Turning Point Brands Announces Second Quarter 2025 Results

• Net Sales for Q2 2025 increased 25.1% year-over-year to $116.6 million
• Modern Oral Net Sales for Q2 2025 increased 651% (or nearly 8x) year-over-year to $30.1 million, and now accounts for 26% of total Net Sales
• Q2 2025 Adjusted EBITDA of $30.5 million, up 14.8% over prior year
• Company increasing 2025 Adjusted EBITDA guidance to $110.0 – 114.0 million (from $108.0 – 113.0 million)
• Company increasing full-year consolidated Modern Oral sales guidance to $100.0 – 110.0 million (from $80.0 – 95.0 million)

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, today announced financial results for the second quarter ended June 30, 2025.

Q2 2025 vs. Q2 2024

• Total consolidated Net Sales increased 25.1% to $116.6 million
  • Stoker's segment Net Sales increased 62.9%
  • Zig-Zag segment Net Sales decreased 6.9%
• Gross Profit increased 32.2% to $66.6 million
• Net Income increased 11.3% to $14.5 million
• Adjusted EBITDA increased 14.8% to $30.5 million (see Schedule A for a reconciliation to net income)
• Adjusted Net Income increased 4.5% to $18.0 million (see Schedule B for a reconciliation to net income)
• Diluted EPS of $0.79 and Adjusted Diluted EPS of $0.98 compared to $0.68 and $0.89, respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS)

Graham Purdy, President and CEO, commented, "Our consolidated second quarter results were better than expected. Modern Oral sales were $30.1 million, increasing by 35% versus prior quarter and up 651% against the prior year. Stoker's MST and looseleaf showed modest gains with Zig-Zag flat sequentially."

Stoker's Products Segment (60% of total net sales in the quarter)

For the second quarter, Stoker's segment net sales increased 62.9% from the prior year to $69.6 million, driven by strong growth in Modern Oral sales, mid-single-digit growth in MST offset by low single-digit declines in looseleaf. For the second quarter, total Stoker's Products segment volume increased 48.3%, while price / product mix increased 14.5%.

Stoker's segment gross profit increased 85.0% from the prior year, and 27.8% sequentially from Q1 2025 to $43.5 million. Gross margin increased 750 basis points from the prior year and 500 basis points sequentially to 62.5%.

Zig-Zag Products Segment (40% of total net sales in the quarter)

For the second quarter, Zig-Zag segment net sales decreased 6.9% to $47.0 million against prior year, but close to flat sequentially.

Zig-Zag segment gross profit decreased 14.0% to $23.1 million. Gross margin decreased 410 basis points to 49.1% driven by product mix.

Performance Measures in the Second Quarter

Second quarter 2025 consolidated selling, general and administrative ("SG&A") expenses were $40.3 million compared to $29.2 million in the second quarter of 2024 primarily driven by white pouch-related SG&A that was not in the prior year period, as well as increased outbound freight and sales and marketing investments.

Second quarter SG&A included the following notable items:

• $1.7 million of FDA PMTA-related expenses for Modern Oral products compared to $1.0 million in the prior year period; and
• $0.6 million of transaction-related costs compared to $0.1 million in the prior year period.
• $0.8 million of non-recurring freight costs compared to $0.0 million in the prior year period.
• $0.5 million of non-recurring legal costs in connection with litigation related to an insurance claim compared to $0.0 million in the prior year period.

Total gross debt as of June 30, 2025 was $300.0 million. Net debt (total gross debt less unrestricted cash) as of June 30, 2025 was $190.1 million. The Company ended the quarter with total liquidity of $176.4 million, comprised of $109.9 million in cash and $66.5 million of availability under its asset backed revolving credit facility.

2025 Outlook

The Company is increasing full-year 2025 projected Modern Oral sales to $100.0 – 110.0 million (from $80.0 – 95.0 million).

The Company is increasing full-year 2025 Adjusted EBITDA guidance to $110.0 – 114.0 million (from $108.0 – 113.0 million).

Earnings Conference Call

As previously disclosed, a conference call with the investment community to review TPB's financial results has been scheduled for 9:30 a.m. Eastern on Wednesday, August 6, 2025. Investment community participants should dial in 10 minutes ahead of time using the toll-free number (800) 715-9871 (international participants should call (646) 307-1963) and follow the audio prompts after typing in the event ID: 6640134. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Adjusted Operating Income (Loss). A reconciliation of these non-GAAP financial measures accompanies this release.

About Turning Point Brands, Inc.

Turning Point Brands (NYSE:TPB) is a manufacturer, marketer and distributor of branded consumer products including smoking accessories and consumables with active ingredients through its Zig-Zag®, Stoker's®, FRE®, and Alp Pouch® brands. TPB's products are available in more than 220,000 retail outlets in North America, and on sites such as www.zigzag.com. For the latest news and information about TPB and its brands, please visit www.turningpointbrands.com.

Forward-Looking Statements

This press release 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, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the "SEC") and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such 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, those included in the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company's cautionary statements under the Private Securities Litigation Reform Act of 1995.

This press release contains TPB's preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB's customary quarter-end closing and review procedures and third-party review. As a result, TPB's reported information in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB's financial condition and results of operations for the quarter ending June 30, 2025 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB's full second quarter 2025 results when such results are disclosed by TPB in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025

Financial Statements Follow on Subsequent Pages

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income . We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance.

We define "EBITDA" as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization. We define "Adjusted EBITDA" as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Net Income" as net income excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Diluted EPS" as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Operating Income" as operating income excluding other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance.

Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure.

In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures.

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Investor Contacts

Turning Point Brands, Inc.

[email protected]