Turning Point Brands(US:TPB)2024-11-07 21:22Financial 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].