TPB - Earnings call transcript Q4 2021 | Turning Point Brands, Inc.

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Operator

Good morning and welcome to the Turning Point Brands Fourth Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. All lines have been placed on mute to prevent any background noise. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. to Officer. conference like Reformina, to now Financial Chief would turn over the Louie I ahead. go Please

Louie Reformina

Thank you. everyone. Officer. Good morning, Chief Reformina, Financial our This is Louie

be me This we our There site. issued CEO, [ph] news call release section President reviewing Purdy, Joining of fourth website Operating located a Point is quarter in available our presentation and IR results. Chief morning www.turningpointbrands.com. Efremov; we is the also Graham and the This Officer. covering Turning are release at will Yavor on a on Brands’ the

Now discuss progress turning to Page against and X, operating our in plans. this strategic call our we and provide will our on consolidated our perspective results segment

press I to factors your attention risk customary, the forward-looking in the our is filings and and direct and in release Exchange Commission. with the of As today’s Securities discussion cautionary statements

reference management we found can financial On why reasons earnings will These call today’s useful provide GAAP in certain the to and be information. measures believes they non-GAAP that with reconciliations along today, measures. release,

would over, new our Yavor Turning CEO, the introduce to now like Efremov. slide I

Yavor Efremov

like I we Thank can on Q&A. to more would this brief you, allow Louie. for so time

company Brands. in line with can position. would frontline the in MST our started on of followed to the a on another excited MST the how First, Tennessee on and I week Florida was lead how by [ph] sales That exactly Dresden, tell and my LA own and two spend working as was side in [indiscernible] in spent and as second a to September the by week one in production Louisville. our rep about doing August on center Then rep sales or in July July, segments trainee, a a departments the with me. followed van made plant offices. the QX joined product to some own I stores about then in in I of the weeks of days week and Turning all few is and by capacity my different different seeking of depending in in of in week am the trainee each proceeded like I Louisville. XXXX of state and I most Point packaging our I I Board job a it opportunity Miami spent then was of visiting in TSM. working result as a fulfillment either because made a the

of financial and I time organic business with already management, a a well ton why Undercover the to work a It goes also the they reviewing as what format, how employee the continued board but the company's good is and inorganic spent performing for position. current meet each without members, do is that Throughout I the also answer they I I and do with performance and not that time, have locations was in of Given significant in spent nature took understanding potential which did Boss that witnessed job. time every has growth, there, those individually and very have saying it. and

price. not organic cap company flow and growth though currently metrics small tobacco as like in are substantial reflected We our is that even viewed generation, our are a cash solid free and share

from do are a on move perspective. balance and impressive end, looking discount. we flow, a are execute To To that strong things two model, solid plan. cash yet strategy brands a we and the and to with where us Number towards sheet we have much that solve diversified. heavy trade one, at have larger place We that, provide a we to more

and in Stoker's again invest the is, has our to ways. we EBITDA business perform Zig-Zag in business are looking current line despite our job the release, pressure been, in stated yet remains we to NewGen. guiding are from in in growth stay Continuing will press targeted to and As and one. solid momentum, with maintain in To

us a brand. will as more in You invest Zig-Zag see

launch have We started Zig-Zag and of area. in do already more Studios to that with the that expect

efficiencies. for since. IT see and as upgrading will something in invest the infrastructure, summer, need to to You us our systems drive identified we levels been in order working to a it our ERP including ever over modern prepare is substantial have This

cost by a implementation an coming the currently ERP that a four typical are the with in and additional scope from from launch we integrating is summer. a from ERP accounting cost benefit in we implementation, get big a savings benefit of actual savings have prior note, consulting systems IT the acquisitions. On of efficiencies, ERP without financial the This and spending side of inherited We arm resources. we to an to this additional new firm expect will addition

minority prioritize actively acquisitions going something two will capital I we we will strategy the In never, one, in out regard, get for perhaps Number learned that and stakes with forward. to a we that like items. will have status. clear that important, of not be help cap on pursue. investment say most no would Second, us that will small hunt control not is but to I is never

compelling that I infrastructure let perspective. well value undertake through results. assure we deliver would we With looking gotten will for time together, turn will right seven back I and that like would Louie the patient. our find provides go when organization. outstanding size. be the our true yet another in months quickly over sometimes to them thank deal a it is into That be that, you it find further have that to and me capital organization shareholder six, to platform inorganic your me Liberty, of Putting like learned to welcoming I believe the at to cautious a the and with and In deals takes to all only you're it sometimes specifically When deals and know timing, the we organic last it. from I terms employees strong delivering over growth. to transactions I for invest handled appears both and quarter to

