Standard Diversified Inc. Reports Financial Results for Its Fourth Quarter and Year Ended December 31, 2018
2018 Fourth Quarter Highlights
- Total revenues increased 39.8% to
$102.9 million as a result of strong growth atTurning Point Brands, Inc. (NYSE: TPB) and the addition of$7.1 million of earned insurance premiums fromMaidstone Insurance Company , which the Company acquired onJanuary 2, 2018 - Net loss attributable to SDI was
$3.0 million or$(0.18) per diluted share
2018 Annual Highlights
- Total revenues increased 28.0% to
$365.8 million as a result of strong growth atTurning Point Brands, Inc. (NYSE: TPB) and the addition of$28.6 million of earned insurance premiums fromMaidstone Insurance Company , which the Company acquired onJanuary 2, 2018 - Net income attributable to SDI was
$2.4 million , or$0.13 per diluted share
About
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, are forward-looking statements. These forward-looking statements address, among other things activities, events or developments that the Company expects, believes or anticipates will or may occur in the future. These forward-looking statements are subject to a number of risks that could cause actual results to differ materially from those contained in the forward-looking statements, including those risks described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended
Consolidated Statements of Income (dollars in thousands except share data) |
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Three Months Ended | Year Ended | |||||||||||||
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2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues: | ||||||||||||||
Net sales | $ | 94,972 | $ | 73,575 | $ | 335,128 | $ | 285,801 | ||||||
Insurance premiums earned | 7,109 | - | 28,648 | - | ||||||||||
Net investment income | 172 | - | 851 | - | ||||||||||
Other income | 601 | - | 1,158 | - | ||||||||||
Total revenues | 102,854 | 73,575 | 365,785 | 285,801 | ||||||||||
Operating costs and expenses: | ||||||||||||||
Cost of sales | 56,189 | 41,313 | 192,336 | 160,835 | ||||||||||
Selling, general and administrative expenses | 29,242 | 22,510 | 99,479 | 77,865 | ||||||||||
Incurred losses and loss adjustment expenses | 8,214 | - | 25,221 | - | ||||||||||
Other operating expenses | 3,119 | - | 8,631 | - | ||||||||||
Total operating costs and expenses | 96,764 | 63,823 | 325,667 | 238,700 | ||||||||||
Operating income |
6,090 | 9,752 | 40,118 | 47,101 | ||||||||||
Interest expense | 4,681 | 3,894 | 17,237 | 16,904 | ||||||||||
Interest and investment income | (116) | (140) | (736) | (517) | ||||||||||
Loss on extinguishment of debt | - | - | 2,384 | 6,116 | ||||||||||
Net periodic benefit (income) expense, excluding service cost | (45) | 6 | 131 | 180 | ||||||||||
Income before income taxes | 1,570 | 5,992 | 21,102 | 24,418 | ||||||||||
Income tax expense | 2,132 | 3,430 | 6,285 | 7,280 | ||||||||||
Net income (loss) | (562) | 2,562 | 14,817 | 17,138 | ||||||||||
Net income attributable to noncontrolling interests | (2,474) | (1,715) | (12,436) | (6,761) | ||||||||||
Net income (loss) attributable to |
$ | (3,036) | $ | 847 | $ | 2,381 | $ | 10,377 | ||||||
Net income (loss) attributable to SDI per Class A and Class |
$ | (0.18) | $ | 0.05 | $ | 0.14 | $ | 0.49 | ||||||
Net income (loss) attributable to SDI per Class A and Class |
$ | (0.18) | $ | 0.05 | $ | 0.13 | $ | 0.48 | ||||||
Weighted Average Class A and Class B Common Shares Outstanding – Basic | 16,929,066 | 16,387,398 | 16,697,542 | 21,223,884 | ||||||||||
Weighted Average Class A and Class B Common Shares Outstanding – Diluted | 16,929,066 | 16,401,604 |
16,747,585 |
21,289,466 | ||||||||||
Consolidated Balance Sheets (dollars in thousands except share data) |
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2018 | 2017 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 21,201 | $ | 18,219 | |||
Fixed maturities available for sale, at fair value; amortized cost |
32,132 | - | |||||
Equity securities, at fair value; cost: |
693 | - | |||||
Trade accounts receivable, net of allowances of |
2,901 | 3,249 | |||||
Premiums receivable | 5,858 | - | |||||
Inventories | 91,237 | 63,296 | |||||
Other current assets | 15,045 | 10,851 | |||||
Property, plant and equipment, net | 27,741 | 9,172 | |||||
Deferred income taxes | - | 450 | |||||
Deferred financing costs, net | 870 | 630 | |||||
Intangible assets, net | 38,325 | 26,436 | |||||
Deferred policy acquisition costs | 2,279 | - | |||||
|
146,696 | 134,620 | |||||
Master Settlement Agreement (MSA) escrow deposits | 30,550 | 30,826 | |||||
Other assets | 6,415 | 965 | |||||
Total assets | $ | 421,943 | $ | 298,714 | |||
LIABILITIES AND EQUITY | |||||||
Reserves for losses and loss adjustment expenses | $ | 27,330 | $ | - | |||
Unearned premiums | 12,707 | - | |||||
Advance premiums collected | 500 | - | |||||
Accounts payable | 9,225 | 3,686 | |||||
Accrued liabilities | 23,883 | 20,014 | |||||
Current portion of long-term debt | 9,431 | 7,850 | |||||
Revolving credit facility | 26,000 | 8,000 | |||||
Notes payable and long-term debt | 208,616 | 186,190 | |||||
Deferred income taxes | 2,711 | - | |||||
Postretirement benefits | 3,096 | 3,962 | |||||
Asset retirement obligations | 2,028 | - | |||||
Other long-term liabilities | 1,687 | 571 | |||||
Total liabilities | 327,214 | 230,273 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, |
- | - | |||||
Class A common stock, |
91 | 83 | |||||
Class B common stock, |
78 | 81 | |||||
Additional paid-in capital | 81,261 | 70,813 | |||||
Class A |
(1,440) | - | |||||
Accumulated other comprehensive loss | (1,683) | (1,558) | |||||
Accumulated deficit | (24,613) | (26,982) | |||||
Total stockholders' equity | 53,694 | 42,437 | |||||
Noncontrolling interests | 41,035 | 26,004 | |||||
Total equity | 94,729 | 68,441 | |||||
Total liabilities and equity | $ | 421,943 | $ | 298,714 |
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