Category: Financial

  • 22nd Century Reports Quarterly Results

    22nd Century Reports Quarterly Results

    Normal 0 false false false EN-US X-NONE X-NONE/* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0cm; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:”Aptos”,sans-serif; mso-ascii-font-family:Aptos; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Aptos; mso-hansi-theme-font:minor-latin; mso-font-kerning:1.0pt; mso-ligatures:standardcontextual;}

    22nd Century Group reported net revenues of $7.4 million for the quarter that ended Dec. 21, 2023, down from net revenues of $10 million in the comparable 2022 quarter. Gross loss for the fourth quarter was $7.8 million compared with a gross loss of $100,000 in the prior-year period. The loss included a one-time charge of $7.9 million for certain inventory write-down adjustments.

    During the quarter, 22nd Century exited its hemp/cannabis operations to fully focus on tobacco harm reduction and contract manufacturing activities. The company substantially reduced operating costs through efficiency initiatives and the hemp/cannabis business sale. It also began new initiatives to increase sales, improve gross margin and increase operating profit in 2024. Moreover, the company started developing new customer engagement strategies to drive additional sales growth for its VLN low-nicotine cigarettes, which have been authorized by the U.S. Food and Drug Administration.

    “Our turnaround is progressing rapidly after restructuring a significant portion of the business over the last 120 days as part of our mandate to produce stronger future financial results,” said 22nd Century chairman and CEO Larry Firestone in a statement. “Most importantly, cash use has declined rapidly, from a peak run rate of approximately $15 million a quarter last year to less than $4 million projected in the first quarter of 2024, with continued sequential improvement expected in each quarter throughout 2024 as we move further from prior-period cash obligations.”

    Firestone said the company now has two primary areas of focus that both directly pertain to its tobacco market assets. “In the short-term, we will evaluate and profitably grow our contract manufacturing business to cover our operating expenses and mission-critical initiatives around 22nd Century’s very low-nicotine content cigarette technology,” he said. “We will also invest in and grow the VLN brand through sales, customer awareness and capitalizing on a positive regulatory and social environment. With success in these efforts, we believe that 22nd Century can break even by the first quarter 2025.”

  • Pyxus Retires Debt

    Pyxus Retires Debt

    Photo: Jade

    Pyxus Holdings has signed a repurchase agreement with certain holders of the company’s 8.50 percent senior secured notes due 2027 and its senior secured Pyxus term loans due 2027.

    “We are pleased our strategy has resulted in the growing strength of our operational and financial performance. Combined with our disciplined approach to working capital management, we have realized a significant opportunity to materially reduce our long-term debt,” said Pyxus President and CEO Pieter Sikkel in a statement. “These retirements improve our overall capital structure, directly enable lower annual interest costs and reinforce our ability to pursue ongoing opportunities to lower our cost of borrowing and drive future profitability.”

    Pursuant to the repurchase agreement, as of March 29, 2024, the company will have paid approximately $60 million in cash plus certain customary fees and expenses and accrued and unpaid interest to repurchase from the holders approximately $78 million of aggregate principal amount of the 2027 notes, a 23 percent discount to par value.

    Under the repurchase agreement, the company has also acquired the right, which it expects to exercise at its sole discretion and subject to certain timing and other considerations, to repurchase from the holders up to an additional $34.2 million of aggregate principal amount of the 2027 notes for $26.3 million, at the same discount to par value, and $10.3 million aggregate principal amount of the 2027 loans for $9.1 million, a 12 percent discount to par value.

    All repurchases, including associated accrued and unpaid interest through their respective repurchase dates as well as certain fees and expenses, are expected to be primarily funded from cash on hand.

    In addition to the $122.5 million reduction in aggregate principal amount of long-term debt from these actions, the company expects to retire, at maturity, the remaining outstanding $20.4 million aggregate principal amount of 10 percent senior secured notes due Aug. 24, 2024. As a result of these anticipated actions, the aggregate principal amount of the company’s long-term debt outstanding at $600.6 million as of Dec. 31, 2023, would be reduced by $142.9 million. The annual interest cost reduction associated with this elimination of long-term debt is $12.9 million per year.

  • Altria to Sell Part of its Anheuser-Busch Stake

    Altria to Sell Part of its Anheuser-Busch Stake

    Photo: Rafael Henrique

    Altria Group plans to sell a portion of its investment in Anheuser-Busch InBev (ABI) through a global secondary offering. In addition, ABI has agreed to repurchase $200 million of ordinary shares directly from Altria, concurrently with, and conditional on, completion of the offering.

