☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-0709285 | |
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
5201 Interchange Way, Louisville, KY | 40229 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | TPB | New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☑ | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |
Emerging growth company | ☑ |
Page No. | ||||
PART I—FINANCIAL INFORMATION | ||||
ITEM 1 | Financial Statements (Unaudited) | |||
5 | ||||
6 | ||||
7 | ||||
11 | ||||
ITEM 2 | ||||
ITEM 3 | ||||
ITEM 4 | ||||
PART II—OTHER INFORMATION | ||||
ITEM 1 | ||||
ITEM 1A | ||||
ITEM 2 | ||||
ITEM 3 | ||||
ITEM 4 | ||||
ITEM 5 | ||||
ITEM 6 | ||||
• | the possibility that we will be unable to identify or contract with new suppliers or producers in the event of a supply or product disruption, as well as other supply chain concerns, including delays in product shipments and increases in freight cost; |
• | sensitivity of end-customers to increased sales taxes and economic conditions including significant increases in the rate of inflation and other declines in purchasing power; |
• | imposition of significant tariffs on imports into the U.S.; |
• | our certificateof incorporation limits the ownership of our common stock by individuals and entities that are Restricted Investors. These restrictions may affect the liquidity of our common stock and may result in Restricted Investors (as defined in our Certificate of Incorporation) being required to sell or redeem their shares at a loss or relinquish their voting, dividend and distribution rights; |
• | fluctuations in our results; |
ASSETS | March 31, 2021 | December 31, 2020 | ||||||
Current assets: | ||||||||
Cash | $ | 167,361 | $ | 41,765 | ||||
Accounts receivable, net of allowances of $148 in 2021 and $150 in 2020 | 6,606 | 9,331 | ||||||
Inventories | 98,351 | 85,856 | ||||||
Other current assets | 24,866 | 26,451 | ||||||
Total current assets | 297,184 | 163,403 | ||||||
Property, plant, and equipment, net | 15,648 | 15,524 | ||||||
Deferred income taxes | 0 | 610 | ||||||
Right of use assets | 17,406 | 17,918 | ||||||
Deferred financing costs, net | 464 | 641 | ||||||
Goodwill | 159,808 | 159,621 | ||||||
Other intangible assets, net | 78,945 | 79,422 | ||||||
Master Settlement Agreement (MSA) escrow deposits | 31,477 | 32,074 | ||||||
Other assets | 26,373 | 26,836 | ||||||
Total assets | $ | 627,305 | $ | 496,049 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 24,166 | $ | 9,201 | ||||
Accrued liabilities | 31,845 | 35,225 | ||||||
Current portion of long-term debt | 5,000 | 12,000 | ||||||
Other current liabilities | 205 | 203 | ||||||
Total current liabilities | 61,216 | 56,629 | ||||||
Notes payable and long-term debt | 424,802 | 302,112 | ||||||
Deferred income taxes | 735 | 0 | ||||||
Lease liabilities | 15,570 | 16,117 | ||||||
Other long-term liabilities | 0 | 3,704 | ||||||
Total liabilities | 502,323 | 378,562 | ||||||
Commitments and contingencies | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock; $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- | 0 | 0 | ||||||
Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 19,576,821 issued shares and 19,059,120 outstanding shares at March 31, 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- | 0 | 0 | ||||||
Additional paid-in capital | 102,879 | 102,423 | ||||||
Cost of repurchased common stock (517,701 shares at March 31, 2021 and 398,670 shares at December 31, 2020) | (15,924 | ) | (10,191 | ) | ||||
Accumulated other comprehensive loss | (480 | ) | (2,635 | ) | ||||
Accumulated earnings | 34,357 | 23,645 | ||||||
Non-controlling interest | 3,954 | 4,050 | ||||||
Total stockholders’ equity | 124,982 | 117,487 | ||||||
Total liabilities and stockholders’ equity | $ | 627,305 | $ | 496,049 |
ASSETS | (unaudited) September 30, 2021 | December 31, 2020 | ||||||
Current assets: | ||||||||
Cash | $ | 130,551 | $ | 41,765 | ||||
Accounts receivable, net of allowances of $138 in 2021 and $150 in 2020 | 8,507 | 9,331 | ||||||
Inventories | 98,605 | 85,856 | ||||||
Other current assets | 27,113 | 26,451 | ||||||
Total current assets | 264,776 | 163,403 | ||||||
Property, plant, and equipment, net | 17,596 | 15,524 | ||||||
Deferred income taxes | 0 | 610 | ||||||
Right of use assets | 15,984 | 17,918 | ||||||
Deferred financing costs, net | 415 | 641 | ||||||
Goodwill | 162,415 | 159,621 | ||||||
Other intangible assets, net | 87,962 | 79,422 | ||||||
Master Settlement Agreement (MSA) escrow deposits | 31,763 | 32,074 | ||||||
Other assets | 42,810 | 26,836 | ||||||
Total assets | $ | 623,721 | $ | 496,049 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 13,151 | $ | 9,201 | ||||
Accrued liabilities | 33,349 | 35,225 | ||||||
Current portion of long-term debt | 7,485 | 12,000 | ||||||
Other current liabilities | 71 | 203 | ||||||
Total current liabilities | 54,056 | 56,629 | ||||||
Notes payable and long-term debt | 413,553 | 302,112 | ||||||
Deferred income taxes | 1,654 | 0 | ||||||
Lease liabilities | 14,201 | 16,117 | ||||||
Other long-term liabilities | 0 | 3,704 | ||||||
Total liabilities | 483,464 | 378,562 | ||||||
Commitments and contingencies | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock; $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- | 0 | 0 | ||||||
Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 19,690,884 issued shares and 18,873,183 outstanding shares at September 30, 2021, and 19,532,464 issued shares and 19,133,794 outstanding shares at December 31, 2020 | 197 | 195 | ||||||
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0- | 0 | 0 | ||||||
Additional paid-in capital | 107,269 | 102,423 | ||||||
Cost of repurchased common stock (817,701 shares at September 30, 2021 and 398,670 shares at December 31, 2020) | (30,672 | ) | (10,191 | ) | ||||
Accumulated other comprehensive loss | (123 | ) | (2,635 | ) | ||||
Accumulated earnings | 61,052 | 23,645 | ||||||
Non-controlling interest | 2,534 | 4,050 | ||||||
Total stockholders’ equity | 140,257 | 117,487 | ||||||
Total liabilities and stockholders’ equity | $ | 623,721 | $ | 496,049 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Net sales | $ | 107,641 | $ | 90,689 | ||||
Cost of sales | 54,380 | 49,258 | ||||||
Gross profit | 53,261 | 41,431 | ||||||
Selling, general, and administrative expenses | 28,912 | 32,394 | ||||||
Operating income | 24,349 | 9,037 | ||||||
Interest expense, net | 4,486 | 3,309 | ||||||
Investment income | (25 | ) | (91 | ) | ||||
Loss on extinguishment of debt | 5,706 | 0 | ||||||
Net periodic income, excluding service cost | 0 | (87 | ) | |||||
Income before income taxes | 14,182 | 5,906 | ||||||
Income tax expense | 2,654 | 1,407 | ||||||
Consolidated net income | 11,528 | 4,499 | ||||||
Net loss attributable to non-controlling interest | (255 | ) | 0 | |||||
Net income attributable to Turning Point Brands, Inc. | $ | 11,783 | $ | 4,499 | ||||
Basic income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.62 | $ | 0.23 | ||||
Diluted income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.57 | $ | 0.22 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 19,093,961 | 19,689,446 | ||||||
Diluted | 22,665,067 | 20,106,800 |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net sales | $ | 109,904 | $ | 104,174 | ||||
Cost of sales | 55,635 | 55,867 | ||||||
Gross profit | 54,269 | 48,307 | ||||||
Selling, general, and administrative expenses | 31,894 | 32,286 | ||||||
Operating income | 22,375 | 16,021 | ||||||
Interest expense, net | 5,397 | 3,539 | ||||||
Investment income | (157 | ) | (3 | ) | ||||
Gain on extinguishment of debt | (375 | ) | 0 | |||||
Net periodic income, excluding service cost | 0 | 1,188 | ||||||
Income before income taxes | 17,510 | 11,297 | ||||||
Income tax expense | 4,073 | 2,277 | ||||||
Consolidated net income | 13,437 | 9,020 | ||||||
Net loss attributable to non-controlling interest | (31 | ) | 0 | |||||
Net income attributable to Turning Point Brands, Inc. | $ | 13,468 | $ | 9,020 | ||||
Basic income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.71 | $ | 0.47 | ||||
