Category: Financial

Founders Invest in Charlie’s Holdings

Photo: Tobacco Reporter archive
Charlie’s Holdings has raised $3 million through the private sale of 351,669,883 shares of common stock to the company’s founders, Brandon Stump, CEO, and Ryan Stump, chief operating officer, the company announced. Charlie’s Holdings intends to use the proceeds to drive growth, facilitate product launches, increase working capital, retire outstanding debt and for other general corporate purposes.
“The extensive process required to compile and submit a comprehensive premarket tobacco product application (PMTA) to the FDA will ultimately prove a huge differentiating factor for Charlie’s, but it was also very expensive,” said Jeff Fox, a member of Charlie’s board of directors.
“Charlie’s invested nearly $5 million for its initial PMTA submission, and the company was in need of additional capital. After lengthy negotiations with numerous other potential investors did not produce acceptable terms, we are pleased that our founders, Brandon and Ryan Stump, chose to personally fund this $3 million common stock only investment.”
After lengthy negotiations with numerous other potential investors did not produce acceptable terms, we are pleased that our founders, Brandon and Ryan Stump, chose to personally fund this $3 million common stock only investment.
Jeff Fox, member of Charlie’s board of directors
Chief Financial Officer David Allen said the proceeds from the private placement will strengthen the company’s balance sheet, accelerate European growth, allow for expansion into the Middle East and facilitate the company reaching several important near-term milestones, including the FDA’s anticipated announcement of Charlie’s successful PMTA.
“Such an accomplishment will allow Charlie’s to benefit tremendously as one of only a select group of companies operating responsibly in the premium e-liquid product space,” said Allen. “Combined with our international growth, a domestic PMTA approval will dramatically increase Charlie’s sales, profits and market share. We expect 2021 will be a very exciting year for our shareholders.”
April 5, 2021
Imperial Expects Results in Line With Guidance

Photo: Casimirokt | Dreamstime.com
Imperial Brands is on track to deliver full-year results in line with the guidance it gave in November, with low-to-mid single-digit organic adjusted operating profit growth at constant currency, the company announced in a trading update.
First half group net revenue is expected to grow by at least 1 percent on an organic constant currency basis, driven by continued strong pricing in tobacco as well as some benefit from growth in next-generation product (NGP) revenues against a weak comparator period.
“In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in [the] U.S., U.K. and Spain more than offsetting declines in Germany and Australia,” the company wrote in a statement. “We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time. Overall tobacco volumes are in line with expectations, although Covid-19 continues to affect consumer buying patterns across different channels and markets.
“In NGP, our clear focus is to improve performance, returns and capabilities. Our preparations for market trials in vapor and heated-tobacco later this year are on track.”
Imperial Brands expects first half group adjusted organic operating profit growth to be at least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased logistics profit. Tobacco operating profit has been impacted by a lower duty windfall in Australia and the impact of U.S. trade inventories following the higher wholesaler purchases in March 2020 to meet Covid-19 pantry loading demand.
“Full-year adjusted group operating profit will reflect increased investment consistent with our strategic plans and is expected to be in line with our guidance for low-mid single digit organic growth at constant currency,” the company wrote.
The interim results for the six months ended March 31, 2021, will be announced on May 18, 2021.
March 30, 2021
Prospect of Vapor Regs Boosts China Tobacco

