Good morning, and welcome to the Turning Point Brands third quarter 2022 earnings conference call. All participants will be in listen only mode. All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Louie Reformina, Chief Financial Officer. Please go ahead. Thank you. Good morning, everyone. This is Louie Reformina, Chief Financial Officer. Joining me is Turning Point Brands President and CEO, Graham Purdy, and Chief Marketing Officer, Summer Frein. This morning, we issued a news release covering our third quarter results. This release is located in the IR section of our website, www.turningpointbrands.com. There is also a presentation we will be referencing in the call available on the site. During this call, we will discuss the consolidated and segment operating results and provide a perspective on the operating environment and our progress against our strategic plan. As is customary, I direct your attention to the discussion of forward-looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission. On the call today, we will reference certain non-GAAP financial measures. These measures and reconciliations to GAAP can be found in today's earnings release, along with reasons why management believes that they will provide useful information. I will now turn the call over to our CEO, Graham Purdy. Thank you, Louie. Good morning, everybody, and thank you for joining our call. For those of you that don't know me, I may be new to the CEO job, but I'm not new to this industry, Turning Point Brands or its people. After spending seven years at PM USA, I joined the company in 2004 as Trade Marketing Director. Throughout the years, I've had many roles, including Head of Field Sales and New Venture Divisions before taking on the COO role in 2019. In that role, I oversaw a repositioning of the company and initiatives that have led to accelerated growth. This included growing Zig-Zag segment sales from $109 million in 2019 to approximately $190 million we are projecting this year. Over my time at the company, I have worked across numerous functional areas and developed strong relationships with talented colleagues throughout the organization. I'm excited by the opportunity to lead the team as we continue to build a world-class CPG company for the benefit of our customers, employees, and shareholders. Before Louie and I go into the recent quarter, I'd like to take a step back and frame my perspective on the Turning Point story and drive home why the team and I are excited by our future. First, Zig-Zag is the number one rolling paper brand in North America. Our portfolio of Zig-Zag products continues to indirectly benefit from cannabis legalization as a leading non-plant touching way to capitalize on this long-term trend. Today, roughly 70% of states have legalized cannabis in some form, either medical or recreational, and roughly 45% of the U.S. population lives in a legal recreational market, and that number is expected to grow in the coming years. One only has to look at these stats just three or five years ago to appreciate how far we've come. I believe we have reached a critical tipping point where Zig-Zag is a must-carry item given its brand strength and product innovation, which is further enhanced by our deep industry relationships. These secular tailwinds, along with all our growth initiatives and new product and multi-channel strategies, have helped drive our projected sales this year to be more than 70% higher than they were in 2019. Despite this growth, we are not resting on our laurels. In recent years, our team has worked hard to reenergize the Zig-Zag brand by introducing new products such as cones in 2019, natural leaf wraps at the end of 2021, and rough cut cigars in 2022, penetrating new alternative distribution channels such as e-commerce, dispensaries, and bringing on new exclusive products like Clipper lighters. We are embracing our brand's iconic 150-year history with new marketing initiatives to reinforce direct consumer connections as the industry evolves. You should expect us to lean into that strategy with a particular focus on, one, serving the alternative channel, which we define as direct to consumer, head shops, smoke shops, dispensaries, and direct bulk paper cone sales to operators. Two, driving exclusive products like Clipper through both the alternative and traditional retail where we already have a strong presence. On Clipper, it's important to note this brand is relatively underdeveloped in the U.S., yet has a much larger share in Europe where it originated. While it's still early in our brand stewardship of Clipper, we see an immense white space in the U.S. to close that gap in a $500 million category. Coming back to today, all of you are aware that the overall economy has softened as we progress through the year. Inflation has put pressure on consumer wallets, and we have returned to more normalized buying patterns post-COVID. Today's environment is particularly challenging given we haven't witnessed this inflationary environment in many decades. As a result, projecting Zig-Zag segment results has been more challenging in 2022 than in the past. This is reflected in the revised guidance we gave last week. Notwithstanding these headwinds, we still expect 7% annual growth for the Zig-Zag segment at the midpoint of the revised guidance. That said, I'm confident in the strength of our brand, the effectiveness of our team, and our core strategic initiatives that will drive profitable future growth. Next, our Stoker's segment is strong and continues to grow. I firmly believe we're still in the middle innings of the strategy I helped to put in place many years ago to increase distribution, grow market share, and position the brand to be a leading MST player focused on the value consumer. I was also overseeing the sales operation when we introduced cans, which allowed us to penetrate large chains leading to significant growth. I believe