Vector Group Ltd. (NYSE: VGR) today announced financial results for the fourth quarter and year ended December 31, 2012.
For the year ended December 31, 2012, revenues were $1.085 billion, compared to $1.133 billion for 2011. The decline in revenues in 2012 was primarily due to decreased unit sales of approximately 8.1% in 2012 compared to 2011, which was partially offset by higher pricing. The Company recorded operating income of $154.9 million for 2012, compared to operating income of $143.3 million for 2011. Net income for 2012 was $30.6 million, or $0.35 per diluted common share, compared to net income of $75.0 million, or $0.89 per diluted common share, for 2011. The results for 2012 included pre-tax losses from changes in the fair value of derivatives embedded within convertible debt of $7.5 million and the acceleration of interest expense of $15.0 million related to the conversion of the Company's convertible debt. Adjusting for these items, net income for the year ended December 31, 2012 was $43.4 million or $0.50 per diluted common share. The results for 2011 included pre-tax gains from liquidation of long-term investments of $25.8 million, changes in the fair value of derivatives embedded within convertible debt of $8.0 million and the sales of townhomes of $3.8 million offset by an acceleration of interest expense of $1.2 million. Adjusting for these items, net income for the year ended December 31, 2011 was $53.3 million or $0.63 per diluted common share. Adjusted EBITDA (as described below and in Table 2 attached hereto) was $171.1 million for the year ended December 31, 2012 as compared to $157.1 million for the year ended December 31, 2011. The increase in Adjusted EBITDA for the year ended December 31, 2012 as compared to the year ended December 31, 2011 was primarily attributable to higher margins in the tobacco segment.
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