Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 21, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-37763 | ||
Entity Registrant Name | TURNING POINT BRANDS, INC. | ||
Entity Central Index Key | 0001290677 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-0709285 | ||
Entity Address, Address Line One | 5201 Interchange Way | ||
Entity Address, City or Town | Louisville | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40229 | ||
City Area Code | 502 | ||
Local Phone Number | 778-4421 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | TPB | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 360 | ||
Entity Common Stock, Shares Outstanding | 17,617,859 | ||
Auditor Firm ID | 49 | ||
Auditor Name | RSM US LLP | ||
Auditor Location | Charlotte, North Carolina |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 117,886 | $ 106,403 |
Accounts receivable, net of allowances of $78 in 2023 and $114 in 2022 | 9,989 | 8,377 |
Inventories, net | 98,960 | 119,915 |
Other current assets | 40,781 | 22,959 |
Total current assets | 267,616 | 257,654 |
Property, plant, and equipment, net | 25,300 | 22,788 |
Deferred income taxes | 1,468 | 8,443 |
Right of use assets | 11,480 | 12,465 |
Deferred financing costs, net | 2,450 | 282 |
Goodwill | 136,250 | 136,253 |
Other intangible assets, net | 80,942 | 83,592 |
Master Settlement Agreement (MSA) escrow deposits | 28,684 | 27,980 |
Other assets | 15,166 | 22,649 |
Total assets | 569,356 | 572,106 |
Current liabilities: | ||
Accounts payable | 8,407 | 8,355 |
Accrued liabilities | 33,635 | 33,001 |
Current portion of long-term debt | 58,294 | 0 |
Other current liabilities | 0 | 20 |
Total current liabilities | 100,336 | 41,376 |
Notes payable and long-term debt | 307,064 | 406,757 |
Lease liabilities | 9,950 | 10,593 |
Total liabilities | 417,350 | 458,726 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock; $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- | 0 | 0 |
Additional paid-in capital | 119,075 | 113,242 |
Cost of repurchased common stock (2,316,460 shares at December 31, 2023 and 2022) | (78,093) | (78,093) |
Accumulated other comprehensive loss | (2,648) | (2,393) |
Accumulated earnings | 112,443 | 78,691 |
Non-controlling interest | 1,030 | 1,735 |
Total stockholders' equity | 152,006 | 113,380 |
Total liabilities and stockholders' equity | 569,356 | 572,106 |
Common Stock, Voting [Member] | ||
Stockholders' equity: | ||
Common stock | 199 | 198 |
Common Stock, Nonvoting [Member] | ||
Stockholders' equity: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Accounts receivable, allowance | $ 78 | $ 114 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Repurchased common stock (in shares) | 2,316,460 | 2,316,460 |
Common Stock, Voting [Member] | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 190,000,000 | 190,000,000 |
Common stock, shares issued (in shares) | 19,922,137 | 19,801,623 |
Common stock, shares outstanding (in shares) | 17,605,677 | 17,485,163 |
Common Stock, Non-Voting [Member] | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Consolidated Statements of Income [Abstract] | ||||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 | |
Cost of sales | 202,152 | 209,475 | 227,637 | |||||||||
Gross profit | 50,524 | 51,622 | 52,478 | 48,617 | 49,563 | 52,712 | 51,469 | 51,794 | 203,241 | 205,538 | 217,834 | |
Selling, general, and administrative expenses | 125,009 | 130,024 | 127,513 | |||||||||
Other operating income, net | (4,345) | 0 | 0 | |||||||||
Operating income | 82,577 | 75,514 | 90,321 | |||||||||
Interest expense, net | 14,645 | 19,524 | 20,500 | |||||||||
Investment loss | 11,914 | 13,303 | 6,673 | |||||||||
Other income | (4,000) | 0 | 0 | |||||||||
Goodwill and intangible impairment loss | 0 | 27,566 | 0 | |||||||||
Gain on extinguishment of debt | (1,664) | (885) | (2,154) | |||||||||
Income before income taxes | 61,682 | 16,006 | 65,302 | |||||||||
Income tax expense | 23,901 | 4,849 | 14,040 | |||||||||
Consolidated net income | 37,781 | 11,157 | 51,262 | |||||||||
Net loss attributable to non-controlling interest | (681) | (484) | (797) | |||||||||
Net income attributable to Turning Point Brands, Inc. | $ 10,109 | $ 10,831 | $ 9,925 | $ 7,597 | $ (16,317) | $ 11,536 | $ 5,424 | $ 10,998 | $ 38,462 | $ 11,641 | $ 52,059 | |
Basic income per common share: | ||||||||||||
Net income attributable to Turning Point Brands, Inc. (in dollars per share) | $ 0.57 | $ 0.62 | $ 0.56 | $ 0.43 | $ (0.93) | $ 0.65 | $ 0.3 | $ 0.6 | $ 2.19 | $ 0.65 | $ 2.75 | |
Diluted income per common share: | ||||||||||||
Net income attributable to Turning Point Brands, Inc. (in dollars per share) | $ 0.53 | $ 0.58 | $ 0.53 | $ 0.41 | $ (0.93) | [1] | $ 0.6 | $ 0.3 | $ 0.55 | $ 2.01 | $ 0.64 | $ 2.52 |
Weighted average common shares outstanding: | ||||||||||||
Basic (in shares) | 17,578,270 | 17,899,794 | 18,917,570 | |||||||||
Diluted (in shares) | 20,467,406 | 18,055,015 | 22,381,994 | |||||||||
[1]The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Consolidated net income | $ 37,781 | $ 11,157 | $ 51,262 |
Other comprehensive income (loss), net of tax | |||
Unrealized gain (loss) on MSA investments, net of tax | 542 | (2,879) | (272) |
Foreign currency translation, net of tax | (74) | (269) | 260 |
Unrealized (loss) gain on derivative instruments, net of tax | (747) | 857 | 2,634 |
Other comprehensive income (loss), net of tax | (279) | (2,291) | 2,622 |
Consolidated comprehensive income | 37,502 | 8,866 | 53,884 |
Comprehensive loss attributable to non-controlling interest | (705) | (577) | (615) |
Comprehensive income attributable to Turning Point Brands, Inc. | $ 38,207 | $ 9,443 | $ 54,499 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other comprehensive income (loss), net of tax | |||
Unrealized gain (loss) on MSA investments, tax | $ 161 | $ 860 | $ 81 |
Foreign currency translation, tax | 0 | 0 | 0 |
Unrealized (loss) gain on derivative instruments, tax | $ 237 | $ 273 | $ 813 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Consolidated net income | $ 37,781 | $ 11,157 | $ 51,262 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on extinguishment of debt | (1,664) | (885) | (2,154) |
Loss (gain) on sale of property, plant, and equipment | 90 | (9) | (54) |
Loss on goodwill impairment | 0 | 25,585 | 0 |
Loss on intangible asset impairment | 0 | 1,981 | 0 |
Gain on insurance recovery of inventory loss | (15,181) | 0 | 0 |
Loss on investments | 12,177 | 13,570 | 7,100 |
Depreciation and other amortization expense | 3,262 | 3,388 | 3,105 |
Amortization of other intangible assets | 3,096 | 1,911 | 1,907 |
Amortization of deferred financing costs | 2,445 | 2,576 | 2,541 |
Deferred income tax expense (benefit) | 7,024 | (6,506) | (1,485) |
Stock compensation expense | 6,561 | 5,273 | 7,557 |
Noncash lease income | (82) | (29) | (167) |
Gain on MSA escrow deposits | 0 | (54) | (255) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (1,609) | (2,103) | 3,317 |
Inventories | 20,977 | (32,653) | (9) |
Other current assets | (3,533) | 4,581 | (134) |
Other assets | (4,835) | 420 | 996 |
Accounts payable | (14) | 1,240 | (2,367) |
Accrued liabilities and other | 386 | 830 | (2,943) |
Net cash provided by operating activities | 66,881 | 30,273 | 68,217 |
Cash flows from investing activities: | |||
Capital expenditures | (5,707) | (7,685) | (6,156) |
Acquisitions, net of cash acquired | 0 | 0 | (16,416) |
Payments for investments | (202) | (1,000) | (16,657) |
Restricted cash, MSA escrow deposits | 0 | (10,170) | (19,664) |
Proceeds on sale of property, plant and equipment | 3 | 62 | 54 |
Net cash used in investing activities | (5,906) | (18,793) | (58,839) |
Cash flows from financing activities: | |||
Proceeds from Senior Notes | 0 | 0 | 250,000 |
Payments of 2018 first lien term loan | 0 | 0 | (130,000) |
Settlement of interest rate swaps | 0 | 0 | (3,573) |
Convertible Senior Notes repurchased | (41,794) | (9,000) | 0 |
Proceeds from call options | 114 | 51 | 0 |
Payment of promissory note | 0 | 0 | (9,625) |
Payment of dividends | (4,497) | (4,250) | (4,096) |
Payments of financing costs | (2,437) | 0 | (6,921) |
Exercise of options | 450 | 504 | 2,071 |
Redemption of options | (346) | (155) | (2,111) |
Redemption of restricted stock units | (995) | (1,229) | 0 |
Common stock repurchased | 0 | (29,224) | (38,678) |
Net cash (used in) provided by financing activities | (49,505) | (43,303) | 57,067 |
Net increase (decrease) in cash | 11,470 | (31,823) | 66,445 |
Effect of foreign currency translation on cash | 13 | (320) | 191 |
Cash, beginning of period: | |||
Unrestricted | 106,403 | 128,320 | 41,765 |
Restricted | 4,929 | 15,155 | 35,074 |
Total cash at beginning of period | 111,332 | 143,475 | 76,839 |
Cash, end of period: | |||
Unrestricted | 117,886 | 106,403 | 128,320 |
Restricted | 4,929 | 4,929 | 15,155 |
Total cash at end of period | 122,815 | 111,332 | 143,475 |
Supplemental disclosures of cash flow information: | |||
Cash paid during the period for interest | 18,047 | 18,717 | 12,539 |
Cash paid during the period for income taxes, net | 12,447 | 13,369 | 16,063 |
Supplemental schedule of noncash investing activities: | |||
Accrued capital expenditures | 8 | 11 | 0 |
Accrued consideration for acquisition of investments | 248 | 0 | 0 |
Supplemental schedule of noncash financing activities: | |||
Dividends declared not paid | $ 1,489 | $ 1,354 | $ 1,261 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] Voting [Member] | Additional Paid-In Capital [Member] | Cost of Repurchased Common Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Earnings (Deficit) [Member] | Non-Controlling Interest [Member] | Total |
Beginning balance at Dec. 31, 2020 | $ 195 | $ 102,423 | $ (10,191) | $ (2,635) | $ 23,645 | $ 4,050 | $ 117,487 |
Beginning balance (in shares) at Dec. 31, 2020 | 19,133,794 | ||||||
Unrealized gain (loss) on MSA investments, net of tax | 0 | 0 | 0 | (272) | 0 | 0 | $ (272) |
Unrealized gain (loss) on derivative instruments, net of tax | 0 | 0 | 0 | 2,634 | 0 | 0 | 2,634 |
Foreign currency translation, net of tax | 0 | 0 | 0 | 78 | 0 | 182 | 260 |
Stock compensation expense | 0 | 7,557 | 0 | 0 | 0 | 0 | 7,557 |
Exercise of options | $ 2 | 2,069 | 0 | 0 | 0 | 0 | 2,071 |
Exercise of options (in shares) | 158,420 | ||||||
Redemption of options | $ 0 | (2,111) | 0 | 0 | 0 | 0 | (2,111) |
Redemption of options (in shares) | 0 | ||||||
Cost of repurchased common stock | $ 0 | 0 | $ (38,678) | 0 | 0 | 0 | (38,678) |
Cost of repurchased common stock (in shares) | (896,738) | ||||||
Acquisition of Recreation Marketing interest | 0 | (1,127) | $ 0 | 0 | 0 | (1,123) | (2,250) |
Dividends | 0 | 0 | 0 | 0 | (4,244) | 0 | (4,244) |
Net income | 0 | 0 | 0 | 0 | 52,059 | (797) | 51,262 |
Ending balance at Dec. 31, 2021 | 197 | 108,811 | (48,869) | (195) | 71,460 | 2,312 | $ 133,716 |
Ending balance (in shares) at Dec. 31, 2021 | 18,395,476 | ||||||
Unrealized gain (loss) on MSA investments, net of tax | 0 | 0 | 0 | (2,879) | 0 | 0 | $ (2,879) |
Unrealized gain (loss) on derivative instruments, net of tax | 0 | 0 | 0 | 857 | 0 | 0 | 857 |
Foreign currency translation, net of tax | 0 | 0 | 0 | (176) | 0 | (93) | (269) |
Stock compensation expense | 0 | 5,273 | 0 | 0 | 0 | 0 | 5,273 |
Exercise of options | $ 1 | 503 | 0 | 0 | 0 | 0 | 504 |
Exercise of options (in shares) | 35,394 | ||||||
Redemption of options | $ 0 | (155) | 0 | 0 | 0 | 0 | (155) |
Redemption of options (in shares) | 0 | ||||||
Issuance of performance based restricted stock units | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Issuance of performance based restricted stock units (in shares) | 69,756 | ||||||
Redemption of performance based restricted stock units | $ 0 | (1,141) | 0 | 0 | 0 | 0 | (1,141) |
Redemption of performance based restricted stock units (in shares) | 0 | ||||||
Issuance of restricted stock units | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Issuance of restricted stock units (in shares) | 5,589 | ||||||
Redemption of restricted stock units | $ 0 | (88) | 0 | 0 | 0 | 0 | (88) |
Redemption of restricted stock units (in shares) | 0 | ||||||
Cost of repurchased common stock | $ 0 | 0 | $ (29,224) | 0 | 0 | 0 | (29,224) |
Cost of repurchased common stock (in shares) | (1,021,052) | ||||||
Settlement of call options, net of tax | 0 | 39 | $ 0 | 0 | 0 | 0 | 39 |
Dividends | 0 | 0 | 0 | 0 | (4,410) | 0 | (4,410) |
Net income | 0 | 0 | 0 | 0 | 11,641 | (484) | 11,157 |
Ending balance at Dec. 31, 2022 | 198 | 113,242 | (78,093) | (2,393) | 78,691 | 1,735 | $ 113,380 |
Ending balance (in shares) at Dec. 31, 2022 | 17,485,163 | ||||||
Unrealized gain (loss) on MSA investments, net of tax | 0 | 0 | 0 | 542 | 0 | 0 | $ 542 |
Unrealized gain (loss) on derivative instruments, net of tax | 0 | 0 | 0 | (747) | 0 | 0 | (747) |
Foreign currency translation, net of tax | 0 | 0 | 0 | (50) | 0 | (24) | (74) |
Stock compensation expense | 0 | 6,561 | 0 | 0 | 0 | 0 | 6,561 |
Exercise of options | $ 0 | 450 | 0 | 0 | 0 | 0 | 450 |
Exercise of options (in shares) | 33,851 | ||||||
Redemption of options | $ 0 | (346) | 0 | 0 | 0 | 0 | (346) |
Redemption of options (in shares) | (15,985) | ||||||
Issuance of performance based restricted stock units | $ 1 | 75 | 0 | 0 | 0 | 0 | 76 |
Issuance of performance based restricted stock units (in shares) | 105,032 | ||||||
Redemption of performance based restricted stock units | $ 0 | (800) | 0 | 0 | 0 | 0 | (800) |
Redemption of performance based restricted stock units (in shares) | (34,704) | ||||||
Issuance of restricted stock units | $ 0 | 2 | 0 | 0 | 0 | 0 | 2 |
Issuance of restricted stock units (in shares) | 40,910 | ||||||
Redemption of restricted stock units | $ 0 | (195) | 0 | 0 | 0 | 0 | $ (195) |
Redemption of restricted stock units (in shares) | (8,590) | ||||||
Cost of repurchased common stock (in shares) | 0 | ||||||
Settlement of call options, net of tax | $ 0 | 86 | 0 | 0 | 0 | 0 | $ 86 |
Dividends | 0 | 0 | 0 | 0 | (4,710) | 0 | (4,710) |
Net income | 0 | 0 | 0 | 0 | 38,462 | (681) | 37,781 |
Ending balance at Dec. 31, 2023 | $ 199 | $ 119,075 | $ (78,093) | $ (2,648) | $ 112,443 | $ 1,030 | $ 152,006 |
Ending balance (in shares) at Dec. 31, 2023 | 17,605,677 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Changes in Stockholders' Equity [Abstract] | ||
Unrealized gain (loss) on MSA investments, tax | $ 161 | $ 860 |
Unrealized gain (loss) on derivative instruments, tax | 237 | 273 |
Foreign currency translation, tax | 0 | 0 |
Settlement of call options, tax | $ 28 | $ 12 |
Organizations and Basis of Pres
Organizations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organizations and Basis of Presentation [Abstract] | |
