☑ | 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 | ||||
5 | ||||
6 | ||||
ITEM 2 | ||||
ITEM 3 | ||||
ITEM 4 | ||||
PART II—OTHER INFORMATION | ||||
ITEM 1 | ||||
ITEM 1A | ||||
ITEM 2 | ||||
ITEM 3 | ||||
ITEM 4 | ||||
ITEM 5 | ||||
ITEM 6 | ||||
• | imposition of significant tariffs on imports into the U.S.; |
our certificate |
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 | 0 | 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 | 0 | ||||||
Lease liabilities | 14,788 | 16,117 | ||||||
Other long-term liabilities | 0 | 3,704 | ||||||
Total liabilities | 495,131 | 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; 19,616,224 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- | 0 | 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 |
ASSETS | (unaudited) March 31, 2022 | December 31, 2021 | ||||||
Current assets: | ||||||||
Cash | $ | 126,045 | $ | 128,320 | ||||
Accounts receivable, net of allowances of $177 in 2022 and $262 in 2021 | 9,450 | 6,496 | ||||||
Inventories | 105,858 | 87,607 | ||||||
Other current assets | 25,663 | 26,746 | ||||||
Total current assets | 267,016 | 249,169 | ||||||
Property, plant, and equipment, net | 20,567 | 18,650 | ||||||
Deferred income taxes | 1,754 | 1,363 | ||||||
Right of use assets | 14,405 | 15,053 | ||||||
Deferred financing costs, net | 362 | 388 | ||||||
Goodwill | 162,323 | 162,333 | ||||||
Other intangible assets, net | 87,022 | 87,485 | �� | |||||
Master Settlement Agreement (MSA) escrow deposits | 30,237 | 31,720 | ||||||
Other assets | 35,017 | 35,399 | ||||||
Total assets | $ | 618,703 | $ | 601,560 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 29,464 | $ | 7,361 | ||||
Accrued liabilities | 29,921 | 32,937 | ||||||
Other current liabilities | 38 | 38 | ||||||
Total current liabilities | 59,423 | 40,336 | ||||||
Notes payable and long-term debt | 414,791 | 414,172 | ||||||
Lease liabilities | 12,625 | 13,336 | ||||||
Total liabilities | 486,839 | 467,844 | ||||||
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; 19,785,806 issued shares and 18,180,174 outstanding shares at March 31, 2022, and 19,690,884 issued shares and 18,395,476 outstanding shares at December 31, 2021 | 198 | 197 | ||||||
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0- | 0 | 0 | ||||||
Additional paid-in capital | 109,073 | 108,811 | ||||||
Cost of repurchased common stock (1,605,632 shares at March 31, 2022, and 1,295,408 shares at December 31, 2021) | (59,491 | ) | (48,869 | ) | ||||
Accumulated other comprehensive loss | (1,326 | ) | (195 | ) | ||||
Accumulated earnings | 81,327 | 71,460 | ||||||
Non-controlling interest | 2,083 | 2,312 | ||||||
Total stockholders’ equity | 131,864 | 133,716 | ||||||
Total liabilities and stockholders’ equity | $ | 618,703 | $ | 601,560 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Net sales | $ | 100,894 | $ | 107,641 | ||||
Cost of sales | 49,100 | 54,380 | ||||||
Gross profit | 51,794 | 53,261 | ||||||
Selling, general, and administrative expenses | 32,565 | 28,912 | ||||||
Operating income | 19,229 | 24,349 | ||||||
Interest expense, net | 5,196 | 4,486 | ||||||
Investment income | (78 | ) | (25 | ) | ||||
Loss on extinguishment of debt | 0 | 5,706 | ||||||
Income before income taxes | 14,111 | 14,182 | ||||||
Income tax expense | 3,340 | 2,654 | ||||||
Consolidated net income | 10,771 | 11,528 | ||||||
Net loss attributable to non-controlling interest | (227 | ) | (255 | ) | ||||
Net income attributable to Turning Point Brands, Inc. | $ | 10,998 | $ | 11,783 | ||||
Basic income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.60 | $ | 0.62 | ||||
Diluted income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 0.55 | $ | 0.57 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 18,257,695 | 19,093,961 | ||||||
Diluted | 21,749,510 | 22,665,067 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Consolidated net income | $ | 10,771 | $ | 11,528 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Unrealized loss on MSA investments, net of tax of $357 in 2022 and $144 in 2021 | (1,126 | ) | (452 | ) | ||||
Foreign currency translation, net of tax of $0 in 2022 and 2021 | (7 | ) | 318 | |||||
Unrealized gain on derivative instruments, net of tax of $0 in 2022 and $937 in 2021 | 0 | 2,448 | ||||||
(1,133 | ) | 2,314 | ||||||
Consolidated comprehensive income | 9,638 | 13,842 | ||||||
Comprehensive loss attributable to non-controlling interest | (229 | ) | (96 | ) | ||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 9,867 | $ | 13,938 |
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 | 0 | (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 | ) | 0 | |||||
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 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income | $ | 10,771 | $ | 11,528 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss on extinguishment of debt | 0 | 5,706 | ||||||
Loss (gain) on sale of property, plant, and equipment | 1 | (2 | ) | |||||
Depreciation expense | 871 | 788 | ||||||
Amortization of other intangible assets | 463 | 477 | ||||||
Amortization of deferred financing costs | 645 | 604 | ||||||
Deferred income tax (benefit) expense | (34 | ) | 552 | |||||
Stock compensation expense | 1,159 | 1,498 | ||||||
Noncash lease (income) expense | (5 | ) | 6 | |||||
Gain on investments | (14 | ) | (13 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (2,958 | ) | 2,735 | |||||
Inventories | (18,258 | ) | (12,461 | ) | ||||
Other current assets | 1,081 | 1,283 | ||||||
Other assets | 382 | 464 | ||||||
Accounts payable | 22,101 | 14,882 | ||||||
Accrued liabilities and other | (3,165 | ) | (3,806 | ) | ||||
Net cash provided by operating activities | $ | 13,040 | $ | 24,241 | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | $ | (2,787 | ) | $ | (842 | ) | ||
Restricted cash, MSA escrow deposits | (8,468 | ) | (14,920 | ) | ||||
Proceeds on the sale of property, plant and equipment | 1 | 2 | ||||||
