Financial Data and Key Metrics Changes - Revenue increased 29% to $121 million for the fourth quarter, with adjusted EBITDA rising 14% to $30 million [3][15] - Gross margin was 55.9%, flat compared to the previous year, while SG&A expenses rose to $47.7 million, an increase of $3.1 million sequentially [15][17] - Free cash flow for the fourth quarter was $19.2 million, with cash at the end of the quarter totaling $222.8 million [17] Business Line Data and Key Metrics Changes - Modern Oral nicotine pouch net sales increased by 266% year-over-year, achieving total revenue of $41.3 million, now accounting for 34% of consolidated net sales, up from 12% a year ago [5][16][17] - Stoker's segment net sales increased 70% year-over-year to $81 million, with legacy Stoker's brands growing by 9% to $39.7 million [8][16] - Zig-Zag segment net sales decreased 13% year-over-year to $40 million, which was anticipated due to the focus on Modern Oral [9][16] Market Data and Key Metrics Changes - The nicotine pouch market is expected to approach or exceed $10 billion in manufacturer's revenue by the end of the decade, with the company targeting double-digit market share [7] - The company is expanding distribution for its brands, particularly in larger regional and national convenience store chains [5][8] Company Strategy and Development Direction - The company is focusing on significant investments in sales and marketing for its white pouch brands, with a goal to enhance consumer relationships and drive repeat purchases [4][8] - Key initiatives include reallocating resources, increasing sales force headcount, improving online presence, and expanding to international markets [8] - The company aims to qualify production lines at its new Louisville factory in the coming months to support growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2026, with guidance for Modern Oral gross revenue set at $220 million-$240 million [3][17] - The company anticipates continued growth in both existing consumer usage and new user acquisition in the nicotine pouch category [42] - Management acknowledged potential tax increases on nicotine pouches but noted that such changes would impact all manufacturers equally [45] Other Important Information - The company is committed to optimizing its supply chain and enhancing margins through improved freight management [25] - The company plans to invest between $3 million-$5 million for the full year to supplement its Modern Oral PMTAs [18] Q&A Session Summary Question: Investment opportunities in nicotine pouch growth - Management indicated that investments in sales and marketing are crucial for a successful launch of ALP in bricks and mortar in Q2 [22] Question: Domestic production outlook - Management expects to qualify production lines soon and will continue to use international partners to avoid supply chain constraints [24] Question: Timing of investment in Modern Oral - Investment will be lumpy throughout the year, with a focus on high ROI projects [28] Question: Store count ramp for ALP - Management expects store count growth for ALP to be similar to the early days of FR launch [30] Question: FR distribution opportunities - There are significant opportunities for store growth in both chain and independent environments [35] Question: Innovation in the category - Management emphasized the importance of winning with existing products while considering future flavor options [38] Question: Nicotine pouch consumption trends - Both existing consumers are using more and new users are entering the category, providing growth vectors [42] Question: Tax landscape for Modern Oral - Management noted that tax increases would impact all manufacturers equally and do not pose a disadvantage [45] Question: Revenue performance between FR and ALP - Both brands performed within expectations, with no specific breakdown provided [48]

Financial Data and Key Metrics Changes - Revenue increased 29% year-over-year to $121 million for Q4 2025, with adjusted EBITDA rising 14% to $30 million [3][14] - Gross margin was 55.9%, flat compared to the previous year, while SG&A expenses rose to $47.7 million, an increase of $3.1 million sequentially [14][16] - Free cash flow for Q4 was $19.2 million, with cash ending the quarter at $222.8 million [16] Business Line Data and Key Metrics Changes - Modern Oral nicotine pouch net sales surged 266% year-over-year, achieving total revenue of $41.3 million, now accounting for 34% of consolidated net sales, up from 12% a year ago [5][15][16] - Stoker's segment net sales increased 70% year-over-year to $81 million, with legacy Stoker's brands growing by 9% [8][15] - Zig-Zag segment net sales decreased 13% year-over-year to $40 million, aligning with expectations due to a focus on Modern Oral [9][15] Market Data and Key Metrics Changes - The nicotine pouch market is projected to approach or exceed $10 billion in manufacturer's revenue by the end of the decade, with the company targeting double-digit market share [6] - The company is expanding distribution for its brands, particularly in larger regional and national convenience store chains [5][6] Company Strategy and Development Direction - The company is prioritizing investments in Modern Oral brands, reallocating sales and marketing resources, and expanding its sales force [7][10] - Significant investments are being made in manufacturing capabilities, with the first production lines at a new factory expected to qualify soon [8][10] - The company aims to build lasting consumer relationships through front-loaded investments, anticipating consistent repeat purchasing [4][6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2026, with guidance for Modern Oral gross revenue set at $220 million-$240 million [3][16] - The company is focused on optimizing its route to market strategy and enhancing brand identities to capture market share [6][10] - Management acknowledged the potential impact of state-level tax increases on nicotine pouches but emphasized a level playing field across manufacturers [42][43] Other Important Information - The company is launching a new flanker brand, Stoker's Proud, aimed at value-seeking consumers [12] - The company is committed to enhancing its online presence and pursuing brand partnerships to strengthen its market position [7][10] Q&A Session Summary Question: Investment opportunities in nicotine pouch growth - Management indicated readiness to invest in sales and marketing for nicotine pouch growth, particularly for the launch of ALK in Q2 [20][21] Question: Domestic production outlook - Management expects to qualify production lines soon and will continue to use international partners to avoid supply chain constraints [22][23] Question: Timing of investment in Modern Oral - Investment will be lumpy throughout the year, with a focus on high ROI projects [27][28] Question: FR distribution opportunities - Management sees substantial opportunities for store growth in both chain and independent environments [34] Question: Innovation in the category - The company is focused on winning with existing products while considering future flavor options as the market grows [36][37] Question: Nicotine pouch consumption trends - Both existing consumers are using more, and new users are entering the category, providing growth vectors [40][41] Question: Tax landscape impact - Management believes that tax increases will affect all manufacturers equally and does not see it as a disadvantage [42][43] Question: Revenue performance between FR and ALP - Both brands performed within expectations, with no specific breakdown provided [46][47] Question: Distribution balance between national chains and existing locations - Management is focused on expanding distribution in both new and existing stores, leveraging investments in the sales force [49][50]