    Altria currently holds approximately 197 million shares of ABI, representing approximately 10 percent ownership. Altria, as the selling shareholder, is offering 35 million of ABI’s ordinary shares. In connection with the offering, Altria expects to grant the underwriters an option to purchase up to 5.25 million additional ABI shares owned by Altria, exercisable within 30 days following the pricing of the offering. In addition, Altria has agreed to a 180-day lockup with the lead underwriter for our remaining ABI shares.

    “As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” said Altria CEO Billy Gifford in a statement.

    “Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”

    Following its investment sale notice, Altria announced a $2.4 billion increase to its existing $1 billion share repurchase program. The expanded program is expected to be completed by Dec. 31, 2024.

    Altria expects cash savings from the elimination of future dividend payments on the repurchased shares.

    “These opportunistic capital allocation decisions reflect our ongoing confidence in Altria’s future and the significant value offered in our shares today,” said Gifford. “We have a longstanding history of returning cash to our shareholders, and today’s announcement reflects our continued desire to create long-term shareholder value.”

  • ITC Shares Jump on BAT Sale

    ITC Shares Jump on BAT Sale

    Timon Schneider/Wirestock

    ITC’s share price jumped more than 8 percent on March 13 after British American Tobacco sold a $2 billion stake in the Indian conglomerate, reports Reuters.

    The share price had initially fallen in the wake of BAT’s original announcement, as investors were uncertain of the transaction’s conditions.

    The sale of 436.9 million shares, representing about 3.5 percent of ITC’s outstanding shares, still leaves BAT with a stake of more than 25 percent in the company.

    Cigarettes are ITC’s largest business, accounting for more than 40 percent of its revenue. The company has been working to consolidate its business, with plans to spin off its hotel business.

    BAT said it intends to use the net proceeds to buy back BAT shares over a period ending December 2025, starting with £700 million in 2024. “This will enable the allocation of operating cashflow to fund investment in our transformation, continue to deleverage towards our new target range of 2-2.5x adjusted net debt/adjusted EBITDA, while also maintaining a progressive dividend and supporting a sustainable share buyback,” the company wrote on its website.

  • French Continuing to Finance Tobacco: Report

    French Continuing to Finance Tobacco: Report

    Image: sergnester

    Several French banks continue to finance the tobacco industry despite promises to stop doing so, according to a report commissioned by anti-smoking group Alliance Contre le Tabac (ACT), reports RFI. In November 2023 alone, the country’s banks invested $733 million in the tobacco business. Of these investment funds, 40 percent came from the BPCE Group and more than 20 percent came from Credit Agricole.

    “If the tobacco industry has succeeded in maintaining its deadly trade, it is, in part, thanks to the resources provided by banking institutions and investment funds,” said Marion Catellin, director of the ACT.

    The banks pledged to stop funding tobacco companies six years ago, according to Catellin.

    Australian nongovernmental organization Tobacco-Free Portfolio introduced the Tobacco-Free Finance Pledge in 2017, which called on international financial players to stop financing tobacco companies. Societe Generale, Credit Agricole and the BPCE group signed this pledge.

    The ACT-commissioned report showed that these banks, between 2018 and 2023, approved loans amounting to $5.3 billion to BAT, Philip Morris International and Imperial Brands.

    “These bank credits are unacceptable,” said Catellin. “As World Health Organization Director-General Tedros Adhanom Ghebreyesus recently stated, every investment in the tobacco industry is an investment in death and disease. By financing the tobacco industry, French banks are complicit in an industry that kills one out of every two consumers.”

    “Aware of the environmental and social impacts associated with the tobacco sector, Societe Generale has committed to a strategy to exit the sector,” said the bank, which accounts for 83 percent of French financial support for the tobacco industry. Societe Generale signed a charter in September 2023 expressing plans to exit the sector.

  • STG Results ‘in Line with Expectations’

    STG Results ‘in Line with Expectations’

    Photo: STG

    Scandinavian Tobacco Group (STG) delivered net sales of DKK8.7 billion ($1.27 billion) in 2023, down slightly from the previous year.

    For the fourth quarter of 2023, net sales were DKK2.3 billion. Organic growth of 5 percent for net sales was driven by the group’s “growth enablers,” which in the fourth quarter accounted for close to 10 percent of group net sales, as well as an improved performance in the machine-rolled cigar business in Europe.

