Financial Data and Key Metrics Changes - Adjusted EBITDA increased 11% to $27.2 million for Q3 2024, with EBITDA excluding CDS up 12% to $26.9 million [5][13] - Q3 sales rose 3.8% to $105.6 million, with overall revenue excluding CDS up 8.4% year-over-year [13] - Gross margin improved by 10 basis points year-over-year to 50.8% [13] - Free cash flow for the quarter was $12.6 million, with year-to-date free cash flow at $45.8 million [15][16] Business Line Data and Key Metrics Changes - Zig-Zag sales increased 5.5% year-over-year to $49.3 million, with growth across all categories except lighters [14] - Stoker's revenue rose 12.1% year-over-year to $41.4 million, with a 2.9% volume increase and a 9.2% price/mix increase [14] - FRE sales more than quadrupled year-over-year, reflecting strong consumer acceptance and market rollout [14][15] Market Data and Key Metrics Changes - Nearly 75% of Americans now live in a legal medical or adult-use state, benefiting businesses like TPB [6] - The alternative channel experienced low double-digit growth both sequentially and year-to-date [6] - Stoker's gained 230 basis points of market share in chewing tobacco, reaching 32.9% [15] Company Strategy and Development Direction - The company is increasing its guidance for full-year 2024 adjusted EBITDA to $101 million to $103 million, up from prior guidance [5][16] - There is a focus on expanding distribution channels, particularly in the alternative market, leveraging a diverse SKU portfolio [6][9] - The cigar category is identified as a significant growth opportunity, with potential for substantial revenue [30] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued growth of Zig-Zag and Stoker's brands, with plans to enhance the commercial system and go-to-market strategy [10][12] - The company is assessing the strategy for the lighter category due to weaker-than-expected performance [5][6] - Management is exploring U.S. manufacturing options in light of recent election results and potential tariff changes [25] Other Important Information - The company retired a $118.5 million convertible note with cash on hand, maintaining a comfortable liquidity position [16] - A share repurchase program with a capacity of $100 million has been authorized by the Board [16] Q&A Session Summary Question: Growth outlook for FRE - Management indicated that growth will come from both expanded velocity in existing stores and new door penetration, with a focus on national distribution [19][20] Question: Comments on the Alp brand partnership - Management refrained from discussing the Alp brand but indicated updates would be provided in the near future [21][22] Question: Sales expectations for new 3 and 6 milligram products - Management noted that nearly 70% of the category is comprised of 3 and 6 milligram products, and early consumer feedback has been positive [24] Question: Supply chain limitations for FRE - Management stated that manufacturing capacity is sufficient, but entering chains can be a lengthy process due to varying planograms [25] Question: Revenue opportunities in alternative channels - Management believes the total addressable market for the alternative space is significant, potentially larger than traditional convenience stores [26] Question: Pricing strategy for FRE - Management confirmed that FRE is positioned as a premium brand and will follow a competitive pricing strategy [28][29] Question: Cigar growth expectations - Management highlighted the cigar category as a massive opportunity, with significant potential for revenue growth [30]