Diluted income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.65 | $ | 0.44 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 18,897,974 | 19,240,187 | ||||||
Diluted | 22,364,807 | 22,839,797 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Consolidated net income | $ | 11,528 | $ | 4,499 | ||||
Other comprehensive income, net of tax | ||||||||
Amortization of unrealized pension and postretirement gain (loss), net of tax of $0 in 2021 and $2 in 2020 | 0 | 9 | ||||||
Unrealized loss on MSA investments, net of tax of $144 in 2021 and $0 in 2020 | (452 | ) | 0 | |||||
Foreign currency translation, net of tax of $0 in 2021 and 2020 | 318 | 0 | ||||||
Unrealized gain (loss) on derivative instruments, net of tax of $937 in 2021 and $624 in 2020 | 2,448 | (1,615 | ) | |||||
2,314 | (1,606 | ) | ||||||
Consolidated comprehensive income | 13,842 | 2,893 | ||||||
Comprehensive (loss) income attributable to non-controlling interest | (96 | ) | 0 | |||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 13,938 | $ | 2,893 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net sales | $ | 340,188 | $ | 299,826 | ||||
Cost of sales | 172,685 | 162,152 | ||||||
Gross profit | 167,503 | 137,674 | ||||||
Selling, general, and administrative expenses | 95,900 | 95,436 | ||||||
Operating income | 71,603 | 42,238 | ||||||
Interest expense, net | 15,406 | 10,143 | ||||||
Investment income | (292 | ) | (128 | ) | ||||
Loss on extinguishment of debt | 5,331 | 0 | ||||||
Net periodic income, excluding service cost | 0 | 997 | ||||||
Income before income taxes | 51,158 | 31,226 | ||||||
Income tax expense | 11,151 | 7,412 | ||||||
Consolidated net income | 40,007 | 23,814 | ||||||
Net loss attributable to non-controlling interest | (598 | ) | 0 | |||||
Net income attributable to Turning Point Brands, Inc. | $ | 40,605 | $ | 23,814 | ||||
Basic income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 2.14 | $ | 1.22 | ||||
Diluted income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 1.95 | $ | 1.17 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 18,988,435 | 19,478,297 | ||||||
Diluted | 22,464,542 | 23,061,499 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income | $ | 11,528 | $ | 4,499 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss on extinguishment of debt | 5,706 | 0 | ||||||
Gain on sale of property, plant, and equipment | (2 | ) | 0 | |||||
Depreciation expense | 788 | 851 | ||||||
Amortization of other intangible assets | 477 | 425 | ||||||
Amortization of deferred financing costs | 604 | 552 | ||||||
Deferred income taxes | 552 | 1,006 | ||||||
Stock compensation expense | 1,498 | 455 | ||||||
Noncash lease expense | 6 | 13 | ||||||
Gain on investments | (13 | ) | 0 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 2,735 | 2,596 | ||||||
Inventories | (12,461 | ) | 1,784 | |||||
Other current assets | 1,283 | (2,420 | ) | |||||
Other assets | 464 | (130 | ) | |||||
Accounts payable | 14,882 | 3,210 | ||||||
Accrued postretirement liabilities | 0 | (27 | ) | |||||
Accrued liabilities and other | (3,806 | ) | 1,913 | |||||
Net cash provided by operating activities | $ | 24,241 | $ | 14,727 | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | $ | (842 | ) | $ | (877 | ) | ||
Restricted cash, MSA escrow deposits | (14,920 | ) | 0 | |||||
Proceeds on the sale of property, plant and equipment | 2 | 0 | ||||||
Net cash used in investing activities | $ | (15,760 | ) | $ | (877 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from Senior Secured Notes | $ | 250,000 | $ | 0 | ||||
Payments of 2018 first lien term loan | (130,000 | ) | (2,000 | ) | ||||
Settlement of interest rate swaps | (3,573 | ) | 0 | |||||
Payment of IVG note | 0 | (4,240 | ) | |||||
Payment of dividends | (958 | ) | (886 | ) | ||||
Payments of financing costs | (6,614 | ) | (168 | ) | ||||
Exercise of options | 425 | 227 | ||||||
Redemption of options | (1,466 | ) | 0 | |||||
Common stock repurchased | (5,733 | ) | (2,627 | ) | ||||
Net cash provided by (used in) financing activities | $ | 102,081 | $ | (9,694 | ) | |||
Net increase in cash | $ | 110,562 | $ | 4,156 | ||||
Effect of foreign currency translation on cash | $ | 101 | $ | 0 | ||||
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 | 167,361 | 99,406 | ||||||
Restricted | 20,141 | 32,074 | ||||||
Total cash at end of period | $ | 187,502 | $ | 131,480 | ||||
Supplemental schedule of noncash financing activities: | ||||||||
Dividends declared not paid | $ | 1,071 | $ | 998 | ||||
Accrued expenses for incurred financing costs | $ | 301 | $ | 13 |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Consolidated net income | $ | 13,437 | $ | 9,020 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Amortization of unrealized pension and postretirement gain, net of tax of $0 in 2021 and $62 in 2020 | 0 | 1,816 | ||||||
Unrealized loss on MSA investments, net of tax of $14 in 2021 and $0 in 2020 | (43 | ) | 0 | |||||
Foreign currency translation, net of tax of $0 in 2021 and 2020 | (637 | ) | 0 | |||||
Unrealized gain on derivative instruments, net of tax of $1 in 2021 and $84 in 2020 | 3 | 238 | ||||||
(677 | ) | 2,054 | ||||||
Consolidated comprehensive income | 12,760 | 11,074 | ||||||
Comprehensive loss attributable to non-controlling interest | (306 | ) | 0 | |||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 13,066 | $ | 11,074 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Consolidated net income | $ | 40,007 | $ | 23,814 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Amortization of unrealized pension and postretirement gain, net of tax of $0 in 2021 and $57 in 2020 | 0 | 1,830 | ||||||
Unrealized loss on MSA investments, net of tax of $75 in 2021 and $0 in 2020 | (235 | ) | 0 | |||||
Foreign currency translation, net of tax of $0 in 2021 and 2020 | 324 | 0 | ||||||
Unrealized gain (loss) on derivative instruments, net of tax of $811 in 2021 and $516 in 2020 | 2,628 | (1,302 | ) | |||||
2,717 | 528 | |||||||
Consolidated comprehensive income | 42,724 | 24,342 | ||||||
Comprehensive loss attributable to non-controlling interest | (393 | ) | 0 | |||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 43,117 | $ | 24,342 |
Voting Shares | Common Stock, Voting | Additional Paid-In Capital | Cost of Repurchased Common Stock | Accumulated Other Comprehensive Loss | Accumulated Earnings (Deficit) | Non- Controlling Interest | Total | |||||||||||||||||||||||||
Beginning balance January 1, 2021 | 19,133,794 | $ | 195 | $ | 102,423 | $ | (10,191 | ) | $ | (2,635 | ) | $ | 23,645 | $ | 4,050 | $ | 117,487 | |||||||||||||||
Unrealized loss on MSA investments, net of tax of $144 | - | 0 | 0 | 0 | (452 | ) | 0 | 0 | (452 | ) | ||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $937 | - | 0 | 0 | 0 | 2,448 | 0 | 0 | 2,448 | ||||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | 159 | 0 | 159 | 318 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 1,498 | 0 | 0 | 0 | 0 | 1,498 | ||||||||||||||||||||||||
Exercise of options | 44,357 | 1 | 424 | 0 | 0 | 0 | 0 | 425 | ||||||||||||||||||||||||
Redemption of options | - | 0 | (1,466 | ) | 0 | 0 | 0 | 0 | (1,466 | ) | ||||||||||||||||||||||
Cost of repurchased common stock | (119,031 | ) | 0 | 0 | (5,733 | ) | 0 | 0 | 0 | (5,733 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (1,071 | ) | 0 | (1,071 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 11,783 | (255 | ) | 11,528 | |||||||||||||||||||||||
Ending balance March 31, 2021 | 19,059,120 | $ | 196 | $ | 102,879 | $ | (15,924 | ) | $ | (480 | ) | $ | 34,357 | $ | 3,954 | $ | 124,982 | |||||||||||||||
Beginning balance January 1, 2020 | 19,680,673 | $ | 197 | $ | 125,469 | $ | 0 | $ | (3,773 | ) | $ | (15,308 | ) | $ | 0 | $ | 106,585 | |||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $2 | - | 0 | 0 | 0 | 9 | 0 | 9 | |||||||||||||||||||||||||
Unrealized loss on derivative instruments, net of tax of $624 | - | 0 | 0 | 0 | (1,615 | ) | 0 | (1,615 | ) | |||||||||||||||||||||||
Stock compensation expense | - | 0 | 455 | 0 | 0 | 0 | 455 | |||||||||||||||||||||||||
