American new tobacco product company Turning Point Brands announced its fourth quarter and full year financial performance ending on December 31, 2023.
In the fourth quarter of 2023, total combined net sales decreased by 6.1% to $97.1 million. Net sales for Zig-Zag products decreased by 2.9%, while net sales for Stoker's products increased by 18.6%. Net sales for innovative distribution solutions decreased by 43.7%. Gross profit increased by 1.9% to $50.5 million. Net income increased by $26.4 million to $10.1 million. Adjusted net income increased by 15.9% to $15.3 million. Adjusted EBITDA increased by 7.5% to $24.8 million.
TPB President and CEO Graham Purdy stated, "Our fourth quarter performance is at the high end of our expectations." "Aside from the impact of a discontinued product line, the Zig-Zag division has remained stable compared to last year and is expected to see growth in 2024. Stoker's had a strong performance this quarter, achieving the highest growth rate in four years, driven by double-digit growth in Stoker's MST. Over the past year, we have also achieved strong free cash flow, allowing us to build up a cash reserve to address the principal on our remaining convertible notes due in July. We are optimistic about the outlook for 2024 and expect steady growth in the Zig-Zag and Stoker's product businesses."
Our U.S. Zig-Zag and alternative channel businesses showed strong performance at the end of the year, achieving double-digit growth. With the reduction of trade inventory throughout the year, the zig-zag adjustment wave is now expected to recover growth with the help of long-term industry growth trends and internal growth initiatives.
"Stoker's has achieved strong market share growth in the MST and loose leaf categories, with its value proposition continuing to resonate with consumers," Perdi continued. "We are excited about the annual expansion of our FRe nicotine pouch products."
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