Financial Performance - Net sales for the three months ended September 30, 2024, were $105.617 million, a 3.5% increase from $101.722 million in the same period of 2023[9]. - Gross profit for the three months ended September 30, 2024, was $53.699 million, compared to $51.622 million in 2023, reflecting a gross margin improvement[9]. - Consolidated net income for the three months ended September 30, 2024, was $12.359 million, up from $10.866 million in the prior year, representing a 14% increase[9]. - Basic income per common share for the three months ended September 30, 2024, was $0.70, compared to $0.62 for the same period in 2023[9]. - Comprehensive income attributable to Turning Point Brands, Inc. for the three months ended September 30, 2024, was $13,341,000, compared to $10,254,000 in 2023, indicating an increase of approximately 30.3%[11]. - Consolidated net income for the nine months ended September 30, 2024, was $37,455,000, up from $27,916,000 in 2023, reflecting a growth of about 34.3%[12]. - Net income for the three months ended September 30, 2024, is reported at $12,359,000, compared to $10,866,000 for the same period in 2023, reflecting an increase of about 14%[14]. - Net income attributable to Turning Point Brands, Inc. for the three months ended September 30, 2024, was $37.389 million, compared to $28.353 million for the same period in 2023, representing a 32.5% increase[109]. - Diluted earnings per share (EPS) increased to $1.99 for the three months ended September 30, 2024, from $1.51 in the same period of 2023, reflecting a 31.8% growth[109]. Assets and Liabilities - Total current assets decreased to $184.752 million as of September 30, 2024, from $267.616 million at the end of 2023, indicating a significant reduction[6]. - Total assets as of September 30, 2024, were $488.009 million, down from $569.356 million at the end of 2023[8]. - Total current liabilities as of September 30, 2024, were $41,278 million, compared to $43,911 million as of December 31, 2023, showing a decrease of 6.0%[123]. - The total notes payable and long-term debt as of September 30, 2024, is $248,282 million, down from $307,064 million as of December 31, 2023[60]. - The company’s long-term debt as of September 30, 2024, was $248.3 million, down from $307.1 million at the end of 2023[200]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2024, was $49,321,000, compared to $40,005,000 in 2023, an increase of approximately 23.1%[13]. - Total cash at the end of the period was $35,516,000, down from $101,000,000 at the end of the previous period, indicating a decrease of approximately 64.9%[13]. - The company reported a loss on investments of $2,722,000 for the nine months ended September 30, 2024, compared to a loss of $11,162,000 in 2023, reflecting an improvement[13]. - The company recorded a $4.0 million receivable in other current assets related to a settlement approved by the court on December 12, 2023[104]. Segment Performance - The Company operates three segments: Zig-Zag products, Stoker's products, and Creative Distribution Solutions (CDS), with products available in over 217,000 retail outlets in North America[17]. - Zig-Zag products segment net sales were $49.324 million for the three months ended September 30, 2024, compared to $46.754 million in 2023, a growth of 5.5%[113]. - Stoker's products segment net sales increased to $41.380 million in the three months ended September 30, 2024, from $36.916 million in 2023, representing a 12.5% increase[113]. - Creative Distribution Solutions segment net sales decreased to $14.913 million for the three months ended September 30, 2024, down from $18.052 million in 2023, a decline of 17.5%[113]. Expenses - Selling, general, and administrative expenses for the three months ended September 30, 2024, were $33.169 million, an increase from $31.385 million in 2023[9]. - Shipping costs incurred were approximately $5.5 million for the three months ending September 30, 2024, compared to $5.1 million for the same period in 2023, indicating a year-over-year increase of approximately 7.8%[25]. - Selling, general, and administrative expenses increased by $1.8 million, or 5.7%, including $1.8 million of stock options and $1.2 million related to PMTA[152]. Regulatory and Market Challenges - The company anticipates continued challenges in the tobacco industry, including declining sales and increased regulatory scrutiny[4]. - The tobacco industry faces significant regulatory risks, including potential flavor bans that could materially affect the Company's financial position and operations[30]. - Key factors affecting operations include market penetration, new product introductions, and regulatory compliance costs[141]. Shareholder Returns - The company declared dividends totaling $1,278,000 for the three months ended September 30, 2024, compared to $1,187,000 for the same period in 2023[14]. - A quarterly cash dividend of $0.07 per common share was paid on October 4, 2024, to shareholders of record[129]. - The company has a share repurchase program totaling $100.0 million, with 133,873 shares repurchased for $4.2 million at an average price of $31.15 for the nine months ended September 30, 2024[131]. Future Outlook - The company continues to focus on market expansion and new product development to drive future growth[120]. - The company expects to have ample liquidity to satisfy its operating cash requirements for the foreseeable future due to strong cash balance and free cash flow generation[192].