Exercise of options | 42,407 | 0 | 227 | 0 | 0 | 0 | 227 | |||||||||||||||||||||||||
Cost of repurchased common stock | (134,130 | ) | 0 | 0 | (2,627 | ) | 0 | 0 | (2,627 | ) | ||||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (998 | ) | (998 | ) | |||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 4,499 | 4,499 | |||||||||||||||||||||||||
Cumulative effect of change in accounting principle | - | 0 | (24,939 | ) | 0 | 0 | 6,436 | (18,503 | ) | |||||||||||||||||||||||
Ending balance March 31, 2020 | 19,588,950 | $ | 197 | $ | 101,212 | $ | (2,627 | ) | $ | (5,379 | ) | $ | (5,371 | ) | $ | 0 | $ | 88,032 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income | $ | 40,007 | $ | 23,814 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss on extinguishment of debt | 5,331 | 0 | ||||||
Pension settlement and curtailment loss | 0 | 1,188 | ||||||
Impairment loss | 0 | 149 | ||||||
(Gain) loss on sale of property, plant, and equipment | (2 | ) | 36 | |||||
Depreciation expense | 2,313 | 2,482 | ||||||
Amortization of other intangible assets | 1,431 | 1,304 | ||||||
Amortization of deferred financing costs | 1,895 | 1,670 | ||||||
Deferred income taxes | 1,528 | 2,259 | ||||||
Stock compensation expense | 6,015 | 1,986 | ||||||
Noncash lease (income) expense | (49 | ) | 179 | |||||
Gain on MSA escrow deposits | (144 | ) | 0 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 1,324 | (1,877 | ) | |||||
Inventories | (10,970 | ) | (2,208 | ) | ||||
Other current assets | (491 | ) | (829 | ) | ||||
Other assets | 685 | 1,941 | ||||||
Accounts payable | 3,488 | (3,200 | ) | |||||
Accrued postretirement liabilities | 0 | (54 | ) | |||||
Accrued liabilities and other | (2,796 | ) | 4,359 | |||||
Net cash provided by operating activities | $ | 49,565 | $ | 33,199 | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | $ | (4,391 | ) | $ | (3,420 | ) | ||
Acquisitions, net of cash acquired | (16,416 | ) | (37,735 | ) | ||||
Payments for investments | (16,657 | ) | 0 | |||||
Restricted cash, MSA escrow deposits | (14,783 | ) | 0 | |||||
Proceeds on the sale of property, plant and equipment | 2 | 3 | ||||||
Net cash used in investing activities | $ | (52,245 | ) | $ | (41,152 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from Senior Secured Notes | $ | 250,000 | $ | 0 | ||||
Payments of 2018 first lien term loan | (130,000 | ) | (8,000 | ) | ||||
Settlement of interest rate swaps | (3,573 | ) | 0 | |||||
Payment of promissory note | (9,625 | ) | 0 | |||||
Payment of IVG note | 0 | (4,240 | ) | |||||
Proceeds from unsecured notes | 0 | 7,485 | ||||||
Standard Diversified Inc. reorganization, net of cash acquired | 0 | (1,737 | ) | |||||
Payment of dividends | (3,056 | ) | (2,846 | ) | ||||
Payments of financing costs | (6,921 | ) | (194 | ) | ||||
Exercise of options | 2,071 | 303 | ||||||
Redemption of options | (2,111 | ) | 0 | |||||
Common stock repurchased | (20,481 | ) | (7,665 | ) | ||||
Net cash provided by (used in) financing activities | $ | 76,304 | $ | (16,894 | ) | |||
Net increase (decrease) in cash | $ | 73,624 | $ | (24,847 | ) | |||
Effect of foreign currency translation on cash | $ | 235 | $ | 0 | ||||
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 | 130,551 | 67,403 | ||||||
Restricted | 20,147 | 35,074 | ||||||
Total cash at end of period | $ | 150,698 | $ | 102,477 | ||||
Supplemental schedule of noncash financing activities: | ||||||||
Dividends declared not paid | $ | 1,255 | $ | 1,081 | ||||
Issuance of note payable for acquisition | $ | 0 | $ | 10,000 | ||||
Accrued consideration for acquisition | $ | 316 | $ | 0 |
Voting Shares | Common Stock, Voting | Additional Paid-In Capital | Cost of Repurchased Common Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Deficit) | Non- Controlling Interest | Total | |||||||||||||||||||||||||
Beginning balance July 1, 2021 | 18,923,523 | $ | 196 | $ | 105,460 | $ | (24,277 | ) | $ | 279 | $ | 48,647 | $ | 3,963 | $ | 134,268 | ||||||||||||||||
Unrealized loss on MSA investments, net of tax of $14 | - | 0 | 0 | 0 | (43 | ) | 0 | 0 | (43 | ) | ||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $1 | - | 0 | 0 | 0 | 3 | 0 | 0 | 3 | ||||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | (362 | ) | 0 | (275 | ) | (637 | ) | |||||||||||||||||||||
Stock compensation expense | - | 0 | 1,752 | 0 | 0 | 0 | 0 | 1,752 | ||||||||||||||||||||||||
Exercise of options | 74,660 | 1 | 1,184 | 0 | 0 | 0 | 0 | 1,185 | ||||||||||||||||||||||||
Cost of repurchased common stock | (125,000 | ) | 0 | 0 | (6,395 | ) | 0 | 0 | 0 | (6,395 | ) | |||||||||||||||||||||
Acquisition of Recreation Marketing interest | - | 0 | (1,127 | ) | 0 | 0 | 0 | (1,123 | ) | (2,250 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (1,063 | ) | 0 | (1,063 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 13,468 | (31 | ) | 13,437 | |||||||||||||||||||||||
Ending balance September 30, 2021 | 18,873,183 | $ | 197 | $ | 107,269 | $ | (30,672 | ) | $ | (123 | ) | $ | 61,052 | $ | 2,534 | $ | 140,257 | |||||||||||||||
Beginning balance July 1, 2020 | 19,467,164 | $ | 197 | $ | 101,989 | $ | (5,289 | ) | $ | (5,299 | ) | $ | 3,933 | $ | 0 | $ | 95,531 | |||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $62 | - | 0 | 0 | 0 | 1,816 | 0 | 0 | 1,816 | ||||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $84 | - | 0 | 0 | 0 | 238 | 0 | 0 | 238 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 772 | 0 | 0 | 0 | 0 | 772 | ||||||||||||||||||||||||
Exercise of options | 4,048 | 0 | 58 | 0 | 0 | 0 | 0 | 58 | ||||||||||||||||||||||||
Cost of repurchased common stock | (82,097 | ) | 0 | 0 | (2,376 | ) | 0 | 0 | 0 | (2,376 | ) | |||||||||||||||||||||
Standard Diversified Inc. reorganization, net | (244,214 | ) | (2 | ) | 0 | 0 | 0 | (1,735 | ) | 0 | (1,737 | ) | ||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (975 | ) | 0 | (975 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 9,020 | 0 | 9,020 | ||||||||||||||||||||||||
Ending balance September 30, 2020 | 19,144,901 | $ | 195 | $ | 102,819 | $ | (7,665 | ) | $ | (3,245 | ) | $ | 10,243 | $ | 0 | $ | 102,347 |
Voting Shares | Common Stock, Voting | Additional Paid-In Capital | Cost of Repurchased Common Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Deficit) | Non- Controlling Interest | Total | |||||||||||||||||||||||||
Beginning balance January 1, 2021 | 19,133,794 | $ | 195 | $ | 102,423 | $ | (10,191 | ) | $ | (2,635 | ) | $ | 23,645 | $ | 4,050 | 117,487 | ||||||||||||||||
Unrealized loss on MSA investments, net of tax of $75 | - | 0 | 0 | 0 | (235 | ) | 0 | 0 | (235 | ) | ||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $811 | - | 0 | 0 | 0 | 2,628 | 0 | 0 | 2,628 | ||||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | 119 | 0 | 205 | 324 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 6,015 | 0 | 0 | 0 | 0 | 6,015 | ||||||||||||||||||||||||
Exercise of options | 158,420 | 2 | 2,069 | 0 | 0 | 0 | 0 | 2,071 | ||||||||||||||||||||||||
Redemption of options | - | 0 | (2,111 | ) | 0 | 0 | 0 | 0 | (2,111 | ) | ||||||||||||||||||||||
Cost of repurchased common stock | (419,031 | ) | 0 | 0 | (20,481 | ) | 0 | 0 | 0 | (20,481 | ) | |||||||||||||||||||||
Acquisition of Recreation Marketing interest | - | 0 | (1,127 | ) | 0 | 0 | 0 | (1,123 | ) | (2,250 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (3,198 | ) | 0 | (3,198 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 40,605 | (598 | ) | 40,007 | |||||||||||||||||||||||
Ending balance September 30, 2021 | 18,873,183 | $ | 197 | $ | 107,269 | $ | (30,672 | ) | $ | (123 | ) | $ | 61,052 | $ | 2,534 | $ | 140,257 | |||||||||||||||
Beginning balance January 1, 2020 | 19,680,673 | $ | 197 | $ | 100,530 | $ | 0 | $ | (3,773 | ) | $ | (8,872 | ) | $ | 0 | $ | 88,082 | |||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $57 | - | 0 | 0 | 0 | 1,830 | 0 | 0 | 1,830 | ||||||||||||||||||||||||
Unrealized loss on derivative instruments, net of tax of $516 | - | 0 | 0 | 0 | (1,302 | ) | 0 | 0 | (1,302 | ) | ||||||||||||||||||||||
Stock compensation expense | - | 0 | 1,986 | 0 | 0 | 0 | 0 | 1,986 | ||||||||||||||||||||||||
Exercise of options | 47,402 | 0 | 303 | 0 | 0 | 0 | 0 | 303 | ||||||||||||||||||||||||
Cost of repurchased common stock | (338,960 | ) | 0 | 0 | (7,665 | ) | 0 | 0 | 0 | (7,665 | ) | |||||||||||||||||||||
Standard Diversified Inc. reorganization, net | (244,214 | ) | (2 | ) | 0 | 0 | 0 | (1,735 | ) | 0 | (1,737 | ) | ||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (2,964 | ) | 0 | (2,964 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 23,814 | 0 | 23,814 | ||||||||||||||||||||||||
Ending balance September 30, 2020 | 19,144,901 | $ | 195 | $ | 102,819 | $ | (7,665 | ) | $ | (3,245 | ) | $ | 10,243 | $ | 0 | $ | 102,347 |
● | Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. |
● | Level 2 – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
● | Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
As of March 31, 2021 | As of December 31, 2020 | |||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cost and Estimated Fair Value | ||||||||||||||||
Cash and cash equivalents | $ | 17,141 | $ | 0 | $ | 0 | $ | 17,141 | $ | 32,074 | ||||||||||
U.S. Governmental agency obligations (unrealized loss position < 12 months) | 14,933 | 0 | (597 | ) | 14,336 | 0 | ||||||||||||||
$ | 32,074 | $ | 0 | $ | (597 | ) | $ | 31,477 | $ | 32,074 |
As of March 31, 2021 | ||||
Less than one year | $ | 0 | ||
One to five years | 0 | |||
Five to ten years | 12,984 | |||
Greater than ten years | 1,949 | |||
Total | $ | 14,933 |
As of September 30, 2021 | As of December 31, 2020 | |||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cost and Estimated Fair Value | ||||||||||||||||
Cash and cash equivalents | $ | 17,146 | $ | 0 | $ | 0 | $ | 17,146 | $ | 32,074 | ||||||||||
U.S. Governmental agency obligations (unrealized loss position < 12 months) | 14,927 | 0 | (310 | ) | 14,617 | 0 | ||||||||||||||
$ | 32,073 | $ | 0 | $ | (310 | ) | $ | 31,763 | $ | 32,074 |
As of September 30, 2021 | ||||
Less than one year | $ | 0 | ||
One to five years | 2,000 | |||
Five to ten years | 11,476 | |||
Greater than ten years | 1,451 | |||
Total | $ | 14,927 |
Deposits as of | ||||||||
Sales Year | March 31, 2021 | December 31, 2020 | ||||||
1999 | $ | 211 | $ | 211 | ||||
2000 | 1,017 | 1,017 | ||||||
2001 | 1,673 | 1,673 | ||||||
2002 | 2,271 | 2,271 | ||||||
2003 | 4,249 | 4,249 | ||||||
2004 | 3,714 | 3,714 | ||||||
2005 | 4,553 | 4,553 | ||||||
2006 | 3,847 | 3,847 | ||||||
2007 | 4,167 | 4,167 | ||||||
2008 | 3,364 | 3,364 | ||||||
2009 | 1,619 | 1,619 | ||||||
2010 | 406 | 406 | ||||||
2011 | 193 | 193 | ||||||
2012 | 199 | 199 | ||||||
2013 | 173 | 173 | ||||||
2014 | 143 | 143 | ||||||
2015 | 101 | 101 | ||||||
2016 | 91 | 91 | ||||||
2017 | 83 | 83 | ||||||
Total | $ | 32,074 | $ | 32,074 |
Deposits as of | ||||||||
Sales Year | September 30, 2021 | December 31, 2020 | ||||||
1999 | $ | 211 | $ | 211 | ||||
2000 | 1,017 | 1,017 | ||||||
2001 | 1,673 | 1,673 | ||||||
2002 | 2,271 | 2,271 | ||||||
2003 | 4,249 | 4,249 | ||||||
2004 | 3,714 | 3,714 | ||||||
2005 | 4,553 | 4,553 | ||||||
2006 | 3,847 | 3,847 | ||||||
2007 | 4,167 | 4,167 | ||||||
2008 | 3,364 | 3,364 | ||||||
2009 | 1,619 | 1,619 | ||||||
2010 | 406 | 406 | ||||||
2011 | 193 | 193 | ||||||
2012 | 199 | 199 | ||||||
2013 | 173 | 173 | ||||||
2014 | 143 | 143 | ||||||
2015 | 101 | 101 | ||||||
2016 | 91 | 91 | ||||||
2017 | 82 | 83 | ||||||
Total | $ | 32,073 | $ | 32,074 |
Total consideration transferred | $ | 3,462 | ||
Adjustments to consideration transferred: | ||||
Cash acquired | (43 | ) | ||
Accrued consideration | 480 | |||
Adjusted consideration transferred | 3,899 | |||
Assets acquired: | ||||
Working capital (primarily AR and inventory) | 1,342 | |||
Fixed assets and Other long term assets | 27 | |||
Net assets acquired | $ | 1,369 | ||
Goodwill | $ | 2,530 |
Total consideration transferred | $ | 4,000 | ||
Adjustments to consideration transferred: | ||||
Cash acquired | (3,711 | ) | ||
Working capital | 418 | |||
Debt eliminated in consolidation | 2,000 | |||
Adjusted consideration transferred | 2,707 | |||
Assets acquired: | ||||
Working capital (primarily AR and inventory) | 1,551 | |||
Fixed assets and Other long term assets | 70 | |||
Other liabilities | (203 | ) | ||
Non-controlling interest | (4,050 | ) | ||
Net assets acquired | $ | (2,632 | ) | |
Goodwill | $ | 5,339 |
Consolidated Statement of Income | For the three months ended March 31, 2020 | |||||||||||
As Originally Reported | Effect of Change (a) | As Adjusted | ||||||||||
Cost of sales | $ | 49,258 | $ | 0 | $ | 49,258 | ||||||
Income before income taxes | $ | 4,221 | $ | 0 | $ | 4,221 | ||||||
Income tax expense | $ | 946 | $ | 0 | $ | 946 | ||||||
Net income attributable to Turning Point Brands, Inc. | $ | 3,275 | $ | 0 | $ | 3,275 | ||||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.17 | $ | 0 | $ | 0.17 | ||||||
Diluted | $ | 0.16 | $ | 0 | $ | 0.16 |
Consolidated Balance Sheets | December 31, 2020 | |||||||||||
As Originally Reported | Effect of Change | As Adjusted | ||||||||||
Inventories | $ | 79,750 | $ | 6,106 | $ | 85,856 | ||||||
Deferered income taxes | $ | 4,082 | $ | 1,584 | $ | 5,666 | ||||||
Accumulated earnings (deficit) | $ | 12,058 | $ | 4,522 | $ | 16,580 |
Consolidated Statement of Income | For the three months ended September 30, 2020 | |||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Cost of sales | $ | 55,867 | $ | 0 | $ | 55,867 | ||||||
Income before income taxes | $ | 9,612 | $ | 0 | $ | 9,612 | ||||||
Income tax expense | $ | 1,816 | $ | 0 | $ | 1,816 | ||||||
Net income attributable to Turning Point Brands, Inc. | $ | 7,796 | $ | 0 | $ | 7,796 | ||||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.41 | $ | 0 | $ | 0.41 | ||||||
Diluted | $ | 0.40 | $ | 0 | $ | 0.40 |
Consolidated Statement of Cash Flows | For the three months ended March 31, 2020 | |||||||||||
As Originally Reported | Effect of Change (a) | As Adjusted | ||||||||||
Consolidated net income | $ | 3,275 | $ | 0 | $ | 3,275 | ||||||
Deferred income taxes | $ | 545 | $ | 0 | $ | 545 | ||||||
Inventories | $ | 1,784 | $ | 0 | $ | 1,784 |
For the nine months ended September 30, 2020 | ||||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Cost of sales | $ | 161,996 | $ | 156 | $ | 162,152 | ||||||
Income before income taxes | $ | 26,327 | $ | (156 | ) | $ | 26,171 | |||||
Income tax expense | $ | 6,029 | $ | 0 | $ | 6,029 | ||||||
Net income attributable to Turning Point Brands, Inc. | $ | 20,298 | $ | (156 | ) | $ | 20,142 | |||||
Earnings per common share: | ||||||||||||
Basic | $ | 1.04 | $ | (0.01 | ) | $ | 1.03 | |||||
Diluted | $ | 1.02 | $ | (0.01 | ) | $ | 1.01 |
Consolidated Balance Sheets | December 31, 2020 | |||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Inventories | $ | 79,750 | $ | 6,106 | $ | 85,856 | ||||||
Deferred income taxes | $ | 4,082 | $ | 1,584 | $ | 5,666 | ||||||
Accumulated earnings (deficit) | $ | 12,058 | $ | 4,522 | $ | 16,580 |
Consolidated Statement of Cash Flows | For the nine months ended September 30, 2020 | |||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Consolidated net income | $ | 20,298 | $ | (156 | ) | $ | 20,142 | |||||
Deferred income taxes | $ | 876 | $ | 0 | $ | 876 | ||||||
Inventories | $ | (2,364 | ) | $ | 156 | $ | (2,208 | ) |
March 31, 2021 | December 31, 2020 | |||||||
Raw materials and work in process | $ | 7,519 | $ | 8,137 | ||||
Leaf tobacco | 41,707 | 32,948 | ||||||
Finished goods - Zig-Zag Products | 21,477 | 14,903 | ||||||
Finished goods - Stoker’s Products | 9,777 | 9,727 | ||||||
Finished goods - NewGen products | 16,668 | 18,916 | ||||||
Other | 1,203 | 1,225 | ||||||
Inventory | $ | 98,351 | $ | 85,856 |
September 30, 2021 | December 31, 2020 | |||||||
Raw materials and work in process | $ | 6,892 | $ | 8,137 | ||||
Leaf tobacco | 38,151 | 32,948 | ||||||
Finished goods - Zig-Zag Products | 26,839 | 14,903 | ||||||
Finished goods - Stoker’s Products | 11,666 | 9,727 | ||||||
Finished goods - NewGen products | 13,554 | 18,916 | ||||||
Other | 1,503 | 1,225 | ||||||
Inventories | $ | 98,605 | $ | 85,856 |
