Turning Point Brands (NYSE: TPB) grows Q1 sales but profit and EBITDA decline
Rhea-AI Filing Summary
Turning Point Brands reported first quarter 2026 net sales of $124.3 million, up from $106.4 million a year earlier, as growth in modern oral products offset weakness in legacy lines. Net income attributable to the company fell 19.0% to $11.7 million, and Adjusted EBITDA declined 6.5% to $25.9 million.
The Stoker’s segment, which represented 70% of quarterly net sales, grew net sales 48.1% to $87.6 million, driven by triple-digit modern oral growth, though its gross margin contracted to 54.0%. The Zig-Zag segment, 30% of sales, saw net sales drop 22.4% to $36.7 million while gross margin improved to 57.1% on product mix.
SG&A expenses rose 53.2% to $55.8 million, reflecting heavier sales and marketing investments in modern oral and higher freight costs, which compressed operating income to $12.5 million from $23.2 million. As of March 31, 2026, the company held $192.4 million of cash, net debt of $101.4 million, and total liquidity of $265.0 million.
Positive
- Strong top-line and Stoker’s growth: Q1 2026 net sales rose to $124.3 million from $106.4 million, with Stoker’s segment net sales up 48.1% to $87.6 million, driven by triple-digit modern oral growth and reinforcing momentum in newer nicotine formats.
Negative
- Margin compression and profit decline: Net income attributable to Turning Point Brands fell 19.0% to $11.7 million and Adjusted EBITDA decreased 6.5% to $25.9 million as SG&A jumped 53.2% to $55.8 million and Stoker’s gross margin dropped from 57.5% to 54.0%.
- Weakness in Zig-Zag segment: Zig-Zag net sales decreased 22.4% to $36.7 million and segment gross profit fell 18.1% to $20.9 million, reflecting lower U.S. papers and wraps shipments despite some gross margin improvement from product mix.
Insights
Revenue grew strongly in Q1 2026, but profit and cash flow were pressured by heavy investment.
Turning Point Brands lifted Q1 2026 net sales to $124.3M, helped by Stoker’s segment growth of 48.1% to $87.6M on triple-digit modern oral gains. However, Zig-Zag net sales declined 22.4% to $36.7M, underscoring ongoing pressure in traditional papers and wraps.
Profitability was mixed. Net income attributable to the company decreased 19.0% to $11.7M, and Adjusted EBITDA slipped 6.5% to $25.9M, as gross margin in Stoker’s narrowed and consolidated SG&A jumped 53.2% to $55.8M from modern oral marketing and higher freight. Operating income fell to $12.5M from $23.2M.
The balance sheet remained relatively strong with cash of $192.4M, net debt of $101.4M, and total liquidity of $265.0M as of March 31, 2026. Management continues to emphasize category growth in white nicotine pouches and highlighted non-GAAP metrics such as Adjusted EBITDA and Adjusted Net Income to describe underlying performance, while acknowledging higher near-term spending to support brand building and commercialization.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Modern Oral financial
Master Settlement Agreement (MSA) escrow deposits financial
premarket tobacco production application (PMTA) regulatory
Adjusted Diluted EPS financial
asset backed revolving credit facility financial
Earnings Snapshot
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Item 2.02.
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Results of Operations and Financial Condition.
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Regulation FD Disclosure.
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99.1
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Press Release dated May 7, 2026
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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TURNING POINT BRANDS, INC.
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Dated: May 7, 2026
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By:
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/s/ Brittani N. Cushman
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Brittani N. Cushman
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Senior Vice President, General Counsel and Secretary
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Exhibit 99.1
Turning Point Brands Announces First Quarter 2026 Results
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Q1 2026 Modern Oral Net Sales increased 133% to $52.0 million, accounting for 42% of total company net sales, up from 21% in Q1 2025. |
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Raising FY 2026 Modern Oral Sales guidance; Introducing FY 2026 EBITDA guidance |
LOUISVILLE, KY – May 7, 2026 – Turning Point Brands, Inc. (“TPB” or “the Company”) (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, today announced financial results for the first quarter ended March 31, 2026.
