Q1 2024 Turning Point Brands Inc Earnings Call Transcript
Key Points
- Adjusted EBITDA increased by 21.6% to $25.3 million in Q1, demonstrating strong financial performance.
- Zig-Zag segment revenue grew by 11.5% to $46.7 million, driven by robust growth in papers and alternative channel businesses.
- Stoker's segment revenue increased by 8% to $36.4 million, with market share gains and favorable pricing dynamics.
- The alternative B2B business saw a significant growth of over 60% in Q1, indicating successful expansion in this channel.
- Turning Point Brands Inc reaffirmed its guidance for 2024 adjusted EBITDA in the range of $95 million to $100 million, reflecting confidence in continued strong performance.
- Q1 sales overall were down by 3.9% to $97.1 million, indicating some challenges in revenue generation.
- There was a 4.6% decline in loose leaf volume in the Stoker's segment, suggesting some softness in this product category.
- The Canadian business faced an $800,000 headwind due to the discontinuation of a low-margin third-party product line.
- Gross margin in the Stoker's segment declined by 60 basis points to 57.2%, primarily due to product mix changes.
- The CDS segment, while stable, poses uncertainty regarding its sustainability and future within the company's portfolio.
Good morning and welcome to Turning Brands -- Turning Point Brands' first-quarter 2024 earnings conference call. (Operator Instructions)
As a reminder, this conference call is being recorded.
I would now like to turn the call over to Graham Purdy, Chief Executive Officer. Thank you. Please go ahead.
Thank you. Good morning, everyone. This is Graham Purdy, Chief Executive Officer. Joining me are Turning Point Brands' new CFO, Andrew Flynn; and Chief Revenue Officer, Summer Frein. I want to wish a special welcome to Andrew. Please understand that he didn't join the company until immediately after the March quarter concluded, so please take it easy on him.
Thank you, Graham. Good morning. It's great to be with you today. First, I want to thank the entire organization for the opportunity. I'm thrilled to join the company and lend my support given my
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