Turning Point Brands, Inc. is a branded consumer products company focused primarily on tobacco, alternative smoking accessories, and newer products that may contain or be associated with active ingredients such as nicotine or cannabidiol. The company is headquartered at 5201 Interchange Way in Louisville, Kentucky, and trades on the New ...Turning Point Brands, Inc. is a branded consumer products company focused primarily on tobacco, alternative smoking accessories, and newer products that may contain or be associated with active ingredients such as nicotine or cannabidiol. The company is headquartered at 5201 Interchange Way in Louisville, Kentucky, and trades on the New York Stock Exchange under the ticker TPB. It was founded in 1988 and became a public company through an initial public offering in 2016. Graham A. Purdy has served as president and chief executive officer since October 2022, after previously serving as the company’s chief operating officer.
TPB organizes its operations into three principal divisions. The Zig-Zag Products segment markets and distributes rolling papers, cigarette tubes, pre-rolled cigars, make-your-own cigar wraps, and related smoking accessories. Zig-Zag is the company’s best-known consumer brand and has a long history in the rolling-paper and smoking-accessories market. The Stoker’s Products segment manufactures and sells moist snuff and loose-leaf chewing tobacco. Its portfolio includes Stoker’s, Beech-Nut, Durango, Trophy, and Wind River. These products are distributed through tobacco retailers and other channels throughout the United States. The NewGen Products segment addresses evolving consumer preferences through tobacco-free and nicotine-free offerings, CBD isolate, liquid vapor products, and related products. Its direct-to-consumer and specialty-commerce operations include VaporFi and VaporBeast.
The company reaches consumers through a broad distribution network. Its customers and channel partners include independent and chain convenience stores, tobacco shops, grocery stores, mass retailers, pharmacies, wholesale distributors, e-commerce platforms, and other non-traditional retail outlets. TPB’s business model combines brand ownership, manufacturing, marketing, sales execution, wholesale distribution, and e-commerce capabilities. This integrated go-to-market structure allows the company to promote established brands while also testing or expanding emerging product categories.
The business operates in a highly regulated industry. Product formulation, packaging, labeling, marketing, distribution, taxation, and retail access can be affected by federal, state, and local regulations. Regulatory changes, excise taxes, restrictions on flavored or vapor products, and enforcement practices can materially influence demand, costs, and product availability. The company must therefore balance innovation and brand development with compliance and risk management.
Based on the supplied trailing-twelve-month data, TPB reported a gross profit margin of approximately 59.2%, an EBITDA margin of approximately 19.7%, and a net profit margin of approximately 8.8%. Its reported return on equity was approximately 11.9%, while its current ratio of approximately 5.7 indicated substantial short-term liquidity. The company had approximately $1.68 billion in market capitalization in the supplied snapshot and paid a quarterly dividend represented by a last dividend of $0.31 per share. TPB reported 484 full-time employees, placing it in the 201-500 employee category. Its strategic priorities generally include strengthening core brands, expanding distribution, improving operational efficiency, developing emerging product categories, and adapting to changing consumer behavior and regulatory requirements.
Operator: Good morning, and welcome to the Turning Point Brands First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Andrew Flynn, Chief Financial Officer. Please go ahead, sir.
Andrew Flynn: Good morning, everyone. Earlier today, we issued a press release covering our first quarter results available in the Investor Relations section of our website at www.turningpointbrands.com. During this call, we'll discuss consolidated and segment operating results, the operating environment and our progress against our strategic plan. Before we begin, please refer to forward-looking statements and risk factors in our press release and SEC filings. We'll also reference certain non-GAAP financial measures. Reconciliations and explanations are included in today's earnings release. With that, I'll turn the call over to our CEO, Graham Purdy.
Graham Purdy: Thanks, Andrew. Good morning, everybody, and thank you for joining our call. We started the year with strong momentum, led by accelerating growth in Modern Oral with gross and net sales up 167% and 133% year-over-year and 30% and 26% sequentially. These results are driven by ongoing growth in both brands' D2C platforms, FRE early expansion into larger, higher-volume chain accounts and [indiscernible] very early move into bricks and mortar. In the quarter, Modern Oral accounted for 42% of our total revenue, up from 21% in Q1 2025. Before we dive into details of the quarter, I want to step back and frame the opportunity in front of Turning point brands. We believe we are in the midst of a greater than $50 billion generational shift in nicotine consumption, and we are positioning the business to capture meaningful share of nicotine users in this evolving high-barrier category. We are strengthening that position through foundational investments in our sales force, marketing and commercial capabilities. These investments are critical to building a durable growth platform that can scale into a leading player in the post-cigarette nicotine market over time. While this infrastructure will ultimately allow us to compete across the modern nicotine ecosystem, our priority today is clear: winning in nicotine pouches. We believe the nicotine pouch category is still in its nascent stages of development and can become the dominant revenue and profit driver of the company over time. As we've said before, we expect the market to consolidate around a limited number of scaled brands, and we are increasingly confident that FRE and ALP will be among them. Our confidence is grounded in execution. We continue to see encouraging consumer response across both FRE and ALP, supported by product quality, brand positioning and repeat purchasing behavior. Our outsized share of direct-to-consumer sales, coupled with our continued market share gains in bricks and mortar are evidence that our plan is working in the early innings. …