Q1 2026 Financial Highlights
(All results reflect comparisons to prior-year period)
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Total Consolidated Net Sales increased 16.8% to $124.3 million |
| o | Stoker's segment Net Sales increased 48.1% | |
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Zig-Zag segment Net Sales decreased 22.4% |
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Gross Profit increased 14.6% to $68.3 million |
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Net Income decreased 19.0% to $11.7 million |
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Adjusted EBITDA decreased 6.5% to $25.9 million (see Schedule A for a reconciliation to net income) |
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Diluted EPS of $0.60 and Adjusted Diluted EPS of $0.76 compared to $0.79 and $0.91 respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS) |
“We delivered a strong first quarter, driven by continued momentum in Modern Oral and disciplined execution across the portfolio,” said Graham Purdy, President and CEO. “We believe we are in the early stages of a generational shift in nicotine consumption, with significant opportunity ahead as the category continues to evolve. We are investing behind our brands, commercial capabilities, and consumer reach to position us to capture meaningful share in white pouch, including through initiatives such as our recently announced TKO partnership featuring UFC. At the same time, our legacy brands continue to generate strong cash flow, providing the foundation to fund our strategic priorities. We remain confident in our ability to scale our modern oral business and drive long-term value for shareholders.”
Stoker’s Products Segment (70% of total net sales in the quarter)
For the first quarter, Stoker’s segment net sales increased 48.1% from the prior year to $87.6 million, driven by triple-digit growth in Modern Oral net sales.
For the first quarter, Stoker’s segment gross profit increased 39.1% from the prior year to $47.3 million. Gross profit as a percentage of net sales decreased to 54.0% for the three months ended March 31, 2026, from 57.5% of net sales for the three months ended March 31, 2025, primarily driven by margin contribution from modern oral products.
Zig-Zag Products Segment (30% of total net sales in the quarter)
For the first quarter, Zig-Zag segment net sales decreased 22.4% from the prior year to $36.7 million. The decrease in net sales was driven primarily by lower U.S. papers and wraps shipments.
For the first quarter, Zig-Zag segment gross profit decreased 18.1% from the prior year to $20.9 million. Gross profit as a percentage of net sales increased to 57.1% for the three months ended March 31, 2026, from 54.1% for the three months ended March 31, 2025, driven primarily by product mix.
Performance Measures in the First Quarter
Investment in the first quarter focused on sales and marketing efforts to support distribution and brand building. In the first quarter consolidated selling, general and administrative (“SG&A”) expenses increased 53.2% from the prior year to $55.8 million, inclusive of Modern Oral-related sales and marketing investments and increased outbound freight costs.
As of March 31, 2026 , ending cash was $192.4 million and net debt was $101.4 million. The Company ended the quarter with total liquidity of $265.0 million, comprised of $192.4 million in cash and $72.6 million of asset backed revolving credit facility capacity.
2026 Outlook
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Full year Modern Oral Gross Sales of $280-$300 million (from $220- $240 million) |
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Full year Modern Oral Net Sales of $210-$225 million (from $180- $190 million) |
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Full Year Adjusted EBITDA of $70-$90 million, inclusive of investment in Modern Oral sales, marketing, and trade promotions |
Earnings Conference Call
As previously disclosed, a conference call with the investment community to review TPB’s financial results has been scheduled for 8:30 a.m. Eastern on Thursday, May 7, 2026. Investment community participants should dial in 10 minutes ahead of time using the toll-free number (800) 715-9871 (international participants should call (646) 307-1963) and follow the audio prompts after typing in the event ID: 4128483. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss). A reconciliation of these non-GAAP financial measures accompanies this release. Also note that a reconciliation of forward-looking non-GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be necessary for such reconciliation.
About Turning Point Brands, Inc.
