TPB’s Quarter ‘In Line With Expectations’

Turning Point Brands announced financial results for the first quarter ended March 31, 2022.

Net sales for the first quarter of 2022 decreased 6.3 percent to $100.9 million compared to the previous year. Net sales for Zig-Zag and Stoker’s Products increased 10.1 percent over 2021. Gross profit decreased 2.8 percent to $51.8 million while net income decreased 6.7 percent to $11 million.

“Our first- quarter results were in line with our expectations as we continued to grow our market share for both Zig-Zag and Stoker’s while navigating a difficult consumer and regulatory environment to drive profitability in each of our segments, including NewGen. Sales decreased 6 percent from the previous year driven by a 37 percent decline in NewGen sales but showed double-digit growth excluding NewGen,” said Yavor Efremov, president and CEO of Turning Point Brands, in a statement.

“Zig-Zag delivered another strong growth quarter led by our U.S. papers business, which built on its market-leading share during the quarter. At the same time, Stoker’s maintained its growth trajectory driven by double-digit growth in the moist snuff tobacco business, which benefited from consumer trade-down as a leading value brand. Despite the expected sales decline, NewGen maintained positive profitability during the quarter while improving the distribution reach for its regulated products.”

“We continue to monitor FDA developments. While added regulation may cause short-term disruption, this is a necessary step to fully regulate the industry, create a level playing field and provide consumers with additional reduced-risk alternatives to cigarettes,” continued Efremov.

“We maintain a strong balance sheet that is allowing us to deploy a substantial amount of our free cash flow toward share repurchases, which continued during the quarter. While inflationary pressures, including a spike in gas prices, are impacting the consumer wallet, we remain favorably positioned as we continue to execute and outpace the overall industry. In addition to solid execution on the business side, we have completed both the ERP and CRM scopes we discussed on our last earnings call. I am particularly proud of the fact that the organization undertook a detailed review of the business with heavy involvement from every level of the company while delivering a solid quarter.”