• |
Net sales increased 16.8 percent to $122.6 million
|
• |
Gross profit increased 25.1 percent to $60.0 million
|
• |
Net income increased 49.2 percent to $15.4 million
|
• |
Adjusted EBITDA increased 31.7 percent to $30 million (see Schedule A for a reconciliation to net income)
|
• |
Diluted EPS of $0.73 and Adjusted Diluted EPS of $0.84 as compared to $0.49 and $0.66 in the same period one year ago, respectively (see Schedule B for a reconciliation to Diluted EPS)
|
2 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
3 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
• |
$2.8 million of stock options, restricted stock and incentive expense as compared to $0.8 million in the year-ago period
|
• |
$0.7 million of transaction expenses principally related to M&A activity as compared to $0.3 million in the year-ago period
|
• |
$0.6 million of FDA PMTA-related expenses as compared to $3.3 million in the year-ago period (note that $0.9 million of PMTA-related expenses incurred in the first six months of FY2021 have not been added back to Adjusted EBITDA)
|
• |
$5.8 million in outbound freight expense as compared to $4.4 million in the year-ago period with the increase partly driven by the implementation of the PACT Act
|
• |
$1.0 million from the accounting consolidation of ReCreation Marketing in the current year quarterly period
|
4 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
• |
Net sales of $447 to $462 million (up from previous guidance of $422 to $440 million), which assumes:
|
o |
Strong double-digit sales growth for Zig-Zag Products
|
o |
High single-digit sales growth for Stoker's Products
|
o |
Flat sales growth for NewGen Products (up from previous mid-to-low single-digit declines), which includes low single-digit declines for vape distribution (up from single-digit declines) offset by expected growth in Nu-X
|
• |
Adjusted EBITDA of $108 to $113 million (up from previous guidance of $103 to $108 million)
|
• |
Stock compensation and non-cash incentive expense of $8 million
|
• |
Cash interest expense of $19 million and GAAP interest expense of $22 million
|
• |
Effective income tax rate of 23 percent to 24 percent
|
• |
Capital expenditures of $5 to $6 million
|
• |
Net sales of $109 to $114 million
|
5 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
6 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
Three Months Ended June 30,
| ||||||||
2021
|
2020
| |||||||
Net sales
|
$
|
122,643
|
$
|
104,963
| ||||
Cost of sales
|
62,670
|
57,027
| ||||||
Gross profit
|
59,973
|
47,936
| ||||||
Selling, general, and administrative expenses
|
35,094
|
30,756
| ||||||
Operating income
|
24,879
|
17,180
| ||||||
Interest expense, net
|
5,522
|
3,295
| ||||||
Investment income
|
(110
|
)
|
(34
|
)
| ||||
Net periodic income, excluding service cost
|
-
|
(104
|
)
| |||||
Income before income taxes
|
19,467
|
14,023
| ||||||
Income tax expense
|
4,424
|
3,728
| ||||||
Consolidated net income
|
15,043
|
10,295
| ||||||
Net loss attributable to non-controlling interest
|
(312
|
)
|
-
| |||||
Net income attributable to Turning Point Brands, Inc.
|
$
|
15,355
|
$
|
10,295
| ||||
Basic income per common share:
| ||||||||
Net income attributable to Turning Point Brands, Inc.
|
$
|
0.81
|
$
|
0.53
| ||||
Diluted income per common share:
| ||||||||
Net income attributable to Turning Point Brands, Inc.