Organizations and Basis of Presentation | Note 1. Organizations and Basis of Presentation Description of Business Turning Point Brands, Inc. and its subsidiaries (collectively referred to herein as the “Company,” “we,” “our,” or “us”) is a leading manufacturer, marketer and distributor of branded consumer products. We sell a wide range of products to adult consumers consisting of staple products with our iconic brands Zig-Zag ® and Stoker’s ® and its next generation products to fulfill evolving consumer preferences. Our segments are led by our core, proprietary brands: Zig-Zag ® ® in the Zig-Zag Products segment and Stoker’s ® along with Beech-Nut ® and Trophy ® in the Stoker’s Products segment. The Company’s products are available in more than ,000 retail outlets in North America. We operate in segments: (i) Zig-Zag Products, (ii) Stoker’s Products, and (iii) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations.The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, deferred income tax valuation allowances, the valuation of investments and the valuation of inventory, including reserves. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows in any of the periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary. All significant intercompany transactions have been eliminated. U.S. GAAP requires the Company to identify entities for which control is achieved through means other than voting rights and to determine whether the Company is the primary beneficiary of VIEs. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The primary beneficiary of a VIE is the entity that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. Management of the Company has determined that Turning Point Brands Canada (formerly ReCreation Marketing) is a VIE for which the Company is considered the primary beneficiary due to the power the Company has over the activities that most significantly impact the economic performance of Turning Point Brands Canada and the right to receive benefits and the obligation to absorb losses of Turning Point Brands Canada equity interest, additional subordinated financing provided by the Company to Turning Point Brands Canada and the distribution agreement with Turning Point Brands Canada for the sale of the Company’s products that makes up a significant portion of Turning Point Brands Canada’s business activities. Revenue Recognition The Company recognizes revenues in accordance with Accounting The Company records an allowance for sales returns, based principally on historical volume and return rates, which is included in accrued liabilities on the consolidated balance sheets. The Company records sales incentives, which consist of consumer incentives and trade promotion activities, as a reduction in revenues (a portion of which is based on amounts estimated as being due to wholesalers, retailers and consumers at the end of the period) based principally on historical volume and utilization rates. Expected payments for sales incentives are included in accrued liabilities on the consolidated balance sheets. A further requirement of ASC 606 is for entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Company management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of the Company’s contract revenue for decision making purposes is the disaggregation by segment which can be found in Note 20, “Segment Information”. An additional disaggregation of contract revenue by sales channel can be found within Note 20 as well. Derivative Instruments The Company enters into foreign currency contracts to hedge a portion of its exposure to changes in foreign currency exchange rates on inventory purchase commitments. The Company accounts for its foreign currency contracts under the provisions of ASC 815, Derivatives and Hedging. Under the Company’s policy, the Company may hedge up to 100% of its anticipated purchases of inventory in the denominated invoice currency over a forward period not to exceed twelve months. The Company may also, from time to time, hedge up to 100% of its non-inventory purchases (e.g. production equipment) in the denominated invoice currency. Foreign currency contracts that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on the measurement date, except any hedge ineffectiveness which is recognized currently in income. Gains and losses on these foreign currency contracts are transferred from other comprehensive income into inventory and are transferred to net income as inventory is sold Shipping Costs The Company records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $23.5 million, $24.2 million, and $27.6 million in 2023, 2022, and 2021, respectively. Research and Development and Quality Assurance Costs Research and development and quality assurance costs are expensed as incurred. These expenses, classified as selling, general and administrative expenses, were approximately $0.6 million, $0.6 million, and $1.1 million in 2023, 2022, and 2021, respectively. Cash and Cash Equivalents The Company considers any highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for the purpose of curing. Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is provided using the straight-line method over the lesser of the estimated useful lives of the assets or the life of the leases for leasehold improvements (4 to 7 years for machinery, equipment and furniture, 10 to 15 years for leasehold improvements, and up to 15 years for buildings and building improvements). Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and improvements are capitalized and depreciated over their estimated useful lives. Upon disposition of fixed assets, the costs and related accumulated depreciation amounts are relieved. Any resulting gain or loss is reflected in operations during the period of disposition. Long-lived assets are reviewed for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and Other Intangible Assets The Company follows the provisions of ASC 350, Intangibles – Goodwill and Other in accounting for goodwill and other intangible assets. Goodwill is tested for impairment annually on December 31, or more frequently if certain indicators are present. When testing goodwill for impairment, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in the amount by which the carrying value of the reporting unit exceeds its fair value, limited to the amount of goodwill at the reporting unit. The Company determines fair values for each of the reporting units using a combination of the income approach and/or market approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. Under the market approach, the Company selects peer sets based on close competitors and reviews the revenue and EBITDA multiples to determine the fair value. See Note 10, “Goodwill and Other Intangible Assets” for further information on goodwill. Indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. The Company’s fair value methodology is primarily based on the relief from royalty approach. Definite-lived intangible assets are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3.5 to 15 years. The Company continually evaluates the reasonableness of the useful lives of these assets. Fair Value U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under U.S. GAAP are described below: • Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. • Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Equity Investments The Company's investments include equity securities, which are accounted for at cost and under the equity method of accounting. For equity investments that do not qualify to be accounted for under the equity method of accounting and that do not have a readily determinable fair value, the Company has elected a practical expedient to record the investment at the original cost, as adjusted for impairment and observable price changes. Under the practical expedient, if a qualitative analysis indicates impairment exists, the fair value of the investment is required to be estimated and any excess of the carrying value over the estimated fair value is recognized as an impairment loss. Equity investments accounted for under the equity method of accounting are assessed for impairment when events or circumstances suggest that any loss in value of the investment may be other than temporary. A loss in value of an investment is other than temporary when evidence of a loss in value indicates the absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. In the absence of observable data, the Company estimates the fair values of these investments using a market approach derived from applying market multiples of comparable public companies to the financial results of each investment. The valuation methodology and the significant assumptions used by management in estimating the fair values of each investment, involve a high degree of judgment and may involve the use of third-party valuation specialists. Deferred Financing Costs Deferred financing costs are amortized over the terms of the related debt obligations using the straight-line method. Unamortized amounts are expensed upon extinguishment of the related borrowings. Deferred financing costs are presented as a direct deduction from the carrying amount of that debt liability except for deferred financing costs relating to our revolving credit facility, which are presented as an asset. Income Taxes The Company records the effects of income taxes under the liability method in which deferred income tax assets and liabilities are recognized based on the difference between the financial and tax basis of assets and liabilities using the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company assesses its ability to realize future benefits of deferred tax assets by determining if they meet the “more likely than not” criteria in ASC 740, Income Taxes. If the Company determines that future benefits do not meet the “more likely than not” criteria, a valuation allowance is recorded. Advertising and Promotion Advertising and promotion costs, including point of sale materials, are expensed as incurred and amounted to $9.2 million, $9.3 million, and $12.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. Stock-Based Compensation The Company measures stock-based compensation costs related to its stock options on the fair value-based method under the provisions of ASC 718, Compensation – Stock Compensation. The fair value-based method requires compensation cost for stock options to be recognized over the requisite service period based on the fair value of stock options granted. The Company determined the fair value of these awards using the Black-Scholes option pricing model. The Company grants performance-based restricted stock units (“PRSU”) subject to both performance-based and service-based vesting conditions. The fair value of each PRSU is the Company’s stock price on the date of grant. For purposes of recognizing compensation expense as services are rendered in accordance with ASC 718, the Company assumes all employees involved in the PRSU grant will provide service through the end of the performance period. Stock compensation expense is recorded based on the probability of achievement of the performance conditions specified in the PRSU grant. The Company grants restricted stock units (“RSU”) subject to service-based vesting conditions. The fair value of each RSU is the Company’s stock price on the date of grant. The Company recognizes compensation expense as services are rendered in accordance with ASC 718. Stock compensation expense is recorded over the service period in the RSU grant. Risks and Uncertainties Manufacturers and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In a number of states targeted flavor bans have been proposed or enacted legislatively or by the administrative process. The tobacco industry has experienced, and is experiencing, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes for injuries allegedly caused by smoking or exposure to smoke. However, several lawsuits have been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically, such claims assert that use of smokeless products is addictive and causes oral cancer. Additionally, several lawsuits have been brought against manufacturers and distributors of Creative Distribution Solutions products due to malfunctioning devices. There can be no assurance the Company will not sustain losses in connection with such lawsuits and that such losses will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Master Settlement Agreement (MSA): Pursuant to the MSA and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to also include MYO cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account, with sub-accounts on behalf of each settling state. The STMSA has no similar provisions. The MSA escrow accounts are governed by states’ statutes that expressly give the manufacturers the option of opening, funding, and maintaining an escrow account in lieu of becoming a signatory to the MSA. The statutes require companies who are not signatories to the MSA to deposit, on an annual basis, into qualified banks, escrow funds based on the number of cigarettes or cigarette equivalents, i.e., the pounds of MYO tobacco, sold. The purpose of these statutes is expressly stated to be to eliminate the cost disadvantage the settling manufacturers have as a result of entering into the MSA. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgment to that state’s plaintiffs in the event of such a final judgment against the company. Either option – becoming an MSA signatory or establishing an escrow account – is permissible. The Company chose to open and fund an MSA escrow account as its means of compliance. It is management’s opinion, due to the possibility of future federal or state regulations, though none have to date been enacted, that entering into one or both of the settlement agreements or establishing and maintaining an escrow account would not necessarily prevent future regulations from having a material adverse effect on the results of operations, financial position, and cash flows of the Company. Various states have enacted or proposed complementary legislation intended to curb the activity of certain manufacturers and importers of cigarettes that are selling into MSA states without signing the MSA or who have failed to properly establish and fund a qualifying escrow account. To the best of the Company’s knowledge, no such statute has been enacted which could inadvertently and negatively impact the Company, which has been, and is currently, fully compliant with all applicable laws, regulations, and statutes. However, there can be no assurance that the enactment of any such complementary legislation in the future will not have a material adverse effect on the results of operations, financial position, or cash flows of the Company. Pursuant to the MSA escrow account statutes, in order to be compliant with the MSA escrow requirements, companies selling products covered by the MSA are required to deposit such funds for each calendar year into a qualifying escrow account by April 15 of the following year. At December 31, 2023, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.7 million. At December 31, 2022, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.0 million. The increase in fair value was due to decreasing maturities affecting the fair value of U.S. government securities held in the MSA escrow account. Inputs to the valuation methodology of the MSA escrow deposits when funds are invested include The Company discontinued its generic category of MYO in 2019 and its Zig-Zag branded MYO cigarette smoking tobacco in 2017. Thus, pending a change in MSA legislation, the Company has no remaining product lines covered by the MSA and will not be required to make future escrow deposits. The Company has chosen to invest a portion of the MSA escrow, from time to time, in U.S. Government securities including TIPS, Treasury notes, and Treasury bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA; thus, any investment with an unrealized loss position will be held until the value is recovered, or until maturity. Fair values for the U.S. Governmental agency obligations are Level 2 in the fair value hierarchy. The following tables show cost and estimated fair value of the assets held in the MSA account, respectively, as well as the maturities of the U.S. Governmental agency obligations held in such account for the periods indicated. As of December 31, 2023 As of December 31, 2022 Gross Gross Estimated Gross Gross Estimated Unrealized Unrealized Fair Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Cash and cash equivalents $ 1,929 $ – $ – $ 1,929 $ 1,929 $ – $ – $ 1,929 U.S. Governmental agency obligations (unrealized position < 12 months) – – – – 10,226 – (1,251 ) 8,975 U.S. Governmental agency obligations (unrealized position > 12 months) 30,144 – (3,389 ) 26,755 19,918 – (2,842 ) 17,076 Total $ 32,073 $ – $ (3,389 ) $ 28,684 $ 32,073 $ – $ (4,093 ) $ 27,980 As of December 31, 2023 Less than one year $ 4,200 One to five years 10,735 Five to ten years 13,254 Greater than ten years 1,955 Total $ 30,144 The following shows the amount of deposits by sales year for the MSA escrow account: Sales Deposits as of December 31, Year 2023 2022 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,553 4,553 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 82 82 Total $ 32,073 $ 32,073 Concentration of Credit Risk: The Company sells its products to distributors, retail establishments, and consumers throughout the U.S. and also sells Zig-Zag ® Accounts Receivable Accounts receivable are recognized at their net realizable value. All accounts receivable are trade related, recorded at the invoiced amount, and do not bear interest. The Company maintains allowances for credit losses for estimated uncollectible invoices resulting from a customer’s inability to pay (bankruptcy, out of business, etc., i.e. “bad debt” which results in write-offs). The activity of allowance for credit losses during 2023 and 2022 is as follows: December 31, December 31, 2023 2022 Balance at beginning of period $ 114 $ 262 Additions to allowance account during period 38 191 Deductions of allowance account during period (74 ) (339 ) Balance at end of period $ 78 $ 114 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions [Abstract] | |
