Turning Point Brands Q3 Net Sales Stagnate YoY, What About Adjusted EBITDA?

Turning Point Brands, Inc. TPB, Q3 2022 net sales decreased 1.9% to $107.8 million compared to 109.9 million in Q3 2021.

Q3 2022 Financial Highlights

• Gross profit decreased 2.9% year-over-year to $52.7 million.

• Net income decreased 14.3% year-over-year to $11.5 million.

• Adjusted EBITDA decreased 6.7% year-over-year to $24.5 million.

• Diluted EPS of $0.60 and adjusted diluted EPS of $0.72 compared to $0.65 and $0.72 in the same period one year ago, respectively.

• Total gross debt as of September 30, 2022 was $422.5 million. The corresponding net debt (total gross debt less cash) at September 30, 2022 was $316.8 million.

• The company ended the quarter with total liquidity of $127.1 million, comprised of $105.7 million in cash and $21.4 million of revolving credit facility capacity.

• During the quarter, the company spent $7.6 million to repurchase 307,207 shares at an average price of $24.78 per share.

“Zig-Zag and Stoker’s segments demonstrated strong double-digit growth during the quarter despite a challenging economic backdrop with inflationary pressures continuing to impact consumers. Zig-Zag benefited from solid growth in the U.S. papers and Canadian businesses during the quarter and the successful launch of CLIPPER lighters. Meanwhile, Stoker’s MST experienced continued share gains driven by consumer trade-down to the value category. NewGen sales decreased slightly compared to the previous quarter and the segment remained profitable as we monitor ongoing regulatory developments,” stated Graham Purdy, president and CEO.

“We continued to return capital to our shareholders during the quarter while maintaining a strong cash balance that provides us with the ability to navigate the current financing environment. While our competitive position remains strong and we outperformed our markets during the quarter, it is prudent to adjust our outlook for the year in light of the current economic environment. After 18 years with the company, I am very excited to have the opportunity to lead our team to drive organic growth and create shareholder value,” continued Purdy,

2022 Outlook

Latest Startup Investment Opportunities:

The company expects the following full-year 2022 results:

• Zig-Zag Products sales of $186 to $191 million (compared to previous outlook of $193 to $200 million)

• Stoker's Products sales of $128 to $132 million (compared to previous outlook of $127 to $133 million)

• Consolidated adjusted EBITDA of $96 to $99 million (compared to previous outlook of $97 to $103 million)

Photo by Mackenzie Marco on Unsplash

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