March 31, 2021 | December 31, 2020 | |||||||
Inventory deposits | $ | 7,369 | $ | 7,113 | ||||
Insurance deposit | 3,000 | 3,000 | ||||||
Prepaid taxes | 526 | 813 | ||||||
Other | 13,971 | 15,525 | ||||||
Total | $ | 24,866 | $ | 26,451 |
September 30, 2021 | December 31, 2020 | |||||||
Inventory deposits | $ | 9,423 | $ | 7,113 | ||||
Insurance deposit | 3,000 | 3,000 | ||||||
Prepaid taxes | 1,533 | 813 | ||||||
Other | 13,157 | 15,525 | ||||||
Total | $ | 27,113 | $ | 26,451 |
March 31, 2021 | December 31, 2020 | |||||||
Land | $ | 22 | $ | 22 | ||||
Buildings and improvements | 2,750 | 2,750 | ||||||
Leasehold improvements | 4,702 | 4,702 | ||||||
Machinery and equipment | 16,499 | 15,612 | ||||||
Furniture and fixtures | 9,025 | 9,025 | ||||||
Gross property, plant and equipment | 32,998 | 32,111 | ||||||
Accumulated depreciation | (17,350 | ) | (16,587 | ) | ||||
Net property, plant and equipment | $ | 15,648 | $ | 15,524 |
September 30, 2021 | December 31, 2020 | |||||||
Land | $ | 22 | $ | 22 | ||||
Buildings and improvements | 3,069 | 2,750 | ||||||
Leasehold improvements | 4,739 | 4,702 | ||||||
Machinery and equipment | 19,352 | 15,612 | ||||||
Furniture and fixtures | 9,281 | 9,025 | ||||||
Gross property, plant and equipment | 36,463 | 32,111 | ||||||
Accumulated depreciation | (18,867 | ) | (16,587 | ) | ||||
Net property, plant and equipment | $ | 17,596 | $ | 15,524 |
March 31, 2021 | December 31, 2020 | |||||||
Equity investments | $ | 24,016 | $ | 24,018 | ||||
Other | 2,357 | 2,818 | ||||||
Total | $ | 26,373 | $ | 26,836 |
September 30, 2021 | December 31, 2020 | |||||||
Equity investments | $ | 32,749 | $ | 24,018 | ||||
Debt security investment | 8,000 | 0 | ||||||
Other | 2,061 | 2,818 | ||||||
Total | $ | 42,810 | $ | 26,836 |
March 31, 2021 | December 31, 2020 | |||||||
Accrued payroll and related items | $ | 3,664 | $ | 9,459 | ||||
Customer returns and allowances | 5,683 | 5,259 | ||||||
Taxes payable | 7,025 | 4,326 | ||||||
Lease liabilities | 3,269 | 3,228 | ||||||
Accrued interest | 2,924 | 2,096 | ||||||
Other | 9,280 | 10,857 | ||||||
Total | $ | 31,845 | $ | 35,225 |
September 30, 2021 | December 31, 2020 | |||||||
Accrued payroll and related items | $ | 7,029 | $ | 9,459 | ||||
Customer returns and allowances | 7,635 | 5,259 | ||||||
Taxes payable | 4,409 | 4,326 | ||||||
Lease liabilities | 3,159 | 3,228 | ||||||
Accrued interest | 2,837 | 2,096 | ||||||
Other | 8,280 | 10,857 | ||||||
Total | $ | 33,349 | $ | 35,225 |
March 31, 2021 | December 31, 2020 | |||||||
Senior Secured Notes | $ | 250,000 | $ | 0 | ||||
2018 First Lien Term Loan | 0 | 130,000 | ||||||
Convertible Senior Notes | 172,500 | 172,500 | ||||||
Note payable - Promissory Note | 10,000 | 10,000 | ||||||
Note payable - Unsecured Loan | 7,485 | 7,485 | ||||||
Gross notes payable and long-term debt | 439,985 | 319,985 | ||||||
Less deferred finance charges | (10,183 | ) | (5,873 | ) | ||||
Less current maturities | (5,000 | ) | (12,000 | ) | ||||
Notes payable and long-term debt | $ | 424,802 | $ | 302,112 |
September 30, 2021 | December 31, 2020 | |||||||
Senior Secured Notes | $ | 250,000 | $ | 0 | ||||
2018 First Lien Term Loan | 0 | 130,000 | ||||||
Convertible Senior Notes | 172,500 | 172,500 | ||||||
Note payable - Promissory Note | 0 | 10,000 | ||||||
Note payable - Unsecured Loan | 7,485 | 7,485 | ||||||
Gross notes payable and long-term debt | 429,985 | 319,985 | ||||||
Less deferred finance charges | (8,947 | ) | (5,873 | ) | ||||
Less current maturities | (7,485 | ) | (12,000 | ) | ||||
Notes payable and long-term debt | $ | 413,553 | $ | 302,112 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Operating lease cost | ||||||||
Cost of sales | $ | 225 | $ | 233 | ||||
Selling, general and administrative | 752 | 398 | ||||||
Variable lease cost (1) | 205 | 312 | ||||||
Short-term lease cost | 11 | 83 | ||||||
Sublease income | (30 | ) | (30 | ) | ||||
Total | $ | 1,163 | $ | 996 |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Operating lease cost | ||||||||
Cost of sales | $ | 225 | $ | 225 | ||||
Selling, general and administrative | 771 | 643 | ||||||
Variable lease cost (1) | 214 | 96 | ||||||
Short-term lease cost | 13 | 11 | ||||||
Sublease income | 0 | (30 | ) | |||||
Total | $ | 1,223 | $ | 945 |
(1) | Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying. |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Operating lease cost | ||||||||
Cost of sales | $ | 682 | $ | 683 | ||||
Selling, general and administrative | 2,285 | 1,647 | ||||||
Variable lease cost (1) | 954 | 452 | ||||||
Short-term lease cost | 35 | 120 | ||||||
Sublease income | (60 | ) | (90 | ) | ||||
Total | $ | 3,896 | $ | 2,812 |
March 31, 2021 | December 31, 2020 | |||||||
Assets: | ||||||||
Right of use assets | $ | 17,406 | $ | 17,918 | ||||
Total lease assets | $ | 17,406 | $ | 17,918 | ||||
Liabilities: | ||||||||
Current lease liabilities (2) | $ | 3,269 | $ | 3,228 | ||||
Long-term lease liabilities | 15,570 | 16,117 | ||||||
Total lease liabilities | $ | 18,839 | $ | 19,345 |
(1) | Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying. |
September 30, 2021 | December 31, 2020 | |||||||
Assets: | ||||||||
Right of use assets | $ | 15,984 | $ | 17,918 | ||||
Total lease assets | $ | 15,984 | $ | 17,918 | ||||
Liabilities: | ||||||||
Current lease liabilities (2) | $ | 3,159 | $ | 3,228 | ||||
Long-term lease liabilities | 14,201 | 16,117 | ||||||
Total lease liabilities | $ | 17,360 | $ | 19,345 |
(2) | Reported within accrued liabilities on the balance sheet |
As of March 31, | ||||||||
2021 | 2020 | |||||||
Weighted-average remaining lease term - operating leases | 7.1 years | 7.8 years | ||||||
Weighted-average discount rate - operating leases | 4.93 | % | 5.84 | % |
As of September 30, | ||||||||
2021 | 2020 | |||||||
Weighted-average remaining lease term - operating leases | 6.8 years | 7.4 years | ||||||
Weighted-average discount rate - operating leases | 4.93 | % | 4.93 | % |
March 31, 2021 | ||||
2021 | $ | 3,078 | ||
2022 | 3,795 | |||
2023 | 3,528 | |||
2024 | 2,485 | |||
2025 | 2,125 | |||
Years thereafter | 7,427 | |||
Total lease payments | $ | 22,438 | ||
Less: Imputed interest | 3,599 | |||
Present value of lease liabilities | $ | 18,839 |
September 30, 2021 | ||||
2021 | $ | 989 | ||
2022 | 3,870 | |||
2023 | 3,679 | |||
2024 | 2,485 | |||
2025 | 2,125 | |||
Years thereafter | 7,428 | |||
Total lease payments | $ | 20,576 | ||
Less: Imputed interest | 3,216 | |||
Present value of lease liabilities | $ | 17,360 |
Three Months Ended March 31, | ||||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Service cost | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Interest cost | 0 | 95 | 0 | 0 | ||||||||||||
Expected return on plan assets | 0 | (161 | ) | 0 | 0 | |||||||||||
Amortization of (gains) losses | 0 | 36 | 0 | (57 | ) | |||||||||||
Net periodic benefit income | $ | 0 | $ | (30 | ) | $ | 0 | $ | (57 | ) |
Three Months Ended September 30, | ||||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Service cost | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Interest cost | 0 | 0 | 0 | 0 | ||||||||||||
Expected return on plan assets | 0 | 0 | 0 | 0 | ||||||||||||
Amortization of (gains) losses | 0 | 0 | 0 | 0 | ||||||||||||
Settlement and curtailment loss | 0 | 1,188 | 0 | 0 | ||||||||||||
Net periodic benefit income | $ | 0 | $ | 1,188 | $ | 0 | $ | 0 |
Nine Months Ended September 30, | ||||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Service cost | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Interest cost | 0 | 190 | 0 | 0 | ||||||||||||
Expected return on plan assets | 0 | (322 | ) | 0 | 0 | |||||||||||
Amortization of (gains) losses | 0 | 72 | 0 | (131 | ) | |||||||||||
Settlement and curtailment loss | 0 | 1,188 | 0 | 0 | ||||||||||||
Net periodic benefit income | $ | 0 | $ | 1,128 | $ | 0 | $ | (131 | ) |
Stock Option Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding, December 31, 2019 | 696,716 | $ | 18.13 | $ | 6.17 | |||||||
Granted | 155,000 | 14.85 | 4.41 | |||||||||
