Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | STANDARD DIVERSIFIED OPPORTUNITIES INC. | |
Entity Central Index Key | 911,649 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 8,306,450 | |
Class B Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 8,080,948 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 20,487 | $ 2,865 |
Accounts receivable, net of allowances of $30 in 2017 and $35 in 2016 | 3,018 | 2,181 |
Inventories | 64,761 | 62,185 |
Other current assets | 9,854 | 11,625 |
Total current assets | 98,120 | 78,856 |
Property, plant and equipment, net | 8,778 | 7,590 |
Deferred income taxes | 4,161 | 6,288 |
Deferred financing costs, net | 668 | 139 |
Goodwill | 134,620 | 134,390 |
Other intangible assets, net | 26,611 | 27,138 |
Master Settlement Agreement - escrow deposits | 30,905 | 30,410 |
Other assets | 531 | 209 |
Total assets | 304,394 | 285,020 |
Current liabilities: | ||
Accounts payable | 7,096 | 9,153 |
Accrued liabilities | 15,428 | 15,336 |
Accrued interest expense | 434 | 394 |
Current portion of long-term debt | 7,850 | 1,650 |
Revolving credit facility | 15,550 | 15,034 |
Total current liabilities | 46,358 | 41,567 |
Notes payable and long-term debt | 187,453 | 201,541 |
Postretirement benefits | 4,389 | 4,407 |
Pension benefits | 217 | 423 |
Other long-term liabilities | 712 | 3,024 |
Total liabilities | 239,129 | 250,962 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value; authorized shares 500,000,000; -0- issued and outstanding shares | 0 | 0 |
Additional paid-in capital | 70,590 | 105,616 |
Class A Treasury stock, 16,266 common shares at cost at December 31, 2016. | 0 | (555) |
Accumulated other comprehensive loss | (1,874) | (4,049) |
Accumulated deficit | (27,829) | (66,972) |
Total stockholders' equity | 41,051 | 34,058 |
Noncontrolling interests | 24,214 | 0 |
Total equity | 65,265 | 34,058 |
Total liabilities and equity | 304,394 | 285,020 |
Class A Common Stock [Member] | ||
Equity: | ||
Common stock | 83 | 9 |
Class B Common Stock [Member] | ||
Equity: | ||
Common stock | $ 81 | $ 9 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Accounts receivable, allowance | $ 30 | $ 35 |
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock, common shares (in shares) | 16,266 | |
Class A Common Stock [Member] | ||
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 8,306,450 | 857,714 |
Common stock, shares outstanding (in shares) | 8,306,450 | |
Class B Common Stock [Member] | ||
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 8,080,948 | 841,448 |
Common stock, shares outstanding (in shares) | 8,080,948 | 841,448 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Income (unaudited) [Abstract] | ||||
Net sales | $ 73,352 | $ 50,959 | $ 212,226 | $ 152,406 |
Cost of sales | 40,424 | 26,341 | 119,637 | 78,267 |
Gross profit | 32,928 | 24,618 | 92,589 | 74,139 |
Selling, general and administrative expenses | 19,626 | 12,727 | 55,414 | 40,563 |
Operating income | 13,302 | 11,891 | 37,175 | 33,576 |
Interest expense | 4,023 | 5,557 | 13,002 | 20,895 |
Interest income | (26) | 0 | (35) | 0 |
Investment income | (131) | (279) | (334) | (611) |
Loss on extinguishment of debt | 0 | 0 | 6,116 | 2,824 |
Income before income taxes | 9,436 | 6,613 | 18,426 | 10,468 |
Income tax expense (benefit) | 3,110 | (180) | 3,850 | 642 |
Net income | 6,326 | 6,793 | 14,576 | 9,826 |
Amounts attributable to noncontrolling interests | (3,576) | 0 | (5,046) | 0 |
Net income attributable to Standard Diversified Opportunities Inc. | $ 2,750 | $ 6,793 | $ 9,530 | $ 9,826 |
Net income per Class A and Class B Common Share - Basic (in dollars per share) | $ 0.17 | $ 0.25 | $ 0.42 | $ 0.43 |
Net income per Class A and Class B Common Share - Diluted (in dollars per share) | $ 0.16 | $ 0.24 | $ 0.41 | $ 0.41 |
Weighted Average Class A and Class B Common Shares Outstanding - Basic (in shares) | 16,399,796 | 26,969,990 | 22,853,762 | 22,947,970 |
Weighted Average Class A and Class B Common Shares Outstanding - Diluted (in shares) | 16,410,672 | 28,188,196 | 22,880,941 | 24,119,844 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 6,326 | $ 6,793 | $ 14,576 | $ 9,826 |
Other comprehensive income: | ||||
Tax effect | (43) | 0 | (132) | 0 |
Unrealized gain on investments, net of tax of $8 and $150 | 12 | 0 | 241 | 0 |
Other comprehensive income | 83 | 123 | 459 | 369 |
Amounts attributable to noncontrolling interests | (3,576) | 0 | (5,046) | 0 |
Comprehensive income attributable to Standard Diversified Opportunities Inc. | 2,833 | 6,916 | 9,989 | 10,195 |
Cost of Sales [Member] | ||||
Other comprehensive income: | ||||
Pension and postretirement amortization of unrealized losses | 6 | 6 | 18 | 18 |
Selling, General and Administrative Expenses [Member] | ||||
Other comprehensive income: | ||||
Pension and postretirement amortization of unrealized losses | $ 108 | $ 117 | $ 332 | $ 351 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Other comprehensive income: | ||
Unrealized gain on investments, tax | $ 8 | $ 150 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Equity (unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Common Shares [Member]Class A Common Stock [Member] | Common Shares [Member]Class B Common Stock [Member] | Treasury Shares [Member]Class A Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 9 | $ 9 | $ (555) | $ 105,616 | $ (4,049) | $ (66,972) | $ 0 | $ 34,058 |
Beginning balance (in shares) at Dec. 31, 2016 | 857,714 | 841,448 | (16,266) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of SDOI restricted stock (in shares) | 13,700 | 13,700 | ||||||
Issuance of Class A and Class B Common shares to former holders of Turning Point Brands shares in reverse acquisition | $ 73 | $ 73 | $ 0 | 16,771 | 0 | 0 | 0 | 16,917 |
Issuance of Class A and Class B Common shares to former holders of Turning Point Brands shares in reverse acquisition (in shares) | 7,335,018 | 7,335,018 | ||||||
Allocation of Turning Point Brands equity to noncontrolling interests as part of reverse acquisition | $ 0 | $ 0 | 0 | (50,234) | 1,788 | 29,613 | 18,833 | 0 |
Conversion of Class B common stock into Class A common stock | $ 1 | $ (1) | 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Class B common stock into Class A common stock (in shares) | 109,218 | (109,218) | ||||||
Issuance of Class A common stock in business combination | $ 0 | $ 0 | 0 | 39 | 0 | 0 | 0 | 39 |
Issuance of Class A common stock in business combination (in shares) | 3,757 | |||||||
Issuance of Class A common stock for services performed | $ 0 | 0 | 0 | 34 | 0 | 0 | 0 | 34 |
Issuance of Class A common stock for services performed (in shares) | 3,309 | |||||||
Retirement of Class A treasury shares | $ 0 | 0 | $ 555 | (555) | 0 | 0 | 0 | 0 |
Retirement of Class A treasury shares (in shares) | (16,266) | 16,266 | ||||||
Unrecognized pension and postretirement cost adjustment | $ 0 | 0 | $ 0 | 0 | 179 | 0 | 39 | 218 |
Unrealized gain on investments | 0 | 0 | 0 | 0 | 208 | 0 | 33 | 241 |
SDOI stock-based compensation | 0 | 0 | 0 | 132 | 0 | 0 | 0 | 132 |
Impact of Turning Point equity transactions on APIC and NCI | 0 | 0 | 0 | (653) | 0 | 0 | (293) | (946) |
Turning Point acquisition of noncontrolling interest | 0 | 0 | 0 | (560) | 0 | 0 | 560 | 0 |
Turning Point distribution to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (4) | (4) |
Net income | 0 | 0 | 0 | 0 | 0 | 9,530 | 5,046 | 14,576 |
Ending balance at Sep. 30, 2017 | $ 83 | $ 81 | $ 0 | $ 70,590 | $ (1,874) | $ (27,829) | $ 24,214 | $ 65,265 |
Ending balance (in shares) at Sep. 30, 2017 | 8,306,450 | 8,080,948 | 0 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 14,576 | $ 9,826 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Loss on extinguishment of debt | 6,116 | 2,824 |
Loss on sale of property, plant and equipment | 17 | 0 |
Depreciation expense | 1,200 | 896 |
Amortization of deferred financing costs | 768 | 1,070 |
Amortization of original issue discount | 66 | 591 |
Amortization of other intangible assets | 527 | 0 |
Deferred income taxes | 1,847 | 47 |
Stock-based compensation expense | 630 | 145 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (837) | 546 |
Inventories | (970) | (7,405) |
Other current assets | 2,263 | 1,562 |
Other assets | (107) | (45) |
Accounts payable | (2,292) | (531) |
Accrued pension liabilities | 144 | 196 |
Accrued postretirement liabilities | (18) | (89) |
Accrued expenses and other | (7,250) | (3,967) |
Net cash provided by (used in) operating activities | 16,680 | (476) |
Cash flows from investing activities: | ||
Cash and cash equivalents acquired in reverse acquisition | 20,253 | 0 |
Acquisitions, net of cash acquired | (22) | 0 |
Capital expenditures | (1,052) | (1,245) |
Net cash provided by (used in) investing activities | 19,179 | (1,245) |
Cash flows from financing activities: | ||
Proceeds from 2017 revolving credit facility | 15,550 | 0 |
Payment of financing costs | (4,783) | (200) |
Payments of revolving credit facility | (15,083) | (18) |
Payments of Vapor Shark loans | (1,867) | 0 |
Prepaid Turning Point Brands equity issuance costs | (394) | 0 |
Redemption of subsidiary options by Turning Point Brands | 0 | (661) |
Redemption of subsidiary warrants by Turning Point Brands | 0 | (5,500) |
Turning Point Brands exercise of stock options | 1,371 | 8 |
Turning Point Brands exercise of warrants | 0 | 4 |
Turning Point Brands redemption of options | (1,740) | 0 |
Turning Point Brands surrender of options | (1,000) | 0 |
Proceeds from issuance of Turning Point Brands stock | 0 | 55,746 |
Distribution to noncontrolling interest of Turning Point Brands | (4) | 0 |
Net cash (used in) provided by financing activities | (18,237) | 1,296 |
Net increase (decrease) in cash | 17,622 | (425) |
Cash, beginning of period | 2,865 | 4,835 |
Cash, end of period | 20,487 | 4,410 |
Supplemental schedule of noncash investing and financing activities: | ||
Issuance of SDOI shares in business combination | 39 | 0 |
Issuance of Turning Point Brands restricted stock | 0 | 279 |
Common stock issued in connection with reverse acquisition | 16,917 | 0 |
PIK Toggle Notes [Member] | ||
Supplemental schedule of noncash investing and financing activities: | ||
Conversion of Notes to equity | 0 | 29,014 |
7% Senior Notes [Member] | ||
Supplemental schedule of noncash investing and financing activities: | ||
Conversion of Notes to equity | 0 | 10,074 |
PIK Toggle Notes [Member] | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Interest incurred but not paid on notes | 0 | 3,422 |
Interest paid on notes | 0 | (9,893) |
Cash flows from financing activities: | ||
Payment of PIK Toggle Notes | 0 | (24,107) |
7% Senior Notes [Member] | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Interest incurred but not paid on notes | 0 | 329 |
2017 First Lien Term Loans [Member] | ||
Cash flows from financing activities: | ||
Proceeds from term loans | 145,000 | 0 |
Payment of term loans | (2,925) | 0 |
2017 Second Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Proceeds from term loans | 55,000 | 0 |
First Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Payment of term loans | (147,362) | (3,976) |
Second Lien Term Loan [Member] | ||
Cash flows from financing activities: | ||
Payment of term loans | $ (60,000) | $ (20,000) |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Description of Business [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business The accompanying condensed consolidated financial statements include the results of operations of Standard Diversified Opportunities Inc. (“SDOI”), a holding company, and its subsidiaries (collectively, “the Company”). SDOI (f/k/a Special Diversified Opportunities Inc. and Strategic Diagnostics Inc.) was incorporated in the State of Delaware in 1990, and, until 2013, engaged in bio-services and industrial bio-detection (collectively, the “Life Sciences Business”). On July 12, 2013, SDOI sold substantially all of its rights, title and interest in substantially all of its non-cash assets related to the Life Sciences Business and became a “shell company,” as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended. On June 1, 2017, SDOI consummated a Contribution and Exchange Transaction (the “Contribution and Exchange”) to acquire a 52.1% controlling interest in Turning Point Brands, Inc. (“Turning Point”). The transaction was accounted for as a recapitalization or reverse acquisition. Turning Point was the accounting acquirer for financial reporting purposes, notwithstanding the legal form of the transaction. The primary reason the transaction was treated as a purchase by Turning Point rather than a purchase by SDOI was because SDOI was a shell company with limited operations and Turning Point’s stockholders gained majority control of the outstanding voting power of the Company’s equity securities through their collective ownership of a majority of the outstanding shares of Company common stock. Consequently, reverse acquisition accounting has been applied to the transaction. As of September 30, 2017, SDOI has a 51.3% ownership interest in Turning Point. Prior to the consummation of the Contribution and Exchange, SDOI amended and restated its certificate of incorporation to provide for, among other things, (i) the reclassification of every 25 shares of its common stock, par value $0.01 per share, into one share of a new class of common stock, par value $0.01 per share, designated as Class A Common Stock (the “Class A Common Stock”) and (ii) the authorization for issuance of an additional class of common stock, par value $0.01 per share, of SDOI designated as Class B Common Stock (the “Class B Common Stock”). Prior to the closing of the Contribution and Exchange, SDOI declared a dividend of one share of Class B Common Stock for each outstanding share of Class A Common Stock, payable to holders of record of Class A Common Stock on June 2, 2017. The capital structure, including the number and type of shares issued appearing in the consolidated balance sheets for the periods presented, reflects that of the legal parent or accounting acquiree, SDOI, including the shares issued to effect the reverse acquisition after the Contribution and Exchange and the capital structure modified by the 1-for-25 exchange ratio of the SDOI shares outstanding prior to the consummation of the Contribution and Exchange. As a result of the reverse acquisition, stockholders’ equity has been retrospectively adjusted as of the earliest period presented in these consolidated financial statements. These adjustments include an increase of $9 to the par value of Class A common stock issued, an increase of $9 to the par value of Class B common stock issued, a decrease of $184 in the par value of common stock, an increase of $(555) in treasury stock and an increase of $721 to additional paid-in capital as of January 1, 2017. There was no change to Turning Point’s historical total stockholders’ equity as a result of the reverse acquisition. All references in the unaudited condensed consolidated financial statements presented herein to the number of shares and per share amounts of common stock have been retroactively restated to reflect the reclassification of common stock, the shares issued in the Contribution and Exchange and the dividend of Class B Common Stock. Refer to Note 3, Acquisitions, for further information. As a result of the consummation of the Contribution and Exchange, SDOI is no longer a shell company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation SDOI is now a holding company and its consolidated financial statements include Turning Point and its subsidiaries. Turning Point is also a holding company which owns North Atlantic Trading Company, Inc. (“NATC”), and its subsidiaries and Turning Point Brands, LLC (“TPLLC”), and its subsidiaries. Except where the context indicates otherwise, references to Turning Point include Turning Point; NATC and its subsidiaries National Tobacco Company, L.P. (“NTC”), National Tobacco Finance Corporation (“NTFC”), North Atlantic Operating Company, Inc. (“NAOC”), Smoke Free Technologies, Inc.—d/b/a VaporBeast (“VaporBeast”)—North Atlantic Cigarette Company, Inc. (“NACC”), and RBJ Sales, Inc. (“RBJ”); and TPLLC and its subsidiaries Intrepid Brands, LLC (“Intrepid”) and Vapor Shark, LLC—f/k/a The Hand Media—and its subsidiaries (collectively, “Vapor Shark”). Effective September 1, 2017, Turning Point: (1) dissolved NATC Holding Company, formerly a direct subsidiary of Turning Point which owned NATC and its subsidiaries; (2) transferred direct ownership of Vapor Shark from Turning Point to TPLLC; and (3) merged Stoker, Inc., and Fred Stoker & Sons, Inc., with and into RBJ Sales, Inc. The condensed consolidated financial statements also include the results of Standard Outdoor LLC, a wholly-owned subsidiary, since July 3, 2017, the date of acquisition. See Note 3 – Acquisitions. The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. As a result of the consummation of the Contribution and Exchange, the historical financial statements of Turning Point became the Company’s historical financial statements. Accordingly, the historical financial statements of Turning Point are included in the comparative prior periods. The operating results of SDOI are included in these financial statements beginning on June 1, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes of SDOI and Turning Point contained in Amendment No. 4 to the Company’s registration statement on Form S-4 filed with the Securities and Exchange Commission on May 4, 2017. The unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and the results of Vapor Shark from April 1, 2017, through June 30, 2017. All significant intercompany transactions have been eliminated. Vapor Shark was a variable interest entity (“VIE”) for which Turning Point was considered the primary beneficiary due to an April 2017 management agreement in which Turning Point was granted the right to purchase equity of Vapor Shark. Turning Point did not own Vapor Shark during the second quarter of 2017. On June 30, 2017, Turning Point exercised a warrant to purchase all of the issued and outstanding equity of Vapor Shark. Beginning June 30, 2017, Vapor Shark became a wholly owned subsidiary of Turning Point. See ‘Note 3 – Acquisitions’ for details regarding the warrant exercise. Noncontrolling Interests These condensed consolidated financial statements reflect the application of Accounting Standards Codification Topic 810, Consolidations SDOI acquired a 52.1% interest in Turning Point on June 1, 2017 through a reverse acquisition as described in Note 1. Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Company are reported as noncontrolling interests in the accompanying condensed consolidated financial statements. As of September 30, 2017, SDOI has an ownership interest of 51.3% in Turning Point. Prior to the acquisition of Vapor Shark by Turning Point on June 30, 2017, it was consolidated by Turning Point as a VIE from April 1, 2017 to June 30, 2017, with its results during this period reflected as noncontrolling interest. Use of Estimates The preparation of the condensed consolidated financial statements requires the management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the period. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, assumptions used in determining pension and postretirement benefit obligations and deferred income tax valuation allowances. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Revenue Recognition Turning Point recognizes revenues, net of sales incentives and sales returns, including shipping and handling charges billed to customers, upon delivery to the customer. Delivery signifies a transfer of title and risk of loss to the customer in accordance with ASC 605-10-S99. Turning Point classifies customer rebates as sales deductions in accordance with the requirements of ASC 605-50-25. The Company’s outdoor sign business recognizes outdoor advertising revenue on an accrual basis ratably over the term of the contracts. Shipping Costs Turning Point records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $2.9 million and $1.7 million for the three months ended September 30, 2017 and 2016, respectively. Shipping costs incurred were approximately $7.4 million and $4.8 million for the nine months ended September 30, 2017 and 2016, respectively. Fair Value GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under GAAP are described below: 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 derived principally from or corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Master Settlement Agreement Escrow Account Pursuant to the Master Settlement Agreement (the “MSA”) entered into in November 1998 by most states (represented by their attorneys general acting through the National Association of Attorneys General) and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to include a manufacturer of make-your-own (“MYO”) cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account to have funds available for certain potential tobacco-related liabilities, with sub-accounts on behalf of each settling state. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgment to that state’s plaintiffs in the event of such a final judgment against the company. Turning Point has chosen to open, fund and maintain an escrow account as its method of compliance. It is Turning Point’s policy to record amounts on deposit in the escrow account for prior years as a non-current asset. Each year’s annual obligation is required to be deposited in the escrow account by April 15 of the following year. In addition to the annual deposit, many states have elected to require quarterly deposits for the previous quarter’s sales. As of September 30, 2017, Turning Point had on deposit approximately $32.0 million, the fair value of which was approximately $30.9 million. At December 31, 2016, Turning Point had on deposit approximately $31.9 million, the fair value of which was approximately $30.4 million. Turning Point invests a portion of the MSA escrow in U.S. Government securities including TIPS, Treasury Notes and Treasury Bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA. Thus, any investment in an unrealized loss position will be held until the value is recovered or until maturity. The following shows the fair value of the MSA escrow account: September 30, 2017 December 31, 2016 Cost Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents $ 3,106 $ - $ 3,106 $ 2,786 $ - $ - $ 2,786 U.S. Governmental agency obligations 3,022 (86 ) 2,936 29,156 19 (1,551 ) 27,624 U.S. Governmental agency obligations 25,918 (1,055 ) 24,863 - - - - $ 32,046 $ (1,141 ) $ 30,905 $ 31,942 $ 19 $ (1,551 ) $ 30,410 Fair value for the U.S. Governmental agency obligations are Level 2. The following schedule shows the maturities of the U.S. Governmental agency obligations: September 30, 2017 December 31, 2016 Less than five years $ 7,114 $ 9,113 Six to ten years 18,151 16,141 Greater than ten years 3,675 3,902 Total U.S. Governmental agency obligations $ 28,940 $ 29,156 The following table represents the amount of deposits by sales year for the MSA escrow account and reflects the decline in annual deposits beginning in 2009, due to the significant increase in federal excise taxes: Deposits Sales Year September 30, 2017 December 31, 2016 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,715 3,715 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,626 1,626 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 142 2015 101 100 2016 80 37 2017 59 - Total $ 32,046 $ 31,942 Food and Drug Administration (“FDA”) On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the Food and Drug Administration (“FDA”) to immediately regulate the manufacture, sale and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to additionally regulate cigars, pipe tobacco, e-cigarettes, vaporizers and e-liquids as “deemed” tobacco products under the FSPTCA. The FDA assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S. Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP”, also known as the “Tobacco Buyout”) assessment. First, the total annual congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers. Prior to October 1, 2016, these FDA user fees applied only to those products then regulated by the FDA. Effective October 1, 2016, the FDA began additionally applying FDA user fees to newly deemed tobacco products subject to FDA user fees as described above, i.e., cigars and pipe tobacco. On July 28, 2017, the FDA announced a new direction in regulating tobacco products, including the newly “deemed” markets, such as cigars and vapor products. The FDA stated it intends to begin several new rulemaking processes, some of which will outline foundational rules governing the premarket application process for the deemed products, including Substantial Equivalence Applications and Premarket Tobacco Applications. Compliance and related costs could be significant and could increase the costs of operating in our NewGen Segment. The original filing deadlines for newly “deemed” products on the market as of August 8, 2016, have been postponed until August 8, 2021, for “combustible” products (e.g., cigar and pipe), and August 8, 2022, for “non-combustible” products (e.g., vapor products). No other filing deadlines were altered. The FDA also acknowledged a “continuum of risk” among tobacco products, i.e., certain tobacco products pose a greater risk to individual and public health than others; that it intends to seek public comment on the role flavors play in attracting youth and the role flavors may play in helping some smokers switch to potentially less harmful forms of nicotine delivery; and that it would be increasing its focus on the regulation of cigarette products. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires that compensation costs related to employee share based payment transactions are measured in the financial statements at the fair value on the date of grant and are recognized over the vesting period of the award. Recent Accounting Pronouncements Adopted The Company adopted Accounting Standards Update (“ASU”), ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The Company adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Leases In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | Note 3. Acquisitions Acquisitions by SDOI On November 25, 2016, SDOI and Standard General Master Fund L.P., P Standard General Ltd. and Standard General Focus Fund L.P. (collectively the “SG Parties”), entered into a Contribution and Exchange Agreement, as amended by the: (1) First Amendment to Contribution and Exchange Agreement, dated January 25, 2017, (2) Second Amendment to Contribution and Exchange Agreement, dated April 5, 2017, and (3) Third Amendment to Contribution and Exchange Agreement, dated May 3, 2017 (as amended, the “Contribution and Exchange Agreement”). Pursuant to the Contribution and Exchange Agreement, the SG Parties agreed to contribute approximately 9,842,373 shares of voting Turning Point Common Stock in exchange for shares of the Company based on an exchange ratio, calculated as of the closing of the Contribution and Exchange, equal to the lesser of (i) the 30-calendar day trailing VWAP of the Turning Point Common Stock divided by the 30-calendar day trailing VWAP of the Common Stock of the Company (as adjusted to reflect the reclassification of the Common Stock of the Company and (ii) the 30-calendar day trailing VWAP of the Turning Point Common Stock divided by the pro forma book value per share of the Company. On June 1, 2017, at the consummation of the Contribution and Exchange, the SG Parties contributed to SDOI 9,842,373 shares of Turning Point Common Stock, representing a 52.1% ownership interest of Turning Point in exchange for 7,335,018 shares of Class A Common Stock of SDOI, based on the exchange ratio described above. Immediately after the consummation of the Contribution and Exchange, SDOI distributed a dividend of 7,335,018 shares of Class B Common Stock to the SG Parties. As of September 30, 2017, SDOI has an ownership interest of 51.3% in Turning Point. The transaction was accounted for as a recapitalization or reverse acquisition. Turning Point was the accounting acquirer and SDOI was the accounting acquiree for financial reporting purposes. Accordingly, the historical financial statements of Turning Point became the Company’s historical financial statements, including the comparative prior periods. As such, the historical cost bases of assets and liabilities of Turning Point are maintained in the consolidated financial statements of the merged company and the assets and liabilities of the SDOI are accounted for at fair value. In this case, since the assets of SDOI at the acquisition date consist principally of cash and cash equivalents, there is no significant difference between book value and fair value. Results of operations of SDOI are included in the financial statements of the combined company only from the June 1, 2017 transaction date. During the third quarter of 2017, the Company recorded a measurement period adjustment, to the opening balance sheet, relating to an accrued liability that was not recorded previously. The measurement period adjustment had no impact on the Company’s results of operations. The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date and as of September 30, 2017: Preliminary purchase price allocation as of June 1, Measurement period adjustment Preliminary purchase price allocation as of September 30, 2017 Cash and cash equivalents $ 20,253 $ - $ 20,253 Other current assets 277 - 277 Accrued liabilities (2,384 ) (1,229 ) (3,613 ) Net assets acquired $ 18,146 $ (1,229 ) $ 16,917 The Company's condensed consolidated financial statements for the nine months ended September 30, 2017 include SDOI results of operations from the acquisition date of June 1, 2017 through September 30, 2017. Net loss attributable to SDOI during this period and included in the Company's condensed consolidated statements of income for the three and nine months ended September 30, 2017 was $1.0 million and $1.6 million, respectively. On July 3, 2017, the Company acquired assets consisting of five billboards located in several counties near Austin, Texas for consideration of $0.3 million. Acquisitions by Turning Point In March 2017, Turning Point entered into a strategic partnership with Vapor Shark in which Turning Point agreed to make a deposit to Vapor Shark in exchange for a warrant to purchase 100% of the equity interest in Vapor Shark on or before April 15, 2018. In the event Turning Point exercised the warrant, Turning Point granted Vapor Shark’s shareholder the option to purchase from Vapor Shark the retail stores it owns effective as of January 1, 2018. In April 2017, Turning Point entered into a management agreement with Vapor Shark whereby Turning Point obtained control of the operations. As a result of the management agreement, Vapor Shark became a VIE. Turning Point determined that it is the primary beneficiary and consolidated Vapor Shark as of April 1, 2017. Since Vapor Shark is a business, Turning Point accounted for the consolidation of the VIE as if it were an acquisition and recorded the assets and liabilities at fair value. The Company exercised its warrant on June 30, 2017 and obtained ownership of Vapor Shark as of that date for a nominal purchase price. There was no goodwill assigned as a result of the transaction. Turning Point acquired $3.9 million in assets and assumed $3.9 million in liabilities which includes a liability relating to the option provided to Vapor Shark’s shareholder to purchase the Vapor Shark retail stores it owns. In November 2016, Turning Point purchased five chewing tobacco brands from Wind River Tobacco Company for $2.5 million. Turning Point paid $0.6 million at closing with the remaining $1.9 million payable quarterly through November 2019 of which $1.4 million was outstanding at September 30, 2017. The transaction was accounted for as an asset purchase with the fair value of the purchase price of $2.4 million assigned to trade names which have an indefinite life. In November 2016, Turning Point also acquired the outstanding stock of VaporBeast for total consideration of $26.5 million, net of working capital adjustment of $0.4 million. The purchase price was satisfied through $4.0 million in cash at closing, $19.0 million in short-term notes paid in December 2016, plus $4.0 million in payments deferred for eighteen months. Turning Point completed the accounting for the acquisition of VaporBeast in 2017, resulting in an increase in goodwill of $0.2 million. The following purchase price and goodwill are based on the excess of the acquisition price over the estimated fair value of the tangible and intangible assets acquired: Purchase price: Total purchase price $ 27,000 Adjustments to purchase price: Working capital (400 ) Fair value of holdback (128 ) Adjusted purchase price $ 26,472 Assets acquired: Working capital $ 4,270 Property and equipment 7 Other intangible assets 16,272 Net assets acquired $ 20,549 Goodwill $ 5,923 The goodwill of $5.9 million consists of the synergies and scale expected from combining the operations. The goodwill is deductible for tax purposes. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 4. Fair Value of Financial Instruments The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of ASC 825, Financial Instruments. The estimated fair value amounts have been determined by the Company using the methods and assumptions described below. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and Cash Equivalents The Company has used Level 1 inputs to determine the fair value of its cash equivalents. As of September 30, 2017 and December 31, 2016, cost represented fair value of the Company's cash and cash equivalents. Accounts Receivable The fair value of accounts receivable approximates their carrying value due to their short-term nature. Revolving Credit Facility The fair value of the revolving credit facility approximates its carrying value as the interest rate fluctuates with changes in market rates. Long-Term Debt The fair value of Turning Point’s long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to Turning Point for debt of the same remaining maturities. As of September 30, 2017, the fair values of the 2017 First Lien Term Loans and the 2017 Second Lien Term Loan approximate their face amounts of $142.1 million and $55.0 million, respectively as the agreements were initiated during the first quarter of 2017. As of December 31, 2016, the fair values of the First Lien Term Loans and the Second Lien Term Loan approximated their face amounts of $147.3 million and $60.0 million, respectively as they were paid off in February 2017 at face amounts. See Note 8. Notes Payable and Long-Term Debt for details regarding Turning Point’s credit facilities. Foreign Exchange Turning Point had no forward contracts outstanding as of September 30, 2017. Turning Point had forward contracts as of December 31, 2016 for the purchase of €4.9 million. The fair value of the foreign exchange forward contracts was based upon the quoted market price that resulted in an insignificant liability as of December 31, 2016. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories [Abstract] | |
