Earnings release
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• TURNING POINT ™ BRANDS Turning Point Brands Announces Second Quarter 2026 Results Q2 2026 Modern Oral Gross Revenue increased 149 % to $ 87.0 million and Net Sales increased 128 % to $ 68.4 million . Accounting for 48 % of total company net sales , up from 26 % in Q2 2025 • Raising FY 2026 Modern Oral Gross and Net Sales guidance LOUISVILLE , KY – August 4 , 2026 – Turning Point Brands , Inc. ( " TPB " or " the Company " ) ( NYSE : TPB ) , a manufacturer , marketer and distributor of branded consumer products , including alternative smoking accessories and consumables with active ingredients , today announced financial results for the second quarter ended June 30 , 2026 . Q2 2026 Financial Highlights ( All results reflect comparisons to prior - year period ) Stoker's segment Net Sales increased 54.5 % • Total Consolidated Net Sales increased 22.6 % to $ 142.9 million O 0 • • Zig - Zag segment Net Sales decreased 24.8 % Gross Profit increased 40.6 % to $ 93.7 million driven by Modern Oral growth and a tariff refund ; adjusting for the out of period COGS related to the tariff refund , gross profit was $ 81.5 million Net Income decreased 75.2 % to $ 3.6 million Adjusted EBITDA decreased 50.0 % to $ 15.2 million inclusive of strategic sales and marketing investments ( see Schedule A for a reconciliation to Net Income ) Diluted EPS of $ 0.18 and Adjusted Diluted EPS of $ 0.23 compared to $ 0.79 and $ 0.98 respectively , in the same period one year ago ( see Schedule B for a reconciliation to Diluted EPS ) “ We delivered another strong quarter , highlighted by continued growth in Modern Oral . ” said Graham Purdy , President and CEO . " We believe our investments in retail distribution , commercial capabilities and brand development are translating into stronger consumer adoption and expanding market access for both FRE and ALP . The progress we're making today positions us to capitalize on the continued shift in nicotine consumption toward modern oral to maximize long - term shareholder value . "
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Stoker’s Products Segment (75% of total net sales in the quarter) For the second quarter, Stoker’s segment net sales increased 54.5% from the prior year to $107.6 million, driven by triple -digit growth in Modern Oral net sales. For the quarter, Stoker’s segment gross profit increased 63.3% from the prior year to $71.1 million. Adjusting for the out of period COGS related to a tariff refund, gross profit increased 40.7% to $61.2 million year -over-year. Adjusted gross profit as a percentage of net sales decreased to 56.9% for the three months ended June 30, 2026, from 62.5% for the three months ended Ju ne 30, 2025, due to higher chain penetration. Zig-Zag Products Segment (25% of total net sales in the quarter) For the second quarter, Zig-Zag segment net sales decreased 3.5% to $35.4 million compared to the first quarter 2026. For the quarter, Zig-Zag segment gross profit decreased 2.1% from the prior year to $22.6 million. Adjusting for the out of period COGS related to the tariff refund, gross profit was $20.3 million. Adjusted gross profit as a percentage of net sales increased to 57.3% for the three months ended June 30, 2026, from 49.1% for the three months ended June 30, 2025, driven primarily by product mix. Performance Measures in the Second Quarter Investment in the quarter focused on sales and marketing efforts to support distribution and brand building. In the second quarter, consolidated selling, general and administrative (“SG&A”) expenses increased 91.1% from the prior year to $76.9 million, inclusive of Modern Oral-related sales and marketing investments and increased outbound freight costs. As of June 30, 2026, ending cash was $268.3 million and net debt was $31.7 million, inclusive of approximately $59.6 million of equity raised during the quarter to support long term strategic objectives. The company’s total liquidity is $339.0 million, which includes $70.7 million of availability on an asset backed revolving credit facility. 