Acquisitions | Note 3. Acquisitions Unitabac In July 2021, the Company acquired certain assets of Unitabac, a marketer of mass-market cigars, for $10.7 million in total consideration, comprised of $9.6 million in cash and $1.1 million of capitalized transaction costs. The acquired assets are comprised of a portfolio of cigarillo products and all related intellectual property, including Cigarillo Non-Tip (“NT”) Homogenized Tobacco Leaf (“HTL”) products and Rolled Leaf and Natural Leaf Cigarillo Products. The transaction was accounted for as an asset purchase with $10.0 million assigned to intellectual property and $0.7 million assigned to inventory. The intellectual property asset is deductible for tax purposes. Direct Value Wholesale In April 2021, Turning Point Brands Canada, a VIE for which the Company is considered the primary beneficiary, purchased 100% of the equity interests of Westhem Ventures LTD d/b/a Direct Value Wholesale (“DVW”) for $3.9 million, net of cash acquired, with $3.5 million paid in cash at closing and $0.5 million in accrued consideration paid during 2021. DVW is a Canadian distribution entity that operates in markets not primarily served by Turning Point Brands Canada. The acquisition expands Turning Point Brands Canada’s markets in Canada. The Company recorded goodwill of $2.5 million related to its acquisition of DVW which consists of the synergies expected from combining the operations and is deductible for tax purposes. Goodwill is determined as the consideration transferred in excess of the acquisition price over the estimated fair value of the identifiable net assets acquired. Turning Point Brands Canada In July 2021, the Company invested an additional $2.3 million in Turning Point Brands Canada increasing its ownership interest to 65%. The Company received board seats aligned with its ownership position. The Company has determined that Turning Point Brands Canada continues to be a VIE due to its required subordinated financial support. The Company has determined it remains the primary beneficiary due to its 65% equity interest, additional subordinated financing and distribution agreement with Turning Point Brands Canada for the sale of the Company’s products. As a result of the Company remaining the primary beneficiary, the increase in ownership interest resulted in a decrease in Non-controlling interest of $1.1 million and a decrease in Additional paid-in capital of $1.1 million. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | Note 4. Derivative Instruments Foreign Currency The Company’s policy is to manage the risks associated with foreign exchange rate movements. The policy allows hedging up to 100% of its anticipated purchases of inventory over a forward period that will not exceed 12 rolling and consecutive months. The Company may, from time to time, hedge currency for non-inventory purchases, e.g., production equipment, not to exceed 100% of the purchase price. During 2023, the Company executed various foreign exchange contracts which met hedge accounting requirements for the purchase of €20.1 million and sale of €15.2 million. During 2022, the Company executed various foreign exchange contract, which met hedge accounting requirements for the purchase of €28.9 million and sale of €28.9 million At December 31, 2023, the Company had foreign currency contracts outstanding for the purchase of €15.2 million and sale of €15.2 million. The foreign currency contract’s fair value at December 31, 2023, resulted in an asset of $0.3 million included in Other current assets and a liability of $0.1 million included in Accrued liabilities. At December 31, 2022, the Company had foreign currency contracts for the purchase of €18.5 million and sale of €18.5 million. The foreign currency contracts’ fair value at December 31, 2022, resulted in an asset of $1.2 million included in Other current assets and a liability of $0.0 million included in Accrued liabilities. A $0.9 million gain and $0.1 million loss were reclassified from Accumulated other comprehensive loss to Cost of sales for the years ended December 31, 2023 and 2022, respectively Interest Rate Swaps The Company terminated its interest rate swap agreements in the first quarter of 2021 with an early termination payment made by the Company in the amount of $3.6 million which was reclassified out of accumulated other comprehensive loss into loss on extinguishment of debt. A loss of $0.1 million was reclassified into interest expense |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 5. Fair Value of Financial Instruments The estimated fair value amounts have been determined by the Company using the methods and assumptions described below. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and Cash Equivalents Cash and cash equivalents are, by definition, short-term. Thus, the carrying amount is a reasonable estimate of fair value. Accounts Receivable The fair value of accounts receivable approximates their carrying value due to their short-term nature. Long-Term Debt The Company’s Senior Secured Notes bear interest at a rate of 5.625% per year. As of December 31, 2023, the fair value approximated $234.9 million, with a carrying value of $250 million. As of December 31, 2022, the fair value approximated $226.4 million with a carrying value of $250 million. The Convertible Senior Notes bear interest at a rate of 2.50% per year. As of December 31, 2023, the fair value approximated $114.7 million, with a carrying value of $118.5 million. As of December 31, 2022, the fair value approximated $139.2 million, with a carrying value of $162.5 million. See Note 13, “Notes Payable and Long-Term Debt”, for further information regarding the Company’s long-term debt. Foreign Currency The fair value of the Company’s foreign currency contracts are based upon quoted market prices for similar instruments, thus leading to a Level 2 classification within the fair value hierarchy. See Note 4, “Derivative Instruments”, for further information regarding the Company’s foreign currency contracts |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories [Abstract] | |
Inventories | Note 6. Inventories The components of inventories are as follows: December 31, December 31, 2023 2022 Raw materials and work in process $ 5,201 $ 7,283 Leaf tobacco 34,894 43,468 Finished goods - Zig-Zag Products 41,783 42,279 Finished goods - Stoker’s Products 8,090 9,667 Finished goods - Creative Distribution Solutions 7,281 15,431 Other 1,711 1,787 Inventories $ 98,960 $ 119,915 The following represents the inventory valuation allowance roll-forward, for the years ended December 31: 2023 2022 Balance at beginning of period $ (4,533 ) $ (7,668 ) Charged to cost and expense (17,275 ) (987 ) Deductions for inventory disposed 1,215 4,122 Balance at end of period $ (20,593 ) $ (4,533 ) In December 2023, a third-party warehouse in Tennessee used to store some of the Company’s leaf tobacco incurred significant tornado damage resulting in damage to the leaf tobacco. As a result, the Company recorded a $ 15.2 , net loss probable of being recovered $ 15.2 million , net ended In 2022, the Company determined that the incorrect weight had been used in calculating the amount of federal excise tax assessed and paid on its imported MYO cigar wraps during the years 2019 - 2021. As a result, the Company filed a refund claim for $4.3 million with the Alcohol and Tobacco Tax and Trade Bureau for the overpayment of federal excise taxes, which was approved and paid in the fourth quarter of 2023. This refund is presented in Other operating income, net on the Company’s Consolidated Statements of Income for the year ended December 31, 2023. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2023 | |
Other Current Assets [Abstract] | |
Other Current Assets | Note 7. Other Current Assets Other current assets consists of: December 31, December 31, 2023 2022 Inventory deposits $ 5,707 $ 6,395 Insurance deposit 3,000 3,000 Prepaid taxes 153 448 Settlement receivable 4,000 – Insurance recovery receivable 15,181 – Other 12,740 13,116 Total $ 40,781 $ 22,959 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment, Net | Note 8. Property, Plant and Equipment, Net Property, plant and equipment consists of: December 31, December 31, 2023 2022 Land $ 22 $ 22 Buildings and improvements 3,956 3,096 Leasehold improvements 5,440 5,404 Machinery and equipment 29,751 25,832 Furniture and fixtures 8,391 9,264 Gross property, plant and equipment 47,560 43,618 Accumulated depreciation (22,260 ) (20,830 ) Net property, plant and equipment $ 25,300 $ 22,788 |
Deferred Financing Costs, Net
Deferred Financing Costs, Net | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Financing Costs, Net [Abstract] | |
Deferred Financing Costs, Net | Note 9. Deferred Financing Costs, Net Deferred financing costs consist of: December 31, December 31, 2023 2022 Deferred financing costs, net of accumulated amortization of $ 104 200 $ 2,450 $ 282 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | Note 10. Goodwill and Other Intangible Assets The following table summarizes goodwill by segment: Zig-Zag Stoker’s CDS Total Balance as of December 31, 2021 $ 104,158 $ 32,590 $ 25,585 $ 162,333 Impairment – – (25,585 ) (25,585 ) Cumulative translation adjustment (495 ) – – (495 ) Balance as of December 31, 2022 $ 103,663 $ 32,590 $ – $ 136,253 Cumulative translation adjustment (3 ) – – (3 ) Balance as of December 31, 2023 $ 103,660 $ 32,590 $ – $ 136,250 The Company tests goodwill for impairment annually as of December 31, or more frequently when events or changes in circumstances indicate that the fair value is below its carrying value. The Company elected to perform a qualitative assessment in evaluating its Zig-Zag and Stoker’s reporting units for impairment as of December 31, 2023. The Creative Distribution Solutions reporting unit goodwill was fully impaired as of December 31, 2022 as discussed below. In evaluating the impairment indicators of its Zig-Zag and Stoker’s reporting units for its 2023 qualitative assessments, the Company considered macro and micro-economic indicators, changes in costs, overall financial performance and other relevant entity-specific events and noted no indication of impairment. The Company also considered the significant excess of fair values over carrying values as determined in the prior year’s quantitative assessment as discussed below. The underlying assumptions utilized during the prior year’s quantitative assessment remain sufficiently similar in 2023 and in line with Company projections. Thus, such underlying assumptions on which the previous fair values are based have not sufficiently changed from the prior year to suggest a material difference in the 2023 fair value assessments to indicate that it is more likely than not that the fair values of the reporting units in 2023 are below their carrying amounts. For 2022, the Company performed quantitative testing on its Zig-Zag and Stoker’s reporting units as part of its annual impairment test and determined that no goodwill impairments existed. For the quantitative assessment, the Company used a combination of discounted cash flow models (income approach) utilizing Level 3 unobservable inputs and the Guideline Public Company Method (market approach). The Company’s significant assumptions in these analyses include, but are not limited to, projected revenue, the weighted average cost of capital, the terminal growth rate, derived multiples from comparable market transactions and other market data The Company also performed quantitative testing on its Creative Distribution Solutions reporting unit as of December 31, 2022, using a combination of the income approach utilizing Level 3 unobservable inputs and the market approach. Based on the analysis performed the Company concluded that the carrying amount of the reporting unit exceeded its fair value resulting in a non-cash goodwill impairment charge of million included in Goodwill and intangible impairment loss for the year ended December 31, 2022. The impairment resulted from continued regulatory uncertainty. The Company’s goodwill impairment analysis as of December 31, 2022 referenced above used the discounted cash flow model (income approach) utilizing Level 3 unobservable inputs. The Company’s significant assumptions in this analysis included, but were not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. The Company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategies. These estimates could be negatively affected by changes in federal, state, or local regulations or economic downturns. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates. If the Company’s ongoing estimates of future cash flows are not met or if discount rates change, the Company may have to record additional impairment charges in future periods. The Company also used the Guideline Public Company Method (market approach). The significant assumptions used in this analysis include, but are not limited to, the derived multiples from comparable market transactions and other market data. The selection of comparable businesses is based on the markets in which the reporting unit operates giving consideration to risk profiles, size, geography, and diversity of products. The Company probability-weighted scenarios for both the income and market approaches and also applied an overall probability-weighting to the income and market approaches to determine the concluded fair value of the reporting unit given the uncertainty in the current economic environment to determine the concluded fair value of the reporting unit. The following tables summarize information about the Company’s other intangible assets. Gross carrying amounts of unamortized, indefinite-lived intangible assets are shown below: December 31, 2023 December 31, 2022 Zig-Zag Stoker’s CDS Total Zig-Zag Stoker’s CDS Total Unamortized, indefinite life intangible assets: Trade names $ – $ 8,500 $ – $ 8,500 $ – $ 8,500 $ 9,162 $ 17,662 Formulas 42,245 53 – 42,298 52,217 53 – 52,270 Total $ 42,245 $ 8,553 $ – $ 50,798 $ 52,217 $ 8,553 $ 9,162 $ 69,932 In 2023, the Company conducted a qualitative assessment of its indefinite life intangible assets and noted no indicators of impairment, consistent with the goodwill assessment as discussed above. In January 2023, the Company transferred certain of its formulas and trade names within the Zig-Zag and Creative Distribution Solutions segments to amortized intangible assets. The Company began to amortize the formula and trade name over their useful lives of 15 years In 2022, based on its annual impairment testing, the fair value of the trade name in the Creative Distribution Solutions segment was less than its carrying amount resulting in an impairment of $1.6 million included in Goodwill and intangible impairment loss for the year ended December 31, 2022. The circumstances giving rise to this impairment are consistent with those resulting in the Creative Distribution Solutions goodwill impairment discussed above. Amortized intangible assets consists of: Zig-Zag Stoker’s CDS December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Amortized intangible assets: Customer relationships (useful life of 8 10 $ – $ – $ – $ – $ – $ – $ – $ – $ 6,936 $ 5,596 $ 6,936 $ 4,768 Trade names (useful life of 15 449 10 – – 2,372 633 2,372 475 16,063 2,952 7,158 2,137 Formulas (useful life of 15 9,972 665 – – – – – – – – – – Master distribution agreement (useful life of 15 5,489 1,281 5,489 915 – – – – – – – – Franchise agreements (useful life of 8 – – – – – – – – – – 780 780 Non-compete agreements (useful life of 3.5 – – – – – – – – – – 100 100 Total $ 15,910 $ 1,956 $ 5,489 $ 915 $ 2,372 $ 633 $ 2,372 $ 475 $ 22,999 $ 8,548 $ 14,974 $ 7,785 In 2023, the Company noted indicators of possible impairment triggers for its Creative Distribution Solutions reporting unit and, as a result, performed an undiscounted cash flows recoverability assessment which provided that the fair value of the asset group exceeded its carrying value, and thus no further impairment analysis was performed In 2022, the Company recorded an asset impairment charge of $0.3 million related to the franchise agreements intangible asset within the Creative Distribution Solutions segment included in Goodwill and intangible impairment loss for the year ended December 31, 2022. The Company exited the franchise business and determined that the intangible asset was fully impaired. Annual amortization expense for the next five years is estimated to be approximately $3.0 million for 2024 and $2.4 million for 2025 through 2028, assuming no additional transactions occur that require the amortization of intangible assets. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Other Assets | Note 11. Other Assets Other assets consists of: December 31, December 31, 2023 2022 Equity investments $ 2,405 $ 13,376 Debt security investment 6,750 7,820 Capitalized software 5,923 929 Other 88 524 Total $ 15,166 $ 22,649 The Company records its equity investments without a readily determinable fair value, that are not accounted for under the equity method, at cost, with adjustments for impairment and observable price changes. Equity Investments In April 2021, the Company invested were and $0.1 million were no amounts In October 2020, the Company invested $2.5 million to acquire a 20% stake in Wild Hempettes, LLC, a manufacturer of natural CBD cigarettes designed as the first cigarette-styled CBD pre-roll in the world. The Company has options to increase its stake to a 100% ownership position based on certain milestones. As part of the transaction, the Wild Hempettes joint venture was spun off from Crown Distributing LLC and formed as a vehicle for the Company to be the exclusive distributor of Hempettes™ to U.S. bricks and mortar retailers under a profit-sharing arrangement. Effective January 2023, the Company terminated its distribution agreement. The Company accounts for its 20% share of Wild Hempettes profit or loss using the equity method of accounting. In 2023, based on Wild Hempettes financial results, the Company deemed its investment in Wild Hempettes to be other-than-temporarily impaired resulting in a $2.2 million impairment charge included in investment loss for the year ending December 31, 2023. Fair value for the Company’s share of investment in Wild Hempettes was determined using a valuation derived from relevant revenue multiples (Level 3). The Company recorded investment losses including impairment charges of $2.3 million and $0.1 million for years ended December 31, 2023 and 2022, respectively. Purchases of inventory from Wild Hempettes was $0.0 million and $0.4 million in 2023 and 2022, respectively. There were no amounts payable to Wild Hempettes at December 31, 2023 and 2022. The Company has a $0.2 million receivable from Wild Hemp at December 31, 2023 for the return of product previously purchased and paid for. In October 2020, the Company invested $15.0 million in dosist™ (“Dosist”), a global cannabinoid company, with an option to invest an additional $15.0 million on pre-determined terms over the twelve month period ending October 2021. The Company received a warrant exercisable for preferred shares of Dosist that would automatically be exercised upon the changing of certain federal cannabis laws in the United States, rescheduling cannabis and/or permitting the general cultivation, distribution and possession of cannabis. In 2021, based on the financial results of Dosist and the overall cannabinoid market, the Company deemed its investment was impaired resulting in a loss of $7.1 million recorded in investment loss for the year ended December 31, 2021. In 2022, after a contemplated sale of the assets of Dosist did not occur, Dosist entered into an agreement with a new buyer receiving the assets of Dosist for the assumption of its liabilities. As such, the Company considered its remaining investment in Dosist to be fully impaired and recorded an additional loss of $7.9 million in investment loss for the year ended December 31, 2022. Fair value was determined using a valuation derived from the contemplated purchase price (Level 3). There were no purchases of inventory from Dosist in 2023 or 2022. In October 2020, the Company invested $1.8 million in BOMANI Cold Buzz, LLC (“BOMANI”), a manufacturer of alcohol-infused cold brew coffee. The Company received rights to receive equity in BOMANI in the event of an equity financing. There were no purchases of inventory from BOMANI in 2023 or 2022. There were no amounts payable to BOMANI at December 31, 2023 and 2022. The Company has a minority ownership position in Canadian American Standard Hemp (“CASH”). CASH is headquartered in Warwick, Rhode Island, and manufactures cannabidiol isolate (“CBD”) developed through highly efficient and proprietary processes. In October 2020, CASH merged with Real Brands, Inc. (“Real Brands”), an over the counter traded shell company. CASH continued business under the Real Brands name. The Company maintained its ownership position in Real Brands subsequent to the merger. In 2022, as a result of a significant decline in the enterprise value, the Company determined that the fair value of the investment was $0.0 and fully impaired the investment. The impairment resulted in a loss of $4.3 million which is recorded in investment loss for the year ended December 31, 2022. There were no purchases of inventory from Real Brands in 2023 or 2022. There were no amounts payable to Real Brands at December 31, 2023 and 2022. In December 2018, the Company acquired a minority ownership position in General Wireless Operations, Inc. (d/b/a RadioShack; “RadioShack”) from 5G gaming LLC for $0.4 million. There were no amounts payable to General Wireless Operations, Inc. at December 31, 2023 and 2022. Debt Security Investment In July 2021, the Company invested $8.0 million in Old Pal Holding Company LLC (“Old Pal”). In July 2022, the Company invested an additional $1.0 million in Old Pal. The Company invested in the form of a convertible note which includes additional follow-on investment rights. The accrued interest of $0.2 million from July 2021 to July 2022 was rolled into the convertible note in July 2022 resulting in a total investment of $9.2 million. Old Pal is a leading brand in the cannabis lifestyle space that operates a non-plant touching licensing model. The convertible note bears an interest rate of 3.0% per year and matures July 31, 2026. Interest and principal not paid to date are receivable at maturity. Old Pal has the option to extend the maturity date in one-year increments. The interest rate is subject to change based on Old Pal reaching certain sales thresholds. The weighted average interest rate on the convertible note was 3.0% for the year ended December 31, 2023. Old Pal has the option to convert the note into shares once sales reach a certain threshold. The conditions required to allow Old Pal to convert the note were not met as of December 31, 2023. Additionally, the Company has the right to convert the note into shares at any time. The Company has classified the debt security with Old Pal as available for sale. The Company reports interest income on available for sale debt securities in interest income in our Consolidated Statements of Income. Quarterly, we perform a qualitative assessment to determine if the fair value of the investment could be less than the amortized cost basis. In 2022, the Company performed a quantitative assessment of the fair value of the investment. The fair value as of December 31, 2022 was determined to be $7.9 million based on a Monte Carlo simulation (Level 3). The Company determined that the impairment was a result of credit related factors and, as such, recorded an allowance for credit losses of $1.4 million which is included in investment loss for the year ended December 31, 2022. In 2023, based on a subsequent quantitative assessment of the fair value using a Monte Carlo simulation, the Company determined the fair value to be $6.9 million and recorded an additional allowance for credit losses of $1.3 million which is included in investment loss for the year ended December 31, 2023. The Company has recorded accrued interest receivable of $ 0.1 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Note 12. Accrued Liabilities Accrued liabilities consists of: December 31, December 31, 2023 2022 Accrued payroll and related items $ 7,085 $ 7,685 Customer returns and allowances 5,239 7,291 Taxes payable 3,821 1,867 Lease liabilities 2,678 3,102 Accrued interest 6,682 7,277 Other 8,130 5,779 Total $ 33,635 $ 33,001 |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Note 13. Notes Payable and Long-Term Debt Notes payable and long-term debt consists of the following in order of preference: December 31, December 31, 2023 2022 Senior Secured Notes $ 250,000 $ 250,000 Convertible Senior Notes 118,541 162,500 Gross notes payable and long-term debt 368,541 412,500 Less deferred finance charges (3,183 ) (5,743 ) Less current maturities (58,294 ) – Notes payable and long-term debt $ 307,064 $ 406,757 Senior Secured Notes On February 11, 2021, the Company closed a private offering (the “Offering”) of $250.0 million aggregate principal amount of its 5.625% senior secured notes due 2026 (the “Senior Secured Notes” or the “Notes”). The Senior Secured Notes bear interest at a rate of 5.625% and will mature on February 15, 2026. Interest on the Senior Secured Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2021. The Company used the proceeds from the Offering (i) to repay all obligations under and terminate the 2018 First Lien Credit Facility, (ii) to pay related fees, costs, and expenses and (iii) for general corporate purposes. O bligations under the Senior Secured Notes are guaranteed by the Company’s existing and future wholly-owned domestic subsidiaries (the “Guarantors”) that guarantee any credit facility (as defined in the Indenture governing the Senior Secured Notes or the “Senior Secured Notes Indenture”) or capital markets debt securities of the Company or Guarantors in excess The Company may redeem the Senior Secured Notes, in whole or in part, at any time on or after February 15, 2023, at the redemption prices (expressed as a percentage of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, on the Senior Secured Notes to be redeemed to (but not including) the applicable redemption date if redeemed during the period indicated below: On or after February 15, 2023 102.813 % On or after February 15, 2024 101.406 % On or after February 15, 2025 and thereafter 100.000 % If the Company experiences a change of control (as defined in the Senior Secured Notes Indenture), the Company must offer to repurchase the Senior Secured Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. The Senior Secured Notes Indenture contains covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to: (i) grant or incur liens; (ii) incur, assume or guarantee additional indebtedness; (iii) sell or otherwise dispose of assets, including capital stock of subsidiaries; (iv) make certain investments; (v) pay dividends, make distributions or redeem or repurchase capital stock; (vi) engage in certain transactions with affiliates; and (vii) consolidate or merge with or into, or sell substantially all of our assets to another entity. These covenants are subject to a number of limitations and exceptions set forth in the Senior Secured Notes Indenture. The Senior Secured Notes Indenture provides for customary events of default. The Company was in compliance with all financial covenants as of December 31, 2023. The Company incurred debt issuance costs attributable to the issuance of the Senior Secured Notes of $6.4 million which are amortized to interest expense using the straight-line method over the expected life of the Senior Secured Notes. 2021 Revolving Credit Facility In connection with the Offering, the Company also entered into a $25.0 million senior secured revolving credit facility (the “2021 Revolving Credit Facility”) with the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent (in such capacity, the “Agent”). On May 10, 2023, the Company and certain of its subsidiaries, as guarantors, entered into an amendment (the “Amendment”) to the 2021 Revolving Credit Facility (as amended, the “Amended Revolving Credit Facility”). The Amendment includes certain modifications to the 2021 Revolving Credit Facility relating to the replacement of the London Inter-Bank Offered Rate with a Secured Overnight Financing Rate (“SOFR”) as the interest rate benchmark under the 2021 Revolving Credit Facility and adjusts certain other provisions to reflect current documentation standards and other agreed modifications. On November 7, 2023, in connection with the entry by a subsidiary of the Company in a new asset-backed revolving credit facility, the Company terminated the Amended Revolving Credit Agreement. See “2023 ABL Facility” below. The Company had letters of credit outstanding under the Amended Revolving Credit Facility of approximately $1.4 million that were terminated with the facility. The Company incurred debt issuance costs attributable to the issuance of the Amended Revolving Credit Facility of $0.5 million, with a remaining $0.2 million written off to gain on debt extinguishment upon termination of the facility. 2023 ABL Facility On November 7, 2023, TPB Specialty Finance, LLC, a wholly-owned subsidiary of the Company (the “ABL Borrower”), entered into a new $75.0 million asset-backed revolving credit facility (the “2023 ABL Facility”), with the several lenders thereunder, and Barclays Bank Plc, as administrative agent (the “Administrative Agent”) and as collateral agent (the “Collateral Agent”) and First-Citizens Bank & Trust Company as additional collateral agent (the “Additional Collateral Agent”). Under the 2023 ABL Facility, the ABL Borrower may draw up to $75.0 million under Revolving Credit Loans and Last In Last Out (“LILO”) Loans. The 2023 ABL Facility includes a $40.0 million accordion feature. In connection with the 2023 ABL Facility, Turning Point Brands contributed certain existing inventory to the ABL Borrower. The 2023 ABL Facility is secured on a first priority basis (subject to customary exceptions) by all assets of the ABL Borrower. The 2023 ABL Facility contains customary borrowing conditions including a borrowing base equal to the sum of (a) the lesser of (1) 85% of the lower of (A) the market value (on a first in first out basis) of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (B) 85% of the cost of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (2) 85% of the net orderly liquidation value (“NOLV”) percentage of the lower of (1)(A) or (1)(B); plus (b) 85% of the face value of all eligible accounts of the ABL Borrower minus (c) the amount of all eligible reserves. The 2023 ABL Facility also includes a LILO borrowing base equal to the sum of (a) the lesser of: (1) 10% of the lower of (A) the market value (on a first in first out basis) of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (B) the cost of the sum of eligible inventory, plus eligible in-transit inventory and (2) 10% of the NOLV percentage of the lower of (1)(A) or (1)(B); plus (b) 10% of the face amount of eligible account; minus (c) the amount of all eligible reserves. Amounts borrowed under the 2023 ABL Facility are subject to an interest rate margin per annum equal to (a) from and after the closing date until the last day of the first full fiscal quarter ended after the closing date, (i) 1.25% per annum, in the case base rate loans, and (ii) 2.25% per annum, in the case of revolving credit loans that are SOFR Loans, (b)(i) 2.25% per annum, in the case of LILO loans that are base rate loans, and (ii) 3.25% per annum, in the case of LILO loans that are SOFR loans, (c) on the first day of each fiscal quarter, the applicable interest rate margins will be determined from the pricing grid below based upon the historical excess availability for the most recent fiscal quarter ended immediately prior to the relevant date, as calculated by the Administrative Agent. Level Historical Excess Availability Applicable Margin for SOFR Loans Applicable Margin for Base Rate Loans I Greater than or equal to 66.66% 1.75% 0.75% II Less than 66.66%, but greater than or equal to 33.33% 2.00% 1.00% III Less than 33.33% 2.25% 1.25% The 2023 ABL Facility also requires the Company and its restricted subsidiaries to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the end of any four consecutive fiscal quarters if excess availability shall be less than the greater of (a) 12.5% of the line cap and (b) $9.4 million, at any time and continuing until excess availability is equal to or exceeds the greater of (i) 12.5% of the line and (ii) $9.4 million for thirty (30) consecutive calendar days; provided that such $9.4 million level shall automatically increase in proportion to the amount of any increase in the aggregate revolving credit commitments thereunder in connection with any incremental facility. The 2023 ABL Facility shall mature on the earlier of (x) November 7, 2027 and (y) the date that is 91 days prior to the maturity date of any material debt of the ABL Borrower or the Company or any of its restricted subsidiaries (subject to customary extensions agreed by the lenders thereunder); provided that clause (y) shall not apply to the extent that on any applicable date of determination (on any date prior to the date set forth in clause (y)), (A) the sum of (x) cash that is held in escrow for the repayment of such material debt pursuant to arrangements satisfactory to the Administrative Agent, (y) cash that is held in accounts with the Administrative Agent and/or the Additional Collateral Agent, plus (z) excess availability, is sufficient to repay such material debt