Good morning, and welcome to the Turning Point Brands Q3 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 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 are Turning Point Brands President and CEO, Graham Purdy, and Chief Revenue Officer, Summer Frein. This morning, we issued a news release covering our Q3 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, provide our 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 SEC. On the call today, we will reference our non-GAAP financial measures. These measures and reconciliations to GAAP can be found in today's earnings release, along with reasons why management believes 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 Q3 results were in line with our expectations and demonstrated continued progress against our plan. During the September quarter, we showed double-digit revenue growth at Stoker's and sequential stability in the Zig-Zag segment, notwithstanding the year-over-year comparison as we continue to gain traction from the alternative channel initiatives we've put in place. Given our performance through the first nine months of the year, we are raising the bottom end of our EBITDA guidance from $90 -$92 million, with the range now $92 -$95 million, from $90 -$95 million. As we finish up this year and move into 2024, we are particularly excited about our national rollout of our modern all-white pouch nicotine product called FRE, that's F-R-E. This product will compete in a category that's already worth over $1 billion in wholesale revenue and is currently growing 40%-50% per MSAI. Up until now, we've spent most of our time over the past year shoring up our supply chain to ensure consistent product quality, analyzing consumer feedback, and testing online, select in-store marketing and merchandising programs to ensure a successful national rollout. Given our progress to date, we are now focusing on prudently ramping up our sales and distribution efforts to achieve steady growth over time. Our early learnings and performance in test markets have given us more confidence to now leverage our sales and distribution expertise to profitably expand FRE's profile in store count, similar to what we achieved with Stoker's moist snuff over time. We look forward to providing updates on this exciting new product in the quarters and years to come. Stoker's had another strong quarter with revenue up 10.1%, an acceleration from 7.3% growth in the June quarter, reflecting overall volume and market share gains as its quality to value proposition continues to resonate with consumers. Stoker's continues to be a steady growth engine with a long runway for volume growth and favorable pricing dynamics. Zig-Zag sales were consistent with the last quarter, but faced a tough comp from the previous year due to promotional activity, initial Clipper load-in, timing of Canadian paper deliveries, and the discontinuation of a low-margin product line in Canada. Despite this transitory dynamic, we're confident that the Zig-Zag brand continues to strengthen based on a number of factors we track. Our sell-through was better than our reported year-over-year results, and we are encouraged by our wholesale customers and retail consumers' response to our expanding portfolio, which includes Clipper lighters and our recent new product introductions. This is particularly true in our alternative channel, where Zig-Zag and its growing portfolio efficiently fills out our customers' inventory to better satisfy the growing demand from end consumers. Both factors are expanding our addressable market. We are having success not only winning new, untapped alternative customers across the brick-and-mortar and alternative distributor network, but we are also seeing existing alt customers buying a more complete Zig-Zag portfolio. As a result, we've seen healthy increases in average order sizes across the alternative space while providing the Zig-Zag brand with more valuable shelf space and merchandising real estate within these stores to build brand awareness as we satisfy evolving end consumer preferences. As you know, the alternative channel is consistently expanding by virtue of additional states green-lighting medical and recreational cannabis, as well as attempts to provide a better shopping experience for consumers. In addition to more legal dispensaries and manufacturing and processing facilities, other retail outlets like head shops are drafting off this trend. Our alternative B2B business saw Zig-Zag sales accelerate, growing over 40% during the quarter. We also continue to be proactive in optimizing our capital structure and opportunistically purchased another $15 million notional of our convertible notes during the Q2, bringing the total purchased as of the end of the quarter to $54 million, while maintaining a strong cash balance to help address future maturities. Moreover, today we announced the formation of a $75 million ABL revolving credit facility, which, along with the cash on hand and projected future FRE cash flow, allows us to comfortably address the maturity of our convertible notes next summer. Louie will discuss details later in the call. 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, our focus on growing the Zig-Zag brand remains a critical element of our plan. We continue to execute against our multi-year roadmap to solidify Zig-Zag as a lifestyle brand, especially in the alternative channel, which Graham noted. There's significant value of growing brand awareness, trial, and conversion, and ultimately becoming a ubiquitous brand that a consumer is able to find anywhere. As Graham mentioned, we had another strong quarter in our B2B alt segment, which saw an acceleration in our core Zig-Zag papers and cones portfolio. We saw a double-digit increase in the number of customers and orders on our alternative platform, with a healthy increase in average order size. We made significant progress across the business this past quarter, as we saw growth in every subcategory with the alt channel, which includes head shops, smoke shops, dispensaries, including MSO-owned, distributors, cultivators, and manufacturers, and processors. Additionally, we