Turning Point Brands (TPB) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales rose 28.1% year-over-year to $106.4 million, driven by strong growth in Stoker's and Modern Oral products.

• Modern Oral sales reached $22.3 million, nearly 10x prior year and almost double the previous quarter.

• Adjusted EBITDA increased 12% to $27.7 million, with full-year guidance reaffirmed at $108–$113 million.

• Net income attributable to the company increased 19.8% to $14.4 million for the quarter.

• The company divested its Creative Distribution Solutions segment, now reported as discontinued operations.

Financial highlights

• Gross profit increased 23.3% to $59.6 million; gross margin was 56%, down from 58.2% year-over-year but flat sequentially.

• SG&A expenses were $36.4 million, up from $29.1 million, mainly due to Out's full-quarter impact, ALP-related costs, and higher FDA PMTA expenses.

• Free cash flow was $12.4 million, with CapEx at $2.2 million for the quarter.

• Operating income rose 20.3% to $23.2 million; operating margin decreased to 21.8%.

• Ended the quarter with $99.6 million in cash and $62.2 million available under the ABL facility.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance reaffirmed at $108–$113 million.

• Modern Oral sales guidance increased to $80–$95 million, reflecting higher investment and anticipated tariff impacts.

• Effective income tax rate expected to be 23%–26% going forward.

• Budgeted CapEx for 2025 is $4–$5 million, plus $3–$5 million for modern oral PMTAs.

• Management expects continued strong liquidity and cash flow generation to support operations and growth.