Core Insights - Sin stocks, representing companies in industries like alcohol, tobacco, cannabis, and gambling, are often viewed as unethical but have a history of delivering strong returns due to consistent demand [2][3][4] - These stocks are characterized by their defensive nature, maintaining stable demand even during economic downturns, which allows for strong pricing power and consistent cash flows [3][4] - Despite their potential for robust returns, sin stocks face challenges such as heavy regulation, negative public perception, and ethical concerns that may deter some investors [5][10] Industry Overview - Sin stocks have shown resilience during both economic expansions and contractions, making them appealing for investors willing to overlook ethical concerns [4] - The alcohol sector is experiencing a shift towards premium and craft offerings, while tobacco companies are adapting to declining cigarette use by investing in vaping products [8] - The cannabis industry is rapidly expanding in regions where legalization is increasing, presenting both growth opportunities and volatility [8][9] Company Analysis - **Diageo Plc (DEO)**: Focuses on market share growth through innovation and premiumization in the alcohol sector [6] - **Las Vegas Sands (LVS)**: Concentrates on property upgrades and strategic investments to drive growth in the gambling sector [6][18] - **Turning Point Brands (TPB)**: Building a growth story around established brands and next-generation products, with a focus on smoke-free alternatives [12][13][14] - **Boston Beer Company (SAM)**: Maintains a strong position in the U.S. craft beverage market, emphasizing innovation and operational efficiency to adapt to consumer preferences [15][16][17] - **MGM Resorts International (MGM)**: Holds a leading position in global gaming, enhancing its competitive edge through capital investments and expansion in digital gaming [18][19][20]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 001-37763 TURNING POINT BRANDS, INC. (Exact name of registrant as specified in its ...

Turning Point Brands (TPB) Q2 2025 Earnings Call August 06, 2025 09:30 AM ET Speaker0Good morning, and welcome to the Turning Point Brands Second Quarter twenty twenty five Earnings Conference Call. All participants are in a listen only mode. All lines have been placed on mute to prevent any background noise. Please note this event is being recorded. It is now my pleasure to turn the conference call over to Andrew Flynn, Chief Financial Officer.Please go ahead.Speaker1Good morning, everyone. A short while a ...

Turning Point Brands (TPB) came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.79 per share. This compares to earnings of $0.89 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +24.05%. A quarter ago, it was expected that this company would post earnings of $0.75 per share when it actually produced earnings of $0.91, delivering a surprise of +21.33%.Over the last four quarters, the co ...

LOUISVILLE, KY – Aug 6, 2025 – Turning Point Brands, Inc. ("TPB" or "the Company") (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, today announced financial results for the second quarter ended June 30, 2025. Q2 2025 vs. Q2 2024 Graham Purdy, President and CEO, commented, "Our consolidated second quarter results were better than expected. Modern Oral sales were $30.1 million, increasing by ...

Turning Point Brands (TPB) shares soared 5.1% in the last trading session to close at $78.39. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.4% loss over the past four weeks.Turning Point Brands shares are gaining on optimism surrounding growth in the modern oral segment, supported by expanding nicotine pouch sales and increasing market penetration. The company’s focus on brand building, retail partnerships, and operational en ...

Core Insights - Zig-Zag has launched a new premium natural leaf cigar line named Zig-Zag Woods, targeting convenience stores and smoke shops [1][6] - The product is designed to meet consumer preferences, with over 58% of consumers referring to rough-cut cigars as "woods" [2] - Zig-Zag Woods features a slow-burning, all-natural leaf wrap filled with premium rough-cut tobacco, offering a rich smoking experience [2][3] Product Offering - Zig-Zag Woods includes five flavor varieties: Natural, Silk & Berries, Sweet Aromatic, Crème Royale, and Velvet [10] - The cigars are competitively priced at $1.39 for two cigars, with packaging configurations of 15 pouches per carton and 24 cartons per case [10] - The product aims for high turnover and margins, appealing to both consumers and retailers [5][6] Market Position - The rough-cut cigar segment is strong, with over 300 million units sold annually, positioning Zig-Zag Woods to compete effectively [3] - Zig-Zag is a market leader in premium tobacco and smoking accessories, with a legacy of over 140 years [7] - The brand continues to innovate and adapt to consumer trends while maintaining product quality [7]

