Turning Point Brands(TPB) - 2025 Q2 - Quarterly Report

Company Information FORM 10-Q Filing Details This section details the filing information for Turning Point Brands, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2025, including registrant name, jurisdiction, address, telephone number, and stock exchange listing (NYSE: TPB). The company is classified as an accelerated filer with 18,024,761 shares of common stock outstanding as of July 28, 2025 - Filing is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] - Registrant: TURNING POINT BRANDS, INC., incorporated in Delaware[2] | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | --- | | Common Stock, $0.01 par value | TPB | New York Stock Exchange | | Large accelerated filer | ☐ | Accelerated filer | ☑ | | --- | --- | --- | --- | | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | | Emerging growth company ☐ | | | | - As of July 28, 2025, there were 18,024,761 shares outstanding of the registrant's voting common stock[4] Cautionary Note Regarding Forward-Looking Statements Forward-Looking Statements and Risk Factors This section highlights that the Quarterly Report contains forward-looking statements subject to risks and uncertainties, which could cause actual events to differ materially from expectations. TPB has no obligation to update these statements, except as required by law. Key risk factors include declining tobacco sales, dependence on suppliers, brand recognition, intense competition, regulatory changes (FDA, taxes), product liability litigation, indebtedness, internal control weaknesses, and external factors like epidemics or climate change. - Forward-looking statements are identified by words like "anticipate," "believe," "expect," "intend," "plan," and "will"[7] - TPB has no obligation to update forward-looking statements, except as required by federal securities laws[7] - Factors that could cause differences include declining tobacco sales, dependence on third-party suppliers, potential termination of licenses, failure to maintain consumer loyalty, intense competition, and substantial and increasing regulation (e.g., FDA enforcement priorities, taxes)[7] - Other risks include complications with ERP system implementation, product recalls, nicotine addiction concerns, significant product liability litigation, indebtedness, internal control weaknesses, and external events like epidemics or natural disasters[8] PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements of Turning Point Brands, Inc. for the periods ended June 30, 2025, and December 31, 2024 (Balance Sheets), and for the three and six months ended June 30, 2025 and 2024 (Income, Comprehensive Income, Cash Flows, and Stockholders' Equity). Key financial highlights include a significant increase in cash and total assets, alongside growth in net sales and net income, primarily driven by the Stoker's products segment. The company also details its accounting policies, discontinued operations, and various financial instrument valuations. Consolidated Balance Sheets Consolidated Balance Sheets (dollars in thousands): | ASSETS | June 30, 2025 | December 31, 2024 | |---|---|---| | Cash | $109,925 | $46,158 | | Accounts receivable, net | $30,056 | $9,624 | | Inventories, net | $105,009 | $96,253 | | Total current assets | $285,217 | $198,205 | | Total assets | $595,788 | $493,353 | | LIABILITIES AND STOCKHOLDERS' EQUITY | June 30, 2025 | December 31, 2024 | |---|---|---| | Accounts payable | $26,169 | $11,675 | | Accrued liabilities | $41,340 | $31,096 | | Total current liabilities | $67,509 | $44,820 | | Notes payable and long-term debt | $293,138 | $248,604 | | Total liabilities | $370,965 | $302,973 | | Total stockholders' equity | $224,823 | $190,380 | | Total liabilities and stockholders' equity | $595,788 | $493,353 | - Cash increased significantly from $46.16 million at December 31, 2024, to $109.93 million at June 30, 2025[10] - Total assets grew by approximately 20.8% from $493.35 million to $595.79 million[10] Consolidated Statements of Income Consolidated Statements of Income (dollars in thousands, except share and per share data): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Net sales | $116,634 | $93,225 | $223,070 | $176,289 | | Gross profit | $66,623 | $50,398 | $126,233 | $98,752 | | Operating income | $26,327 | $22,872 | $49,516 | $42,142 | | Income from continuing operations before income taxes | $21,204 | $17,391 | $39,035 | $33,301 | | Consolidated net income | $16,960 | $12,920 | $32,751 | $25,099 | | Net income attributable to Turning Point Brands, Inc. | $14,480 | $13,007 | $28,875 | $25,017 | | Basic earnings per share | $0.81 | $0.74 | $1.62 | $1.42 | | Diluted earnings per share | $0.79 | $0.68 | $1.58 | $1.31 | - Net sales increased by 25.1% for the three months ended June 30, 2025, and 26.5% for the six months ended June 30, 2025, compared to the prior year periods[11] - Diluted EPS from continuing operations increased from $0.68 to $0.79 for the three months, and from $1.31 to $1.58 for the six months ended June 30, 2025, year-over-year[11] Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (dollars in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Consolidated net income | $16,960 | $12,920 | $32,751 | $25,099 | | Other comprehensive income (loss), net of tax | $373 | $(33) | $865 | $(441) | | Consolidated comprehensive income | $17,333 | $12,887 | $33,616 | $24,658 | | Comprehensive income attributable to Turning Point Brands, Inc. | $14,853 | $12,974 | $29,740 | $24,576 | - Other comprehensive income (loss) significantly improved, moving from a loss of $(33) thousand to a gain of $373 thousand for the three months ended June 30, 2025, and from a loss of $(441) thousand to a gain of $865 thousand for the six months ended June 30, 2025[13] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (dollars in thousands): | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---| | Net cash provided by operating activities | $29,230 | $36,077 | | Net cash used in investing activities | $(8,626) | $(7,972) | | Net cash provided by (used in) financing activities | $40,312 | $(6,747) | | Net increase in cash | $60,916 | $21,358 | | Total cash at end of period | $111,838 | $144,097 | - Net cash provided by financing activities saw a substantial increase, moving from a use of $(6.75) million in 2024 to a provision of $40.31 million in 2025, primarily due to the issuance of **2032