Inventories | Note 5. Inventories Inventories are stated at the lower of cost or market. Cost is determined on the last-in, first-out (“LIFO”) method for approximately 47% of the inventories and the first-in, first out (“FIFO”) method for the remaining inventories. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for curing. The components of inventories are as follows: September 30, 2017 December 31, 2016 Raw materials and work in process $ 2,617 $ 2,596 Leaf tobacco 28,011 27,391 Finished goods - smokeless products 5,441 4,789 Finished goods - smoking products 17,413 18,384 Finished goods - electronic / vaporizer products 14,233 11,993 Other 1,492 1,232 69,207 66,385 LIFO reserve (4,446 ) (4,200 ) $ 64,761 $ 62,185 The inventory valuation allowance at September 30, 2017 and December 31, 2016 was $0.7 million and $0.6 million, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 6. Property, Plant and Equipment Property, plant and equipment consists of: September 30, 2017 December 31, 2016 Land $ 22 $ 22 Building and improvements 1,899 1,899 Leasehold improvements 1,873 1,666 Machinery and equipment 12,066 10,532 Advertising structures 329 - Furniture and fixtures 3,726 3,409 19,915 17,528 Accumulated depreciation (11,137 ) (9,938 ) $ 8,778 $ 7,590 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Note 7. Accrued Liabilities Accrued liabilities consist of: September 30, 2017 December 31, 2016 Accrued payroll and related items $ 3,704 $ 5,331 Customer returns and allowances 2,172 2,818 Other 9,552 7,187 $ 15,428 $ 15,336 Other liabilities include $1,466 of SDOI related accruals at September 30, 2017. There were no SDOI related accrued liabilities at December 31, 2016. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Note 8. Notes Payable and Long-Term Debt Notes payable and long-term debt consists of the following: September 30, 2017 December 31, 2016 2017 First Lien First Out Term Loan $ 107,250 $ - 2017 First Lien Second Out Term Loan 34,825 - 2017 Second Lien Term Loan 55,000 - Note payable - VaporBeast 2,000 2,000 First Lien Term Loan - 146,451 Second Lien Term Loan - 59,128 Total Notes Payable and Long-Term Debt 199,075 207,579 Less deferred finance charges (3,772 ) (4,388 ) Less current maturities (7,850 ) (1,650 ) $ 187,453 $ 201,541 Long-term Debt On February 17, 2017, Turning Point and its wholly-owned subsidiary, NATC Holding Company, Inc. (“NATC”), entered into a new $250 million secured credit facility, comprised of (i) a First Lien Credit Facility with Fifth Third Bank, as administrative agent, and other lenders (the “2017 First Lien Credit Facility”), and (ii) a Second Lien Credit Facility with Prospect Capital Corporation, as administrative agent, and other lenders (the “2017 Second Lien Credit Facility,” and together with the 2017 First Lien Credit Facility, the “2017 Credit Facility”). Turning Point used the proceeds of the 2017 Credit Facility to repay in full Turning Point’s First Lien Term Loan, Second Lien Term Loan, Revolving Credit Facility and to pay related fees and expenses. The 2017 Credit Facility contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain other material indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts and change in control defaults. The 2017 Credit Facility also contains certain negative covenants customary for facilities of these types including, covenants that, subject to exceptions described in the 2017 Credit Facility, restrict the ability of the Company and its subsidiary guarantors: (i) to pledge assets; (ii) to incur additional indebtedness; (iii) to pay dividends; (iv) to make distributions; (v) to sell assets; and (vi) to make investments. 2017 First Lien Credit Facility The 2017 First Lien Credit Facility consists of: (i) a $50 million revolving credit facility (the “2017 Revolving Credit Facility”); (ii) a $110 million first out term loan facility (the “2017 First Out Term Loan”), and (iii) a $35 million second out term loan facility (the “2017 Second Out Term Loan”), which will be repaid in full only after repayment in full of the 2017 First Out Term Loan. The 2017 First Lien Credit Facility also includes an accordion feature allowing Turning Point to borrow up to an additional $40 million upon the satisfaction of certain conditions, including obtaining commitments from one or more lenders. Borrowings under the 2017 Revolving Credit Facility may be used for general corporate purposes, including acquisitions. The 2017 First Out Term Loan and the 2017 Revolving Credit Facility have a maturity date of February 17, 2022, and the 2017 Second Out Term Loan has a maturity date of May 17, 2022. The 2017 First Out Term Loan and the 2017 Revolving Credit Facility bear interest at LIBOR plus a spread of 2.5% to 3.5% based on Turning Point’s senior leverage ratio. The 2017 First Out Term Loan has quarterly required payments of $1.4 million beginning June 30, 2017 increasing to $2.1 million on June 30, 2019 and increasing to $2.8 million on June 30, 2021. The 2017 Second Out Term Loan bears interest at LIBOR plus 6% (subject to a floor of 1.00%). The 2017 Second Out Term Loan has quarterly required payments of $0.1 million beginning June 30, 2017. The 2017 First Lien Credit Facility contains certain financial covenants, including maximum senior leverage ratio of 3.75x with step-downs to 3.00x, a maximum total leverage ratio of 4.75x with step-downs to 4.00x, and a minimum fixed charge coverage ratio of 1.20x. The weighted average interest rate at September 30, 2017 on the 2017 Revolving Credit Facility was 4.3%. The weighted average interest rate at September 30, 2017 on the 2017 First Out Term Loan was 4.3%. The weighted average interest rate at September 30, 2017 on the 2017 Second Out Term Loan was 7.3%. 2017 Second Lien Credit Facility The 2017 Second Lien Credit Facility consists of a $55 million second lien term loan (the “2017 Second Lien Term Loan”) having a maturity date of August 17, 2022. The 2017 Second Lien Term Loan bears interest at a fixed rate of 11%. The 2017 Second Lien Credit Facility contains certain financial covenants, including a maximum senior leverage ratio of 4.25x with step-downs to 3.50x, a maximum total leverage ratio of 5.25x with step-downs to 4.50x, and a minimum fixed charge coverage ratio of 1.10x. Note Payable – VaporBeast On November 30, 2016, Turning Point issued a note payable to VaporBeast’s former shareholders (“VaporBeast Note.”) The VaporBeast Note is $2.0 million principal with 6% interest compounded monthly and matures on May 30, 2018. The VaporBeast Note may be prepaid at any time without penalty and is subject to a late payment penalty of 5% and a default rate of 13% per annum. The VaporBeast Note is subject to customary defaults, including defaults for nonpayment, nonperformance, any material breach under the purchase agreement and bankruptcy or insolvency. First Lien Term Loan All of NATC’s subsidiaries, as well as Turning Point and NATC Holding, were guarantors under the First Lien Term Loan. Turning Point Brands, LLC and its subsidiary were not guarantors of the First Lien Term Loan. The First Lien Term Loan was secured by a first priority lien on substantially all of the assets of the borrowers and the guarantors thereunder, including a pledge of the capital stock of NATC and its subsidiaries held by NATC Holding, NATC or any guarantor, other than certain excluded assets (the “Collateral”). The loans designated as LIBOR loans bore interest at the LIBOR then in effect (but not less than 1.25%) plus 6.50% and the loans designated as base rate loans bore interest at the (i) highest of (A) the Prime Rate, (B) the Federal Funds Rate plus 0.50%, (C) LIBOR for an interest period of one month plus 1.00% and (D) 2.25% per year plus (ii) 5.50%. The First Lien Term Loan was paid in full with the proceeds from the 2017 Credit Facility. Second Lien Term Loan The Second Lien Term Loan was secured by a second priority security interest in the Collateral and was guaranteed by the same entities as the First Lien Term Loan. Under the Second Lien Term Loan the loans designated as LIBOR loans bore interest at LIBOR then in effect (but not less than 1.25%) plus 10.25%. The loans designated as base rate loans bore interest at (i) the highest of (A) the Prime Rate, (B) the Federal Funds Rate plus 0.50%, (C) LIBOR for an interest period of one month plus 1.00% and (D) 2.25% per year plus (ii) 9.25%. The Second Lien Term Loan was paid in full with the proceeds from the 2017 Credit Facility. Revolving Credit Facility The Revolving Credit Facility provided for aggregate commitments of up to $40 million, subject to a borrowing base, which was calculated as the sum of (i) 85% of eligible accounts receivable, plus (ii) the lesser of (A) the product of 70% and the value of eligible inventory or (B) the product of 85%, the net recovery percentage identified in the most recent inventory appraisal, and the value of eligible inventory, plus (iii) the lesser of (A) the product of 75% and the value of eligible inventory or (B) the product of 85%, the net recovery percentage identified in the most recent inventory appraisal, and the value of the eligible finished goods inventory, minus (iv) the aggregate amount of reserves established by the administrative agent. The outstanding balance on the Revolving Credit Facility was paid in full with proceeds from the 2017 Credit Facility. PIK Toggle Notes On January 13, 2014, Turning Point issued PIK Toggle Notes (“PIK Toggle Notes”) to Standard General Master Fund, L.P. (“Standard General”) with a principal amount of $45 million and warrants to purchase 42,424 of Turning Point’s common stock at $.01 per share, as adjusted for stock splits and other events specified in the agreement. After adjustment for the stock split effected in connection with the IPO of 10.43174381 to 1, the warrants provide for the purchase of 442,558 of Turning Point’s common stock. Due to the issuance of the warrants the PIK Toggle Notes had an original issue discount of $1.7 million and were initially valued at $43.3 million. The PIK Toggle Notes were scheduled to mature and the warrants to expire, on January 13, 2021. The PIK Toggle Notes accrued interest based on LIBOR then in effect (but not less than 1.25%) plus 13.75%. Interest was payable on the last day of each quarter and upon maturity. Turning Point had the flexibility to pay interest in kind through an increase in the principal amount at the same interest rate as the PIK Toggle Notes. Turning Point chose to increase the PIK Toggle Notes for all interest for the first three months of 2016. In connection with the Turning Point IPO, in May of 2016, Turning Point redeemed and retired all of the outstanding PIK Toggle Notes in exchange for a combination of cash and shares of Turning Point’s voting common stock. As a result of this transaction, Turning Point incurred a loss on extinguishment of debt of $2.8 million during the second quarter of 2016. 7% Senior Notes In January of 2014, Turning Point issued 7% Senior Notes to various stockholders with a principal amount of $11 million and warrants to purchase 11,000,000 units of membership interests in Intrepid, a subsidiary of Turning Point, which represented 40% of the Intrepid Common Units outstanding on a fully diluted basis, at a purchase price of $1.00 per unit. Due to the issuance of the Intrepid warrants, the 7% Senior Notes had an original issue discount of $2.8 million and were initially valued at $8.2 million. The 7% Senior Notes were scheduled to mature and the warrants to expire on December 31, 2023. The 7% Senior Notes accrued interest at a fixed rate of 7% per annum. The 7% Senior Notes were general unsecured obligations of Turning Point and ranked equally with Turning Point’s other unsecured and unsubordinated debt from time to time outstanding. Redemptions of the 7% Senior Notes could be made by Turning Point at any time without penalty or premium. In connection with the Turning Point IPO in May of 2016, Turning Point redeemed and retired all of the outstanding 7% Senior Notes in exchange for shares of the Company’s voting common stock. |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Postretirement Benefit Plans [Abstract] | |
Pension and Postretirement Benefit Plans | Note 9. Pension and Postretirement Benefit Plans Turning Point has a defined benefit pension plan. Benefits for hourly employees were based on a stated benefit per year of service, reduced by amounts earned in a previous plan. Benefits for salaried employees were based on years of service and the employees’ final compensation. The defined benefit plan is frozen. Turning Point expects to make no contributions to the pension plan in the year ending December 31, 2017. Turning Point also sponsored a defined benefit postretirement plan that covered hourly employees. This plan provides medical and dental benefits. This plan is contributory, with retiree contributions adjusted annually. Turning Point expects to contribute approximately $0.2 million to its postretirement plan in 2017 for the payment of benefits. The components of Net Periodic Benefit Cost are as follows: Pension Benefits Postretirement Benefits For the three months ended September 30, 2017 2016 2017 2016 Service cost $ 26 $ 26 $ - $ - Interest cost 164 174 36 52 Expected return on plan assets (256 ) (258 ) - - Amortization of gains and losses 114 123 - - Net periodic benefit cost $ 48 $ 65 $ 36 $ 52 Pension Benefits Postretirement Benefits For the nine months ended September 30, 2017 2016 2017 2016 Service cost $ 78 $ 78 $ - $ - Interest cost 484 524 108 157 Expected return on plan assets (768 ) (775 ) - - Amortization of gains and losses 350 369 - - Net periodic benefit cost $ 144 $ 196 $ 108 $ 157 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 10. Stockholders’ Equity Common Stock As described in Note 1, just prior to the Contribution and Exchange, the Company’s issued and outstanding common stock was reclassified such that every 25 shares of common stock became one fully paid and nonassessable share of Class A Common Stock. Any fractional shares were rounded up and an additional share was issued. At the consummation of the Contribution and Exchange, the Company issued 7,335,018 shares of its Class A Common Stock to Turning Point shareholders, in exchange for 9,842,373 shares of Turning Point stock, and 857,714 shares of its Class A Common Stock, in exchange for the Company’s outstanding common stock. The Company also issued 13,700 shares of Class A Common Stock to holders of the Company’s restricted stock, which vested at the time of the Contribution and Exchange. Following the consummation of the Contribution and Exchange, the Company distributed a dividend of one share of Class B Common Stock for each outstanding share of Class A Common Stock, for a total issuance of 8,190,166 shares of Class B Common Stock. In the third quarter of 2017, the Company adjusted the Class A and Class B Common Stock balances as of January 1, 2017 (adjusted for the reverse stock split and reclassification) by to appropriately reflect the correct beginning share balance for the Class A and Class B Common Stock. In addition, under the Fifth Amended and Restated Certificate of Incorporation, which became effective at the time of the Contribution and Exchange, the number of authorized shares of the Company’s Common Stock, $0.01 par value per share, was increased from 50,000,000 to 330,000,000, of which 300,000,000 are Class A Common Stock and 30,000,000 are Class B Common Stock. Shares of Class A Common Stock and Class B Common Stock have the same rights and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution or winding up of the Company), share ratably and are identical in all respects and as to all matters. The holders of shares of Class A Common Stock and Class B Common Stock will vote together as a single class on all matters (including the election of directors) submitted to a vote or for the written consent of the stockholders of the Company. Each holder of Class A Common Stock has the right to one vote per share of Class A Common Stock and each holder of Class B Common Stock has the right to ten votes per share of Class B Common Stock. The shares of Class B Common Stock are convertible into shares of Class A Common Stock automatically upon the transfer of such shares of Class B Common Stock, with certain exceptions, or upon the affirmative vote of holders of two-thirds of the then-outstanding shares of Class B Common Stock or voluntarily by the holder of such shares of Class B Common Stock. Subsequent to the issuance of the Class B Common Stock through September 30, 2017, 109,218 shares of Class B Common Stock were converted to Class A Common Stock. The was approved by the Company’s stockholders by partial written consent on July 14, 2017, and in accordance with the rules of the Securities and Exchange Commission and Delaware corporation law regarding approval by partial written consent, became effective when filed with the Secretary of State of the State of Delaware on August 18, 2017. Preferred Stock On May 30, 2017, under the Fifth Amended and Restated Certificate of Incorporation, the Company increased the number of authorized shares of the Company’s Preferred Stock, $0.01 par value per share, from 19,664,362 to 500,000,000, all of which is designated as blank check preferred stock. No changes with respect to Preferred Stock were made in the Sixth Amended and Restated Certificate of Incorporation. Common Stock Repurchase Program On June 29, 2017, the Company’s Board of Directors authorized a program, effective immediately, to repurchase over a period of twelve months shares of the Company’s Class A Common Stock or Class B Common Stock, par value $0.01 per share, constituting, in the aggregate, up to 5% of the outstanding shares of Common Stock. Shares of the Common Stock may be repurchased in the open market or through negotiated transactions. The program may be terminated or suspended at any time at the discretion of the Company. The time of purchases and the exact number of shares to be purchased, if any, will depend on market conditions. The repurchase program does not include specific price targets or timetables. The Company intends to finance the purchases using available working capital. No repurchases of common stock were made pursuant to this program during the nine months ended September 30, 2017. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 11. Share-Based Compensation The Company has a stock option plan (the “2000 Plan”) which authorizes the granting of incentive and nonqualified stock options and restricted stock units. Incentive stock options are granted at not less than 100% of fair market value at the date of grant (110% for stockholders owning more than 10% of the Company’s common stock). Nonqualified stock options are granted at not less than 85% of fair market value at the date of grant. A maximum of 8,000,000 shares of common stock are issuable under the 2000 Plan. Certain additional options have been granted outside the 2000 Plan. These options generally follow the provisions of the 2000 Plan. The Company issues new shares to satisfy option exercises and the vesting of restricted stock awards. As of the effective date of the 2017 Plan, described further below, no additional grants will be made under the 2000 Plan. On June 9, 2017, the Company’s Board of Directors adopted the 2017 Omnibus Equity Compensation Plan (the “2017 Plan”) in order to provide employees of the Company and its subsidiaries, certain consultants and advisors who perform services for the Company or its subsidiaries, and non-employee members of the Board of Directors of the Company with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, and other stock-based awards. The Board authorized 1,000,000 shares of the Class A Common Stock of the Company to be issued under the Plan. The Plan was approved by the Company’s stockholders by partial written consent on July 14, 2017, and in accordance with the rules of the Securities and Exchange Commission and Delaware corporation law regarding approval by partial written consent, became effective on August 17, 2017. No awards were made under this plan during the nine months ended September 30, 2017. The Company also has an Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible full-time employees to purchase shares of common stock at 90 percent of the lower of the fair market value of a share of common stock on the first or last day of the quarter. Eligible employees are provided the opportunity to acquire Company common stock during each quarter. No more than 26,447 shares of common stock may be issued under the ESPP. Such stock may be unissued shares or treasury shares of the Company or may be outstanding shares purchased in the open market or otherwise on behalf of the ESPP. The Company’s ESPP is compensatory and therefore, the Company is required to recognize compensation expense related to the discount from market value of shares sold under the ESPP. The Company issues new shares to satisfy shares purchased under the ESPP. Including the share-based compensation expense of SDOI’s subsidiaries, there was share-based compensation expense of $0.3 million and $0.6 million recorded for the three and nine months ended September 30, 2017 and $0.1 million for the three and nine months ended September 30, 2016. This expense is a component of selling, general and administrative expense. No options of SDOI were exercised in the three and nine month periods ended September 30, 2017 and 2016. Upon consummation of the reverse merger with Turning Point on June 1, 2017, all outstanding options to purchase SDOI common shares were converted into stock options to purchase SDOI Class A common stock on terms substantially identical to those in effect prior to the reverse merger, except for adjustments to the underlying number of shares and the exercise price based on the 25-for-1 reverse stock split and reclassification. Information with respect to the adjusted activity of outstanding stock options is summarized as follows: Number of Shares Price Range Weighted Average Remaining Contractual term Aggregate Intrinsic Value Balance, January 1, 2017 18,757 $ 31.00 - $ 93.50 Granted - Cancelled (9,294 ) $ 31.25 - $ 93.50 Forfeited (2,000 ) $ 54.75 - $ 54.75 Balance, September 30, 2017 7,463 $ 31.00 - $ 56.25 3.21 years $ - Vested and exercisable at September 30, 2017 7,463 $ 31.00 - $ 56.25 3.21 years $ - The following table provides additional information about the Company’s stock options outstanding and exercisable at September 30, 2017: Options Outstanding Options Exercisable Weighted Average Wtd. Average Range of Exercise Prices Number of Shares Remaining Contractual Life Exercise Price Number of Shares Exercise Price $ 31.00 - $31.25 2,800 3.6 Years $ 31.18 2,800 $ 31.18 $ 45.25 - $46.25 1,463 2.0 Years $ 45.80 1,463 $ 45.80 $ 50.00 - $56.25 3,200 3.4 Years $ 51.56 3,200 $ 51.56 $ 31.00 - $56.25 7,463 3.2 Years $ 42.78 7,463 $ 42.78 The Company grants restricted stock awards (“RSA”) which is the right to receive shares. The fair value of RSAs is based on the market price for the stock at the date of grant. The following table summarizes the changes in non-vested RSAs for the nine months ended September 30, 2017: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested RSAs at January 1, 2017 13,700 $ 28.25 Granted 119,102 10.62 Vested (13,700 ) 28.25 Cancelled/Forfeited - - Non-vested RSAs at September 30, 2017 119,102 $ 10.62 $ 21,284 The RSAs outstanding as of January 1, 2017 vested upon the consummation of the Contribution and Exchange transaction as the performance-based criteria required for vesting were satisfied. As of September 30, 2017, there was $1.1 million of total unrecognized stock-based compensation expense, related to restricted stock awards, which will be recognized over the weighted-average remaining vesting period of 2.61 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 12. Income Taxes On June 1, 2017, SDOI consummated the Contribution and Exchange to acquire a 52.1% controlling interest in Turning Point (see Note 3 above). The structuring of this acquisition results in SDOI consolidating Turning Point in its consolidated financial statements. However, SDOI’s controlling interest does not meet the ownership threshold to file a consolidated federal tax return with Turning Point. Therefore, the parent company will continue to file a separate federal tax return apart from Turning Point. The Company’s income tax expense for the three and nine months ended September 30, 2017 does not bear the normal relationship to income before income taxes of approximately 41% due to tax benefits of $0.9 million and $4.5 million relating to Turning Point stock options exercised during the three and nine months ended September 30, 2017, respectively. In addition, SDOI incurred a net operating loss for its three and four months of operating results included in the three and nine months ended September 30, 2017, respectively, for which no tax benefit has been recorded due to its full valuation allowance offsetting its net deferred tax assets, as described below. The Company’s income tax expense for the three and nine months ended September 30, 2016, does not bear the normal relationship to income before income taxes because of Turning Point net operating loss carryforwards that were utilized by Turning Point and were partially offset by certain minimum state income taxes. SDOI has recorded a full valuation allowance, as of September 30, 2017, offsetting its U.S. federal and state net deferred tax assets which primarily represent net operating loss carry forwards (“NOLs”). At September 30, 2017, the Company’s management concluded, based upon the evaluation of all available evidence, that it is more likely than not that the U.S. federal and state net deferred tax assets will not be realized. Due to the reverse acquisition transaction with Turning Point, the Company determined that SDOI has experienced a “change in control” as defined in Internal Revenue Code Section 382, which will result in an annual limitation on SDOI’s utilization of NOLs in future periods. The Company is currently evaluating the effects of Section 382 on SDOI’s future utilization of its NOLs. The Company follows the provisions of ASC 740-10-25, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position must be more-likely-than-not to be sustained upon examination by taxing authorities for those benefits to be recognized. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of September 30, 2017, SDOI had approximately $628 of unrecognized tax benefits under the provisions of ASC 740-10-25, $622 of which were recorded as a reduction to existing net operating loss and tax credit carry forwards, and therefore require no accrual for interest or penalty. The remaining $6 includes de minimis interest and penalties where required. SDOI does not expect that the total amount of unrecognized tax benefits related to positions taken in prior periods will change significantly during the next twelve months. Turning Point has determined that it did not have any uncertain tax positions requiring recognition under the provisions of ASC 740-10-25. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of interest expense. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. For federal purposes, SDOI’s post-2001 tax years remain open to examination as a result of net operating losses generated during those years that |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Contingencies [Abstract] | |
Contingencies | Note 13. Contingencies The Company is involved in various claims and actions that arise in the normal course of business. While the outcome of these legal proceedings cannot be predicted with certainty, it is the opinion of management that the resolution of the proceedings should not have a material adverse effect on the financial position, results of operations or cash flows of the Company. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 14. Earnings Per Share The Company has two classes of common stock, Class A and Class B; shares of Class B Common Stock are convertible into shares of Class A Common Stock at any time, on a one-for-one basis. S hares of Class A Common Stock and Class B Common Stock have the same rights and powers, rank equally, share ratably and are identical in all respects and as to all matters, except that (i) each share of Class B Common Stock shall have the right to 10 votes per share and (ii) the shares of Class B Common Stock shall be convertible into shares of Class A Common Stock automatically upon the transfer of such shares of Class B Common Stock, with certain exceptions, or upon the affirmative vote of holders of two-thirds of the then-outstanding shares of Class B Common Stock or voluntarily by the holder of such shares of Class B Common Stock. Diluted earnings per share is calculated similarly to basic earnings per share, except that the calculation includes the dilutive effect of the assumed exercise of options issuable under the Company’s stock incentive plans and the Company’s unvested restricted stock awards. Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and the weighted average effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options and restricted stock awards and the dilutive effect of such awards is reflected in diluted earnings per share by application of the treasury stock method. Due to the reverse acquisition, the basic weighted average number of common shares outstanding for the three and nine months ended September 30, 2016 have been calculated using Turning Point’s historical weighted average number of common shares outstanding multiplied by the conversion ratio used in the reverse acquisition. For the nine months ended September 30, 2017, the basic weighted average shares outstanding has been calculated using the number of common shares outstanding of Turning Point from January 1, 2017 through the June 1, 2017 acquisition date multiplied by the exchange ratio used in the transaction and the number of common shares outstanding of the Company from June 1, 2017 through September 30, 2017. For the three months ended September 30, 2017, the basic weighted average shares outstanding has been calculated using the number of common shares outstanding of SDOI from July 1, 2017 through September 30, 2017. The following tables set forth the computation of basic and diluted net income per share of Class A and Class B common stock (in thousands, except share amounts and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic net income per common share calculation: Net income attributable to SDOI $ 2,750 $ 6,793 $ 9,530 $ 9,826 Weighted average Class A common shares outstanding – basic 8,306,108 13,484,995 11,464,539 11,473,985 Weighted average Class B common shares outstanding – basic 8,093,688 13,484,995 11,389,223 11,473,985 Weighted average common shares outstanding – basic 16,399,796 26,969,990 22,853,762 22,947,970 Net income per share of common stock – basic $ 0.17 $ 0.25 $ 0.42 $ 0.43 Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Diluted net income per common share calculation: Net income attributable to SDOI $ 2,750 $ 6,793 $ 9,530 $ 9,826 Impact of subsidiary dilutive securities (1) (93 ) - (155 ) - Net income attributable to SDOI - diluted $ 2,657 $ 6,793 $ 9,375 $ 9,826 Weighted average Class A common shares outstanding – basic 8,306,108 13,484,995 11,464,539 11,473,985 Weighted average Class B common shares outstanding – basic 8,093,688 13,484,995 11,389,223 11,473,985 Dilutive impact of stock options and restricted stock awards 10,876 1,218,206 27,179 1,171,874 Weighted average common shares outstanding – diluted 16,410,672 28,188,196 22,880,941 24,119,844 Net income per share of common stock – diluted $ 0.16 $ 0.24 $ 0.41 $ 0.41 (1) The dilutive impact of subsidiary stock-based awards on the Company’s reported net income is recorded as an adjustment to net income for the three and nine months ended September 30, 2017, for the purposes of calculating income per share. There is no adjustment to the three and nine months ended September 30, 2016 because the reverse acquisition of Turning Point by SDOI did not occur until June 1, 2017. The following outstanding securities at September 30, 2017 have been excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive: September 30, 2017 Stock options 7,463 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information [Abstract] | |
