Turning Point Brands Q4 2022 Net Sales Drop Slightly, What About Adjusted EBITDA?

Turning Point Brands, Inc. TPB released financial results for the fourth quarter and full year ended December 31, 2022, revealing total consolidated net sales decreased 1.8% to $103.4 million compared to Q4 2021.

Q4 2022 vs. Q4 2021

• Gross profit decreased 1.5% to $49.6 million

• Net income decreased $27.8 million to $($16.3) million primarily due to $34.8 million non-cash asset impairments

• Adjusted EBITDA decreased 2.9% to $23.1 million

• Diluted EPS of $(0.93) and adjusted diluted EPS of $0.69 compared to $0.57 and $0.66 in the same period one pear ago, respectively

• Total gross debt as of December 31, 2022 was $412.5 million. The corresponding net debt (total gross debt less cash) at December 31, 2022 was $306.1 million.

• The company ended the quarter with total liquidity of $127.8 million, comprised of $106.4 million in cash and $21.4 million of revolving credit facility capacity.

• The company recorded impairment charges of $34.8 million during the quarter related to goodwill and intangible assets of the NewGen segment and certain minority investments in development stage ventures.

FY 2022 vs. FY 2021

• Total consolidated net sales decreased 6.8% to $415.0 million

  • Combined net sales for Zig-Zag and Stoker’s Products increased 6.8% (increased 7.9% and 5.3%, respectively)

  • NewGen net sales declined by 35.2%

• Gross profit decreased 5.6% to $205.5 million

• Net income decreased $40.4 million to $11.6 million due in part to $41.1 million non-cash asset impairments

• Adjusted net income decreased $7.4 million to $56.2 million

• Adjusted EBITDA decreased 9.7% to $97.6 million

• Diluted EPS of $0.64 and Adjusted Diluted EPS of $2.83 as compared to $2.52 and $3.03 in the same period one year ago, respectively

2023 Outlook

At this time, the company expects full-year 2023 adjusted EBITDA to be $88 to $94 million.

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