Photo: Shenzhen Smoore Technology
Chinese stocks related to the traditional tobacco business rose following suggestions that China would regulate e-cigarettes like tobacco products.
Cigarette packaging provider Letong Chemical and cigarette printing and filter maker Shaanxi Jinye Sci Tech & Education surged by the daily cap of 10 percent, according to the South China Morning Post.
By contrast, vapor companies tanked. Smoore lost HKD106 billion in market cap while RELX Technology shed $14.45 billion on the New York Stock Exchange immediately after the announcement.
On March 22, China’s Ministry of Industry and Information Technology and the State Tobacco Monopoly Administration released a proposed policy that aims to address tobacco product quality issues and false advertising. Without providing details, the agencies indicated that the changes would also apply to vapor products. The changes are currently subject to a public consultation that ends April 22.
Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing will help raise standards for the devices worldwide.
Kaival Innovations Group
With around 300 million smokers, China is the world’s largest tobacco market and the world’s largest potential market for vapor products. iiMedia Research estimates that the Chinese e-cigarette market could reach CNY10 billion ($1.53 billion) in 2021. There were more than 170,000 vapor companies as of February 2021. The market is also expected to grow in the future year.
In 2019, Chinese authorities banned e-cigarettes from online shopping channels. The restrictions prompted e-cigarette companies to invest significantly in developing physical stores across the country. RELX Technology, for example, received 30 percent of its revenues from online sales prior to the ban. In January 2020, the company pledged to invest more than CNY500 million over the three years to open 10,000 authorized sellers in China.
Some vapor companies welcomed the prospect of greater supervision over the e-cigarette sector in China. U.S.-headquartered Kaival Innovations Group, which distributes the Bidi Stick brand, said the announcement would have no effect on its operations.
“Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing [in China] will help raise standards for the devices worldwide,” the company wrote in a press release.
March 25, 2021
KT&G Seeks to Generate Half of its Sales Abroad
KT&G seeks to generate half of sales from abroad by 2025, according to the Yonhap News Agency.
Currently, KT&G earns 40 percent of its tobacco sales from exports.
The company operates sales subsidiaries in five countries—Russia, Indonesia, Turkey, Taiwan and the United States.
In 2020, its sales rose 6.8 percent to a record KRW5.3 trillion ($4.68 billion) from KRW4.96 trillion a year earlier, helped by strong demand for its products in Russia, the U.S. and the Middle East.
KT&G’s factories in South Korea, Russia, Turkey and Indonesia had a combined capacity of 13.6 billion cigarettes a year in 2020.
In addition to its mainstay tobacco business, KT&G owns Korea Ginseng Corp., which produces ginseng and cosmetics products.
March 24, 2021
Japan Tobacco Releases Integrated Report

Photo: JTI
Japan Tobacco (JT) has released its 2020 Integrated Report.
In full year 2019, JT began publishing its Integrated Report as a substitute for its Annual Report and Sustainability Report.
The report provides stakeholders with both key financial and nonfinancial information in order to have clearer and deeper understanding of the JT Group’s sustainable corporate value growth.
March 24, 2021
Kaival Brands Reaches $100 Million in Revenue
Kaival Brands Innovations Group reported significant revenue and profitability milestones in the quarter ended Jan. 31, 2021. The company achieved a cumulative $100 million in revenues since it commenced business operations in March 2020, despite revenue slowdowns during the fourth quarter of 2020 due to packaging and labeling updates.
During the fourth quarter of 2020, the company and Bidi Vapor made the decision to wash out inventory and repackage the entire product line in an effort to go “above and beyond” U.S. Food and Drug Administration packaging and labeling guidelines.
First quarter 2021 revenues were $37.3 million compared to revenues of $0 in the first quarter of 2020. “Given the significant expenses associated with infrastructure, startup costs, marketing, legal and many other business necessities, we are proud of our ability to reach profitability so early on in our development,” said Niraj Patel, Kaival’s president and CEO, in a statement.
“The gross profit number provides a glimpse into our future net profits as we continue to scale the business in a smart and efficient operational manner.”
The gross profit number provides a glimpse into our future net profits as we continue to scale the business in a smart and efficient operational manner.
Niraj Patel, president and CEO, Kaival
From a revenue perspective, February and March have benefited from the company’s new distribution partnerships as well as the rollout of the Bidi Pouch. As such, the company expects revenues to increase during the second fiscal quarter ending April 31, 2021. “Given our current visibility, we remain very confident in our full-year fiscal 2021 revenue guidance of $400 million to $450 million,” Patel said.
March 18, 2021
Swedish Match Releases Annual Report

Photo: Swedish Match
Swedish Match has released its annual report for 2020.
Highlights included record sales and operating profit, driven by strong traction for ZYN nicotine pouches in the U.S., and double-digit operating profit growth in local currencies for the smokefree and cigar product segments.
In local currencies, sales increased by 17 percent. Reported sales increased by 13 percent to SEK16.7 billion ($1.96 billion), despite significant strengthening of the Swedish krona during the year versus the U.S. dollar, the Norwegian krona and the Brazilian real.
In local currencies, operating profit from product segments increased by 28 percent. Reported operating profit from product segments increased by 23 percent to SEK7.16 billion.
Operating profit amounted to SEK6.99 billion and profit after tax was SEK4.89 billion.

