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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Turning Point Brands Inc | NYSE:TPB | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.06 | 0.10% | 60.71 | 61.61 | 60.33 | 61.29 | 115,508 | 01:00:00 |
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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|
|
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
Trading Symbol(s)
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Name of each exchange on which registered
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 2.02. |
Results of Operations and Financial Condition.
|
| Item 7.01. |
Regulation FD Disclosure.
|
| Item 9.01. |
Financial Statements and Exhibits.
|
| (d) |
Exhibits
|
|
Press Release dated November 07, 2024
|
||
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
TURNING POINT BRANDS, INC.
|
|||
|
Dated: November 07, 2024
|
By:
|
/s/ Brittani N. Cushman
|
|
|
Brittani N. Cushman
|
|||
|
Senior Vice President, General Counsel and Secretary
|
|||
| • |
Q3 2024 Adjusted EBITDA of $27.2 million, up 11% over prior year
|
| • |
Zig-Zag and Stoker’s Products Net Sales for Q3 2024 Increased 8% Year-Over-Year
|
| • |
Company increases full-year 2024 adjusted EBITDA guidance to $101 to $103 million
|
| • |
Total consolidated net sales increased 3.8% to $105.6 million
|
| o |
Zig-Zag Products net sales increased 5.5%
|
| o |
Stoker’s Products net sales increased 12.1%
|
| o |
Creative Distribution Solutions net sales decreased 17.4%
|
| • |
Gross profit increased 4.0% to $53.7 million
|
| • |
Net income increased 14.3% to $12.4 million
|
| • |
Adjusted net income increased 9.8% to $15.9 million (see Schedule B for a reconciliation to net income)
|
| • |
Adjusted EBITDA increased 11.3% to $27.2 million (see Schedule A for a reconciliation to net income)
|
| • |
Diluted EPS of $0.68 and Adjusted Diluted EPS of $0.87 compared to $0.58 and $0.76, respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted
EPS)
|
| • |
$1.2 million of FDA PMTA-related expenses for modern oral products compared to $0.3 million in the year-ago period; and
|
| • |
$0.9 million of transaction related costs compared to $0.1 million in the year-ago period
|
|
Three Months Ended September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Net sales (1)
|
$
|
105,617
|
$
|
101,722
|
||||
|
Cost of sales
|
51,918
|
50,100
|
||||||
|
Gross profit
|
53,699
|
51,622
|
||||||
|
Selling, general, and administrative expenses
|
33,169
|
31,385
|
||||||
|
Operating income
|
20,530
|
20,237
|
||||||
|
Interest expense, net
|
3,773
|
3,984
|
||||||
|
Investment (gain) loss
|
(203
|
)
|
2,101
|
|||||
|
Gain on extinguishment of debt
|
-
|
(481
|
)
|
|||||
|
Income before income taxes
|
16,960
|
14,633
|
||||||
|
Income tax expense
|
4,601
|
3,767
|
||||||
|
Consolidated net income
|
12,359
|
10,866
|
||||||
|
Net (loss) income attributable to non-controlling interest
|
(16
|
)
|
35
|
|||||
|
Net income attributable to Turning Point Brands, Inc.
|
$
|
12,375
|
$
|
10,831
|
||||
|
Basic income per common share:
|
||||||||
|
Net income attributable to Turning Point Brands, Inc.
|
$
|
0.70
|
$
|
0.62
|
||||
|
Diluted income per common share:
|
||||||||
|
Net income attributable to Turning Point Brands, Inc.
