Turning Point Brands, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Turning Point Brands, Inc. filed its quarterly report (10-Q) for the period ending March 31, 2024, detailing financial information and corporate history.</b>

AI Summary

Turning Point Brands, Inc. (TPB) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. The filing is a 10-Q report for Turning Point Brands, Inc. for the fiscal quarter ended March 31, 2024. The company's Central Index Key (CIK) is 0001290677. The Standard Industrial Classification (SIC) code for the company is TOBACCO PRODUCTS [2100]. The company was formerly known as North Atlantic Holding Company, Inc. and changed its name on May 17, 2004. The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023.

Why It Matters

For investors and stakeholders tracking Turning Point Brands, Inc., this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance and position of Turning Point Brands, Inc. for the first quarter of 2024. Understanding the company's historical name changes and SIC code helps in categorizing its business operations within the tobacco products industry.

Risk Assessment

Risk Level: low — Turning Point Brands, Inc. shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not inherently contain significant new risks beyond those typically associated with public companies in the tobacco sector.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to assess the company's current financial health and operational performance.

Key Numbers

• 20240331 — Period of Report (Conformed period of report)
• 20240502 — Filing Date (Filed as of date)
• 12-31 — Fiscal Year End (Fiscal year end)
• 2024-01-01 — Quarter Start Date (First quarter of 2024)
• 2024-03-31 — Quarter End Date (First quarter of 2024)
• 2023-03-31 — Prior Year Quarter End Date (Comparison period)
• 2023-12-31 — Prior Year End Date (Comparison period)

Key Players & Entities

• Turning Point Brands, Inc. (company) — Filer name
• North Atlantic Holding Company, Inc. (company) — Former company name
• 0001290677 (company) — Central Index Key
• 2100 (company) — Standard Industrial Classification code for TOBACCO PRODUCTS
• DE (company) — State of Incorporation
• Louisville (company) — Business and Mail Address City
• KY (company) — Business and Mail Address State
• 20040517 (date) — Date of name change

FAQ

Industry Context

Turning Point Brands, Inc. operates within the tobacco products industry, a sector subject to significant regulation and evolving consumer preferences.

Regulatory Implications

The tobacco products industry is heavily regulated by federal, state, and local authorities concerning manufacturing, marketing, and sales.

What Investors Should Do

1. Analyze the company's revenue streams and profitability for Q1 2024.
2. Examine any disclosed changes in operational costs or capital expenditures.
3. Review management's commentary on future outlook and potential challenges.

Year-Over-Year Comparison

This filing represents the quarterly update for March 31, 2024, compared to previous filings which would include the prior quarter and the same quarter in the prior year.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value TPB New York Stock Exchan

Filing Documents

• ef20026317_10q.htm (10-Q) — 2448KB
• ef20026317_ex10-2.htm (EX-10.2) — 19KB
• ef20026317_ex31-1.htm (EX-31.1) — 8KB
• ef20026317_ex31-2.htm (EX-31.2) — 8KB
• ef20026317_ex31-3.htm (EX-31.3) — 8KB
• ef20026317_ex32-1.htm (EX-32.1) — 8KB
• 0001140361-24-024041.txt (&nbsp;) — 13463KB
• tpb-20240331.xsd (EX-101.SCH) — 77KB
• tpb-20240331_cal.xml (EX-101.CAL) — 102KB
• tpb-20240331_def.xml (EX-101.DEF) — 453KB
• tpb-20240331_lab.xml (EX-101.LAB) — 1013KB
• tpb-20240331_pre.xml (EX-101.PRE) — 650KB
• ef20026317_10q_htm.xml (XML) — 2876KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION ITEM 1

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023 5 Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 6 Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 7 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 8 Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2024 and 2023 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10 ITEM 2

Management's Discussion and Analysis of Financial Condition and

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 ITEM 3

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 38 ITEM 4

Controls and Procedures

Controls and Procedures 39

—OTHER INFORMATION

PART II—OTHER INFORMATION ITEM 1

Legal Proceedings

Legal Proceedings 40 ITEM 1A

Risk Factors

Risk Factors 40 ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds 40 ITEM 3 Defaults Upon Senior Securities 40 ITEM 4 Mine Safety Disclosures 40 ITEM 5 Other Information 40 ITEM 6 Exhibits 41

