Turning Point Brands announced financial results for the first quarter ended March 31, 2023.
Total consolidated net sales increased 0.1 percent to $101 million from the first quarter of 2022. Zig-Zag product net sales decreased by 8.3 percent from the previous year due to anticipated reduction of trade inventory during the quarter. Stoker’s product net sales increased by 6.2 percent. Creative Distribution Solutions net sales increased by 8 percent.
Gross profit decreased 6.1 percent to $48.6 million, and net income decreased 30.9 percent to $7.6 million. Adjusted net income decreased 18.1 percent to $11.9 million, and adjusted EBITDA decreased 17.7 percent to $20.8 million.
“We are encouraged by our first-quarter operating results, which fell within our expectations,” said Turning Point Brands President and CEO Graham Purdy in a statement. “The Zig-Zag segment had an anticipated inventory reduction with certain wholesale customers but saw strong performance from the alternative channel and the rollout of Clipper lighters. With the adjustment in trade inventory, Zig-Zag is now well positioned to demonstrate growth for the balance of the year.
“Stoker’s had a solid quarter of performance as the value proposition of Stoker’s MST and looseleaf led to another quarter of market share gains. We opportunistically purchased another $13.9 million in aggregate principal amount of our convertible notes during the first quarter while maintaining a strong cash balance. We are currently maintaining our annual guidance as we focus on executing against our plan for the balance of the year.”