Segment Information | Note 15. Segment Information In accordance with ASC 280, Segment Reporting, the Company has three reportable segments, (1) Smokeless products; (2) Smoking products; and (3) NewGen products. The smokeless products segment: (a) manufactures and markets moist snuff and (b) contracts for and markets chewing tobacco products. The smoking products segment: (a) imports and markets cigarette papers, tubes and related products and (b) imports and markets finished cigars and MYO cigar wraps. The NewGen products segment (a) markets e-cigarettes, e-liquids, vaporizers and other related products and (b) distributes a wide assortment of vaping products to non-traditional retail outlets. The Company’s smoking and smokeless products are distributed primarily through wholesale distributors in the United States. The Other segment includes the results of operations of SDOI, assets of the Company not assigned to the three reportable segments. Elimination includes the elimination of intercompany accounts between segments. Accounting policies of these segments are the same as those of the Company. Segment data includes a charge allocating corporate costs to the three reportable segments based on their respective net sales. The Company evaluates the performance of its segments and allocates resources to them based on operating income. The tables below present financial information about reported segments: For the three months ended September 30, 2017 September 30, 2016 Net Sales Smokeless Products $ 21,294 $ 18,909 Smoking Products 26,860 28,760 NewGen Products 25,186 3,290 Other(1) 12 - $ 73,352 $ 50,959 Operating Income Smokeless Products $ 6,218 $ 4,695 Smoking Products 7,403 7,645 NewGen Products 780 (230 ) Other(1) (1,099 ) (219 ) 13,302 11,891 Interest expense (4,023 ) (5,557 ) Investment income 157 279 Income before income taxes $ 9,436 $ 6,613 Capital Expenditures Smokeless Products $ 446 $ 426 NewGen Products 39 (40 ) $ 485 $ 386 Depreciation and amortization Smokeless products $ 341 $ 310 NewGen Products 255 - Other(1) 8 - $ 604 $ 310 For the nine months ended September 30, 2017 September 30, 2016 Net Sales Smokeless Products $ 63,563 $ 58,939 Smoking Products 81,056 83,434 NewGen Products 67,595 10,033 Other(1) 12 - $ 212,226 $ 152,406 Operating Income Smokeless Products $ 15,088 $ 13,097 Smoking Products 21,095 22,391 NewGen Products 2,646 (758 ) Other(1) (1,654 ) (1,154 ) 37,175 33,576 Interest expense (13,002 ) (20,895 ) Investment income 369 611 Loss on extinguishment of debt (6,116 ) (2,824 ) Income before income taxes $ 18,426 $ 10,468 Capital Expenditures Smokeless Products $ 973 $ 1,160 NewGen Products 79 85 $ 1,052 $ 1,245 Depreciation and amortization Smokeless products $ 1,046 $ 896 NewGen Products 673 - Other(1) 8 - $ 1,727 $ 896 September 30, 2017 December 31, 2016 Assets Smokeless Products $ 88,327 $ 85,559 Smoking Products 149,552 150,498 NewGen Products 45,023 39,416 Other (1) 21,492 9,547 $ 304,394 $ 285,020 (1) “Other” includes sales, operating income or assets that are not assigned to the three reportable segments, such as sales, operating income or assets of SDOI and Turning Point deferred taxes. All goodwill has been allocated to reportable segments. Net Sales - Domestic and Foreign (in thousands) The tables below present financial information about domestic and foreign net sales for the three and nine months ended September 30, 2017 and 2016: Three Months Ended September 30, 2017 September 30, 2016 Domestic $ 69,496 $ 48,469 Foreign 3,856 2,490 Net Sales $ 73,352 $ 50,959 Nine Months Ended September 30, 2017 September 30, 2016 Domestic $ 203,222 $ 144,568 Foreign 9,004 7,838 Net Sales $ 212,226 $ 152,406 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 16. Related Party Transactions Subsequent to the closing of the Contribution and Exchange transaction on June 1, 2017, SDOI paid invoices on behalf of Turning Point and Standard General L.P. and its affiliates “(SG Parties”) The SG Parties hold a significant majority of the Company’s total voting power. Under the Contribution and Exchange Agreement, the Company was required to reimburse Turning Point and the SG Parties for up to $1,400 of certain legal expenses related to the transaction. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Event [Abstract] | |
Subsequent Event | Note 17. Subsequent Events On November 9, 2017, the Board of Directors of Turning Point approved the initiation of a cash dividend to its shareholders. The initial quarterly dividend of $0.04 per common share will be paid on December 15, 2017 to shareholders of record at the close of business on November 27, 2017. Approximately $400 will be distributed to noncontrolling interest holders as a result of this dividend. |
Organization and Description 26
Organization and Description of Business (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Description of Business [Abstract] | |
Contribution and Exchange Transaction | On June 1, 2017, SDOI consummated a Contribution and Exchange Transaction (the “Contribution and Exchange”) to acquire a 52.1% controlling interest in Turning Point Brands, Inc. (“Turning Point”). The transaction was accounted for as a recapitalization or reverse acquisition. Turning Point was the accounting acquirer for financial reporting purposes, notwithstanding the legal form of the transaction. The primary reason the transaction was treated as a purchase by Turning Point rather than a purchase by SDOI was because SDOI was a shell company with limited operations and Turning Point’s stockholders gained majority control of the outstanding voting power of the Company’s equity securities through their collective ownership of a majority of the outstanding shares of Company common stock. Consequently, reverse acquisition accounting has been applied to the transaction. As of September 30, 2017, SDOI has a 51.3% ownership interest in Turning Point. Prior to the consummation of the Contribution and Exchange, SDOI amended and restated its certificate of incorporation to provide for, among other things, (i) the reclassification of every 25 shares of its common stock, par value $0.01 per share, into one share of a new class of common stock, par value $0.01 per share, designated as Class A Common Stock (the “Class A Common Stock”) and (ii) the authorization for issuance of an additional class of common stock, par value $0.01 per share, of SDOI designated as Class B Common Stock (the “Class B Common Stock”). Prior to the closing of the Contribution and Exchange, SDOI declared a dividend of one share of Class B Common Stock for each outstanding share of Class A Common Stock, payable to holders of record of Class A Common Stock on June 2, 2017. The capital structure, including the number and type of shares issued appearing in the consolidated balance sheets for the periods presented, reflects that of the legal parent or accounting acquiree, SDOI, including the shares issued to effect the reverse acquisition after the Contribution and Exchange and the capital structure modified by the 1-for-25 exchange ratio of the SDOI shares outstanding prior to the consummation of the Contribution and Exchange. As a result of the reverse acquisition, stockholders’ equity has been retrospectively adjusted as of the earliest period presented in these consolidated financial statements. These adjustments include an increase of $9 to the par value of Class A common stock issued, an increase of $9 to the par value of Class B common stock issued, a decrease of $184 in the par value of common stock, an increase of $(555) in treasury stock and an increase of $721 to additional paid-in capital as of January 1, 2017. There was no change to Turning Point’s historical total stockholders’ equity as a result of the reverse acquisition. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | SDOI is now a holding company and its consolidated financial statements include Turning Point and its subsidiaries. Turning Point is also a holding company which owns North Atlantic Trading Company, Inc. (“NATC”), and its subsidiaries and Turning Point Brands, LLC (“TPLLC”), and its subsidiaries. Except where the context indicates otherwise, references to Turning Point include Turning Point; NATC and its subsidiaries National Tobacco Company, L.P. (“NTC”), National Tobacco Finance Corporation (“NTFC”), North Atlantic Operating Company, Inc. (“NAOC”), Smoke Free Technologies, Inc.—d/b/a VaporBeast (“VaporBeast”)—North Atlantic Cigarette Company, Inc. (“NACC”), and RBJ Sales, Inc. (“RBJ”); and TPLLC and its subsidiaries Intrepid Brands, LLC (“Intrepid”) and Vapor Shark, LLC—f/k/a The Hand Media—and its subsidiaries (collectively, “Vapor Shark”). Effective September 1, 2017, Turning Point: (1) dissolved NATC Holding Company, formerly a direct subsidiary of Turning Point which owned NATC and its subsidiaries; (2) transferred direct ownership of Vapor Shark from Turning Point to TPLLC; and (3) merged Stoker, Inc., and Fred Stoker & Sons, Inc., with and into RBJ Sales, Inc. The condensed consolidated financial statements also include the results of Standard Outdoor LLC, a wholly-owned subsidiary, since July 3, 2017, the date of acquisition. See Note 3 – Acquisitions. The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. As a result of the consummation of the Contribution and Exchange, the historical financial statements of Turning Point became the Company’s historical financial statements. Accordingly, the historical financial statements of Turning Point are included in the comparative prior periods. The operating results of SDOI are included in these financial statements beginning on June 1, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes of SDOI and Turning Point contained in Amendment No. 4 to the Company’s registration statement on Form S-4 filed with the Securities and Exchange Commission on May 4, 2017. |
Consolidation | The unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and the results of Vapor Shark from April 1, 2017, through June 30, 2017. All significant intercompany transactions have been eliminated. |
Variable Interest Entity | Vapor Shark was a variable interest entity (“VIE”) for which Turning Point was considered the primary beneficiary due to an April 2017 management agreement in which Turning Point was granted the right to purchase equity of Vapor Shark. Turning Point did not own Vapor Shark during the second quarter of 2017. On June 30, 2017, Turning Point exercised a warrant to purchase all of the issued and outstanding equity of Vapor Shark. Beginning June 30, 2017, Vapor Shark became a wholly owned subsidiary of Turning Point. See ‘Note 3 – Acquisitions’ for details regarding the warrant exercise. |
Noncontrolling Interests | Noncontrolling Interests These condensed consolidated financial statements reflect the application of Accounting Standards Codification Topic 810, Consolidations SDOI acquired a 52.1% interest in Turning Point on June 1, 2017 through a reverse acquisition as described in Note 1. Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Company are reported as noncontrolling interests in the accompanying condensed consolidated financial statements. As of September 30, 2017, SDOI has an ownership interest of 51.3% in Turning Point. Prior to the acquisition of Vapor Shark by Turning Point on June 30, 2017, it was consolidated by Turning Point as a VIE from April 1, 2017 to June 30, 2017, with its results during this period reflected as noncontrolling interest. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements requires the management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the period. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, assumptions used in determining pension and postretirement benefit obligations and deferred income tax valuation allowances. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. |
Revenue Recognition | Revenue Recognition Turning Point recognizes revenues, net of sales incentives and sales returns, including shipping and handling charges billed to customers, upon delivery to the customer. Delivery signifies a transfer of title and risk of loss to the customer in accordance with ASC 605-10-S99. Turning Point classifies customer rebates as sales deductions in accordance with the requirements of ASC 605-50-25. The Company’s outdoor sign business recognizes outdoor advertising revenue on an accrual basis ratably over the term of the contracts. |
Shipping Costs | Shipping Costs Turning Point records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $2.9 million and $1.7 million for the three months ended September 30, 2017 and 2016, respectively. Shipping costs incurred were approximately $7.4 million and $4.8 million for the nine months ended September 30, 2017 and 2016, respectively. |
Fair Value | Fair Value GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under GAAP are described below: 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 derived principally from or corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Master Settlement Agreement Escrow Account | Master Settlement Agreement Escrow Account Pursuant to the Master Settlement Agreement (the “MSA”) entered into in November 1998 by most states (represented by their attorneys general acting through the National Association of Attorneys General) and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to include a manufacturer of make-your-own (“MYO”) cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account to have funds available for certain potential tobacco-related liabilities, with sub-accounts on behalf of each settling state. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgment to that state’s plaintiffs in the event of such a final judgment against the company. Turning Point has chosen to open, fund and maintain an escrow account as its method of compliance. It is Turning Point’s policy to record amounts on deposit in the escrow account for prior years as a non-current asset. Each year’s annual obligation is required to be deposited in the escrow account by April 15 of the following year. In addition to the annual deposit, many states have elected to require quarterly deposits for the previous quarter’s sales. As of September 30, 2017, Turning Point had on deposit approximately $32.0 million, the fair value of which was approximately $30.9 million. At December 31, 2016, Turning Point had on deposit approximately $31.9 million, the fair value of which was approximately $30.4 million. Turning Point invests a portion of the MSA escrow in U.S. Government securities including TIPS, Treasury Notes and Treasury Bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA. Thus, any investment in an unrealized loss position will be held until the value is recovered or until maturity. The following shows the fair value of the MSA escrow account: September 30, 2017 December 31, 2016 Cost Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents $ 3,106 $ - $ 3,106 $ 2,786 $ - $ - $ 2,786 U.S. Governmental agency obligations 3,022 (86 ) 2,936 29,156 19 (1,551 ) 27,624 U.S. Governmental agency obligations 25,918 (1,055 ) 24,863 - - - - $ 32,046 $ (1,141 ) $ 30,905 $ 31,942 $ 19 $ (1,551 ) $ 30,410 Fair value for the U.S. Governmental agency obligations are Level 2. The following schedule shows the maturities of the U.S. Governmental agency obligations: September 30, 2017 December 31, 2016 Less than five years $ 7,114 $ 9,113 Six to ten years 18,151 16,141 Greater than ten years 3,675 3,902 Total U.S. Governmental agency obligations $ 28,940 $ 29,156 The following table represents the amount of deposits by sales year for the MSA escrow account and reflects the decline in annual deposits beginning in 2009, due to the significant increase in federal excise taxes: Deposits Sales Year September 30, 2017 December 31, 2016 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,715 3,715 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,626 1,626 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 142 2015 101 100 2016 80 37 2017 59 - Total $ 32,046 $ 31,942 |
Food and Drug Administration | Food and Drug Administration (“FDA”) On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the Food and Drug Administration (“FDA”) to immediately regulate the manufacture, sale and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to additionally regulate cigars, pipe tobacco, e-cigarettes, vaporizers and e-liquids as “deemed” tobacco products under the FSPTCA. The FDA assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S. Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP”, also known as the “Tobacco Buyout”) assessment. First, the total annual congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers. Prior to October 1, 2016, these FDA user fees applied only to those products then regulated by the FDA. Effective October 1, 2016, the FDA began additionally applying FDA user fees to newly deemed tobacco products subject to FDA user fees as described above, i.e., cigars and pipe tobacco. On July 28, 2017, the FDA announced a new direction in regulating tobacco products, including the newly “deemed” markets, such as cigars and vapor products. The FDA stated it intends to begin several new rulemaking processes, some of which will outline foundational rules governing the premarket application process for the deemed products, including Substantial Equivalence Applications and Premarket Tobacco Applications. Compliance and related costs could be significant and could increase the costs of operating in our NewGen Segment. The original filing deadlines for newly “deemed” products on the market as of August 8, 2016, have been postponed until August 8, 2021, for “combustible” products (e.g., cigar and pipe), and August 8, 2022, for “non-combustible” products (e.g., vapor products). No other filing deadlines were altered. The FDA also acknowledged a “continuum of risk” among tobacco products, i.e., certain tobacco products pose a greater risk to individual and public health than others; that it intends to seek public comment on the role flavors play in attracting youth and the role flavors may play in helping some smokers switch to potentially less harmful forms of nicotine delivery; and that it would be increasing its focus on the regulation of cigarette products. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires that compensation costs related to employee share based payment transactions are measured in the financial statements at the fair value on the date of grant and are recognized over the vesting period of the award. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted The Company adopted Accounting Standards Update (“ASU”), ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The Company adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Leases In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Fair Value of MSA Escrow Account | The following shows the fair value of the MSA escrow account: September 30, 2017 December 31, 2016 Cost Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents $ 3,106 $ - $ 3,106 $ 2,786 $ - $ - $ 2,786 U.S. Governmental agency obligations 3,022 (86 ) 2,936 29,156 19 (1,551 ) 27,624 U.S. Governmental agency obligations 25,918 (1,055 ) 24,863 - - - - $ 32,046 $ (1,141 ) $ 30,905 $ 31,942 $ 19 $ (1,551 ) $ 30,410 |
