Financial Data and Key Metrics Changes - Revenue increased by 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 by 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 by 13% year-over-year to $40 million, which was anticipated [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 focusing on expanding distribution in larger regional and national convenience store chains, with significant investments planned for 2026 [8] Company Strategy and Development Direction - The company is prioritizing investments in its white pouch brands and reallocating sales and marketing resources to enhance brand presence [8][10] - Key initiatives include increasing sales force headcount, improving online presence, and expanding into international markets [8] - The company aims to build lasting consumer relationships through front-loaded investments, expecting consistent repeat purchasing [4] 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 first quarter 2026 adjusted EBITDA to be between $24 million and $27 million, reflecting increased investment in sales and marketing [4][17] - Management noted that both existing consumers are using more nicotine pouches and new users are entering the category, providing growth vectors [42] Other Important Information - The company is making significant investments in domestic production, with initial production lines expected to be qualified in the coming months [24] - The company is also focused on optimizing freight costs to enhance margins [25] 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 [21][22] Question: Domestic production outlook - Management expects to qualify production lines soon and will continue to use an Indian partner to supplement growth, with no anticipated supply chain constraints [23][24] Question: Timing of investment in Modern Oral - Investment will be lumpy throughout the year, with high ROI projects prioritized [27][28] Question: FR distribution opportunities - Management sees substantial store opportunities in both chain environments and independent customers, with expectations for continued store growth [33][35] Question: Innovation in the category - Management emphasized winning with existing products while considering future investments in additional flavor options [37][38] Question: Nicotine pouch consumption growth - Both existing consumers using more and new users entering the category are expected to drive growth [41][42] Question: Tax landscape impact - Management believes that tax increases will affect all manufacturers equally and does not anticipate a significant disadvantage [44][45] Question: Revenue performance between FR and ALP - Both brands performed within expectations, with no specific breakdown provided [47][48] Question: Distribution balance between national chains and existing locations - Management sees significant opportunities in both areas and plans to invest in trade programs and strategic partnerships [50][51]