    The growth enablers comprise three opportunities that currently represent a small proportion of the group’s overall business but that have significant potential to contribute to greater net sales and earnings, according to STG. They are continued retail expansion in the U.S., international growth in handmade cigars and development of next-generation products, such as nicotine pouches and hemp products in key markets.  

    For the full year 2024, net sales are expected to be in the range of DKK8.8 billion to DKK9.1 billion.

    “Despite a challenging consumer environment STG delivered solid results for 2023 due to the commitment and performance of our employees across the globe,” said STG CEO Niels Frederiksen in a statement.

    “We continued to execute well on our strategy with two acquisitions, and I am particularly happy to see the progress in our growth enablers, where we saw healthy growth in international handmade cigars, retail expansion and next generation products. As we move into 2024, we are increasing our investments in the growth enablers and we expect 2024 to be a year of growth for STG.” 

    At the annual general meeting on April 4, 2024, the board of directors will propose an increase in the ordinary dividend of 2 percent to DKK8.40 per share, complementing the up to DKK850 million share buy-back program, which was started in Nov. 2023.

    The group’s annual report is here.

  • TPB Announces Financial Results

    TPB Announces Financial Results

    Photo: Summit Art Creations

    Turning Point Brands announced financial results for the fourth quarter and full year ended Dec. 31, 2023.

    Total consolidated net sales decreased 6.1 percent in the fourth quarter of 2023 to $97.1 million. Zig-Zag Products net sales decreased by 2.9 percent. Stoker’s Products net sales increased by 18.6 percent. Creative Distribution Solutions net sales decreased by 43.7 percent. Gross profit increased 1.9 percent to $50.5 million. Net income increased $26.4 million to $10.1 million. Adjusted net income increased 15.9 percent to $15.3 million. Adjusted EBITDA increased 7.5 percent to $24.8 million.

    “Our fourth-quarter results were at the high end of our expectations,” said TPB President and CEO Graham Purdy in a statement. “The Zig-Zag segment was stable from the previous year, excluding the impact of a discontinued product line, and is well positioned to return to growth in 2024. Stoker’s had an outstanding quarter, posting its highest growth rate in over four years led by double-digit growth year-over-year in Stoker’s MST. We also had strong free cash flow generation during the year, allowing us to build a cash balance to address the remaining principal amount of our convertible notes at maturity in July. Our outlook for 2024 is positive as we expect solid growth in our Zig-Zag and Stoker’s Products businesses.

    “Our U.S. Zig-Zag papers and alternative channel business posted a strong quarter with double-digit growth to close the year. With the reduction of trade inventory through the year, Zig-Zag is now positioned to return to growth aided by industry secular growth trends and internal growth initiatives.”

    “Stoker’s had an exceptional quarter with strong market share gains in both the MST and loose-leaf categories as its value proposition continues to resonate with consumers,” continued Purdy. “We are excited about the planned expansion of our FRE white nicotine pouch product throughout the year.”

  • Habanos Reports $721 Million Turnover

    Habanos Reports $721 Million Turnover

    Photo: Corporacion Habanos

    Corporacion Habanos generated revenues of $721 million in 2023, up 31 percent compared to the previous year.

    “The achievements of Habanos S.A. during 2023 are the result of the recognition of the unique origin of our tobacco, the strength and prestige of our brands, and, of course, the passion shared by all those involved in this fascinating world of Habanos,” Habanos’ co-presidents, Maritza Carrillo Gonzalez and Luis Sanchez-Harguindey, were quoted as saying in a press note.

    “Thus, we celebrate 30 years of Corporacion Habanos, S.A., offering unparalleled moments and experiences to all lovers of premium tobacco in every corner of the world.”

    With 27 brands and a presence in more than 130 countries, Habanos attributed its performance to “excellence, tradition and innovation.”

    The company’s products are available on five continents. During 2023, the markets that contributed most to Habanos’ sales volume were Spain, France, China, Germany and Switzerland. By region, Europe remains the leading market for Habanos, accounting for 56 percent of total sales value, followed by Asia (21 percent), the Americas (13 percent) and Africa and the Middle East (10 percent).

    In 2023, the company launched 31 new products, including Cohiba Siglo de Oro, Cohiba Ideales, Romeo y Julieta Cupidos, Hoyo de Monterrey Monterreyes No. 4 and Bolivar New Gold Medal.

    During the Habano Festival this week, the company will be unveiling several additional products.