Maturities of U.S. Governmental Agency Obligations | The following schedule shows the maturities of the U.S. Governmental agency obligations: September 30, 2017 December 31, 2016 Less than five years $ 7,114 $ 9,113 Six to ten years 18,151 16,141 Greater than ten years 3,675 3,902 Total U.S. Governmental agency obligations $ 28,940 $ 29,156 |
Deposits by Sales Year for MSA Escrow Account | The following table represents the amount of deposits by sales year for the MSA escrow account and reflects the decline in annual deposits beginning in 2009, due to the significant increase in federal excise taxes: Deposits Sales Year September 30, 2017 December 31, 2016 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,715 3,715 2005 4,552 4,552 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,626 1,626 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 142 2015 101 100 2016 80 37 2017 59 - Total $ 32,046 $ 31,942 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Turning Point [Member] | |
Acquisitions [Abstract] | |
Acquisition | The following purchase price and goodwill are based on the excess of the acquisition price over the estimated fair value of the tangible and intangible assets acquired: Purchase price: Total purchase price $ 27,000 Adjustments to purchase price: Working capital (400 ) Fair value of holdback (128 ) Adjusted purchase price $ 26,472 Assets acquired: Working capital $ 4,270 Property and equipment 7 Other intangible assets 16,272 Net assets acquired $ 20,549 Goodwill $ 5,923 |
VaporBeast [Member] | |
Acquisitions [Abstract] | |
Acquisition | The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date and as of September 30, 2017: Preliminary purchase price allocation as of June 1, Measurement period adjustment Preliminary purchase price allocation as of September 30, 2017 Cash and cash equivalents $ 20,253 $ - $ 20,253 Other current assets 277 - 277 Accrued liabilities (2,384 ) (1,229 ) (3,613 ) Net assets acquired $ 18,146 $ (1,229 ) $ 16,917 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories [Abstract] | |
Inventories | The components of inventories are as follows: September 30, 2017 December 31, 2016 Raw materials and work in process $ 2,617 $ 2,596 Leaf tobacco 28,011 27,391 Finished goods - smokeless products 5,441 4,789 Finished goods - smoking products 17,413 18,384 Finished goods - electronic / vaporizer products 14,233 11,993 Other 1,492 1,232 69,207 66,385 LIFO reserve (4,446 ) (4,200 ) $ 64,761 $ 62,185 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consists of: September 30, 2017 December 31, 2016 Land $ 22 $ 22 Building and improvements 1,899 1,899 Leasehold improvements 1,873 1,666 Machinery and equipment 12,066 10,532 Advertising structures 329 - Furniture and fixtures 3,726 3,409 19,915 17,528 Accumulated depreciation (11,137 ) (9,938 ) $ 8,778 $ 7,590 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of: September 30, 2017 December 31, 2016 Accrued payroll and related items $ 3,704 $ 5,331 Customer returns and allowances 2,172 2,818 Other 9,552 7,187 $ 15,428 $ 15,336 |
Notes Payable and Long-Term D33
Notes Payable and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Notes payable and long-term debt consists of the following: September 30, 2017 December 31, 2016 2017 First Lien First Out Term Loan $ 107,250 $ - 2017 First Lien Second Out Term Loan 34,825 - 2017 Second Lien Term Loan 55,000 - Note payable - VaporBeast 2,000 2,000 First Lien Term Loan - 146,451 Second Lien Term Loan - 59,128 Total Notes Payable and Long-Term Debt 199,075 207,579 Less deferred finance charges (3,772 ) (4,388 ) Less current maturities (7,850 ) (1,650 ) $ 187,453 $ 201,541 |
Pension and Postretirement Be34
Pension and Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Postretirement Benefit Plans [Abstract] | |
Components of Net Periodic Benefit Cost | The components of Net Periodic Benefit Cost are as follows: Pension Benefits Postretirement Benefits For the three months ended September 30, 2017 2016 2017 2016 Service cost $ 26 $ 26 $ - $ - Interest cost 164 174 36 52 Expected return on plan assets (256 ) (258 ) - - Amortization of gains and losses 114 123 - - Net periodic benefit cost $ 48 $ 65 $ 36 $ 52 Pension Benefits Postretirement Benefits For the nine months ended September 30, 2017 2016 2017 2016 Service cost $ 78 $ 78 $ - $ - Interest cost 484 524 108 157 Expected return on plan assets (768 ) (775 ) - - Amortization of gains and losses 350 369 - - Net periodic benefit cost $ 144 $ 196 $ 108 $ 157 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Compensation [Abstract] | |
Stock Option Activity | Information with respect to the adjusted activity of outstanding stock options is summarized as follows: Number of Shares Price Range Weighted Average Remaining Contractual term Aggregate Intrinsic Value Balance, January 1, 2017 18,757 $ 31.00 - $ 93.50 Granted - Cancelled (9,294 ) $ 31.25 - $ 93.50 Forfeited (2,000 ) $ 54.75 - $ 54.75 Balance, September 30, 2017 7,463 $ 31.00 - $ 56.25 3.21 years $ - Vested and exercisable at September 30, 2017 7,463 $ 31.00 - $ 56.25 3.21 years $ - |
Stock Options Outstanding and Exercisable | The following table provides additional information about the Company’s stock options outstanding and exercisable at September 30, 2017: Options Outstanding Options Exercisable Weighted Average Wtd. Average Range of Exercise Prices Number of Shares Remaining Contractual Life Exercise Price Number of Shares Exercise Price $ 31.00 - $31.25 2,800 3.6 Years $ 31.18 2,800 $ 31.18 $ 45.25 - $46.25 1,463 2.0 Years $ 45.80 1,463 $ 45.80 $ 50.00 - $56.25 3,200 3.4 Years $ 51.56 3,200 $ 51.56 $ 31.00 - $56.25 7,463 3.2 Years $ 42.78 7,463 $ 42.78 |
Non-Vested Restricted Stock Awards | The following table summarizes the changes in non-vested RSAs for the nine months ended September 30, 2017: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested RSAs at January 1, 2017 13,700 $ 28.25 Granted 119,102 10.62 Vested (13,700 ) 28.25 Cancelled/Forfeited - - Non-vested RSAs at September 30, 2017 119,102 $ 10.62 $ 21,284 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The following tables set forth the computation of basic and diluted net income per share of Class A and Class B common stock (in thousands, except share amounts and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic net income per common share calculation: Net income attributable to SDOI $ 2,750 $ 6,793 $ 9,530 $ 9,826 Weighted average Class A common shares outstanding – basic 8,306,108 13,484,995 11,464,539 11,473,985 Weighted average Class B common shares outstanding – basic 8,093,688 13,484,995 11,389,223 11,473,985 Weighted average common shares outstanding – basic 16,399,796 26,969,990 22,853,762 22,947,970 Net income per share of common stock – basic $ 0.17 $ 0.25 $ 0.42 $ 0.43 Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Diluted net income per common share calculation: Net income attributable to SDOI $ 2,750 $ 6,793 $ 9,530 $ 9,826 Impact of subsidiary dilutive securities (1) (93 ) - (155 ) - Net income attributable to SDOI - diluted $ 2,657 $ 6,793 $ 9,375 $ 9,826 Weighted average Class A common shares outstanding – basic 8,306,108 13,484,995 11,464,539 11,473,985 Weighted average Class B common shares outstanding – basic 8,093,688 13,484,995 11,389,223 11,473,985 Dilutive impact of stock options and restricted stock awards 10,876 1,218,206 27,179 1,171,874 Weighted average common shares outstanding – diluted 16,410,672 28,188,196 22,880,941 24,119,844 Net income per share of common stock – diluted $ 0.16 $ 0.24 $ 0.41 $ 0.41 (1) The dilutive impact of subsidiary stock-based awards on the Company’s reported net income is recorded as an adjustment to net income for the three and nine months ended September 30, 2017, for the purposes of calculating income per share. There is no adjustment to the three and nine months ended September 30, 2016 because the reverse acquisition of Turning Point by SDOI did not occur until June 1, 2017. |
Antidilutive Securities Excluded from Computation of Diluted Weighted Average Shares Outstanding | The following outstanding securities at September 30, 2017 have been excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive: September 30, 2017 Stock options 7,463 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information [Abstract] | |
Financial Information of Reportable Segments | The tables below present financial information about reported segments: For the three months ended September 30, 2017 September 30, 2016 Net Sales Smokeless Products $ 21,294 $ 18,909 Smoking Products 26,860 28,760 NewGen Products 25,186 3,290 Other(1) 12 - $ 73,352 $ 50,959 Operating Income Smokeless Products $ 6,218 $ 4,695 Smoking Products 7,403 7,645 NewGen Products 780 (230 ) Other(1) (1,099 ) (219 ) 13,302 11,891 Interest expense (4,023 ) (5,557 ) Investment income 157 279 Income before income taxes $ 9,436 $ 6,613 Capital Expenditures Smokeless Products $ 446 $ 426 NewGen Products 39 (40 ) $ 485 $ 386 Depreciation and amortization Smokeless products $ 341 $ 310 NewGen Products 255 - Other(1) 8 - $ 604 $ 310 For the nine months ended September 30, 2017 September 30, 2016 Net Sales Smokeless Products $ 63,563 $ 58,939 Smoking Products 81,056 83,434 NewGen Products 67,595 10,033 Other(1) 12 - $ 212,226 $ 152,406 Operating Income Smokeless Products $ 15,088 $ 13,097 Smoking Products 21,095 22,391 NewGen Products 2,646 (758 ) Other(1) (1,654 ) (1,154 ) 37,175 33,576 Interest expense (13,002 ) (20,895 ) Investment income 369 611 Loss on extinguishment of debt (6,116 ) (2,824 ) Income before income taxes $ 18,426 $ 10,468 Capital Expenditures Smokeless Products $ 973 $ 1,160 NewGen Products 79 85 $ 1,052 $ 1,245 Depreciation and amortization Smokeless products $ 1,046 $ 896 NewGen Products 673 - Other(1) 8 - $ 1,727 $ 896 September 30, 2017 December 31, 2016 Assets Smokeless Products $ 88,327 $ 85,559 Smoking Products 149,552 150,498 NewGen Products 45,023 39,416 Other (1) 21,492 9,547 $ 304,394 $ 285,020 (1) “Other” includes sales, operating income or assets that are not assigned to the three reportable segments, such as sales, operating income or assets of SDOI and Turning Point deferred taxes. All goodwill has been allocated to reportable segments. |
Net Sales - Domestic and Foreign | The tables below present financial information about domestic and foreign net sales for the three and nine months ended September 30, 2017 and 2016: Three Months Ended September 30, 2017 September 30, 2016 Domestic $ 69,496 $ 48,469 Foreign 3,856 2,490 Net Sales $ 73,352 $ 50,959 Nine Months Ended September 30, 2017 September 30, 2016 Domestic $ 203,222 $ 144,568 Foreign 9,004 7,838 Net Sales $ 212,226 $ 152,406 |
Organization and Description 38
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | Jun. 01, 2017$ / sharesshares | Sep. 30, 2017$ / shares | Jun. 29, 2017$ / shares | Dec. 31, 2016USD ($)$ / shares |
Organization and Description of Business [Abstract] | ||||
Stock split and reclassification ratio | 0.04 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Shares distributed as a dividend (in shares) | shares | 1 | |||
Class A Common Stock [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Class B Common Stock [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Common stock, par value (in dollars per share) | 0.01 | $ 0.01 | ||
Shares distributed as a dividend (in shares) | shares | 8,190,166 | |||
Common Shares [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Common stock, par value (in dollars per share) | 0.01 | |||
Adjustment to beginning balance of stockholders' equity | $ | $ (184) | |||
Common Shares [Member] | Class A Common Stock [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Common stock, par value (in dollars per share) | 0.01 | |||
Adjustment to beginning balance of stockholders' equity | $ | 9 | |||
Common Shares [Member] | Class B Common Stock [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Adjustment to beginning balance of stockholders' equity | $ | 9 | |||
Treasury Shares [Member] | Class A Common Stock [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Adjustment to beginning balance of stockholders' equity | $ | (555) | |||
Additional Paid-in Capital [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Adjustment to beginning balance of stockholders' equity | $ | $ 721 | |||
Turning Point [Member] | ||||
Organization and Description of Business [Abstract] | ||||
Percentage of ownership interest | 52.10% | 51.30% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)CategoryClass | Sep. 30, 2016USD ($) | Jun. 01, 2017 | Dec. 31, 2016USD ($) | |
Shipping Costs [Abstract] | ||||||
Shipping costs | $ 2,900 | $ 1,700 | $ 7,400 | $ 4,800 | ||
Fair Value of MSA Escrow Account [Abstract] | ||||||
Cost | 32,046 | 32,046 | $ 31,942 | |||
Gross unrealized gains | 19 | |||||
Gross unrealized losses | (1,141) | (1,141) | (1,551) | |||
Estimated fair value | 30,905 | 30,905 | 30,410 | |||
Maturities of U.S. Governmental Agency Obligations [Abstract] | ||||||
Less than five years | 7,114 | 7,114 | 9,113 | |||
Six to ten years | 18,151 | 18,151 | 16,141 | |||
Greater than ten years | 3,675 | 3,675 | 3,902 | |||
Total U.S. Governmental agency obligations | 28,940 | 28,940 | 29,156 | |||
Master Settlement Agreement Escrow Account by Sales Year [Abstract] | ||||||
1,999 | 211 | 211 | 211 | |||
2,000 | 1,017 | 1,017 | 1,017 | |||
2,001 | 1,673 | 1,673 | 1,673 | |||
2,002 | 2,271 | 2,271 | 2,271 | |||
2,003 | 4,249 | 4,249 | 4,249 | |||
2,004 | 3,715 | 3,715 | 3,715 | |||
2,005 | 4,552 | 4,552 | 4,552 | |||
2,006 | 3,847 | 3,847 | 3,847 | |||
2,007 | 4,167 | 4,167 | 4,167 | |||
2,008 | 3,364 | 3,364 | 3,364 | |||
2,009 | 1,626 | 1,626 | 1,626 | |||
2,010 | 406 | 406 | 406 | |||
2,011 | 193 | 193 | 193 | |||
2,012 | 199 | 199 | 199 | |||
2,013 | 173 | 173 | 173 | |||
2,014 | 143 | 143 | 142 | |||
2,015 | 101 | 101 | 100 | |||
2,016 | 80 | 80 | 37 | |||
2,017 | 59 | 59 | 0 | |||
Total | 32,046 | $ 32,046 | 31,942 | |||
Food and Drug Administration [Abstract] | ||||||
Number of categories of tobacco products regulated by the FDA | Category | 4 | |||||
Number of classes of regulated tobacco products on which user fees are assessed by the FDA | Class | 6 | |||||
Cash and Cash Equivalents [Member] | ||||||
Fair Value of MSA Escrow Account [Abstract] | ||||||
Cost | 3,106 | $ 3,106 | 2,786 | |||
Gross unrealized gains | 0 | |||||
Gross unrealized losses | 0 | 0 | 0 | |||
Estimated fair value | 3,106 | 3,106 | 2,786 | |||
U.S. Governmental Agency Obligations (Unrealized Loss Position less than 12 Months) [Member] | ||||||
Fair Value of MSA Escrow Account [Abstract] | ||||||
Cost | 3,022 | 3,022 | 29,156 | |||
Gross unrealized gains | 19 | |||||
Gross unrealized losses | (86) | (86) | (1,551) | |||
Estimated fair value | 2,936 | 2,936 | 27,624 | |||
U.S. Governmental Agency Obligations (Unrealized Loss Position more than 12 Months) [Member] | ||||||
Fair Value of MSA Escrow Account [Abstract] | ||||||
Cost | 25,918 | 25,918 | 0 | |||
Gross unrealized gains | 0 | |||||
Gross unrealized losses | (1,055) | (1,055) | 0 | |||
Estimated fair value | $ 24,863 | $ 24,863 | 0 | |||
Turning Point [Member] | ||||||
Noncontrolling Interests [Abstract] | ||||||
Percentage of ownership interest | 51.30% | 51.30% | 52.10% | |||
Master Settlement Agreement Escrow Account [Abstract] | ||||||
Deposit amount | $ 32,000 | $ 32,000 | 31,900 | |||
Fair value of deposit amount | $ 30,900 | $ 30,900 | $ 30,400 |
Acquisitions, Acquisitions by S
Acquisitions, Acquisitions by SDOI (Details) $ in Thousands | Jul. 03, 2017USD ($)Billboard | Jun. 01, 2017USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Nov. 25, 2016shares |
Acquisitions [Abstract] | ||||||
Shares distributed as a dividend (in shares) | shares | 1 | |||||
Results of Operations [Abstract] | ||||||
Net loss since acquisition date of June 1, 2017 | $ (1,000) | $ (1,600) | ||||
Number of billboards acquired | Billboard | 5 | |||||
Consideration paid to acquire billboards | $ 300 | |||||
Class A Common Stock [Member] | ||||||
Acquisitions [Abstract] | ||||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | shares | 7,335,018 | |||||
Class B Common Stock [Member] | ||||||
Acquisitions [Abstract] | ||||||
Shares distributed as a dividend (in shares) | shares | 8,190,166 | |||||
Turning Point [Member] | ||||||
Acquisitions [Abstract] | ||||||
Number of voting shares to be contributed by the SG Parties (in shares) | shares | 9,842,373 | |||||
Number of calendar days used to calculate VWAP | 30 days | |||||
Number of voting shares contributed by the SG Parties (in shares) | shares | 9,842,373 | |||||
Percentage of ownership interest | 52.10% | 51.30% | 51.30% | 51.30% | ||
Preliminary Purchase Price Allocation [Abstract] | ||||||
Cash and cash equivalents | $ 20,253 | $ 20,253 | $ 20,253 | $ 20,253 | ||
Other current assets | 277 | 277 | 277 | 277 | ||
Accrued liabilities | (2,384) | (3,613) | (3,613) | (3,613) | ||
Net assets acquired | $ 18,146 | $ 16,917 | 16,917 | $ 16,917 | ||
Measurement Period Adjustment [Abstract] | ||||||
