VGR - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Vector Group Ltd.'s First Quarter 2024 Earnings Conference Call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the Investor Relations section of the company's website located at www.vectorgroupltd.com.During this call, the terms adjusted operating income, adjusted net income, adjusted EBITDA and tobacco adjusted operating income will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted operating income, adjusted net income, adjusted EBITDA and tobacco adjusted operating income are contained in the company's earnings release, which has been posted to the Investor Relations section of the company's website.Before the call begins, I would like to read a safe harbor statement. results this statements that risks or that that cause during facts not and implied made from could forward-looking materially are are actual by statements forward-looking conference forth are call historical uncertainties those statements. The set differ in to subject to Howard company's of President like risks the to Lorber. These the call described Vector and Commission Exchange over more in and are the Chief turn Officer Executive filings.Now Group, in to detail Securities I would

Howard Lorber

our thank today and us Operating tobacco Vector Lampen, sheet results and Brands. morning, final and Chief joining will I Good sheet. you Conference Operating will President comments Vector's consolidated on for to our Anson, first our of the Chief Chief update summarize business. Group's call Vector open for I our to balance the Earnings review balance Financial performance XXXX. financial Officer XXXX will Call. quarter our Nick Liggett and Officer; of Officer; Kirkland, I ask provide First Then are for Quarter the Bryant questions.Turning With and for me Richard with of an close Nick

of significant cash March we of XXXX, cash million, with of $XXX maintained XX, and cash equivalents $XX As million Liggett. approximately including liquidity at

now or investment XXXX common the net million increased million the from to the per for $XXX.X common in Adjusted the income diluted in diluted results diluted increased the revenues a million X XXXX for of million $XX.X share income held Nick $X.XX will with $XX period. $X.XX $XX.X a March million.Turning $XX.X Adjusted Nick? the consolidated share it per Group's share tobacco per XXXX. from or share to compared $XX.X over discuss Net million per turn to increased fair quarter to long-term Vector's period million also securities or million XXXX ago. same period.I We investments $XXX.X period. XXXX our $XXX from months $X.XX in and Vector $X.XX to value or in corresponding diluted of $XX.X operations. year to to million EBITDA approximately first XX, were ended

Nicholas Anson

good market once delivered strong trend Howard, excellent year brand first of compared results the share the strength reflects the market remained morning.Continuing build again in at Tobacco we by cigarette or our retail largest margin, share, income market stable continue brand. quarter. from largest performance, to Liggett United our $X.X prior and X.X% the discount in the States market you, of remains the which Thank Montego, segment increased The period, to while X.X%. million fourth and stability as the Operating of country's

to a our continue gross market considering which and to noteworthy share quarter year broad-based strategic of prior X.X% increases. X% grew in grow the distribution retail excellent in while analysis, Montego margin result to first ability our is improving the XXXX, up period, Our is in quarter national of particularly profit from first execution.Montego's price ongoing market the retail

a the from range distribution Montego's of period. XX% and has to premium Montego the industry's the In remained XX,XXX expanded between addition, the leading stores, approximately stable quarter year stores XXXX, XX% retail. price in in of first the gap up prior in brands In discount to XX,XXX

cigarette outperform the stable, overall our relatively continues gradually while market share optimizing this profit increasing volume, in perspective, value consumers market and with pricing remains remains by Montego From share providing strong broader to remain a effectively our market. margins. to deep the managing while and with discount our long-term industry U.S. the expect strategy consistent Our year with of objective category.Looking we segment ahead, excellent to

par recognize increased year. brands.During retail volumes period with they discount Additionally, Science X.X% XXXX, including category is on the the Management brands while data, declined quarter options, first that product Associates affordable more same consumers to select Montego, expensive last the X% like industry deep more based quality as of the on compared