Financial Performance - Q3 2024 Adjusted EBITDA increased 11.3% to $27.2 million compared to the same period last year[2] - Total consolidated net sales increased 3.8% to $105.6 million in Q3 2024, with Zig-Zag Products net sales up 5.5% and Stoker's Products net sales up 12.1%[2] - Gross profit increased 4.0% to $53.7 million in Q3 2024[2] - Net income increased 14.3% to $12.4 million in Q3 2024[2] - Adjusted net income increased 9.8% to $15.9 million in Q3 2024[2] - The Company increased its full-year 2024 adjusted EBITDA guidance to $101 to $103 million, up from the previous range of $98 to $102 million[6] - Consolidated net income for the nine months ended September 30, 2024, was $37.455 million, compared to $27.916 million in the same period in 2023[16] - Net cash provided by operating activities increased to $49.321 million in 2024 from $40.005 million in 2023[16] - Adjusted EBITDA for the three months ended September 30, 2024, was $27.158 million, up from $24.403 million in 2023[22] - GAAP Net Income for Q3 2024 was $16,960 thousand, with an adjusted net income of $12,375 thousand and adjusted diluted EPS of $0.68[23] - Net sales for Q3 2024 were $105,617 thousand, a 3.8% increase from $101,722 thousand in Q3 2023[24] - Gross profit for Q3 2024 was $53,699 thousand, up 4% from $51,622 thousand in Q3 2023[24] - Operating income for Q3 2024 was $20,530 thousand, slightly higher than $20,237 thousand in Q3 2023[24] - Adjusted operating income for Q3 2024 was $22,985 thousand, compared to $20,916 thousand in Q3 2023[24] Segment Performance - Stoker's Products segment gross profit increased 12.1% to $23.1 million in Q3 2024, with gross margin up 10 basis points to 55.8%[4] - Zig-Zag Products segment gross profit increased 2.2% to $27.3 million in Q3 2024, though gross margin declined 180 basis points to 55.4%[3] - Creative Distribution Solutions (CDS) net sales were $14.9 million in Q3 2024, with gross profit of $3.3 million and gross margin of 22.1%[4] - Zig-Zag Products net sales for Q3 2024 were $49,324 thousand, up 5.5% from $46,754 thousand in Q3 2023[24] - Stoker's Products net sales for Q3 2024 were $41,380 thousand, up 12.1% from $36,916 thousand in Q3 2023[24] - Creative Distribution Solutions net sales for Q3 2024 were $14,913 thousand, down 17.4% from $18,052 thousand in Q3 2023[24] Debt and Liquidity - Total gross debt as of September 30, 2024 was $250.0 million, with net debt of $216.4 million and total liquidity of $92.4 million[5] - Net cash used in financing activities was $127.527 million in 2024, compared to $45.956 million in 2023[16] - Total cash at the end of the period was $35.516 million in 2024, down from $101.000 million in 2023[16] Expenses and Costs - Capital expenditures decreased to $3.516 million in 2024 from $4.206 million in 2023[16] - Stock compensation expense increased to $5.720 million in 2024 from $4.660 million in 2023[16] - Depreciation and other amortization expense rose to $3.393 million in 2024 from $2.388 million in 2023[16] - FDA PMTA costs increased to $1.242 million in 2024 from $275 million in 2023[22] - Non-cash asset impairment was $2.173 million in 2023, with no impairment recorded in 2024[22] - FDA PMTA costs for Q3 2024 were $1,242 thousand, significantly higher than $275 thousand in Q3 2023[23][24] - Corporate restructuring costs for Q3 2024 were $186 thousand, slightly lower than $190 thousand in Q3 2023[23][24]

Company Overview - Turning Point Brands, Inc. (NYSE: TPB) specializes in selling tobacco rolling paper, nicotine pouches, and other nicotine products [1] - The company is expected to report its Q3 results near the end of October [1] Investment Philosophy - The investment approach focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1] - This methodology allows for a flexible investment strategy that encompasses various prospects of a stock, assessing the risk-to-reward ratio [1]

Turning Point Brands (TPB) is involved in multiple areas of the tobacco space, but TPB's recent price performance has been driven largely by the company's success in the tobacco-free nicotine pouch space. Alexander Farnsworth/iStock via Getty Images Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not recei ...

