Turning Point Brands, Inc. Q4 FY2025 earnings call

• CEO Graham Purdy mentioned revenue increased 29% to 121 million for fourth quarter, adjusted EBITDA increased 14% to 30 million. Initiated 2026 modern oral gross revenue guidance at 220 - 240 million and net revenue at 180 - 190 million. Focus on building lasting consumer relationships with front - loaded investment. Net white pouch sales increased by 266% year - over - year, gross sales increased 337%. Expanding freeze distribution to larger regional and national C - store chains, ALP starting to appear on bricks - and - mortar shelves. Key investment initiatives include reallocating sales and marketing resources, increasing sales force headcount, improving online presence, ramping up investment in chain accounts, pursuing brand enhancing partnerships, expanding to international markets, and building out U.S. manufacturing. Stoker's segment portfolio performed better than expected, with net revenue increase due to modern oral revenue growth. - Summer mentioned continuing to make significant investments to support go - to - market strategies, expanding efforts for free, seeing early benefits of new sales and merchandising tools, recent event at Madison Square Garden for brand awareness. For ZigZag, advancing rollout of natural leaf flat wraps, supporting trial of legacy paper products, advancing brand into lifestyle platform with new apparel lines. Launch of new flanker brand Stokers Proud in Stoker's segment.

Fourth quarter revenue increased 29% to 121 million, including 41.3 million in modern oral net revenue. Adjusted EBITDA increased 14% to 30 million. Zigzag's segment net sales were down 13% year - over - year to 40 million for the quarter. Stoker's segment net sales increased 70% year - over - year to 81 million for the quarter. The Stoker's segment now accounts for 67% of consolidated net sales. Legacy Stokers brands increased by 9% year - over - year to 39.7 million for the quarter, driven by continued share growth in MSD that was partially offset by anticipated declines in loose leaf. Modern oral nicotine pouch net sales, free and out, were up 266% year - over - year, achieving total revenue of 41.3 million. White Pouch now accounts for 34% of consolidated net sales, up from 12% a year ago.

• Initiated 2026 modern oral gross revenue guidance at a range of 220 to 240 million and net revenue at a range of 180 to 190 million. Expect first quarter 2026 consolidated adjusted EBITDA to be between 24 and 27 million. Effective income tax range is 23 to 26% on a go - forward basis. Budgeted CapEx for 2026 is 4 to 5 million, exclusive of projects related to modern oral business. Expect to spend between 3 to 5 million for the full year to supplement modern oral PMTAs.

Q: Regarding investment opportunities, could provide more color on sales and marketing opportunities for 2026 and how to think about EBITDA guide.

A: Andrew said they are investing in sales and marketing and preparing for ALP's bricks - and - mortar launch in Q2, need to invest upfront for successful launch.

Q: On domestic production, expand on outlook for the year.

A: Expect to qualify lines in next couple of months, used Indian partner, U.S. will supplement growth, expect margin enhancements towards end of the year with focus on inbound freight optimization.

Q: On ramp of modern oil investment, timing and sustainable rate.

A: Investment will be lumpy through the year, modulate quarter to quarter.

Q: On store count ramp for ALP, benchmark to free's launch.

A: Incredibly excited about Q2 outlaunch, store count growth likely similar to early days of free launch focusing on areas with free distribution.

Q: On free distribution opportunities in 2026.

A: Still a tremendous amount of store opportunity in chain environment and independent customers, expect continued store growth though maybe lumpy.

Q: On innovation in the category.

A: First focus on winning with existing products, confident in flavor profiles, moisture level, see opportunities for additional flavor options long - term.

Q: On nicotine pouch consumption growth, existing consumers vs new users.

A: Both existing consumers using more and new users entering the category provide growth factors.

Q: On tax landscape within Modern Oral.

A: Taxes impact all products in a state, playing field is level, anticipate taxes will continue to grow like existing tobacco products.

Q: On revenue performance between free and ALP.

A: Both brands performed within expectation in the quarter.

Q: On learnings from first year of white pouch rollouts and distribution balance.

A: Learned a lot, there's still white space for both free and ALP distribution, focused on all above including more stores, more shelf space, etc.