|
$
|
0.68
|
$
|
0.58
|
||||
|
Weighted average common shares outstanding:
|
||||||||
|
Basic
|
17,722,855
|
17,595,980
|
||||||
|
Diluted
|
18,448,720
|
20,098,450
|
||||||
|
(unaudited)
|
||||||||
|
September 30,
|
December 31,
|
|||||||
|
ASSETS
|
2024
|
2023
|
||||||
|
Current assets:
|
||||||||
|
Cash
|
$
|
33,557
|
$
|
117,886
|
||||
|
Accounts receivable, net of allowances of $59 in 2024 and $78 in 2023
|
10,582
|
9,989
|
||||||
|
Inventories, net
|
106,416
|
98,960
|
||||||
|
Other current assets
|
34,197
|
40,781
|
||||||
|
Total current assets
|
184,752
|
267,616
|
||||||
|
Property, plant, and equipment, net
|
26,082
|
25,300
|
||||||
|
Deferred income taxes
|
919
|
1,468
|
||||||
|
Right of use assets
|
10,788
|
11,480
|
||||||
|
Deferred financing costs, net
|
1,984
|
2,450
|
||||||
|
Goodwill
|
136,413
|
136,250
|
||||||
|
Other intangible assets, net
|
78,621
|
80,942
|
||||||
|
Master Settlement Agreement (MSA) escrow deposits
|
29,482
|
28,684
|
||||||
|
Other assets
|
18,968
|
15,166
|
||||||
|
Total assets
|
$
|
488,009
|
$
|
569,356
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
13,436
|
$
|
8,407
|
||||
|
Accrued liabilities
|
30,475
|
33,635
|
||||||
|
Current portion of long-term debt
|
-
|
58,294
|
||||||
|
Total current liabilities
|
43,911
|
100,336
|
||||||
|
Notes payable and long-term debt
|
248,282
|
307,064
|
||||||
|
Lease liabilities
|
9,057
|
9,950
|
||||||
|
Total liabilities
|
301,250
|
417,350
|
||||||
|
Commitments and contingencies
|
||||||||
|
Stockholders' equity:
|
||||||||
|
Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0-
|
-
|
-
|
||||||
|
Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,167,180 issued shares and 17,716,847 outstanding shares at
September 30, 2024, and 19,922,137 issued shares and 17,605,677 outstanding shares at December 31, 2023
|
202
|
199
|
||||||
|
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0-
|
-
|
-
|
||||||
|
Additional paid-in capital
|
123,833
|
119,075
|
||||||
|
Cost of repurchased common stock (2,450,333 shares at September 30, 2024, and 2,316,460 shares at December 31, 2023)
|
(82,263
|
)
|
(78,093
|
)
|
||||
|
Accumulated other comprehensive loss
|
(2,112
|
)
|
(2,648
|
)
|
||||
|
Accumulated earnings
|
146,014
|
112,443
|
||||||
|
Non-controlling interest
|
1,085
|
1,030
|
||||||
|
Total stockholders' equity
|
186,759
|
152,006
|
||||||
|
Total liabilities and stockholders' equity
|
$
|
488,009
|
$
|
569,356
|
||||
|
Nine Months Ended September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Consolidated net income
|
$
|
37,455
|
$
|
27,916
|
||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Gain on extinguishment of debt
|
-
|
(1,858
|
)
|
|||||
|
Loss on sale of property, plant, and equipment
|
38
|
34
|
||||||
|
Gain on MSA investments
|
(14
|
)
|
-
|
|||||
|
Depreciation and other amortization expense
|
3,393
|
2,388
|
||||||
|
Amortization of other intangible assets
|
2,337
|
2,315
|
||||||
|
Amortization of deferred financing costs
|
1,947
|
1,795
|
||||||
|
Deferred income tax expense
|
349
|
694
|
||||||
|
Stock compensation expense
|
5,720
|
4,660
|
||||||
|
Noncash lease income
|
(317
|
)
|
(48
|
)
|
||||
|
Loss on investments
|
2,722
|
11,162
|
||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable
|
(412
|
)
|
(2,112
|
)
|
||||
|
Inventories
|
(7,281
|
)
|
3,036
|
|||||
|
Other current assets
|
3,075
|
(1,384
|
)
|
|||||
|
Other assets
|
(1,031
|
)
|
(5,110
|
)
|
||||
|
Accounts payable
|
5,019
|
2,865
|
||||||
|
Accrued liabilities and other
|
(3,679
|
)
|
(6,348
|
)
|
||||
|
Net cash provided by operating activities
|
$
|
49,321
|
$
|
40,005
|
||||
|
Cash flows from investing activities:
|
||||||||
|
Capital expenditures
|
$
|
(3,516
|
)
|
$
|
(4,206
|
)
|
||
|
Purchases of investments
|
(8,865
|
)
|
(200
|
)
|
||||
|
Proceeds from sale of investments
|
4,520
|
-
|
||||||
|
Purchases of non-marketable equity investments
|
(1,250
|
)
|
-
|
|||||
|
Proceeds on the sale of property, plant and equipment
|
3
|
3
|
||||||
|
MSA escrow deposits, net
|
44
|
-
|
||||||
|
Net cash used in investing activities
|
$
|
(9,064
|
)
|
$
|
(4,403
|
)
|
||
|
Cash flows from financing activities:
|
||||||||
|
Convertible Senior Notes repurchased
|
$
|
-
|
$
|
(41,794
|
)
|
|||
|
Payment of Convertible Senior Notes
|
(118,541
|
)
|
-
|
|||||
|
Proceeds from call options
|
-
|
114
|
||||||
|
Payment of financing costs
|
(133
|
)
|
-
|
|||||
|
Payment of dividends
|
(3,644
|
)
|
(3,354
|
)
|
||||
|
Exercise of options
|
1,341
|
419
|
||||||
|
Redemption of options
|
(328
|
)
|
(346
|
)
|
||||
|
Redemption of restricted stock units
|
(840
|
)
|
-
|
|||||
|
Redemption of performance based restricted stock units
|
(1,212
|
)
|
(995
|
)
|
||||
|
Common stock repurchased
|
(4,170
|
)
|
-
|
|||||
|
Net cash used in financing activities
|
$
|
(127,527
|
)
|
$
|
(45,956
|
)
|
||
|
Net decrease in cash
|
$
|
(87,270
|
)
|
$
|
(10,354
|
)
|
||
|
Effect of foreign currency translation on cash
|
$
|
(29
|
)
|
$
|
22
|
|||
|
Cash, beginning of period:
|
||||||||
|
Unrestricted
|
$
|
117,886
|
$
|
106,403
|
||||
|
Restricted
|
4,929
|
4,929
|
||||||
|
Total cash at beginning of period
|
$
|
122,815
|
$
|
111,332
|
||||
|
Cash, end of period:
|
||||||||
|
Unrestricted
|
$
|
33,557
|
$
|
96,071
|
||||
|
Restricted
|
1,959
|
4,929
|
||||||
|
Total cash at end of period
|
$
|
35,516
|
$
|
101,000
|
||||
| Three Months Ended | ||||||||
|
September 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Net income attributable to Turning Point Brands, Inc.