Turning Point Brands, Inc. (NYSE: TPB) is a manufacturer, marketer and distributor of branded consumer products including alternative smoking accessories and consumables with active ingredients through its iconic brand portfolio, including Zig-Zag®, Stoker’s®, FRE®, and ALP®. TPB’s products are available in more than 220,000 retail outlets in North America and on sites such as www.zigzag.com, www.frepouch.com, and www.alppouch.com. For the latest news and information about TPB and its brands, please visit www.turningpointbrands.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including our outlook for 2026 with respect to Modern Oral Gross and Net Sales and Adjusted EBITDA . Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the “SEC”) and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, those included in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.
This press release contains TPB’s preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB's customary quarter-end closing and review procedures and third-party review. As a result, TPB's reported information in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB's financial condition and results of operations for the quarter ending March 31, 2026 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB's full first quarter 2026 results when such results are disclosed by TPB in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
Investor Contacts
Turning Point Brands, Inc.
ir@tpbi.com
Financial Statements Follow on Subsequent Pages
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Turning Point Brands, Inc. |
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Consolidated Statements of Income |
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(dollars in thousands except share data) |
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(unaudited) |
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Three Months Ended March 31, |
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2026 |
2025 |
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Net sales |
$ | 124,278 | $ | 106,436 | ||||
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Cost of sales |
55,983 | 46,826 | ||||||
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Gross profit |
68,295 | 59,610 | ||||||
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Selling, general, and administrative expenses |
55,811 | 36,421 | ||||||
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Operating income |
12,484 | 23,189 | ||||||
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Other expense, net |
63 | - | ||||||
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Interest expense, net |
4,423 | 4,414 | ||||||
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Investment gain |
(151 | ) | (141 | ) | ||||
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Income from equity method investment |
(2,983 | ) | (150 | ) | ||||
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Loss on extinguishment of debt |
- | 1,235 | ||||||
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Income from continuing operations before income taxes |
11,132 | 17,831 | ||||||
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Income tax (benefit) expense |
(2,810 | ) | 2,040 | |||||
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Consolidated net income |
13,942 | 15,791 | ||||||
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Net income attributable to non-controlling interest |
2,275 | 1,396 | ||||||
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Net income attributable to Turning Point Brands, Inc. |
$ | 11,667 | $ | 14,395 | ||||
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Basic income per common share: |
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Net income attributable to Turning Point Brands, Inc. |
$ | 0.61 | $ | 0.81 | ||||
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Diluted income per common share: |
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Net income attributable to Turning Point Brands, Inc. |
$ | 0.60 | $ | 0.79 | ||||
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Weighted average common shares outstanding: |
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Basic |
19,214,389 | 17,795,243 | ||||||
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Diluted |
19,474,877 | 18,249,306 | ||||||
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Turning Point Brands, Inc. |
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Consolidated Balance Sheets |
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(dollars in thousands except share data) |
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(unaudited) |
| March 31, | December 31, | |||||||
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ASSETS |
2026 |
2025 |
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Current assets: |
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Cash |
$ | 192,439 | $ | 222,760 | ||||
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Accounts receivable, net of allowances of $228 in 2026 and $206 in 2025 |
27,473 | 25,726 | ||||||
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Inventories, net |
129,580 | 107,989 | ||||||
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Other current assets |
68,712 | 60,675 | ||||||
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Total current assets |
418,204 | 417,150 | ||||||
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Property, plant, and equipment, net |
40,584 | 36,247 | ||||||
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Right of use assets |
15,409 | 14,480 | ||||||
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Deferred financing costs, net |
1,019 | 1,180 | ||||||
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Goodwill |
135,974 | 136,097 | ||||||
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Other intangible assets, net |
63,731 | 64,042 | ||||||
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Master Settlement Agreement (MSA) escrow deposits |
29,786 | 29,887 | ||||||
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Other assets |
67,390 | 64,667 | ||||||
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Total assets |
$ | 772,097 | $ | 763,750 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 35,889 | $ | 20,420 | ||||
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Accrued liabilities |
35,394 | 54,587 | ||||||
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Total current liabilities |
71,283 | 75,007 | ||||||
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Deferred income tax liability |
8,363 | 8,289 | ||||||
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Notes payable and long-term debt |
293,885 | 293,625 | ||||||
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Other long-term liabilities |
2,034 | 4,138 | ||||||
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Lease liabilities |
11,043 | 10,708 | ||||||
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Total liabilities |
386,608 | 391,767 | ||||||
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Stockholders’ equity: |
