NYSE$TPB

Turning Point Brands Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Turning Point Brands experienced growth across key segments and increased financial outlook.

Turning Point Brands reported a 7.6% increase in net sales to $104.2 million for the third quarter of 2020. The company's gross profit increased by 12.8% to $48.3 million, and net income rose to $7.8 million despite PMTA costs. Adjusted EBITDA increased by 27.4% to $23.9 million, and the company has raised its outlook for the remainder of the fiscal year.

  • Net sales increased 7.6% to $104.2 million.
  • Gross profit increased 12.8% to $48.3 million.
  • Net income increased $1.5 million to $7.8 million.
  • Adjusted EBITDA increased 27.4% to $23.9 million.

Headline financials

Total Revenue

$104M

Previous: $96.8M+7.6%
EPS (adj)

$0.75

Previous: $0.56+33.9%
Capital Expenditures

-$1.46M

Previous: -$2.1M+30.2%
Free Cash Flow

$6.33M

Previous: $4.18M+51.6%
Net Income

$7.8M

Previous: $6.27M+24.3%
Operating Income

$16M

Previous: $13M+22.9%
Gross Profit

$48.3M

Previous: $42.8M+12.8%
Cash & Equivalents

$67.4M

Previous: $81.1M-16.9%
Total Assets

$479M

Previous: $454M+5.5%
Stock-Based Comp

$773K

Previous: $1.07M-27.6%

Revenue & EPS history

Turning Point Brands · Revenue · Quarterly

$104M

Q3 2020+7.6%vs Q3 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Turning Point Brands · $36M total across 1 segment · Q3 2020

  • Zig-Zag Products
    $36M

Forward guidance

The company projects 2020 net sales to be $395 to $401 million and 2020 Adjusted EBITDA of $87 million to $90 million.

Tailwinds

  • 2020 net sales to be $395 to $401 million
  • 2020 Adjusted EBITDA of $87 million to $90 million
  • Stock compensation and non-cash incentive expense in 2020 is projected to be $2.8 million
  • The company spent a total of $16.6 million on the PMTA process
  • Capital expenditures for 2020 are anticipated to be approximately $6 million

Headwinds

  • expected near-term volatility within our NewGen segment
  • Cash interest expense is projected to be $12 million
  • GAAP interest expense includes $7 million of debt discount amortization equal to the fair value of the equity components over the expected life of the 2024 convertible notes
  • The company expects the 2020 effective income tax rate to be 23% to 24%
  • Net Sales for the fourth quarter of 2020 are expected to be $95 to $101 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+3.8%

Avg return

Earnings day

+4.7%

Avg return

5 days after

+7.6%

Avg return

30 days after

68%

30 / 44 earnings

Positive

+26.2%

Q1 2025

Best reaction

-22.2%

Q3 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.5%-0.6%
Q4 2025+5.0%-33.1%-45.8%
Q3 2025-1.1%-0.7%-0.3%
Q1 2025+26.2%+7.8%+17.4%
Q4 2024-8.1%-11.9%-18.6%
Q3 2024+1.3%+7.8%+25.8%
Q2 2024-1.3%-5.4%+5.1%
Q1 2024+12.1%+13.1%+12.4%
Q4 2023+10.2%+15.0%+27.7%
Q3 2023+2.8%+0.5%+13.6%
Q2 2023+8.0%+9.2%+5.0%
Q1 2023-3.5%-6.0%-4.5%
Q4 2022+10.2%+8.3%-4.6%
Q3 2022+7.9%+8.3%-2.3%
Q2 2022-15.3%-19.3%-19.5%
Q1 2022+1.0%+1.6%-6.6%
Q4 2021-1.1%-1.3%-4.7%
Q3 2021-22.2%-21.5%-23.3%
Q2 2021+9.9%+13.3%+5.8%
Q1 2021+1.0%+0.5%-10.3%
Q4 2020+1.2%+15.2%+4.0%
Q3 2020+14.6%+13.8%+16.6%
Q2 2020+11.1%+8.2%-5.0%
Q1 2020+2.4%+8.2%+16.2%
Q4 2019+12.2%+14.3%-9.1%
Q3 2019+21.9%+26.1%+32.3%
Q2 2019-8.2%-5.6%-11.6%
Q1 2019+21.3%+24.5%+15.1%
Q4 2018+6.2%+11.0%+9.3%
Q3 2018-9.2%-15.2%-31.6%
Q2 2018-2.9%-0.5%+16.7%
Q1 2018+5.4%+6.4%+33.5%
Q4 2017+2.2%+1.3%-5.3%
Q3 2017-2.5%+1.8%+8.9%
Q2 2017+12.8%+4.1%+11.2%
Q1 2017-4.2%-3.5%+3.4%
Q4 2016+4.8%+12.0%+20.7%
Q4 2014+4.8%+12.0%+20.7%
Q3 2015+0.5%+12.7%+2.6%
Q3 2016+0.5%-0.7%-10.6%
Q2 2016+22.5%+19.0%+69.3%
Q2 2015+22.5%+19.0%+69.3%
Q1 2016-8.8%+18.3%+37.9%
Q1 2015-8.8%+18.3%+37.9%
Q3 2014
Q2 2014
Q1 2014

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