Louie Reformina

Thank you, Yavor.

primarily Page in sales growth previous relative our due This to decline by to points X, in implementation. NewGen. million of led is line with basis Zig-Zag. and write basis $X our XXX which product to or EBITDA was without of was increased the within without Zig-Zag previous This due million in to expenses Act segment write mix million each gross downs Adjusted and expectations NewGen. QX down million the down primarily down inventory and Turning million by points from freight offset Stoker's overview, at were consolidation performance inventory strong to $X margin the XXX segment down the and is the of $XXX year guidance TPB year-over-year $XXX Canada. PACT consolidated $XX was with year-over-year, Zig-Zag in above Adjusted reserves

Page have consolidation in [indiscernible] Zig-Zag Turning and with our X.X% sales XX.X% $XX.X growth Wraps Zig-Zag without now would would Canada. grew for mix. been TPB million to year-over-year XX.X% X% from XX% COVID-related Adjusted quarters Growth quarter have in much of products. headwind the a to X, price business three headwind from XXXX. Wraps average fourth due was a been COVID-related a the stronger. back-order On with for from revenue million year-over-year the to our year. of in was fill first QX basis $X consistent of down Wraps volume

they us quarter, in to as those expect we be Zig-Zag wraps reintroduced the for products and introduced Leaf Hemp tailwinds During Natural XXXX. ramp Zig-Zag markets limited wraps and in

a U.S. XXXX. growth of up doubling cones Papers E-commerce in than up sales. e-commerce X% X.X XX% strong with sub-segment was more times of paper and Our & driven by E-commerce and was expected now business year-over-year

million consolidation was margins excluding margin earlier QX category, recreation DBW and basis higher which the would market large which XX% category sales $X share, only opportunity of of partners anecdote, and with limited brand two the in launch The and points cones contributed and million in point markets. the contribution $X business, million $X.X year. measured paper product of for billion Zig-Zag strong paper our X.X paper number with market per the XXX measured growing receiving with million year was Wraps coming the from a its quarter category during third like operating than in of previous Zig-Zag Unitabac marketing with which years basis also a the number year. majority adult the basis a sales edition times during paper the the Natural showed launch cones consolidation been QX. decline with from to this the the have e-commerce audience the acquisition in year-over-year. at driven by up one paper wide subcategory Wraps organic XXX by Margins in which grow through encouraged Canada, cigar also and XXX year-over-year carried one videos, in from to an Cones e-commerce during Zig-Zag growth partially also of The the introduced was were remains the to the MSAi by which The acquisition Studio income growth cones. cigars one the our decline December tripled declined our Zig-Zag base of launching in years We with million and set margins, acquisition. receiving XXXX. The X.X%. major during comps collaborations XX.X% into of $X.X the decline. being brand. of a variable have points, revenue after the touched old [ph] The the down given Cigars than in remains lower accessory to more tough added the been later points that quarter DBW have Sales assets has growth continue by Canada, of products, declined MSAi concept lower the TPB had quarter. marketing We tripling revenue quarter excited Canada nonexistent were share. of would XX.X% up of exciting biggest margins provides was growth stores is back-fill Zig-Zag Canada to high the large of premium brand an is in low Gross $X.X initiatives sub-segment. look the re-entry products TPB and in due TPB to [ph] in XXXX led reception in The more contribution grew reach. with in of overall the MSAi Others quarter. As in the of TPB business during Canada consolidated driver $X.X now offset or apparel Leaf manufacturer cones the XXXX, ago, our margins. forward

also segment. a for through We to our from we quarter improve Canada and operating segment expect in fourth million to XXXX. loss consolidated be which fastest our Zig-Zag growing $X.X Overall TPB continues the income of accounted XX%