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Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- |
- | - | ||||||
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Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,824,677 issued shares and 19,367,534 outstanding shares at March 31, 2026, and 20,589,527 issued shares and 19,132,384 outstanding shares at December 31, 2025 |
218 | 216 | ||||||
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Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0- |
- | - | ||||||
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Additional paid-in capital |
205,542 | 203,627 | ||||||
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Cost of repurchased common stock (1,457,143 shares at March 31, 2026 and 1,457,143 shares at December 31, 2025) |
(47,637 | ) | (47,637 | ) | ||||
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Accumulated other comprehensive loss |
(2,090 | ) | (1,563 | ) | ||||
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Accumulated earnings |
209,730 | 199,661 | ||||||
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Non-controlling interest |
19,726 | 17,679 | ||||||
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Total stockholders’ equity |
385,489 | 371,983 | ||||||
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Total liabilities and stockholders’ equity |
$ | 772,097 | $ | 763,750 | ||||
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Turning Point Brands, Inc. |
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Consolidated Statements of Cash Flows |
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(dollars in thousands) |
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(unaudited) |
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Three Months Ended March 31, |
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2026 |
2025 |
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Cash flows from operating activities: |
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Consolidated net income |
$ | 13,942 | $ | 15,791 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Loss on extinguishment of debt |
- | 1,235 | ||||||
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Loss on sale of property, plant, and equipment |
- | 40 | ||||||
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Income from equity method investment |
(2,983 | ) | (150 | ) | ||||
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Gain on investments |
(15 | ) | - | |||||
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Depreciation and other amortization expense |
1,753 | 1,309 | ||||||
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Amortization of other intangible assets |
306 | 307 | ||||||
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Amortization of deferred financing costs |
421 | 448 | ||||||
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Deferred income tax expense |
96 | 1,716 | ||||||
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Stock compensation expense |
2,938 | 1,664 | ||||||
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Noncash lease income |
(807 | ) | (380 | ) | ||||
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Changes in operating assets and liabilities: |
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Accounts receivable |
(1,941 | ) | (5,539 | ) | ||||
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Inventories |
(21,700 | ) | (8,310 | ) | ||||
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Other current assets |
(8,062 | ) | (5,399 | ) | ||||
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Other assets |
(108 | ) | (1,268 | ) | ||||
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Accounts payable |
15,637 | 15,433 | ||||||
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Accrued liabilities and other |
(21,736 | ) | 512 | |||||
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Net cash (used in) provided by operating activities |
$ | (22,259 | ) | $ | 17,409 | |||
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Cash flows from investing activities: |
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Capital expenditures |
$ | (5,139 | ) | $ | (2,185 | ) | ||
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Payment for equity investments |
- | (2,783 | ) | |||||
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Purchases of investments |
(2,283 | ) | (714 | ) | ||||
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Proceeds from sale of investments |
2,351 | 500 | ||||||
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MSA escrow deposits, net |
5 | (48 | ) | |||||
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Net cash used in investing activities |
$ | (5,066 | ) | $ | (5,230 | ) | ||
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Cash flows from financing activities: |
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Redemption of 2026 Notes |
$ | - | $ | (250,000 | ) | |||
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Proceeds from 2032 Notes |
- | 300,000 | ||||||
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Payment of dividends |
(1,671 | ) | (1,385 | ) | ||||
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Payments of financing costs |
- | (6,582 | ) | |||||
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Exercise of options |
323 | 973 | ||||||
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Redemption of options |
- | (33 | ) | |||||
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Redemption of restricted stock units |
(330 | ) | (1,828 | ) | ||||
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Redemption of performance based restricted stock units |
(1,014 | ) | (2,625 | ) | ||||
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Net cash (used in) provided by financing activities |
$ | (2,692 | ) | $ | 38,520 | |||
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Net (decrease) increase in cash |
$ | (30,017 | ) | $ | 50,699 | |||
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Effect of foreign currency translation on cash |
$ | (304 | ) | $ | (48 | ) | ||
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Cash, beginning of period: |
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Unrestricted |
$ | 222,760 | $ | 48,941 | ||||
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Restricted |
1,914 | 1,961 | ||||||
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Total cash at beginning of period |
$ | 224,674 | $ | 50,902 | ||||
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Cash, end of period: |
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Unrestricted |
$ | 192,439 | $ | 99,640 | ||||
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Restricted |
1,914 | 1,913 | ||||||
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Total cash at end of period |
$ | 194,353 | $ | 101,553 | ||||
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss). We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss) are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance.