Cash and cash equivalents | 0 | |||||
Other current assets | 0 | |||||
Accrued liabilities | (1,229) | |||||
Net assets acquired | $ (1,229) | |||||
Turning Point [Member] | Class A Common Stock [Member] | SG Parties [Member] | ||||||
Acquisitions [Abstract] | ||||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | shares | 7,335,018 | |||||
Turning Point [Member] | Class B Common Stock [Member] | SG Parties [Member] | ||||||
Acquisitions [Abstract] | ||||||
Shares distributed as a dividend (in shares) | shares | 7,335,018 |
Acquisitions, Acquisitions by T
Acquisitions, Acquisitions by Turning Point - Vapor Shark (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Acquisitions [Abstract] | ||||
Goodwill | $ 134,620 | $ 134,390 | ||
Turning Point [Member] | Vapor Shark [Member] | ||||
Acquisitions [Abstract] | ||||
Equity interest to be purchased upon exercise of warrant | 100.00% | |||
Goodwill | $ 0 | |||
Assets acquired | 3,900 | |||
Liabilities assumed | $ 3,900 |
Acquisitions, Acquisitions by42
Acquisitions, Acquisitions by Turning Point - Wind River Tobacco Company (Details) - Turning Point [Member] - Wind River Tobacco Company [Member] $ in Millions | 1 Months Ended | |
Nov. 30, 2016USD ($)Brand | Sep. 30, 2017USD ($) | |
Acquisitions [Abstract] | ||
Number of brands of chewing tobacco purchased | Brand | 5 | |
Purchase price | $ 2.5 | |
Cash paid at closing | 0.6 | |
Payments deferred at closing | 1.9 | |
Deferred payments outstanding | $ 1.4 | |
Trade Names [Member] | ||
Acquisitions [Abstract] | ||
Indefinite-lived intangible asset acquired | $ 2.4 |
Acquisitions, Acquisitions by43
Acquisitions, Acquisitions by Turning Point - VaporBeast (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2016 | Nov. 30, 2016 | Sep. 30, 2017 | |
Assets Acquired [Abstract] | |||
Goodwill | $ 134,390 | $ 134,620 | |
Turning Point [Member] | VaporBeast [Member] | |||
Acquisitions [Abstract] | |||
Total consideration, net of working capital adjustment | $ 26,500 | ||
Cash paid at closing | 4,000 | ||
Notes issued at closing | 19,000 | ||
Short-term notes paid after closing | $ 19,000 | ||
Payments deferred at closing | 4,000 | ||
Term of payment deferral at closing | 18 months | ||
Increase in goodwill | $ 200 | ||
Purchase Price [Abstract] | |||
Total purchase price | 27,000 | ||
Adjustments to Purchase Price [Abstract] | |||
Working capital | (400) | ||
Fair value of holdback | (128) | ||
Adjusted purchase price | 26,472 | ||
Assets Acquired [Abstract] | |||
Working capital | 4,270 | ||
Property and equipment | 7 | ||
Other intangible assets | 16,272 | ||
Net assets acquired | 20,549 | ||
Goodwill | 5,923 | ||
Goodwill deductible for tax purposes | $ 5,923 |
Fair Value of Financial Instr44
Fair Value of Financial Instruments (Details) - Turning Point [Member] € in Millions, $ in Millions | Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) |
Foreign Exchange Contracts [Member] | ||||
Foreign Exchange [Abstract] | ||||
Notional amount | € | € 0 | € 4.9 | ||
First Lien Term Loan [Member] | ||||
Long-Term Debt [Abstract] | ||||
Face amount | $ 142.1 | $ 147.3 | ||
Second Lien Term Loan [Member] | ||||
Long-Term Debt [Abstract] | ||||
Face amount | 55 | 60 | ||
Fair Value [Member] | 2017 First Lien Term Loans [Member] | ||||
Long-Term Debt [Abstract] | ||||
Long-term debt | 142.1 | |||
Fair Value [Member] | 2017 Second Lien Term Loan [Member] | ||||
Long-Term Debt [Abstract] | ||||
Long-term debt | $ 55 | |||
Fair Value [Member] | First Lien Term Loan [Member] | ||||
Long-Term Debt [Abstract] | ||||
Long-term debt | 147.3 | |||
Fair Value [Member] | Second Lien Term Loan [Member] | ||||
Long-Term Debt [Abstract] | ||||
Long-term debt | $ 60 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Percentage of LIFO inventories | 47.00% | |
Raw materials and work in process | $ 2,617 | $ 2,596 |
Leaf tobacco | 28,011 | 27,391 |
Other | 1,492 | 1,232 |
Inventory | 69,207 | 66,385 |
LIFO reserve | (4,446) | (4,200) |
Inventory, net | 64,761 | 62,185 |
Inventory valuation allowance | 700 | 600 |
Smokeless Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | 5,441 | 4,789 |
Smoking Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | 17,413 | 18,384 |
Electronic / Vaporizer Products [Member] | ||
Inventories [Abstract] | ||
Finished goods | $ 14,233 | $ 11,993 |
Property, Plant and Equipment46
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 19,915 | $ 17,528 |
Accumulated depreciation | (11,137) | (9,938) |
Property, plant and equipment, net | 8,778 | 7,590 |
Land [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 22 | 22 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 1,899 | 1,899 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 1,873 | 1,666 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 12,066 | 10,532 |
Advertising Structures [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 329 | 0 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 3,726 | $ 3,409 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Liabilities [Abstract] | ||
Accrued payroll and related items | $ 3,704 | $ 5,331 |
Customer returns and allowances | 2,172 | 2,818 |
Other | 9,552 | 7,187 |
Total accrued liabilities | 15,428 | 15,336 |
SDOI related accruals | $ 1,466 | $ 0 |
Notes Payable and Long-Term D48
Notes Payable and Long-Term Debt, Summary of Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Feb. 17, 2017 | Dec. 31, 2016 | Nov. 30, 2016 |
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | $ 199,075 | $ 207,579 | ||
Less deferred finance charges | (3,772) | (4,388) | ||
Less current maturities | (7,850) | (1,650) | ||
Notes payable and long-term debt | 187,453 | 201,541 | ||
2017 First Lien First Out Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 107,250 | 0 | ||
2017 First Lien Second Out Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 34,825 | 0 | ||
2017 Second Lien Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 55,000 | 0 | ||
Note Payable - VaporBeast [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 2,000 | 2,000 | ||
First Lien Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 0 | 146,451 | ||
Second Lien Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Notes payable and long-term debt | 0 | 59,128 | ||
Turning Point [Member] | 2017 Credit Facility [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Face amount | $ 250,000 | |||
Turning Point [Member] | Note Payable - VaporBeast [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Face amount | $ 2,000 | |||
Turning Point [Member] | First Lien Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Face amount | 142,100 | 147,300 | ||
Turning Point [Member] | Second Lien Term Loan [Member] | ||||
Notes Payable and Long-Term Debt [Abstract] | ||||
Face amount | $ 55,000 | $ 60,000 |
Notes Payable and Long-Term D49
Notes Payable and Long-Term Debt, 2017 First Lien Credit Facility (Details) - Turning Point and NATC [Member] $ in Millions | Feb. 17, 2017USD ($)Counterparty | Feb. 17, 2022USD ($) | Sep. 30, 2017 | Mar. 31, 2021USD ($) | Mar. 31, 2019USD ($) | May 17, 2022USD ($) |
2017 First Lien Credit Facility [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Additional borrowing capacity | $ 40 | |||||
2017 First Lien Credit Facility [Member] | Minimum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Number of lenders that can provide additional borrowing capacity | Counterparty | 1 | |||||
Senior leverage ratio | 3 | |||||
Total leverage ratio | 4 | |||||
Fixed charge coverage ratio | 1.20 | |||||
2017 First Lien Credit Facility [Member] | Maximum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Senior leverage ratio | 3.75 | |||||
Total leverage ratio | 4.75 | |||||
2017 Revolving Credit Facility [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Maximum borrowing capacity | $ 50 | |||||
Maturity date | Feb. 17, 2022 | |||||
Weighted average interest rate | 4.30% | |||||
2017 Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Margin on variable rate | 2.50% | |||||
2017 Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Margin on variable rate | 3.50% | |||||
2017 First Out Term Loan [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Face amount | $ 110 | |||||
Maturity date | Feb. 17, 2022 | |||||
Frequency of required payment | Quarterly | |||||
Weighted average interest rate | 4.30% | |||||
2017 First Out Term Loan [Member] | Forecast [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Required payment | $ 2.8 | $ 2.1 | $ 1.4 | |||
2017 First Out Term Loan [Member] | LIBOR [Member] | Minimum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Margin on variable rate | 2.50% | |||||
2017 First Out Term Loan [Member] | LIBOR [Member] | Maximum [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Margin on variable rate | 3.50% | |||||
2017 Second Out Term Loan [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Face amount | $ 35 | |||||
Maturity date | May 17, 2022 | |||||
Frequency of required payment | Quarterly | |||||
Weighted average interest rate | 7.30% | |||||
2017 Second Out Term Loan [Member] | Forecast [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Required payment | $ 0.1 | |||||
2017 Second Out Term Loan [Member] | LIBOR [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Margin on variable rate | 6.00% | |||||
Floor interest rate | 1.00% |
Notes Payable and Long-Term D50
Notes Payable and Long-Term Debt, 2017 Second Lien Credit Facility (Details) - Turning Point and NATC [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Feb. 17, 2017 | |
2017 Second Lien Credit Facility [Member] | Minimum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Senior leverage ratio | 3.50 | |
Total leverage ratio | 4.50 | |
Fixed charge coverage ratio | 1.10 | |
2017 Second Lien Credit Facility [Member] | Maximum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Senior leverage ratio | 4.25 | |
Total leverage ratio | 5.25 | |
2017 Second Lien Term Loan [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Face amount | $ 55 | |
Maturity date | Aug. 17, 2022 | |
Interest rate | 11.00% |
Notes Payable and Long-Term D51
Notes Payable and Long-Term Debt, Note Payable - VaporBeast (Details) - Turning Point [Member] - Note Payable - VaporBeast [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Nov. 30, 2016 | |
Notes Payable and Long-Term Debt [Abstract] | ||
Face amount | $ 2 | |
Interest rate | 6.00% | |
Maturity date | May 30, 2018 | |
Late payment fee percentage | 5.00% | |
Default interest rate | 13.00% |
Notes Payable and Long-Term D52
Notes Payable and Long-Term Debt, First Lien Term Loan (Details) - Turning Point and NATC [Member] | 9 Months Ended |
Sep. 30, 2017 | |
First Lien Term Loan LIBOR Rate Loans [Member] | LIBOR [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 6.50% |
First Lien Term Loan LIBOR Rate Loans [Member] | LIBOR [Member] | Minimum [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Interest rate | 1.25% |
First Lien Term Loan Base Rate Loans [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Interest rate | 2.25% |
Margin on variable rate | 5.50% |
First Lien Term Loan Base Rate Loans [Member] | LIBOR [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 1.00% |
Term of variable rate | 1 month |
First Lien Term Loan Base Rate Loans [Member] | Federal Funds Rate [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 0.50% |
Notes Payable and Long-Term D53
Notes Payable and Long-Term Debt, Second Lien Term Loan (Details) - Turning Point and NATC [Member] | 9 Months Ended |
Sep. 30, 2017 | |
Second Lien Term Loan LIBOR Rate Loans [Member] | LIBOR [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 10.25% |
Second Lien Term Loan LIBOR Rate Loans [Member] | LIBOR [Member] | Minimum [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Interest rate | 1.25% |
Second Lien Term Loan Base Rate Loans [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Interest rate | 2.25% |
Margin on variable rate | 9.25% |
Second Lien Term Loan Base Rate Loans [Member] | LIBOR [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 1.00% |
Term of variable rate | 1 month |
Second Lien Term Loan Base Rate Loans [Member] | Federal Funds Rate [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Margin on variable rate | 0.50% |
Notes Payable and Long-Term D54
Notes Payable and Long-Term Debt, Revolving Credit Facility (Details) - Turning Point and NATC [Member] - Revolving Credit Facility [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Feb. 17, 2017 | |
Notes Payable and Long-Term Debt [Abstract] | ||
Maximum borrowing capacity | $ 40 | |
Borrowing base | Borrowing base, which is calculated as the sum of (i) 85% of eligible accounts receivable, plus (ii) the lesser of (A) the product of 70% and the value of eligible inventory or (B) the product of 85%, the net recovery percentage identified in the most recent inventory appraisal, and the value of eligible inventory, plus (iii) the lesser of (A) the product of 75% and the value of eligible inventory or (B) the product of 85%, the net recovery percentage identified in the most recent inventory appraisal, and the value of the eligible finished goods inventory, minus (iv) the aggregate amount of reserves established by the administrative agent. |
Notes Payable and Long-Term D55
Notes Payable and Long-Term Debt, PIK Toggle Notes (Details) $ / shares in Units, $ in Thousands | Jun. 01, 2017 | Jan. 13, 2014USD ($)$ / sharesshares | May 31, 2016shares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jan. 31, 2014shares |
Notes Payable and Long-Term Debt [Abstract] | |||||||||
Stock split conversion ratio | 0.04 | ||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ (6,116) | $ (2,824) | |||||
Turning Point [Member] | |||||||||
Notes Payable and Long-Term Debt [Abstract] | |||||||||
Number of shares of TPB common stock that can be purchased with warrants (in shares) | shares | 11,000,000 | ||||||||
Turning Point [Member] | PIK Toggle Notes [Member] | |||||||||
Notes Payable and Long-Term Debt [Abstract] | |||||||||
Face amount | $ 45,000 | ||||||||
Number of shares of TPB common stock that can be purchased with warrants (in shares) | shares | 42,424 | 442,558 | |||||||
Purchase price of common stock (in dollars per unit) | $ / shares | $ 0.01 | ||||||||
Stock split conversion ratio | 10.43174381 | ||||||||
Original issue discount | $ 1,700 | ||||||||
Issue price | $ 43,300 | ||||||||
Loss on extinguishment of debt | $ (2,800) | ||||||||
Turning Point [Member] | PIK Toggle Notes [Member] | LIBOR [Member] | |||||||||
Notes Payable and Long-Term Debt [Abstract] | |||||||||
Margin on variable rate | 13.75% | ||||||||
Turning Point [Member] | PIK Toggle Notes [Member] | LIBOR [Member] | Minimum [Member] | |||||||||
Notes Payable and Long-Term Debt [Abstract] | |||||||||
Interest rate | 1.25% |
Notes Payable and Long-Term D56
Notes Payable and Long-Term Debt, 7% Senior Notes (Details) $ / shares in Units, $ in Millions | Jan. 31, 2014USD ($)$ / sharesshares |
Turning Point [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Number of membership units in Intrepid that can be purchased with warrants (in shares) | shares | 11,000,000 |
Turning Point [Member] | 7% Senior Notes [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Interest rate | 7.00% |
Face amount | $ 11 |
Original issue discount | 2.8 |
Issue price | $ 8.2 |
Intrepid [Member] | |
Notes Payable and Long-Term Debt [Abstract] | |
Percentage of Common Units called by warrants to total Common Units outstanding | 40.00% |
Purchase price of common unit (in dollars per unit) | $ / shares | $ 1 |
Pension and Postretirement Be57
Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits [Member] | ||||
Net Periodic Benefit Cost [Abstract] | ||||
Service cost | $ 26 | $ 26 | $ 78 | $ 78 |
Interest cost | 164 | 174 | 484 | 524 |
Expected return on plan assets | (256) | (258) | (768) | (775) |
Amortization of gains and losses | 114 | 123 | 350 | 369 |
Net periodic benefit cost | 48 | 65 | 144 | 196 |
Postretirement Benefits [Member] | ||||
Net Periodic Benefit Cost [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 36 | 52 | 108 | 157 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of gains and losses | 0 | 0 | 0 | 0 |
Net periodic benefit cost | 36 | $ 52 | 108 | $ 157 |
Turning Point [Member] | Pension Benefits [Member] | ||||
Plan Contributions [Abstract] | ||||
Expected contributions in 2017 | 0 | 0 | ||
Turning Point [Member] | Postretirement Benefits [Member] | ||||
Plan Contributions [Abstract] | ||||
Expected contributions in 2017 | $ 200 | $ 200 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Jun. 01, 2017$ / sharesshares | Sep. 30, 2017$ / sharesshares | Sep. 30, 2017Vote / shares$ / sharesshares | Jun. 29, 2017$ / shares | May 31, 2017shares | May 30, 2017$ / sharesshares | May 29, 2017shares | Dec. 31, 2016$ / sharesshares |
Common Stock, [Abstract] | ||||||||
Stock split and reclassification ratio | 0.04 | |||||||
Common stock, shares outstanding (in shares) | 857,714 | |||||||
Shares distributed as a dividend (in shares) | 1 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized (in shares) | 330,000,000 | 50,000,000 | ||||||
Preferred Stock [Abstract] | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | 19,664,362 | 500,000,000 | |||
Common Stock Repurchase Program [Abstract] | ||||||||
Period stock repurchase program is in effect | 12 months | |||||||
