Welcome to Vector Group Ltd.'s third quarter 2022 earnings conference call. This call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the investor relations section of the company's website, located at www.vectorgroupltd.com, for one year. During this call, the terms adjusted operating income, adjusted net income from continuing operations, adjusted EBITDA from continuing operations, and tobacco adjusted operating income will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted operating income from continuing operations, adjusted net income from continuing operations, adjusted EBITDA from continuing operations, and tobacco adjusted operating income are contained in the company's earnings release, which has been posted on the investor relations section of the company's website. Before the call begins, I would like to read a safe harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by forward-looking statements. These risks are described in more detail in the company's Securities and Exchange Commission filings. Now I would like to turn the call over to the President and Chief Executive Officer of Vector Group, Howard M. Lorber. Please go ahead. Good morning, and thank you for joining us for Vector Group's third quarter 2022 earnings conference call. With me today are Richard Lampen, our Chief Operating Officer, Bryant Kirkland, our Chief Financial Officer, and Nick Anson, President and Chief Operating Officer of Liggett Vector Brands. Ron Bernstein, Senior Advisor to Liggett Vector Brands, will also join us during the Q&A. During this call, I will review Vector Group's consolidated financial results for the third quarter of 2022. Nick will then summarize the performance of our tobacco business. I will then provide closing comments and open the call for questions. Before reviewing Vector Group's consolidated financial results, please note that because of the spin-off of Douglas Elliman in the fourth quarter of 2021, Douglas Elliman's financial results are presented as discontinued operations in Vector Group's consolidated financial statements for the 2021 period and are excluded from our adjusted results. First, beginning with Vector Group's consolidated balance sheet. Our balance sheet remains strong. As of September 30th, 2022, we maintained significant liquidity with cash and cash equivalents of approximately $385 million, including cash of $174 million at Liggett. We also held investment securities and investment partnership interests with a fair value of approximately $160 million. During the third quarter, we also repurchased and retired $12.9 million in aggregate principal amount of our 10.5% senior notes due 2026 at a discount. This retirement reduces our cash annual interest expenditures by approximately $1.4 million. Some market conditions, we may repurchase additional amounts of our 10.5% senior notes in open market purchases or privately negotiated transactions. Turning to Vector Group's consolidated results from operations for the three months ended September 30th, 2022. Vector Group's revenues for the quarter were $378 million, compared to $298.5 million in the third quarter of 2021. Net income attributed to Vector Group was $38.9 million or $0.25 per diluted common share, compared to $48.9 million or $0.31 per diluted common share in the third quarter of 2021. Net income attributed to Vector Group from continuing operations was $38.9 million or $0.25 per diluted common share, compared to $29.9 million or $0.19 per diluted common share in the third quarter of 2021. The company recorded adjusted EBITDA from continuing operations as $87.3 million, compared to $88.7 million in the third quarter of 2021. Adjusted net income from continuing operations was $37.6 million or $0.24 per diluted share, compared to $33.9 million or $0.22 per diluted share in the third quarter of 2021. Next, Vector Group's consolidated results from operations for the nine months ended September 30, 2022. Vector Group's revenues for the nine months ended September 30, 2022 were $1.08 billion, compared to $907 million in the 2021 period. Net income attributed to Vector Group was $110.6 million or $0.70 per diluted common share, compared to $174 million or $1.11 per common share in the 2021 period. Net income attributed to Vector Group Ltd. from continuing operations was $110.6 million or $0.70 per diluted common share, compared to $116.4 million or $0.74 per diluted common share in the 2021 period. The company recorded adjusted EBITDA from continuing operations of $259.5 million compared to $265.6 million in the 2021 period. Adjusted net income from continuing operations was $104.4 million, or $0.66 per diluted share, compared to $133.4 million or $0.85 per diluted share, in the 2021 period. I will now turn it over to Nick to discuss our tobacco operations. Nick? Thank you, Howard, and good morning. Liggett delivered another strong performance during the third quarter of 2022, including record quarterly revenues as we continue to capitalize on favorable marketplace opportunities to invest in our Montego brand and expand our foundation for long-term earnings growth. Liggett's third-quarter wholesale shipments increased by more than 30%, and our retail volumes increased by approximately 23% compared to the same period a year ago. Liggett's retail market share also increased to 5.7%, driven by the significant growth of our Montego brand. This represents