Good morning, welcome to the Turning Point Brands Q1 2023 Earnings Conference Call. All participants will be in a 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 star 0. 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 are Turning Point Brands President and CEO, Graham Purdy, and Chief Revenue Officer, Summer Frein. This morning, we issued a news release covering our Q1 results. This release is located in the IR section of our website, www.turningpointbrands.com. During this call, we will discuss our consolidated and segment operating results and provide our perspective on the operating environment and our progress against our strategic plan. As is customary, I direct my attention to the discussion of forward-looking and cautionary statement 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 the reasons why management believes that they produce useful information. I will now turn the call over to our CEO, Graham Purdy. Thanks, Louie. Good morning, everyone, and thank you for joining our call. Our Q1 results were in line with our expectations, and we are generally pleased with our start to 2023 as we are beginning to see traction from the initiatives we have put in place, and consumers are responding as demonstrated by market share gains in all of our major categories. As we mentioned on our last call, we anticipated a tough comparison to Q1 of last year. Recall, the macro environment, principally inflation, started materially impacting our customers in the second quarter of 2022. Our results reflect an uncertain consumer environment, where many of our end consumers continue to feel the impacts of prolonged inflation and higher interest rates. Moreover, as also discussed on our last call and reflected in today's numbers, our wholesale customers, particularly buyers of Zig-Zag U.S. paper and wraps portfolio, have been carefully monitoring inventory levels in response to the higher cost of financing their working capital. That said, we now think our customers' inventory adjustments are largely behind them. In fact, we expect the Zig-Zag segment to demonstrate growth for the balance of the year, driven by new product introductions, further penetration of the non-traditional channel, and normalization of U.S. paper and wrap order patterns. We still see continued strength in the end markets, given the secular tailwinds we are experiencing, and we're making progress penetrating the alternative space to better satisfy this growing consumer base. Stoker's had another solid quarter with strong market share gains in both the MST and loosely chewing tobacco categories as its value proposition continues to resonate with consumers. As an organization, we've taken this opportunity to refocus on internal execution across all areas of our business to best position Turning Point for profitable long-term growth to drive shareholder value. Since my appointment to CEO, the team has been focused on evaluating all aspects of our business, from our distribution and channel strategies to our product portfolio and go-to-market plans, and improving our infrastructure, systems, and logistics capabilities to become more efficient. We also continue to be proactive in optimizing our capital structure and opportunistically purchased another $13.9 million notional of our convertible notes during Q1 while maintaining a strong cash balance to help address further maturities. Let me now take you through some of the segment highlights. First, Zig-Zag. Zig-Zag remains the number one rolling paper and wraps brand in North America. Net sales decreased due to the previously discussed and anticipated reduction of trade inventory during the quarter. We saw strong growth in our Canadian operations, other smoking accessories, and our eCommerce business had another quarter of double-digit growth as we continue to build our presence in the alternative channel. In U.S. papers and wraps, despite the double-digit decline we experienced in shipments, we had market share gains in the measured channel at retail and remain encouraged by our sales initiatives in the alternative channel, which Summer will discuss in a few moments. We have made significant progress in eCommerce as now over 30% of Zig-Zag's U.S. paper sales, a meaningful improvement over the past three years. CLIPPER also had a strong quarter as we continue to penetrate the market through additional distribution. We believe that brands with scale are increasingly important in our enhanced portfolio across categories, from traditional papers to cones, wraps, accessories, and now CLIPPER allows us to offer our customers a more complete product assortment to address their needs across a variety of adjacent categories in the store. Moving on to Stoker's. As mentioned, Stoker's delivered another solid quarter with revenue up 6.2%, highlighted by high single-digit growth in MST and low single-digit growth in loosely chewed tobacco, both reflecting market share gains, which gives us confidence in our approach. For us, the silver lining in the current economic environment is that it's led some dippers to try our Stoker's MST product for the first time as we continue to increase store penetration. We think our new customers are impressed with the value proposition of the product, high quality, and flavor at a reasonable price. Based on past experiences, we expect many to stick with Stoker's even when economic conditions improve. Looking ahead, we are maintaining our full year 2023 adjusted EBITDA guidance. With that, let me hand the call over to Summer to walk through some progress and results of some of our specific go-to-market initiatives Thank you, Graham. As discussed in prior quarters, we continue to focus heavily on growing the Zig-Zag brand and have built a multi-year roadmap to continue to solidify Zig-Zag's positioning as a lifestyle brand for this emerging generation and broadening its addressable market by accelerating growth in the alternative channel. As previously shared, while Zig-Zag is relatively ubiquitous across what we call the traditional channel, we continue to push hard to capture