Turning Point Brands Q2 2024 10-Q Filed

TL;DR

**TPB filed its Q2 10-Q. Financials and lease info updated.**

AI Summary

Turning Point Brands, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter. Key financial data and disclosures related to leases and liabilities are presented.

Why It Matters

This filing provides investors and analysts with the latest financial health and operational status of Turning Point Brands, Inc., crucial for investment decisions.

Risk Assessment

Risk Level: medium — As a tobacco product company, Turning Point Brands operates in a highly regulated industry with inherent risks.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial information is reported.)
• 20240801 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• Turning Point Brands, Inc. (company) — Filer of the 10-Q
• North Atlantic Holding Company, Inc. (company) — Former company name
• 20240630 (date) — End of the reporting period
• 20240801 (date) — Filing date

FAQ

Key Financial Figures

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

Filing Documents

• ef20030087_10q.htm (10-Q) — 3258KB
• ef20030087_ex31-1.htm (EX-31.1) — 8KB
• ef20030087_ex31-2.htm (EX-31.2) — 8KB
• ef20030087_ex31-3.htm (EX-31.3) — 8KB
• ef20030087_ex32-1.htm (EX-32.1) — 8KB
• 0001140361-24-035344.txt ( ) — 15713KB
• tpb-20240630.xsd (EX-101.SCH) — 77KB
• tpb-20240630_cal.xml (EX-101.CAL) — 106KB
• tpb-20240630_def.xml (EX-101.DEF) — 457KB
• tpb-20240630_lab.xml (EX-101.LAB) — 1026KB
• tpb-20240630_pre.xml (EX-101.PRE) — 659KB
• ef20030087_10q_htm.xml (XML) — 3591KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION ITEM 1

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets as of June 30, 2024, and December 31, 2023 5 Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 6 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 7 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 8 Consolidated Statements of Changes in Stockholders' Equity for the three months ended June 30, 2024 and 2023 9 Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2024 and 2023 10

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11 ITEM 2

Management's Discussion and Analysis of Financial

Management's Discussion and Analysis of Financial Condition and Results of Operations 33 ITEM 3

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 45 ITEM 4

Controls and Procedures

Controls and Procedures 46

—OTHER INFORMATION

PART II—OTHER INFORMATION ITEM 1

Legal Proceedings

Legal Proceedings 47 ITEM 1A

Risk Factors

Risk Factors 47 ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds 47 ITEM 3 Defaults Upon Senior Securities 47 ITEM 4 Mine Safety Disclosures 47 ITEM 5 Other Information 47 ITEM 6 Exhibits 48

Signatures

Signatures 49 2 Table of Contents Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q for the quarter ended June 30, 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 rec

—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) June 30, December 31, ASSETS 2024 2023 Current assets: Cash $ 142,159 $ 117,886 Accounts receivable, net of allowances of $ 54 in 2024 and $ 78 in 2023 12,557 9,989 Inventories, net 102,333 98,960 Other current assets 32,688 40,781 Total current assets 289,737 267,616 Property, plant, and equipment, net 26,441 25,300 Deferred income taxes 1,177 1,468 Right of use assets 10,305 11,480 Deferred financing costs, net 2,145 2,450 Goodwill 136,307 136,250 Other intangible assets, net 79,393 80,942 Master Settlement Agreement (MSA) escrow deposits 28,407 28,684 Other assets 17,644 15,166 Total assets $ 591,556 $ 569,356 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 11,919 $ 8,407 Accrued liabilities 30,428 33,635 Current portion of long-term debt 118,470 58,294 Total current liabilities 160,817 100,336 Notes payable and long-term debt 247,960 307,064 Lease liabilities 8,834 9,950 Total liabilities $ 417,611 $ 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 ; 20,126,521 issued shares and 17,703,166 outstanding shares at June 30 , 2024 , and 19,922,137 issued shares and 17,605,677 outstanding shares at December 31 , 2023 201 199 Common stock, nonvoting, $ 0.01 par value; authorized shares, 10,000,000 ; issued and outstanding shares - 0 - – – Additional paid-in capital 121,948 119,075 Cost of repurchased common stock ( 2,423,355 shares at June 30 , 2024 and 2,316,460 shares December 31 , 2023 ) ( 81,144 ) ( 78,093 ) Accumulated other comprehensive loss ( 3,072 ) ( 2,648

Financial Statements

Financial Statements (dollars in thousands, except where designated and per share data) Note 1. 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 ("CDS", 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 of and

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View this 10-Q filing on SEC EDGAR