Net cash used in investing activities | $ | (11,254 | ) | $ | (15,760 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from Senior Secured Notes | $ | 0 | $ | 250,000 | ||||
Payments of 2018 first lien term loan | 0 | (130,000 | ) | |||||
Settlement of interest rate swaps | 0 | (3,573 | ) | |||||
Payment of dividends | (1,022 | ) | (958 | ) | ||||
Payments of financing costs | 0 | (6,614 | ) | |||||
Exercise of options | 245 | 425 | ||||||
Redemption of options | 0 | (1,466 | ) | |||||
Redemption of performance restricted stock units | (1,141 | ) | 0 | |||||
Common stock repurchased | (10,622 | ) | (5,733 | ) | ||||
Net cash provided by (used in) financing activities | $ | (12,540 | ) | $ | 102,081 | |||
Net (decrease) increase in cash | $ | (10,754 | ) | $ | 110,562 | |||
Effect of foreign currency translation on cash | $ | (3 | ) | $ | 101 | |||
Cash, beginning of period: | ||||||||
Unrestricted | 128,320 | 41,765 | ||||||
Restricted | 15,155 | 35,074 | ||||||
Total cash at beginning of period | 143,475 | 76,839 | ||||||
Cash, end of period: | ||||||||
Unrestricted | 126,045 | 167,361 | ||||||
Restricted | 6,673 | 20,141 | ||||||
Total cash at end of period | $ | 132,718 | $ | 187,502 | ||||
Supplemental schedule of noncash investing activities: | ||||||||
Accrued capital expenditures | $ | 187 | $ | 177 | ||||
Supplemental schedule of noncash financing activities: | ||||||||
Dividends declared not paid | $ | 1,131 | $ | 1,071 | ||||
Accrued expenses for incurred financing costs | $ | 0 | $ | 301 |
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Net sales | $ | 230,284 | $ | 195,652 | ||||
Cost of sales | 117,050 | 106,285 | ||||||
Gross profit | 113,234 | 89,367 | ||||||
Selling, general, and administrative expenses | 64,006 | 63,150 | ||||||
Operating income | 49,228 | 26,217 | ||||||
Interest expense, net | 10,009 | 6,604 | ||||||
Investment income | (135 | ) | (125 | ) | ||||
Loss on extinguishment of debt | 5,706 | 0 | ||||||
Net periodic income, excluding service cost | 0 | (191 | ) | |||||
Income before income taxes | 33,648 | 19,929 | ||||||
Income tax expense | 7,078 | 5,135 | ||||||
Consolidated net income | 26,570 | 14,794 | ||||||
Net loss attributable to non-controlling interest | (567 | ) | 0 | |||||
Net income attributable to Turning Point Brands, Inc. | $ | 27,137 | $ | 14,794 | ||||
Basic income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 1.43 | $ | 0.75 | ||||
Diluted income per common share: | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 1.30 | $ | 0.73 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 19,034,415 | 19,598,660 | ||||||
Diluted | 22,559,087 | 23,075,534 |
Voting Shares | Common Stock, Voting | Additional Paid-In Capital | Cost of Repurchased Common Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings | Non- Controlling Interest | Total | |||||||||||||||||||||||||
Beginning balance January 1, 2022 | 18,395,476 | $ | 197 | $ | 108,811 | $ | (48,869 | ) | $ | (195 | ) | $ | 71,460 | $ | 2,312 | $ | 133,716 | |||||||||||||||
Unrealized loss on MSA investments, net of tax of $357 | - | 0 | 0 | 0 | (1,126 | ) | 0 | 0 | (1,126 | ) | ||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | (5 | ) | 0 | (2 | ) | (7 | ) | |||||||||||||||||||||
Stock compensation expense | - | 0 | 1,159 | 0 | 0 | 0 | 0 | 1,159 | ||||||||||||||||||||||||
Exercise of options | 25,166 | 0 | 245 | 0 | 0 | 0 | 0 | 245 | ||||||||||||||||||||||||
Performance restricted stock units issuance | 103,843 | 1 | (1 | ) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Performance restricted stock units redeemed | (34,087 | ) | 0 | (1,141 | ) | 0 | 0 | 0 | 0 | (1,141 | ) | |||||||||||||||||||||
Cost of repurchased common stock | (310,224 | ) | 0 | 0 | (10,622 | ) | 0 | 0 | 0 | (10,622 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (1,131 | ) | 0 | (1,131 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 10,998 | (227 | ) | 10,771 | |||||||||||||||||||||||
Ending balance March 31, 2022 | 18,180,174 | $ | 198 | $ | 109,073 | $ | (59,491 | ) | $ | (1,326 | ) | $ | 81,327 | $ | 2,083 | $ | 131,864 | |||||||||||||||
Beginning balance Janauary 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 |
Three Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Consolidated net income | $ | 15,043 | $ | 10,295 | ||||
Other comprehensive income, net of tax | ||||||||
Amortization of unrealized pension and postretirement gain, net of tax of $0 in 2021 and $2 in 2020 | 0 | 7 | ||||||
Unrealized gain on MSA investments, net of tax of $83 in 2021 and $0 in 2020 | 260 | 0 | ||||||
Foreign currency translation, net of tax of $0 in 2021 and 2020 | 642 | 0 | ||||||
Unrealized gain on derivative instruments, net of tax of $126 in 2021 and $25 in 2020 | 178 | 73 | ||||||
1,080 | 80 | |||||||
Consolidated comprehensive income | 16,123 | 10,375 | ||||||
Comprehensive income attributable to non-controlling interest | 9 | 0 | ||||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 16,114 | $ | 10,375 |
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Consolidated net income | $ | 26,570 | $ | 14,794 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Amortization of unrealized pension and postretirement gain, net of tax of $0 in 2021 and $5 in 2020 | 0 | 14 | ||||||
Unrealized loss on MSA investments, net of tax of $61 in 2021 and $0 in 2020 | (192 | ) | 0 | |||||
Foreign currency translation, net of tax of $0 in 2021 and 2020 | 960 | 0 | ||||||
Unrealized gain (loss) on derivative instruments, net of tax of $810 in 2021 and $600 in 2020 | 2,626 | (1,540 | ) | |||||
3,394 | (1,526 | ) | ||||||
Consolidated comprehensive income | 29,964 | 13,268 | ||||||
Comprehensive loss attributable to non-controlling interest | (87 | ) | 0 | |||||
Comprehensive income attributable to Turning Point Brands, Inc. | $ | 30,051 | $ | 13,268 |
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 | 0 | ||||||
Impairment loss | 0 | 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 | ) | 0 | |||||
