Turning Point Brands, Inc.

Good morning and welcome to the Turning Point brand Q1 2025 conference call. All participants will be in listen-only mode. All lines have been placed on mute to prevent any background noise. Should you need any 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, this event is being recorded. I would now like to turn the conference over to Andrew Flynn, Turning Point's

Good morning, everyone. A short while ago, we issued a press release covering our Q1 results. This release is located in the IR section of our website at www.turningpointbrands.com. During this call, we will discuss our consolidated and segment operating results and provide some perspective on the operating environment and 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 Securities and Exchange Commission. On the call today, we will reference certain non-GAAP financial measures. These measures and the reconciliations to GAAP are in today's earnings release, along with reasons why management believes they provide useful information. I will now turn the call over to our CEO, Graham Purdy.

Thanks, Andrew. Good morning, everyone, and thank you for joining our call. Our consolidated first quarter results were better than expected and demonstrated continued progress against our plan. Revenue increased 28% to $106.4 million for the quarter, including $22.3 million in modern oral revenue. Adjusted EBITDA increased 12% to $27.7 million for the quarter. We reaffirm our previously announced 2025 adjusted EBITDA guidance of 108 to 113 million. We are increasing full-year consolidated nicotine pouch sales guidance to a range of 80 to 95 million from 60 to 80 million. This includes both free and ALP. We are particularly pleased with the growth of our white nicotine pouch brands. Their long-lasting, vibrant flavor options, comfortable mouthfeel, and flexible nicotine levels have resonated with consumers. During the quarter, white pouch sales increased by nearly 10 times year over year and two times sequentially following the launch of our out-supply company, JV, with TCN in Q4 2024. We believe the white nicotine pouch space will ultimately feature four to five widely distributed brands, that command most of the market. Analyst expectations for the size of the category differ, but most believe it will exceed $5 billion in manufacturer's revenue by the end of the decade. Our Q1 performance supports our long-term target of double-digit market share in that space. In order to best position the company to capitalize on this multibillion-dollar opportunity, we are making significant investments in the business in refining our route-to-market strategy to prioritize free and out while continuing to generate strong cash flow from our heritage brands. Key initiatives include reallocating sales and marketing resources, increasing the headcount of our sales force, improving our online presence, ramping up investment in chain accounts, and exploring U.S. manufacturing to improve white pouch profitability and mitigate supply chain risk. The rest of the Stoker segment portfolio also performed well in the quarter. Overall, Stoker's revenue increased 63% to $59.2 million, reflecting a 4% increase in loose leaf, a 10% increase in MST, and $22.3 million in modern oral revenue. During the first quarter, Zigzag revenue was up 1%. Excluding Clipper, it was up 3%. For modeling purposes, People should recall that in Q2, we will face difficult year-over-year comps due to significant zigzag segment load-in associated with our reentry into the cigar category and very strong 18.5% stoker segment growth in Q2 2024. With that, I will hand the call over to Summer to walk through the progress of our key go-to-market initiatives.