Group 1 - Turning Point Brands (TPB) shares increased by 5.1% to close at $78.39, supported by higher trading volume compared to normal sessions, contrasting with a 1.4% loss over the past four weeks [1] - The growth in the modern oral segment, particularly from nicotine pouch sales and market penetration, is driving optimism for Turning Point Brands [2] - The company is projected to report quarterly earnings of $0.79 per share, reflecting an 11.2% decrease year-over-year, with expected revenues of $105.55 million, down 2.7% from the previous year [3] Group 2 - The consensus EPS estimate for Turning Point Brands has remained stable over the last 30 days, indicating that stock price increases may not sustain without earnings estimate revisions [4] - Turning Point Brands holds a Zacks Rank of 3 (Hold), while Altria (MO), another stock in the tobacco industry, has a Zacks Rank of 2 (Buy) and finished the last trading session at $58.48, up 0.6% [5][6]

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]

Industry Overview - The Zacks Tobacco industry is shifting towards smoke-free alternatives due to increased consumer health awareness and stricter regulations on traditional cigarettes [1][4] - Major companies like Philip Morris International, Altria Group, and Turning Point Brands are investing in reduced-risk products (RRPs) to cater to the demand for healthier nicotine options [1][4] Market Trends - The popularity of smoke-free options, such as heated tobacco and vaping products, is reshaping the industry as consumers seek safer alternatives [4] - Tobacco companies are leveraging strong pricing power to maintain revenues despite declining cigarette sales, as loyal consumers tend to absorb price increases [2][5] Challenges - The industry faces challenges in cigarette sales volumes due to inflation and changing consumer behavior, alongside regulatory restrictions impacting sales and advertising [6] Industry Performance - The Zacks Tobacco industry ranks 65, placing it in the top 27% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has outperformed the broader market, gaining 63.8% over the past year compared to the S&P 500's 9.8% increase [10] Valuation - The industry is currently trading at a forward P/E of 15.78X, lower than the S&P 500's 21.89X and the sector's 17.62X [13] Company Highlights - **Altria Group**: Focused on transitioning to a smoke-free future with its oral nicotine pouch brand, on!, and has seen a 29.3% increase in shares over the past year [15][17] - **Philip Morris International**: Leading in RRPs with products like IQOS and ZYN, shares have surged 81% in the past year [20][21] - **Turning Point Brands**: Gaining traction with innovative products and strong demand for smokeless alternatives, shares have skyrocketed 132.8% in the past year [24][25]

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)

Turning Point Brands (TPB) Q1 2025 Earnings Call May 07, 2025 09:30 AM ET Company Participants Andrew Flynn - CFOGraham Purdy - CEO, President & DirectorSummer Frein - Chief Revenue OfficerAaron Grey - Managing Director, Head of Consumer ResearchIan Zaffino - Managing Director Conference Call Participants Eric Des Lauriers - Senior Research AnalystNick Anderson - Director & Research Analyst Operator Good morning, and welcome to the Turning Point Brand Q1 twenty twenty five Conference Call. All participants ...

Financial Data and Key Metrics Changes - Revenue increased by 28% to $106.4 million for Q1 2025, with adjusted EBITDA rising by 12% to $27.7 million [4][13] - Gross margin was 56%, down 220 basis points year over year but flat sequentially [13] - Free cash flow for the quarter was $12.4 million, with capital expenditures of $2.2 million [16] Business Line Data and Key Metrics Changes - Modern Oral revenue reached $22.3 million, with sales increasing nearly 10 times year over year [5][16] - Stoker's revenue increased by 63% to $59.2 million, with MST portfolio net sales growing by 10% to $26.3 million [7][15] - Zig Zag sales increased by 1% year over year to $47.3 million, with gross profit decreasing by 7.2% compared to the prior year [14] Market Data and Key Metrics Changes - The company anticipates the modern oral category will exceed $5 billion in manufacturers' revenue by the end of the decade [5] - The company aims for a long-term target of double-digit market share in the modern oral space [6] Company Strategy and Development Direction - The company is increasing full-year consolidated nicotine pouch sales guidance to a range of $80 million to $95 million from $60 million to $80 million [5][17] - Key initiatives include reallocating sales and marketing resources, increasing sales force headcount, and improving online presence [6][10] - The company is exploring U.S. manufacturing to improve profitability and mitigate supply chain risks [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of white nicotine pouch brands and the overall modern oral category [5][6] - The company is focused on building brands for the long term and executing against an omnichannel plan [11][12] - Management acknowledged potential headwinds from tariffs and foreign exchange impacts on the Zig Zag segment [17] Other Important Information - The company reaffirmed its previously announced 2025 adjusted EBITDA guidance of $108 million to $113 million [5][17] - Budgeted capital expenditures for 2025 are projected to be between $4 million to $5 million, excluding modern oral business projects [17] Q&A Session Summary Question: Comments on distribution gains in Modern Oral and rollout expectations for ALP - Management noted strong traction with retailers and plans for rollouts and enhancements later in the year [22][23] Question: Capacity to produce nicotine pouches at current facilities - Management confirmed adequate supply and ongoing exploration of onshoring production options [26] Question: Timing impact on pouch shipments and brand awareness for ALP - Management indicated that ALP's rollout is focused on online direct-to-consumer channels and is seeing good brand awareness [30][32] Question: Stoker segment gross margin performance - Management stated that pouch margins are within previously discussed ranges and are performing well [35] Question: Advertising regulations for nicotine pouches - Management acknowledged more flexibility in advertising compared to traditional tobacco products but emphasized responsible marketing [44] Question: Timing of PMTA applications amid FDA changes - Management indicated uncertainty regarding timing due to changes in government but continues to monitor the situation [46]