|
$
|
12,375
|
$
|
10,831
|
||||
|
Add:
|
||||||||
|
Interest expense, net
|
3,773
|
3,984
|
||||||
|
Gain on extinguishment of debt
|
-
|
(481
|
)
|
|||||
|
Income tax expense
|
4,601
|
3,767
|
||||||
|
Depreciation expense
|
981
|
782
|
||||||
|
Amortization expense
|
1,204
|
844
|
||||||
|
EBITDA
|
$
|
22,934
|
$
|
19,727
|
||||
|
Components of Adjusted EBITDA
|
||||||||
|
Corporate and CDS restructuring (a)
|
186
|
190
|
||||||
|
ERP/CRM (b)
|
154
|
138
|
||||||
|
Stock options, restricted stock, and incentives expense (c)
|
1,769
|
1,824
|
||||||
|
Transactional expenses and strategic initiatives (d)
|
873
|
76
|
||||||
|
FDA PMTA (e)
|
1,242
|
275
|
||||||
|
Non-cash asset impairment (f)
|
-
|
2,173
|
||||||
|
Adjusted EBITDA
|
$
|
27,158
|
$
|
24,403
|
||||
|
(a)
|
Represents costs associated with corporate and CDS restructuring, including severance.
|
|
(b)
|
Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses.
|
|
(c)
|
Represents non-cash stock options, restricted stock, incentives expense and Solace performance stock units.
|
|
(d)
|
Represents the fees incurred for transaction expenses.
|
|
(e)
|
Represents costs associated with applications related to FDA premarket tobacco product application ("PMTA"). The PMTA regime requires the
Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a onetime
resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical
one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit
additional PMTA applications for any new product lines after the submission for the remaining two are complete.
|
|
(f)
|
Represents impairment of investment assets.
|
|
(unaudited)
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||||||||||||||||||||||
|
September 30, 2024
|
September 30, 2023
|
|||||||||||||||||||||||||||||||||||||||
|
|
Income before income taxes
|
Income tax expense (h)
|
Net loss attributable to non-controlling interest
|
Adjusted Net Income
|
Adjusted Diluted EPS
|
Income before income taxes
|
Income tax expense (h)
|
Net loss attributable to non-controlling interest
|
Net Income
|
Diluted EPS
|
||||||||||||||||||||||||||||||
|
GAAP Net Income and Diluted EPS
|
$
|
16,960
|
$
|
4,601
|
$
|
(16
|
)
|
$
|
12,375
|
$
|
0.68
|
$
|
14,633
|
$
|
3,767
|
$
|
35
|
$
|
10,831
|
$
|
0.58
|
|||||||||||||||||||
|
Gain on extinguishment of debt (a)
|
-
|
-
|
-
|
-
|
-
|
(481
|
)
|
(124
|
)
|
-
|
(357
|
)
|
(0.02
|
)
|
||||||||||||||||||||||||||
|
Corporate restructuring (b)
|
186
|
50
|
-
|
136
|
0.01
|
190
|
49
|
-
|
141
|
0.01
|
||||||||||||||||||||||||||||||
|
ERP/CRM (c)
|
154
|
42
|
-
|
112
|
0.01
|
138
|
36
|
-
|
102
|
0.01
|
||||||||||||||||||||||||||||||
|
Stock options, restricted stock, and incentives expense (d)
|
1,769
|
480
|
-
|
1,289
|
0.07
|
1,824
|
470
|
-
|
1,354
|
0.07
|
||||||||||||||||||||||||||||||
|
Transactional expenses and strategic initiatives (e)
|
873
|
237
|
-
|
636
|
0.03
|
76
|
20
|
-
|
56
|
0.00
|
||||||||||||||||||||||||||||||
|
FDA PMTA (f)
|
1,242
|
337
|
-
|
905
|
0.05
|
275
|
71
|
-
|
204
|
0.01
|
||||||||||||||||||||||||||||||
|
Non-cash asset impairment (g)
|
-
|
-
|
-
|
-
|
-
|
2,173
|
559
|
-
|
1,614
|
0.08
|
||||||||||||||||||||||||||||||
|
Tax benefit (i)
|
-
|
(494
|
)
|
-
|
494
|
0.03
|
-
|
(575
|
)
|
-
|
575
|
0.03
|
||||||||||||||||||||||||||||
|
Adjusted Net Income and Adjusted Diluted EPS
|
$
|
21,184
|
$
|
5,253
|
$
|
(16
|
)
|
$
|
15,947
|
$
|
0.87
|
$
|
18,828
|
$
|
4,272
|
$
|
35
|
$
|
14,521
|
$
|
0.76
|
|||||||||||||||||||
|
Totals may not foot due to rounding
|
|
(a)
|
Represents gain on extinguishment of debt.