and (B) the ABL Borrower has excess availability of at least $15.0 million after giving effect to such repayment of material debt, including any borrowings under the commitments in connection therewith. The Company has not drawn any borrowings under the 2023 ABL Facility but has letters of credit of approximately $1.4 million outstanding under the facility and has an available balance of $60.0 million as of December 31, 2023. The Company incurred debt issuance costs attributable to the 2023 ABL Facility of $2.6 million which are amortized to interest expense using the straight-line method over the expected life of the 2023 ABL Facility. Convertible Senior Notes In July 2019, the Company closed an offering of $172.5 million in aggregate principal amount of its 2.50% Convertible Senior Notes due July 15, 2024 (the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at a rate of 2.50% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. The Convertible Senior Notes are senior unsecured obligations of the Company. In the fourth quarter of 2022, a wholly owned subsidiary of the Company repurchased $10.0 million in aggregate principal amount of the Convertible Senior Notes on the open market resulting in a $0.9 million gain on extinguishment of debt. Subsequent principal repurchases occurred in 2023 for an aggregate principal amount of $44.0 million resulting in a gain on extinguishment of debt of $1.9 million. The repurchased notes continue to be held by our subsidiary and may be resold subject to compliance with applicable securities law. As of December 31, 2023, $118.5 million aggregate principal remains outstanding and held by third parties. The Convertible Senior Notes held by third parties are convertible into approximately 2,217,807 shares of TPB Common Stock under certain circumstances prior to maturity at a conversion rate of 18.7092 shares per $1,000 principal amount of the Convertible Senior Notes, which represents a conversion price of approximately $53.45 per share, subject to adjustment under certain conditions, but will not be adjusted for any accrued and unpaid interest. The conversion price is adjusted periodically as a result of dividends paid by the Company in excess of pre-determined thresholds of $0.04 per share. Upon conversion, the Company may pay cash, shares of common stock or a combination of cash and stock, as determined by the Company at its discretion. The conditions required to allow the holders to convert their Convertible Senior Notes were not met as of December 31, 2023. As discussed above, on November 7, 2023, a wholly-owned subsidiary of the Company entered into the new 2023 ABL Facility to refinance up to $75.0 million of the Convertible Senior notes at maturity. As a result, the Company classified $60.0 million related to the Convertible Senior Notes in Notes payable and long-term debt on the Company’s December 31, 2023 Balance Sheet. Based on current liquidity, free cash flow generation and availability under the 2023 ABL Facility, the Company believes it will have sufficient liquidity to address the maturity of the remaining Convertible Senior Notes. The Company incurred debt issuance costs attributable to the Convertible Senior Notes of $5.9 million which are amortized to interest expense using the straight-line method over the expected life of the Convertible Senior Notes. In connection with the Convertible Senior Notes offering, the Company entered into privately negotiated capped call transactions with certain financial institutions. The capped call transactions have a strike price of $53.45 per share and a cap price of $82.86 per share, and are exercisable when, and if, the Convertible Senior Notes are converted. The Company paid $20.53 million for these capped calls at the time they were entered into and charged that amount to additional paid-in capital. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 14. Income Taxes Income tax expense (benefit) for the years ended December 31 consists of the following components: 2023 2022 2021 Current Deferred Total Current Deferred Total Current Deferred Total Federal $ 13,291 $ 4,091 $ 17,382 $ 8,457 $ (4,713 ) $ 3,744 $ 11,315 $ (583 ) $ 10,732 State and Local 3,602 2,166 5,768 2,815 (1,291 ) 1,524 4,210 (637 ) 3,573 Foreign (16 ) 767 751 83 (502 ) (419 ) – (265 ) (265 ) Total $ 16,877 $ 7,024 $ 23,901 $ 11,355 $ (6,506 ) $ 4,849 $ 15,525 $ (1,485 ) $ 14,040 Deferred tax assets and liabilities consists of: December 31, December 31, 2023 2022 Assets Liabilities Assets Liabilities Inventory $ 5,310 $ – $ 1,384 $ – Property, plant, and equipment – 3,120 – 2,856 Goodwill and other intangible assets – 3,182 – 2,812 Foreign NOL carryforward 1,495 – 561 – State NOL carryforward 2,398 – 2,483 – Unrealized loss on investments 7,203 – 5,168 – Leases 3,278 2,978 3,544 3,222 Original issue discount 426 – 1,604 – Stock compensation 4,879 – 4,333 – Insurance receivable – 3,764 – – Other 4,536 3,567 4,281 2,963 Gross deferred income taxes 29,525 16,611 23,358 11,853 Valuation allowance (11,446 ) – (3,062 ) – Net deferred income taxes $ 18,079 $ 16,611 $ 20,296 $ 11,853 At December 31, 2023, the Company had state net operating loss (“NOL”) carryforwards for income tax purposes of approximately $27.4 million, which expire between 2034 and 2042, $25.7 million of which has an indefinite carryforward period. The Company has determined that, at December 31, 2023 and 2022 its ability to realize future benefits of its state NOL carryforwards does not meet the “more likely than not” criteria in ASC 740, Income Taxes. Therefore, a valuation allowance for state NOL carryforwards of $2.9 million and $2.4 million has been recorded at December 2023 and 2022, respectively. The Company has determined that, at December 31, 2023 its ability to realize future benefits of its unrealized loss on investments and foreign NOL carryforwards do not meet the “more likely than not” criteria in ASC 740, Income Taxes. Therefore a valuation allowance for unrealized loss on investments of $6.4 million and foreign NOL carryforwards of $1.7 million has been recorded at December 31, 2023. ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company has determined that they did not have any uncertain tax positions requiring recognition as a result of the provisions of ASC 740-10-25. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as part of interest expense. For the years ended December 31, 2023, 2022, and 2021, no estimated interest or penalties were recognized for the uncertainty of tax positions taken. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In general, the Company is no longer subject to U.S. federal and state tax examinations for years prior to 2020. Reconciliation of the federal statutory rate and the effective income tax rate for the years ended December 31 is as follows: 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Foreign rate differential (0.1 )% (0.5 )% (0.1 )% State taxes 4.3 % 5.7 % 3.4 % Permanent differences (0.1 )% (0.2 )% (4.1 )% Other - 1.7 % 0.7 % Valuation allowance 13.6 % 2.6 % 0.6 % Effective income tax rate 38.7 % 30.3 % 21.5 % The permanent differences for the years ended December 31, 2023 and 2022 are not significant in the aggregate. The permanent difference for the year December 31, 2021 are primarily related to income tax benefits of $7.5 million ($1.6 million tax effected) as a result of the forgiveness of the $7.5 million unsecured loan and $7.2 million ($1.5 million tax effected) as a result of stock option exercises. |
401(k) Retirement Savings Plan
401(k) Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2023 | |
401(k) Retirement Savings Plan [Abstract] | |
401(k) Retirement Savings Plan | Note 15. 401(k) Retirement Savings Plan The Company sponsors a voluntary 401(k) |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2023 | |
Lease Commitments [Abstract] | |
Lease Commitments | Note 16. Lease Commitments The Company’s leases consist primarily of leased property for manufacturing, warehouse, corporate offices and retail space, as well as vehicle leases. At lease inception, the Company recognizes a lease right of use asset and lease liability calculated as the present value of future minimum lease payments. In general, the Company does not recognize any renewal periods within the lease terms as there are no significant barriers to ending the lease at the initial term. Lease and non-lease components are accounted for as a single lease component. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense consist of the following: For the year ended December 31, 2023 2022 2021 Operating lease cost Cost of sales $ 507 $ 940 $ 907 Selling, general and administrative 1,991 1,622 1,907 Variable lease cost (1) 1,183 765 1,182 Short-term lease cost 24 37 48 Sublease income – – (60 ) Total $ 3,705 $ 3,364 $ 3,984 (1) Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying. For the year ended December 31, 2023 2022 2021 Financing lease cost Selling, general and administrative $ 1,164 $ 1,138 $ 1,094 Total $ 1,164 $ 1,138 $ 1,094 The Company's lease balances consist of the following: December 31, December 31, 2023 2022 Assets: Right of use assets $ 8,950 $ 10,967 Right of use assets 2,530 1,498 Total lease assets $ 11,480 $ 12,465 Liabilities: Current lease liabilities (2) $ 1,991 $ 2,007 Current lease liabilities (2) 687 1,095 Long-term lease liabilities 8,374 10,243 Long-term lease liabilities 1,576 350 Total lease liabilities $ 12,628 $ 13,695 (2) Reported within accrued liabilities on the balance sheet Other information related to the Company's leases consists of the following: December 31, December 31, 2023 2022 Right of use assets obtained in exchange for lease obligations: Operating leases $ 143 $ – Finance leases $ 2,169 $ 494 As of December 31, 2023 2022 Weighted-average remaining lease term - operating leases 5.7 years 6.5 years Weighted-average discount rate - operating leases 5.17 % 5.19 % Weighted-average remaining lease term - financing leases 3.4 years 1.8 years Weighted-average discount rate - financing leases 6.48 % 3.42 % Nearly all the lease contracts for the Company do not provide a readily determinable implicit rate. For these contracts, the Company uses a discount rate that approximates its incremental borrowing rate at the time of the lease commencement. The table illustrates the Company's future minimum rental payments for non-cancelable leases as of Year Operating Finance 2024 $ 2,471 $ 813 2025 2,174 741 2026 2,084 644 2027 2,035 327 2028 1,046 – Years thereafter 2,263 – Total lease payments 12,073 2,525 Less: Imputed interest 1,708 262 Present value of lease liabilities $ 10,365 $ 2,263 |
Share Incentive Plans
Share Incentive Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share Incentive Plans [Abstract] | |
Share Incentive Plans | Note 17. Share Incentive Plans On March 22, 2021, the Company’s Board of Directors adopted the Turning Point Brands, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which awards may be granted to employees, non-employee directors, and consultants. In addition, the 2021 Plan provides for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Pursuant to the 2021 Plan, 1,290,000 shares, plus 100,052 shares remaining available for issuance under the 2015 Equity Incentive Plan (the “2015 Plan”), of TPB Common Stock are reserved for issuance as awards to employees, non-employee directors, and consultants as compensation for past or future services or the attainment of certain performance goals. The 2021 Plan is scheduled to terminate on March 21, 2031. The 2021 Plan is administered by the compensation committee (the “Committee”) of the Company’s Board of Directors. The Committee determines the vesting criteria for the awards, with such criteria to be specified in the award agreement. As of December 31, 2023, net of forfeitures, there were 271,662 Restricted Stock Units (“RSUs”), 113,801 options and 23,315 Performance Based Restricted Stock Units (“PRSUs”) granted under the 2021 Plan. There are 981,274 shares available for future grant under the 2021 Plan. On April 28, 2016, the Board of Directors of the Company adopted the 2015 Plan, pursuant to which awards could have been granted to employees, non-employee directors, and consultants. In addition, the 2015 Plan provided for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Upon adoption of the 2021 Plan, the 2015 Plan was terminated, and the Company determined no additional grants would be made under the 2015 Plan. However, all awards issued under the 2015 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2015 Plan. On February 8, 2006, the Board of Directors of the Company adopted the 2006 Equity Incentive Plan (the “2006 Plan”) of North Atlantic Holding Company, Inc., pursuant to which nonqualified stock options and restricted stock awards may be granted to employees. Upon the adoption of the Company’s 2015 Equity Incentive Plan in connection with its IPO, the Company determined no additional grants would be made under the 2006 Plan. However, all awards issued under the 2006 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2006 Plan. Stock option activity for the 2006, 2015 and 2021 Plans is summarized below: Weighted Weighted Stock Average Average Option Exercise Grant Date Shares Price Fair Value Outstanding, December 31, 2021 619,835 $ 28.51 $ 8.70 Granted 114,827 30.58 10.34 Exercised (40,331 ) 12.49 4.08 Forfeited (11,117 ) 32.60 9.35 Outstanding, December 31, 2022 683,214 $ 29.74 $ 9.24 Granted 77,519 20.71 6.45 Exercised (33,851 ) 13.30 4.24 Forfeited (69,931 ) 27.51 9.11 Outstanding, December 31, 2023 656,951 $ 29.79 $ 9.18 Under the 2006, 2015 and 2021 Plans, the total intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021, was $0.3 million, $0.7 million, and $7.9 million, respectively. At December 31, 2023, under the 2006 Plan, the exercise price for the 43,693 outstanding options is $3.83 per share, all of which are exercisable. The weighted average of the remaining lives of the outstanding stock options with an exercise price of $3.83 is approximately 0.60 years. The Company estimates the expected life of these stock options is ten years from the date of grant. For the $3.83 per share options, the weighted average fair value of options at the date of grant was determined using the Black-Scholes model with the following assumptions: a ten-year life from grant date, a current share price and exercise price of $3.83, a risk-free interest rate of 3.57%, volatility of 40%, and no assumed dividend yield. Based on these assumptions, the fair value of these options is approximately $2.17 per share option granted. At December 31, 2023, under the 2015 and 2021 Plans, the risk-free interest rate is based on the U.S. Treasury rate for the expected life at the time of grant. The expected volatility is based on the average long-term historical volatilities of peer companies. We intend to continue to consistently use the same group of publicly traded peer companies to determine expected volatility until sufficient information regarding volatility of our share price becomes available or until the selected companies are no longer suitable for this purpose. Due to our limited trading history, we are using the simplified method presented by SEC Staff Accounting Bulletin No. 107 to calculate expected holding periods, which represent the periods of time for which options granted are expected to be outstanding. We will continue to use this method until we have sufficient historical exercise experience to give us confidence in the reliability of our calculations. The fair values of these options were determined using the Black-Scholes option pricing model. The following table outlines the assumptions for options granted under the 2015 Plan. February 10, May 17, March 7, March 20, October 24, March 18, February 18, May 3, 2017 2017 2018 2019 2019 2020 2021 2021 Number of options granted 40,000 93,819 98,100 155,780 25,000 155,000 100,000 12,000 Options outstanding at December 31, 2023 20,000 39,183 51,567 125,514 25,000 79,675 89,021 12,000 Number exercisable at December 31, 2023 20,000 39,183 51,567 125,514 25,000 79,675 63,394 8,040 Exercise price $ 13.00 $ 15.41 $ 21.21 $ 47.58 $ 20.89 $ 14.85 $ 51.75 $ 47.76 Remaining lives 3.12 3.38 4.19 5.22 5.82 6.22 7.14 7.34 Risk free interest rate 1.89 % 1.76 % 2.65 % 2.34 % 1.58 % 0.79 % 0.56 % 0.84 % Expected volatility 27.44 % 26.92 % 28.76 % 30.95 % 31.93 % 35.72 % 28.69 % 29.03 % Expected life 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 Dividend yield – – 0.83 % 0.42 % 0.95 % 1.49 % 0.55 % 0.59 % Fair value at grant date $ 3.98 $ 4.60 $ 6.37 $ 15.63 $ 6.27 $ 4.41 $ 13.77 $ 13.06 The following table outlines the assumptions for options granted under the 2021 Plan. May 17, March 14, April 29, May 12, 2021 2022 2022 2023 Number of options granted 7,500 100,000 14,827 77,519 Options outstanding at December 31, 2023 7,500 71,451 14,827 77,519 Number exercisable at December 31, 2023 5,100 24,741 5,042 58,139 Exercise price $ 45.05 $ 30.46 $ 31.39 $ 20.71 Remaining lives 7.38 8.21 8.33 9.37 Risk free interest rate 0.84 % 2.10 % 2.92 % 3.41 % Expected volatility 31.50 % 35.33 % 35.33 % 34.51 % Expected life 6.000 6.000 6.000 5.186 Dividend yield 0.63 % 1.01 % 0.98 % 1.61 % Fair value at grant date $ 13.23 $ 10.23 $ 11.07 $ 6.45 The Company has recorded compensation expense related to the options based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the options on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the options of approximately $0.7 million, $1.1 million and $2.