Exercised | (135,146 | ) | 6.37 | 2.74 | ||||||||
Forfeited | (5,510 | ) | 27.25 | 8.64 | ||||||||
Outstanding, December 31, 2020 | 711,060 | 19.58 | 6.42 | |||||||||
Granted | 100,000 | 51.75 | 13.77 | |||||||||
Exercised | (74,615 | ) | 5.70 | 2.66 | ||||||||
Forfeited | (850 | ) | 21.63 | 6.15 | ||||||||
Outstanding, March 31, 2021 | 735,595 | $ | 25.36 | $ | 7.80 |
Stock Option Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding, December 31, 2019 | 696,716 | $ | 18.13 | $ | 6.17 | |||||||
Granted | 155,000 | 14.85 | 4.41 | |||||||||
Exercised | (135,146 | ) | 6.37 | 2.74 | ||||||||
Forfeited | (5,510 | ) | 27.25 | 8.64 | ||||||||
Outstanding, December 31, 2020 | 711,060 | 19.58 | 6.42 | |||||||||
Granted | 119,500 | 50.93 | 13.58 | |||||||||
Exercised | (202,768 | ) | 10.22 | 6.35 | ||||||||
Forfeited | (5,749 | ) | 31.61 | 9.44 | ||||||||
Outstanding, September 30, 2021 | 622,043 | $ | 28.54 | $ | 8.70 |
February 10, 2017 | May 17, 2017 | March 7, 2018 | March 13, 2018 | March 20, 2019 | October 24, 2019 | March 18, 2020 | February 18, 2021 | |||||||||||||||||||||||||
Number of options granted | 40,000 | 93,819 | 98,100 | 26,000 | 155,780 | 25,000 | 155,000 | 100,000 | ||||||||||||||||||||||||
Options outstanding at March 31, 2021 | 27,050 | 54,183 | 77,967 | 26,000 | 144,134 | 25,000 | 147,799 | 99,850 | ||||||||||||||||||||||||
Number exercisable at March 31, 2021 | 27,050 | 54,183 | 77,967 | 26,000 | 96,076 | 16,750 | 47,413 | 0 | ||||||||||||||||||||||||
Exercise price | $ | 13.00 | $ | 15.41 | $ | 21.21 | $ | 21.49 | $ | 47.58 | $ | 20.89 | $ | 14.85 | $ | 51.75 | ||||||||||||||||
Remaining lives | 5.87 | 6.13 | 6.94 | 6.96 | 7.98 | 8.57 | 8.97 | 9.89 | ||||||||||||||||||||||||
Risk free interest rate | 1.89 | % | 1.76 | % | 2.65 | % | 2.62 | % | 2.34 | % | 1.58 | % | 0.79 | % | 0.56 | % | ||||||||||||||||
Expected volatility | 27.44 | % | 26.92 | % | 28.76 | % | 28.76 | % | 30.95 | % | 31.93 | % | 35.72 | % | 28.69 | % | ||||||||||||||||
Expected life | 6.000 | 6.000 | 6.000 | 5.495 | 6.000 | 6.000 | 6.000 | 6.000 | ||||||||||||||||||||||||
Dividend yield | 0 | 0 | 0.83 | % | 0.82 | % | 0.42 | % | 0.95 | % | 1.49 | % | 0.55 | % | ||||||||||||||||||
Fair value at grant date | $ | 3.98 | $ | 4.60 | $ | 6.37 | $ | 6.18 | $ | 15.63 | $ | 6.27 | $ | 4.41 | $ | 13.77 |
February 10, 2017 | May 17, 2017 | March 7, 2018 | March 20, 2019 | October 24, 2019 | March 18, 2020 | February 18, 2021 | May 3, 2021 | |||||||||||||||||||||||||
Number of options granted | 40,000 | 93,819 | 98,100 | 155,780 | 25,000 | 155,000 | 100,000 | 12,000 | ||||||||||||||||||||||||
Options outstanding at September 30, 2021 | 27,050 | 47,483 | 67,417 | 142,284 | 25,000 | 107,219 | 98,750 | 12,000 | ||||||||||||||||||||||||
Number exercisable at September 30, 2021 | 27,050 | 47,483 | 67,417 | 110,015 | 16,750 | 33,167 | 9,500 | 0 | ||||||||||||||||||||||||
Exercise price | $ | 13.00 | $ | 15.41 | $ | 21.21 | $ | 47.58 | $ | 20.89 | $ | 14.85 | $ | 51.75 | $ | 47.76 | ||||||||||||||||
Remaining lives | 5.37 | 5.63 | 6.44 | 7.47 | 8.07 | 8.47 | 9.39 | 9.59 | ||||||||||||||||||||||||
Risk free interest rate | 1.89 | % | 1.76 | % | 2.65 | % | 2.34 | % | 1.58 | % | 0.79 | % | 0.56 | % | 0.84 | % | ||||||||||||||||
Expected volatility | 27.44 | % | 26.92 | % | 28.76 | % | 30.95 | % | 31.93 | % | 35.72 | % | 28.69 | % | 29.03 | % | ||||||||||||||||
Expected life | 6.000 | 6.000 | 6.000 | 6.000 | 6.000 | 6.000 | 6.000 | 6.000 | ||||||||||||||||||||||||
Dividend yield | 0 | 0 | 0.83 | % | 0.42 | % | 0.95 | % | 1.49 | % | 0.55 | % | 0.59 | % | ||||||||||||||||||
Fair value at grant date | $ | 3.98 | $ | 4.60 | $ | 6.37 | $ | 15.63 | $ | 6.27 | $ | 4.41 | $ | 13.77 | $ | 13.06 |
May 17, 2021 | ||||
Number of options granted | 7,500 | |||
Options outstanding at September 30, 2021 | 7,500 | |||
Number exercisable at September 30, 2021 | 0 | |||
Exercise price | $ | 45.05 | ||
Remaining lives | 9.63 | |||
Risk free interest rate | 0.84 | % | ||
Expected volatility | 31.50 | % | ||
Expected life | 6.000 | |||
Dividend yield | 0.63 | % | ||
Fair value at grant date | $ | 13.23 |
March 31, 2017 | March 7, 2018 | March 20, 2019 | March 20, 2019 | July 19, 2019 | March 18, 2020 | December 28, 2020 | February 18, 2021 | |||||||||||||||||||||||||
Number of PRSUs granted | 94,000 | 96,000 | 92,500 | 4,901 | 88,582 | 94,000 | 88,169 | 100,000 | ||||||||||||||||||||||||
PRSUs outstanding at March 31, 2021 | 83,000 | 93,000 | 85,250 | 0 | 21,342 | 93,350 | 88,169 | 99,800 | ||||||||||||||||||||||||
Fair value as of grant date | $ | 15.60 | $ | 21.21 | $ | 47.58 | $ | 47.58 | $ | 52.15 | $ | 14.85 | $ | 46.42 | $ | 51.75 | ||||||||||||||||
Remaining lives | 0.75 | 1.75 | 2.75 | - | 1.75 | 3.75 | 2.75 | 4.75 |
March 31, 2017 | March 7, 2018 | March 20, 2019 | March 20, 2019 | July 19, 2019 | March 18, 2020 | December 28, 2020 | February 18, 2021 | |||||||||||||||||||||||||
Number of PRSUs granted | 94,000 | 96,000 | 92,500 | 4,901 | 88,582 | 94,000 | 88,169 | 100,000 | ||||||||||||||||||||||||
PRSUs outstanding at September 30, 2021 | 83,000 | 93,000 | 84,600 | 0 | 21,342 | 92,400 | 88,169 | 98,700 | ||||||||||||||||||||||||
Fair value as of grant date | $ | 15.60 | $ | 21.21 | $ | 47.58 | $ | 47.58 | $ | 52.15 | $ | 14.85 | $ | 46.42 | $ | 51.75 | ||||||||||||||||
Remaining lives | 0.25 | 1.25 | 2.25 | - | 1.25 | 3.25 | 2.25 | 4.25 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 11,783 | $ | 4,499 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average | 19,093,961 | $ | 0.62 | 19,689,446 | $ | 0.23 | ||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 11,783 | $ | 4,499 | ||||||||||||||||||||
Interest expense related to Convertible Senior Notes, net of tax | 1,054 | 0 | ||||||||||||||||||||||
Diluted net income attributable to Turning Point Brands. Inc. | $ | 12,837 | $ | 4,499 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Basic weighted average | 19,093,961 | 19,689,446 | ||||||||||||||||||||||
Convertible Senior Notes | 3,205,895 | 0 | ||||||||||||||||||||||
Stock options | 365,211 | 417,354 | ||||||||||||||||||||||
22,665,067 | $ | 0.57 | 20,106,800 | $ | 0.22 |
Three Months Ended September 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 13,468 | $ | 9,020 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average | 18,897,974 | $ | 0.71 | 19,240,187 | $ | 0.47 | ||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 13,468 | $ | 9,020 | ||||||||||||||||||||
Interest expense related to Convertible Senior Notes, net of tax | 1,054 | 1,047 | ||||||||||||||||||||||
Diluted net income attributable to Turning Point Brands. Inc. | $ | 14,522 | $ | 10,067 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Basic weighted average | 18,897,974 | 19,240,187 | ||||||||||||||||||||||
Convertible Senior Notes | 3,207,293 | 3,202,808 | ||||||||||||||||||||||
Stock options | 259,540 | 396,802 | ||||||||||||||||||||||
22,364,807 | $ | 0.65 | 22,839,797 | $ | 0.44 |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 40,605 | $ | 23,814 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average | 18,988,435 | $ | 2.14 | 19,478,297 | $ | 1.22 | ||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 40,605 | $ | 23,814 | ||||||||||||||||||||
Interest expense related to Convertible Senior Notes | 3,162 | 3,141 | ||||||||||||||||||||||
Diluted net income attributable to Turning Point Brands. Inc. | $ | 43,767 | $ | 26,955 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Basic weighted average | 18,988,435 | 19,478,297 | ||||||||||||||||||||||
Convertible Senior Notes | 3,207,293 | 3,202,808 | ||||||||||||||||||||||
Stock options | 268,814 | 380,394 | ||||||||||||||||||||||
22,464,542 | $ | 1.95 | 23,061,499 | $ | 1.17 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Net sales | ||||||||
Zig-Zag products | $ | 41,004 | $ | 28,914 | ||||
Stoker’s products | 29,255 | 26,495 | ||||||
NewGen products | 37,382 | 35,280 | ||||||
Total | $ | 107,641 | $ | 90,689 | ||||
Gross profit | ||||||||
Zig-Zag products | $ | 24,896 | $ | 16,132 | ||||
Stoker’s products | 15,892 | 13,874 | ||||||
