Turning Point Brands Announces Fourth Quarter and Full Year 2025 Results

• Q4 2025 Modern Oral Net Sales increased 266% to $41.3 million, accounting for 34% of total company net sales, up from 12% in Q4 2024.
• Q4 2025 adjusted EBITDA increased 14% to $30.0 million.
• FY 2026 guidance: Modern Oral Gross Revenue of $220-$240 million and Net Revenue of $180-$190 million.

Turning Point Brands, Inc. ("TPB" or "the Company") (NYSE:TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, today announced financial results for the fourth quarter and full year ended December 31, 2025.

Q4 2025 vs. Q4 2024

• Total Consolidated Net Sales increased 29.2% to $121.0 million
  • Stoker's segment Net Sales increased 69.5%
  • Zig-Zag segment Net Sales decreased 12.8%
• Gross Profit increased 29.1% to $67.7 million
• Net Income increased 239.8% to $8.2 million
• Adjusted EBITDA increased 14.4% to $30.0 million (see Schedule A for a reconciliation to net income)

Diluted EPS of $0.42 and Adjusted Diluted EPS of $0.95 compared to $0.13 and $0.98 respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS)

FY 2025 vs. FY 2024

• Total Consolidated Net Sales increased 28.4% to $463.1 million
  • Stoker's segment Net Sales increased 69.1%
  • Zig-Zag segment Net Sales decreased 7.2%
• Gross Profit increased 31.1% to $264.3 million
• Net Income increased 46.1% to $58.2 million
• Adjusted EBITDA increased 14.4% to $119.5 million (see Schedule A for a reconciliation to net income)
• Diluted EPS of $3.11 and Adjusted Diluted EPS of $3.96 compared to $2.14 and $3.49, respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS)

Graham Purdy, President and CEO, commented "We are excited by the growth of the modern oral category and the strong performance of our FRE and ALP brands. We are well positioned to achieve double-digit share of the category over time, while our legacy brands continue to generate durable cash flows that provide strong funding for investment in future growth."

Stoker's Products Segment (67% of total net sales in the quarter)

For the fourth quarter, Stoker's segment net sales increased 69.5% from the prior year to $81.0 million, driven by triple-digit growth in Modern Oral sales and single-digit growth in legacy Stoker's products.

For the quarter, Stoker's segment gross profit increased 66.2% from the prior year to $45.8 million. Gross margin decreased 115 basis points from the prior year to 56.6% driven primarily by mix.

For the full year, Stoker's segment net sales increased 69.1% to $284.6 million, driven by triple-digit growth in Modern Oral sales and high-single-digit growth in legacy Stoker's products.

For the full year, Stoker's segment gross profit increased 77.3% to $168.4 million. Gross margin increased 275 basis points to 59.2%

Zig-Zag Products Segment (33% of total net sales in the quarter)

Zig-Zag performance for the fourth quarter and the year was in-line with our expectations given the planned wind-down of the Clipper business and allocation of sales and marketing resources to white pouch.

For the fourth quarter, Zig-Zag segment net sales decreased 12.8% from the prior year to $40.0 million driven by declines in US sales partially offset by growth in Canadian sales.

For the quarter, Zig-Zag segment gross profit decreased 12.1% from the prior year to $21.8 million. Gross margin increased 40 basis points from the prior year to 54.6%.

For the full year, Zig-Zag segment net sales decreased 7.2% from the prior year to $178.5 million driven by low-double-digit declines in US sales, partially offset by low-double-digit growth in Canada sales.

For the full year, Zig-Zag segment gross profit decreased 10.0% from the prior year to $95.9 million. Gross margin declined 170 basis points from the prior year to 53.7%.

Performance Measures in the Fourth Quarter

Investment in the fourth quarter focused on sales and marketing efforts to support distribution and brand building. In the fourth quarter consolidated selling, general and administrative ("SG&A") expenses increased 38.2% from the prior year and 7.2% sequentially to $47.7 million, inclusive of Modern Oral-related sales and marketing investments and increased outbound freight costs.

Fourth quarter SG&A included the following notable items:

• $1.1 million of FDA PMTA-related expenses to support the compliance roadmap for Modern Oral growth, compared to $0.5 million in the prior year period; and
• $0.4 million of transaction-related costs compared to $1.1 million in the prior year period.

As of December 31, 2025, ending cash was $222.8 million and net debt was $77.2 million. The Company ended the quarter with total liquidity of $290.1 million, comprised of $222.8 million in cash and $68.1 million of asset backed revolving credit facility capacity.

2026 Outlook

Management currently expects full year 2026 Modern Oral Gross Revenue of $220-$240 million and Net Revenue of $180-$190 million. We currently expect Q1 2026 adjusted EBITDA of $24-$27 million, inclusive of investment in Modern Oral sales, marketing, and trade promotions.

Earnings Conference Call

As previously disclosed, a conference call with the investment community to review TPB's financial results has been scheduled for 9:00 a.m. Eastern on Monday, March 2, 2026. Investment community participants should dial in 10 minutes ahead of time using the toll-free number (800) 715-9871 (international participants should call (646) 307-1963) and follow the audio prompts after typing in the event ID: 6640134. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Adjusted Operating Income (Loss). A reconciliation of these non-GAAP financial measures accompanies this release.

About Turning Point Brands, Inc.

Turning Point Brands, Inc. (NYSE:TPB) is a manufacturer, marketer and distributor of branded consumer products including alternative smoking accessories and consumables with active ingredients through its iconic brand portfolio, including Zig-Zag®, Stoker's®, FRE®, and ALP®. TPB's products are available in more than 220,000 retail outlets in North America and on sites such as www.zigzag.com, www.frepouch.com, and www.alppouch.com. For the latest news and information about TPB and its brands, please visit www.turningpointbrands.com.

Forward-Looking Statements

This press release 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, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the "SEC") and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such 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. Factors that could cause these differences include, but are not limited to, those included in the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company's cautionary statements under the Private Securities Litigation Reform Act of 1995.

This press release contains TPB's preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB's customary quarter-end closing and review procedures and third-party review. As a result, TPB's reported information in its Annual Report on Form 10-K for the year ended December 31, 2025 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB's financial condition and results of operations for the year ending December 31, 2025 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB's full year 2025 results when such results are disclosed by TPB in its Annual Report on Form 10-K for the year ended December 31, 2025.

Financial Statements Follow on Subsequent Pages

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss). We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance.

We define "EBITDA" as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization. We define "Adjusted EBITDA" as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Net Income" as net income excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Diluted EPS" as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define "Adjusted Operating Income (Loss)" as operating income (loss) excluding other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance.

Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure.

In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures.