Zig-Zag Segment On Sustainable Growth Trajectory, Turning Point CEO Reports 7% YoY Improvement In Adjusted EBITDA, Raises 2024 Guidance

Turning Point Brands, Inc. TPB, a maker of branded consumer products, including alternative smoking accessories and consumables with active ingredients, reported its financial results on Thursday for the second quarter ended June 30, 2024.

Adjusted EBITDA for the quarter came in positive at $27 million, representing a year-over-year improvement of 7%. That said, Turning Point has increased its full-year 2024 adjusted EBITDA guidance to $98 to $102 million.

"We were pleased by our second quarter results," Graham Purdy, president and CEO said. "We achieved our highest quarterly EBITDA since the second quarter of 2021."

Read Also: Zig-Zag Rolling Paper Sales Made 48% Of Total Turning Point Brands Sales In First Quarter

Q2 2024 Financial Highlights

• Total consolidated net sales increased 2.8% year-over-year to $108.5 million.
• Zig-Zag products net sales increased 8% year-over-year.
• Stoker's products net sales increased 18.5% year-over-year.
• Creative Distribution Solutions net sales decreased 33% year-over-year.
• Gross profit increased 2.6% year-over-year to $53.8 million.
• Net income increased 31% year-over-year to $13 million.
• Adjusted net income increased 12.2% year-over-year to $17.2 million.
• Second quarter consolidated selling, general and administrative expenses were $32.8 million compared to $31.9 million in the second quarter of 2023.

Other Highlights

• Total gross debt as of June 30, 2024 was $368.5 million.
• Net debt as of June 30, 2024 was $226.4 million.
• The company ended the quarter with total liquidity of $201 million, comprised of $142.2 million in cash and $58.8 million of asset-backed revolving credit facility capacity.
• On July 15, 2024, the company retired the remaining $118.5 million of its convertible notes outstanding with cash on hand.
• Pro forma for the retirement of the convertible notes as of June 30, 2024, the company had gross debt outstanding of $250 million and net debt of $226.4 million.

Zig-Zag and Stoker's Products net sales for the period Increased 13% year-over-year, the company said. "We believe Zig-Zag is on a sustainable growth trajectory, and Stoker's MST continues to grow market share," Purdy continued.

Read Next:

• Zig-Zag Segment Stable, Says CEO As Turning Point Reports Profit Increase And 6.1% YoY Drop In Q4 Net Sales

TPB Price Action

Turning Point Brands' shares traded 1.92% higher at $38.44 per share at the time of writing on Thursday morning.