are seeing increased engagement across our digital platforms. Total online traffic sessions on our dedicated B2C site are up 33% versus year ago. Our investment into organic SEO since early 2020 has placed Zig-Zag into an optimal situation across the digital atmosphere, with over 10,000+ branded and non-branded key terms earning placement on page 1 of Google and various other search engines. This focus on search engine optimization has driven an approximately 70% increase for the channel's organic search visitorship since 2022. We've also seen an increase in returning and repeat customer rates. Further, last quarter, we shared the exciting news of launching in Zumiez as part of our commitment to continuing to expand our sales channel. As a reminder, Zumiez is one of the largest brick-and-mortar specialty apparel stores, with over 600 locations across the United States. Due to successful progress and consumer interest in purchases thus far, we've already had the opportunity to expand into additional stores. We look forward to continuing to provide updates that showcase the momentum and efforts that support Zig-Zag's growth. Turning to Clipper, we continue to build consumer awareness through our efforts, both in store and online. The engagement in our social channels highlight that consumers are interested in the points of difference of Clipper versus competitive lighter brands by way of significant and increasing engagement. Throughout the quarter, we saw our social media follower growth, total consumer impressions, and content interactions grow, driven in particular by showcasing the unique features of Clipper. As noted in previous calls, we believe this category is complementary to our existing business, and we continue to see the synergies of coupling Zig-Zag and Clipper together with healthy demand for Zig-Zag brand and Clipper lighters. Moving to smokeless, Graham covered the progress we continue to see for Stoker's. As more consumers are entering the Stoker's franchise because of the value proposition, we have continued to see more engagement with the brand across our digital properties. Building this engagement is an essential part of our strategy as we continue to see adult dippers transition to Stoker's and remain with the brand over time. We are also excited about our upcoming broader push on FRE. The early receptivity and engagement has been encouraging thus far as our differentiated nicotine offerings are resonating with our customers and consumers. In summary, we continue to focus on maximizing the value of our brands, executing against the plan we've established, and growing our business with both our retail and end consumers. We continue to focus 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. Q3 sales were down 5.6% to $101.7 million. Gross margin was up 180 basis points to 50.7% due to segment and product mix. Adjusted EBITDA was $24.4 million, which was stable from the previous year. Going into segment performance, Zig-Zag sales decreased 10.2% year-over-year, $46.8 million, but stable sequentially. Our U.S. papers and wraps businesses were down due to promotional activities during the previous year period, but were up sequentially. Our e-commerce business, particularly B2B alternative sales, grew double digits. Our Canadian and other smoking accessories categories saw declines during the quarter, primarily due to favorable timing of Canadian deliveries in the prior year period, and a discontinuation of a low-margin third-party product line, which impacted sales by $1.8 million during the period. Gross margins increased 330 basis points to 57.2% during the quarter, driven primarily by product mix, including the impact of the Clipper load during the prior year period and the discontinuation of the low-margin product line. Stoker's products net sales increased 10.1% to $36.9 million in the quarter, with a 2.2% volume increase and 7.9% price mix increase. Net sales for the MST portfolio grew double digits. Stoker's volume was up 4.6%, despite category volume down 5.3%, with share growing 70 basis points year-over-year to 7.0% during the quarter, according to MSAI. Its share in-store selling was up 70 basis points year-over-year to 10.5%, with Stoker's now in stores representing 67% of industry volumes, which still provides a long runway for growth. Tub sales were up low single digits from the previous year. Stoker's tub was the number one tub brand in the quarter, gaining 220 basis points of share to 30.6%, according to MSAI. Overall, TPB loose-leaf volume was up 0.4% versus the category, which declined 3.1%. Category performance was driven by a larger decline in premium loose-leaf, with TPB's volumes benefiting from customer trade down as Stoker's volumes grew from the previous year. Our FRE sales more than doubled off a low base as we started expansion of the product. Gross margin increased 100 basis points to 55.7%, primarily due to MST pricing gains. Moving to CDS, which was restructured during the quarter to eliminate certain unprofitable businesses and focus on a narrower set of products to better position it as a standalone business. Sales were $18.0 million. Gross margin was 23.8%. Moving to our balance sheet. We repurchased $15.0 million notional value of our convertible bonds during the quarter. We ended the quarter with $96.1 million of cash on the balance sheet. We also closed on a $75 million ABL facility that provides the company with further flexibility, and along with our cash on hand and FRE cash flow generation, ample liquidity to address the maturity of our remaining $118.5 million convertible notes through July 2024. We now have liquidity to allow us to reduce our net and gross leverage to within a target of 2.5-3.5x range after addressing the convert. Moving to guidance. We now expect consolidated Adjusted EBITDA of $92 -$95 million for fiscal year 2023, compared to our previous outlook of $90 -$95 million. Other projections include effective income tax rate of 24%-26%. We now expect CapEx to be approximately $8 million, compared to $13 million previously, with the difference due to timing of payments related to our automation projects that are