XX% Turning sales were price mix. while portfolio we $XX.X Page earlier. the Stoker's as represented our to according with the quarter, products of from grew was products. now million grew X.X% share X.X% a sales and volume The from XX% up X, year to XX% increased growth quarter X.X% MSAi. X.X% quarter basis in the during X.X% Stoker's and net Stoker's our MST revenues Net up for points category the to X.X% XX in to down

runway which in X% still down to TPB in points basis according XXX volumes, share number and of the Stoker's year MSAi. category. growth. which provides one X.X%, outperforming Chewing for the brand now was XX% Chew tobacco at stores to Stoker's quarter the declined previous from remained stores Our fourth with industry the long X.X% selling a XX.X% of in the share gaining category chewing representing

placed secular shift business into value as going annuity tobacco stream the a of provide brand, leading category stable value Stoker's well us the and with forward. flow to With continued a cash chewing positioning the is

XXX margins stable despite across segment. and previous from quarter, points shipping were the gross year, basis by Second, by the promotional to expanded margins driven higher price Operating XX.X% costs. the during

manage to $XX to with continued million. XX% we previous products, year a sales disruptive NewGen environment from the the through X, Page to Turning down

the Our XX% base of due alternative to implementation distribution saw a Act dynamics environment acquired PACT distribution from with which from resulting the twitch the business USPS decline regulatory and market the infrastructure. along the

BXB as as Adjust vape during margins was we disruption. regulatory business basis down products quarter impacted our products downs of reserves, Other NewGen XX% the write by were were $X other XXX and million the the inventory down points that industry gross Other mostly to were related by took for the to impacted customers the NewGen Our for lower last for USPS received to gross we the partially December, lower segment to and income infrastructure million offset qualified distribution $X.X variable operating in shipments. down Encouragingly regulatory BXC Adjusted exemption dynamics. was the continue profit, due SG&A. shipments our which by mile we build was

Now continues to the process, in as the in myself the await being FDA. PMTA industry progress

in term We the presents detail all have facing opportunity for currently the regulatory challenges operating the talked vape to still Ultimately, and ability in believe past with about calls. us in we the our the our short are distribution an challenging that in business, environment. we is industry long-term navigate size, given environment

to a capital a and liquidity, January. with PPP ended in dosist. cash to recorded of a $XXX of $X.X million We deployment. We over $XX.X balance we million flexibility shares of impairment the investment now from liquidity, our on quarter Turning million forgiveness quarter Page $XXX of million and in repurchased the sheet $X.X million but sheet X, balance providing the gain $X.X on available related the loan, our recorded during and million

We convenience channel stores, our Lighter product presence very player the strong Wraps in including size in lack is to number for presents is in $X lighter U.S. which and Europe. large and with CLIPPER opportunity partnership market a is now number for CLIPPER a Agreement. distribution strong The channel, preferred TPB alternative strong in in is number us market. growing with Papers This lighter several have cannabis but currently partnering roll-your-own million revenue morning the it's in is Flamagas announcing a developed opportunities reusable billion Lighters cross-selling underrepresented markets in and wholesale and world, markets equals of in Zig-Zag the channel. one of in the the with retail in presence $XXX playbook the approximately exclusive the our Turning in share alternative believe paper for lighter release store share distribution. with it other in given strong CLIPPER CLIPPER rolling also small currently which two revenue, Canada. underrepresented a distribution. X, CLIPPER with market roughly of the with but overall X% approximately that companies press one in convenience a had presence this U.S., Distribution the by their but the in Slide other issued is U.S. has and we the success currently This

it in We expect with QX second late the fast CLIPPER the through Zig-Zag year gradual selling the a of ramp products half in and we'll segment. report

markets demonstrates our and was expect meaningful to as believe contribution our do long-term testament tremendous the for a partner a opportunity currently we the products. choice Furthermore, and value we our of be decision and is While to deliberate of of reach Flamagas the the a of distribution profitability infrastructure, our by ability year, carrying addressable complementary a for company. TPB Zig-Zag is not expand to by this

or our guidance. for landscape, and limited our sales With to $XXX products limiting Zig-Zag that we PMTA at top million, growth XXXX, to are we $XXX products line X Page backdrop, regulatory With segment. midpoint. XX% the guidance Zig-Zag to million the which project Moving Stoker's represents visibility around of

