Tag: Turning Point Brands

TPB Announces Private Offering

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Turning Point Brands (TPB) announced the proposed private offering of $250 million aggregate principal amount of its senior secured notes due 2026. The notes will bear cash interest semi-annually beginning in 2021. The notes will be TPB’s senior secured obligations and will be guaranteed on a senior secured basis by each of TPB’s wholly owned domestic subsidiaries (except for certain specified subsidiaries).
TPB intends to use the proceeds from the offering to repay all obligations under and terminate its existing term loan and revolving credit facility; to pay related fees, costs and expenses; and for general corporate purposes. The offering is subject to market conditions.
TPB also announced that in connection with the offering, it intends to enter into a new $25 million senior secured revolving credit facility. The offering is not conditioned on the entry into the revolving credit facility.
In connection with its proposed offering, TPB announced certain preliminary operating results for the fourth quarter and full year ended Dec. 31, 2020.
TPB estimates that for the fourth quarter of 2020 net sales will be between $103.5 million and $105.5 million, income before taxes will be between $16 million and $17 million and adjusted EBITDA will be between $25 million and $26 million. Each of net sales and adjusted EBITDA will be near or above the high end of TPB’s previously disclosed guidance for the fourth quarter of 2020. TPB plans to release its full year end 2020 financial results on Feb. 10, 2021.
The company will hold a conference call to review fourth quarter and fiscal year 2020 results on Feb. 10.
February 2, 2021
Turning Point Declares Stock Dividend

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Turning Point Brands (TPB) has declared a regular quarterly dividend of $0.05 per common share. The dividend is payable on Jan. 8, 2021, to shareholders of record on the close of business on Dec. 18, 2020, the company announced in a statement.
TPB manufactures, markets and distributes branded consumer products with active ingredients through its Zig-Zag and Stoker’s core brands and its emerging brands within the NewGen segment.
The company’s products are available in more than 210,000 retail outlets in North America and on various websites.
November 13, 2020
TPB Raises Guidance After Strong Quarter

Image by Steve Buissinne from Pixabay
Turning Point Brands (TPB) reported net sales of $104.2 million in the third quarter of 2020, up 7.6 percent over those of last year’s third quarter.
Gross profit increased 12.8 percent to $48.3 million. Net income increased $1.5 million to $7.8 million, despite PMTA costs incurred during the current quarter.
Adjusted EBITDA increased 27.4 percent to $23.9 million.
“Streamlining and repositioning the business at the end of 2019 has paid dividends throughout 2020,” said Larry Wexler, president and CEO of TPB, in a statement.
“Smokeless saw continued same store sales momentum in MST and newfound strength in loose leaf chewing tobacco. Smoking (Zig-Zag) saw its highest growth rate in recent history driven by product and channel growth initiatives behind rolling papers, the benefits of greater control of our MYO cigar wraps business after the Durfort transaction closed in the second quarter, and a burgeoning e-commerce presence, he said.
“The NewGen segment navigated admirably through significant market disruption caused by the PMTA application deadline, said Wexler. “Overall, we are seeing ongoing benefits from reshaping our business towards a more growth-oriented mindset and are able to raise our outlook once again for the remainder of the fiscal year.”
TPB also revised its 2020 guidance provided on July 28, 2020. Absent any further acquisitions, the company projects 2020 net sales to be between $395 million and $401 million, up from previous guidance of $370 million to $382 million.
October 28, 2020
Turning Point Invests in Cannabinoid Business