Liggett's largest market share since 1984, when we originally disrupted the tobacco industry by introducing discount cigarettes. Our expertise in the discount category continues to be a core competency. Following a competitor's exit from the U.S. marketplace in December 2021, we quickly capitalized on the opportunity and captured a significant portion of that competitor's approximately 3% market share. As of September 30th, 2022, we have converted more than 40% of that competitor's vacated business to Montego volume by leveraging our broad distribution base and strong retail sales execution. Our conversion percentage related to the competitor's exit is the highest in the market and twice as much as the next competitor. Our performance is driven by Liggett's mission to offer the best value propositions in the U.S. cigarette industry, which is particularly relevant in the current economic environment as more consumers shift to the discount segment in search of better value. According to Management Science Associates retail data for the three months ended September 30th, 2022, the discount category represented 28.3% of the total market, compared to 26.6% for the same period last year. Within the discount category, we continue to see momentum and growth for brands in the deep discount segment. For the third quarter of 2022, we estimate that the deep discount segment comprised 43% of the total discount category, compared to 36% in the same period a year ago. We expect this migration to continue as deep discount segment presents a more attractive value proposition for consumers. As such, we believe that our value-focused brand portfolio, broad national distribution, and extensive experience in developing profitable discount brands provide Liggett with a competitive advantage to meet shifting market demands. Montego, which became our largest brand in 2022, has also grown to become the second-largest discount brand and sixth-largest cigarette brand in the United States. Distribution expanded to nearly 71,000 stores this quarter, compared to approximately 37 stores in the third quarter of 2021. The brand's market share increased to 2.8% in the third quarter of 2022, up from 2.4% in the second quarter of this year and 0.7% in the third quarter of last year. We estimate that Montego's share of the deep discount segment in the third quarter was approximately 24%, a significant expansion from its deep discount share of 7% in the third quarter of 2021. Our strategy with Montego is consistent with our long-term objective of optimizing profit by effectively managing volume pricing and market share in our value-based brand portfolio. While our investment in Montego expands our foundation for long-term earnings growth, we also continue to reap significant benefits from our growth brands, Eagle 20's and Pyramid. Eagle 20's is now delivering substantial margin, and Pyramid's long-term resilience continues to provide a substantial profit and market presence. As a result, Liggett's retail shipments for the three months ended September 30th, 2022, increased 22.8% from the third quarter of 2021, while industry retail shipments declined 8.5%, according to data from Management Science Associates. Further, as mentioned earlier, Liggett's third-quarter retail market share increased to 5.7%, up from 4.2% in the prior year period. I will now turn to the combined tobacco financials for Liggett Group and Vector Tobacco. For the three and nine months ended September 30th, 2022, revenues increased 26.9% to a record $338 million and 18.5% to approximately $1.1 billion, respectively, compared to $297.9 million and $895.9 million for the corresponding 2021 periods. Tobacco operating income for the three and nine months ended September 30, 2022, was $88.1 million and $254.1 million, respectively, compared to $91.8 million and $276.6 million for the corresponding periods a year ago. Tobacco adjusted EBITDA for the three and nine months ended September 30, 2022, was $89.6 million and $256.6 million, respectively, compared to $93.4 million and $278.9 million for the corresponding periods a year ago. Strategic investment has accelerated Montego's significant volume and market share growth and led to an expected decline in year-over-year income in the first nine months of 2022. However, consistent with previous brand expansions, we fully expect to realize a significant return on our Montego investment as we move forward. As always, our investment decisions are based on thorough market analysis and adjusted in real-time based on market circumstances and opportunities. Related to this, despite an increase in MSA cost per pack from $0.40 in the third quarter of 2021 to $0.57 in the third quarter of 2022, tobacco gross profit for the three months ended September 30, 2022, declined only slightly to $111 million compared to $111.5 million for the corresponding period a year ago, reflecting a gradual transition of our strategy on Montego's growth from volume to profit-based. Nonetheless, the price gap between Montego and the industry's leading premium brand has remained stable throughout the year and currently provides a difference that represents close to a 50% discount in average pack prices at retail. In summary, the operational and financial performance of our tobacco business remains strong. Our historic retail market share gains this quarter validate our long-term profit growth strategy