|
$
|
0.73
|
$
|
0.49
| ||||
Weighted average common shares outstanding:
| ||||||||
Basic
|
18,975,522
|
19,507,874
| ||||||
Diluted
|
22,489,662
|
23,037,153
| ||||||
Supplemental disclosures of statement of income information:
| ||||||||
Excise tax expense
|
$
|
7,687
|
$
|
4,678
| ||||
FDA fees
|
$
|
180
|
$
|
134
|
7 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
ASSETS
|
(unaudited)
June 30,
2021
|
December 31,
2020
| ||||||
Current assets:
| ||||||||
Cash
|
$
|
157,474
|
$
|
41,765
| ||||
Accounts receivable, net of allowances of $143 in 2021 and $150 in 2020
|
5,814
|
9,331
| ||||||
Inventories
|
99,010
|
85,856
| ||||||
Other current assets
|
25,809
|
26,451
| ||||||
Total current assets
|
288,107
|
163,403
| ||||||
Property, plant, and equipment, net
|
16,291
|
15,524
| ||||||
Deferred income taxes
|
-
|
610
| ||||||
Right of use assets
|
16,607
|
17,918
| ||||||
Deferred financing costs, net
|
441
|
641
| ||||||
Goodwill
|
162,768
|
159,621
| ||||||
Other intangible assets, net
|
78,468
|
79,422
| ||||||
Master Settlement Agreement (MSA) escrow deposits
|
31,819
|
32,074
| ||||||
Other assets
|
34,898
|
26,836
| ||||||
Total assets
|
$
|
629,399
|
$
|
496,049
| ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
| ||||||||
Current liabilities:
| ||||||||
Accounts payable
|
$
|
11,159
|
$
|
9,201
| ||||
Accrued liabilities
|
37,495
|
35,225
| ||||||
Current portion of long-term debt
|
12,485
|
12,000
| ||||||
Other current liabilities
|
104
|
203
| ||||||
Total current liabilities
|
61,243
|
56,629
| ||||||
Notes payable and long-term debt
|
417,935
|
302,112
| ||||||
Deferred income taxes
|
1,165
|
-
| ||||||
Lease liabilities
|
14,788
|
16,117
| ||||||
Other long-term liabilities
|
-
|
3,704
| ||||||
Total liabilities
|
495,131
|
378,562
| ||||||
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; 19,616,224 issued shares and 18,923,523 outstanding shares at June 30, 2021, and 19,532,464 issued shares and 19,133,794 outstanding shares at December 31, 2020
|
196
|
195
| ||||||
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0-
|
-
|
-
| ||||||
Additional paid-in capital
|
105,460
|
102,423
| ||||||
Cost of repurchased common stock
| ||||||||
(692,701 shares at June 30, 2021 and 398,670 shares at December 31, 2020)
|
(24,277
|
)
|
(10,191
|
)
| ||||
Accumulated other comprehensive income (loss)
|
279
|
(2,635
|
)
| |||||
Accumulated earnings
|
48,647
|
23,645
| ||||||
Non-controlling interest
|
3,963
|
4,050
| ||||||
Total stockholders' equity
|
134,268
|
117,487
| ||||||
Total liabilities and stockholders' equity
|
$
|
629,399
|
$
|
496,049
|
8 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
Six Months Ended June 30,
| ||||||||
2021
|
2020
| |||||||
Cash flows from operating activities:
| ||||||||
Consolidated net income
|
$
|
26,570
|
$
|
14,794
| ||||
Adjustments to reconcile net income to net cash provided by operating activities:
| ||||||||
Loss on extinguishment of debt
|
5,706
|
-
| ||||||
Impairment loss
|
-
|
149
| ||||||
(Gain) loss on sale of property, plant, and equipment
|
(2
|
)
|
12
| |||||
Depreciation expense
|
1,546
|
1,673
| ||||||
Amortization of other intangible assets
|
954
|
827
| ||||||
Amortization of deferred financing costs
|
1,251
|
1,113
| ||||||
Deferred income taxes
|
1,027
|
2,367
| ||||||
Stock compensation expense
|
4,263
|
1,213
| ||||||
Noncash lease expense
|
(19
|
)
|
18
| |||||
Gain on investments
|
(34
|
)
|
-
| |||||
Changes in operating assets and liabilities:
| ||||||||
Accounts receivable
|
3,955
|
1,794
| ||||||
Inventories
|
(12,007
|
)
|
(4,421
|
)
| ||||
Other current assets
|
813
|
(253
|
)
| |||||
Other assets
|
599
|
(766
|
)
| |||||
Accounts payable
|
1,423
|
235
| ||||||
Accrued postretirement liabilities
|
-
|
(54
|
)
| |||||
Accrued liabilities and other
|
1,370
|
(1,167
|
)
| |||||
Net cash provided by operating activities
|
$
|
37,415
|
$
|
17,534
| ||||
Cash flows from investing activities:
| ||||||||
Capital expenditures
|
$
|
(2,170
|
)
|
$
|
(1,956
|
)
| ||
Acquisitions, net of cash acquired
|
(3,419
|
)
|
(37,772
|
)
| ||||
Payments for investments
|
(8,657
|
)
|
-
| |||||
Restricted cash, MSA escrow deposits
|
(20,147
|
)
|
-
| |||||
Proceeds on the sale of property, plant and equipment
|
2
|
-
| ||||||
Net cash used in investing activities
|
$
|
(34,391
|
)
|
$
|
(39,728
|
)
| ||
Cash flows from financing activities:
| ||||||||
Proceeds from Senior Secured Notes
|
$
|
250,000
|
$
|
-
| ||||
Payments of 2018 first lien term loan
|
(130,000
|
)
|
(5,000
|
)
| ||||
Settlement of interest rate swaps
|
(3,573
|
)
|
-
| |||||
Payment of IVG note
|
-
|
(4,240
|
)
| |||||
Proceeds from unsecured notes
|
-
|
7,485
| ||||||
Payment of dividends
|
(2,006
|
)
|
(1,872
|
)
| ||||
Payments of financing costs
|
(6,921
|
)
|
(194
|
)
| ||||
Exercise of options
|
886
|
246
| ||||||
Redemption of options
|
(2,111
|
)
|
-
| |||||
Common stock repurchased
|
(14,086
|
)
|
(5,289
|
)
| ||||
Net cash provided by (used in) financing activities
|
$
|
92,189
|
$
|
(8,864
|
)
| |||
Net increase (decrease) in cash
|
$
|
95,213
|
$
|
(31,058
|
)
| |||
Effect of foreign currency translation on cash
|
$
|
315
|
$
|
-
| ||||
Cash, beginning of period:
| ||||||||
Unrestricted
|
41,765
|
95,250
| ||||||
Restricted
|
35,074
|
32,074
| ||||||
Total cash at beginning of period
|
76,839
|
127,324
| ||||||
Cash, end of period:
| ||||||||
Unrestricted
|
157,474
|
64,192
| ||||||
Restricted
|
14,893
|
32,074
| ||||||
Total cash at end of period
|
$
|
172,367
|
$
|
96,266
|
9 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
10 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
Three Months Ended
June 30,
| ||||||||
2021
|
2020
| |||||||
Net income attributable to Turning Point Brands, Inc.