2 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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2026 Outlook ● Projected full year Modern Oral Gross Sales of $330-$350 million up from $280-$300 million ● Projected full year Modern Oral Net Sales of $260-$270 million up from $210-$225 million ● Projected full Year Adjusted EBITDA of $70-90 million, inclusive of investment in Modern Oral sales, marketing, and trade promotions Earnings Conference Call As previously disclosed, a conference call with the investment community to review TPB’s financial results has been scheduled for 9:00 a.m. Eastern on Tuesday, August 4, 2026. Investment community participants should dial in 10 minutes ahead of time using the toll - free number (833) 461-5787 (International Dial-Ins) and follow the audio prompts after typing in the event ID: 335968790. A live listen- only webcast of the call will be available on the Events and Presentations sect ion of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call. Non-GAAP Financial Measures In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States ( GAAP), this press release includes certain non -GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss). A reconciliation of these non -GAAP financial measures accompanies this release. Also note that a reconciliation of forward-looking non-GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be necessary for suc h reconciliation. About Turning Point Brands, Inc. Turning Point Brands, Inc. (NYSE: TPB) is a manufacturer, marketer and distributor of branded consumer products including alternative smoking accessories and consumables with active ingredients through its iconic brand portfolio, including Zig-Zag®, Stoker’s®, FRE®, and ALP®. TPB’s products are available in more than 220,000 retail outlets in North America and on sites such as www.zigzag.c om, www.frepouch.com, and www.alppouch.com. For the latest news and information about TPB and its brands , please visit www.turningpointbrands.com. 3 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their natu re, forward -looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward -looking statements. Any forward -looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the “SEC”) and other public statements made from time -to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such events or how they may affect it. TPB has no obligation, and does not intend, to update any forward -looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, those included in the Company’s Annual Reports on Form 10 -K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995. This press release contains TPB’s preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB's customary quarter -end closing and review procedures and third -party review. As a result, TPB's reported information in its Quarterly Report on Form 10 -Q for the quarter ended June 30, 2026 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB's financial condition and results of operations for the quarter ending June 30, 2026 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB's full second quarter 2026 results when such results are disclosed by TPB in its Quarterly Report on Form 10 -Q for the quarter ended June 30, 2026. Investor Contacts Turning Point Brands, Inc. ir@tpbi.com Financial Statements Follow on Subsequent Pages 4 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Turning Point Brands, Inc. Consolidated Statements of Income (dollars in thousands except share data) (unaudited) Three Months Ended June 30, 2026 2025 Net sales $ 142,960 $ 116,634 Cost of sales 49,256 50,011 Gross profit 93,704 66,623 Selling, general, and administrative expenses 76,991 40,296 Operating income 16,713 26,327 Other expense, net 63 - Interest expense, net 4,251 5,140 Investment loss (gain) 1,089 (78 ) (Income) loss from equity method investment (2,674 ) 61 Income before income taxes 13,984 21,204 Income tax expense 3,683 4,244 Consolidated net income 10,301 16,960 Net income attributable to non-controlling interest 6,703 2,480 Net income attributable to Turning Point Brands, Inc. $ 3,598 $ 14,480 Basic income per common share: Net income attributable to Turning Point Brands, Inc. $ 0.18 $ 0.81 Diluted income per common share: Net income attributable to Turning Point Brands, Inc. $ 0.18 $ 0.79 Weighted average common shares outstanding: Basic 19,890,588 17,920,567 Diluted 20,160,795 18,321,913 5 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Turning Point Brands, Inc. Consolidated Balance Sheets (dollars in thousands except share data) (unaudited) June 30, December 31, ASSETS 2026 2025 Current assets: Cash $ 268,307 $ 222,760 Accounts receivable, net of allowances of $244 in 2026 and $206 in 2025 22,698 25,726 Inventories, net 133,434 107,989 Other current assets 75,695 60,675 Total current assets 500,134 417,150 Property, plant, and equipment, net 39,703 36,247 Right of use assets 15,689 14,480 Deferred