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Lorillard – LO – Acquisition of blu ecigs

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Lorillard, Inc. (NYSE: LO) announced results for the quarter ended March 31, 2012, and the acquisition of blu ecigs®.

Highlights

  • LO First quarter reported (GAAP) diluted earnings per share decreased 0.6% versus last year to $1.70.
  • LO First quarter adjusted (Non-GAAP) diluted earnings per share increased 1.8% versus last year to $1.74.
  • Lorillard domestic wholesale shipments decreased 2.5% in the first quarter versus last year compared to an estimated 4.0% decline in industry domestic wholesale shipments.
  • Adjusted for fluctuations in trade inventory patterns, Lorillard domestic wholesale shipments increased 1.8% over year ago.
  • Total Lorillard retail market share increased 0.4 share points in the first quarter versus last year to an all-time high of 14.5%.
  • Newport retail share of the menthol segment increased 0.5 share points to 36.8% and total Lorillard share of the menthol segment increased 1.0 share points to 40.0%, both all-time highs.
  • LO repurchased 1.6 million shares during the quarter at a cost of $188 million.
  • LO acquired blu ecigs, the leading electronic cigarette company.

Acquisition of blu ecigs


Lorillard announced that it has acquired all of the assets of blu ecigs, a U.S. electronic cigarette (e-cigarette) company for $135 million in cash. The acquisition provides Lorillard with the leading brand, offering the best consumer experience and unique social networking features, in the rapidly growing e-cigarette category. blu ecigs is the best-selling e-cigarette brand, with the look and feel of traditional cigarettes – without the tobacco smoke, ash, or smell.

blu ecigs is the market leader in providing innovative technology for an improved consumer experience that enhances the enjoyment and social aspect of e-cigarettes. blu ecigs will be a separate operating company of Lorillard and it is Lorillard’s intention to retain blu ecigs’ current management team and its headquarters in Charlotte, NC.

“blu ecigs are the perfect adjacency for us to participate in the smokeless market, but in a Lorillard way. That is, ecigarettes offer many of the benefits of other smokeless products but do so in a way that is familiar and enjoyed by current adult cigarette consumers,” said Murray Kessler. “We believe that blu will benefit from Lorillard Tobacco Company’s regulatory experience and sales infrastructure which are needed for it, and the category, to reach its potential in a responsible manner.”

About Lorillard, Inc. (LO)

Lorillard, Inc. (LO), through its Lorillard Tobacco Company subsidiary, is the third largest manufacturer of cigarettes in the United States. Founded in 1760, Lorillard is the oldest continuously operating tobacco company in the U.S. Newport, Lorillard’s flagship menthol-flavored premium cigarette brand, is the top selling menthol and second largest selling cigarette in the U.S. In addition to Newport, the Lorillard product line has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different product offerings which vary in price, taste, flavor, length and packaging. Lorillard maintains its headquarters and manufactures all of its products in Greensboro, North Carolina.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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