In Process: Lorillard, Inc. Reports First Quarter 2009 Results ..

April 27, 2009 - Net sales were $917 million in the first quarter of 2009, compared to $921 million in the first quarter of 2008. The 0.4% decrease in net sales reflects lower net unit sales volume and higher sales promotion costs accounted for as a reduction in net sales, partially offset by higher average unit prices.

Wholesale shipment volume in the first quarter of 2009 compared to the same quarter of 2008 for Lorillard and for the total industry was negatively impacted by tax-driven trade purchasing patterns in anticipation of the $0.62 increase in the federal excise tax on cigarettes from $0.39 to $1.01 per pack on April 1, 2009. This legislation included provisions that imposed this increase in excise taxes on inventory held as of March 31, 2009 (a "floor tax"). As a result, many wholesalers and retailers depleted their inventory levels as of that date to minimize any such floor taxes owed based on inventory. Additionally, the first quarter of 2009 contained one less shipping day than the first quarter of 2008. See attached table for details of Lorillard's wholesale shipments. On March 6, 2009, Lorillard increased its wholesale selling prices by $0.71 per pack to cover the increase in the federal excise tax and other costs.

Based on Lorillard's proprietary retail shipment data, Newport continued to increase its retail market share during the first quarter of 2009 by 0.2 share points from 9.9% in the first quarter of 2008 to 10.1% in the first quarter of 2009.

Newport trails only Altria Group Inc.'s (MO) ubiquitous Marlboro brand and dominates the menthol cigarette market. Lorillard's menthol market share rose to 34.5% from 32.2%. Wholesale volume dropped 7.6%, compared to what Lorillard said was a 10% decline industrywide. As such, market share of its Newport brand rose to 10.1% from 9.9%. It accounts for the vast majority of Lorillard's volume and nearly all of its profit. Newport trails only Altria Group Inc.'s (MO) ubiquitous Marlboro brand and dominates the menthol cigarette market. Lorillard's menthol market share rose to 34.5% from 32.2%.

Waiting on results of conference call to discuss the first quarter 2009 results of Lorillard, Inc. has been scheduled for 10:00 a.m. EDT, April 27, 2009. Lorillard Inc. Q1 2009 Earnings Call Transcript, Seeking Alpha, 4/27/2009.

Lorillard, Inc. and Subsidiaries
Selected Domestic Retail Market Share Data (1)


Three Months
Ended March 31,
2009 2008 Pt Change

Lorillard 11.4 10.8 0.6


Newport 10.1 9.9 0.2


Total Industry Menthol 29.4 28.9 0.5


Newport Share
of Menthol Segment 34.5 34.2 0.3