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 | 0 | (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 | ) | 0 | |||||
Restricted cash, MSA escrow deposits | (20,147 | ) | 0 | |||||
Proceeds on the sale of property, plant and equipment | 2 | 0 | ||||||
Net cash used in investing activities | $ | (34,391 | ) | $ | (39,728 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from Senior Secured Notes | $ | 250,000 | $ | 0 | ||||
Payments of 2018 first lien term loan | (130,000 | ) | (5,000 | ) | ||||
Settlement of interest rate swaps | (3,573 | ) | 0 | |||||
Payment of IVG note | 0 | (4,240 | ) | |||||
Proceeds from unsecured notes | 0 | 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 | ) | 0 | |||||
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 | $ | 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 | 157,474 | 64,192 | ||||||
Restricted | 14,893 | 32,074 | ||||||
Total cash at end of period | $ | 172,367 | $ | 96,266 | ||||
Supplemental schedule of noncash financing activities: | ||||||||
Dividends declared not paid | $ | 1,241 | $ | 991 | ||||
Issuance of note payable for acquisition | $ | 0 | $ | 10,000 | ||||
Accrued consideration for acquisition | $ | 402 | $ | 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 April 1, 2021 | 19,059,120 | $ | 196 | $ | 102,879 | $ | (15,924 | ) | $ | (480 | ) | $ | 34,357 | $ | 3,954 | $ | 124,982 | |||||||||||||||
Unrealized gain on MSA investments, net of tax of $83 | - | 0 | 0 | 0 | 260 | 0 | 0 | 260 | ||||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $126 | - | 0 | 0 | 0 | 178 | 0 | 0 | 178 | ||||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | 321 | 0 | 321 | 642 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 2,764 | 0 | 0 | 0 | 0 | 2,764 | ||||||||||||||||||||||||
Exercise of options | 39,403 | 0 | 462 | 0 | 0 | 0 | 0 | 462 | ||||||||||||||||||||||||
Redemption of options | - | 0 | (645 | ) | 0 | 0 | 0 | 0 | (645 | ) | ||||||||||||||||||||||
Cost of repurchased common stock | (175,000 | ) | 0 | 0 | (8,353 | ) | 0 | 0 | 0 | (8,353 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (1,065 | ) | 0 | (1,065 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 15,355 | (312 | ) | 15,043 | |||||||||||||||||||||||
Ending balance June 30, 2021 | 18,923,523 | $ | 196 | $ | 105,460 | $ | (24,277 | ) | $ | 279 | $ | 48,647 | $ | 3,963 | $ | 134,268 | ||||||||||||||||
Beginning balance April 1, 2020 | 19,588,950 | $ | 197 | $ | 101,212 | $ | (2,627 | ) | $ | (5,379 | ) | $ | (5,371 | ) | $ | 0 | $ | 88,032 | ||||||||||||||
Unrecognized pension and postretirement cost adjustment, net of tax of $2 | - | 0 | 0 | 0 | 7 | 0 | 0 | 7 | ||||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $25 | - | 0 | 0 | 0 | 73 | 0 | 0 | 73 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 759 | 0 | 0 | 0 | 0 | 759 | ||||||||||||||||||||||||
Exercise of options | 947 | 0 | 18 | 0 | 0 | 0 | 0 | 18 | ||||||||||||||||||||||||
Cost of repurchased common stock | (122,733 | ) | 0 | 0 | (2,662 | ) | 0 | 0 | 0 | (2,662 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (991 | ) | 0 | (991 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 10,295 | 0 | 10,295 | ||||||||||||||||||||||||
Ending balance June 30, 2020 | 19,467,164 | $ | 197 | $ | 101,989 | $ | (5,289 | ) | $ | (5,299 | ) | $ | 3,933 | $ | 0 | $ | 95,531 |
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 $61 | - | 0 | 0 | 0 | (192 | ) | 0 | 0 | (192 | ) | ||||||||||||||||||||||
Unrealized gain on derivative instruments, net of tax of $810 | - | 0 | 0 | 0 | 2,626 | 0 | 0 | 2,626 | ||||||||||||||||||||||||
Foreign currency translation, net of tax of $0 | - | 0 | 0 | 0 | 480 | 0 | 480 | 960 | ||||||||||||||||||||||||
Stock compensation expense | - | 0 | 4,263 | 0 | 0 | 0 | 0 | 4,263 | ||||||||||||||||||||||||
Exercise of options | 83,760 | 1 | 885 | 0 | 0 | 0 | 0 | 886 | ||||||||||||||||||||||||
Redemption of options | - | 0 | (2,111 | ) | 0 | 0 | 0 | 0 | (2,111 | ) | ||||||||||||||||||||||
Cost of repurchased common stock | (294,031 | ) | 0 | 0 | (14,086 | ) | 0 | 0 | 0 | (14,086 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (2,135 | ) | 0 | (2,135 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 27,137 | (567 | ) | 26,570 | |||||||||||||||||||||||
Ending balance June 30, 2021 | 18,923,523 | $ | 196 | $ | 105,460 | $ | (24,277 | ) | $ | 279 | $ | 48,647 | $ | 3,963 | $ | 134,268 | ||||||||||||||||
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 $5 | - | 0 | 0 | 0 | 14 | 0 | 0 | 14 | ||||||||||||||||||||||||
Unrealized loss on derivative instruments, net of tax of $600 | - | 0 | 0 | 0 | (1,540 | ) | 0 | 0 | (1,540 | ) | ||||||||||||||||||||||
Stock compensation expense | - | 0 | 1,214 | 0 | 0 | 0 | 0 | 1,214 | ||||||||||||||||||||||||
Exercise of options | 43,354 | 0 | 245 | 0 | 0 | 0 | 0 | 245 | ||||||||||||||||||||||||
Cost of repurchased common stock | (256,863 | ) | 0 | 0 | (5,289 | ) | 0 | 0 | 0 | (5,289 | ) | |||||||||||||||||||||
Dividends | - | 0 | 0 | 0 | 0 | (1,989 | ) | 0 | (1,989 | ) | ||||||||||||||||||||||
Net income | - | 0 | 0 | 0 | 0 | 14,794 | 0 | 14,794 | ||||||||||||||||||||||||
Ending balance June 30, 2020 | 19,467,164 | $ | 197 | $ | 101,989 | $ | (5,289 | ) | $ | (5,299 | ) | $ | 3,933 | $ | 0 | $ | 95,531 |
● | 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 June 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 | $ | 11,893 | $ | 0 | $ | 0 | $ | 11,893 | $ | 32,074 | ||||||||||
U.S. Governmental agency obligations (unrealized loss position < 12 months) | 20,180 | 10 | (264 | ) | 19,926 | 0 | ||||||||||||||
$ | 32,073 | $ | 10 | $ | (264 | ) | $ | 31,819 | $ | 32,074 |
As of June 30, 2021 | ||||
Less than one year | $ | 0 | ||
One to five years | 3,497 | |||
Five to ten years | 14,552 | |||
Greater than ten years | 1,877 | |||
Total | $ | 19,926 |
As of March 31, 2022 | As of December 31, 2021 | |||||||||||||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 3,673 | $ | 0 | $ | 0 | $ | 3,673 | $ | 12,155 | $ | 0 | $ | 0 | $ | 12,155 | ||||||||||||||||