We enter 2021 as a stronger, yet different, company.
Lars Dahlgren, president and CEO, Swedish Match
“On a local currency basis, all product segments delivered top-line and operating profit growth for the year,” said Lars Dahlgren, president and CEO of Swedish Match. “The U.S. smokefree business contributed with significant year-on-year sales and profit growth throughout the whole year. For cigars in the U.S. and for the first half, the year-on-year financial development was negatively impacted by Covid-19, but over the course of the second half of 2020, we saw an impressive recovery with accelerated volumes, sales and operating profit growth.”
Dahlgren expressed optimism about 2021. “We enter 2021 as a stronger, yet different, company,” he said. “The success that we experienced in 2020 would not have been possible without the tireless dedication and ingenuity of our employees, the long-forged relationships that we have with our vendors and the continued passion and trust that our customers and consumers place in Swedish Match and its brands.”
March 17, 2021
22nd Century Reports Financial Results

Photo: Firmbee from Pixabay
22nd Century Group reported a gross profit of $1.4 million in 2020—an increase of 9,413 percent over the previous year. Gross profit for the fourth quarter improved by 161.8 percent to $588,000 compared to the prior-year period. The improvement in gross margin was primarily the result of higher volume, price increases and lower labor and overhead costs driven by factory efficiencies implemented in 2020.
For the fourth quarter of 2020, operating loss was unfavorable by $696,000 compared to the prior year period. This was primarily driven by an increase in selling, general and administrative expense and was partially offset by higher gross profit and lower research and development spend related to the company’s modified-risk tobacco product (MRTP) application in 2019.
For full-year 2020, operating loss improved by $4.4 million to $19.2 million compared to the prior year, driven by the combination of higher gross profit and lower total operating expenses. The decrease in operating expenses was primarily driven by a decrease in research and development expenses related to the MRTP application in 2019, a reduction in personnel expense and an intellectual property portfolio rationalization that resulted in higher impairment in the prior year.
The company reported net sales revenue of $7.3 million in the fourth quarter of 2020, up 0.6 from the comparable 2019 quarter. For full-year 2020, net sales revenue increased 8.8 percent to $28.1 million compared to the prior year. The increase for both periods was primarily driven by higher volume and increased pricing in the company’s contract manufacturing business.
We look forward to monetizing a portion of our hemp/cannabis IP this year.

James A. Mish, CEO, 22nd Century Group
“As we look to 2021, we see tremendous commercial opportunity for our tobacco and hemp/cannabis franchises,” said James A. Mish, CEO of 22nd Century Group, in a statement. “Our focus remains on our primary mission: to reduce the harm caused by smoking. Once we secure MRTP designation, we will capitalize on our VLN brand and begin to build our tobacco franchise through licensing and partnership opportunities in the U.S. and internationally.
“We have made significant progress in our hemp/cannabis research and look forward to monetizing a portion of our hemp/cannabis IP this year. With the majority of our hemp/cannabis operational partnerships now in place, we believe we will be able to commercialize our new disruptive, commercially valuable hemp/cannabis plants in development in two years.”
March 11, 2021
STG Pleased With 2020 Financial Performance

Photo: STG
Scandinavian Tobacco Group (STG) delivered net sales of DKK8.01 billion ($1.28 billion) and EBITDA before special items of DKK1.83 billion in fiscal year 2020. This corresponds to 6.6 percent organic growth in net sales and 14 percent organic growth in EBITDA. Net profit decreased to DKK678 million from DKK748 million.
While the Covid-19 pandemic created significant challenges across the entire value chain, STG benefitted from its strong online presence combined with increased consumption of handmade cigars in the U.S. The integration of Agio Cigars delivered the expected synergies and the company’s Fueling the Growth program was completed one year ahead of time.
“In a challenging year, we delivered a satisfactory financial performance,” said STG CEO Niels Frederiksen, in a statement accompanying the presentation of the company’s annual report.
“We saw solid operational performance across all three divisions, and we continued to deliver on all major efficiency initiatives ahead of time, but we also benefitted from an increased demand for handmade cigars in the U.S. A genuine team effort.”
In a challenging year, we delivered a satisfactory financial performance.
Niels Frederiksen, CEO, STG
The board of directors proposes an ordinary dividend of DKK6.50 per share for 2020, an increase of 6.6 percent compared to the ordinary dividend for 2019. This will be supplemented by a share buyback program of up to DKK600 million in 2021.
STG expects to generate organic EBITDA growth of more than 7 percent for the full year 2021.
March 10, 2021
KT&G to Hold Annual General Meeting
KT&G will hold its 34th annual general meeting (AGM) of shareholders on March 19, 2021, at 10 a.m. Korea Standard Time.
The meeting will be held in Vision Hall at the KT&G Human Resources Development Institute in Daejeon.
Shareholders who attend the AGM are required to attend with their social security ID cards (proof of investment for foreign residents) and can exercise their voting rights indirectly using a proxy statement.
KT&G solicits the exercise of voting rights by proxy.
To secure shareholders’ safety and prevent infection or spread of Covid-19, the company recommends exercising voting rights by using the e-proxy system rather than attending the AGM.
If an amendment motion is submitted on an item at the shareholder meeting, the votes previously submitted via the e-system are regarded as abstained.
KT&G posted record financial results in 2020. An agenda of the AGM is available here.
March 8, 2021