We define “EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization. We define “Adjusted EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Net Income” as net income excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Diluted EPS” as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Operating Income (Loss)” as operating income (loss) excluding other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance.
Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure.
In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures. Note that a reconciliation of forward-looking non-GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be necessary for such reconciliation.
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Schedule A |
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Turning Point Brands, Inc. |
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Reconciliation of GAAP Net Income to Adjusted EBITDA |
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(dollars in thousands) |
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(unaudited) |
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Three Months Ended |
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March 31, |
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2026 |
2025 |
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Net income attributable to Turning Point Brands, Inc. |
$ | 11,667 | $ | 14,395 | ||||
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Add: |
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Interest expense, net |
4,569 | 4,401 | ||||||
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Loss on extinguishment of debt |
- | 1,235 | ||||||
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Income tax (benefit) expense |
(2,492 | ) | 2,040 | |||||
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Depreciation expense |
794 | 828 | ||||||
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Amortization expense |
1,285 | 822 | ||||||
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EBITDA |
$ | 15,823 | $ | 23,721 | ||||
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Components of Adjusted EBITDA |
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Corporate restructuring (a) |
97 | - | ||||||
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ERP/CRM (b) |
- | 211 | ||||||
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Stock based compensation (c) |
2,938 | 1,664 | ||||||
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Transactional expenses and strategic initiatives (d) |
145 | 176 | ||||||
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Non-recurring legal (e) |
153 | - | ||||||
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FDA PMTA (f) |
290 | 1,591 | ||||||
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Mark-to-market gain on Canadian inter-company note (g) |
(116 | ) | 315 | |||||
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Tariff adjustment (h) |
5,903 | - | ||||||
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Manufacturing start-up costs (i) |
594 | - | ||||||
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Honorarium (j) |
63 | - | ||||||
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Adjusted EBITDA |
$ | 25,890 | $ | 27,678 | ||||
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(a) |
Represents costs associated with corporate restructuring, including severance and early retirement. |
| (b) | Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses. |
| (c) | Represents non-cash stock options, restricted stock, PSRUs, etc. |
| (d) | Represents the fees incurred for transaction expenses. |
| (e) | Represents legal expenses incurred in connection with litigation related to an insurance claim. |
| (f) | Represents costs associated with applications related to FDA premarket tobacco production application ("PMTA").The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the pending two are complete. |
| (g) | Represents a mark-to-market loss attributable to foreign exchange fluctuation. |