U.S. Governmental agency obligations (unrealized position < 12 months) | 21,452 | 5 | (1,145 | ) | 20,312 | 19,918 | 4 | (357 | ) | 19,565 | ||||||||||||||||||||||
U.S. Governmental agency obligations (unrealized position > 12 months) | 6,948 | 0 | (696 | ) | 6,252 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
$ | 32,073 | $ | 5 | $ | (1,841 | ) | $ | 30,237 | $ | 32,073 | $ | 4 | $ | (357 | ) | $ | 31,720 |
As of | ||||
March 31, 2022 | ||||
Less than one year | $ | 0 | ||
One to five years | 7,443 | |||
Five to ten years | 20,001 | |||
Greater than ten years | 956 | |||
Total | $ | 28,400 |
Deposits as of | ||||||||
Sales Year | June 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 |
Deposits as of | ||||||||
Sales Year | March 31, 2022 | December 31, 2021 | ||||||
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 | 82 | ||||||
Total | $ | 32,073 | $ | 32,073 |
Total consideration transferred | $ | 3,462 | ||
Adjustments to consideration transferred: | ||||
Cash acquired | (42 | ) | ||
Accrued consideration | 402 | |||
Adjusted consideration transferred | 3,822 | |||
Assets acquired: | ||||
Working capital (primarily AR and inventory) | 1,265 | |||
Fixed assets and Other long term assets | 27 | |||
Net assets acquired | $ | 1,292 | ||
Goodwill | $ | 2,530 |
Total consideration transferred | $ | 3,462 | ||
Adjustments to consideration transferred: | ||||
Cash acquired | (43 | ) | ||
Accrued consideration | 472 | |||
Adjusted consideration transferred | 3,891 | |||
Assets acquired: | ||||
Working capital (primarily AR and inventory) | 1,334 | |||
Fixed assets and Other long term assets | 27 | |||
Net assets acquired | $ | 1,361 | ||
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 June 30, 2020 | |||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Cost of sales | $ | 56,871 | $ | 156 | $ | 57,027 | ||||||
Income before income taxes | $ | 12,494 | $ | (156 | ) | $ | 12,338 | |||||
Income tax expense | $ | 3,267 | $ | 0 | $ | 3,267 | ||||||
Net income attributable to Turning Point Brands, Inc. | $ | 9,227 | $ | (156 | ) | $ | 9,071 | |||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.47 | $ | (0.01 | ) | $ | 0.46 | |||||
Diluted | $ | 0.47 | $ | (0.01 | ) | $ | 0.46 |
For the six months ended June 30, 2020 | ||||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Cost of sales | $ | 106,129 | $ | 156 | $ | 106,285 | ||||||
Income before income taxes | $ | 16,715 | $ | (156 | ) | $ | 16,559 | |||||
Income tax expense | $ | 4,213 | $ | 0 | $ | 4,213 | ||||||
Net income attributable to Turning Point Brands, Inc. | $ | 12,502 | $ | (156 | ) | $ | 12,346 | |||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.64 | $ | (0.01 | ) | $ | 0.63 | |||||
Diluted | $ | 0.63 | $ | (0.01 | ) | $ | 0.62 |
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 six months ended June 30, 2020 | |||||||||||
As Originally Reported | Effect of LIFO Change | As Adjusted | ||||||||||
Consolidated net income | $ | 12,502 | $ | (156 | ) | $ | 12,346 | |||||
Deferred income taxes | $ | 1,445 | $ | 0 | $ | 1,445 | ||||||
Inventories | $ | (4,577 | ) | $ | 156 | $ | (4,421 | ) |
June 30, 2021 | December 31, 2020 | |||||||
Raw materials and work in process | $ | 7,026 | $ | 8,137 | ||||
Leaf tobacco | 40,778 | 32,948 | ||||||
Finished goods - Zig-Zag Products | 21,915 | 14,903 | ||||||
Finished goods - Stoker’s Products | 10,654 | 9,727 | ||||||
Finished goods - NewGen products | 17,473 | 18,916 | ||||||
Other | 1,164 | 1,225 | ||||||
Inventories | $ | 99,010 | $ | 85,856 |
March 31, 2022 | December 31, 2021 | |||||||
Raw materials and work in process | $ | 7,483 | $ | 6,936 | ||||
Leaf tobacco | 47,733 | 35,900 | ||||||
Finished goods - Zig-Zag Products | 28,928 | 25,663 | ||||||
Finished goods - Stoker’s Products | 11,142 | 8,959 | ||||||
Finished goods - NewGen products | 9,167 | 8,591 | ||||||
Other | 1,405 | 1,558 | ||||||
Inventories | $ | 105,858 | $ | 87,607 |
June 30, 2021 | December 31, 2020 | |||||||
Inventory deposits | $ | 7,938 | $ | 7,113 | ||||
Insurance deposit | 3,000 | 3,000 | ||||||
Prepaid taxes | 1,475 | 813 | ||||||
Other | 13,396 | 15,525 | ||||||
Total | $ | 25,809 | $ | 26,451 |
March 31, 2022 | December 31, 2021 | |||||||
Inventory deposits | $ | 9,245 | $ | 12,091 | ||||
Insurance deposit | 3,000 | 3,000 | ||||||
Other | 13,418 | 11,655 | ||||||
Total | $ | 25,663 | $ | 26,746 |
June 30, 2021 | December 31, 2020 | |||||||
Land | $ | 22 | $ | 22 | ||||
Buildings and improvements | 2,750 | 2,750 | ||||||
Leasehold improvements | 4,544 | 4,702 | ||||||
Machinery and equipment | 17,890 | 15,612 | ||||||
Furniture and fixtures | 9,189 | 9,025 | ||||||
Gross property, plant and equipment | 34,395 | 32,111 | ||||||
Accumulated depreciation | (18,104 | ) | (16,587 | ) | ||||
Net property, plant and equipment | $ | 16,291 | $ | 15,524 |
March 31, 2022 | December 31, 2021 | |||||||
Land | $ | 22 | $ | 22 | ||||
Buildings and improvements | 3,096 | 3,096 | ||||||
Leasehold improvements | 5,389 | 5,374 | ||||||
Machinery and equipment | 22,322 | 19,591 | ||||||
Furniture and fixtures | 9,380 | 9,402 | ||||||
Gross property, plant and equipment | 40,209 | 37,485 | ||||||
Accumulated depreciation | (19,642 | ) | (18,835 | ) | ||||
Net property, plant and equipment | $ | 20,567 | $ | 18,650 |
June 30, 2021 | December 31, 2020 | |||||||
Equity investments | $ | 32,714 | $ | 24,018 | ||||
Other | 2,184 | 2,818 | ||||||
Total | $ | 34,898 | $ | 26,836 |
March 31, 2022 | December 31, 2021 | |||||||
Equity investments | $ | 25,617 | $ | 25,649 | ||||
Debt security investment | 8,000 | 8,000 | ||||||
Other | 1,400 | 1,750 | ||||||
Total | $ | 35,017 | $ | 35,399 |
June 30, 2021 | December 31, 2020 | |||||||
Accrued payroll and related items | $ | 4,918 | $ | 9,459 | ||||
Customer returns and allowances | 7,818 | 5,259 | ||||||
Taxes payable | 4,951 | 4,326 | ||||||
Lease liabilities | 3,225 | 3,228 | ||||||
Accrued interest | 7,621 | 2,096 | ||||||
Other | 8,962 | 10,857 | ||||||
Total | $ | 37,495 | $ | 35,225 |
