Turning Point Brands, Inc.

Andrew Flynn, Chief Financial Officer Please go ahead

Good morning, everyone. Earlier today, we issued a press release covering our second quarter results, available in our 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 the forward-looking statements, disclosure, and risk factors in our press release and SEC filings. will 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.

Thanks, Andrew. Good morning, everybody, and thank you for joining our call. We delivered another quarter of strong execution in Modern Oral, with gross and net sales up 149% and 128% year over year, and 26% and 32% sequentially. Growth was driven by our continued focus on expanding retail distribution for both free and out and our direct-to-consumer platforms. Our performance versus the market proves that both brands are resonating with adult nicotine consumers. Our investments continue to strengthen our competitive position and drive market share gains. In the quarter, Modern Oral accounted for 48% of our total revenue. up from 26% in Q2 of 2025. We were pleased by Stoker's tobacco results and early customer response to the launch of our new Stoker's Proud MST product earlier this year. We believe Stoker's will continue to gain share as the segment's only truly premium product for value-oriented consumers. Performance across ZigZag was in line with our expectations, We are sharpening our new product pipeline to better reflect evolving consumer preferences and leveraging our growing sales force to expand distribution. These initiatives have helped stabilize our heritage businesses and position them for long term growth. In the near term, these businesses continue to contribute strong cash flow, which we are investing to accelerate growth in modern oral. Last quarter, We discussed the generational opportunity Marlboro Oil represents as nicotine consumption shifts away from cigarettes. Our priorities for 2026 remain centered on the initiatives we believe will have the greatest impact on building a scaled, profitable nicotine pouch business. These strategic actions, despite near-term zoning pressure, are critical to capturing meaningful share in this evolving high barrier category. First is accelerating customer traction. We are seeing positive results across both free and out. Summer will expand on wins, supporting both awareness of our products and customer acquisition. Second is growing distribution. As previously mentioned, we expect our chain store count to increase 70% year over year by the end of 2026 as a result of our strong chain store conversations. Working alongside these retailers, We have established distribution plans for these new placements. As is typical with national chain accounts, shelf resets can have long lead times, meaning our products will be added to stores incrementally over the next several quarters. Notably, shelf resets have begun with numerous new large retail accounts across the country, which we expect to largely fulfill through the balance of the year. Third is building and scaling our infrastructure. as we've scaled the distribution of our brands, we've continued investing in our sales force to service these new accounts. Our sales organization is critical to executing successfully at retail by ensuring product availability, merchandising execution, shelf placement, and ongoing customer support. We are on pace to increase our sales force by approximately 50% this year, making strong progress towards building the right sales force that can best capture the nicotine pouch growth opportunity and Maximize Performance at ZigZag and Stokers. After this initial build-out, we'll be able to further scale without comparable increases in SG&A. Subject to regulatory approval, we are on track to launch U.S. manufacturing by the end of the year. We should expect to significantly reduce COGS over time. Once fully scaled, we believe we can achieve gross margins of approximately 70%. Our results continue to reinforce our disciplined capital allocation strategy. We are directing capital and commercial resources towards the brands and categories with the greatest long-term value creation potential, particularly modern oil. The investments we've made over the past several quarters in free and out are already contributing meaningful to our top-line performance and should accelerate earnings growth over time. These foundational investments position us to capture meaningful market share and create sustainable shareholder value as the category continues to develop. With that, I will hand the call over to Summer to walk through the progress of our key go-to-market initiatives.