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Standard Diversified Inc. Reports Financial Results for Its First Quarter Ended March 31, 2019

NEW YORK--(BUSINESS WIRE)--

Standard Diversified Inc. (the “Company”) (NYSE American: SDI) today announced its financial results for the first quarter ended March 31, 2019. In addition to its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, the Company will also make available an updated Investor Presentation on its corporate website at www.standarddiversified.com.

2019 First Quarter Highlights

  • Total revenues increased 21.9% to $100.0 million as a result of strong growth at Turning Point Brands, Inc. (TPB).
  • Net loss attributable to SDI was $(3.5) million or $(0.21) per diluted share

About Standard Diversified Inc.

Standard Diversified Inc. is a holding company that owns and operates subsidiaries in a variety of industries, including insurance, other tobacco products and outdoor advertising. For more information about the Company, please visit the Company’s website at www.standarddiversified.com.

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 December 31, 2018. Except as required by law, the Company assumes no obligation to update publicly any such forward-looking statements.

 
Standard Diversified Inc. and Subsidiaries
Consolidated Statements of (Loss) Income

(dollars in thousands except share and per share data)

(unaudited)

 
Three Months Ended March 31,
2019   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 -
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 - 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 $ (0.21 ) $ 0.03  
Net (loss) income attributable to SDI per Class A and Class B Common Share – Diluted $ (0.21 ) $ 0.03  
Weighted Average Class A and Class B Common Shares Outstanding – Basic 16,863,621 16,559,432
Weighted Average Class A and Class B Common Shares Outstanding – Diluted 16,863,621 16,603,228
 
   
Standard Diversified Inc. and Subsidiaries
Consolidated Balance Sheets

(dollars in thousands except share and per share data)

(unaudited)

 
March 31, December 31,
2019 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 -
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 -
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 - -

Class A common stock, $0.01 par value; authorized shares, 300,000,000; 9,061,130 issued and
outstanding at March 31, 2019 and 9,156,293 issued and 9,052,801 outstanding at December 31, 2018

91 92

Class B common stock, $0.01 par value; authorized shares, 30,000,000; 7,753,566 and 7,801,995
issued and outstanding at March 31, 2019 and December 31, 2018, respectively; convertible into
Class A shares on a one-for-one basis

78 78
Additional paid-in capital 79,686 81,260
Class A Treasury stock, 103,492 common shares at cost as of December 31, 2018. - (1,440 )
Accumulated other comprehensive loss (1,156 ) (1,683 )
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  
 

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