Our of base business orders. outside have Canada depending of fluctuations Canadian TPB timing on quarterly can

million $X.X year orders. XXXX as business XXXX. Just in our full our base revenue due was was million $XX.X QX of timing a of on reminder, to

tough of QX. as So reminder, we a million will headwind comp a face in $X approximately

$XXX that growth We with in QX. midpoint. million, Stoker's QX last a product represents trade Wraps build in pulled sales a which from $X the of X% to million $XXX also had forward our of million inventory pull in year business

line consolidated XXXX, the EBITDA products year volatility anticipated in in generate fiscal with current is segment. Our despite expectation NewGen to

of new in in we logistics the ramp Zig-Zag, be continued the and the as in With as products half. half the year than expect stronger well improvement first to infrastructure, vape our second

million expense and Our other of compensation expense of incentive expense projections stock million. $XX.X include cash $X interest and million non-cash and GAAP $XX interest of

tax for With gets We further CapEx value regard drive to CapEx, underway. effective we be the increase reviewing to can projects as expect organization. that we will the income this projects between our expect XX% but an year, are do rate XX%. in believe give We currently to color

those like phase implementation call through like the upgrade stages, moving you process detailed mentioned stages involving manufacturing project for With a that, a late-stage to Yavor the of in return where of with completion ERP is today, attractive very from begin this currently today with call One in later year, projects design planning questions. I'd the next for thank we'd last are costs into improvement planning and year the include year The we planned it next with carrying the to to participating into likely now year. open profile.

Operator

Azer Instructions] ahead. from Cowen. Vivien you. Please first Your Thank comes question go [Operator from

Vivien Azer

of some My on on the but comment your cannabis. pending catalysts? or company Thank the specifically do with meant square understand to you. square was congratulations philosophy. stakes two of cannabis could and minority those hoping scale Good for that M&A, we of around has of How morning, first that is concepts? role. kind I the more large the priority taken the is M&A new legislative rationale appreciate you I that Thanks. less about question, Are a kind please, we perhaps historical

Yavor Efremov

if Yes contender of quite it's think pick this to is will you a and multiple out come clear will, so, quite hard cannabis winner. There's in contenders, a evolving directions. pretty no rapidly I At stage, few this.

deploy to shareholders being a So quite existed in have and cannabis money situation. portfolio risky of brands is to going then some today and yesterday would legalized were fully perform our capital. I on and yesterday well gone, a think fashionable way said, that of putting out a lot me That

whatever were to legalized, we a existing strong, we'll ever So position think our if extent be. be say assets well say, attractive I That are never, look, the specifically and I'll if developed and and will where need cannabis to exactly where that in never I we control the of size make invest one to and around is look. heavily do as cash is and large brands, and being cannabis criteria, and of said, see of brands think best all meets invest something the we we taking gets leading in and legalization I potential in they hard the of our are terms flow, be kind are think the thing to addressing we're they that in But in. perceived kind can current I a number sure going category

Vivien Azer

helpful. and in you. Any And not it still question I and your Thanks. be and the guys on quarter, in any a be that would lumpiness adjustments simple first there other your certainly fair helpful, color ERP understand. given be back loaded? That's that any more second planning is the ERP Thank results. undertake, disruption understand is be endeavor my obviously, implementation, of to some to build really you business can kind to movements shouldn't drive safety stock around the that's Louie, that phases, would too. will inventory making an to half you're implementation in

Louie Reformina

I in the we're early I that's Yes, fair. mean, think process.

phases, really As don't still the stages the in mentioned, at late begin at in that we're implementations and beginning the of we're expect so year even Yavor until the implementation. to we scoping

Vivien Azer

much. Thank fair enough. you Okay, very

Operator

Susan go from Your ahead. Please from comes B. Anderson Riley. next question

Susan Anderson

quarter. you're are or that Nice growth such out to was to, job products the versus you growth? new the then morning. as could Zig-Zag I pricing major or guiding there be year if for market gains and also for maybe just going good break this industry wondering there Hi, volume drivers expectations on share the

Graham Purdy

growth we're for looking me, to mostly mean, let drive bindings. our Yes, Zig-Zag through I

a combination, of a market. got the that mentioned Wraps are launching we the We reintroduction in we our products it's new cigars Natural of the reintroduction products. of Leaf, So number and

and to in So alternative see we gains, increase we expect those penetration we channel. to market especially the for to continue our be big growth drivers share as expect

