Turning Point Brands Q2 2022 Net Sales Decreased 16.1% YoY, What About Net Income?

Turning Point Brands, Inc. TPB released financial results for the second quarter ended June 30, 2022, revealing net sales decreased 16.1%, compared to Q2 2021 to $102.9 million.

Q2 2022 vs. Q2 2021

  • Gross profit decreased 14.2% to $51.5 million.

  • Net income decreased 64.7% to $5.4 million.

  • Adjusted EBITDA decreased 17.6% to $24.7 million.

  • Diluted EPS of $0.30 and adjusted Diluted EPS of $0.70 as compared to $0.73 and $0.84 in the same period one year ago, respectively.

“We are pleased with the stable performance of both the Zig-Zag and Stoker’s segments during the quarter in light of a heightened inflationary environment for our customers with rising prices at the pump impacting consumer traffic in convenience stores. While overall sales decreased 16 percent from the previous year, Zig-Zag and Stoker’s sales were steady despite weakness in the wraps and loose leaf subsegments. Zig-Zag maintained its leading positions in both the roll-your-own paper and cigar wraps markets while Stoker’s MST experienced accelerated share gains driven by consumer trade-down to the value category. Despite NewGen revenue decreasing 45 percent from last year, the segment remained relatively stable from the previous quarter and profitable as we continue to monitor FDA regulatory developments,” stated Yavor Efremov, president and CEO. “We continued to deploy a substantial amount of our free cash flow towards share repurchases during the quarter while maintaining a strong balance sheet providing us with optionality on further capital deployment.”

Total gross debt as of June 30, 2022 was $422.5 million. The corresponding net debt at June 30, 2022 was $315.1 million. The company ended the quarter with total liquidity of $128.8 million, comprised of $107.4 million in cash and $21.4 million of revolving credit facility capacity.

2022 Outlook

Due to the uncertain macro environment and slower than expected improvement in its NewGen products segment, the company now expects the following full-year 2022 results:

  • Zig-Zag products sales of $193 to $200 million.

  • Stoker’s products sales of $127 to $133 million.

  • Consolidated adjusted EBITDA of $97 to $103 million.

  • Photo by Jeff W on Unsplash

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