Turning Point Brands, Inc.

Good morning and welcome to the Turning Point Brands first quarter 2022 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 that this event is being recorded. I would now like to turn the conference over to Louis Reformina, Chief Financial Officer. Please go ahead.

Thank you, Operator. Good morning, everyone. This is Louis Reformina, Chief Financial Officer. Joining me are Turning Point Brands President and CEO Yavor Efremov and Graham Purdy, Chief Operating Officer. This morning, we issued a news release covering our first quarter results. This release is located in the IR section of our website, www.turningpointbrands.com. There is also a presentation we will be referencing on the call available on the site. On that presentation, if you turn to slide two, our disclaimer, during this call, we will discuss our consolidated and segment operating results and provide a perspective on 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 certain non-GAAP financial measures These measures and reconciliation of the gap can be found in today's earnings release, along with reasons why management believes that they provide useful information. I will now turn the call over to our CEO, Yavor Efremov. Thank you, Louis.

Good morning, everyone, and thank you for joining our call. We had a strong start to the year with our first quarter results in line to slightly better than our expectations. ZigZag continued its strong growth trajectory with another quarter of double-digit growth led by our U.S. papers business, building on its market share gains in the measured channel. In addition, we're showing good progress in our alternative channel efforts as we benefit from increased sales force focus into the channel and the secular growth in the industry. Stalker's MSP also saw double-digit growth during the quarter. While inflation is pressuring the consumer wallet, Solvers was well positioned with its value proposition to capture share as consumers traded down during the quarter. Meanwhile, NewGen navigated an expected decline in sales resulting from the PACT Act and the regulatory environment. Our vape distribution business remained profitable despite these challenges. I'm very proud of the fact that we completed the scope of both the ERP and the CRM system within the quarter and did so on plan and on budget. While this is only the first step of a long journey, I am encouraged by the fact that we did all of that that needed to be done while still delivering a strong quarter. We did not cut corners and had full engagement in the process top to bottom. I believe this says a lot about the organization and its potential. On April 14th, the FDA obtained regulatory oversight over non-tobacco nicotine products. As a result, these products are now subject to the same regulatory regime as tobacco-derived products. Pre-market filings for non-tobacco nicotine products must be submitted by May 14th. Products subject to a timely filing may remain on the market until July 13th unless they receive a negative action. After July 13th, these products become subject to enforcement. We view FDA oversight as a critical component of effective regulation of the entire industry. And while it may cause some short-term disruption around upcoming deadlines, we view this as a long-term positive to level the playing field and continue to enhance our position in the industry. With regard to our product portfolio, We aim to file new applications for a number of non-tobacco nicotine offerings, including our free nicotine pouch products, and we are evaluating spending up to $10 million on PMTA applications throughout the year with a heavy focus on modern oral. On capital allocation, we continue to buy back shares during the quarter after receiving increased authorization from our board. We continue to be committed to not growing our cash balance from here as we aim to use our cash flow to invest in our organic growth. Practically all remaining cash flow will be directed towards buybacks so long as the shares remain priced attractively. On the M&A front, as stated before, that is not our new term focus. However, to reiterate from the previous call, Our intent is to be patient and do deals that leverage our brand and distribution expertise and will be value-creative to shareholders. Any large-scale transaction we pursue will be synergistic and thus leverage an existing asset, including our distribution network, to drive shareholder value. We may also pursue smaller stocking acquisitions that deliver a capability to service our existing business that we prefer to acquire rather than build organically. We recently announced the hiring of a new CMO, Tamma Frein, who brings extensive consumer products industry experience and we're excited about what she and our marketing team can do to further build our brand. In addition, we have also brought on a chief information officer to oversee our technology systems including our ERP implementation, and a chief people officer to support our organizational infrastructure. We have revamped our organizational structure to improve accountability and more clearly define functional responsibilities and the reporting structure within the organization. We have also realigned our segment reporting to better reflect the results of our vape business. NuGen in the past was a combination of a profitable vape distribution business and our NuX product development platform. Effectively, we have streamlined and integrated the non-vape part of NuX into the rest of the organization from an operational and financial reporting standpoint. NuGen results are now a clean representation of 100% of our vape organization as if it were a standalone entity. With that, let me turn the call back to Lloyd to go through our results.