Turning Point Brands(TPB) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated net sales for Q3 2025 increased by 31.2% year-over-year to $119.0 million[6] - Modern Oral sales reached $36.7 million, a 627.6% increase year-over-year, accounting for 30.8% of total net sales[6] - Stoker's segment net sales increased by 80.8% year-over-year to $74.8 million, with gross profit rising by 95.2% to $45.0 million[4][5] - Net income increased by 70.3% to $21.1 million, with diluted EPS rising to $1.13 compared to $0.68 in the same period last year[6][19] - Consolidated net income for the nine months ended September 30, 2025, was $56,508,000, an increase from $37,459,000 in 2024, representing a growth of 51.4%[23] - For the three months ended September 30, 2025, the net income was $30,229,000, compared to $6,472,000 for the same period in 2024, representing a significant increase[31] - Adjusted net income for the same period was $28,201,000, up from $5,925,000 in 2024, indicating a strong performance improvement[31] EBITDA and Profitability - Adjusted EBITDA for Q3 2025 was $31.3 million, up 17.2% from the prior year, with full-year guidance increased to $115.0 – 120.0 million[6][11] - Total gross profit increased by 39.7% to $70.4 million, with a gross margin of 59.0%[6][19] - Adjusted EBITDA for the three months ended September 30, 2025, was $31,345,000, compared to $26,755,000 in 2024, indicating a growth of 17.5%[29] - Adjusted operating income for Q3 2025 was $27,847,000, compared to $23,260,000 in Q3 2024, showing a year-over-year increase of about 20%[33] Cash Flow and Liquidity - Total liquidity as of September 30, 2025, was $267.8 million, consisting of $201.2 million in cash and $66.6 million available under a revolving credit facility[9] - Operating cash flows from continuing operations for the nine months ended September 30, 2025, were $32,515,000, down from $44,908,000 in 2024, a decrease of 27.5%[23] - Net cash provided by operating activities decreased to $32,515,000 in 2025 from $49,321,000 in 2024, reflecting a decline of 34%[23] - The company reported a net increase in cash of $152,381,000 for the nine months ended September 30, 2025, compared to a decrease of $87,270,000 in 2024[23] - Total cash at the end of the period increased to $203,101,000 in 2025 from $35,516,000 in 2024, marking a significant increase of 471.5%[23] - The company’s unrestricted cash at the end of the period rose to $201,189,000 in 2025 from $33,557,000 in 2024, an increase of 497.5%[23] Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2025, were $10,182,000, significantly higher than $3,516,000 in 2024, an increase of 189.5%[23] - The company raised $97.5 million in net proceeds under its "At the Market" offering program to accelerate growth in Modern Oral products[6] - The company incurred a loss on extinguishment of debt amounting to $1,235,000 in 2025, while there was no such loss reported in 2024[23] Segment Performance - Zig-Zag segment net sales decreased by 10.5% year-over-year to $44.2 million, but showed mid-single-digit growth sequentially excluding the Clipper business wind-down[7] Regulatory and Compliance Costs - The FDA PMTA-related costs were $482,000 in Q3 2025, down from $1,242,000 in Q3 2024, suggesting improved efficiency in regulatory compliance[33] Other Financial Metrics - The effective tax rate for Q3 2025 was 21.4%, compared to 27.1% in Q3 2024, which positively impacted net income[32] - The company reported a loss on discontinued operations of $165,000 in Q3 2025, compared to a loss of $16,000 in Q3 2024, indicating challenges in this segment[31] - Total adjustments to GAAP operating income included corporate restructuring costs of $233,000 in Q3 2025, reflecting ongoing strategic initiatives[33] - The company incurred $1,884,000 in stock-based compensation for Q3 2025, compared to $1,769,000 in Q3 2024, indicating ongoing investment in employee incentives[31]