Company Performance - Turning Point Brands (TPB) reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.75 per share, and up from $0.80 per share a year ago, representing an earnings surprise of 21.33% [1] - The company posted revenues of $106.44 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 11.92%, compared to $97.06 million in the same quarter last year [2] - Over the last four quarters, Turning Point Brands has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Turning Point Brands shares have increased approximately 8% since the beginning of the year, while the S&P 500 has declined by 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $106.55 million, and for the current fiscal year, it is $3.42 on revenues of $425.4 million [7] Industry Outlook - The Tobacco industry, to which Turning Point Brands belongs, is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

Financial Performance - Q1 2025 net sales increased 28.1% year-over-year to $106.4 million, with Stoker's Products net sales up 62.7% and Zig-Zag Products net sales up 1.2%[6] - Modern Oral sales reached $22.3 million, nearly 10 times the prior year and almost double the previous quarter[3] - Adjusted EBITDA for Q1 2025 was $27.7 million, up 12.0% compared to the prior year[6] - Gross profit increased 23.3% to $59.6 million, while gross margin was 56.0%[6] - Net income rose 19.8% to $14.4 million, with adjusted net income increasing 8.0% to $16.7 million[6] - Consolidated net income for Q1 2025 was $15,791,000, an increase of 29.5% compared to $12,179,000 in Q1 2024[20] - Adjusted EBITDA for Q1 2025 reached $27,678,000, up 12% from $24,703,000 in Q1 2024[26] - Adjusted net income for Q1 2025 was $23.023 million, compared to $20.242 million in Q1 2024, representing a 8.8% increase[30] - The diluted EPS for Q1 2025 was $0.91, an increase from $0.80 in Q1 2024, marking a 13.8% rise[30] - Adjusted operating income for Q1 2025 was $25.482 million, compared to $21.540 million in Q1 2024, indicating a 18.2% increase[35] - The company’s operating income for Q1 2025 was $23.189 million, up from $19.270 million in Q1 2024, reflecting a 20.0% increase[35] Sales Guidance - The company is raising its full-year 2025 Modern Oral sales guidance to a range of $80.0 – 95.0 million, up from $60.0 – 80.0 million[9] Debt and Liquidity - Total gross debt as of March 31, 2025, was $300.0 million, with net debt at $200.4 million[8] - The company ended the quarter with total liquidity of $161.8 million, including $99.6 million in cash[8] - The company redeemed $250,000,000 of 2026 Notes and raised $300,000,000 from 2032 Notes in Q1 2025[20] - The company reported a loss on extinguishment of debt of $1,235,000 in Q1 2025, compared to no such loss in Q1 2024[20] Cash Flow and Expenditures - Net cash provided by operating activities decreased to $14,626,000 in Q1 2025 from $22,639,000 in Q1 2024, reflecting a decline of 35.4%[20] - Total cash at the end of Q1 2025 was $101,553,000, down from $132,837,000 at the end of Q1 2024[20] - Capital expenditures increased significantly to $2,185,000 in Q1 2025 from $366,000 in Q1 2024[20] - The company incurred $1,591,000 in costs related to FDA PMTA applications in Q1 2025, up from $841,000 in Q1 2024[26] Profitability Metrics - Total consolidated net sales for Q1 2025 included a gross profit of $25.6 million from the Zig-Zag Products segment, despite a 7.2% decrease from the prior year[4] - Stoker's Products segment gross profit increased 63.6% year-over-year to $34.0 million, with a gross margin of 57.5%[7] - The net income attributable to non-controlling interest for Q1 2025 was $2.040 million, compared to $3.729 million in Q1 2024, showing a decrease of 45.4%[30] Other Financial Impacts - The company experienced a mark-to-market loss of $315,000 due to foreign exchange fluctuations in Q1 2025[26] - Corporate restructuring costs were $1.261 million in Q1 2024, which were not present in Q1 2025[35]