financing costs, net 858 1,180 Goodwill 135,830 136,097 Other intangible assets, net 63,419 64,042 Master Settlement Agreement (MSA) escrow deposits 29,684 29,887 Other assets 69,879 64,667 Total assets $ 855,196 $ 763,750 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 35,292 $ 20,420 Accrued liabilities 52,924 54,587 Total current liabilities 88,216 75,007 Deferred tax liabilities, net 7,851 8,289 Notes payable and long-term debt 294,145 293,625 Other long-term liabilities - 4,138 Lease liabilities 10,960 10,708 Total liabilities 401,172 391,767 Stockholders’ equity: Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- - - Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,833,181 issued shares and 20,048,922 outstanding shares at June 30, 2026, and 20,589,527 issued shares and 19,132,384 outstanding shares at December 31, 2025 225 216 Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0- - - Additional paid-in capital 241,320 203,627 Cost of repurchased common stock (784,259 shares at June 30, 2026 and 1,457,143 shares at December 31, 2025) (21,171 ) (47,637 ) Accumulated other comprehensive loss (1,975 ) (1,563 ) Accumulated earnings 211,699 199,661 Non-controlling interest 23,926 17,679 Total stockholders’ equity 454,024 371,983 Total liabilities and stockholders’ equity $ 855,196 $ 763,750 6 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Turning Point Brands, Inc. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Consolidated net income $ 24,243 $ 32,751 Adjustments to reconcile net income to net cash provided by operating activities: Loss on extinguishment of debt - 1,235 Loss on sale of property, plant, and equipment - 45 (Income) loss from equity method investment (5,657 ) 211 Loss (gain) on investments, net 1,224 (17 ) Depreciation and other amortization expense 3,808 2,893 Amortization of other intangible assets 627 612 Amortization of deferred financing costs 842 872 Deferred income tax expense (398 ) 2,716 Stock compensation expense 5,639 3,292 Noncash lease income (1,623 ) (728 ) Changes in operating assets and liabilities: Accounts receivable 2,671 (20,504 ) Inventories (25,701 ) (8,604 ) Other current assets (15,060 ) (5,486 ) Other assets (46 ) (4,087 ) Accounts payable 13,564 14,187 Accrued liabilities and other (65 ) 9,842 Net cash provided by operating activities $ 4,068 $ 29,230 Cash flows from investing activities: Capital expenditures $ (5,227 ) $ (6,176 ) Payment for equity investments (1,450 ) (2,783 ) Purchases of investments (3,833 ) (4,079 ) Proceeds from sale of investments 3,850 4,460 MSA escrow deposits, net 5 (48 ) Purchase of option agreement (4,940 ) - Net cash used in investing activities $ (11,595 ) $ (8,626 ) Cash flows from financing activities: Redemption of 2026 Notes $ - $ (250,000 ) Proceeds from 2032 Notes - 300,000 Equity offering proceeds 59,549 - Tax distribution (2,500 ) - Payment of dividends (3,270 ) (2,731 ) Payment of financing costs - (7,251 ) Exercise of options 324 4,921 Redemption of options - (33 ) Redemption of restricted stock units (330 ) (1,970 ) Redemption of performance based restricted stock units (1,014 ) (2,624 ) Net cash provided by financing activities $ 52,759 $ 40,312 Net increase in cash $ 45,232 $ 60,916 Effect of foreign currency translation on cash $ 292 $ 20 Cash, beginning of period: Unrestricted $ 222,760 $ 48,941 Restricted 1,914 1,961 Total cash at beginning of period $ 224,674 $ 50,902 Cash, end of period: Unrestricted $ 268,307 $ 109,925 Restricted 1,891 1,913 Total cash at end of period $ 270,198 $ 111,838 7 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Non-GAAP Financial Measures To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non -U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss). We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss) are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance. We define “EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, deprecia tion, amortization. We define “Adjusted EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, incom e tax expense, depreciation, amortization, other non -cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Net Income” as net income excluding items that we do not conside r ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Diluted EPS” as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adju sted Operating Income (Loss)” as operating income (loss) excluding other non -cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) exclude s ignificant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non -U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures. Note that a reconciliation of forward -looking non -GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be ne cessary for such reconciliation. 