we still have meaningful runway to grow stores, and we're uniquely positioned in an industry with favorable pricing dynamics. On the loose-leaf side, many of you who have followed us or the industry are aware that this category has been seeing volume declines for over 30 years. Despite that, the business remains highly profitable and has generated stable free cash flow for market share gains and pricing, which we are deploying in part to support new initiatives such as the recent Frē launch in the Modern Oral category. This should allow TPB to participate in the growing $1 billion white pouch category that leverages our existing infrastructure. In rapidly expanding markets, such as Modern Oral, we don't need to be the biggest or spend the most to generate significant value for shareholders. We proved this with our rollout of Stoker's MST. Let me be clear, we are still in the very early innings with Frē and other growth initiatives. Every launch must walk before it runs, and I will be highly judicious about deploying capital and internal resources to ensure we're focused on the right opportunities to create the most value. Next, NewGen. While we continue to monitor the regulatory backdrop, most of it is out of our control. Despite the regulatory disruption in this segment as we navigate the process, we have maintained profitability and continue to explore ways to maximize the value of the strategic distribution asset we have built. While I'm optimistic we'll eventually get resolution that should benefit TPB, we are committed to finding a solution that reduces the volatility we have experienced in recent years. Last, let me address some of the technology investments, such as our ongoing ERP and CRM implementations. We are on track and on budget to position TPB for the future, which I believe should drive substantial efficiencies. We are scheduled to complete the design phase of our ERP implementation next month, and we'll give further details on cost when that is completed. However, from what we know today, I'm pleased that the projects are tracking within our initial expectations. As we focus on our core business, I wanted to address some of the questions we've received over the past year regarding our M&A strategy. It's not lost on anyone that tighter financial market conditions, coupled with an uncertain economic environment, have made it more difficult to execute accretive transactions. The way I see it, every dollar we spend will be highly scrutinized versus our internal hurdle rate. The bar for synergistic M&A will be high, especially in context of alternative uses like returning capital to our stakeholders. In summary, we are hyper-focused on our existing businesses, led by world-class brands and extensive distribution capabilities, coupled with a dedicated team committed to our success. I'm confident that TPB will continue to generate attractive, durable free cash flow that we will deploy to increase shareholder value. As you may know, I personally am a large shareholder with a disproportionate amount of my assets tied to the success of this company, so I'm highly aligned and incentivized with all of you to make this happen. Thank you to the TPB team for this opportunity, and I look forward to future updates to give more color on our progress. Turning now to the specifics of the quarter. We were satisfied with the resilience of our businesses during the quarter, but as mentioned, the consumer economy is clearly becoming more strained as the year progresses with ongoing pressure from inflation, which is impacting consumer traffic and spending in our channels. Zig-Zag posted a record quarter, with paper cones and alternative channel sales, including e-commerce, continue to be key drivers of growth. We also had a strong uptick from promotions implemented at the end of the quarter to respond to the current consumer environment. Adding to growth for the quarter were the initial sales from the launch of Clipper lighters, which so far has been very successful. Our sales force has started rolling out distribution of Clipper lighters into independent convenience stores in late July, and we have physically been placing Clipper into an average of 1,000 new stores per week, ending the quarter with over 8,000 new retail points of distribution. In addition to selling into new wholesale distribution customers to support the rollout. Clipper is the world's number one reusable lighter and is the lighter of choice for environmentally conscious consumers, wholesalers, and retail customers. We will continue to grow this business and are excited about the initial reception from our trade partners. Stoker's delivered another solid quarter, highlighted by strong double-digit growth in MST as we continued to gain share in both MST and loose-leaf categories. NewGen navigated another challenging quarter but remained profitable despite a 40% decline in sales year-over-year. Notably, sales were down just 4% sequentially over Q2. As disclosed last week, we did revise our guidance for the year. Despite strong outperformance relative to the market in the third quarter, we believe it is prudent to adjust our outlook in light of the current macro environment and sales that we believe were shifted from Q4 to Q3. Going forward, I remain bullish on our growth prospects and am very excited to lead our team to focus on driving organic growth and creating shareholder value. With that, let me turn the call back over to Louie to go through our results. Thank you, Graham. Starting with our consolidated results. Despite 17.7% growth from the Zig-Zag and Stoker's segments, overall Q3 sales were down 1.9% to $107.8 million, impacted by NewGen, which had a 40% year-over-year decline, but has been relatively stable sequentially this year and starts facing less challenging comps as we exit the year. Gross margin decreased 50 basis points to 48.9%, driven by product mix in each segment. Adjusted