Yavor Efremov

gains pushing looking add look, before, And what in prepared to in the just we more to are kind of invest to mentioned I Zig-Zag just, is Louie the to we a remarks saying, that as this behind we price not of is take this Yavor, we is volume. that the and my to happen volume bit out of if don’t question, that mix, brand one the overnight, like initiatives site. and but other from take of material. specific Zig-Zag any best like way out, they will Studios where also brand, of things we time the taking And to to little hold, building It obviously was are encouraging do the can and about are the are there think Zig-Zag of you Zig-Zag Zig-Zag. in the coming thing we majority vast think price continue invest that's We're is

Susan Anderson

that's first that that Got say, Wraps Zig-Zag then guys how you And did was? delayed to going it, said were think the helpful. say in be you quarter, did I much you

Graham Purdy

the a to that will in tough Wraps a so was in due No a million year, what mentioned year. QX the we forward we side but QX, a bit mentioned into QX out on and as us year, pull in impacted the headwind there we was quarter, forward $X pull trade model for QX tailwind this we of of is a QX a it inventory had that last from be load

Susan Anderson

lastly, And that complete? then guys expect last on I guess fully network, just mile the to you okay. Got when it, I do have guess,

Yavor Efremov

PACT to complete, Look, try the say on baseball, we're little we a it's insight give to Act. working it. started I'll preparing very you tough of hard bit

it as I year. tests, of came ran soon starting we April, a number May think, of As out, in last

time, the kind been since. test earlier for the reason. we're we we much would run testing our of taking prohibitively essentially, have network we've been shift The full no effectively a at to is expensive, taking all our been were of way of carriers now which would have shipping and ever using only off So hit to

because out over you individual the It's to we're well. we're a talk We're carriers. quite doing completion kind So give big date, a we've build for shippers continuing now. done to for as obviously, to of this local difficult the built year, XXX% mile well, to been most is last by well out of year continuing a

So to along. that's come a much harder thing

the I believe obviously a out. progress over made, to how place time now, not be going great but understand work happy a long-term potential. the as think with kind vape lot right that to it's we've do is of I'm highlighted I I

all can we're tell a So this focused, hard it. I I've you on been times Miami on is, very spending of to lot I'm and working three year. vape. time very We're

I've been going there So on there three back times, a I'm whenever in of lot two weeks. spending time We're it.

it. that We of don't hell we'll get are corner know focused ever of XXX% States, each close we on every sure but full pushing United to as if get I to and can. a to as we're the as

Susan Anderson

Great, Thanks luck so year. very much. Good this helpful.

Yavor Efremov

you. Thank

Operator

Your go next from ahead. Lauriers Please Eric Craig-Hallum. question Des from comes

Eric Des Lauriers

Great. and Thanks quarter questions for on great my taking a here. congrats

Yavor Efremov

you. Thank

Eric Des Lauriers

with I share. that that was leverage a just of Thanks. color sort how relationship into give on on channels? and more to bit to could hoping guys you're you a expand more bit And get CLIPPER's, you us alternative alternative looking distribution then more

Graham Purdy

Yes, mean, opportunity go a it's so shops I to you'll find and you head Lighters. if for the because us great CLIPPER dispensaries

So we with the Zig-Zag they've presence channel, where got strong are underrepresented. alternative in very

of we selling channel essentially great in now must a with alternative that Zig-Zag. point piggyback it's a for have carry We can kind us. So item a the

United limited States. flip convenience in the they've On sold the presence got most stores in lighters the side, very where are

the think our strength, huge product able our into what great measure us a a for of kind is to channel. opportunity to which be is take is that the So we C-store,

Yavor Efremov

excited get, we mind sales Yavor, from to bold our market force with brick people a just and competitor that, in offers thing And the inundated in I to it’s found wouldn’t about very say pretty beat and brand. distribute their is network. obviously and have selling Obviously, mortar. with add leading strong their their have in CLIPPER largest inundated digital we ways partnering a stuff much home They Keep and them. to but we're through to about it's

was offers relationship partner. there. XX% with, of this deal success channel. look the because where and good we We so to But people stuff. omni They're about we're one to So right much easy to it it declined sense was made forward distribute the

