Turning Point Brands (TPB) investor relations material

Executive summary

• Q3 2025 net sales rose 31.2% year-over-year to $119.0 million, driven by a 627.6% surge in Modern Oral sales, now 30.8% of total sales, and strong Stoker's segment growth, while Zig-Zag sales declined.

• Adjusted EBITDA increased 17.2% to $31.3 million, and net income attributable to shareholders grew 68.1% to $21.1 million, with diluted EPS of $1.13.

• For the nine months ended September 30, 2025, net sales grew 28.1% to $342.0 million, and net income attributable to shareholders rose 32.9% to $50.0 million.

• The company completed the divestiture of its CDS segment, now reported as discontinued operations.

• Modern Oral sales grew 22% sequentially from the prior quarter, and the company expects to qualify its first U.S. white pouch production lines in H1 2026.

Financial highlights

• Q3 2025 gross profit increased 39.7% year-over-year to $70.4 million, with gross margin improving to 59.2%.

• SG&A expenses were $44.5 million, up 50.5% year-over-year, mainly due to Modern Oral marketing and higher freight costs.

• Operating income for Q3 2025 was $25.9 million, up 24.4% from the prior year.

• Cash on hand at September 30, 2025, was $201.2 million, with no borrowings under the $75 million ABL facility.

• Free cash flow was negative $1 million, including a bond coupon payment.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance raised to $115–$120 million (from $110–$114 million).

• Full-year Modern Oral sales guidance increased to $125–$130 million (from $100–$110 million).

• Effective income tax rate expected to be 23%–26% going forward; CapEx for 2025 budgeted at $4–$5 million, with an additional $3–$5 million for Modern Oral PMTAs.

• Management expects continued growth in Modern Oral products and ongoing investment in organic growth, acquisitions, and joint ventures.

• Liquidity is expected to remain strong, with ample cash and borrowing capacity to meet operating needs.