Turning Point Brands (NYSE:TPB) Q2 2024 Results Conference Call August 1, 2024 10:00 AM ET Company Participants Andrew Flynn - Chief Financial Officer Graham Purdy - Chief Executive Officer Summer Frein - Chief Revenue Officer Conference Call Participants Michael Legg - The Benchmark Company Eric Des Lauriers - Craig-Hallum Capital Group Operator Thank you for standing by. My name is Sully, and I will be your conference operator today. At this time, I would like to welcome everyone to the Turning Point Bran ...

Andrii Atanov/iStock via Getty Images Turning Point Brands, Inc. (NYSE:TPB) reported the company's Q2 results on Thursday in pre-market hours, showing a clear earnings beat compared to Wall Street analysts' estimates. The stock opened on the stock market with a neutral reaction, surprisingly so as the report was in my opinion clearly great. In my previous article on the stock, I initiated Turning Point Brands at Buy rating due to the company's great, stable cash flow yield in the slow industry. I also noted ...

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, 2024 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 charter) Delaware ...

Exhibit 99.1 Turning Point Brands Announces Second Quarter 2024 Results • Q2 2024 Adjusted EBITDA of $27.0 million, up 7% over prior year • Zig-Zag and Stoker's Products Net Sales for Q2 2024 Increased 13% Year-Over-Year • Company increases full-year 2024 adjusted EBITDA guidance to $98 to $102 million LOUISVILLE, KY – August 1, 2024 – Turning Point Brands, Inc. ("TPB" or "the Company") (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessor ...

Financial Data and Key Metrics Changes - Q1 sales decreased by 3.9% to $97.1 million, but excluding the CDS segment, overall revenue increased by 10% [60] - Adjusted EBITDA rose by 21.6% to $25.3 million for the quarter [31][60] - Gross margin improved by 530 basis points to 53.5% due to favorable segment and product mix [60] Business Line Data and Key Metrics Changes - Zig-Zag sales increased by 11.5% year-over-year to $46.7 million, driven by strong growth in papers and the alternative channel [31][39] - Stoker's revenue increased by 8% to $36.4 million, with a 0.1% volume increase and a 7.9% price mix increase [62] - FRE sales more than tripled from a low base, indicating strong early momentum in national distribution [63] Market Data and Key Metrics Changes - The alternative B2B business grew over 60% in Q1, reflecting the expanding market for cannabis-related products [32] - Stoker's market share grew by 140 basis points to 31.1%, making it the 1 chewing brand [41] - The overall category volume for loose leaf tobacco declined by 6.9%, but the company's volume benefited from consumer trade down [41] Company Strategy and Development Direction - The company is focused on expanding its sales and distribution efforts in the alternative channel to achieve steady growth [33] - There is a commitment to building Zig-Zag as a lifestyle brand and increasing its presence in the alternative channel [35] - The company aims to maximize the value of its brands and strengthen distribution capabilities [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable growth backdrop for 2024, with positive responses from wholesale and retail customers [24] - The company reaffirmed its guidance for projected 2024 adjusted EBITDA in the range of $95 million to $100 million [26][64] - Management noted that the competitive landscape is evolving, with a focus on satisfying consumer preferences and expanding product offerings [52][75] Other Important Information - The company ended the quarter with over $130 million in cash, sufficient to address the maturity of $118.5 million convertible notes due July 2024 [17] - The Canadian business faced an approximate $800,000 headwind due to the discontinuation of a low-margin product line [61] Q&A Session Summary Question: Can you clarify the B2B growth within Zig-Zag? - The 60% growth mentioned is entirely from the alternative channel [44] Question: What is the margin impact from the CLIPPER stocking? - The management is assessing the margin improvement from the elimination of the CLIPPER stocking versus overall margin improvement [46] Question: Is the CDS business sustainable at current levels? - The CDS business has stabilized at $14 million, and management is comfortable with its current performance [50][82] Question: Can you provide more details on the alternative channel penetration? - The company is successfully expanding its portfolio and increasing shelf space, leading to healthy increases in average order sizes [52][75] Question: What is the competitive landscape for Stoker's? - Management noted that they are well-positioned with their product offerings and are seeing positive consumer feedback [76][85]