Products [Member] | ||
Net Sales by Sales Channel [Abstract] | ||
Net sales | 43,565 | 26,199 |
NewGen Products [Member] | Wholesalers [Member] | ||
Net Sales by Sales Channel [Abstract] | ||
Net sales | 2,197 | 2,330 |
NewGen Products [Member] | Retail Outlets [Member] | ||
Net Sales by Sales Channel [Abstract] | ||
Net sales | 28,645 | 20,884 |
NewGen Products [Member] | End-customers [Member] | ||
Net Sales by Sales Channel [Abstract] | ||
Net sales | 12,673 | 2,935 |
NewGen Products [Member] | Other [Member] | ||
Net Sales by Sales Channel [Abstract] | ||
Net sales | $ 50 | $ 50 |
Segment Information, Net Sales
Segment Information, Net Sales - Domestic and Foreign (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Information [Abstract] | ||
Net sales | $ 92,309 | $ 74,348 |
Reportable Geographical Component [Member] | Domestic [Member] | ||
Segment Information [Abstract] | ||
Net sales | 89,450 | 71,264 |
Reportable Geographical Component [Member] | Foreign [Member] | ||
Segment Information [Abstract] | ||
Net sales | $ 2,859 | $ 3,084 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Pine Hill Group [Member] | Accounting and Financial Reporting Services [Member] | ||
Related Party Transactions [Abstract] | ||
Related party transaction, expenses incurred | $ 0.3 | $ 0.5 |
Statutory Information (Details)
Statutory Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
NYSDFS [Member] | ||
Statutory Information [Abstract] | ||
Dividends that may be paid without approval | $ 0 | |
Amount of dividend declared or paid | 0 | |
Statutory capital and surplus | 2,915 | $ 4,769 |
Statutory net loss | $ (1,983) | $ (9,559) |
NAIC [Member] | Maximum [Member] | ||
Statutory Information [Abstract] | ||
Risk-based capital ratio | 150.00% | |
NAIC [Member] | Minimum [Member] | ||
Statutory Information [Abstract] | ||
Risk-based capital ratio | 100.00% |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 07, 2019USD ($)Billboard | Feb. 20, 2018Billboard | Jan. 18, 2018Billboard | Apr. 30, 2019USD ($) | Jun. 30, 2019USD ($) |
Turning Point [Member] | Plan [Member] | |||||
Subsequent Events [Abstract] | |||||
Gain on settlement of VMR Agreement | $ 5.5 | ||||
Standard Outdoor [Member] | |||||
Subsequent Events [Abstract] | |||||
Number of billboards acquired | Billboard | 86 | 83 | |||
Subsequent Event [Member] | Turning Point [Member] | |||||
Subsequent Events [Abstract] | |||||
Proceeds from settlement of VMR Agreement | $ 6.7 | ||||
Subsequent Event [Member] | Standard Outdoor [Member] | |||||
Subsequent Events [Abstract] | |||||
Number of billboards acquired | Billboard | 6 | ||||
Consideration paid to acquire billboards | $ 0.6 |