and the competitive advantage we have in the discount segment. Our strategy is underpinned by our broad distribution base, our consumer-focused programs, and the scope and capabilities of our sales force. Most importantly, it builds on our foundation for long-term earnings potential. While we are subject to industry, regulatory, and general market risks, we are confident that we have the strategy and infrastructure in place to keep our business operating efficiently. Thanks for your attention, and back to you, Howard. Thank you, Nick. Vector Group is having another outstanding year in 2022. We have strong cash reserves and continue to increase our long-term tobacco revenues and market share. We are pleased with our long-standing practice of paying a quarterly cash dividend. It continues to be an important component of our capital allocation strategy, and is our expectation that our policy will continue. Now, operator, please open the call for questions. Absolutely. At this time, we will open the floor for questions. If you would like to ask a question, please press the star followed by the one key on your touch-tone phone. Questions will be taken in the order in which they are received. If at any time you would like to remove yourself from the questioning queue, please press star two. Please limit your questions to one at a time. Again, to ask a question, please press star one. We will take our first question from Pallav Mittal with Barclays. Your line is open. Hi, thank you for taking my questions. Clearly, the volume gains are impressive and unprecedented. Can you please, segregate the volume benefit from the exit of a competitor and the benefit, from down trading? Nick, you wanna handle that? Sure. Just, let me just clarify the question. The segment, the down trading from the gains from the competitor vacated volume, was that the question? I apologize. Yes. The volume gains are 30%. Just want to understand how much of that is from the exit of the competitor and how much is due to down trading. I understand. The 40% that we have gained is actually the aggregate of both the vacated volume and also the down trading. The increase in volumes itself, it's probably about a 70/30 split between that volume that's been vacated by KT&G and what we've gained through just general down trading and people searching for value in the marketplace. Got it. Also, you mentioned now gradually shifting from volume growth to profit growth on Montego. Does that mean the market share has peaked at 5.7%? How should we think about EBIT progression over the next couple of years? Sure. Well, as you know, we certainly don't give guidance as it relates to EBIT. You know, overall, we're feeling, you know, very good about the performance of Montego, and that's, you know, consistent, as I mentioned in my earlier remarks, consistent with the long-term objective of optimizing profit over the long term. As with our previous deep discount brand developments, such as Pyramid and Eagle 20's, the first critical objective there is to, you know, build that broad volume base, and that's what we've done, and we've certainly exceeded expectations with respect to that. You know, ultimately, as we start to monetize that, we look at the marketplace and make adjustments in real time. As I mentioned, we have started taking pricing on the brand this year, and that's reflected in the improvement in our margins in the third quarter. Versus the first half of this year. We're feeling very good about Montego. We have, you know, a lot of experience in this, and we have a clear track record of these brand developments and turning these brands profitable. We're feeling very good about the future there and ultimately, you know, raising our earnings base to a higher level. Sure. If I can ask one last question. How are you planning to approach the California flavor ban that could happen sometime in Q4 of this year? Sure. Look, I think, you know, with respect to that proposition that's up for vote, I think it's probably likely that it will pass. We think that, well, almost certainly the industry will challenge that. In fact, Reynolds has already challenged it earlier, but the arguments weren't deemed ripe. From our perspective, though, we're not too concerned. We are, you know, heavily under-indexed as it relates to menthol in the California market. In fact, you know, our menthol volumes in California represent less than 0.5% of our volumes there. You know, from our perspective, almost certainly we expect the industry to challenge it, but we're not concerned for the longer term. Got it. Thank you. Our next question comes from Ian Zaffino. Your line is open. Great. Thank you very much. You know, I just wanted to key in a little bit more on Montego. You know, as you look at where Montego is, you know, versus some of your other brands that you were market share takers and then you took up price, is there anything different in Montego? As you think about it, you know, is the pricing opportunity better? Can you maybe capture pricing faster than you did in your other brands? Is the, you know, tail longer where you could take price on this brand? Is there anything kind of like unique or specific to it that would lead us to believe that it wouldn't maybe follow the same cadence or might have like a bigger impact than other brands did? Thanks. Yeah, no, we don't see this being any different. As I mentioned in