our fair share and more in the alternative channel. This is especially important given the secular trends which are growing our addressable market. To that end, we continue to expand our product innovation that we believe resonates with consumers in both the traditional and alternative channels. Expanding our product portfolio allows us to increase our on-shelf presence in key trade classes within alternatives, such as dispensaries and head shops, and allows us to continue to learn from these early adopters that we can leverage in the traditional channel. In addition, selling to manufacturers and cultivators is another opportunity we have to harness the brand's power to meet our end consumer with Zig-Zag quality and branding. So far this year, we have expanded the Zig-Zag product portfolio with two innovative offerings, Palm Rolls and 70's Cones. Palm is a new substrate for Zig-Zag wraps, taking learnings from our Canadian partners, and the seventies are a smaller version of our powerful cone franchise designed to meet consumers on the go. Both sets of new offerings have been received positively by the trade and end consumers and further reinforces Zig-Zag's ability to satisfy ever-evolving consumer preferences. In addition to our pipeline of new products and increased sales efforts to penetrate the alternative channel, we continue to build on past learnings with brands and partnerships, like our recent collaboration with AMIRI, a high-end fashion brand, that are resonating with our existing and growing consumer base. These initiatives are a critical element of our multi-year plan to remain highly relevant and engage with our diverse and growing consumer base. As another example in our broad-based strategy, we are currently collaborating with Hippie Sabotage, a popular independent music band, where we wrapped their tour bus with Zig-Zag branding in addition to launching several brand activations alongside the band on its 35-city tour. We've seen a significant amount of consumer engagement through this partnership as this rolling Zig-Zag billboard on wheels travels to key cities across the country. For the quarter, our e-commerce and B2B business grew double digits. Our pipeline of new initiatives is growing. The growth was due to continued investment in our sales team that led to growth in customers combined with increases in average order size as we expand our portfolio. We have more exciting initiatives underway. I look forward to sharing more updates in future quarters. Turning to CLIPPER. As we've discussed, the brand is a well-known top lighter brand in international markets. We believe we have a proven track record of leveraging our sales force and marketing engines to grow brands in the U.S. Our initial focus is to rapidly increase distribution and expand product assortment across all sales channels. Our longer-term focus is building brand awareness and engagement by educating consumers on the CLIPPER brand at retail and through digital channels with highly relevant content explaining its unique features, such as its ability to be refilled, is more environmentally friendly, and has a unique packing tool with its detachable flint. We continue to grow our retail footprint, and we recently secured placement into one of the largest U.S. C-store chains, and we will begin shipping to a subset of their stores later this year. Securing this trade partner reflects the interest and value of CLIPPER's points of difference in the market relative to the competition as the world's number one reusable lighter. We are also growing brand awareness and sales across other channels for CLIPPER, such as our Q1 launch on Amazon and other sales and social digital channels. As noted in previous calls, we continue to believe this category is synergistic to our existing business and presents plenty of runway, given the roughly $500 million market and our growth thus far. Moving on to Stoker's. Stoker's had a strong quarter, and its positioning continues to benefit from the secular trend of consumer trade down as we execute to further increase store penetration. Stoker's delivers on the promise of a great dip at a fair price, which we believe resonates well with consumers, especially those facing a challenging inflationary backdrop, and has likely helped to accelerate share growth and drive consumer adoption. We ended the quarter with Stoker's at 66% weighted distribution, up from 64% in Q4 2022. On the product innovation front within Smokeless, we continue to support the FRE brand and remain committed to profitably competing in the growing $1 billion white pouch category. We believe FRE's point of difference with more satisfaction in every pouch will enable it to carve out a competitive and distinct position in the market. We see encouraging results both in-store and online, We'll continue to refine our strategy and take learnings from our success in other product categories to efficiently scale into this segment as the category matures and becomes less promotional over time. In summary, we are hyper-focused on maximizing the value of our world-class brands and extensive distribution capabilities. Let me now turn the call back over to Louie to go through our results. Thank you, Summer. Starting with our consolidated quarterly results. Q1 sales were up 0.1% to $101.0 million. Adjusted gross margin was down 310 basis points to 48.2% due to segment and product mix. Adjusted EBITDA was $20.8 million, down $4.5 million year-over-year due to the decline in Zig-Zag gross profit. Going into segment performance. Zig-Zag sales decreased 8.3% to $41.9 million, with volume down 8.6% and price mix up 0.3%. Our U.S. papers and wraps businesses were down double digits due to the anticipated reduction in trade inventory during the quarter, which we've previously discussed. If you look through our shipments to retail, our sell-through is outperforming the market in a traditional channel. Our E-commerce business, particularly B2B alternative sales, grew double digits. Our Canadian and other smoking accessories categories also grew double digits during the