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Total unrecognized compensation expense related to options at December 31, 2023, is $0.1 million, which will be expensed over 1.0 year. PRSUs are restricted stock units subject to both performance-based and service-based vesting conditions. The number of shares of TPB Common Stock a recipient will receive upon vesting of a PRSU will be calculated by reference to certain performance metrics related to the Company’s performance over a five-year period. PRSUs will vest on the measurement date, which is no more than 65 days after the performance period provided the applicable service and performance conditions are satisfied. At December 31, 2023, there are 449,790 PRSUs outstanding. The following table outlines the PRSUs granted and outstanding as of December 31, 2023. March 20, March 18, December 28, February 18, March 14, May 4, 2019 2020 2020 2021 2022 2023 Number of PRSUs granted 92,500 94,000 88,169 100,000 49,996 133,578 PRSUs outstanding at December 31, 2023 76,430 83,560 31,040 84,690 41,550 132,520 Fair value as of grant date $ 47.58 $ 14.85 $ 46.42 $ 51.75 $ 30.46 $ 22.25 Remaining lives – 1.00 – 2.00 3.00 2.00 The Company recorded compensation expense related to the PRSUs of approximately $3.0 million, $2.9 million and $5.0 million in the consolidated statements of income for the years ended December 31, 2023, 2022 and 2021, respectively, based on the probability of achieving the performance condition. Total unrecognized compensation expense related to these awards at December 31, 2023, is $4.1 million, which will be expensed over the service period based on the probability of achieving the performance condition. RSUs are stock units subject to service-based vesting conditions over one The following table outlines the RSUs granted and outstanding as of December 31, 2023. March 14, March 14, April 29, May 5, May 5, May 8, 2022 2022 2022 2023 2023 2023 Number of RSUs granted 50,004 28,726 4,522 130,873 22,472 20,101 RSUs outstanding at December 31, 2023 40,592 18,961 4,522 128,406 5,618 20,101 Fair value as of grant date $ 30.46 $ 30.46 $ 31.39 $ 22.25 $ 22.25 $ 21.77 Remaining lives 3.00 1.00 3.00 2.25 – 0.35 The Company has recorded compensation expense related to the RSUs based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the RSUs on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the RSUs of approximately $2.9 million, $1.3 million and $0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Total unrecognized compensation expense related to RSUs at December 31, 2023, is $2.5 million, which will be expensed over 2.3 years. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Contingencies [Abstract] | |
Contingencies | Note 18. Contingencies On October 9, 2020, a purported stockholder of Turning Point Brands, Inc., Paul-Emile Berteau, filed a complaint in the Delaware Court of Chancery relating to the merger of SDI with a TPB subsidiary pursuant to the Agreement and Plan of Merger and Reorganization, dated as of April 7, 2020, by and among TPB, SDI and Merger Sub. The parties attended a mediation in late November 2022 where a settlement was reached. On December 12, 2023, the Court approved the settlement and dismissed the action with prejudice. As of December 31, 2023, the Company recorded a $4.0 million receivable in other current assets, and a corresponding gain on settlement in other income on its Consolidated Statement of Income for the year ended December 31, 2023. These funds were received in January 2024. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 19. Earnings Per Share T he following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations of net income: December 31, 2023 December 31, 2022 December 31, 2021 Per Per Per Income Shares Share Income Shares Share Income Shares Share Basic EPS: Numerator Net income attributable to Turning Point Brands, Inc. $ 38,462 $ 11,641 $ 52,059 Denominator Weighted average 17,578,270 $ 2.19 17,899,794 $ 0.65 18,917,570 $ 2.75 Diluted EPS: Numerator Net income attributable to Turning Point Brands, Inc. $ 38,462 $ 11,641 $ 52,059 Interest expense related to Convertible Senior Notes, net of tax 2,667 – 4,317 Diluted consolidated net income $ 41,129 $ 11,641 $ 56,376 Denominator Basic weighted average 17,578,270 17,899,794 18,917,570 Convertible Senior Notes (1) 2,533,201 – 3,208,172 Stock options and restricted stock units 355,935 155,221 256,252 20,467,406 $ 2.01 18,055,015 $ 0.64 22,381,994 $ 2.52 (1) For 2022, the effect of 3,208,172 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information [Abstract] | |
Segment Information | Note 20. Segment Information In accordance with ASC Segment Reporting, the Company has three reportable segments, Zig-Zag Products; Stoker’s Products; and Creative Distribution Solutions. The Zig-Zag Products segment markets and distributes (a) rolling papers, tubes, and related products; (b) finished cigars and MYO cigar wraps and (c) CLIPPER reusable lighters and other accessories. The Stoker’s Products segment (a) manufactures and markets moist snuff and (b) contracts for and markets loose-leaf chewing tobacco products. The Creative Distribution Solutions segment (a) markets and distributes liquid nicotine products and certain other products without tobacco and/or nicotine; (b) distributes a wide assortment of products to non-traditional retail outlets via Vapor Beast; and (c) markets and distributes a wide assortment of products to individual consumers via the VaporFi B2C online platform. Products in the Zig-Zag Products and Stoker’s Products segments are distributed primarily through wholesale distributors in the U.S. and Canada while products in the Creative Distribution Solutions segment are distributed primarily through e-commerce to non-traditional retail outlets and direct to consumers in the U.S. Corporate unallocated includes the costs and assets of the Company not assigned to one of the three reportable segments such as intercompany transfers, deferred taxes, deferred financing fees, and investments in subsidiaries. The Company had no customer that accounted for more than 10% of net sales in 2023, 2022, or 2021. The accounting policies of these segments are the same as those of the Company. Corporate costs are not directly charged to the three reportable segments in the ordinary course of operations. The Company evaluates the performance of its segments and allocates resources to them based on operating income. The tables below present financial information about reportable segments: For the year ended December 31, 2023 2022 2021 Net sales Zig-Zag products $ 180,455 $ 190,403 $ 176,491 Stoker’s products 144,609 130,826 124,280 Total Zig-Zag and Stoker’s products 325,064 321,229 300,771 Creative Distribution Solutions 80,329 93,784 144,700 Total $ 405,393 $ 415,013 $ 445,471 Gross profit Zig-Zag products $ 101,055 $ 106,576 $ 102,739 Stoker’s products 81,887 71,254 68,084 Total Zig-Zag and Stoker’s products 182,942 177,830 170,823 Creative Distribution Solutions 20,299 27,708 47,011 Total $ 203,241 $ 205,538 $ 217,834 Operating income (loss) Zig-Zag products $ 68,280 $ 73,342 $ 77,109 Stoker’s products 62,208 53,331 52,073 Corporate unallocated (1)(2) (47,528 ) (52,665 ) (41,124 ) Total Zig-Zag and Stoker’s products 82,960 74,008 88,058 Creative Distribution Solutions (383 ) 1,506 2,263 Total $ 82,577 $ 75,514 $ 90,321 Interest expense, net 14,645 19,524 20,500 Investment loss 11,914 13,303 6,673 Other income (4,000 ) – – Goodwill and intangible impairment loss – 27,566 – Gain on extinguishment of debt (1,664 ) (885 ) (2,154 ) Income before income taxes $ 61,682 $ 16,006 $ 65,302 Capital expenditures Zig-Zag products $ 1,112 $ 4,641 $ 141 Stoker’s products 4,595 3,044 5,960 Total Zig-Zag and Stoker’s products 5,707 7,685 6,101 Creative Distribution Solutions – – 55 Total $ 5,707 $ 7,685 $ 6,156 Depreciation and amortization Zig-Zag products $ 1,077 $ 412 $ 388 Stoker’s products 3,041 2,972 2,565 Total Zig-Zag and Stoker’s products 4,118 3,384 2,953 Creative Distribution Solutions 2,240 1,915 2,059 Total $ 6,358 $ 5,299 $ 5,012 (1) Includes corporate costs that are not allocated to any of the three reportable segments. (2) Includes costs related to PMTA of $2.1 million, $4.6 million and $2.6 million in 2023, 2022, and 2021, respectively. December 31, December 31, 2023 2022 Assets Zig-Zag products $ 177,135 $ 225,893 Stoker’s products 174,994 151,241 Corporate unallocated (1) 190,223 155,348 Total Zig-Zag and Stoker’s products 542,352 532,482 Creative Distribution Solutions 27,004 39,624 Total $ 569,356 $ 572,106 (1) Includes assets not assigned to the three reportable segments. All goodwill has been allocated to the reportable segments. Revenue Disaggregation—Sales Channel Revenues of the Zig-Zag Products and Stoker’s Products segments are primarily comprised of sales made to wholesalers while Creative Distribution Solutions sales are made business to business and business to consumer, both online and through our corporate retail stores. Creative Distribution Solutions net sales are broken out by sales channel below. Creative Distribution Solutions For the year ended December 31, 2023 2022 2021 Business to Business $ 71,104 $ 76,462 $ 107,235 Business to Consumer - Online 8,761 16,836 37,069 Other 464 486 396 Total $ 80,329 $ 93,784 $ 144,700 Net Sales: Domestic and Foreign The following table shows a breakdown of consolidated net sales between domestic and foreign. For the year ended December 31, 2023 2022 2021 Domestic $ 374,352 $ 381,723 $ 415,514 Foreign 31,041 33,290 29,957 Total $ 405,393 $ 415,013 $ 445,471 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Selected Quarterly Financial Information (Unaudited) [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | Note 21. Selected Quarterly Financial Information (Unaudited) The following table presents the quarterly operating results: 1st 2nd 3rd 4th 2023 Net sales $ 100,956 $ 105,595 $ 101,722 $ 97,120 Gross profit 48,617 52,478 51,622 50,524 Net income attributable to Turning Point Brands, Inc. 7,597 9,925 10,831 10,109 Basic net income attributable to Turning Point Brands, Inc. per share 0.43 0.56 0.62 0.57 Diluted net income attributable to Turning Point Brands, Inc. per share $ 0.41 $ 0.53 $ 0.58 $ 0.53 2022 Net sales $ 100,894 $ 102,925 $ 107,802 $ 103,392 Gross profit 51,794 51,469 52,712 49,563 Net income attributable to Turning Point Brands, Inc. 10,998 5,424 11,536 (16,317 ) Basic net income attributable to Turning Point Brands, Inc. per share 0.60 0.30 0.65 (0.93 ) Diluted net income attributable to Turning Point Brands, Inc. per share $ 0.55 $ 0.30 $ 0.60 $ (0.93 ) (1) (1) The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. The amounts presented in the table above are computed independently for each quarter. As a result, their sum may not equal the total year amounts. |
Additional Information with Res
Additional Information with Respect to Unrestricted Subsidiary | 12 Months Ended |
Dec. 31, 2023 | |
Additional Information with Respect to Unrestricted Subsidiary [Abstract] | |
Additional Information with Respect to Unrestricted Subsidiary | Note 22. Additional Information with Respect to Unrestricted Subsidiary Under the terms of the Senior Secured Notes Indenture and Senior Secured Notes, the Company has designated its subsidiaries, South Beach Brands LLC, TPB Beast LLC and Intrepid Brands, LLC as “Unrestricted Subsidiaries”. South Beach Brands LLC is a holding company under which our TPB Beast LLC business operating as Creative Distribution Solutions sits. The Company is required under the terms of the Senior Secured Notes Indenture and the Senior Secured Notes to present additional information that reflects the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Company’s Unrestricted Subsidiaries as of and for the periods presented. This additional information is below. Income Statement for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 2022 Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Net sales $ 325,063 $ 80,330 $ 405,393 $ 321,229 $ 93,784 $ 415,013 Cost of sales 142,121 60,031 202,152 143,399 66,076 209,475 Gross profit 182,942 20,299 203,241 177,830 27,708 205,538 Selling, general, and administrative expenses 104,327 20,682 125,009 129,900 124 130,024 Other operating income, net (4,345 ) – (4,345 ) – – – Operating income (loss) 82,960 (383 ) 82,577 47,930 27,584 75,514 Interest expense, net 14,645 – 14,645 19,524 – 19,524 Investment loss 11,914 – 11,914 13,303 – 13,303 Other income (4,000 ) – (4,000 ) – – – Goodwill and intangible impairment loss – – 1,488 26,078 27,566 Gain on extinguishment of debt (1,664 ) – (1,664 ) (885 ) – (885 ) Income (loss) before income taxes 62,065 (383 ) 61,682 14,500 1,506 16,006 Income tax expense 24,049 (148 ) 23,901 4,393 456 4,849 Consolidated net income (loss) 38,016 (235 ) 37,781 10,107 1,050 11,157 Net loss attributable to non-controlling interest (681 ) – (681 ) (484 ) – (484 ) Net income (loss) attributable to Turning Point Brands, Inc. $ 38,697 $ (235 ) $ 38,462 $ 10,591 $ 1,050 $ 11,641 Year Ended December 31, 2021 Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Net sales $ 300,771 $ 144,700 $ 445,471 Cost of sales 129,948 97,689 227,637 Gross profit 170,823 47,011 217,834 Selling, general, and administrative expenses 82,765 44,748 127,513 Operating income 88,058 2,263 90,321 Interest expense, net 20,500 – 20,500 Investment loss 6,673 – 6,673 Gain on extinguishment of debt (2,154 ) – (2,154 ) Income before income taxes 63,039 2,263 65,302 Income tax expense 13,553 487 14,040 Consolidated net income 49,486 1,776 51,262 Net loss attributable to non-controlling interest (797 ) – (797 ) Net income attributable to Turning Point Brands, Inc. $ 50,283 $ 1,776 $ 52,059 Balance Sheet as of December 31, 2023: ASSETS Company and Restricted Subsidiaries Unrestricted Subsidiaries Eliminations Consolidated Current assets: Cash $ 116,725 $ 1,161 $ – $ 117,886 Accounts receivable, net 9,989 – – 9,989 Inventories, net 91,679 7,281 – 98,960 Other current assets 36,937 3,844 – 40,781 Total current assets 255,330 12,286 – 267,616 Property, plant, and equipment, net 25,142 158 – 25,300 Deferred income taxes 1,468 – – 1,468 Right of use assets 11,359 121 – 11,480 Deferred financing costs, net 2,450 – – 2,450 Goodwill 136,250 – – 136,250 Other intangible assets, net 66,490 14,452 – 80,942 Master Settlement Agreement (MSA) escrow deposits 28,684 – – 28,684 Other assets 15,166 – – 15,166 Investment in unrestricted subsidiaries 48,229 – (48,229 ) – Total assets $ 590,568 $ 27,017 $ (48,229 ) $ 569,356 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,781 $ 626 $ – $ 8,407 Accrued liabilities 32,052 1,583 – 33,635 Current portion of long-term debt 58,294 – – 58,294 Total current liabilities 98,127 2,209 – 100,336 Notes payable and long-term debt 307,064 – – 307,064 Lease liabilities 9,898 52 – 9,950 Total liabilities 415,089 2,261 – 417,350 Commitments and contingencies Stockholders’ equity: Total Turning Point Brands Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries 174,449 24,756 (48,229 ) 150,976 Non-controlling interest 1,030 – – 1,030 Total stockholders’ equity 175,479 24,756 (48,229 ) 152,006 Total liabilities and stockholders’ equity $ 590,568 $ 27,017 $ (48,229 ) $ 569,356 Balance Sheet as of December 31, 2022: ASSETS Company and Restricted Subsidiaries Unrestricted Subsidiaries Eliminations Consolidated Current assets: Cash $ 103,990 $ 2,413 $ – $ 106,403 Accounts receivable, net 7,374 1,003 – 8,377 Inventories, net 104,883 15,032 – 119,915 Other current assets 18,828 4,131 – 22,959 Total current assets 235,075 22,579 – 257,654 Property, plant, and equipment, net 22,261 527 – 22,788 Deferred income taxes 8,443 – – 8,443 Right of use assets 12,328 137 – 12,465 Deferred financing costs, net 282 – – 282 Goodwill 136,253 – – 136,253 Other intangible assets, net 67,241 16,351 – 83,592 Master Settlement Agreement (MSA) escrow deposits 27,980 – – 27,980 Other assets 22,619 30 – 22,649 Investment in unrestricted subsidiaries 60,120 – (60,120 ) – Total assets $ 592,602 $ 39,624 $ (60,120 ) $ 572,106 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,628 $ 727 $ – $ 8,355 Accrued liabilities 31,118 1,883 – 33,001 Other current liabilities 20 – – 20 Total current liabilities 38,766 2,610 – 41,376 Notes payable and long-term debt 406,757 – – 406,757 Lease liabilities 10,593 – – 10,593 Total liabilities 456,116 2,610 – 458,726 Commitments and contingencies Stockholders’ equity: Total Turning Point Brands Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries 134,751 37,014 (60,120 ) 111,645 Non-controlling interest 1,735 – – 1,735 Total stockholders’ equity 136,486 37,014 (60,120 ) 113,380 Total liabilities and stockholders’ equity $ 592,602 $ 39,624 $ (60,120 ) $ 572,106 |