NewGen products | 12,473 | 11,425 | ||||||
Total | $ | 53,261 | $ | 41,431 | ||||
Operating income (loss) | ||||||||
Zig-Zag products | $ | 19,437 | $ | 12,417 | ||||
Stoker’s products | 12,255 | 9,746 | ||||||
NewGen products | 2,006 | 477 | ||||||
Corporate unallocated (1)(2) | (9,349 | ) | (13,603 | ) | ||||
Total | $ | 24,349 | $ | 9,037 | ||||
Interest expense, net | 4,486 | 3,309 | ||||||
Investment income | (25 | ) | (91 | ) | ||||
Loss on extinguishment of debt | 5,706 | 0 | ||||||
Net periodic income, excluding service cost | 0 | (87 | ) | |||||
Income before income taxes | $ | 14,182 | $ | 5,906 | ||||
Capital expenditures | ||||||||
Zig-Zag products | $ | 0 | $ | 0 | ||||
Stoker’s products | 840 | 860 | ||||||
NewGen products | 2 | 17 | ||||||
Total | $ | 842 | $ | 877 | ||||
Depreciation and amortization | ||||||||
Zig-Zag products | $ | 114 | $ | 0 | ||||
Stoker’s products | 635 | 519 | ||||||
NewGen products | 516 | 757 | ||||||
Total | $ | 1,265 | $ | 1,276 |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net sales | ||||||||
Zig-Zag products | $ | 42,234 | $ | 35,973 | ||||
Stoker’s products | 30,472 | 29,764 | ||||||
NewGen products | 37,198 | 38,437 | ||||||
Total | $ | 109,904 | $ | 104,174 | ||||
Gross profit | ||||||||
Zig-Zag products | $ | 23,703 | $ | 21,263 | ||||
Stoker’s products | 17,104 | 16,042 | ||||||
NewGen products | 13,462 | 11,002 | ||||||
Total | $ | 54,269 | $ | 48,307 | ||||
Operating income (loss) | ||||||||
Zig-Zag products | $ | 17,122 | $ | 16,827 | ||||
Stoker’s products | 13,305 | 11,466 | ||||||
NewGen products | 2,027 | 745 | ||||||
Corporate unallocated (1)(2)(3) | (10,079 | ) | (13,017 | ) | ||||
Total | $ | 22,375 | $ | 16,021 | ||||
Interest expense, net | 5,397 | 3,539 | ||||||
Investment income | (157 | ) | (3 | ) | ||||
Gain on extinguishment of debt | (375 | ) | 0 | |||||
Net periodic income, excluding service cost | 0 | 1,188 | ||||||
Income before income taxes | $ | 17,510 | $ | 11,297 | ||||
Capital expenditures | ||||||||
Zig-Zag products | $ | 12 | $ | 0 | ||||
Stoker’s products | 2,209 | 1,450 | ||||||
NewGen products | 2 | 14 | ||||||
Total | $ | 2,223 | $ | 1,464 | ||||
Depreciation and amortization | ||||||||
Zig-Zag products | $ | 90 | $ | 91 | ||||
Stoker’s products | 638 | 562 | ||||||
NewGen products | 516 | 633 | ||||||
Total | $ | 1,244 | $ | 1,286 |
(1) | Includes corporate costs that are not allocated to any of the 3 reportable segments. |
(2) | Includes costs related to PMTA of $5.3 million in 2020. |
(3) | Shipping costs are included in the applicable operating segment and not in Corporate unallocated. |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net sales | ||||||||
Zig-Zag products | $ | 130,440 | $ | 92,290 | ||||
Stoker’s products | 93,096 | 87,081 | ||||||
NewGen products | 116,652 | 120,455 | ||||||
Total | $ | 340,188 | $ | 299,826 | ||||
Gross profit | ||||||||
Zig-Zag products | $ | 76,342 | $ | 53,066 | ||||
Stoker’s products | 51,142 | 46,424 | ||||||
NewGen products | 40,019 | 38,184 | ||||||
Total | $ | 167,503 | $ | 137,674 | ||||
Operating income (loss) | ||||||||
Zig-Zag products | $ | 57,897 | $ | 41,471 | ||||
Stoker’s products | 39,386 | 33,296 | ||||||
NewGen products | 5,690 | 4,493 | ||||||
Corporate unallocated (1)(2)(3) | (31,370 | ) | (37,022 | ) | ||||
Total | $ | 71,603 | $ | 42,238 | ||||
Interest expense, net | 15,406 | 10,143 | ||||||
Investment income | (292 | ) | (128 | ) | ||||
Loss on extinguishment of debt | 5,331 | 0 | ||||||
Net periodic income, excluding service cost | 0 | 997 | ||||||
Income before income taxes | $ | 51,158 | $ | 31,226 | ||||
Capital expenditures | ||||||||
Zig-Zag products | $ | 110 | $ | 0 | ||||
Stoker’s products | 4,226 | 3,148 | ||||||
NewGen products | 55 | 272 | ||||||
Total | $ | 4,391 | $ | 3,420 | ||||
Depreciation and amortization | ||||||||
Zig-Zag products | $ | 297 | $ | 91 | ||||
Stoker’s products | 1,901 | 1,605 | ||||||
NewGen products | 1,546 | 2,090 | ||||||
Total | $ | 3,744 | $ | 3,786 |
(1) | Includes corporate costs that are not allocated to any of the 3 reportable segments. |
(2) | Includes costs related to PMTA of |
(3) | Shipping costs are included in the applicable operating segment and not in Corporate unallocated. |
September 30, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Zig-Zag products | $ | 230,291 | $ | 206,900 | ||||
Stoker’s products | 151,494 | 133,016 | ||||||
NewGen products | 80,868 | 91,116 | ||||||
Corporate unallocated (1) | 161,068 | 65,017 | ||||||
Total | $ | 623,721 | $ | 496,049 |
March 31, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Zig-Zag products | $ | 212,400 | $ | 206,900 | ||||
Stoker’s products | 148,093 | 133,016 | ||||||
NewGen products | 91,616 | 91,116 | ||||||
Corporate unallocated (1) | 175,196 | 65,017 | ||||||
Total | $ | 627,305 | $ | 496,049 |
(1) | Includes assets not assigned to the 3 reportable segments. All goodwill has been allocated to the reportable segments. |
NewGen Segment | ||||||||
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Business to Business | $ | 27,257 | $ | 25,278 | ||||
Business to Consumer - Online | 10,033 | 8,134 | ||||||
Business to Consumer - Corporate store | 0 | 1,794 | ||||||
Other | 92 | 74 | ||||||
Total | $ | 37,382 | $ | 35,280 |
NewGen Segment | ||||||||
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Business to Business | $ | 27,169 | $ | 26,080 | ||||
Business to Consumer - Online | 9,959 | 10,880 | ||||||
Business to Consumer - Corporate store | 0 | 1,389 | ||||||
Other | 70 | 88 | ||||||
Total | $ | 37,198 | $ | 38,437 |
NewGen Segment | ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Business to Business | $ | 85,141 | $ | 81,727 | ||||
Business to Consumer - Online | 31,255 | 34,066 | ||||||
Business to Consumer - Corporate store | 0 | 4,500 | ||||||
Other | 256 | 162 | ||||||
Total | $ | 116,652 | $ | 120,455 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Domestic | $ | 100,127 | $ | 87,568 | ||||
Foreign | 7,514 | 3,121 | ||||||
Total | $ | 107,641 | $ | 90,689 |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Domestic | $ | 102,255 | $ | 100,492 | ||||
Foreign | 7,649 | 3,682 | ||||||
Total | $ | 109,904 | $ | 104,174 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Domestic | $ | 318,166 | $ | 290,050 | ||||
Foreign | 22,022 | 9,776 | ||||||
Total | $ | 340,188 | $ | 299,826 |
Three Months Ended March 31, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Consolidated Results of Operations Data: | ||||||||||||
Net sales | ||||||||||||
Zig-Zag products | $ | 41,004 | $ | 28,914 | 41.8 | % | ||||||
Stoker’s products | 29,255 | 26,495 | 10.4 | % | ||||||||
NewGen products | 37,382 | 35,280 | 6.0 | % | ||||||||
Total net sales | 107,641 | 90,689 | 18.7 | % | ||||||||
Cost of sales | 54,380 | 49,258 | 10.4 | % | ||||||||
Gross profit | ||||||||||||
Zig-Zag products | 24,896 | 16,132 | 54.3 | % | ||||||||
Stoker’s products | 15,892 | 13,874 | 14.5 | % | ||||||||
NewGen products | 12,473 | 11,425 | 9.2 | % | ||||||||
Total gross profit | 53,261 | 41,431 | 28.6 | % | ||||||||
Selling, general, and administrative expenses | 28,912 | 32,394 | -10.7 | % | ||||||||
Operating income | 24,349 | 9,037 | 169.4 | % | ||||||||
Interest expense, net | 4,486 | 3,309 | 35.6 | % | ||||||||
Investment income | (25 | ) | (91 | ) | -72.5 | % | ||||||
Loss on extinguishment of debt | 5,706 | - | NM | |||||||||
Net periodic income, excluding service cost | - | (87 | ) | -100.0 | % | |||||||
Income before income taxes | 14,182 | 5,906 | 140.1 | % | ||||||||
Income tax expense | 2,654 | 1,407 | 88.6 | % | ||||||||
Consolidated net income | 11,528 | 4,499 | 156.2 | % | ||||||||
Net loss attributable to non-controlling interest | (255 | ) | - | |||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 11,783 | $ | 4,499 |
Three Months Ended September 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Consolidated Results of Operations Data: | ||||||||||||
Net sales | ||||||||||||
Zig-Zag products | $ | 42,234 | $ | 35,973 | 17.4 | % | ||||||
Stoker’s products | 30,472 | 29,764 | 2.4 | % | ||||||||