quarter, both aided by CLIPPER sales. Gross margins declined 420 basis points to 53.5% during the quarter, driven primarily by product mix, principally the trade inventory adjustment of higher margin U.S. rolling paper and wraps products, and further impacted by the contribution of CLIPPER lighters, which operates at lower gross profit margins. We expect higher gross margins sequentially as U.S. paper and wrap sales normalize. Moving to Stoker's. Stoker's products net sales increased 6.2% to $33.7 million in the quarter, with a 0.3% volume increase and a 5.9% price mix increase. Net sales for the MST portfolio grew high single digits. Stoker's volumes up 5.0% despite category volume down 4.9%, with share growing 60 basis points year-over-year to 6.4% during the quarter, according to MSAi. Its share in store selling was up 50 basis points year-over-year to 9.7%, with Stoker's now in stores representing 66% of industry volumes, which still provides a long runway for growth. Chew sales were up low single digits from the previous year. Stoker's Chew was the number one chewing brand in the quarter, gaining 310 basis points of share to 29.8%, according to MSAi. Overall, TPB loose-leaf volume was flat versus the category, which declined 7%. Category performance was driven by a larger decline in premium loose-leaf compared to discount brands, with TPB's volumes benefiting from consumer trade down. Gross margin increased 200 basis points, primarily due to MST pricing gains. Moving to CDS, our wholly owned distribution subsidiary. Sales were $25.4 million, and adjusted gross margins were 26.6%. Moving to our balance sheet. We repurchased $13.9 million notional value of our convertible bonds during the quarter, and we ended the quarter with $104.8 million of cash and $128.4 million of available liquidity, providing flexibility for further capital deployment. We continue to closely monitor the financing markets ahead of our July 2024 convertible note maturity. We believe our current cash balance and free cash flow generation provides us the necessary flexibility to address the maturity. On to guidance. At this point of the year, with continued economic uncertainty, we continue to project consolidated adjusted EBITDA of $88 million-$94 million for fiscal year 2023. Other projections include effective income tax rate of 24%-26%, up from previous projection of 22%-24%. We continue to expect CapEx to be temporarily elevated this year at approximately $13 million, with $9 million related to a manufacturing project we expect to complete this year. We expect CapEx to return to more normalized levels in 2024. We expect to spend $12 million-$15 million in capitalized software implementation costs related to our ERP and CRM implementations, which are still expected to be completed by the end of the year. We continue to carefully evaluate potential PMTA spend related to our modern oral products, all of which have been accepted by the FDA. Let me turn it back to Graham. Before I open the call to Q&A, I wanted to give you some thoughts on why I'm excited about the long-term opportunity we have in front of us, and why we have confidence in the balance of the year now that we believe the inventory reset is largely in the rearview mirror. We have a portfolio of iconic brands that consumers love. Zig-Zag is the number one rolling paper and wraps brand in North America that is benefiting from secular growth trends in cannabis consumption, new product introductions, and a compelling channel opportunity. We've entered a new category in lighters with a proven global brand in CLIPPER that significantly expands the addressable market we compete in. For those of you that don't know, let me remind you that among mass market lighters, CLIPPER is differentiated by being one of the few that are refillable, providing an environmental benefit that's attractive to many of our customers. Stoker's is the number one loose-leaf brand, and Stoker's Moist Snuff remains one of the fastest-growing brands in the category with a sizable share of market we have yet to penetrate. These brands are being sold, distributed, and marketed by a world-class team, and our entire organization is aligned towards creating shareholder value by driving organic growth combined with acting financially disciplined. Thank you for participating in the call today. With that, I'd like to open the call for questions. Thank you. If you would like to ask a question on the phone lines today, you can press star one on your telephone keypad. To remove yourself from the queue, it is star one again. We'll take our first question from Vivien Azer with TD Cowen. Hi, this is Victor Ma on for Vivien Azer. Thank you very much for the questions. I have a few. A key competitor in the U.S. tobacco space recently revised down their expectation for price elasticities in the U.S. cigarette market. While you don't play in that segment, can you comment on how your views of price elasticities in MST have evolved? Yeah, I don't think there's any evolution in our thinking. You know, we're generally a price follower in the industry. Our plan is, you know, to continue to go and get more weighted distribution and continue to follow what the industry does. We've got a nice value proposition with our MST, and I think we're well-positioned in the current economic environment. Got it. Thank you. High single-digit growth in Stoker's would suggest that down-trading, you know, is continuing in the MST space. Can you comment on, you know, how that's evolved and whether you expect down-trading to persist or accelerate from here? Yeah, I can't prognosticate whether it's gonna accelerate in the future. It's been fairly consistent, you know, over the last few years. At this point in time, we're, you know, keeping our head down, focused on our existing plan and, you know, taking what the market will give us. Got it. Thank you. On FRE, can you please expand on the rationale for expanding all the way down to a 3-milligram offering? You know, a bulk of the category volume sits at the 6-milligram offering, and the strategic rationale