March 31, 2022 | December 31, 2021 | |||||||
Accrued payroll and related items | $ | 4,768 | $ | 6,974 | ||||
Customer returns and allowances | 6,257 | 6,497 | ||||||
Taxes payable | 5,269 | 2,053 | ||||||
Lease liabilities | 3,034 | 2,976 | ||||||
Accrued interest | 2,724 | 7,318 | ||||||
Other | 7,869 | 7,119 | ||||||
Total | $ | 29,921 | $ | 32,937 |
June 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 | 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 | (9,565 | ) | (5,873 | ) | ||||
Less current maturities | (12,485 | ) | (12,000 | ) | ||||
Notes payable and long-term debt | $ | 417,935 | $ | 302,112 |
March 31, 2022 | December 31, 2021 | |||||||
Senior Secured Notes | $ | 250,000 | $ | 250,000 | ||||
Convertible Senior Notes | 172,500 | 172,500 | ||||||
Gross notes payable and long-term debt | 422,500 | 422,500 | ||||||
Less deferred finance charges | (7,709 | ) | (8,328 | ) | ||||
Notes payable and long-term debt | $ | 414,791 | $ | 414,172 |
Three Months Ended June 30, | Three Months Ended March 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Operating lease cost | ||||||||||||||||
Cost of sales | $ | 232 | $ | 225 | $ | 227 | $ | 225 | ||||||||
Selling, general and administrative | 762 | 606 | 690 | 752 | ||||||||||||
Variable lease cost (1) | 535 | 44 | 112 | 205 | ||||||||||||
Short-term lease cost | 11 | 26 | 14 | 11 | ||||||||||||
Sublease income | (30 | ) | (30 | ) | 0 | (30 | ) | |||||||||
Total | $ | 1,510 | $ | 871 | $ | 1,043 | $ | 1,163 |
(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. |
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Operating lease cost | ||||||||
Cost of sales | $ | 457 | $ | 458 | ||||
Selling, general and administrative | 1,514 | 1,004 | ||||||
Variable lease cost (1) | 740 | 356 | ||||||
Short-term lease cost | 22 | 109 | ||||||
Sublease income | (60 | ) | (60 | ) | ||||
Total | $ | 2,673 | $ | 1,867 |
June 30, 2021 | December 31, 2020 | March 31, 2022 | December 31, 2021 | |||||||||||||
Assets: | ||||||||||||||||
Right of use assets | $ | 16,607 | $ | 17,918 | $ | 14,405 | $ | 15,053 | ||||||||
Total lease assets | $ | 16,607 | $ | 17,918 | $ | 14,405 | $ | 15,053 | ||||||||
Liabilities: | ||||||||||||||||
Current lease liabilities (2) | $ | 3,225 | $ | 3,228 | $ | 3,034 | $ | 2,976 | ||||||||
Long-term lease liabilities | 14,788 | 16,117 | 12,625 | 13,336 | ||||||||||||
Total lease liabilities | $ | 18,013 | $ | 19,345 | $ | 15,659 | $ | 16,312 |
(2) | Reported within accrued liabilities on the balance sheet |
As of June 30, | As of March 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Weighted-average remaining lease term - operating leases | 7.0 years | 7.6 years | 6.5 years | 7.1 years | ||||||||||||
Weighted-average discount rate - operating leases | 4.93 | % | 5.65 | % | 4.88 | % | 4.93 | % |
June 30, 2021 | ||||
2021 | $ | 2,036 | ||
2022 | 3,797 | |||
2023 | 3,531 | |||
2024 | 2,487 | |||
2025 | 2,129 | |||
Years thereafter | 7,428 | |||
Total lease payments | $ | 21,408 | ||
Less: Imputed interest | 3,395 | |||
Present value of lease liabilities | $ | 18,013 |
March 31, 2022 | ||||
2022 | $ | 2,775 | ||
2023 | 3,635 | |||
2024 | 2,460 | |||
2025 | 2,145 | |||
2026 | 2,085 | |||
Years thereafter | 5,343 | |||
Total lease payments | $ | 18,443 | ||
Less: Imputed interest | 2,784 | |||
Present value of lease liabilities | $ | 15,659 |
Three Months Ended June 30, | ||||||||||||||||
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 | (74 | ) | |||||||||||
Net periodic benefit income | $ | 0 | $ | (30 | ) | $ | 0 | $ | (74 | ) |
Six Months Ended June 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 | ) | |||||||||||
Net periodic benefit income | $ | 0 | $ | (60 | ) | $ | 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 | 119,500 | 50.93 | 13.58 | |||||||||
Exercised | (128,108 | ) | 6.93 | 3.87 | ||||||||
Forfeited | (4,397 | ) | 29.99 | 8.66 | ||||||||
Outstanding, June 30, 2021 | 698,055 | $ | 27.20 | $ | 8.30 |
Stock Option Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | ||||||||||
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 | (7,957 | ) | 33.22 | 9.63 | ||||||||
Outstanding, December 31, 2021 | 619,835 | 28.51 | 8.70 | |||||||||
Granted | 100,000 | 30.46 | 10.23 | |||||||||
Exercised | (25,166 | ) | 16.14 | 4.89 | ||||||||
Forfeited | (7,217 | ) | 29.53 | 8.13 | ||||||||
Outstanding, March 31, 2022 | 687,452 | $ | 29.23 | $ | 9.07 |
February 10, 2017 | May 17, 2017 | March 7, 2018 | March 13, 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 | 26,000 | 155,780 | 25,000 | 155,000 | 100,000 | 12,000 | |||||||||||||||||||||||||||
Options outstanding at June 30, 2021 | 27,050 | 53,273 | 77,167 | 26,000 | 143,294 | 25,000 | 125,705 | 98,750 | 12,000 | |||||||||||||||||||||||||||
Number exercisable at June 30, 2021 | 27,050 | 53,273 | 77,167 | 26,000 | 111,025 | 16,750 | 51,653 | 9,500 | 0 | |||||||||||||||||||||||||||
Exercise price | $ | 13.00 | $ | 15.41 | $ | 21.21 | $ | 21.49 | $ | 47.58 | $ | 20.89 | $ | 14.85 | $ | 51.75 | $ | 47.76 | ||||||||||||||||||
Remaining lives | 5.62 | 5.88 | 6.69 | 6.71 | 7.73 | 8.32 | 8.72 | 9.64 | 9.85 | |||||||||||||||||||||||||||
Risk free interest rate | 1.89 | % | 1.76 | % | 2.65 | % | 2.62 | % | 2.34 | % | 1.58 | % | 0.79 | % | 0.56 | % | 0.84 | % | ||||||||||||||||||
Expected volatility | 27.44 | % | 26.92 | % | 28.76 | % | 28.76 | % | 30.95 | % | 31.93 | % | 35.72 | % | 28.69 | % | 29.03 | % | ||||||||||||||||||
Expected life | 6.000 | 6.000 | 6.000 | 5.495 | 6.000 | 6.000 | 6.000 | 6.000 | 6.000 | |||||||||||||||||||||||||||
Dividend yield | 0 | 0 | 0.83 | % | 0.82 | % | 0.42 | % | 0.95 | % | 1.49 | % | 0.55 | % | 0.59 | % | ||||||||||||||||||||
Fair value at grant date | $ | 3.98 | $ | 4.60 | $ | 6.37 | $ | 6.18 | $ | 15.63 | $ | 6.27 | $ | 4.41 | $ | 13.77 | $ | 13.06 |
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 March 31, 2022 | 20,000 | 46,483 | 58,667 | 142,284 | 25,000 | 94,612 | 94,529 | 12,000 | ||||||||||||||||||||||||