EBITDA was down $1.8 million year over year, with a decrease coming from the decline in our NewGen distribution business. Both Zig-Zag and Stoker's segment profitability grew from the previous year. Going into segment performance. Zig-Zag sales increased 23.3% year-over-year to $52.1 million, with 21.7% from volume and 1.6% from price mix. Wraps revenue was down 3% year-over-year due to a category decline as we adjusted a new normal of post-COVID consumer consumption. Despite the category decline, Zig-Zag continues to grow share. Our U.S. papers and e-commerce business was up 19% year-over-year, driven by the growth in e-commerce and paper cones. Canada was up 30% during the quarter, with solid growth aided by $1.5 million of orders pulled forward from Q4. The cigars and other subcategory grew dramatically off of the low base due to the Clipper launch. For the overall segment, we estimate that the strong promotional uptake and the timing of Canadian deliveries pulled forward approximately $5 million of sales from the fourth quarter. Gross margins declined 220 basis points during the quarter, driven primarily by the Clipper launch and higher growth in lower margin products like paper cones. Operating margin declined 450 basis points for the quarter due to the gross margin decline, variable costs from increased B2C e-commerce sales, increased TPB Canada SG&A, and the reallocation of segment costs. The fundamental long-term drivers for the segment remain intact as cannabis legalization continues to drive growth in the all channel, and Clipper penetration provides further tailwinds. Moving to Stoker's. Stoker's products net sales increased 10.0% to $33.5 million in the quarter, with 2.4% volume growth and 7.6% price mix increase. Net sales for the MST and Frē portfolio grew 18%. Stoker's volume was up 3.1% as its share grew despite category volume down 5.7%, with its share increasing 50 basis points year-over-year to 6.2% during the quarter, according to MSAI. Its share in-store selling was up 60 basis points year-over-year to 9.7%, with Stoker's now in stores representing 64% of industry volumes, which still provides a long runway for growth. Frē was a marginal contributor to the segment sales during the quarter. Tobacco chew sales declined 4% from the previous year. Stoker's Chew was the number one chewing brand in the quarter, gaining 270 basis points of share to 28.4% share, according to MSAI. Category volume was down 7.6% during the quarter, according to MSAI, with TPB's products performing better. With a heightened inflationary environment, Stoker's performed well as its value proposition products resonated well with consumers. Gross margin decreased 160 basis points, primarily due to mix from Frē and stronger growth in discount loose leaf products. Operating margin decreased 300 basis points due to the gross margin decline, higher sales and marketing costs, and increased shipping costs. Moving to NewGen, where we continue to manage through a disruptive environment with sales down 40.3% from the previous year to $22.2 million. Our third-party distribution business continues to be disrupted by the regulatory environment, as previously mentioned. Gross margins were down 740 basis points year-over-year, impacted by product and channel mix in addition to the competitive environment. Operating income was down $1.9 million due to lower sales, offset by lower variable SG&A and reallocation of shared costs into the corporate segment. The business remained profitable despite the challenging environment. Moving to our balance sheet. We ended the quarter with $105.7 million of cash and $127 million of available liquidity, providing flexibility on capital deployment. We repurchased 7.6 million shares during the quarter. On to guidance. As discussed in last week's press release, we now expect the following results for the year. Zig-Zag product sales of $186 million-$191 million, compared to previous outlook of $193 million-$200 million, which represents 7% year-over-year growth at the midpoint. Stoker's product sales of $128 million-$132 million, compared to previous outlook of $127 million-$133 million, which represents 5% year-over-year growth at the midpoint. Consolidated adjusted EBITDA of $96 million-$99 million, compared to previous outlook of $97 million-$103 million. We continue to expect CapEx to be up to $10 million this year. This excludes ERP and CRM projects. PMTA spend on supplemental filings for new products, including our Frē nicotine pouch, to be up to $6 million. Thank you for participating in the call today. With that, I would like to open the call up for questions. At this time, I would like to remind everyone in order to ask a question, press star then one on your telephone keypad. We'll pause for just a moment to compile the question and answer roster. Your first question comes from the line of Vivien Azer from Cowen. Your line is open. Thank you. Good morning, and congrats, Graham, on the new role. I think it's really encouraging for everyone to hear your commitment to organic growth, perhaps a more temperate approach to M&A and your commitment to shareholder returns. You know, with all of that said, I think, you know, your deep experience in tobacco is a real asset to the organization, especially now. I'd love to hear your thoughts on how you think about Stoker's pricing relative to the competitive environment. Thank you. Yeah. Thank you very much for the kind words, Vivien. Yeah, look, I think that you know, we have a lot of favorability relative to pricing with our MST business. You know, we're certainly a price follower and we're you know, committed to following the industry. I think it's important to note that we've mentioned in the past that this concept of you know, sort of closing the gap with premium brands. In Q3, we actually took a little opportunity on our Stoker's tubs you know, to do just that. We are starting to actualize