Science segment in XX.X% discount in are shipments deep compared Management the provide consumers, to XX.X% present portfolio that of XXXX, XX.X% the while declined the migration advantage footprint up same result, the to option we by period shipments ago a overall period price X.X% from as last from quarter This quarter, market retail segment comprised first the first the by according deep continues.Liggett's and industry with data year attractive a to a brand discount an continues nationwide and competitive X.X% quarter. Associates. meaningful to confident As and value-focused our in same Liggett for retail declined

primarily the modestly industry various by manufacturers' retail timing driven nature outperformed and our wholesaler quarter of price shipments X.X%. XX.X% our between market, declined first were our performance wholesale discrepancy of by wholesale the which in retail shipment The shipments shipments the patterns, While by increases. short-term declined reflects inconsistent wholesale the purchasing while

will Liggett As the we past, Tobacco. industry a to that Vector indicator Group shipments significantly believe and volume have retail turn of the are now performance.I reliable tobacco consolidated we more in noted financials for

was for months XXXX. adjusted $XX million corresponding X March XX, pricing. ended Liggett's million to prior quarter income the XX, XX.X% period. the offset an compared increased $XXX.X $XX.X This increased referenced ended the X.X% in operating March in compared the Tobacco decrease $XX.X shipments decline X.X% corresponding $XX during $XXX.X period. to months from XXXX, XXXX, first in the X.X% for to XXXX EBITDA to wholesaler year to the million million in X million which first revenues period, by to the For partially quarter previously increase was the X.X% declined million in of attributable

a groups matter. of publish gross final to consult the has revenues, representing are instead that points this first pleased regulatory to to basis the an front, Our XX.X% outside to first news menthol decided XXXX.On hear its margin of XXX of quarter quarter on increase approximately the equated delay recent the and ruling with compared we to further decision government

have that the not have we consequences previously growth supported we right we it as in on markets. answer based illicit, always as sound is unintended discussed, evidence, regulation scientific prohibition such reasonable while inevitably our of the drives remain firm As unregulated position

final and We the growth and that expect the industry.In performance includes retail summary, of profit the our strategy advantages our menthol financial segment. market in operational by be ban business the long-term strong, challenged will on stable competitive share discount ruling vigorously and any and validate our tobacco remains

segment market growth only the a #X brand, of nation's platform leaders we great the with the on. discount in to build have As

the value XXXX and more developed have market carefully market mission provide propositions statement never been U.S. has for in Our our to relevant. been the plans best

and are you, in in on for proven the While operating segment expertise Howard. well maintain growth.As environment, increasingly positions we our earnings long-term competitive our always, foundation back an for momentum and to discount thanks to your And our build leadership attention. us

Howard Lorber

summary, Thank well quarter of pleased our with quarterly results you, first dividend. our we In as practice long-standing Nick. operating are as paying a

this policy open dividend questions. We for operator, continue.Now call expect the please will that

Operator

[Operator our first from we Ian Instructions] will And Zaffino question take with Oppenheimer.

Ian Zaffino

should share you about Montego sort share that ultimate point Just to brand? ask of market wanted the the a in be past to of I the maybe in market what can a and you Montego before to brand, get what from similar Very or harvesting think you remind able Where do you maybe can performed guideline as profits gains. guess, might you this that we expect Montego. had brand strong of

Nicholas Anson

the Sure. Yes, on increases Thanks, gain even that price in performance very pleased the taking Again, share. with margin Ian. been first brand's increasing and though obviously, strategically it's quarter. Montego to brand, continued the we've market

is to that, even we've grown obviously, brand. remind That would the continuing other brands and to launched Prix that store. they similar the I opportunity take it's the Pyramid continue to you grow. both invested in cheapest Grand brands be may and the to not grow though So and And

our to So -- and execution. that's, excellent retail again, down

the again, it's apologize. positioned. very where good our -- about Again, I'll So feeling our second. I -- reinforce feeling one brand

Our been more has value the proposition never mission statement to provide relevant. best

about good we very where the the at stand feeling in moment. So marketplace

Ian Zaffino

I how up this? X a on Was be Understood. you shipments And any maybe good menthol in to also, noticeable as commentary questions. there about like delay. federal ban that And had those seen equally ban? out potential guess bans? normalize thinking would follow-up, this maybe then just then leading difference a state-level then as the of that coming challenged should you are And as

Nicholas Anson

I Yes. No, right to the a that it's feeling the the at bans decision think with We're level, decision. exactly with handled inevitable states some but will be But obviously, Ian. that very -- respect when to think we've state-by-state activity that we increased will seen pleased basis, made. delay. we be may that's sure in as menthol final rule state not on see Again,