|
|
(b)
|
Represents costs associated with corporate and CDS restructuring, including severance.
|
|
(c)
|
Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses.
|
|
(d)
|
Represents non-cash stock options, restricted stock, incentives expense and Solace PRSUs.
|
|
(e)
|
Represents the fees incurred for transaction expenses.
|
|
(f)
|
Represents costs associated with applications related to FDA premarket tobacco product application ("PMTA"). The PMTA regime requires the
Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a onetime
resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical
one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit
additional PMTA applications for any new product lines after the submission for the remaining two are complete.
|
|
(g)
|
Represents impairment of investment assets.
|
|
(h)
|
Income tax expense calculated using the effective tax rate for the quarter of 27.1% in 2024 and 25.7% in 2023.
|
|
(i)
|
Represents adjustment from quarterly tax rate to annual projected tax rate of 25% in 2024 and 23% in 2023.
|
|
Consolidated
|
Zig-Zag Products
|
Stoker's Products
|
Creative Distribution Solutions
|
|||||||||||||||||||||||||||||
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
3rd Quarter
|
|||||||||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||||||||||||||
|
Net sales
|
$
|
105,617
|
$
|
101,722
|
$
|
49,324
|
$
|
46,754
|
$
|
41,380
|
$
|
36,916
|
$
|
14,913
|
$
|
18,052
|
||||||||||||||||
|
Gross profit
|
$
|
53,699
|
$
|
51,622
|
$
|
27,327
|
$
|
26,745
|
$
|
23,071
|
$
|
20,572
|
$
|
3,301
|
$
|
4,305
|
||||||||||||||||
|
Operating income (loss)
|
$
|
20,530
|
$
|
20,237
|
$
|
17,378
|
$
|
16,672
|
$
|
17,162
|
$
|
15,703
|
$
|
(278
|
)
|
$
|
(460
|
)
|
||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||||||||||
|
Corporate restructuring
|
186
|
190
|
-
|
-
|
-
|
-
|
-
|
190
|
||||||||||||||||||||||||
|
ERP/CRM
|
154
|
138
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
|
Transactional expenses and strategic initiatives
|
873
|
76
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
|
FDA PMTA
|
1,242
|
275
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
|
Adjusted operating income (loss)
|
$
|
22,985
|
$
|
20,916
|
$
|
17,378
|
$
|
16,672
|
$
|
17,162
|
$
|
15,703
|
$
|
(278
|
)
|
$
|
(270
|
)
|
||||||||||||||
Document and Entity Information |
Nov. 07, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Nov. 07, 2024 |
| Entity File Number | 001-37763 |
| Entity Registrant Name | TURNING POINT BRANDS, INC. |
| Entity Central Index Key | 0001290677 |
| Entity Incorporation, State or Country Code | DE |
| Entity Tax Identification Number | 20-0709285 |
| Entity Address, Address Line One | 5201 Interchange Way |
| Entity Address, City or Town | Louisville |
| Entity Address, State or Province | KY |
| Entity Address, Postal Zip Code | 40229 |
| City Area Code | 502 |
| Local Phone Number | 778-4421 |
| Title of 12(b) Security | Common Stock, $0.01 par value |
| Trading Symbol | TPB |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
1 Year Turning Point Brands Chart |
1 Month Turning Point Brands Chart |
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