Turning Point Brands (NYSE: TPB)
INVESTOR PRESENTATION
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Disclaimer
FORWARD LOOKING STATEMENTS
This presentation 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 nature, 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, actual events may differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause these differences include, but are not limited to, the factors set forth in "Risk Factors" included in Turning Point Brands, Inc. (the "Company", "we", "our", "us", or "TPB") annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time. Any forward-looking statement made by TPB in this presentation has been prepared in good faith and, where applicable, is based on estimates, assumptions and analysis that we believe, as of the date hereof, provide a reasonable basis for the information contained herein. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these 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.
This presentation includes industry and market data derived from internal analyses based upon publicly available data or proprietary research and analysis, surveys or studies conducted by third parties and industry and general publications, including those by the Management Science Associates, Inc. ("MSAi") and Nielsen Holdings, N.V. ("Nielsen"). Third-party industry and general publications, research, surveys and studies generally state that the information contained therein has been obtained from sources believed to be reliable. Although there can be no assurance as to the accuracy or completeness of the included information, we believe that this information is reliable. While this information has been prepared in good faith and we believe our internal analyses provide a reasonable basis for the information contained herein, they have not been verified by any independent sources. Any such data and analysis involve risks and uncertainties and are subject to change based on various factors, including those set forth in "Risk Factors" included in TPB's annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time.
NON-GAAP RECONCILIATION
This presentation includes certain non-U.S. generally accepted accounting principles ("GAAP") financial measures, including EBITDA, Adjusted EBITDA and Net Debt. Such non-GAAP financial measures are not in accordance with, or an alternative to, financial measures prepared in accordance with GAAP. Please refer to the Appendix of this presentation for a reconciliation of EBITDA and Adjusted EBITDA to net income and Net Debt to Debt. To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP, we use non GAAP financial measures, including EBITDA, Adjusted EBITDA and Net Debt. We believe EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to financial condition and results of operations. Adjusted EBITDA and Net Debt are used by management to compare performance to that of prior periods for trend analyses and planning purposes and is presented to our board of directors. We believe that EBITDA and Adjusted EBITDA are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance.
Non GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. EBITDA and Adjusted EBITDA exclude significant expenses that are required by GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate these non GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure.
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Turning Point Brands (NYSE: TPB)
Company Overview
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TPB: A Unique Consumer Products Growth Company
Turning Point Brands
Segment Comprises | |
Majority of Profit Pool and | |
#1 Premium and Overall | Benefits from Secular |
Rolling Paper Brand in the U.S. | Growth Trends in |
and Canada and #1 in MYO | Cannabinoid Consumption |
Cigar Wraps1 |
13% | Significant Opportunity | |
to Expand Distribution of | ||
3-Yr EBITDA2 CAGR | #1 Reusable Lighter in | |
the World | ||
#1 Loose Leaf Chew
and Leading MST Value
Brand1
CapEx = ~1% Sales
average 2017-2022
Asset-light Business
Model and Recession
Resistant Products Drive
Stable Cash Flow
(NYSE: TPB)
- Per MSAi as of FY2022.
- For period ending FY2022. See "Non-GAAP Reconciliation" in Disclaimer.
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TPB is a Consumer Products company that markets strong brands
BROAD PORTFOLIO OF ICONIC AND EMERGING BRANDS
Turning Point Brands (NYSE: TPB)
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TPB Business Segments
Zig-Zag Products | Stoker's Products | |
Rolling papers and Make-Your-Own ("MYO") cigar wraps | Loose leaf chewing tobacco and moist snuff tobacco | |
LTM Sales1 | $182mm | $139mm |
Key Brands
Turning Point Brands (NYSE: TPB)
Strategic Priorities
- Continue strong growth trajectory in the near term
- Capture growth in cannabinoid consumption
- Drive recently launched product offerings and expand penetration in e-commerce and alternative channels (head shops, dispensaries)
- CLIPPER distribution expansion
- Capitalize on strong growth in Moist Snuff Tobacco and stability of tobacco chew
-
Stoker's: the leading value brand in tobacco chew with a long runway for growth in MST
"Great dip at a fair price" - Growth predominantly driven by same store sales with opportunity for further expansion and distribution gains
- Nicotine pouch entry (FRE)
1. LTM Period Ended 9/30/23
* Excludes vapor distribution business which was contributed in Q4 2022 to Creative Distribution Services, a new wholly-owned unrestricted subsidiary of TPB.
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Efficient Manufacturing, Supply & Distribution Model
Turning Point Brands (NYSE: TPB)
ASSET LIGHT | THIRD-PARTY | NATIONAL | BEST-IN-CLASS | B2C AND B2B |
APPROACH | SOURCING | DISTRIBUTION | SUPPLY CHAIN | CAPABILITIES |
Asset-Light approach allows | A majority of net sales are | National distribution coupled | Sourcing teams in Asia and | Online B2C distribution |
TPB to maintain low | from products manufactured | with national account sales | across North American farm | platforms reach millions of |
overhead costs, maximize | by third-party manufacturers | team focused on chains and | networks source highest | customers, B2B e-commerce |
operational flexibility, and | regional sales teams focused | quality products | platform caters to alternative | |
invest minimal CapEx | on independents maximizes | stores with capabilities to | ||
breadth of reach | deliver regulated products |
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TPB Strategic Priorities
Grow Share of Existing Product Lines, Domestically and Internationally
Increase Zig-Zag's Presence in the Alternative Channel
Expand into Adjacent Categories through Innovation and New
Partnerships
Accelerate Growth via National Distribution Network
Maintain Lean, Low-Cost Operating Model
Generate Strong Free Cash Flow
Turning Point Brands (NYSE: TPB)
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TPB Key Investment Highlights
1 | Large, Leading Brands with Significant Scale |
2 | Exposure to Growing Cannabinoid Consumption Trends |
3 | Successful Track Record of New Product Launches and Category Expansions |
4 | E-Commerce Capabilities |
5 | Extensive Distribution Network and Data Driven Sales Organization |
6 | Asset-light Business Model that Generates Resilient Free Cash Flow |
7 | Expertise to Succeed in Dynamic Regulatory Environments |
8 | Experienced Management Team |
Turning Point Brands (NYSE: TPB)
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Large, Leading Brands with Significant
Scale
Zig Zag Products: Iconic Brand with Leading Market Share
About Zig-Zag | Papers | Wraps | New Product Launches |
Embedded into pop culture | #1 premium and overall | Market leader in MYO cigar | Continued roll-out of paper |
with a storied history that | rolling paper brand sold in | wraps with a majority share | cones, unbleached and hemp |
dates over 120 years | the U.S.1 and Canada2 | of the market 1 | rolling papers along with new |
product introductions |
Turning Point Brands (NYSE: TPB)
#1 Brand
Zig Zag owns ~35%1 of
the rolling paper market in
the US and a majority of
the cigar wraps market
- Per MSAi as of FY2022.
- Management estimates.
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Turning Point Brands Inc. published this content on 07 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2023 16:34:09 UTC.