now scheduled for 2024. We expect to spend $12 -$15 million in capitalized software implementation costs related to our ERP and CRM implementation, which is still expected to be completed by the end of the year, although the timing of final payments may fall into 2024. We currently expect to spend approximately $2 million for the full year on PMTAs related to our Modern Oral products, which remain under review by the FDA. Now, let me turn it back to Graham. To conclude, despite this year's challenges, in particular, navigating wholesale inventory reductions at Zig-Zag Canada, and contending with some difficult comparisons related to last year's Clipper load, we feel good about the business, particularly our progress in the alt channel and FRE. We remain focused on demonstrating further progress for the balance of the year and into 2024. Thank you for participating in the call today, and with that, I would like to open the call for questions. In order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Vivien Azer. Your line is open. Vivien, your line is open. Sorry about that. Good morning. Good morning, Vivien. So, Graham, I wanted to follow up on your commentary on FRE. Certainly encouraging to hear, given the robust trends that we're seeing from a segment-level perspective. You know, just so that we don't get, you know, over our skis in terms of the modeling, how incremental do you think we should expect this to be in 2024? Thanks. Yeah, look, I think, you know, Q4 is sort of the time of year where we're sort of expanding out the foundation. You know, I think our expectation for the product is to look similar to Stoker's over time. You know, as we compete against the large players in the category, you know, our share gains are generally small and incremental over a period of time. Certainly, and there are some kind of geographic nuances to market share across the competitive landscape in the Modern Oral nicotine category. Can you speak to how you guys are thinking about targeting geographically to optimize your share opportunity? Yeah, it's f or us, it's not necessarily a geographical focus on the product. It's really a store output focus on the product, similar to some of the past practices we've had with other categories, specifically Stoker's MST. You know, we focus on the stores that have the highest volume. Totally reasonable. And maybe just pivoting to Stoker's. So, you know, obviously, Modern Oral's weighing on the moist smokeless tobacco category broadly, Stoker's uniquely, you know, continuing to consolidate share, which is great to see. But can you comment at all on how you've seen the competitive pricing landscape evolve as competitors, you know, shift their focus towards Modern Oral? Thanks. Yeah, it's y ou know, obviously, we keep a very close eye on it. Stoker's has been a really nice success story for this, for this company. I think as of late, you've seen, some of the large competitors engage, more strongly in the discount category, and so we're mindful of that, but I think we, you know, we keep our head down, we keep focused on, doing what we do. We certainly believe in our unique proposition, quality above all else, and certainly with the value, and, of course, the tub is, a unique offering for, for the consumer and provides a unique value proposition. So I think we're mindful, as, as the competitors sort of, you know, sort out, their go-to-market strategies, and we continue to focus on the things that we do well. Perfect. I'll just squeeze one last one in on Zig-Zag. Very nice margin expansion. You noted, Louie, some discontinued ops, which were helpful. But how should we think about a nd you commented on product mix as well as a benefit, but how should we think about channel mix as you continue to push towards non-traditional outlets? Thanks. Yeah, from a Gross Margin perspective, you know, obviously, we're agnostic in terms of where we're selling it to, but what we're seeing in the B2B side is comparable to the Gross Margins that we're seeing on the core side. Okay. That's awesome. Thanks. Your next question comes from the line of Michael Lavery. Your line is open. Thanks, good morning. Congrats on the quarter. Wanted to dig a little bit more into the Clipper penetration. How far do you think along you are with your 200+ distribution outlets? What type of penetration do we have so far, and where do we expect to get? Yeah, we haven't disclosed the kind of the stores that we are broken into. Obviously, that's competitive intel that we're keeping close guarded. But I would say is what we disclosed before was that Clipper, the lighter market in the U.S. and Canada is about $500 million, with about, you know, Clipper having about 3% share of that market. So we're around that level and building up, is how I would think about it. Okay. Can you give us a little more detail on the promotional activity we saw with Zig-Zag last year, please? I'm sorry, can you repeat that? The promotional activity that you referred to last year, that you compared, Zig-Zag sales to. Can you talk about what the promotional activity was and what type of impact you think that was? Yeah. So what we, what we had said was, you know, last year, in light of the inflationary environment, we tested some promotions to gauge kind of customer receptivity. It ended up being stronger than we thought, which led to that $5 million impact. So that was a combination of both the impact of those promotional activities as well as some timing of deliveries with one of our Canadian distributors last year. So those were headwinds that we faced, and we also mentioned, you know, this year, we discontinued a Canadian product line that was basically a low-margin loss leader for our operations out there. That was $1.8 million of impact. We'll have another $1.4 million of that next quarter as you think about the model, and then, another $1 million in Q1 of next year before we anniversary that comp. You know, this year, we didn't mention it in our earlier, in our earlier commentary, but we also saw some destocking in Canada, which we think impacted sales by another $1.5 million during the quarter. Okay, great. And then just