Eric Des Lauriers

on just color. a but here, the of take this and maybe outlook of And appreciate I necessarily than year-to-year there's quarter-to-quarter a you step more bit then that of hemp, guess kind understanding can is that year, I back won't Okay, last wraps of year volatility cigars the repeat type if cigars a and quarter-to-quarter kind a this question you kind us here, and IP type that a, to what you but and wraps? in cigars products help guys we Thank bit ramp now can the help you're belt, get and ramp sort your us here, understand a of expect under wraps frame of looking just cigars in have should that you. of these out of the just

Louie Reformina

of let questions there's the mean I wraps and Sure, the Graham piece two answer separate it. parts take cigar I'll there. will

we're excited the really, new that the the and category is natural we're today of not, right And the underrepresented So now. a digit wraps about. growth growing. in within wraps, we've leaf one then overall the percentage products, of market which two in wraps double is side, It's pretty on game, got we're

We product through wraps that to well. our got reintroduced Leaf we ramp Zig-Zag for year. the Natural expect product a ramp us year We've brand hemp under expect also that to late we the as last

Graham Purdy

got business, to two you've With tale of hey, a is cigar Yes, it the there. Graham. respect cities

HTL business. positions in Natural When leaf you've you we think the I the the in it or well segment. the sort cigars got back cigar look last the Leaf of marginalized where deal that HTL action did year, with is cigars. So at units us of The tobacco is energy

the at our is brand. launch to As last leaf under natural plan this quarter, exact mentioned I'd on the call, of end this cigars

with So we're complement pretty mentioned natural know, you wraps leaf energy then leaf about the Louie sort that natural leaf natural the has, excited cigars. and of

building sort So of excited leaf about natural out we're as we beyond. portfolio, think about and our pretty QX

Louie Reformina

cigars market Yes, of we're markets we I really opportunities the is is, addressable what the the years And of the last another of been think have Zig-Zag, that overall, cannabis when you the of doing think within of edition kind that in largest and playing front the extent increasing couple about of addressable we've accessories being that in over CLIPPER portfolio. kind just us.

Eric Des Lauriers

that's So all you much. very helpful. very Thank

Operator

[Operator Please comes from go Instructions] And ahead. next Gaurav Jain from question your Barclays.

Gaurav Jain

Thanks I questions morning. here. lot. good Hi, few have a a

trading one free larger plan about a on million. flow and approximately company, is, make is times cash much is Yavor So XX your $XX into the the number TPB to your stock at

to either equity So flow become you free cash or how much your company? use do a bigger

YavorEfremov

both before. It is before. Liberty you use at of and on the about and target Liberty time I've acquired going dependent done billion vehicle $X be has been have deal $X very I combination the to Yes, you after. billion much the at the that I acquire it, had cash did structure. look Formula an done and think it on when to One it of it used

how I a to that and does am happen? also investors. and So investment lot some outside structuring With of talking

first depends the all I for So But investment never. I've my At it setting to not the in say structuring, It It's should target and not out are that the with structure. our the I'm Charter it happen showing Formula capital for a from $X.X stranger not bigger be cash calling strategy. doable. and and with of above outside twice size. to Again, same the a the mean Again, business. on our with that high done millions them it will time, no proper raised to capital that's right a outside minority proper going is quickly, I'm yourself. One. billion in on showing buy on target, be explaining primarily that billion complex not structuring. them people, $X overnight. But can But from done showed the depends interpret it and stranger we're small done structure, We structure. raising say sights hundreds I've raised a preference I before. some comments I the we of never of situation, Are would than if it easy. fairly for doesn't who acquisition? is right target possible be to much our to up. somebody the investors. depends

Gaurav Jain

and media Standard General tobacco? be which almost Would acquired downplaying like be that it, focus? it and today it a company. industries be read would or could Would guess, something are question, your Vivian's I to be it has just Sure, I cannabis cannabis you