Core Insights - FRE® Nicotine Pouches has entered a multi-year partnership with Professional Bull Riders (PBR) as the official partner of the Unleash The Beast series, marking FRE's largest sports sponsorship to date [1][2] Group 1: Partnership Overview - The partnership aims to connect with a passionate audience that appreciates authenticity and high-energy moments, aligning with FRE's innovative approach to nicotine [2] - PBR's viewership is on the rise, with events selling out across iconic venues, indicating a growing and engaged fan base [2] Group 2: Event Activation - FRE made its debut at the Kid Rock's Rock N Rodeo and PBR World Finals from May 16-18 at AT&T Stadium, introducing fans to an innovative nicotine experience [3] - The introduction of the "FRE Challenge Button" at the Championship allows bull riders to request a judges' review for a second chance at an official score, integrating FRE into the competition [3] Group 3: Future Engagement - The upcoming 2025 PBR Unleash The Beast season is expected to feature larger activations and deeper brand integration, enhancing fan engagement with FRE [5] - FRE's partnership with PBR is described as a long-term commitment, with plans for innovative activations and continued engagement with the Western sports audience [6] Group 4: Company Background - FRE is designed for nicotine users, aiming to provide a superior alternative to traditional nicotine pouches, and is produced by Turning Point Brands, a publicly traded company [7]

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1] Investment Philosophy - The investment approach is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1]