what we've been talking about for many years. You know, I think the tailwinds around pricing are great, but at the same time, you know, we're still only in, you know, just over 60% of the addressable market. One of the largest, you know, opportunities that the company has is to continue to focus on gaining more stores, where we don't compete because it's a source of brand new volume for us. At the same time, we're committed to growing share in the existing stores we're in. You know, I think we've got three really good levers of future growth for our MST business. Absolutely. That all seems perfectly reasonable. Louie, maybe pivoting to the model a little bit. I was hoping to unpack some of the gross margin compression in the Zig-Zag segment, for instance. You pointed out, you know, COVID and the lighters. Sorry, I believe there was another. Excuse me. Is the gross margin. Can you maybe just dimensionalize those two headwinds, which was the bigger, you know. Anything you could offer there? Yeah. I mean, Clipper was a large headwind for us. You know, kind of to think about the impact. We said the lighter market before is about a $500 million market, and Clipper historically has had a 3% share. We're gonna ramp up that business. What we've said before in our third-party products is it's generally 20%-40% gross margins. I would say, you know, with Clipper, our planning right now is to be kind of in the midpoint or lower end of that as we try to gain distribution in the short term and, you know, hopefully be able to scale that gross margin over time. Understood. That's really helpful. Perhaps just lastly on the Stoker's segment, kind of same question, if you will. An update on Frē, which you called out, but didn't disclose from a revenue perspective. If you can offer any color there, that would be great. Just kind of the contributions to margin headwinds from discounted loose-leaf products, please. Thank you. Yeah. We're trying to limit disclosure for competitive reasons on it. But I would say with FRĒ, we disclosed the first half revenue on it, and I would say it was consistent with first half levels. We don't really expect FRE to ramp for us until next year. On the gross margin, please? Yeah, FRĒ is running below current segment gross margins. Right now it's similar to kind of the range that I mentioned with Clipper. You know, as we scale that business as we scale the supply chain, we expect to ramp up that gross margin over time. Understood, and sorry to press the issue. This is, I promise, the last one. Of the 160 basis points, was FRE the bigger headwind versus the discounted loose leaf? Yes. Okay. Thank you. If you would like to ask a question, press star then the number one on your telephone keypad. Your next question comes from the line of Eric Des Lauriers from Craig-Hallum. Your line is open. Great. Thank you for taking my questions and congrats again, Graham. Thanks, Eric. Appreciate it. You mentioned wraps within Zig-Zag, sort of, you know, facing some, you know, negative growth after the COVID, sort of boom last year. As you look at the macro environment now, and maybe, you know, coupled with that sort of COVID overhang, which of the Zig-Zag, you know, sort of sub-segments are you noticing, perhaps facing greater headwinds than others? Just wondering if you could kind of comment on the Zig-Zag sub-segments, sort of in light of the macro challenges that you guys are seeing, if there's any trends, kind of popping up for one or the other. Thanks. Sure. Yeah. I think if you look at the sub-segments, you know, with the papers, we have a nice offset because we are growing our business in the alternate channel and gaining a lot of share there. So our e-commerce and you know paper cones business continued to be strong for us during the quarter from a growth perspective, outpacing that sub-segment's growth. On the wraps, we don't have as big of an offset just because with our tobacco wraps, it's not really sold in dispensaries without tobacco licenses. So I think there we are seeing the impact more just because that is primarily sold in the measured channel where we've seen some inflationary pressures, especially kind of at gas stations through the year. We think we're normalizing in terms of consumer demand patterns now post-COVID. Okay, maybe it's kind of safe to say that you're seeing similar, you know, maybe macro headwinds or dynamics for the sub-segments, but perhaps a difference in the traditional versus alternative channel of just, you know, that increasing penetration there helping offset some of those headwinds. Exactly. Yeah. Okay, great. All right. That's helpful. On NewGen, obviously the you know, regulatory uncertainty remains uncertain. I was wondering if you could give us a bit more insight into the CapEx spend that you have ongoing for those PMTA applications and you know, perhaps any sort of indication on timing there of when you expect to have that wrapped up versus, you know, when you might expect to hear back from the FDA. Obviously, that's a bit you know, a bit more uncertain there. Yeah. You know, we continue to monitor the situation with FDA and specifically as it relates to, you know, capital deployment on PMTAs. You know, I think it's sort of important to note that at this point in time, we've submitted, you know, multiple PMTA applications, and we're in a position where, you know, we'll continue to supplement on an as-needed basis, and supplement where we believe that future value can come from. Okay, great. All right. That's it for me. Thanks, guys. Thanks, Eric. There are no further questions at this time. Mr. Graham Purdy, Chief Executive Officer, I turn the call back over to you. Yeah. Thank you so much, operator. Really appreciate everybody joining the call today. We're really excited about the future here at TPB, and we'll talk to you all next quarter. This concludes today's conference call. You may now disconnect.