So of outside we about point turning it be how ramps? could think completely

Yavor Efremov

is something sheet to need us means and enhance bring to We believe growth and is of all are of completely don’t unlikely want of say would only to can be in diversified, in more I larger areas There to we a buy the point the are space it's an cash it. going above. find highly hey, would to just, you tell that us and therefore, balance investing more outside can We what capital a we it. that there's scope. make than our decent be see flow; that going story, you story opportunity. growth kind me, that preclude we our tourism. for behind you, to Anything I

running the So, there's allocation. sense. all, be makes two I There’s got job rule. it one business. to logic capital that that no be And cadence number to the that my or is, is to do job exceptions to [ph] above continues number way Job some

a way else, capital shareholders. to be in allocate And drives to diversify. it So, shareholders. tobacco I would so to as or in Again, long if to driven value happens is preference our value that be be so that someplace will it,

pay. checks So, to will But multiple boxes again, be the out bar higher the terms tobacco if that that of to in for plantations. willing in it is the going we’re result all

Gaurav Jain

I sketchy, argue and I of has been acquisition, Turning this and that if NewGen it were lot through of actually Point the value. led was built its quite so of prior look acquisitions Brands performance shareholder segment, at has And would which to to the destruction Sure. a

will So, then before help shut look price you would also strategy, M&A to past of making, stock to transactions on businesses which loss some these higher do your deals? down and of some the you a are or multiple, some which embark unwind you get

Yavor Efremov

Sure.

not any So, M&A XX have tell are actually it, I lot true. and average let companies of I in seen company this they that’s a There quite or dig two us, done batting are who that of. do XXX% me you that, parts, you if explain for There has that know see have will. it, nobody for people have M&A, you into I if years,

or which differentiate no temporary recovers. just when where comes in So, want headwinds, point, where, to an already that’s been we're to which I it something future situations which asset to situations in your unwinding undoing experiencing done, between are severe agree there's I with

on being industry, is the about that storm. given time because like sits. harbor bit team NewGen are mind well our To in I've bit, Vape the by I internally, why obviously my that's harbor, segment managed a the And operation. mind. ships, everybody's little analogy lot talk That's said, for they management that's the it's a where is little which me and is, a I've spent a a there's in that a let solid, Vape run, the our beaten describes of Like big, Vape anything well group of lot Miami. ships So

to you supportive that not, plenty history in. they're of given very that's we is a doing have good taking that's do needs over, there's we're cases We're position be be companies, that of believe of We're that or there going is position the industry think to of of guy ships that be and the same vaping guys. storm page in and it a happens, they're to are going a like a not point an the to USPS. needs with It where and to industry recognized remain surviving been I We've beaten But think to is the anywhere. harbor once going other are regulator. But outstanding ship job time the the over the going no they're as storm by and very be spending lot in be guidance It's the a to some of I be when the question in they going look good stay it. fully like it mind. other any if situation the much question inside about good at being to handful Whether here by FDA. storm, one the happened. I damage, the been already an the in We're that my on has good regulated. a

You off with bankruptcy can and a you look look in written and my on can at experience, and John own verge in was phenomenal of stayed and asset. everybody at went -- patient Malone and serious ended was extent up the which had

after correct the Charter and the You out is was that more cable, to can was my than best everybody a time own. to when to coming look there management Charter, Charter five and one of at it world team end turned is thought the still assets mind an that

position we to do So, think question not settles? much internally in are fact so future question settles, now? better The much-much that the relative better when that like is other and the going tough the is do to spot, a dust the I competitors. when look what does in And position what much dust we a the be we're

Gaurav Jain

last if quick And I Yavor. in lot, could question. a sneak Thanks just one

So off share table? buybacks are now the

Yavor Efremov

to of the the completely taking pedal. not pedal are they say are we kind were we be way that foot I nor table. are wouldn't off the that all pressing going the say off gas down, wouldn't -- gas I our they

do I the on not buyback. never as flexibility what think we will maintain view appropriate, but we saying are to we certainly

Gaurav Jain

lot. a Thanks

Yavor Efremov

you. Thank

Operator

call this no the time. I are back will over at presenters for there closing And further turn to questions the remarks.

Louie Reformina

we'll on everyone, you, next time call. and next see our you Thank

Graham Purdy

Thank you

Yavor Efremov

you Thank

Operator

This conference call. this concludes

now You disconnect. may

Turning Point Brands (TPB) 22 Feb 222021 Q4 Earnings call transcript