Part I [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2025 financials show strong growth, asset increase from debt refinancing, and CDS segment divestiture [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$564.6 million** by March 31, 2025, driven by cash from debt refinancing, with liabilities and equity also rising Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $259,013 | $198,205 | | **Total Assets** | **$564,552** | **$493,353** | | **Total Current Liabilities** | $58,603 | $44,820 | | **Notes payable and long-term debt** | $293,062 | $248,604 | | **Total Liabilities** | **$361,115** | **$302,973** | | **Total Stockholders' Equity** | $203,437 | $190,380 | - Assets and liabilities held for sale, which were **$15.3 million** and **$2.0 million** respectively at year-end 2024, were disposed of and are **no longer on the balance sheet** as of March 31, 2025[11](index=11&type=chunk)[22](index=22&type=chunk) [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2025 saw net sales rise 28.1% to **$106.4 million**, with operating income up 20.3% and diluted EPS at **$0.79**, despite a debt extinguishment loss Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $106,436 | $83,064 | 28.1% | | Gross Profit | $59,610 | $48,354 | 23.3% | | Operating Income | $23,189 | $19,270 | 20.3% | | Net Income Attributable to TPB | $14,395 | $12,010 | 19.8% | | Diluted EPS | $0.79 | $0.63 | 25.4% | - The company recorded a **$1.235 million** loss on extinguishment of debt in Q1 2025, which was not present in the prior year[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$17.4 million** in Q1 2025, while financing activities provided **$38.5 million** due to new debt issuance Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,409 | $22,639 | | Net cash used in investing activities | $(5,230) | $(7,986) | | Net cash provided by (used in) financing activities | $38,520 | $(4,573) | - Financing activities were driven by receiving **$300.0 million** from the issuance of 2032 Notes and paying **$250.0 million** for the redemption of 2026 Notes[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail business structure, accounting policies, CDS divestiture, debt refinancing, lower tax rate, and Stoker's segment performance [Note 1. Business and Basis of Presentation](index=14&type=section&id=Note%201.%20Business%20and%20Basis%20of%20Presentation) The company manufactures branded consumer products through Zig-Zag and Stoker's segments, divesting its CDS segment on January 2, 2025 - The company operates two segments: Zig-Zag products (rolling papers, cigars, accessories) and Stoker's products (moist snuff, chewing tobacco, modern oral products)[20](index=20&type=chunk) - On January 2, 2025, the company contributed its interest in the Creative Distribution Solutions (CDS) segment to General Wireless Operations, Inc. (GWO) in exchange for a **49% stake** in GWO, with financial results of CDS now reported as **discontinued operations**[21](index=21&type=chunk)[22](index=22&type=chunk) [Note 3. Assets and Liabilities Held for Sale and Discontinued Operations](index=20&type=section&id=Note%203.%20Assets%20and%20Liabilities%20Held%20for%20Sale%20and%20Discontinued%20Operations) CDS segment divestiture completed January 2, 2025, for a 49% equity interest in GWO, with no additional loss recognized in Q1 2025 - The company contributed its CDS segment to GWO in exchange for **49% of GWO common stock** and an option to purchase the remaining 51% for an initial price of **$22.0 million**[49](index=49&type=chunk) Loss from Discontinued Operations (in thousands) | Metric | Three Months Ended March 31, 2024 | | :--- | :--- | | Net sales | $13,994 | | Operating loss | $(3) | | Loss from discontinued operations | $(2) | [Note 11. Notes Payable and Long-Term Debt](index=26&type=section&id=Note%2011.%20Notes%20Payable%20and%20Long-Term%20Debt) In February 2025, the company issued **$300.0 million** of 7.625% Notes due 2032 to redeem **$250.0 million** of 5.625% Notes due 2026 - On February 19, 2025, the company issued **$300.0 million** of **7.625% Senior Secured Notes due 2032**[73](index=73&type=chunk) - On February 20, 2025, the company used proceeds from the new notes to redeem all **$250.0 million** of its **5.625% Notes due 2026**, resulting in a write-off of **$1.2 million** in remaining debt issuance costs[78](index=78&type=chunk)[79](index=79&type=chunk) - The company has an available balance of **$62.2 million** under its 2023 ABL Facility as of March 31, 2025, with **no borrowings drawn**[87](index=87&type=chunk) [Note 12. Income Taxes](index=29&type=section&id=Note%2012.%20Income%20Taxes) The effective income tax rate for Q1 2025 significantly decreased to **11.4%** from 23.4% due to permanent tax differences from restricted stock units - The effective tax rate was **11.4%** for Q1 2025, compared to **23.4%** for Q1 2024[89](index=89&type=chunk) - The decrease in the tax rate was due to permanent tax differences from **restricted stock units** issued in Q1 2025[89](index=89&type=chunk) [Note 16. Segment Information](index=33&type=section&id=Note%2016.%20Segment%20Information) Stoker's products segment drove Q1 2025 growth with **62.7%** net sales increase, while Zig-Zag saw modest growth and increased corporate costs Segment Performance for Q1 2025 vs Q1 2024 (in thousands) | Segment | Net Sales 2025 | Net Sales 2024 | % Change | Operating Income 2025 | Operating Income 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zig-Zag products | $47,265 | $46,697 | 1.2% | $16,930 | $18,000 | -5.9% | | Stoker's products | $59,171 | $36,367 | 62.7% | $24,134 | $15,396 | 56.8% | | **Total Segment** | **$106,436** | **$83,064** | **28.1%** | **$41,064** | **$33,396** | **23.0%** | - Corporate unallocated costs, which include executive management, finance, legal, IT, and PMTA expenses, increased to **$17.9 million** in Q1 2025 from **$14.1 million** in Q1 2024[109](index=109&type=chunk) [Note 17. Dividends and Share Repurchases](index=36&type=section&id=Note%2017.