Turning Point Brands, Inc. TPB released financial results for the second quarter ended June 30, 2022, revealing net sales decreased by 16.1% compared to Q2 2021 at $102.9 million.
Q2 2022 vs. Q2 2021
Gross profit decreased by 14.2% to $51.5 million.
Net profit decreased by 64.7% at $5.4 million.
Adjusted EBITDA decreased by 17.6% to $24.7 million.
Diluted EPS of $0.30 and Adjusted Diluted EPS of $0.70 compared to $0.73 and $0.84 in the same period a year ago, respectively.
“We are satisfied with the stable performance of the Zig-Zag and Stokerduring the quarter in light of an increased inflationary environment for our customers, with rising prices at the pump affecting consumer traffic in convenience stores. While overall sales were down 16% from the prior year, Zig-Zag and Stoker sales remained flat despite weakness in the packaging and loose-leaf sub-segments. Zig-Zag maintained its leading positions in the self-rolling paper and cigar wrapper markets, while Stoker’s MST saw accelerating market share gains on lower consumer trade in the category. value. Despite New generation revenue was down 45% from last year, the segment remained relatively stable from the prior quarter and profitable as we continue to monitor FDA regulatory developments,” said Yavor Efremov, Chairman and CEO. “We continued to deploy a substantial amount of our free cash flow into share buybacks during the quarter while maintaining a strong balance sheet giving us an option on deploying additional capital.”
Total gross debt as of June 30, 2022 was $422.5 million. The corresponding net debt as of June 30, 2022 was $315.1 million. The company ended the quarter with total liquidity of $128.8 million, consisting of $107.4 million in cash and $21.4 million in revolving credit facility capacity.
Due to the uncertain macroeconomic environment and the slower than expected improvement in its NewGen product segment, the company now expects the following results for the full year 2022:
Zig-Zag product sales of $193-200 million.
Stoker product sales of $127-133 million.
Consolidated adjusted EBITDA of $97 to $103 million.
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Turning Point Brands’ net income in the first quarter of 2022 fell 6.7% to $11 million year-over-year