Photo: Herbal Hemp from Pixabay
Turning Point Brands (TPB) will invest $15 million Dosist, a global cannabinoid company. It has also signed an exclusive co-development and distribution agreement for a new CBD brand, created in partnership with Dosist’s THC-free business unit.
TPB has an option to invest another $15 million at predetermined terms within the next 12 months.
“The cannabis market is exploding, and now is the opportune time to invest in the space and significantly expand our addressable market,” said Larry Wexler, CEO of TPB, in a statement. “With its leadership in results-oriented plant-based formulas and dose control technology, global recognition, consumer trust and scalability, Dosist was the clear choice to be our new partner in this critical growth market.”
“We are extremely proud to partner with Turning Point Brands on our next phase of growth and distribution as we continue to transcend the way consumers think about their health and wellness,” said Gunner Winston, CEO of Dosist. “Turning Point’s leadership team has demonstrated remarkable foresight and vision about the future and opportunity for federally legal cannabinoid products. The synergy between our brands around this scope and mission is incredible and we are excited by what we will achieve together with this partnership.”
Dosist’s cannabis products are currently available in California, Colorado, Nevada and Canada, serving a total dispensary network of more than 700 stores. The company has plans to launch into key new markets in the coming months, adding geographies as they continue their North American expansion.
October 28, 2020
TPB Takes Stake in Hemp Cigarettes

Photo: Wild Hempettes
Turning Point Brands (TPB) has acquired a 20 percent stake in Wild Hempettes, a leading manufacturer of hemp cigarettes under the WildHemp and Hempettes brands, with options to increase its stake to a 100 percent ownership position based on certain milestones.
As part of the transaction, the Wild Hempettes joint venture was spun off from Crown Distributing and formed as a vehicle for TPB to be the exclusive distributor of Hempettes to U.S. brick-and-mortar retailers under a profit-sharing arrangement.
Wild Hemp was an early entrant into the hemp CBD smoking market with its Hempettes branded cigarette, the leading 20-count pack hemp smoking product in the U.S. The product is currently available in three popular styles: original, sweet and pineapple blaze. An additional menthol SKU will be added to the brand lineup by the end of 2020.
“The combination of our Hempettes product along with TPB’s distribution presence in over 210,000 outlets in North America provides tremendous growth potential,” said Zain Meghani, Wild Hempettes CEO in a statement.
October 5, 2020
Turning Point Submits PMTAs for 250 Products

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Turning Point Brands (TPB) has submitted to the U.S. Food and Drug Administration (FDA) premarket tobacco product applications (PMTAs) for 250 products.
The PMTAs cover a broad assortment of products in the vapor category including multiple proprietary e-liquid offerings in varying nicotine strengths, technologies and sizes. They also include proprietary replacement parts and components of open system tank devices, along with a closed system e-cigarette.
According to TPB, the filings provide detailed scientific data to demonstrate that the products are “appropriate for the protection of public health,” as required by law.
The applications are supported by five pharmacokinetics studies, a likelihood-of-use study, and a patterns-of-use study, in addition to a toxicological review. Data throughout the applications underline that TPB products do not appeal to never users, youth or former users; that an extremely small percentage of users are never users, youth, or former users; that a significant majority of users have completely ceased use of combustible cigarettes; that a low percentage of users engage in dual or poly use; and that the products are substantially less harmful than combustible cigarettes and comparable to other products in the vapor category.
TPB has also provided a detailed marketing plan to illustrate how it will continue to prevent youth exposure to the products.
“We look forward to engaging with the FDA as it reviews our submissions,” said Larry Wexler, president and CEO of TPB.
The FDA deadline for submitting PMTAs is today.
September 9, 2020
Cushman Named General Counsel
Brittani Cushman
Turning Point Brands (TPB) has appointed Brittani Cushman as general counsel, effective Oct. 31. James Dobbins, TPB senior vice president, general counsel and secretary, will retire that day following more than 20 years leading the company’s legal and governance functions.
Cushman currently serves as senior vice president of external affairs in the company’s legal department. She joined TPB as director of external affairs in 2014. During her tenure with the company, Cushman has been a key driver of initiatives related to the company’s policy strategy and regulatory filings along with advising on significant acquisitions, TPB wrote in a statement. Prior to joining TPB, Cushman served as general counsel at a privately held tobacco product manufacturer.
“James has been an invaluable resource for our growing organization during his tenure with the company, including the successful initial public offering in 2016,” said Larry Wexler, president and CEO of TPB. “The board of directors and executive team thank James for his leadership and service to the company. I am particularly pleased that he has agreed to remain with the company in a consulting role.”
Cushman will assume the role of deputy general counsel immediately, working with Dobbins to ensure a seamless transition ahead of his departure.
“Brittani has been a critical piece of our leadership team,” Wexler commented. “Since joining the company, her unique skillset and forward-thinking contributions have strengthened the business. Brittani’s ability to diagnose and respond to evolving legal landscapes will be a significant factor to our continued success.”
August 20, 2020
Sales and Profit up at Turning Point Brands

