Turning Point Brands Announces Second Quarter 2023 Results; Increases 2023 Guidance
- Net Sales for Q2 2023 Zig-Zag and Stoker’s Products Increased 3.7 Percent Year-Over-Year
- Adjusted EBITDA for Q2 2023 Increased 2.2 Percent Year-Over-Year
LOUISVILLE, Ky.–(BUSINESS WIRE)–Turning Point Brands, Inc. (“TPB” or “the Company”) (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, announced today financial results for the second quarter ended June 30, 2023.
Q2 2023 vs. Q2 2022
- Total consolidated net sales increased 2.6% to $105.6 million
- Zig-Zag Products net sales increased by 1.1%
- Stoker’s Products net sales increased by 7.3%
- Creative Distribution Solutions net sales decreased by 1.3%
- Gross profit increased 2.0% to $52.5 million
- Net income increased 83.0% to $9.9 million
- Adjusted net income increased 8.4% to $15.3 million (see Schedule B for a reconciliation to net income)
- Adjusted EBITDA increased 2.2% to $25.3 million (see Schedule A for a reconciliation to net income)
- Diluted EPS of $0.53 and Adjusted Diluted EPS of $0.79 compared to $0.30 and $0.70 in the same period one year ago, respectively (see Schedule B for a reconciliation to Diluted EPS)
Graham Purdy, President and CEO, commented: “Our second quarter results demonstrated continued progress against our plan. The Zig-Zag segment grew double-digits sequentially from the first quarter as trade inventory normalized. Stoker’s had another solid quarter of performance led by double-digit growth in Stoker’s MST. We opportunistically purchased another $15.1 million in aggregate principal amount of our convertible notes during the second quarter while maintaining a strong cash balance. Given our solid first half performance, we are raising our guidance for the full year.”
Zig-Zag Products Segment (44% of total net sales in the quarter)
For the second quarter, Zig-Zag Products net sales increased 1.1% to $46.7 million. TPB’s Canadian and other smoking accessories businesses saw strong growth during the quarter which was partially offset by declines in the U.S. rolling papers and wraps businesses.
For the quarter, the Zig-Zag Products segment gross profit was steady at $26.4 million. Gross margin declined 60 basis points to 56.6% driven primarily by product mix.
Our e-commerce business had another quarter of double-digit growth as we continue to build our omni-channel presence. We remain encouraged by our prospects with secular cannabis consumption growth trends driving demand for our products.
Graham Purdy, President and CEO
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