Number exercisable at March 31, 2022 | 20,000 | 46,483 | 58,667 | 142,284 | 25,000 | 62,148 | 39,386 | 4,080 | ||||||||||||||||||||||||
Exercise price | $ | 13.00 | $ | 15.41 | $ | 21.21 | $ | 47.58 | $ | 20.89 | $ | 14.85 | $ | 51.75 | $ | 47.76 | ||||||||||||||||
Remaining lives | 4.87 | 5.13 | 5.94 | 6.98 | 7.57 | 7.97 | 8.89 | 9.10 | ||||||||||||||||||||||||
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 June 30, 2021 | 7,500 | |||
Number exercisable at June 30, 2021 | 0 | |||
Exercise price | $ | 45.05 | ||
Remaining lives | 9.88 | |||
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 |
May 17, 2021 | March 14, 2022 | |||||||
Number of options granted | 7,500 | 100,000 | ||||||
Options outstanding at March 31, 2022 | 7,500 | 100,000 | ||||||
Number exercisable at March 31, 2022 | 2,550 | 0 | ||||||
Exercise price | $ | 45.05 | $ | 30.46 | ||||
Remaining lives | 9.13 | 9.96 | ||||||
Risk free interest rate | 0.84 | % | 2.10 | % | ||||
Expected volatility | 31.50 | % | 35.33 | % | ||||
Expected life | 6.000 | 6.000 | ||||||
Dividend yield | 0.63 | % | 1.01 | % | ||||
Fair value at grant date | $ | 13.23 | $ | 10.23 |
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 June 30, 2021 | 83,000 | 93,000 | 84,750 | 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 | 0.50 | 1.50 | 2.50 | - | 1.50 | 3.50 | 2.50 | 4.50 |
March 7, 2018 | March 20, 2019 | July 19, 2019 | March 18, 2020 | December 28, 2020 | February 18, 2021 | March 14, 2022 | ||||||||||||||||||||||
Number of PRSUs granted | 96,000 | 92,500 | 88,582 | 94,000 | 88,169 | 100,000 | 49,996 | |||||||||||||||||||||
PRSUs outstanding at March 31, 2022 | 89,600 | 77,380 | 21,342 | 86,610 | 58,779 | 93,840 | 49,996 | |||||||||||||||||||||
Fair value as of grant date | $ | 21.21 | $ | 47.58 | $ | 52.15 | $ | 14.85 | $ | 46.42 | $ | 51.75 | $ | 30.46 | ||||||||||||||
Remaining lives | 0.75 | 1.75 | 0.75 | 2.75 | 1.75 | 3.75 | 4.75 |
May 4, 2021 | July 23, 2021 | March 14, 2022 | March 14, 2022 | |||||||||||||
Number of RSUs granted | 7,478 | 1,159 | 50,004 | 28,726 | ||||||||||||
RSUs outstanding at March 31, 2022 | 7,478 | 1,159 | 50,004 | 28,726 | ||||||||||||
Fair value as of grant date | $ | 47.86 | $ | 51.81 | $ | 30.46 | $ | 30.46 | ||||||||
Remaining lives | 0.09 | 0.31 | 4.75 | 2.75 |
Three Months Ended June 30, | Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 15,355 | $ | 10,295 | $ | 10,998 | $ | 11,783 | ||||||||||||||||||||||||||||||||||||||||
Denominator | ||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average | 18,975,522 | $ | 0.81 | 19,507,874 | $ | 0.53 | 18,257,695 | $ | 0.60 | 19,093,961 | $ | 0.62 | ||||||||||||||||||||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 15,355 | $ | 10,295 | $ | 10,998 | $ | 11,783 | ||||||||||||||||||||||||||||||||||||||||
Interest expense related to Convertible Senior Notes, net of tax | 1,054 | 1,047 | 1,054 | 1,054 | ||||||||||||||||||||||||||||||||||||||||||||
Diluted net income attributable to Turning Point Brands. Inc. | $ | 16,409 | $ | 11,342 | $ | 12,052 | $ | 12,837 | ||||||||||||||||||||||||||||||||||||||||
Denominator | ||||||||||||||||||||||||||||||||||||||||||||||||
Basic weighted average | 18,975,522 | 19,507,874 | 18,257,695 | 19,093,961 | ||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | 3,206,637 | 3,202,808 | 3,209,690 | 3,205,895 | ||||||||||||||||||||||||||||||||||||||||||||
Stock options | 307,503 | 326,471 | 282,125 | 365,211 | ||||||||||||||||||||||||||||||||||||||||||||
22,489,662 | $ | 0.73 | 23,037,153 | $ | 0.49 | 21,749,510 | $ | 0.55 | 22,665,067 | $ | 0.57 |
Six Months Ended June 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 27,137 | $ | 14,794 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Weighted average | 19,034,415 | $ | 1.43 | 19,598,660 | $ | 0.75 | ||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 27,137 | $ | 14,794 | ||||||||||||||||||||
Interest expense related to Convertible Senior Notes | 2,108 | 2,094 | ||||||||||||||||||||||
Diluted net income attributable to Turning Point Brands. Inc. | $ | 29,245 | $ | 16,888 | ||||||||||||||||||||
Denominator | ||||||||||||||||||||||||
Basic weighted average | 19,034,415 | 19,598,660 | ||||||||||||||||||||||
Convertible Senior Notes | 3,206,637 | 3,202,808 | ||||||||||||||||||||||
Stock options | 318,035 | 274,066 | ||||||||||||||||||||||
22,559,087 | $ | 1.30 | 23,075,534 | $ | 0.73 |
Three Months Ended March 31, | ||||||||||||||||
Three Months Ended June 30, | 2022 | 2021 | ||||||||||||||
2021 | 2020 | |||||||||||||||
Net sales | ||||||||||||||||
Zig-Zag products | $ | 47,202 | $ | 27,403 | $ | 45,672 | $ | 41,004 | ||||||||
Stoker’s products | 33,369 | 30,822 | 31,703 | 29,255 | ||||||||||||
NewGen products | 42,072 | 46,738 | 23,519 | 37,382 | ||||||||||||
Total | $ | 122,643 | $ | 104,963 | $ | 100,894 | $ | 107,641 | ||||||||
Gross profit | ||||||||||||||||
Zig-Zag products | $ | 27,743 | $ | 15,671 | $ | 26,343 | $ | 24,896 | ||||||||
Stoker’s products | 18,146 | 16,508 | 17,686 | 15,892 | ||||||||||||
NewGen products | 14,084 | 15,757 | 7,765 | 12,473 | ||||||||||||
Total | $ | 59,973 | $ | 47,936 | $ | 51,794 | $ | 53,261 | ||||||||
Operating income (loss) | ||||||||||||||||
Zig-Zag products | $ | 21,338 | $ | 12,227 | $ | 18,737 | $ | 19,437 | ||||||||
Stoker’s products | 13,826 | 12,084 | 13,506 | 12,255 | ||||||||||||
NewGen products | 1,657 | 3,271 | 678 | 2,006 | ||||||||||||
Corporate unallocated (1)(2)(3) | (11,942 | ) | (10,402 | ) | ||||||||||||
Corporate unallocated (1)(2) | (13,692 | ) | (9,349 | ) | ||||||||||||
Total | $ | 24,879 | $ | 17,180 | $ | 19,229 | $ | 24,349 | ||||||||
Interest expense, net | 5,522 | 3,295 | 5,196 | 4,486 | ||||||||||||
Investment income | (110 | ) | (34 | ) | (78 | ) | (25 | ) | ||||||||
Net periodic income, excluding service cost | 0 | (104 | ) | |||||||||||||
Loss on extinguishment of debt | 0 | 5,706 | ||||||||||||||
Income before income taxes | $ | 19,467 | $ | 14,023 | $ | 14,111 | $ | 14,182 | ||||||||
Capital expenditures | ||||||||||||||||
