Turning Point Brands, Inc. (NYSE: TPB) reported that net sales fell 1.8% to $103.4 million in the fourth quarter ending December 31, 2022. Net income decreased $27.8 million to $($16.3) million which the company attributed to $34.8 million non-cash asset impairments.
The company also reported a diluted EPS of $(0.93) and Adjusted Diluted EPS of $0.69 compared to $0.57 and $0.66 in the same period one year ago, respectively
For the fiscal year 2022, total consolidated net sales decreased 6.8% to $415.0 million. For the full year Turning Point reported net income decreased $40.4 million to $11.6 million due in part to $41.1 million non-cash asset impairments. The diluted EPS of $0.64 and Adjusted Diluted EPS of $2.83 as compared to $2.52 and $3.03 in the same period one year ago, respectively
Turning point said it now expects full-year 2023 adjusted EBITDA to be $88 to $94 million. This is a drop from 2022’s adjusted EBITDA which decreased 9.7% to $97.6 million
“The fourth quarter operating results finished in-line with our expectations with solid execution across our segments,” said Graham Purdy, President and CEO. “The Zig-Zag segment grew during the quarter despite the impact of a previously disclosed pull-forward in the prior quarter, benefiting from continued market share gains and the contribution from a full quarter of CLIPPER lighters. We are pleased with the ongoing roll-out and strong channel receptivity to the world’s #1 reusable lighter.”
He continued saying, “Stoker’s MST experienced strong share gains as consumer trade-downs to value accelerated, consistent with the current inflationary and economic backdrop. The challenging regulatory environment continues to negatively affect the NewGen segment which was down materially vs. 2021, but with declines moderating in the back half of the year. In addition to returning capital to our shareholders through share repurchases, we opportunistically purchased $10 million notional of our convertible notes during the fourth quarter while maintaining a strong cash balance.”
NewGen Products net sales decreased 11.1% to $24.9 million. The regulatory environment continues to negatively impact sales. Purdy said, “”The regulatory environment for NewGen remains dynamic given the uncertainty over the outcome of the PMTA process and the potential for additional state and federal regulations.”