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Dec 31, 2019
Turning Point Brands Q4 2019 Earnings Report
Turning Point Brands experienced a challenging Q4 2019 due to vaping market disruption, but core tobacco segment remained solid, and strategic restructuring positioned the company for renewed growth.
Key Takeaways
Turning Point Brands' Q4 2019 net sales decreased by 14.9% to $80.2 million, and the company reported a net loss of $12.3 million, primarily due to $24.7 million in restructuring costs. The vaping market disruption significantly impacted the NewGen segment, but the core tobacco segment showed resilience. The company has taken steps to consolidate its operations and focus on creating value for shareholders.
Net sales decreased 14.9% to $80.2 million due to vaping market disruption.
Net loss of $12.3 million was reported, impacted by $24.7 million in restructuring costs.
Core tobacco segment performed well, while the NewGen segment was significantly impacted by vaping market issues.
Company restructured operations to stabilize the vaping business and focus on growth in MST, Zig-Zag, and Nu-X.
Turning Point Brands
Turning Point Brands
Turning Point Brands Revenue by Segment
Revenue by Segment
Stoker's Products Sales Revenue
CapyFin.comZig-Zag Products Sales Revenue
CapyFin.com Forward Guidance
The company projects 2020 net sales to be $338 to $353 million and Adjusted EBITDA of $69 to $75 million, assuming no upside from the PMTA process.
Positive Outlook
- Projected 2020 net sales of $338 to $353 million.
- Projected 2020 Adjusted EBITDA of $69 to $75 million.
- Expects to continue growing market share in MST.
- Plans to expand Zig-Zag in the alternatives space.
- Aims to further enhance product pipeline at Nu-X.
Challenges Ahead
- Projections assume no upside from the PMTA process in 2020.
- Stock compensation and non-cash incentive expense in 2020 is projected to be $3.3 million.
- Cash interest expense is projected to be $11-$12 million.
- The company expects the 2020 effective income tax rate to be 21-23%.
- Capital expenditures for 2020 are anticipated to be approximately $4.0 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income