Dividends and Share Repurchase
Dividends and Share Repurchase | 12 Months Ended |
Dec. 31, 2023 | |
Dividends and Share Repurchase [Abstract] | |
Dividends and Share Repurchase | Note 23. Dividends and Share Repurchase The Company currently pays a quarterly cash dividend. Dividends are considered restricted payments under the Senior Secured Notes Indenture. The Company is generally permitted to make restricted payments provided that, at the time of payment, or as a result of payment, the Company is not in default on its debt covenants. Additional earning and market capitalization restrictions limit the aggregate amount of restricted, quarterly dividends during a fiscal year. During the year ended December 31, 2023, the Company paid cash dividends of $0.26 per common share for $4.5 million. On February 25, 2020, the Company’s Board of Directors approved a $50.0 million share repurchase program, which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board of Directors. On October 25, 2021, the Board of Directors increased the approved share repurchase program by $30.7 million and by an additional $24.6 million on February 24, 2022, in each case bringing the aggregate approval back to $50.0 million. As of December 31, 2023, $27.2 million remains available for share repurchases under the program. There were no shares repurchased for the year ended December 31, 2023. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organizations and Basis of Pr_2
Organizations and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Organizations and Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations.The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, deferred income tax valuation allowances, the valuation of investments and the valuation of inventory, including reserves. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows in any of the periods presented. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary. All significant intercompany transactions have been eliminated. U.S. GAAP requires the Company to identify entities for which control is achieved through means other than voting rights and to determine whether the Company is the primary beneficiary of VIEs. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The primary beneficiary of a VIE is the entity that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. Management of the Company has determined that Turning Point Brands Canada (formerly ReCreation Marketing) is a VIE for which the Company is considered the primary beneficiary due to the power the Company has over the activities that most significantly impact the economic performance of Turning Point Brands Canada and the right to receive benefits and the obligation to absorb losses of Turning Point Brands Canada equity interest, additional subordinated financing provided by the Company to Turning Point Brands Canada and the distribution agreement with Turning Point Brands Canada for the sale of the Company’s products that makes up a significant portion of Turning Point Brands Canada’s business activities. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues in accordance with Accounting The Company records an allowance for sales returns, based principally on historical volume and return rates, which is included in accrued liabilities on the consolidated balance sheets. The Company records sales incentives, which consist of consumer incentives and trade promotion activities, as a reduction in revenues (a portion of which is based on amounts estimated as being due to wholesalers, retailers and consumers at the end of the period) based principally on historical volume and utilization rates. Expected payments for sales incentives are included in accrued liabilities on the consolidated balance sheets. A further requirement of ASC 606 is for entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Company management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of the Company’s contract revenue for decision making purposes is the disaggregation by segment which can be found in Note 20, “Segment Information”. An additional disaggregation of contract revenue by sales channel can be found within Note 20 as well. |
Derivative Instruments | Derivative Instruments The Company enters into foreign currency contracts to hedge a portion of its exposure to changes in foreign currency exchange rates on inventory purchase commitments. The Company accounts for its foreign currency contracts under the provisions of ASC 815, Derivatives and Hedging. Under the Company’s policy, the Company may hedge up to 100% of its anticipated purchases of inventory in the denominated invoice currency over a forward period not to exceed twelve months. The Company may also, from time to time, hedge up to 100% of its non-inventory purchases (e.g. production equipment) in the denominated invoice currency. Foreign currency contracts that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on the measurement date, except any hedge ineffectiveness which is recognized currently in income. Gains and losses on these foreign currency contracts are transferred from other comprehensive income into inventory and are transferred to net income as inventory is sold |
Shipping Costs | Shipping Costs The Company records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $23.5 million, $24.2 million, and $27.6 million in 2023, 2022, and 2021, respectively. |
Research and Development and Quality Assurance Costs | Research and Development and Quality Assurance Costs Research and development and quality assurance costs are expensed as incurred. These expenses, classified as selling, general and administrative expenses, were approximately $0.6 million, $0.6 million, and $1.1 million in 2023, 2022, and 2021, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers any highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for the purpose of curing. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is provided using the straight-line method over the lesser of the estimated useful lives of the assets or the life of the leases for leasehold improvements (4 to 7 years for machinery, equipment and furniture, 10 to 15 years for leasehold improvements, and up to 15 years for buildings and building improvements). Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and improvements are capitalized and depreciated over their estimated useful lives. Upon disposition of fixed assets, the costs and related accumulated depreciation amounts are relieved. Any resulting gain or loss is reflected in operations during the period of disposition. Long-lived assets are reviewed for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company follows the provisions of ASC 350, Intangibles – Goodwill and Other in accounting for goodwill and other intangible assets. Goodwill is tested for impairment annually on December 31, or more frequently if certain indicators are present. When testing goodwill for impairment, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in the amount by which the carrying value of the reporting unit exceeds its fair value, limited to the amount of goodwill at the reporting unit. The Company determines fair values for each of the reporting units using a combination of the income approach and/or market approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. Under the market approach, the Company selects peer sets based on close competitors and reviews the revenue and EBITDA multiples to determine the fair value. See Note 10, “Goodwill and Other Intangible Assets” for further information on goodwill. Indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. The Company’s fair value methodology is primarily based on the relief from royalty approach. Definite-lived intangible assets are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3.5 to 15 years. The Company continually evaluates the reasonableness of the useful lives of these assets. |
Fair Value | Fair Value U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under U.S. GAAP are described below: • Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. • Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Equity Investments | Equity Investments The Company's investments include equity securities, which are accounted for at cost and under the equity method of accounting. For equity investments that do not qualify to be accounted for under the equity method of accounting and that do not have a readily determinable fair value, the Company has elected a practical expedient to record the investment at the original cost, as adjusted for impairment and observable price changes. Under the practical expedient, if a qualitative analysis indicates impairment exists, the fair value of the investment is required to be estimated and any excess of the carrying value over the estimated fair value is recognized as an impairment loss. Equity investments accounted for under the equity method of accounting are assessed for impairment when events or circumstances suggest that any loss in value of the investment may be other than temporary. A loss in value of an investment is other than temporary when evidence of a loss in value indicates the absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. In the absence of observable data, the Company estimates the fair values of these investments using a market approach derived from applying market multiples of comparable public companies to the financial results of each investment. The valuation methodology and the significant assumptions used by management in estimating the fair values of each investment, involve a high degree of judgment and may involve the use of third-party valuation specialists. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are amortized over the terms of the related debt obligations using the straight-line method. Unamortized amounts are expensed upon extinguishment of the related borrowings. Deferred financing costs are presented as a direct deduction from the carrying amount of that debt liability except for deferred financing costs relating to our revolving credit facility, which are presented as an asset. |
Income Taxes | Income Taxes The Company records the effects of income taxes under the liability method in which deferred income tax assets and liabilities are recognized based on the difference between the financial and tax basis of assets and liabilities using the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company assesses its ability to realize future benefits of deferred tax assets by determining if they meet the “more likely than not” criteria in ASC 740, Income Taxes. If the Company determines that future benefits do not meet the “more likely than not” criteria, a valuation allowance is recorded. |
Advertising and Promotion | Advertising and Promotion Advertising and promotion costs, including point of sale materials, are expensed as incurred and amounted to $9.2 million, $9.3 million, and $12.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation costs related to its stock options on the fair value-based method under the provisions of ASC 718, Compensation – Stock Compensation. The fair value-based method requires compensation cost for stock options to be recognized over the requisite service period based on the fair value of stock options granted. The Company determined the fair value of these awards using the Black-Scholes option pricing model. The Company grants performance-based restricted stock units (“PRSU”) subject to both performance-based and service-based vesting conditions. The fair value of each PRSU is the Company’s stock price on the date of grant. For purposes of recognizing compensation expense as services are rendered in accordance with ASC 718, the Company assumes all employees involved in the PRSU grant will provide service through the end of the performance period. Stock compensation expense is recorded based on the probability of achievement of the performance conditions specified in the PRSU grant. The Company grants restricted stock units (“RSU”) subject to service-based vesting conditions. The fair value of each RSU is the Company’s stock price on the date of grant. The Company recognizes compensation expense as services are rendered in accordance with ASC 718. Stock compensation expense is recorded over the service period in the RSU grant. |
Risks and Uncertainties | Risks and Uncertainties Manufacturers and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In a number of states targeted flavor bans have been proposed or enacted legislatively or by the administrative process. The tobacco industry has experienced, and is experiencing, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes for injuries allegedly caused by smoking or exposure to smoke. However, several lawsuits have been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically, such claims assert that use of smokeless products is addictive and causes oral cancer. Additionally, several lawsuits have been brought against manufacturers and distributors of Creative Distribution Solutions products due to malfunctioning devices. There can be no assurance the Company will not sustain losses in connection with such lawsuits and that such losses will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Master Settlement Agreement (MSA): Pursuant to the MSA and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to also include MYO cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account, with sub-accounts on behalf of each settling state. The STMSA has no similar provisions. The MSA escrow accounts are governed by states’ statutes that expressly give the manufacturers the option of opening, funding, and maintaining an escrow account in lieu of becoming a signatory to the MSA. The statutes require companies who are not signatories to the MSA to deposit, on an annual basis, into qualified banks, escrow funds based on the number of cigarettes or cigarette equivalents, i.e., the pounds of MYO tobacco, sold. The purpose of these statutes is expressly stated to be to eliminate the cost disadvantage the settling manufacturers have as a result of entering into the MSA. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgment to that state’s plaintiffs in the event of such a final judgment against the company. Either option – becoming an MSA signatory or establishing an escrow account – is permissible. The Company chose to open and fund an MSA escrow account as its means of compliance. It is management’s opinion, due to the possibility of future federal or state regulations, though none have to date been enacted, that entering into one or both of the settlement agreements or establishing and maintaining an escrow account would not necessarily prevent future regulations from having a material adverse effect on the results of operations, financial position, and cash flows of the Company. Various states have enacted or proposed complementary legislation intended to curb the activity of certain manufacturers and importers of cigarettes that are selling into MSA states without signing the MSA or who have failed to properly establish and fund a qualifying escrow account. To the best of the Company’s knowledge, no such statute has been enacted which could inadvertently and negatively impact the Company, which has been, and is currently, fully compliant with all applicable laws, regulations, and statutes. However, there can be no assurance that the enactment of any such complementary legislation in the future will not have a material adverse effect on the results of operations, financial position, or cash flows of the Company. Pursuant to the MSA escrow account statutes, in order to be compliant with the MSA escrow requirements, companies selling products covered by the MSA are required to deposit such funds for each calendar year into a qualifying escrow account by April 15 of the following year. At December 31, 2023, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.7 million. At December 31, 2022, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.0 million. The increase in fair value was due to decreasing maturities affecting the fair value of U.S. government securities held in the MSA escrow account. Inputs to the valuation methodology of the MSA escrow deposits when funds are invested include The Company discontinued its generic category of MYO in 2019 and its Zig-Zag branded MYO cigarette smoking tobacco in 2017. Thus, pending a change in MSA legislation, the Company has no remaining product lines covered by the MSA and will not be required to make future escrow deposits. The Company has chosen to invest a portion of the MSA escrow, from time to time, in U.S. Government securities including TIPS, Treasury notes, and Treasury bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA; thus, any investment with an unrealized loss position will be held until the value is recovered, or until maturity. Fair values for the U.S. Governmental agency obligations are Level 2 in the fair value hierarchy. The following tables show cost and estimated fair value of the assets held in the MSA account, respectively, as well as the maturities of the U.S. Governmental agency obligations held in such account for the periods indicated. As of December 31, 2023 As of December 31, 2022 Gross Gross Estimated Gross Gross Estimated Unrealized Unrealized Fair Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Cash and cash equivalents $ 1,929 $ – $ – $ 1,929 $ 1,929 $ – $ – $ 1,929 U.S. Governmental agency obligations (unrealized position < 12 months) – – – – 10,226 – (1,251 ) 8,975 U.S. Governmental agency obligations (unrealized position > 12 months) 30,144 – (3,389 ) 26,755 19,918 – (2,842 ) 17,076 Total $ 32,073 $ – $ (3,389 ) $ 28,684 $ 32,073 $ – $ (4,093 ) $ 27,980 As of December 31, 2023 Less than one year $ 4,200 One to five years 10,735 Five to ten years 13,254 Greater than ten years 1,955 Total $ 30,144 The following shows the amount of deposits by sales year for the MSA escrow account: Sales Deposits as of December 31, Year 2023 2022 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,553 4,553 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 82 82 Total $ 32,073 $ 32,073 |