NewGen products | 37,198 | 38,437 | -3.2 | % | ||||||||
Total net sales | 109,904 | 104,174 | 5.5 | % | ||||||||
Cost of sales | 55,635 | 55,867 | -0.4 | % | ||||||||
Gross profit | ||||||||||||
Zig-Zag products | 23,703 | 21,263 | 11.5 | % | ||||||||
Stoker’s products | 17,104 | 16,042 | 6.6 | % | ||||||||
NewGen products | 13,462 | 11,002 | 22.4 | % | ||||||||
Total gross profit | 54,269 | 48,307 | 12.3 | % | ||||||||
Selling, general, and administrative expenses | 31,894 | 32,286 | -1.2 | % | ||||||||
Operating income | 22,375 | 16,021 | 39.7 | % | ||||||||
Interest expense, net | 5,397 | 3,539 | 52.5 | % | ||||||||
Investment income | (157 | ) | (3 | ) | 5133.3 | % | ||||||
Gain on extinguishment of debt | (375 | ) | - | NM | ||||||||
Net periodic income, excluding service cost | - | 1,188 | -100.0 | % | ||||||||
Income before income taxes | 17,510 | 11,297 | 55.0 | % | ||||||||
Income tax expense | 4,073 | 2,277 | 78.9 | % | ||||||||
Consolidated net income | 13,437 | 9,020 | 49.0 | % | ||||||||
Net loss attributable to non-controlling interest | (31 | ) | - | NM | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 13,468 | $ | 9,020 | 49.3 | % |
Nine Months Ended September 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Consolidated Results of Operations Data: | ||||||||||||
Net sales | ||||||||||||
Zig-Zag products | $ | 130,440 | $ | 92,290 | 41.3 | % | ||||||
Stoker’s products | 93,096 | 87,081 | 6.9 | % | ||||||||
NewGen products | 116,652 | 120,455 | -3.2 | % | ||||||||
Total net sales | 340,188 | 299,826 | 13.5 | % | ||||||||
Cost of sales | 172,685 | 162,152 | 6.5 | % | ||||||||
Gross profit | ||||||||||||
Zig-Zag products | 76,342 | 53,066 | 43.9 | % | ||||||||
Stoker’s products | 51,142 | 46,424 | 10.2 | % | ||||||||
NewGen products | 40,019 | 38,184 | 4.8 | % | ||||||||
Total gross profit | 167,503 | 137,674 | 21.7 | % | ||||||||
Selling, general, and administrative expenses | 95,900 | 95,436 | 0.5 | % | ||||||||
Operating income | 71,603 | 42,238 | 69.5 | % | ||||||||
Interest expense, net | 15,406 | 10,143 | 51.9 | % | ||||||||
Investment income | (292 | ) | (128 | ) | 128.1 | % | ||||||
Loss on extinguishment of debt | 5,331 | - | NM | |||||||||
Net periodic income, excluding service cost | - | 997 | -100.0 | % | ||||||||
Income before income taxes | 51,158 | 31,226 | 63.8 | % | ||||||||
Income tax expense | 11,151 | 7,412 | 50.4 | % | ||||||||
Consolidated net income | 40,007 | 23,814 | 68.0 | % | ||||||||
Net loss attributable to non-controlling interest | (598 | ) | - | NM | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 40,605 | $ | 23,814 | 70.5 | % |
(in thousands) | Three Months Ended September 30, | |||||||
2021 | 2020 | |||||||
Net income attributable to Turning Point Brands, Inc. | $ | 13,468 | $ | 9,020 | ||||
Add: | ||||||||
Interest expense, net | 5,397 | 3,539 | ||||||
Gain on extinguishment of debt | (375 | ) | - | |||||
Income tax expense | 4,073 | 2,277 | ||||||
Depreciation expense | 767 | 809 | ||||||
Amortization expense | 477 | 477 | ||||||
EBITDA | $ | 23,807 | $ | 16,122 | ||||
Components of Adjusted EBITDA | ||||||||
Other (a) | - | 1,188 | ||||||
Stock options, restricted stock, and incentives expense (b) | 1,752 | 772 | ||||||
Transactional expenses (c) | (232 | ) | 570 | |||||
FDA PMTA (d) | 960 | 5,271 | ||||||
Adjusted EBITDA | $ | 26,287 | $ | 23,923 |
Three Months Ended | ||||||||
(in thousands) | March 31, | |||||||
2021 | 2020 | |||||||
Net income attributable to Turning Point Brands, Inc. | $ | 11,783 | $ | 4,499 | ||||
Add: | ||||||||
Interest expense, net | 4,486 | 3,309 | ||||||
Loss on extinguishment of debt | 5,706 | - | ||||||
Income tax expense | 2,654 | 1,407 | ||||||
Depreciation expense | 788 | 851 | ||||||
Amortization expense | 477 | 425 | ||||||
EBITDA | $ | 25,894 | $ | 10,491 | ||||
Components of Adjusted EBITDA | ||||||||
Other (a) | - | (87 | ) | |||||
Stock options, restricted stock, and incentives expense (b) | 1,498 | 455 | ||||||
Transactional expenses (c) | 607 | 1,049 | ||||||
FDA PMTA (d) | - | 5,874 | ||||||
Adjusted EBITDA | $ | 27,999 | $ | 17,782 |
(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”). |
(in thousands) | Nine Months Ended September 30, | |||||||
2021 | 2020 | |||||||
Net income attributable to Turning Point Brands, Inc. | $ | 40,605 | $ | 23,814 | ||||
Add: | ||||||||
Interest expense, net | 15,406 | 10,143 | ||||||
Loss on extinguishment of debt | 5,331 | - | ||||||
Income tax expense | 11,151 | 7,412 | ||||||
Depreciation expense | 2,313 | 2,482 | ||||||
Amortization expense | 1,431 | 1,304 | ||||||
EBITDA | $ | 76,237 | $ | 45,155 | ||||
Components of Adjusted EBITDA | ||||||||
Other (a) | - | 841 | ||||||
Stock options, restricted stock, and incentives expense (b) | 6,015 | 1,987 | ||||||
Transactional expenses (c) | 1,077 | 1,909 | ||||||
FDA PMTA (d) | 960 | 14,435 | ||||||
Adjusted EBITDA | $ | 84,289 | $ | 64,327 |
(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”). |
As of | As of | |||||||||||||||
(in thousands) | March 31, | December 31, | September 30, 2021 | December 31, 2020 | ||||||||||||
2021 | 2020 | |||||||||||||||
Current assets | $ | 129,823 | $ | 121,638 | $ | 134,225 | $ | 121,638 | ||||||||
Current liabilities | 61,216 | 56,629 | 54,056 | 56,629 | ||||||||||||
Working capital | $ | 68,607 | $ | 65,009 | $ | 80,169 | $ | 65,009 |
March 31, | December 31, | |||||||||||||||
2021 | 2020 | |||||||||||||||
September 30, 2021 | December 31, 2020 | |||||||||||||||
Senior Secured Notes | $ | 250,000 | $ | - | $ | 250,000 | $ | - | ||||||||
2018 First Lien Term Loan | - | 130,000 | - | 130,000 | ||||||||||||
Convertible Senior Notes | 172,500 | 172,500 | 172,500 | 172,500 | ||||||||||||
Note payable - Promissory Note | 10,000 | 10,000 | - | 10,000 | ||||||||||||
Note payable - Unsecured Loan | 7,485 | 7,485 | 7,485 | 7,485 | ||||||||||||
Gross notes payable and long-term debt | 439,985 | 319,985 | 429,985 | 319,985 | ||||||||||||
Less deferred finance charges | (10,183 | ) | (5,873 | ) | (8,947 | ) | (5,873 | ) | ||||||||
Less current maturities | (5,000 | ) | (12,000 | ) | (7,485 | ) | (12,000 | ) | ||||||||
Notes payable and long-term debt | $ | 424,802 | $ | 302,112 | $ | 413,553 | $ | 302,112 |
Maximum Number | ||||||||||||||||
(or Approximate | ||||||||||||||||
Total Number of | Dollar Value) | |||||||||||||||
Shares Purchased | of Shares that | |||||||||||||||
Total Number | Average | as Part of Publicly | May Yet Be | |||||||||||||
of Shares | Price Paid | Announced Plans | Purchased Under the | |||||||||||||
Period | Purchased (1) | per Share | or Programs | Plans or Programs | ||||||||||||
January 1 to January 31 | 40,498 | $ | 44.14 | 40,498 | 38,020,412 | |||||||||||
February 1 to February 28 | 8,533 | $ | 55.98 | 8,533 | 37,542,735 | |||||||||||
March 1 to March 31 | 100,258 | $ | 49.21 | 70,000 | 34,075,635 | |||||||||||
Total | 149,289 | 119,031 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
July 1 to July 31 | - | $ | - | - | $ | 25,723,385 | ||||||||||
August 1 to August 31 | 125,000 | $ | 51.16 | 125,000 | $ | 19,328,385 | ||||||||||
September 1 to September 30 | - | $ | - | - | $ | 19,328,385 | ||||||||||
Total | 125,000 | 125,000 |
Exhibit No. | |
Preferability letter from | |
Rule 13a-14(a)/15d-14(a) Certification of Lawrence S. Wexler.* | |
Rule 13a-14(a)/15d-14(a) Certification of Luis Reformina.* | |
Rule 13a-14(a)/15d-14(a) Certification of Brian Wigginton.* | |
Section 1350 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* | |
101 | XBRL (eXtensible Business Reporting Language). The following materials from Turning Point Brands, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, |
104 | Cover Page Interactive Data File (formatted in iXBRL and included in Exhibit 101).* |
TURNING POINT BRANDS, INC. | ||||
By: /s/ Lawrence S. Wexler | ||||
Name: Lawrence S. Wexler | ||||
Title: President and Chief Executive Officer | ||||
By: /s/ Luis Reformina | ||||
Name: Luis Reformina | ||||
Title: Chief Financial Officer | ||||
By: /s/ Brian Wigginton | ||||
Name: Brian Wigginton | ||||
Title: Chief Accounting Officer |