|
$
|
15,355
|
$
|
10,295
| ||||
Add:
| ||||||||
Interest expense, net
|
5,522
|
3,295
| ||||||
Income tax expense
|
4,424
|
3,728
| ||||||
Depreciation expense
|
758
|
822
| ||||||
Amortization expense
|
479
|
402
| ||||||
EBITDA
|
$
|
26,538
|
$
|
18,542
| ||||
Components of Adjusted EBITDA
| ||||||||
Other (a)
|
-
|
(104
|
)
| |||||
Stock options, restricted stock, and incentives expense (b)
|
2,764
|
760
| ||||||
Transactional expenses (c)
|
702
|
290
| ||||||
FDA PMTA (d)
|
-
|
3,290
| ||||||
Adjusted EBITDA
|
$
|
30,004
|
$
|
22,778
|
(a) |
Represents non-cash pension expense (income) and foreign exchange hedging.
|
(b) |
Represents non-cash stock options, restricted stock, incentives expense and Solace performance stock units.
|
(c) |
Represents the fees incurred for transaction expenses.
|
(d) |
Represents costs associated with applications related to FDA premarket tobacco product application ('PMTA').
|
11 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
(unaudited)
|
Three Months Ended
| |||||||
June 30,
| ||||||||
2021
|
2020
| |||||||
GAAP EPS
|
$
|
0.73
|
$
|
0.49
| ||||
Other (a)
|
-
|
(0.00
|
)
| |||||
Stock options, restricted stock, and incentives expense (b)
|
0.09
|
0.02
| ||||||
Transactional expenses (c)
|
0.02
|
0.01
| ||||||
FDA PMTA (d)
|
-
|
0.10
| ||||||
Tax (expense) benefit (e)
|
(0.01
|
)
|
0.03
| |||||
Adjusted diluted EPS (f)
|
$
|
0.84
|
$
|
0.66
|
Totals may not foot due to rounding
|
Consolidated
|
Zig-Zag Products
|
Stoker's Products
|
NewGen Products
| |||||||||||||||||||||||||||||
2nd Quarter
2021
|
2nd Quarter
2020
|
2nd Quarter
2021
|
2nd Quarter
2020
|
2nd Quarter
2021
|
2nd Quarter
2020
|
2nd Quarter
2021
|
2nd Quarter
2020
| |||||||||||||||||||||||||
Net sales
|
$
|
122,643
|
$
|
104,963
|
$
|
47,202
|
$
|
27,403
|
$
|
33,369
|
$
|
30,822
|
$
|
42,072
|
$
|
46,738
| ||||||||||||||||
Gross profit
|
$
|
59,973
|
$
|
47,936
|
$
|
27,743
|
$
|
15,671
|
$
|
18,146
|
$
|
16,508
|
$
|
14,084
|
$
|
15,757
| ||||||||||||||||
Operating income
|
$
|
24,879
|
$
|
17,180
|
$
|
21,338
|
$
|
12,227
|
$
|
13,826
|
$
|
12,084
|
$
|
1,657
|
$
|
3,271
| ||||||||||||||||
Adjustments:
| ||||||||||||||||||||||||||||||||
Transactional expenses
|
702
|
290
|
-
|
-
|
-
|
-
|
-
|
-
| ||||||||||||||||||||||||
FDA PMTA
|
-
|
3,290
|
-
|
-
|
-
|
-
|
-
|
-
| ||||||||||||||||||||||||
Adjusted operating income
|
$
|
25,581
|
$
|
20,760
|
$
|
21,338
|
$
|
12,227
|
$
|
13,826
|
$
|
12,084
|
$
|
1,657
|
$
|
3,271
|
12 |
Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
|
Attachments
- Original document
- Permalink
Disclaimer
Turning Point Brands Inc. published this content on 27 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2021 14:49:07 UTC.