Turning Point Brands(US:TPB)2025-11-05 21:44Sales Performance - For the three months ended September 30, 2025, total net sales increased by $28.3 million, or 31.2%, compared to the prior year period, primarily driven by the Stoker's products segment [144]. - Zig-Zag products segment net sales decreased by $5.2 million, or 10.5%, due to declines in U.S. papers and wraps, and the Clipper lighter business [145]. - Stoker's products segment net sales increased by $33.4 million, or 80.8%, with sales volume increasing by 69.0% and price/product mix contributing an additional 11.8% [146]. - For the nine months ended September 30, 2025, consolidated net sales increased by $75.1 million, or 28.1%, compared to the prior year period, primarily driven by the Stoker's products segment [165]. - Net sales in the Zig-Zag products segment decreased by $8.1 million, or 5.5%, due to declines in U.S. papers and wraps, and cigar products [166]. - Net sales in the Stoker's products segment increased by $83.1 million, or 69.0%, with sales volume up 62.9% and price/product mix contributing an additional 6.1% [167]. - Net sales for Q3 2025 reached $118.979 million, a 31% increase from $90.704 million in Q3 2024 [217]. - For the nine months ended September 30, 2025, net sales totaled $342.049 million, a 28% increase from $266.993 million in the same period of 2024 [217]. Profitability - Consolidated gross profit increased by $20.0 million, or 39.7%, with gross profit as a percentage of net sales rising to 59.2% [147]. - Consolidated gross profit increased by $47.5 million, or 31.9%, with gross profit as a percentage of net sales rising to 57.5% [168]. - Gross profit for Q3 2025 was $70.427 million, compared to $50.395 million in Q3 2024, reflecting a 39.8% increase [217]. - Operating income for Q3 2025 was $25.885 million, up from $20.805 million in Q3 2024, representing a 24.5% increase [217]. - Consolidated net income from continuing operations increased by $11.2 million, or 89.7%, reaching $23.8 million [143]. - Consolidated net income for Q3 2025 was $23.757 million, compared to $12.525 million in Q3 2024, marking an increase of 89.5% [217]. - Net income attributable to Turning Point Brands, Inc. for the nine months ended September 30, 2025, was $50.0 million, compared to $37.6 million in the prior year [184]. - For the three months ended September 30, 2025, net income attributable to Turning Point Brands, Inc. was $21.1 million, compared to $12.4 million for the same period in 2024, representing an increase of 70% [188]. Expenses - Selling, general, and administrative expenses increased by $15.0 million, or 50.5%, primarily due to increased shipping and selling costs related to modern oral sales [150]. - Selling, general, and administrative expenses increased by $33.4 million, or 38.0%, primarily due to increased shipping and selling costs related to modern oral sales [171]. - Consolidated operating income increased by $5.1 million, or 24.4%, but operating income as a percentage of net sales decreased to 21.8% [152]. - Consolidated operating income increased by $12.5 million, or 19.8%, but as a percentage of net sales decreased to 22.0% [174]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2025, was $32.5 million, a decrease of $12.4 million compared to the prior year period [196]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $28.4 million, an increase of $19.3 million compared to the prior year period, mainly due to the purchase of an option to acquire the Canadian distribution business for $8 million [197]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $148.3 million, an increase of $275.8 million compared to the prior year period, driven by proceeds from the ATM Program of $97.5 million [198]. - 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]. - As of September 30, 2025, the company had $201.2 million in cash and $66.6 million available under the 2023 ABL Facility, with no borrowings outstanding [191]. Debt and Financing - As of September 30, 2025, the Company had $293.4 million in long-term debt, consisting of the newly issued 2032 Notes [202]. - The Company closed a private offering of $250.0 million aggregate principal amount of 5.625% senior secured notes due 2026, with interest payable semi-annually [206]. - The company entered into an ATM Program to increase the aggregate dollar amount of shares of common stock it may sell by an additional $200 million, with gross proceeds of $100 million from shares sold between August 15, 2025, and September 11, 2025 [193]. - The 2023 ABL Facility allows the Company to draw up to $75.0 million, with a $40.0 million accordion feature, secured by all assets of the ABL Borrower [209]. - The Company incurred debt issuance costs of $7.1 million related to the 2032 Notes, amortized over the expected life of the notes [205]. - The Company has not drawn any borrowings under the 2023 ABL Facility but incurred debt issuance costs of $2.6 million related to it [214]. - The 2032 Notes Indenture includes covenants that restrict the Company from incurring additional indebtedness and paying dividends under certain conditions [204]. Assets and Liabilities - Total current assets as of September 30, 2025, were $396.436 million, compared to $349.405 million as of September 30, 2024 [218]. - Total liabilities as of September 30, 2025, were $384.695 million, an increase from $365.923 million as of September 30, 2024 [218]. - Cash and cash equivalents as of September 30, 2025, amounted to $201.189 million, up from $167.917 million in the previous year [218]. - Total stockholders' equity as of September 30, 2025, was $358.153 million, compared to $314.413 million as of September 30, 2024 [218]. - Current liabilities totaled $44,820 million, with accounts payable at $11,675 million [219]. - Goodwill on the balance sheet was recorded at $135,932 million [219]. Market and Economic Conditions - Inflation has negatively impacted purchasing power, but the company has managed to implement price increases where feasible [221]. - No material changes in exposure to foreign currency, credit risk, or interest rate sensitivity reported for the nine months ended September 30, 2025 [222][223][224].