Turning Point Brands Reports 3.8% Revenue Growth, 13.7% Net Income Increase in Q3 2024

Turning Point Brands, Inc. reported its financial results for the quarter and nine months ended September 30, 2024, showcasing a solid performance with notable increases in revenue and profitability compared to the previous fiscal period.

For the third quarter of 2024, net sales reached $105.6 million, a 3.8% increase from $101.7 million in the same period of 2023. The growth was primarily driven by the Zig-Zag and Stoker’s product segments, which saw net sales rise to $49.3 million (up 5.5%) and $41.4 million (up 12.1%), respectively. However, the Creative Distribution Solutions segment experienced a decline, with net sales falling to $14.9 million, down 17.4% year-over-year.

Gross profit for the third quarter increased to $53.7 million, reflecting a 4.0% rise from $51.6 million in the prior year. Operating income also saw a slight increase to $20.5 million, up 1.4% from $20.2 million. Income before income taxes rose significantly by 15.9% to $17.0 million, while consolidated net income increased by 13.7% to $12.4 million. Net income attributable to Turning Point Brands was $12.4 million, compared to $10.8 million in the previous year.

For the nine months ended September 30, 2024, total net sales were $311.2 million, a modest increase of 0.9% from $308.3 million in 2023. The Zig-Zag segment reported an 8.2% increase in net sales to $146.5 million, while Stoker’s products saw a 13.0% rise to $120.5 million. Conversely, the Creative Distribution Solutions segment's sales dropped by 33.3% to $44.2 million, attributed to reduced liquid nicotine distribution volumes and the strategic elimination of unprofitable brands.

Total gross profit for the nine-month period increased to $159.5 million, a 4.4% rise from $152.7 million. Operating income for the nine months was $62.6 million, up 6.7% from $58.6 million. Consolidated net income for the period reached $37.5 million, a substantial increase of 34.2% compared to $27.9 million in 2023.

The company’s current assets decreased to $184.8 million as of September 30, 2024, from $267.6 million at the end of 2023, while total assets also fell to $488.0 million from $569.4 million. Current liabilities decreased to $248.3 million, down from $307.1 million. Total stockholders’ equity increased to $186.8 million, compared to $152.0 million at the end of 2023.

In terms of strategic developments, Turning Point Brands has continued to focus on organic growth and acquisitions, including a recent investment in Teaza Energy, LLC. The company also repurchased shares, totaling $4.2 million for the nine months ended September 30, 2024. The company remains committed to maintaining a strong financial position while navigating market challenges and opportunities.