Percentage of outstanding shares of commons stock authorized for repurchase | 5.00% | |||||||
Shares of common stock repurchased (in shares) | 0 | |||||||
Class A Common Stock [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | 7,335,018 | |||||||
Common stock, shares outstanding (in shares) | 8,306,450 | 8,306,450 | ||||||
Issuance of shares for restricted stock (in shares) | 13,700 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Number of votes per share | Vote / shares | 1 | |||||||
Class B Common Stock [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Common stock, shares outstanding (in shares) | 8,080,948 | 8,080,948 | 841,448 | |||||
Shares distributed as a dividend (in shares) | 8,190,166 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 30,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Number of votes per share | Vote / shares | 10 | |||||||
Percentage of outstanding shares that can approve conversion of Class B to Class A common stock | 66.67% | |||||||
Common Shares [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Common Shares [Member] | Class A Common Stock [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | 7,335,018 | |||||||
Issuance of shares for restricted stock (in shares) | 13,700 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Conversion of Class B common stock into Class A common stock (in shares) | 109,218 | 109,218 | ||||||
Common Shares [Member] | Class B Common Stock [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Issuance of shares for Contribution and Exchange Agreement (in shares) | 7,335,018 | |||||||
Issuance of shares for restricted stock (in shares) | 13,700 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Conversion of Class B common stock into Class A common stock (in shares) | (109,218) | (109,218) | ||||||
Turning Point [Member] | ||||||||
Common Stock, [Abstract] | ||||||||
Common stock, shares outstanding (in shares) | 9,842,373 |
Share-Based Compensation, 2000
Share-Based Compensation, 2000 Plan, 2017 Plan and ESPP (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Jun. 09, 2017 | |
2000 Plan [Member] | ||
Share-Based Compensation [Abstract] | ||
Maximum number of shares issuable (in shares) | 8,000,000 | |
2000 Plan [Member] | Incentive Stock Options [Member] | ||
Share-Based Compensation [Abstract] | ||
Minimum percentage of fair market value at date of grant | 100.00% | |
Percentage of fair market value at date of grant for stockholders owning more than 10% of Company's common stock | 110.00% | |
2000 Plan [Member] | Nonqualified Stock Options [Member] | ||
Share-Based Compensation [Abstract] | ||
Minimum percentage of fair market value at date of grant | 85.00% | |
2017 Plan [Member] | ||
Share-Based Compensation [Abstract] | ||
Number of awards granted (in shares) | 0 | |
2017 Plan [Member] | Class A Common Stock [Member] | ||
Share-Based Compensation [Abstract] | ||
Maximum number of shares issuable (in shares) | 1,000,000 | |
ESPP [Member] | ||
Share-Based Compensation [Abstract] | ||
Maximum number of shares issuable (in shares) | 26,447 | |
Purchase price of common stock as percentage of fair market value | 90.00% |
Share-Based Compensation, Compe
Share-Based Compensation, Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Selling, General and Administrative Expense [Member] | ||||
Share-Based Compensation [Abstract] | ||||
Share-based compensation expense | $ 0.3 | $ 0.1 | $ 0.6 | $ 0.1 |
Share-Based Compensation, Stock
Share-Based Compensation, Stock Option Activity (Details) | Jun. 01, 2017 | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016shares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016shares |
Share-Based Compensation [Abstract] | |||||
Stock split and reclassification ratio | 0.04 | ||||
2000 Plan [Member] | Stock Options [Member] | |||||
Share-Based Compensation [Abstract] | |||||
Options exercised (in shares) | shares | 0 | 0 | 0 | 0 | |
Number of Shares [Roll Forward] | |||||
Balance at beginning of period (in shares) | shares | 18,757 | ||||
Granted (in shares) | shares | 0 | ||||
Cancelled (in shares) | shares | (9,294) | ||||
Forfeited (in shares) | shares | (2,000) | ||||
Balance at end of period (in shares) | shares | 7,463 | 7,463 | |||
Vested and exercisable at end of period (in shares) | shares | 7,463 | 7,463 | |||
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |||||
Weighted average remaining contractual term, balance outstanding at end of period | 3 years 2 months 16 days | ||||
Aggregate intrinsic value, balance outstanding at end of period | $ | $ 0 | $ 0 | |||
Weighted average remaining contractual term, vested and exercisable at end of period | 3 years 2 months 16 days | ||||
Aggregate intrinsic value, vested and exercisable at end of period | $ | $ 0 | $ 0 | |||
2000 Plan [Member] | Stock Options [Member] | Minimum [Member] | |||||
Weighted Average Exercise Price [Abstract] | |||||
Balance outstanding at beginning of period (in dollars per share) | $ 31 | ||||
Cancelled (in dollars per share) | 31.25 | ||||
Forfeited (in dollars per share) | 54.75 | ||||
Balance outstanding at end of period (in dollars per share) | $ 31 | 31 | |||
Vested and exercisable at end of period (in dollars per share) | 31 | 31 | |||
2000 Plan [Member] | Stock Options [Member] | Maximum [Member] | |||||
Weighted Average Exercise Price [Abstract] | |||||
Balance outstanding at beginning of period (in dollars per share) | 93.50 | ||||
Cancelled (in dollars per share) | 93.50 | ||||
Forfeited (in dollars per share) | 54.75 | ||||
Balance outstanding at end of period (in dollars per share) | 56.25 | 56.25 | |||
Vested and exercisable at end of period (in dollars per share) | $ 56.25 | $ 56.25 |
Share-Based Compensation, Sto62
Share-Based Compensation, Stock Options Outstanding and Exercisable (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
$31.00 - $56.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | $ 31 |
Exercise price, upper range limit (in dollars per share) | $ 56.25 |
Options outstanding, number of shares (in shares) | shares | 7,463 |
Options outstanding, weighted average remaining contractual life | 3 years 2 months 12 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 42.78 |
Options exercisable, number of shares (in shares) | shares | 7,463 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 42.78 |
$31.00 - $31.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | 31 |
Exercise price, upper range limit (in dollars per share) | $ 31.25 |
Options outstanding, number of shares (in shares) | shares | 2,800 |
Options outstanding, weighted average remaining contractual life | 3 years 7 months 6 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 31.18 |
Options exercisable, number of shares (in shares) | shares | 2,800 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 31.18 |
$45.25 - $46.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | 45.25 |
Exercise price, upper range limit (in dollars per share) | $ 46.25 |
Options outstanding, number of shares (in shares) | shares | 1,463 |
Options outstanding, weighted average remaining contractual life | 2 years |
Options outstanding, weighted average exercise price (in dollars per share) | $ 45.80 |
Options exercisable, number of shares (in shares) | shares | 1,463 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 45.80 |
$50.00 - $56.25 [Member] | |
Share-Based Compensation [Abstract] | |
Exercise price, lower range limit (in dollars per share) | 50 |
Exercise price, upper range limit (in dollars per share) | $ 56.25 |
Options outstanding, number of shares (in shares) | shares | 3,200 |
Options outstanding, weighted average remaining contractual life | 3 years 4 months 24 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 51.56 |
Options exercisable, number of shares (in shares) | shares | 3,200 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 51.56 |
Share-Based Compensation, Non-V
Share-Based Compensation, Non-Vested Restricted Stock Awards (Details) - Restricted Stock Awards [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Aggregate Intrinsic Value [Abstract] | |
Unrecognized stock-based compensation expense | $ | $ 1,100 |
Weighted-average remaining vesting period for recognition | 2 years 7 months 10 days |
2000 Plan [Member] | |
Shares [Roll Forward] | |
Nonvested balance at beginning of period (in shares) | shares | 13,700 |
Granted (in shares) | shares | 119,102 |
Vested (in shares) | shares | (13,700) |
Cancelled/forfeited (in shares) | shares | 0 |
Nonvested balance at end of period (in shares) | shares | 119,102 |
Weighted Average Grant Date Fair Value [Abstract] | |
Non-vested balance at beginning of period (in dollars per share) | $ / shares | $ 28.25 |
Granted (in dollars per share) | $ / shares | 10.62 |
Vested (in dollars per share) | $ / shares | 28.25 |
Cancelled/forfeited (in dollars per share) | $ / shares | 0 |
Non-vested balance at end of period (in dollars per share) | $ / shares | $ 10.62 |
Aggregate Intrinsic Value [Abstract] | |
Non-vested balance at end of period | $ | $ 21,284 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 01, 2017 | |
Income Taxes [Abstract] | ||||
Period of time operating results from acquisition are included in results of operations | 3 months | 4 months | ||
Tax benefit relating to net operating loss from acquisition | $ 0 | $ 0 | ||
Unrecognized tax benefits | 628 | 628 | ||
Unrecognized tax benefits recorded as reduction to existing net operating loss and tax credit carryforwards | 622 | 622 | ||
Accrued interest and penalties on unrecognized tax benefits | 0 | 0 | ||
Unrecognized tax benefits remaining | 6 | 6 | ||
Forecast [Member] | ||||
Income Taxes [Abstract] | ||||
Effective income tax rate | 41.00% | |||
Turning Point [Member] | ||||
Income Taxes [Abstract] | ||||
Tax benefits relating to stock options exercised | $ 900 | $ 4,500 | ||
Turning Point [Member] | ||||
Income Taxes [Abstract] | ||||
Percentage of ownership interest | 51.30% | 51.30% | 52.10% |
Earnings Per Share (Details)
Earnings Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2017USD ($)Vote / sharesClass$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | ||
Earnings per Share [Abstract] | |||||
Number of classes of common stock | Class | 2 | ||||
Basic Net Income per Common Share Calculation [Abstract] | |||||
Net income attributable to SDOI | $ | $ 2,750 | $ 6,793 | $ 9,530 | $ 9,826 | |
Weighted average common shares outstanding - basic (in shares) | 16,399,796 | 26,969,990 | 22,853,762 | 22,947,970 | |
Net income per share of common stock - basic (in dollars per share) | $ / shares | $ 0.17 | $ 0.25 | $ 0.42 | $ 0.43 | |
Diluted Net Income per Common Share Calculation [Abstract] | |||||
Net income attributable to SDOI | $ | $ 2,750 | $ 6,793 | $ 9,530 | $ 9,826 | |
Impact of subsidiary dilutive securities | $ | [1] | (93) | 0 | (155) | 0 |
Net income attributable to SDOI - diluted | $ | $ 2,657 | $ 6,793 | $ 9,375 | $ 9,826 | |
Weighted average common shares outstanding - basic (in shares) | 16,399,796 | 26,969,990 | 22,853,762 | 22,947,970 | |
Dilutive impact of stock options and restricted stock awards (in shares) | 10,876 | 1,218,206 | 27,179 | 1,171,874 | |
Weighted average common shares outstanding - diluted (in shares) | 16,410,672 | 28,188,196 | 22,880,941 | 24,119,844 | |
Net income per share of common stock - diluted (in dollars per share) | $ / shares | $ 0.16 | $ 0.24 | $ 0.41 | $ 0.41 | |
Class A Common Stock [Member] | |||||
Earnings per Share [Abstract] | |||||
Number of votes per share | Vote / shares | 1 | ||||
Basic Net Income per Common Share Calculation [Abstract] | |||||
Weighted average common shares outstanding - basic (in shares) | 8,306,108 | 13,484,995 | 11,464,539 | 11,473,985 | |
Diluted Net Income per Common Share Calculation [Abstract] | |||||
Weighted average common shares outstanding - basic (in shares) | 8,306,108 | 13,484,995 | 11,464,539 | 11,473,985 | |
Class B Common Stock [Member] | |||||
Earnings per Share [Abstract] | |||||
Number of votes per share | Vote / shares | 10 | ||||
Percentage of outstanding shares that can approve conversion of Class B to Class A common stock | 66.67% | ||||
Basic Net Income per Common Share Calculation [Abstract] | |||||
Weighted average common shares outstanding - basic (in shares) | 8,093,688 | 13,484,995 | 11,389,223 | 11,473,985 | |
Diluted Net Income per Common Share Calculation [Abstract] | |||||
Weighted average common shares outstanding - basic (in shares) | 8,093,688 | 13,484,995 | 11,389,223 | 11,473,985 | |
Stock Options [Member] | |||||
Earnings per Share [Abstract] | |||||
Antidilutive securities excluded from computation of diluted weighted average shares (in shares) | 7,463 | ||||
[1] | The dilutive impact of subsidiary stock-based awards on the Company's reported net income is recorded as an adjustment to net income for the three and nine months ended September 30, 2017, for the purposes of calculating income per share. There is no adjustment to the three and nine months ended September 30, 2016 because the reverse acquisition of Turning Point by SDOI did not occur until June 1, 2017. |
Segment Information, Financial
Segment Information, Financial Information of Reportable Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | ||
Segment Information [Abstract] | ||||||
Number of reportable segments | Segment | 3 | |||||
Segment Information [Abstract] | ||||||
Net sales | $ 73,352 | $ 50,959 | $ 212,226 | $ 152,406 | ||
Operating income | 13,302 | 11,891 | 37,175 | 33,576 | ||
Interest expense | (4,023) | (5,557) | (13,002) | (20,895) | ||
Loss on extinguishment of debt | 0 | 0 | (6,116) | (2,824) | ||
Income before income taxes | 9,436 | 6,613 | 18,426 | 10,468 | ||
Capital expenditures | 485 | 386 | 1,052 | 1,245 | ||
Depreciation and amortization | 604 | 310 | 1,727 | 896 | ||
Assets | 304,394 | 304,394 | $ 285,020 | |||
Reportable Segments [Member] | Smokeless Products [Member] | ||||||
Segment Information [Abstract] | ||||||
Net sales | 21,294 | 18,909 | 63,563 | 58,939 | ||
Operating income | 6,218 | 4,695 | 15,088 | 13,097 | ||
Capital expenditures | 446 | 426 | 973 | 1,160 | ||
Depreciation and amortization | 341 | 310 | 1,046 | 896 | ||
Assets | 88,327 | 88,327 | 85,559 | |||
Reportable Segments [Member] | Smoking Products [Member] | ||||||
Segment Information [Abstract] | ||||||
Net sales | 26,860 | 28,760 | 81,056 | 83,434 | ||
Operating income | 7,403 | 7,645 | 21,095 | 22,391 | ||
Assets | 149,552 | 149,552 | 150,498 | |||
Reportable Segments [Member] | NewGen Products [Member] | ||||||
Segment Information [Abstract] | ||||||
Net sales | 25,186 | 3,290 | 67,595 | 10,033 | ||
Operating income | 780 | (230) | 2,646 | (758) | ||
Capital expenditures | 39 | (40) | 79 | 85 | ||
Depreciation and amortization | 255 | 0 | 673 | 0 | ||
Assets | 45,023 | 45,023 | 39,416 | |||
Other [Member] | ||||||
Segment Information [Abstract] | ||||||
Net sales | [1] | 12 | 0 | 12 | 0 | |
Operating income | [1] | (1,099) | (219) | (1,654) | (1,154) | |
Depreciation and amortization | [1] | 8 | 0 | 8 | 0 | |
Assets | [1],[2] | 21,492 | 21,492 | $ 9,547 | ||
Reconciling Item [Member] | ||||||
Segment Information [Abstract] | ||||||
Interest expense | (4,023) | (5,557) | (13,002) | (20,895) | ||
Investment income | $ 157 | $ 279 | 369 | 611 | ||
Loss on extinguishment of debt | $ (6,116) | $ (2,824) | ||||
[1] | "Other" includes sales, operating income or assets that are not assigned to the three reportable segments, such as sales, operating income or assets of SDOI and Turning Point deferred taxes. All goodwill has been allocated to reportable segments. | |||||
[2] | "Other" includes assets that are not assigned to our three reportable segments, such as assets of SDOI and Turning Point deferred taxes. All goodwill has been allocated to reportable segments. |
Segment Information, Net Sales
Segment Information, Net Sales - Domestic and Foreign (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Information [Abstract] | ||||
Net sales | $ 73,352 | $ 50,959 | $ 212,226 | $ 152,406 |
Reportable Geographical Component [Member] | Domestic [Member] | ||||
Segment Information [Abstract] | ||||
Net sales | 69,496 | 48,469 | 203,222 | 144,568 |
Reportable Geographical Component [Member] | Foreign [Member] | ||||
Segment Information [Abstract] | ||||
Net sales | $ 3,856 | $ 2,490 | $ 9,004 | $ 7,838 |
Related Party Transactions (Det
Related Party Transactions (Details) - Turning Point and SG Parties [Member] - Reimbursement of Transaction Related Legal Expenses Incurred Related to Contribution and Exchange Transaction [Member] $ in Thousands | 4 Months Ended |
Sep. 30, 2017USD ($) | |
Related Party Transactions [Abstract] | |
Amount of related party transaction | $ 1,400 |
Maximum [Member] | |
Related Party Transactions [Abstract] | |
Amount of related party transaction | $ 1,400 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ / shares in Units, $ in Thousands | Nov. 09, 2017USD ($)$ / shares |
Subsequent Events [Abstract] | |
Distribution to noncontrolling interest holders | $ | $ 400 |
Turning Point [Member] | Dividend Declared Q4-2017 [Member] | |
Subsequent Events [Abstract] | |
Dividend payable, date declared | Nov. 9, 2017 |
Dividend payable (in dollars per share) | $ / shares | $ 0.04 |
Dividend payable, date to be paid | Dec. 15, 2017 |
Dividend payable, date of record | Nov. 27, 2017 |