%20Dividends%20and%20Share%20Repurchases) A quarterly dividend of **$0.075** per share was paid, and no shares were repurchased under the **$100.0 million** authorization in Q1 2025 - A dividend of **$0.075 per common share** was paid on April 11, 2025[112](index=112&type=chunk) - The company has a **$100.0 million** share repurchase authorization, but **no shares were repurchased** under the program in Q1 2025[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strong **28.1%** YoY revenue growth driven by Stoker's products, successful debt refinancing, and strong liquidity with **$99.6 million** cash [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Consolidated net sales rose **28.1%** to **$106.4 million** in Q1 2025, primarily from Stoker's products, with operating income up **20.3%** Consolidated Results Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total net sales | $106,436 | $83,064 | 28.1% | | Total gross profit | $59,610 | $48,354 | 23.3% | | Total operating income | $23,189 | $19,270 | 20.3% | - Stoker's products segment net sales increased **62.7%**, driven by **$20.0 million** of sales in modern oral products and **$2.4 million** of growth of Stoker's® MST[132](index=132&type=chunk) - Zig-Zag products segment gross profit decreased **7.2%** YoY, with margins declining from **59.0%** to **54.1%**, primarily due to a shift in sales from higher-margin U.S. papers to lower-margin cigar products[134](index=134&type=chunk) [EBITDA and Adjusted EBITDA](index=43&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA increased to **$27.7 million** in Q1 2025, with key adjustments including stock-based compensation and FDA PMTA expenses Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to TPB | $14,395 | $12,010 | | Interest expense, net | 4,401 | 3,479 | | Income tax expense | 2,040 | 3,729 | | Depreciation & Amortization | 1,650 | 1,153 | | **EBITDA** | **$23,721** | **$20,371** | | Stock based compensation | 1,664 | 2,062 | | FDA PMTA | 1,591 | 841 | | Other Adjustments | 702 | 1,429 | | **Adjusted EBITDA** | **$27,678** | **$24,703** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity with **$99.6 million** cash and **$62.2 million** ABL availability, enhanced by **$300.0 million** debt refinancing - As of March 31, 2025, the company had **$99.6 million** of cash on hand and **$62.2 million** of availability under the 2023 ABL Facility, with **no borrowings outstanding**[153](index=153&type=chunk) - Net cash provided by operating activities was **$17.4 million** for Q1 2025, a decrease from **$19.2 million** in the prior year period (from continuing operations)[156](index=156&type=chunk)[157](index=157&type=chunk) - In February 2025, the company issued **$300.0 million** in new 2032 Notes and redeemed its **$250.0 million** 2026 Notes[163](index=163&type=chunk)[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to market risk exposures, with minimal interest rate risk due to fixed-rate debt and no ABL borrowings - There have been **no material changes** in exposure to exchange rate fluctuation risk or credit risk during the quarter[182](index=182&type=chunk)[183](index=183&type=chunk) - The new 2032 Notes bear a **fixed interest rate**, and the 2023 ABL Facility has **no borrowings outstanding**, **mitigating interest rate sensitivity**[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness in IT general controls, with a remediation plan expected by end of fiscal 2025 - Disclosure controls and procedures were deemed **not effective** as of March 31, 2025, due to a **material weakness** in **IT general controls (ITGCs)**[185](index=185&type=chunk) - The **material weakness** relates to **user access and program change-management** over certain IT systems and did not result in **no identified misstatements** to financial statements[186](index=186&type=chunk)[187](index=187&type=chunk) - A **remediation plan is underway**, including the implementation of a **new ERP system**, and is expected to be completed by the **end of fiscal 2025**[188](index=188&type=chunk)[189](index=189&type=chunk) Part II [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Readers are directed to the 2024 Annual Report on Form 10-K for details on product liability litigation risks - For information on legal proceedings, the company refers to the **risk factors concerning product liability litigation** in its 2024 Annual Report on Form 10-K[194](index=194&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the Risk Factors previously disclosed in the 2024 Annual Report on Form 10-K - **No material changes** have occurred to the Risk Factors set forth in the 2024 Annual Report on Form 10-K[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A **$100.0 million** share repurchase program is authorized, but no shares were repurchased in Q1 2025, except for tax withholdings - The Board of Directors has authorized a **$100.0 million** share repurchase program[196](index=196&type=chunk) Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased as Part of Program | Approx. Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 64,209 (1) | - | 0 | $100,000,000 | | Feb 2025 | 0 | - | 0 | $100,000,000 | | Mar 2025 | 0 | - | 0 | $100,000,000 | | **Total** | **64,209** | **-** | **0** | | - (1) Shares purchased consist of shares withheld to satisfy statutory tax withholdings for stock-based awards and were **not part of the publicly announced repurchase program**[198](index=198&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) Not applicable [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) The report includes certifications by CEO, CFO, and CAO, along with financial statements in Inline XBRL format - Filed exhibits include **Rule 13a-14(a)/15d-14(a) certifications** for the **CEO, CFO, and CAO**[202](index=202&type=chunk) - **Section 1350 certifications** and **Inline XBRL data files** are also included as exhibits[202](index=202&type=chunk)