Standard Diversified Inc. Reports Financial Results for Its Fourth Quarter and Year Ended December 31, 2018 - Turning Point Brands (NYSE:TPB)

Standard Diversified Inc. (the "Company") SDI today announced its financial results for the fourth quarter and year ended December 31, 2018. In addition to its Annual Report on Form 10-K 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 Fourth Quarter Highlights

Total revenues increased 39.8% to $102.9 million as a result of strong growth at Turning Point Brands, Inc. 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 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 at Turning Point Brands, Inc. TPB and the addition of $28.6 million of earned insurance premiums from Maidstone Insurance Company, which the Company acquired on January 2, 2018
Net income attributable to SDI was $2.4 million, or $0.13 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 Income (dollars in thousands except share data)

	Three Months Ended				Year Ended
	December 31,				December 31,
	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 Standard Diversified Inc.	$	(3,036)	$	847	$	2,381	$	10,377


Net income (loss) attributable to SDI per Class A and Class B Common Share – Basic	$	(0.18)	$	0.05	$	0.14	$	0.49
Net income (loss) attributable to SDI per Class A and Class B Common Share – Diluted	$	(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


Standard Diversified Inc. and Subsidiaries Consolidated Balance Sheets (dollars in thousands except share data)

	December 31,		December 31,
	2018		2017
ASSETS
Cash and cash equivalents	$	21,201	$	18,219
Fixed maturities available for sale, at fair value; amortized cost $32,474 in 2018		32,132		-
Equity securities, at fair value; cost: $794 in 2018		693		-
Trade accounts receivable, net of allowances of $42 in 2018 and $17 in 2017		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		-
Goodwill		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, $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; 9,156,293 issued and 9,052,801 outstanding shares at December 31, 2018 and 8,348,373 issued and outstanding at December 31, 2017, respectively		91		83
Class B common stock, $0.01 par value; authorized shares, 30,000,000; 7,801,995 and 8,041,525 issued and outstanding shares at December 31, 2018 and December 31, 2017, respectively; convertible into Class A shares on a one-for-one basis		78		81
Additional paid-in capital		81,261		70,813
Class A Treasury stock, 103,492 and 0 common shares at cost at December 31, 2018 and 2017		(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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