Standard Diversified Inc. Reports Financial Results for Its Third Quarter Ended September 30, 2018

NEW YORK--(BUSINESS WIRE)--Standard Diversified Inc. (“the “Company”) (NYSE American: SDI) today announced its financial results for the third quarter ended September 30, 2018. 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.

2018 Third Quarter Highlights

• Total revenues increased 24.9% to $91.6 million as a result of strong growth at Turning Point Brands, Inc. (NYSE: TPB) and the addition of $7.1 million of earned insurance premiums from Maidstone Insurance Company, which the Company acquired on January 2, 2018
• Net income attributable to SDI was $1.4 million, or $0.08 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, 2017, as filed with the Securities and Exchange Commission, as well as the Company’s subsequent Quarterly Reports on Form 10-Q. 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 Income
(dollars in thousands except share data)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Net sales	$	84,035		$	73,352		$	240,156		$	212,226
Insurance premiums earned		7,088			-			21,539			-
Net investment income		309			-			679			-
Other income		163			-			557			-
Total revenues		91,595			73,352			262,931			212,226
Operating costs and expenses:
Cost of sales		47,742			40,386			136,147			119,522
Selling, general and administrative expenses		24,492			19,606			70,237			55,355
Incurred losses and loss adjustment expenses		5,790			-			17,007			-
Other operating expenses		2,682			-			5,512			-
Total operating costs and expenses		80,706			59,992			228,903			174,877
Operating income		10,889			13,360			34,028			37,349
Interest expense		4,450			4,023			12,556			13,002
Interest and investment income		(243	)		(157	)		(620	)		(369	)
Loss on extinguishment of debt		-			-			2,384			6,116
Net periodic benefit (income) expense, excluding service cost		(45	)		58			176			174
Income before income taxes		6,727			9,436			19,532			18,426
Income tax expense		1,436			3,110			4,153			3,850
Net income		5,291			6,326			15,379			14,576
Net income attributable to noncontrolling interests		3,924			3,576			9,962			5,046
Net income attributable to Standard Diversified Inc.	$	1,367		$	2,750		$	5,417		$	9,530
Net income attributable to SDI per Class A and Class B Common Share – Basic	$	0.08		$	0.17		$	0.33		$	0.42
Net income attributable to SDI per Class A and Class B Common Share – Diluted	$	0.08		$	0.16		$	0.31		$	0.41
Weighted Average Class A and Class B Common Shares Outstanding – Basic		16,677,412			16,399,796			16,618,823			22,853,762
Weighted Average Class A and Class B Common Shares Outstanding – Diluted		16,741,660			16,410,672			16,661,809			22,880,941

Standard Diversified Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands except share data)
	September			December 31,
	2018			2017
ASSETS
Cash and cash equivalents	$	18,520		$	18,219
Fixed maturities available for sale, at fair value; amortized cost $34,492 in 2018		33,908			-
Equity securities, at fair value; cost: $753 in 2018		804			-
Trade accounts receivable, net of allowances of $44 in 2018 and $17 in 2017		6,808			3,249
Premiums receivable		6,245			-
Inventories		89,433			63,296
Other current assets		14,998			10,851
Property, plant and equipment, net		28,068			9,172
Deferred income taxes		-			450
Deferred financing costs, net		922			630
Intangible assets, net		38,206			26,436
Deferred policy acquisition costs		2,384			-
Goodwill		147,464			134,620
Master Settlement Agreement (MSA) escrow deposits		29,926			30,826
Pension asset		-			396
Other assets		2,877			569
Total assets	$	420,563		$	298,714
LIABILITIES AND EQUITY
Reserves for losses and loss adjustment expenses	$	24,741		$	-
Unearned premiums		13,160			-
Advance premiums collected		519			-
Accounts payable		9,943			3,686
Accrued liabilities		18,336			20,014
Current portion of long-term debt		9,299			7,850
Revolving credit facility		30,000			8,000
Notes payable and long-term debt		210,427			186,190
Deferred income taxes		2,598			-
Postretirement benefits		3,916			3,962
Asset retirement obligations		2,028			-
Other long-term liabilities		1,959			571
Total liabilities		326,926			230,273
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; 9,031,641 and 8,348,373 issued and outstanding shares at September 30, 2018 and December 31, 2017, respectively		90			83
Class B common stock, $0.01 par value; authorized shares, 30,000,000; 7,818,645 and 8,041,525 issued and outstanding shares at September 30, 2018 and December 31, 2017, respectively; convertible into Class A shares on a one-for-one basis		78			81
Additional paid-in capital		79,338			70,813
Accumulated other comprehensive loss		(2,503	)		(1,558	)
Accumulated deficit		(21,577	)		(26,982	)
Total stockholders' equity		55,426			42,437
Noncontrolling interests		38,211			26,004
Total equity		93,637			68,441
Total liabilities and equity	$	420,563		$	298,714