my earlier remarks, we, you know, we've got the experience of managing brands in the deep discount segment and the discount segment. We're the leaders of the discount segment, so we know how to manage those brands. Obviously, you look back at our history there with Liggett Select, Grand Prix, Pyramid, and Eagle 20's. Sure. Each launch and each development was different. We're constantly evaluating the marketplace, looking at the nuances and the opportunities there, and we make adjustments in real time. We're feeling very confident that, obviously, we've got the experience and the knowledge to develop this brand, and again, ultimately, realize a significant return. Okay. You know, at what point do you launch another brand beneath Montego? Is that years off? Is that, you know, closer than that? What's sort of the timing of maybe an additional brand? Yeah. Certainly, there's certainly nothing on the short-term horizon there for a new brand. We're focused on, obviously, continuing to monetize Eagle 20's and Pyramid and focusing on the share and ultimately the profit gains on Montego at this point in time. No plans at the moment. Okay. Maybe a question for Howard on the real estate side. You know, how are you thinking about the environment here as far as your, you know, are you a buyer? Are you a seller? Are you a holder? You know, what are you thinking here, you know, and what should we expect as investors and analysts? Thanks. Yeah. Well, obviously that's a difficult question to answer at this stage, not knowing exactly where rates are going and how it's gonna affect the overall market. On the residential side, you know, we're in the luxury market, and the luxury markets, I believe, are not being hit as hard as the lower-end markets. Because when they talk about the 7%-8% interest rates, those are really, you know, 30-year performing mortgages. I think on the luxury side, the people have a lot more flexibility, you know, with private banking and with their stock or equity portfolios to be able to borrow very inexpensively. We really haven't seen too much. While the industry in general is down volume-wise, it's really still performing very well. The other issue is that everyone is going to compare to 2021. Well, 2021 was a market that none of us really understood. It just sort of happened. I don't think that that's a good, you know, for comparison. I would say that 2022 is going to be a good year for us, albeit not the same as 2021. Okay. Thank you very much. Our next question is from Karru Martinson with Jefferies. Your line is open. Good morning. During the quarter, did you see the consumer behavior shift, you know, when gas prices were high, or were the kind of sales consistent when it came to the discount cigarette channel? From the total industry perspective, if we start there, Karru, I mean, throughout the third quarter, if you look at the overall industry decline, the industry was down 8.5% for the quarter. Year to date, it's down 8.5%. Despite, you know, certainly an abatement of gas prices, there's no doubt the consumer for the cigarette consumer continues to remain under pressure there. It's not just, you know, gas prices that are cutting into their disposable income. You know, food prices, energy prices, rental prices remain high. You know, there's no doubt the cigarette consumer remains under pressure throughout Q3. As such, we saw that continued down trading and people searching for more value in their purchases. Okay. In terms of the regulatory update, whether it's the FDA menthol ban or the fixed pricing in Colorado, are there any updates on that front? You know, with respect to the menthol, no real updates. I mean, the FDA at the moment is sifting through what I think about 250,000, at least 250,000 comments that they received in August. So I think, again, we feel it's gonna be some time before they get through that and issue any final standard. You know, ultimately, we believe that will be challenged by the industry. With respect to Colorado, there was a new judge appointed in the federal case there. She actually did dismiss the case. Based on kind of an evaluation of how we're performing in the marketplace and the costs to continue to litigate that, we've decided not to push forward with that case any further. The major reason behind that is because we feel like we've actually performed very well relative to our initial concerns in the Colorado marketplace. Okay. In terms of the bond repurchase on the 10.5, how are you thinking of that maturity, and how would you look at, you know, allocating your cash flows to the debt repurchases in the market? Yes. Hi. Good morning, Karru. It's Bryant Kirkland. We obviously were opportunistic in the quarter where we did buy $13 million back at a discount. We'll continue to be opportunistic. Obviously, that bond does not mature for another four years, so we do have time to be patient. Thank you very much, guys. Appreciate it. It appears we have no further questions at this time. Okay. Thank you for joining our call, and we look forward to speaking with you next quarter. Ladies and gentlemen, those are all the questions we have for today. Thank you for joining us on Vector Group quarterly earnings conference call. This will conclude our call. On behalf of all of us at Vector Group and Liggett, we hope that everyone remains healthy and well. Thank you for your participation. You may disconnect.