Zig-Zag products | $ | 98 | $ | 0 | $ | 2,323 | $ | 0 | ||||||||
Stoker’s products | 1,177 | 838 | 464 | 840 | ||||||||||||
NewGen products | 53 | 241 | 0 | 2 | ||||||||||||
Total | $ | 1,328 | $ | 1,079 | $ | 2,787 | $ | 842 | ||||||||
Depreciation and amortization | ||||||||||||||||
Zig-Zag products | $ | 93 | $ | 0 | $ | 92 | $ | 114 | ||||||||
Stoker’s products | 629 | 524 | 767 | 635 | ||||||||||||
NewGen products | 515 | 700 | 475 | 516 | ||||||||||||
Total | $ | 1,237 | $ | 1,224 | $ | 1,334 | $ | 1,265 |
(1) | Includes corporate costs that are not allocated to any of the 3 reportable segments. |
(2) | Includes costs related to PMTA of |
March 31, 2022 | December 31, 2021 | |||||||
Assets | ||||||||
Zig-Zag products | $ | 227,989 | $ | 227,554 | ||||
Stoker’s products | 172,400 | 142,334 | ||||||
NewGen products | 61,529 | 72,746 | ||||||
Corporate unallocated (1) | 156,785 | 158,926 | ||||||
Total | $ | 618,703 | $ | 601,560 |
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Net sales | ||||||||
Zig-Zag products | $ | 88,206 | $ | 56,317 | ||||
Stoker’s products | 62,624 | 57,317 | ||||||
NewGen products | 79,454 | 82,018 | ||||||
Total | $ | 230,284 | $ | 195,652 | ||||
Gross profit | ||||||||
Zig-Zag products | $ | 52,639 | $ | 31,803 | ||||
Stoker’s products | 34,038 | 30,382 | ||||||
NewGen products | 26,557 | 27,182 | ||||||
Total | $ | 113,234 | $ | 89,367 | ||||
Operating income (loss) | ||||||||
Zig-Zag products | $ | 40,775 | $ | 24,644 | ||||
Stoker’s products | 26,081 | 21,830 | ||||||
NewGen products | 3,663 | 3,748 | ||||||
Corporate unallocated (1)(2)(3) | (21,291 | ) | (24,005 | ) | ||||
Total | $ | 49,228 | $ | 26,217 | ||||
Interest expense, net | 10,009 | 6,604 | ||||||
Investment income | (135 | ) | (125 | ) | ||||
Loss on extinguishment of debt | 5,706 | 0 | ||||||
Net periodic income, excluding service cost | 0 | (191 | ) | |||||
Income before income taxes | $ | 33,648 | $ | 19,929 | ||||
Capital expenditures | ||||||||
Zig-Zag products | $ | 98 | $ | 0 | ||||
Stoker’s products | 2,017 | 1,698 | ||||||
NewGen products | 55 | 258 | ||||||
Total | $ | 2,170 | $ | 1,956 | ||||
Depreciation and amortization | ||||||||
Zig-Zag products | $ | 207 | $ | 0 | ||||
Stoker’s products | 1,263 | 1,043 | ||||||
NewGen products | 1,030 | 1,457 | ||||||
Total | $ | 2,500 | $ | 2,500 |
(1) |
June 30, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Zig-Zag products | $ | 217,069 | $ | 206,900 | ||||
Stoker’s products | 148,447 | 133,016 | ||||||
NewGen products | 84,483 | 91,116 | ||||||
Corporate unallocated (1) | 179,400 | 65,017 | ||||||
Total | $ | 629,399 | $ | 496,049 |
Includes assets not assigned to the 3 reportable segments. All goodwill has been allocated to the reportable segments. |
NewGen Segment | ||||||||
Three Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Business to Business | $ | 30,715 | $ | 30,368 | ||||
Business to Consumer - Online | 11,263 | 15,052 | ||||||
Business to Consumer - Corporate store | 0 | 1,318 | ||||||
Other | 94 | 0 | ||||||
Total | $ | 42,072 | $ | 46,738 |
NewGen Segment | ||||||||||||||||
NewGen Segment | Three Months Ended March 31, | |||||||||||||||
Six Months Ended June 30, | 2022 | 2021 | ||||||||||||||
2021 | 2020 | |||||||||||||||
Business to Business | $ | 57,972 | $ | 55,647 | $ | 19,124 | $ | 27,257 | ||||||||
Business to Consumer - Online | 21,296 | 23,186 | 4,233 | 10,033 | ||||||||||||
Business to Consumer - Corporate store | 0 | 3,111 | ||||||||||||||
Other | 186 | 74 | 162 | 92 | ||||||||||||
Total | $ | 79,454 | $ | 82,018 | $ | 23,519 | $ | 37,382 |
Three Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Domestic | $ | 116,843 | $ | 101,990 | ||||
Foreign | 5,800 | 2,973 | ||||||
Total | $ | 122,643 | $ | 104,963 |
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Domestic | $ | 215,911 | $ | 189,558 | ||||
Foreign | 14,373 | 6,094 | ||||||
Total | $ | 230,284 | $ | 195,652 |
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Domestic | $ | 93,766 | $ | 100,127 | ||||
Foreign | 7,128 | 7,514 | ||||||
Total | $ | 100,894 | $ | 107,641 |
Three Months Ended June 30, | Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||
Consolidated Results of Operations Data: | ||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||
Zig-Zag products | $ | 47,202 | $ | 27,403 | 72.3 | % | $ | 45,672 | $ | 41,004 | 11.4 | % | ||||||||||||
Stoker’s products | 33,369 | 30,822 | 8.3 | % | 31,703 | 29,255 | 8.4 | % | ||||||||||||||||
NewGen products | 42,072 | 46,738 | -10.0 | % | 23,519 | 37,382 | -37.1 | % | ||||||||||||||||
Total net sales | 122,643 | 104,963 | 16.8 | % | 100,894 | 107,641 | -6.3 | % | ||||||||||||||||
Cost of sales | 62,670 | 57,027 | 9.9 | % | 49,100 | 54,380 | -9.7 | % | ||||||||||||||||
Gross profit | ||||||||||||||||||||||||
Zig-Zag products | 27,743 | 15,671 | 77.0 | % | 26,343 | 24,896 | 5.8 | % | ||||||||||||||||
Stoker’s products | 18,146 | 16,508 | 9.9 | % | 17,686 | 15,892 | 11.3 | % | ||||||||||||||||
NewGen products | 14,084 | 15,757 | -10.6 | % | 7,765 | 12,473 | -37.7 | % | ||||||||||||||||
Total gross profit | 59,973 | 47,936 | 25.1 | % | 51,794 | 53,261 | -2.8 | % | ||||||||||||||||
Selling, general, and administrative expenses | 35,094 | 30,756 | 14.1 | % | 32,565 | 28,912 | 12.6 | % | ||||||||||||||||
Operating income | 24,879 | 17,180 | 44.8 | % | 19,229 | 24,349 | -21.0 | % | ||||||||||||||||
Interest expense, net | 5,522 | 3,295 | 67.6 | % | 5,196 | 4,486 | 15.8 | % | ||||||||||||||||
Investment income | (110 | ) | (34 | ) | 223.5 | % | (78 | ) | (25 | ) | 212.0 | % | ||||||||||||
Net periodic income, excluding service cost | - | (104 | ) | -100.0 | % | |||||||||||||||||||
Loss on extinguishment of debt | - | 5,706 | -100.0 | % | ||||||||||||||||||||
Income before income taxes | 19,467 | 14,023 | 38.8 | % | 14,111 | 14,182 | -0.5 | % | ||||||||||||||||
Income tax expense | 4,424 | 3,728 | 18.7 | % | 3,340 | 2,654 | 25.8 | % | ||||||||||||||||