Signatures

Signatures 42 2 Table of Contents Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (this "Quarterly Report"), contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan," and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that may or may not occur in the future. As a result, actual events may differ materially from those expressed in, or suggested by, the forward-looking statements. Any forward-looking statement made by Turning Point Brands, Inc. ("TPB"), in this Quarterly Report on Form 10-Q speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to: declining sales of tobacco products, and expected continuing decline of sales in the tobacco industry overall; our dependence on a small number of third-party suppliers and producers; the possibility that we will be unable to identify or contract with new suppliers or producers in the event of a supply or product disruption, as well as other supply chain concerns, including delays in product shipments and increases in freight cost; the possibility that our licenses to use certain brands or trademarks will be terminated, challenged or restricted; failure to maintain consumer brand re

— FINANCIAL INFORMATION

PART I— FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Turning Point Brands, Inc. Consolidated Balance Sheets (dollars in thousands except share data) (unaudited) March 31, December 31, ASSETS 2024 2023 Current assets: Cash $ 130,903 $ 117,886 Accounts receivable, net of allowances of $ 43 in 2024 and $ 78 in 2023 8,198 9,989 Inventories, net 105,467 98,960 Other current assets 34,437 40,781 Total current assets 279,005 267,616 Property, plant, and equipment, net 24,790 25,300 Deferred income taxes 1,426 1,468 Right of use assets 10,868 11,480 Deferred financing costs, net 2,305 2,450 Goodwill 136,365 136,250 Other intangible assets, net 80,177 80,942 Master Settlement Agreement (MSA) escrow deposits 28,427 28,684 Other assets 22,953 15,166 Total assets $ 586,316 $ 569,356 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 18,934 $ 8,407 Accrued liabilities 30,974 33,635 Current portion of long-term debt 59,397 58,294 Total current liabilities 109,305 100,336 Notes payable and long-term debt 306,496 307,064 Lease liabilities 9,360 9,950 Total liabilities 425,161 417,350 Commitments and contingencies Stockholders' equity: Preferred stock; $ 0.01 par value; authorized shares 40,000,000 ; issued and outstanding shares - 0 - – – Common stock, voting, $ 0.01 par value; authorized shares, 190,000,000 ; 20,016,822 issued shares and 17,627,817 outstanding shares at March 31 , 2024 , and 19,922,137 issued shares and 17,605,677 outstanding shares at December 31 , 2023 200 199 Common stock, nonvoting, $ 0.01 par value; authorized shares, 10,000,000 ; issued and outstanding shares - 0 - – – Additional paid-in capital 119,792 119,075 Cost of repurchased common stock ( 2,389,005 shares at March 31 , 2024 and 2,316,460 shares December 31 , 2023 ) ( 80,172 ) ( 78,093 ) Accumulated other comprehensive loss ( 3,048 ) ( 2,648 )

Financial Statements

Financial Statements (dollars in thousands, except where designated and per share data) Note 1. Description of Business and Basis of Presentation Description of Business Turning Point Brands, Inc. and its subsidiaries (collectively referred to herein as the "Company," "we," "our," or "us") is a leading manufacturer, marketer and distributor of branded consumer products. The Company sells a wide range of products to adult consumers consisting of staple products with its iconic brands Zig-Zag and Stoker's and its next generation products to fulfill evolving consumer preferences. Its segments are led by its core proprietary and iconic brands: Zig-Zag and CLIPPER in the Zig-Zag Products segment and Stoker's along with Beech-Nut and Trophy in the Stoker's Products segment. The Company's products are available in more than 217 ,000 retail outlets in North America. The Company operates in three segments: (i) Zig-Zag Products, (ii) Stoker's Products, and (iii) Creative Distribution Solutions (formerly known as NewGen). Basis of Presentation The accompanying unaudited, interim, consolidated financial statements have been prepared in accordance with the accounting practices described in the Company's audited, consolidated financial statements as of and for the year ended December 31, 2023. In the opinion of management, the unaudited, interim, consolidated financial statements included herein contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows of the Company for the periods presented. Such adjustments, other than nonrecurring adjustments separately disclosed, are of a normal and recurring nature. The operating results for interim periods are not necessarily indicative of results to be expected for a full year or future interim periods. The unaudited, interim, consolidated financial statements should be read in conjunction with the Company's audited, consolidated financial statements and accompanying notes as

View Full Filing

View this 10-Q filing on SEC EDGAR