Financial Data and Key Metrics Changes - Revenue increased 13% to $93.7 million for Q4 2024, and full-year sales were up 11% to $360.7 million [6][25] - Adjusted EBITDA for Q4 increased 5% to $26.2 million, while full-year adjusted EBITDA rose 12% to $104.5 million [7][27] - Gross margin for the full year decreased by 39 basis points to 55.9%, and for Q4, it was 56%, down 108 basis points year over year [25][27] Business Line Data and Key Metrics Changes - Zig Zag sales increased 7% year over year to $192.4 million, with Q4 sales up 2% to $45.9 million [27][28] - Stoker's net sales increased 16% year over year to $168.3 million, with Q4 sales up 26% to $47.8 million [28] - Modern oral revenue included a 419% increase in Free sales to approximately $6.3 million for Q4, reflecting strong growth [14][32] Market Data and Key Metrics Changes - Nearly 75% of Americans now live in states with legal regulated cannabis, expanding the total addressable market (TAM) for related products [12] - Stoker's MST volume was up 10 basis points despite a category volume decline of 6.4%, with market share growing by 50 basis points year over year to 7.6% [29][30] Company Strategy and Development Direction - The company is focusing on growth opportunities in its core business after divesting the CDS segment, which is now classified as discontinued operations [4][6] - The goal is to achieve a 10% market share in the modern oral category, with significant investments planned for sales and marketing [8][34] - The company aims to leverage cross-selling opportunities between its Zig Zag and modern oral products [11][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth momentum across the organization and initiated 2025 adjusted EBITDA guidance of $108 million to $113 million [8][34] - The company is confident in the performance of its modern oral brands, particularly Free and Out, and plans to expand their market presence [17][20] Other Important Information - The company ended the quarter with over $46 million in cash and reported free cash flow of $56.3 million for the year [32] - Capital expenditures for 2024 were $4.6 million, with a budget of $4 to $5 million for 2025 [36] Q&A Session Summary Question: Outlook for modern oral products in national convenience store chains - Management is in discussions with partners and has rolled out a regional partnership with 7-Eleven, showing early positive results [40][43] Question: Growth and distribution opportunities for Stoker's MST - Management believes there are synergies between MST and modern oral products, presenting opportunities for cross-selling [45][47] Question: Drivers of guidance for modern oral products - Guidance is based on expected growth for Free and early reorder rates, with both Free and Out seen as synergistic [50][52] Question: Contribution margin and manufacturing considerations - Gross profit margins for modern oral are in the mid-thirties, with plans to reinvest profits into sales and marketing [56][58] Question: Regulatory environment regarding nicotine products - Management views recent regulatory actions as positive, particularly with the approval of flavored products [62][63] Question: Direct-to-consumer opportunities in the nicotine patch category - Management sees a strong online opportunity for the Out brand, while Free will focus on brick-and-mortar sales [65][67] Question: Marketing strategies for Free and Out brands - The company plans to leverage both online and brick-and-mortar channels to maximize reach across its product portfolio [71][73] Question: Zig Zag's growth and margin profile - Zig Zag is expected to see single-digit growth, with a mix shift impacting gross margins [75][77]

Turning Point Brands, Inc. (NYSE:TPB) Q4 2024 Earnings Conference Call March 6, 2025 10:00 AM ET Company Participants Andrew Flynn - Chief Financial Officer Graham A. Purdy - President and Chief Executive Officer Summer Frein - Chief Marketing Officer Conference Call Participants Eric Des Lauriers - Craig Hallum Capital Group Ian Zaffino - Oppenheimer Nick Anderson - ROTH Capital Partners Aaron Grey - Alliance Global Partners Operator Thank you for standing by. My name is Kathleen, and I will be your confer ...

Company Performance - Turning Point Brands (TPB) reported quarterly earnings of $0.53 per share, missing the Zacks Consensus Estimate of $0.57 per share, and down from $0.79 per share a year ago, representing an earnings surprise of -7.02% [1] - The company posted revenues of $93.67 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.23%, but down from $97.12 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Turning Point Brands shares have increased approximately 11.5% since the beginning of the year, contrasting with the S&P 500's decline of -0.7% [3] - The current consensus EPS estimate for the coming quarter is $0.73 on revenues of $91.9 million, and for the current fiscal year, it is $3.17 on revenues of $384.7 million [7] Industry Outlook - The Tobacco industry, to which Turning Point Brands belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Turning Point Brands' stock may be influenced by the overall outlook for the Tobacco industry [8]

Financial Performance - Q4 2024 net sales increased 12.8% year-over-year to $93.7 million, with total consolidated net sales for FY 2024 increasing 11.0% to $360.7 million[5]. - Adjusted EBITDA for Q4 2024 was $26.2 million, up 5.3% from the prior year, while FY 2024 Adjusted EBITDA increased 12.0% to $104.5 million[5]. - Consolidated net income for 2024 was $40,510,000, an increase from $37,781,000 in 2023, representing a growth of 4.8%[25]. - Adjusted EBITDA for 2024 was $104,459,000, up from $93,252,000 in 2023, reflecting a growth of 11.9%[31]. - Adjusted diluted EPS for the year ended December 31, 2024, was $3.49, an increase from $2.93 in 2023[37]. - Adjusted net income for the quarter was $21.68 million, compared to $20.20 million in the prior year, reflecting an increase of 7.3%[39]. - Adjusted diluted EPS for the quarter was $0.98, compared to $0.82 in the same quarter of the previous year, marking an increase of 19.5%[39]. Segment Performance - Zig-Zag Products segment net sales increased 1.8% to $45.9 million in Q4 2024, while Stoker's Products segment net sales rose 25.8% to $47.8 million[6][8]. - Modern Oral combined sales reached $11.2 million for Q4 2024, with FRE sales more than quadrupling year-over-year and growing 26% sequentially[4]. - Stoker's Products segment gross profit increased 26.0% to $27.6 million in Q4 2024, with a gross margin of 57.7%[9]. Income and Expenses - Net income for Q4 2024 decreased 76.1% to $2.4 million, primarily due to a one-time loss from discontinued operations of $7.3 million[5]. - The company incurred $4,634,000 in corporate restructuring costs for the year ended December 31, 2024[37]. - The FDA PMTA-related costs for the year ended December 31, 2024, amounted to $3,592,000, compared to $2,098,000 in 2023[38]. - The company incurred $1.11 million in transactional expenses and strategic initiatives during the quarter, compared to $3,000 in the same quarter last year[40]. - Loss on extinguishment of debt was reported at $194,000 for Q4 2024, while the previous year showed a gain of $146,000[39]. Balance Sheet and Liquidity - Total gross debt as of December 31, 2024, was $248.6 million, with net debt at $202.4 million and total liquidity of $103.6 million[10]. - Total current assets decreased to $198,205,000 in 2024 from $267,629,000 in 2023, a decline of 26%[24]. - Total liabilities reduced to $302,973,000 in 2024 from $417,363,000 in 2023, a decrease of 27.3%[24]. - Total stockholders' equity increased to $190,380,000 in 2024 from $152,006,000 in 2023, a growth of 25.3%[24]. - Cash at the end of the period decreased to $50,902,000 in 2024 from $122,815,000 in 2023, a decline of 58.6%[26]. Guidance and Future Outlook - FY 2025 guidance projects Adjusted EBITDA of $108-113 million and Modern Oral sales of $60-80 million[14]. - The company expects to maintain its focus on FDA PMTA applications, with costs of $512,000 incurred in Q4 2024[40]. Other Notable Items - The company reported a loss from discontinued operations of $7,517,000 in 2024, compared to $285,000 in 2023[25]. - The company recognized a mark-to-market loss of $942,000 on a Canadian inter-company note in Q4 2024[39]. - The effective tax rate for the quarter was 28.4% in 2024, compared to 24.6% in 2023[41]. - The federal excise tax refund for the year ended December 31, 2024, was $(1,674,000), compared to $(5,095,000) in 2023[37].

Company Overview - Turning Point Brands, Inc. (NYSE: TPB) specializes in selling rolling paper, snuff tobacco, and nicotine pouches among other related products [1] Financial Performance - The company reported preliminary Q4 results on February 10, indicating ongoing financial activities and performance metrics [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Turning Point Brands (TPB) due to lower revenues, with a focus on how actual results will compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.57 per share, reflecting a year-over-year decrease of 27.9%, with revenues projected at $93.4 million, down 3.8% from the previous year [3]. - A positive stock movement is likely if the earnings exceed expectations, while a miss could lead to a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 2.21% higher in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent differing analyst views [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict earnings deviation from consensus, with positive readings being more reliable [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have shown a nearly 70% success rate in beating earnings expectations [8]. Historical Performance - In the last reported quarter, Turning Point Brands had an earnings surprise of +1.49%, beating the expected earnings of $0.67 per share with actual earnings of $0.68 [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Conclusion - Turning Point Brands does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, but other factors should also be considered for investment decisions [16].

Investment Ideas - Zooplus was identified as a top investment idea on October 24th, 2014 [1] - Coca-Cola Bottling Co was highlighted as a top investment idea on May 20th, 2015 [1] - C&C Group was featured as a top investment idea on April 27th, 2018 [1] Company Analysis - Turning Point Brands faced challenges due to a ban on the shipment of vaping products nearly two years ago [3]

Core Insights - The launch of ALP nicotine pouches, co-founded by Tucker Carlson, is expected to significantly impact the nicotine market, appealing to both current pouch users and consumers of other tobacco products [1][5] - ALP nicotine pouches are designed to provide a superior experience compared to existing products like Zyn, emphasizing a cleaner and more enjoyable use [1][7] Company Overview - ALP Supply Co. LLC is responsible for the sales, marketing, and distribution of nicotine pouches in the United States, co-owned by Turning Point Brands and Tucker Carlson Network [3] - The product is now available for order online, with various purchasing options including tins, sleeves, and pallets [2][4] Market Reception - Pre-launch sales of ALP pouches exceeded initial expectations, with a survey indicating that 86% of current U.S. nicotine pouch users are likely to switch to ALP [5]

Core Insights - Turning Point Brands (NYSE: TPB) is expanding its presence in the growing nicotine pouch category while also performing well in its other primary focus segments [1] - The partnership with Tucker Carlson for the Alp pouch brand is a significant development for the company [1] Company Focus - The company is actively involved in the nicotine pouch market, which is experiencing growth [1] - Turning Point Brands has a diversified focus, indicating a strategy to leverage multiple segments for growth [1] Investment Philosophy - The investment approach emphasizes identifying mispriced securities by understanding the financial drivers of a company, often revealed through DCF model valuation [1]

TURNING POINT™ R A N D B Investor Presentation Q3 2024 | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM Turning Point Brands (NYSE: TPB) 2 DISCLAIMER FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable te ...