for the original FRE positioning was to go above that. You know, what's the risk that, you know, with an expanded range of nicotine offerings, that the differentiation around FRE gets diluted? Thanks for that question. I think for FRE, it's important for us as consumers are transitioning into that category to have a wide offering available for them. It doesn't mean that we'll keep, you know, all nicotine offerings on the market in perpetuity, but as we're learning about that consumer, we feel it's important for us to offer that variety for them up to this point. Understood. Thank you. Just last question. Zig-Zag margins were under pressure. They were better than what we expected. With the understanding that CLIPPER will continue to be, you know, a headwind next quarter, is it reasonable to expect margin stabilization and recovery in the second half given the headwinds to the space in the U.S.? Yeah, we actually expect sequential increase just because with the inventory trade reduction, it came from our higher gross margin products. Sequentially, you should see an uplift, but then, you know, after that, you'll have CLIPPER continue to grow, and so that'll be a headwind to gross margins going forward. Understood. Thank you so much for the color. That's it for me. Thank you. We'll take our next question from Eric Des Lauriers with Craig-Hallum. Great. Thank you for taking my questions. first, I was hoping you could just expand on or perhaps just reiterate some of the dynamics that you're seeing at Zig-Zag retail so far year to date. I think I just missed some of those comments. you know, obviously, you have some of your customers working through inventory, but some significant strength it seems like at the retail side, and I was hoping you could just expand on that a bit first. Thanks. Yeah, Eric. Thanks for the question. We talked about this last quarter. There's really two dynamics, us shipping to our wholesale customers and then what our wholesale customers ship to retail and then ultimately what moves to the consumer. We grew share in all four of our major categories in the quarter, and so we feel good about what the consumer's pulling off the shelf. It was really just a, you know, what we consider a disruption in trade inventories of the imbalance that occurred in 2022. In markets, we feel good about. Feel good about the plan that we're on to continue to execute and win those consumers. It's just again, a blip in time here for Q1 on the trade inventories. Okay, great. On the Zig-Zag innovation side, could you just give us some more color on perhaps some of the innovation plans within kind of papers themselves? You know, when you look at, you know, some of the competitive offerings in the alternative channel, especially, you know, there seems to be, you know, much more SKUs than you would see at, you know, C stores, for example. Do you have plans to sort of, you know, expand the number of SKUs for Zig-Zag papers specifically? Kind of any additional commentary around Zig-Zag innovation would be great. Hey, that's a great question and one that we spend a lot of time talking about. As you noted, consumers, particularly in the non-traditional space, are continuously looking for product innovation, and so it's something we're hyper-focused on. As you may have heard on the call, we recently launched, you know, two products, Palm Rolls as well as 70's Cones, and those were driven by some consumer insights that we have because we do spend a lot of time thinking about consumers, you know, what they're looking for in the market and talking to our sales team about what they're seeing in the market. We certainly have a pipeline of products that are underway, and we're excited to bring to market. All right. Appreciate that color. Last one from me here. It's a question I asked on the last call as well. Just wondering if you're seeing any changes to the, you know, competitive dynamics in the alternative channel, specifically following the court order against one of your main rolling paper competitors, just, you know, any sort of increased opportunity to take share or just any additional comments you have there would be great? Thanks. Yeah, sure. As to your point on the last call, we did talk about that initial chatter coming out of that court order that you referenced. We certainly navigated through that with our customers and our consumers. Candidly, it's been a bit quiet. We continue to focus on maintaining our plan with Zig-Zag with both our customers and consumers and are excited to keep plowing through the year with it. All righty. Thank you. We'll take our next question from Hale Holden with Barclays. Good morning. Sorry, I just have two on the same theme there on the innovation questions, on the Palm wraps and the 70-millimeter cones, are those additional shelf space allocation in most places, or are they substitutions for something else you might have on shelf? Great question. We're excited that in most cases, they allow us to expand our shelf space. It's really important to us, particularly in the alternative channel, to capture our fair share in that market. This is an opportunity that affords us the additional shelf space. Great. The last time you guys launched, you know, new cone products, it definitely was noticeable in results. Are these, do you think, incremental or big drivers? It's just hard for me to know. Yeah. It's in the early days of the launch. You know, our plan is for the product to be incremental for the end consumer. Ultimately, what we're trying to do is provide a wide range of options, different sizes, for different consumer needs. We view it as an incremental opportunity for the company. Great. Thank you so much. I appreciate it. Thank you. That does conclude the question and answer session. I'd like to turn the call back over to our presenters for any additional or closing remarks. Thank you, operator. Appreciate everybody's time today. We look forward to speaking to you next quarter. Thank you. Thank you. That does conclude today's presentation. Thank you for your participation. You may now disconnect.