Consolidated net income | 15,043 | 10,295 | 46.1 | % | 10,771 | 11,528 | -6.6 | % | ||||||||||||||||
Net loss attributable to non-controlling interest | (312 | ) | - | NM | (227 | ) | (255 | ) | -11.0 | % | ||||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 15,355 | $ | 10,295 | 49.2 | % | $ | 10,998 | $ | 11,783 | -6.7 | % |
Six Months Ended June 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Consolidated Results of Operations Data: | ||||||||||||
Net sales | ||||||||||||
Zig-Zag products | $ | 88,206 | $ | 56,317 | 56.6 | % | ||||||
Stoker’s products | 62,624 | 57,317 | 9.3 | % | ||||||||
NewGen products | 79,454 | 82,018 | -3.1 | % | ||||||||
Total net sales | 230,284 | 195,652 | 17.7 | % | ||||||||
Cost of sales | 117,050 | 106,285 | 10.1 | % | ||||||||
Gross profit | ||||||||||||
Zig-Zag products | 52,639 | 31,803 | 65.5 | % | ||||||||
Stoker’s products | 34,038 | 30,382 | 12.0 | % | ||||||||
NewGen products | 26,557 | 27,182 | -2.3 | % | ||||||||
Total gross profit | 113,234 | 89,367 | 26.7 | % | ||||||||
Selling, general, and administrative expenses | 64,006 | 63,150 | 1.4 | % | ||||||||
Operating income | 49,228 | 26,217 | 87.8 | % | ||||||||
Interest expense, net | 10,009 | 6,604 | 51.6 | % | ||||||||
Investment income | (135 | ) | (125 | ) | 8.0 | % | ||||||
Loss on extinguishment of debt | 5,706 | - | NM | |||||||||
Net periodic income, excluding service cost | - | (191 | ) | -100.0 | % | |||||||
Income before income taxes | 33,648 | 19,929 | 68.8 | % | ||||||||
Income tax expense | 7,078 | 5,135 | 37.8 | % | ||||||||
Consolidated net income | 26,570 | 14,794 | 79.6 | % | ||||||||
Net loss attributable to non-controlling interest | (567 | ) | - | NM | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 27,137 | $ | 14,794 | 83.4 | % |
Three Months Ended | ||||||||||||||||
(in thousands) | Three Months Ended June 30, | March 31, | ||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ | 15,355 | $ | 10,295 | $ | 10,998 | $ | 11,783 | ||||||||
Add: | ||||||||||||||||
Interest expense, net | 5,522 | 3,295 | 5,196 | 4,486 | ||||||||||||
Loss on extinguishment of debt | - | 5,706 | ||||||||||||||
Income tax expense | 4,424 | 3,728 | 3,340 | 2,654 | ||||||||||||
Depreciation expense | 758 | 822 | 871 | 788 | ||||||||||||
Amortization expense | 479 | 402 | 463 | 477 | ||||||||||||
EBITDA | $ | 26,538 | $ | 18,542 | $ | 20,868 | $ | 25,894 | ||||||||
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 | ||||||||||||||
Corporate restructuring (a) | 1,332 | - | ||||||||||||||
ERP/CRM (b) | 330 | - | ||||||||||||||
Stock options, restricted stock, and incentives expense (c) | 1,159 | 1,498 | ||||||||||||||
Transactional expenses (d) | 425 | 607 | ||||||||||||||
FDA PMTA (e) | 1,139 | - | ||||||||||||||
Adjusted EBITDA | $ | 30,004 | $ | 22,778 | $ | 25,253 | $ | 27,999 |
(a) | Represents |
(b) | Represents costs associated with scoping new ERP and |
Represents non-cash stock options, restricted stock, incentives expense and Solace performance stock units. |
Represents the fees incurred for transaction expenses. |
Represents costs associated with applications related to FDA premarket tobacco product application (“PMTA”). |
(in thousands) | Six Months Ended June 30, | |||||||
2021 | 2020 | |||||||
Net income attributable to Turning Point Brands, Inc. | $ | 27,137 | $ | 14,794 | ||||
Add: | ||||||||
Interest expense, net | 10,009 | 6,604 | ||||||
Loss on extinguishment of debt | 5,706 | - | ||||||
Income tax expense | 7,078 | 5,135 | ||||||
Depreciation expense | 1,546 | 1,673 | ||||||
Amortization expense | 954 | 827 | ||||||
EBITDA | $ | 52,430 | $ | 29,033 | ||||
Components of Adjusted EBITDA | ||||||||
Other (a) | - | (191 | ) | |||||
Stock options, restricted stock, and incentives expense (b) | 4,263 | 1,215 | ||||||
Transactional expenses (c) | 1,309 | 1,339 | ||||||
FDA PMTA (d) | - | 9,164 | ||||||
Adjusted EBITDA | $ | 58,002 | $ | 40,560 |
As of | As of | |||||||||||||||
(in thousands) | June 30, 2021 | December 31, 2020 | March 31, 2022 | December 31, 2021 | ||||||||||||
Current assets | $ | 130,633 | $ | 121,638 | $ | 140,971 | $ | 120,849 | ||||||||
Current liabilities | 61,243 | 56,629 | 59,423 | 40,336 | ||||||||||||
Working capital | $ | 69,390 | $ | 65,009 | $ | 81,548 | $ | 80,513 |
June 30, 2021 | December 31, 2020 | |||||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||||
Senior Secured Notes | $ | 250,000 | $ | - | $ | 250,000 | $ | 250,000 | ||||||||
2018 First Lien Term Loan | - | 130,000 | ||||||||||||||
Convertible Senior Notes | 172,500 | 172,500 | 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 | 422,500 | 422,500 | ||||||||||||
Less deferred finance charges | (9,565 | ) | (5,873 | ) | (7,709 | ) | (8,328 | ) | ||||||||
Less current maturities | (12,485 | ) | (12,000 | ) | ||||||||||||
Notes payable and long-term debt | $ | 417,935 | $ | 302,112 | $ | 414,791 | $ | 414,172 |
Period | Total Number of Shares Purchased (1) | 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 | ||||||||||||
January 1 to January 31 | 172,624 | $ | 37.20 | 172,624 | $ | 25,410,384 | ||||||||||
February 1 to February 28 | 28,855 | $ | 33.81 | 5,572 | $ | 49,814,062 | ||||||||||
March 1 to March 31 | 142,832 | $ | 30.56 | 132,028 | $ | 45,800,411 | ||||||||||
Total | 344,311 | 310,224 |
Period | Total Number of Shares Purchased (1) | 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 | ||||||||||||
April 1 to April 30 | - | $ | - | - | 34,075,635 | |||||||||||
May 1 to May 31 | 184,090 | $ | 47.71 | 170,000 | 25,937,735 | |||||||||||
June 1 to June 31 | 5,000 | $ | 42.87 | 5,000 | 25,723,385 | |||||||||||
Total | 189,090 | 175,000 |
Exhibit No. | Description |
Rule 13a-14(a)/15d-14(a) Certification of | |
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 |
104 | Cover Page Interactive Data File (formatted in iXBRL and included in Exhibit 101).* |
* Filed or furnished herewith |
TURNING POINT BRANDS, INC. | |||||
By: /s/ | |||||
Name: | Yavor Efremov | ||||
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 |