Photo: Tobacco Reporter archive
Turning Point Brands (TPB) announced its second-quarter results and increased its 2020 guidance.
Net sales increased 12.5 percent to $105 million, and gross profit increased 16.8 percent to $48.1 million. Net income decreased $4 million to $9.2 million, reflecting the inclusion of expensing premarket tobacco product application (PMTA) costs incurred during the current quarter compared to the net gain related to a settlement from the V2 winddown in the previous year’s quarter. Adjusted EBITDA increased 24.8 percent to $22.8 million.
Absent any further acquisitions, the company projects 2020 net sales to be $370 million to $382 million (up from previous guidance of $338 million to $353 million). It projects 2020 adjusted EBITDA of $78 million to $83 million (up from previous guidance of $69 million to $75 million). Its projections assume no upside from the PMTA process in 2020.
July 28, 2020
TPB Completes Merger

Photo: Alexas Fotos
Turning Point Brands (TPB) and Standard Diversified (SDI) announced that the merger of SDI with and into Standard Merger Sub, a wholly owned subsidiary of TPB, closed on July 16, 2020.

Pursuant to the merger, each share of SDI’s Class A common stock and SDI’s Class B common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.52095 shares of TPB’s voting common stock.

As a result of the merger, the SDI common stock has ceased trading on, and is being delisted from, the NYSE American.

“The transaction significantly improves the public float of our shares outstanding and eliminates the overhang of a controlling holding company structure,” said Bobby Lavan, TPB’s chief financial officer. “We are excited to welcome all of the new shareholders and thank our existing shareholders that participated in the related secondary offering.”
July 20, 2020
Turning Point Exceeds Quarterly Expectations

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Turning Point Brands (TPB) announced preliminary sales results for the second quarter ended June 30, 2020, in connection with the underwritten secondary offering by certain of its stockholders of 2 million shares of TPB’s common stock. TPB plans to release its full second-quarter 2020 financial results along with updated full-year guidance on July 28, 2020.
During the second quarter of 2020, preliminary estimates of net sales exceeded $100 million compared to net sales guidance of $81 million to $87 million provided on April 28, 2020. All segments outperformed management expectations for the second quarter of 2020.
In the smokeless segment, the secular consumer downtrading trends that accelerated earlier in the year continued during the quarter as the Stoker’s MST line continues to build momentum and gain consumer acceptance.
In the smoking segment, sales benefited from increased consumption, new product penetration and recently implemented growth initiatives, which offset the Covid-related supply chain disruption experienced in the MYO cigar wraps business. In the new generation segment, market share gains and new product introductions returned the segment to positive year-over-year sales growth.
TPB announced the pricing of the previously announced underwritten public offering of 1.8 million shares of company common stock by Standard Diversified and an aggregate of 200,000 shares of company common stock by funds affiliated with Standard General (the Standard General funds) at an offering price of $23.50 per share. In addition, the Standard General funds have granted the underwriter the option to purchase up to 215,000 shares of the company’s common stock from them to cover over-allotments, which will be exercisable for two business days.
The selling stockholders will receive all the net proceeds from the offering. The closing is expected to occur on or about July 13, subject to customary closing conditions. The shares are listed on the New York Stock Exchange under the symbol TPB.
July 9, 2020