Operator

from with comes question Hale next And our Barclays. Holden

Hale Holden

we Just that consider previously distribution X of growth? brands? and for XX,XXX full Or questions. for the The higher to some Montego. should been that room to of close I other distribution? Is quick Pyramid there points is think you've --

Nicholas Anson

to XXX,XXX, those say And continued all Still by certainly about not get grow. stores, portfolio increased grow. we'll we to Vector quarter-over-quarter room Brands X,XXX about there's distribution for Overall for our is stores. in distribution total some room into Liggett that but to

we're continuing in to certainly, So growth see distribution.

Hale Holden

year is single-digit industry in Okay. decline kind you the and pretty settling rate. high then has out, of, this the this question high be Great. to sort been my way if last for the of rate And of second zoom seems over

was the that term basis I on wondering day-to-day the of industry. of if the kind tobacco forces long a cigarette competitive changes you of the So or you're and kind any changes you that about thinking think the face in that way

Nicholas Anson

is I years. when certainly factors Look, the at not Yes. at the more rate macroeconomic been if is accentuating would that for going kind improve the you're decline of in argue I that's to to to our Look, the underlying that the last X%. disposables of both in a then the And position decline. the position think illicit in rate, looking elevated macroeconomic growth the decline smokers. probably the say of you look it's to -- X% couple addition I'm

I market to the cleaned think time illicit it's be up. for going disposable take some to

with foreseeable we're well going rest that and the in actually to be operating segment, dealing for is which growing But of the to market. more performing those elevated relative certainly, a said, again, the future, So declines. we're discount

leaders in in. where So the segment growth taking continue that the to that we're comfort on capitalize in and

Operator

Martinson will question Karru Instructions] take from [Operator our Jefferies. We with next

Karru Martinson

When it, Is margin? X%, down, that you as price to you timing discount at raise that up the continue is conscious and take or wholesalers a the category of to aspect our the sales referenced just what being effort look the deep X.X%. was result

Nicholas Anson

traditional the actions but that, brands also, growth on category, Yes. on that we reflection, and also Montego what's under the slowing referred have to in I of as the coming portfolio we've that pressure. taken pricing do a discount of obviously, mean, increasing that's a which is category obviously,

it's those increases. So combination with and growth declines in brand a of volume price a the Montego offset slowing obviously

Karru Martinson

XX%, you And discount discount Okay. premium XX% the category? competitive more that deep seeing pressures discount to brands, maintaining and are in while that you're

Nicholas Anson

premium But they Certainly, market. we're discounting more in may seeing to be from bigger overall XX%. of brands the players XX% the their discounting

they're deep to not so discount, So impacting speak. really the

we more and getting are handle basis. any always, deal regional distribution deep a discount As is that we that pressures And region-by-region competitive kind market-by-market, segment and can on extremely of we're we Montego's feel broad basis. -- on confident of base with a certainly with the that that

Karru Martinson

just want to streak the asked I time, And I lastly, this going. since keep every Okay.

capital are How streak? You've those 'XX. got mature you the thinking notes about XX.X%

J. Kirkland

Karru, Kirkland. of the years, you How them? XX.X% in $XXX it's million there's said, are X.X as So thinking November due that Bryant we're about XXXX. obviously,

So evaluate of think them. position we're convey But important is to a very to really I we in strength. are what's continuing

our in of million now revolver. growing cash $XX market are dividends $XXX Nick addition that, capacity in his They're less profit. at And paying And holding and paying -- there's to have We share. million team of we're the Liggett's company. growing under we're earnings.

our we about feel good it with bankers. of So investment and we'll evaluate options, all our continue to

Operator

call. conference all and are have Liggett, for those joining all Group we you you behalf and gentlemen, the of your we Thank Vector for that Group's on quarterly and us concludes On today. Vector call. earnings this today's of for at us questions thank Ladies participation,

Howard Lorber

Thank you.

Nicholas Anson

you. Thank

Vector (VGR) 2 May 242024 Q1 Earnings call transcript