  • Vector Group Releases Financials

    Vector Group Releases Financials

    Photo: Summit Art Creations

    Vector Group has released its fourth-quarter and full-year financial results for the three months and year ended Dec. 31, 2023.

    In the fourth quarter, consolidated revenues were $360.4 million, down 0.9 percent, or $3.4 million, compared to the prior year period. The tobacco segment wholesale market share increased to 5.7 percent from 5.5 percent in the prior year period, and retail market share remained at 5.8 percent in the current period.

    Montego wholesale market share increased to 3.8 percent from 3 percent in the prior year period, and retail market share increased to 3.8 percent from 3.2 percent in the prior year period.

    Operating income was $91.6 million, up 2.6 percent, or $2.3 million, compared to the prior year period. The tobacco segment operating income was $98.1 million, up 5.6 percent, or $5.2 million, compared to the prior year period.

    Adjusted EBITDA was $96 million, up 3.6 percent, or $3.3 million, compared to the prior year period. Tobacco adjusted EBITDA was $99.6 million, up 5.4 percent, or $5.1 million, compared to the prior year period.

    For full-year 2023, consolidated revenues were $1.42 billion, down 1.2 percent, or $16.7 million, compared to the prior year. Tobacco segment revenues were $1.42 billion, down 0.1 percent, or $0.9 million, compared to the prior year. Tobacco segment wholesale and retail market share increased to 5.5 percent and 5.8 percent from 5.4 percent and 5.5 percent, respectively, in the prior year.

    Montego wholesale market share increased to 3.5 percent from 2.5 percent in the prior year, and retail market share increased to 3.6 percent from 2.6 percent in the prior year.

    Operating income was $328 million, down 3.2 percent, or $11 million, compared to the prior year. Tobacco segment operating income was $346.7 million, down 0.1 percent, or $0.4 million, compared to the prior year.

    Adjusted EBITDA was $363.2 million, up 3.1 percent, or $11 million, compared to the prior year. Tobacco adjusted EBITDA was $370.6 million, up 5.5 percent, or $19.4 million, compared to the prior year.

    “Vector Group delivered a solid performance in 2023 amid a dynamic operating environment as the successful execution of our targeted investment strategy enabled Montego’s continued growth as the largest discount brand in the United States,” said Howard M. Lorber, president and CEO of Vector Group, in a statement. “The company is well positioned in 2024, and we are confident we have the right strategy and team in place to continue optimizing long-term profit and driving value for our stockholders.”

  • Pyxus Reports Strong Results

    Pyxus Reports Strong Results

    Photo: Pyxus International

    Pyxus International reported sales and other operating revenues of $1.6 billion for the nine months that ended Dec. 31, 2023, up by 8.2 percent over the figures posted for the comparable 2022 period. The company reported positive net income in each of the first three quarters of fiscal 2024 to reach a total of $12.7 million compared to a net loss of $18.5 million in the same period of fiscal 2023. Average gross profit per kilogram increased by 28.3 percent to $0.77.

    “Our teams around the world continue to demonstrate their ability to drive broad-based improvement, leveraging our business momentum and strong position in the current market to produce solid third-quarter and year-to-date results,” said Pyxus President and CEO Pieter Sikkel in a statement. “This success positions us to increase our full-year guidance as we remain focused on concluding an outstanding fiscal year.”

    The company attributed its improved sales and operating revenues to consistent execution, an inventory mix well matched to specific customer demand and an increase in average pricing of 10 percent. This growth was slightly offset by a 1.9 percent reduction in volume.

    Sales and other operating revenues in the third quarter of $529.8 million were lower as compared to $655.6 million in the same period of the prior year. The decrease was principally due to a 22.7 percent decrease in volume, which primarily reflects a difficult comparison to the year-ago quarter, which benefited from the inclusion of previously delayed shipments as well as acceleration of shipments from the current-year quarter into the first half of the fiscal year, according to Pyxus. The impact of the volume decline was partially offset by an average market sales price increase of 3.7 percent in this year’s third quarter.

    Third quarter net income improved to $3.8 million as compared to a net loss of $2.3 million in the prior year’s third quarter despite the inclusion of a noncash expense of $12 million related to a pension termination in the United Kingdom.

    “Our operational discipline, improved working capital efficiency and geographic diversification enabled us to purchase more tobacco even as we accelerated our repayment of outstanding lines of credit,” said Sikkel. “We believe these attributes enable the company to deliver significant and sustainable value to its financial stakeholders and support further potential improvements in our operational results and working capital.”