| (h) | Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund. |
| (i) | Represents non-recurring expenses incurred during the start-up of manufacturing lines. |
| (j) | Represents an honorarium gift included in other expense, net. |
|
Schedule B |
|
Turning Point Brands |
|
Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted EPS to Adjusted Diluted EPS |
|
(dollars in thousands except share data) |
|
(unaudited) |
|
Three Months Ended |
Three Months Ended |
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|
March 31, 2026 |
March 31, 2025 |
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| Income from continuing operations before income taxes | Income tax expense (m) | Net loss attributable to non-controlling interest | Adjusted Net Income | Adjusted Diluted EPS | Income from continuing operations before income taxes | Income tax expense (m) | Net loss attributable to non-controlling interest |
Net Income |
Diluted EPS |
|||||||||||||||||||||||||||||||
|
GAAP Net Income and Diluted EPS |
$ | 11,132 | $ | (2,810 | ) | $ | 2,275 | $ | 11,667 | $ | 0.60 | $ | 17,831 | $ | 2,040 | $ | 1,396 | $ | 14,395 | $ | 0.79 | |||||||||||||||||||
|
Loss on extinguishment of debt (a) |
- | - | - | - | - | 1,235 | 141 | - | 1,094 | 0.06 | ||||||||||||||||||||||||||||||
|
Corporate restructuring (b) |
97 | (24 | ) | - | 121 | 0.01 | - | - | - | - | - | |||||||||||||||||||||||||||||
|
ERP/CRM (c) |
- | - | - | - | - | 211 | 24 | - | 187 | 0.01 | ||||||||||||||||||||||||||||||
|
Stock based compensation (d) |
2,938 | (742 | ) | - | 3,680 | 0.19 | 1,664 | 190 | - | 1,474 | 0.08 | |||||||||||||||||||||||||||||
|
Transactional expenses and strategic initiatives(e) |
145 | (37 | ) | - | 182 | 0.01 | 176 | 20 | - | 156 | 0.01 | |||||||||||||||||||||||||||||
|
Non-recurring legal (f) |
153 | (39 | ) | - | 192 | 0.01 | - | - | - | - | - | |||||||||||||||||||||||||||||
|
FDA PMTA (g) |
290 | (73 | ) | - | 363 | 0.02 | 1,591 | 182 | - | 1,409 | 0.08 | |||||||||||||||||||||||||||||
|
Mark-to-market loss on Canadian inter-company note (h) |
(116 | ) | 29 | - | (145 | ) | (0.01 | ) | 315 | 36 | - | 279 | 0.02 | |||||||||||||||||||||||||||
|
Tariff adjustment (i) |
5,903 | (1,490 | ) | - | 7,393 | 0.38 | - | - | - | - | - | |||||||||||||||||||||||||||||
|
Manufacturing start-up costs (j) |
594 | (150 | ) | - | 744 | 0.04 | - | - | - | - | - | |||||||||||||||||||||||||||||
|
Honorarium (k) |
63 | (16 | ) | - | 79 | 0.00 | - | - | - | - | - | |||||||||||||||||||||||||||||
|
Tax benefit (l) |
- | 9,475 | - | (9,475 | ) | (0.49 | ) | - | 2,329 | - | (2,329 | ) | (0.13 | ) | ||||||||||||||||||||||||||
|
Adjusted Net Income and Adjusted Diluted EPS |
$ | 21,199 | $ | 4,124 | $ | 2,275 | $ | 14,800 | $ | 0.76 | $ | 23,023 | $ | 4,963 | $ | 1,396 | $ | 16,664 | $ | 0.91 | ||||||||||||||||||||
| (a) | Represents loss on extinguishment of debt as a result of the redemptions of the 2026 Notes. |
|
(b) |
Represents costs associated with corporate restructuring, including severance and early retirement. |
| (c) | Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses. |
| (d) | Represents non-cash stock options, restricted stock, PSRUs, etc. |
| (e) | Represents the fees incurred for transaction expenses. |
| (f) | Represents legal expenses incurred in connection with litigation related to an insurance claim. |
| (g) | Represents costs associated with applications related to FDA premarket tobacco production application ("PMTA").The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the pending two are complete. |
| (h) | Represents a mark-to-market loss attributable to foreign exchange fluctuation. |
| (i) | Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund. |
| (j) | Represents non-recurring expenses incurred during the start-up of manufacturing lines. |
| (k) | Represents an honorarium gift included in other expense, net. |
| (l) | Represents adjustment from quarterly tax rate to quarterly projected tax rate of 24% in 2026 and 21% in 2025. |
| (m) | Income tax expense calculated using the effective tax rate for the quarter of -25.2% in 2026 and 11.4% in 2025. |