on the alt channel, can you talk about, you know, how the penetration is occurring? Are they calling you, or are you calling them? You know, are you displacing anyone, or is it just all growth? Yeah, I'm happy to take that question. This is Summer. We continue to see exciting growth in the alt channel. And I think to your question, it, you know, certainly goes both ways, us calling them, them calling us. But I think, you know, even coming out of last night's exciting win in Ohio, if you think about that overall business opportunity, when coupled with D.C., it means that nearly half of the United States has access to a legal rec market. So we continue to focus on, you know, getting more, product into those customers. We saw great progress with our core paper line in the quarter, so not just, you know, growth based on innovative products, and we continue to work on being more of a solutions provider for all of those customers. Great. Thanks, guys. Congrats on the quarter. Thanks. Thanks. Bye. Your next question comes from the line of Eric Des Lauriers. Your line is open. Great. Thank you for taking my questions. First one from Clipper on me. So I understand, you know, you kind of want to be a bit more tight-lipped about, you know, exact distribution and whatnot. I was wondering if you could maybe just help us understand what you're seeing with current inventory trade dynamics. You know, when you expect sort of that headwind to, you know, perhaps turn into a tailwind, and when you're kind of expecting Clipper sales to, I guess, resume some growth here. Yeah. So, you know, what we've kind of said about, Clipper initially, or any new product, initially, you've got this load period where you have strong sales, and then you go through this period, of, what I would call kind of a lull, as the trade absorbs that inventory. We're in that lull period today, and we expect kind of, you know, sales to kind of bounce back, kind of as we enter 2024 and go through the year. Okay. And then, on FRE, I'm wondering if you can just comment a bit more on the competitive positioning that you're expecting to kind of roll out with that product. You mentioned that, you know, the sort of playbook is gonna kind of follow Stoker's from a distribution standpoint, you know, going after stores with higher volume. Can you kind of comment on the competitive positioning that you're planning on having with FRE as it relates to, you know, price points? Is this another kind of value product similar to Stoker's? So while the strategy is similar to Stoker's in terms of our approach and our growth expectations, we certainly are thinking about FRE as a more of a premium offering. We have strong belief in our point of difference, our USP, which is higher nicotine strength options available for our consumers, which we continue to see resonate both in-store and strong response online, and plan to profitably compete in the segment against those big brands. All right, that's helpful. Next question, just on loose-leaf. You know, understood it's a smaller segment within Stoker's. I think this was the first sort of return to year-over-year growth that we saw in a while. Is this something that you know, we should kind of expect going forward? Do you feel that you're at sort of a sustainable path forward? I you know, I understand it's a declining category. Are you seeing anything to suggest that you know, this year-over-year growth isn't just a kind of one-off this quarter or no real change to the overall kind of competitive dynamics within that? I would say we've seen some accelerated share gains in our loose leaf products, especially with our discount loose leaf offering out there, that's seeing growth. I wouldn't underwrite growth in this market going forward. I would say we're still expecting kind of a, you know, from a sales perspective, flattish to down. You know, the good news with loose leaf over time is that it has shrunk as a percentage of the overall Stoker's business. So, you know, it was two-thirds of our segment when we IPO, and now it's less than a third. So it's having less of an impact to sales, with MST being the bigger driver going forward. So obviously, we're happy with the growth that we saw in the quarter, but that is not our expectation for loose leaf going forward. That makes sense. And then just last one from me. Could you perhaps expand a bit on the margin impact of the discontinued product line in Canada? You know, I guess obviously there was some promotional activity over the past year or so. You know, we're now back up to that sort of 57%+ gross margin for Zig-Zag. Is this more of a sustainable path or I guess sustainable level going forward, or do you see a potential for some further margin gains now that this discontinued product line is phasing out? Yeah. I mean, from here, I would say that, you know, one, the $1.8 million came with single-digit gross margin, so it has a decent impact to our gross margins from a year-over-year perspective. The other thing is that, as we mentioned, Clipper is in a lull period now, and we mentioned those carry lower gross margins. So Clipper was down for us year-over-year perspective, as we were comping against a period where we had that load last year. So our expectation is actually, you know, with some of the newer products that we have, and if Clipper takes off, that should, you know, that may reduce our gross margins over time. But again, our focus within the Zig-Zag segment is increasing our gross profit dollars and leveraging the fixed costs associated that we have in that segment to grow our operating income. So, you know, we're not so focused on maintaining that gross margin levels, especially if we can get growth out of Clipper and some of our newer products that we're entering into the market with. That definitely makes sense. Thanks for the questions. There are no further questions at this time. Graham Purdy, I will turn the call back over to you. Thanks, operator. I appreciate everybody joining us for the call today, and we look forward to talking to you about another quarter from now. Thank you so much. This concludes today's conference call. You may now disconnect.