Financial Data and Key Metrics Changes - Revenue increased by 25% to $116.6 million for the quarter, with Modern Oral revenue contributing $30.1 million, accounting for 26% of total revenue [4][20] - Adjusted EBITDA rose by 15% to $30.5 million, with a margin of 26.1% [5][16] - Gross margin improved to 57.1%, up 310 basis points year over year and 110 basis points sequentially [16] Business Line Data and Key Metrics Changes - Zig Zag sales decreased by 6.9% year over year to approximately $47 million, while Stoker's revenue increased by 63% to about $70 million [17][18] - Modern Oral nicotine pouch sales surged nearly 8 times year over year, achieving total revenue of $30.1 million, reflecting a 35% sequential increase [6][19] - The MST portfolio net sales grew by 4% year over year to $29 million, with Stoker's chewing tobacco gaining market share [18] Market Data and Key Metrics Changes - Analysts expect the nicotine pouch category to approach $10 billion in manufacturers' revenue by the end of the decade [6] - The company aims for a long-term target of double-digit market share in the nicotine pouch category [6] Company Strategy and Development Direction - The company is prioritizing investments in the white pouch category while maintaining strong cash flow from heritage brands [7] - Key initiatives include expanding the sales force, enhancing online presence, and increasing investments in chain accounts [12] - The company plans to double the size of its sales force by 2026, with progress ahead of schedule [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the Modern Oral category and the positive consumer feedback received [11] - The company is managing tariff headwinds and is focused on controlling costs while investing in U.S. manufacturing capabilities [36][37] - Management remains optimistic about the premium MST business and its potential for growth despite prioritizing Modern Oral [63] Other Important Information - The company increased its full-year adjusted EBITDA guidance to a range of $110 million to $114 million [5][20] - Capital expenditures for the quarter were $3.9 million, with budgeted CapEx for 2025 expected to be between $4 million and $5 million [21] Q&A Session Summary Question: Plans for ALP brick and mortar rollout - Management indicated excitement about online results and confidence in transitioning to brick and mortar, with expectations for gradual store acquisition [26][27] Question: Slotting fees and distribution expansion - Management acknowledged the competitive nature of the market and the necessity of investing in slotting fees to gain access to chains [38] Question: Gross margins and future expectations - Management noted healthy margins in the Stoker's business and expressed optimism about the margin profile of the Modern Oral segment despite potential lumpiness [42][45] Question: Modern Oral promotional environment - Management highlighted the competitive promotional landscape and expressed excitement about the opportunity to build brand awareness in the category [52][54] Question: Legacy MST business growth - Management emphasized the synergy between Modern Oral and MST distribution, indicating strong potential for continued growth in the MST segment [61][63]