8 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Schedule A Turning Point Brands, Inc. Reconciliation of GAAP Net Income to Adjusted EBITDA (dollars in thousands) (unaudited) Three Months Ended June 30, 2026 2025 Net income attributable to Turning Point Brands, Inc. $ 3,598 $ 14,480 Add: Interest expense, net 4,388 5,140 Income tax expense 3,974 4,244 Depreciation expense 939 842 Amortization expense 1,429 1,048 EBITDA $ 14,328 $ 25,754 Components of Adjusted EBITDA Corporate restructuring (a) 133 - Stock based compensation (b) 2,701 1,628 Transactional expenses and strategic initiatives (c) 94 569 Non-recurring legal (d) 667 504 FDA PMTA (e) 3,170 1,651 Mark-to-market loss (gain) on Canadian inter-company note (f) 598 (665 ) Tariff adjustment (g) (8,475 ) - Manufacturing start-up costs (h) 657 - Honorarium (i) 63 - Non-cash asset impairment (j) 1,307 908 Gain on investment (k) - (714 ) Non-recurring freight (l) - 837 Adjusted EBITDA $ 15,243 $ 30,472 (a) Represents costs associated with corporate restructuring, including severance and early retirement. (b) Represents non-cash stock options, restricted stock, PRSUs, etc. (c) Represents the fees incurred for transaction expenses. (d) Represents legal expenses incurred in connection with litigation related to an insurance claim. (e) Represents costs associated with applications related to FDA premarket tobacco product application (“PMTA”). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete. (f) Represents a mark-to-market loss (gain) attributable to foreign exchange fluctuation. (g) Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund or refunded. (h) Represents non-recurring expenses incurred during the start-up of manufacturing lines. (i) Represents an honorarium gift included in other expense, net. (j) Represents impairment of investment assets. (k) Represents gain on investments. (l) Represents elevated non-recurring outbound freight costs due to ERP transition. 9 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238
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Schedule B Turning Point Brands Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted EPS to Adjusted Diluted EPS (dollars in thousands except share data) (unaudited) Three Months Ended Three Months Ended June 30, 2026 June 30, 2025 Adjusted Net Income Adjusted Diluted EPS Adjusted Net Income Adjusted Diluted EPS GAAP Net Income and Diluted EPS $ 3,598 $ 0.18 $ 14,480 $ 0.79 Corporate restructuring (a) 98 0.00 - - Stock based compensation (b) 1,990 0.10 1,302 0.07 Transactional expenses and strategic initiatives (c) 69 0.00 455 0.02 Non-recurring legal (d) 491 0.02 403 0.02 FDA PMTA (e) 2,335 0.12 1,321 0.07 Mark-to-market gain on Canadian inter-company note (f) 441 0.02 (532 ) (0.03 ) Tariff adjustment (g) (6,243 ) (0.31 ) - - Manufacturing start-up costs (h) 484 0.02 - - Honorarium (i) 46 0.00 - - Non-cash asset impairment (j) 963 0.05 726 0.04 Gain on investment (k) - - (571 ) (0.03 ) Non-recurring freight (l) - - 669 0.04 Tax benefit (m) 400 0.02 (265 ) (0.01 ) Adjusted Net Income and Adjusted Diluted EPS $ 4,672 $ 0.23 $ 17,988 $ 0.98 (a) Represents costs associated with corporate restructuring, including severance and early retirement. (b) Represents non-cash stock options, restricted stock, PRSUs, etc. (c) Represents the fees incurred for transaction expenses. (d) Represents legal expenses incurred in connection with litigation related to an insurance claim. (e) Represents costs associated with applications related to FDA premarket tobacco product application (“PMTA”). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete. (f) Represents a mark-to-market loss (gain) attributable to foreign exchange fluctuation. (g) Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund or refunded. (h) Represents non-recurring expenses incurred during the start-up of manufacturing lines. (i) Represents an honorarium gift included in other expense, net. (j) Represents impairment of investment assets. (k) Represents gain on investments. (l) Represents elevated non-recurring outbound freight costs due to ERP transition. (m) Represents adjustment from quarterly tax rate to quarterly projected tax rate of 22% in 2026 and 21% in 2025. 10 Turning Point Brands, Inc. | www.turningpointbrands.com | ir@tpbi.com | 502.774.9238