Concentration of Credit Risk | Concentration of Credit Risk: The Company sells its products to distributors, retail establishments, and consumers throughout the U.S. and also sells Zig-Zag ® |
Accounts Receivable | Accounts Receivable Accounts receivable are recognized at their net realizable value. All accounts receivable are trade related, recorded at the invoiced amount, and do not bear interest. The Company maintains allowances for credit losses for estimated uncollectible invoices resulting from a customer’s inability to pay (bankruptcy, out of business, etc., i.e. “bad debt” which results in write-offs). The activity of allowance for credit losses during 2023 and 2022 is as follows: December 31, December 31, 2023 2022 Balance at beginning of period $ 114 $ 262 Additions to allowance account during period 38 191 Deductions of allowance account during period (74 ) (339 ) Balance at end of period $ 78 $ 114 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Fair Value of MSA Escrow Account | Fair values for the U.S. Governmental agency obligations are Level 2 in the fair value hierarchy. The following tables show cost and estimated fair value of the assets held in the MSA account, respectively, as well as the maturities of the U.S. Governmental agency obligations held in such account for the periods indicated. As of December 31, 2023 As of December 31, 2022 Gross Gross Estimated Gross Gross Estimated Unrealized Unrealized Fair Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Cash and cash equivalents $ 1,929 $ – $ – $ 1,929 $ 1,929 $ – $ – $ 1,929 U.S. Governmental agency obligations (unrealized position < 12 months) – – – – 10,226 – (1,251 ) 8,975 U.S. Governmental agency obligations (unrealized position > 12 months) 30,144 – (3,389 ) 26,755 19,918 – (2,842 ) 17,076 Total $ 32,073 $ – $ (3,389 ) $ 28,684 $ 32,073 $ – $ (4,093 ) $ 27,980 |
Maturities of U.S. Governmental Agency Obligations | As of December 31, 2023 Less than one year $ 4,200 One to five years 10,735 Five to ten years 13,254 Greater than ten years 1,955 Total $ 30,144 |
Deposits by Sales Year for MSA Escrow Account | The following shows the amount of deposits by sales year for the MSA escrow account: Sales Deposits as of December 31, Year 2023 2022 1999 $ 211 $ 211 2000 1,017 1,017 2001 1,673 1,673 2002 2,271 2,271 2003 4,249 4,249 2004 3,714 3,714 2005 4,553 4,553 2006 3,847 3,847 2007 4,167 4,167 2008 3,364 3,364 2009 1,619 1,619 2010 406 406 2011 193 193 2012 199 199 2013 173 173 2014 143 143 2015 101 101 2016 91 91 2017 82 82 Total $ 32,073 $ 32,073 |
Allowance for Credit Losses | Accounts receivable are recognized at their net realizable value. All accounts receivable are trade related, recorded at the invoiced amount, and do not bear interest. The Company maintains allowances for credit losses for estimated uncollectible invoices resulting from a customer’s inability to pay (bankruptcy, out of business, etc., i.e. “bad debt” which results in write-offs). The activity of allowance for credit losses during 2023 and 2022 is as follows: December 31, December 31, 2023 2022 Balance at beginning of period $ 114 $ 262 Additions to allowance account during period 38 191 Deductions of allowance account during period (74 ) (339 ) Balance at end of period $ 78 $ 114 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories [Abstract] | |
Inventories | The components of inventories are as follows: December 31, December 31, 2023 2022 Raw materials and work in process $ 5,201 $ 7,283 Leaf tobacco 34,894 43,468 Finished goods - Zig-Zag Products 41,783 42,279 Finished goods - Stoker’s Products 8,090 9,667 Finished goods - Creative Distribution Solutions 7,281 15,431 Other 1,711 1,787 Inventories $ 98,960 $ 119,915 |
Inventory Valuation Allowance | The following represents the inventory valuation allowance roll-forward, for the years ended December 31: 2023 2022 Balance at beginning of period $ (4,533 ) $ (7,668 ) Charged to cost and expense (17,275 ) (987 ) Deductions for inventory disposed 1,215 4,122 Balance at end of period $ (20,593 ) $ (4,533 ) |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Current Assets [Abstract] | |
Other Current Assets | Other current assets consists of: December 31, December 31, 2023 2022 Inventory deposits $ 5,707 $ 6,395 Insurance deposit 3,000 3,000 Prepaid taxes 153 448 Settlement receivable 4,000 – Insurance recovery receivable 15,181 – Other 12,740 13,116 Total $ 40,781 $ 22,959 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment, Net | Property, plant and equipment consists of: December 31, December 31, 2023 2022 Land $ 22 $ 22 Buildings and improvements 3,956 3,096 Leasehold improvements 5,440 5,404 Machinery and equipment 29,751 25,832 Furniture and fixtures 8,391 9,264 Gross property, plant and equipment 47,560 43,618 Accumulated depreciation (22,260 ) (20,830 ) Net property, plant and equipment $ 25,300 $ 22,788 |
Deferred Financing Costs, Net (
Deferred Financing Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Financing Costs, Net [Abstract] | |
Deferred Financing Costs | Deferred financing costs consist of: December 31, December 31, 2023 2022 Deferred financing costs, net of accumulated amortization of $ 104 200 $ 2,450 $ 282 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill | The following table summarizes goodwill by segment: Zig-Zag Stoker’s CDS Total Balance as of December 31, 2021 $ 104,158 $ 32,590 $ 25,585 $ 162,333 Impairment – – (25,585 ) (25,585 ) Cumulative translation adjustment (495 ) – – (495 ) Balance as of December 31, 2022 $ 103,663 $ 32,590 $ – $ 136,253 Cumulative translation adjustment (3 ) – – (3 ) Balance as of December 31, 2023 $ 103,660 $ 32,590 $ – $ 136,250 |
Unamortized Indefinite-Lived Intangible Assets | The following tables summarize information about the Company’s other intangible assets. Gross carrying amounts of unamortized, indefinite-lived intangible assets are shown below: December 31, 2023 December 31, 2022 Zig-Zag Stoker’s CDS Total Zig-Zag Stoker’s CDS Total Unamortized, indefinite life intangible assets: Trade names $ – $ 8,500 $ – $ 8,500 $ – $ 8,500 $ 9,162 $ 17,662 Formulas 42,245 53 – 42,298 52,217 53 – 52,270 Total $ 42,245 $ 8,553 $ – $ 50,798 $ 52,217 $ 8,553 $ 9,162 $ 69,932 |
Amortized Intangible Assets | Amortized intangible assets consists of: Zig-Zag Stoker’s CDS December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Carrying Amortization Amortized intangible assets: Customer relationships (useful life of 8 10 $ – $ – $ – $ – $ – $ – $ – $ – $ 6,936 $ 5,596 $ 6,936 $ 4,768 Trade names (useful life of 15 449 10 – – 2,372 633 2,372 475 16,063 2,952 7,158 2,137 Formulas (useful life of 15 9,972 665 – – – – – – – – – – Master distribution agreement (useful life of 15 5,489 1,281 5,489 915 – – – – – – – – Franchise agreements (useful life of 8 – – – – – – – – – – 780 780 Non-compete agreements (useful life of 3.5 – – – – – – – – – – 100 100 Total $ 15,910 $ 1,956 $ 5,489 $ 915 $ 2,372 $ 633 $ 2,372 $ 475 $ 22,999 $ 8,548 $ 14,974 $ 7,785 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Assets [Abstract] | |
Other Assets | Other assets consists of: December 31, December 31, 2023 2022 Equity investments $ 2,405 $ 13,376 Debt security investment 6,750 7,820 Capitalized software 5,923 929 Other 88 524 Total $ 15,166 $ 22,649 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities consists of: December 31, December 31, 2023 2022 Accrued payroll and related items $ 7,085 $ 7,685 Customer returns and allowances 5,239 7,291 Taxes payable 3,821 1,867 Lease liabilities 2,678 3,102 Accrued interest 6,682 7,277 Other 8,130 5,779 Total $ 33,635 $ 33,001 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Notes Payable and Long-Term Debt [Abstract] | |
Notes Payable and Long-Term Debt | Notes payable and long-term debt consists of the following in order of preference: December 31, December 31, 2023 2022 Senior Secured Notes $ 250,000 $ 250,000 Convertible Senior Notes 118,541 162,500 Gross notes payable and long-term debt 368,541 412,500 Less deferred finance charges (3,183 ) (5,743 ) Less current maturities (58,294 ) – Notes payable and long-term debt $ 307,064 $ 406,757 |
Redemption Prices of Senior Secured Notes | The Company may redeem the Senior Secured Notes, in whole or in part, at any time on or after February 15, 2023, at the redemption prices (expressed as a percentage of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, on the Senior Secured Notes to be redeemed to (but not including) the applicable redemption date if redeemed during the period indicated below: On or after February 15, 2023 102.813 % On or after February 15, 2024 101.406 % On or after February 15, 2025 and thereafter 100.000 % |
Interest Rate Margins | Amounts borrowed under the 2023 ABL Facility are subject to an interest rate margin per annum equal to (a) from and after the closing date until the last day of the first full fiscal quarter ended after the closing date, (i) 1.25% per annum, in the case base rate loans, and (ii) 2.25% per annum, in the case of revolving credit loans that are SOFR Loans, (b)(i) 2.25% per annum, in the case of LILO loans that are base rate loans, and (ii) 3.25% per annum, in the case of LILO loans that are SOFR loans, (c) on the first day of each fiscal quarter, the applicable interest rate margins will be determined from the pricing grid below based upon the historical excess availability for the most recent fiscal quarter ended immediately prior to the relevant date, as calculated by the Administrative Agent. Level Historical Excess Availability Applicable Margin for SOFR Loans Applicable Margin for Base Rate Loans I Greater than or equal to 66.66% 1.75% 0.75% II Less than 66.66%, but greater than or equal to 33.33% 2.00% 1.00% III Less than 33.33% 2.25% 1.25% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Income Tax Expense (Benefit) | Income tax expense (benefit) for the years ended December 31 consists of the following components: 2023 2022 2021 Current Deferred Total Current Deferred Total Current Deferred Total Federal $ 13,291 $ 4,091 $ 17,382 $ 8,457 $ (4,713 ) $ 3,744 $ 11,315 $ (583 ) $ 10,732 State and Local 3,602 2,166 5,768 2,815 (1,291 ) 1,524 4,210 (637 ) 3,573 Foreign (16 ) 767 751 83 (502 ) (419 ) – (265 ) (265 ) Total $ 16,877 $ 7,024 $ 23,901 $ 11,355 $ (6,506 ) $ 4,849 $ 15,525 $ (1,485 ) $ 14,040 |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consists of: December 31, December 31, 2023 2022 Assets Liabilities Assets Liabilities Inventory $ 5,310 $ – $ 1,384 $ – Property, plant, and equipment – 3,120 – 2,856 Goodwill and other intangible assets – 3,182 – 2,812 Foreign NOL carryforward 1,495 – 561 – State NOL carryforward 2,398 – 2,483 – Unrealized loss on investments 7,203 – 5,168 – Leases 3,278 2,978 3,544 3,222 Original issue discount 426 – 1,604 – Stock compensation 4,879 – 4,333 – Insurance receivable – 3,764 – – Other 4,536 3,567 4,281 2,963 Gross deferred income taxes 29,525 16,611 23,358 11,853 Valuation allowance (11,446 ) – (3,062 ) – Net deferred income taxes $ 18,079 $ 16,611 $ 20,296 $ 11,853 |
Reconciliation of Statutory to Effective Income Tax Rate | Reconciliation of the federal statutory rate and the effective income tax rate for the years ended December 31 is as follows: 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Foreign rate differential (0.1 )% (0.5 )% (0.1 )% State taxes 4.3 % 5.7 % 3.4 % Permanent differences (0.1 )% (0.2 )% (4.1 )% Other - 1.7 % 0.7 % Valuation allowance 13.6 % 2.6 % 0.6 % Effective income tax rate 38.7 % 30.3 % 21.5 % |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Lease Commitments [Abstract] | |
Components of Lease Expense | The components of lease expense consist of the following: For the year ended December 31, 2023 2022 2021 Operating lease cost Cost of sales $ 507 $ 940 $ 907 Selling, general and administrative 1,991 1,622 1,907 Variable lease cost (1) 1,183 765 1,182 Short-term lease cost 24 37 48 Sublease income – – (60 ) Total $ 3,705 $ 3,364 $ 3,984 (1) Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying. For the year ended December 31, 2023 2022 2021 Financing lease cost Selling, general and administrative $ 1,164 $ 1,138 $ 1,094 Total $ 1,164 $ 1,138 $ 1,094 |
Amounts Related to Operating and Financing Leases | The Company's lease balances consist of the following: December 31, December 31, 2023 2022 Assets: Right of use assets $ 8,950 $ 10,967 Right of use assets 2,530 1,498 Total lease assets $ 11,480 $ 12,465 Liabilities: Current lease liabilities (2) $ 1,991 $ 2,007 Current lease liabilities (2) 687 1,095 Long-term lease liabilities 8,374 10,243 Long-term lease liabilities 1,576 350 Total lease liabilities $ 12,628 $ 13,695 (2) Reported within accrued liabilities on the balance sheet Other information related to the Company's leases consists of the following: December 31, December 31, 2023 2022 Right of use assets obtained in exchange for lease obligations: Operating leases $ 143 $ – Finance leases $ 2,169 $ 494 As of December 31, 2023 2022 Weighted-average remaining lease term - operating leases 5.7 years 6.5 years Weighted-average discount rate - operating leases 5.17 % 5.19 % Weighted-average remaining lease term - financing leases 3.4 years 1.8 years Weighted-average discount rate - financing leases 6.48 % 3.42 % |
Future Minimum Rental Payments for Non-Cancelable Leases | The table illustrates the Company's future minimum rental payments for non-cancelable leases as of Year Operating Finance 2024 $ 2,471 $ 813 2025 2,174 741 2026 2,084 644 2027 2,035 327 2028 1,046 – Years thereafter 2,263 – Total lease payments 12,073 2,525 Less: Imputed interest 1,708 262 Present value of lease liabilities $ 10,365 $ 2,263 |
Share Incentive Plans (Tables)
Share Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share Incentive Plans [Abstract] | |
Stock Option Activity | Stock option activity for the 2006, 2015 and 2021 Plans is summarized below: Weighted Weighted Stock Average Average Option Exercise Grant Date Shares Price Fair Value Outstanding, December 31, 2021 619,835 $ 28.51 $ 8.70 Granted 114,827 30.58 10.34 Exercised (40,331 ) 12.49 4.08 Forfeited (11,117 ) 32.60 9.35 Outstanding, December 31, 2022 683,214 $ 29.74 $ 9.24 Granted 77,519 20.71 6.45 Exercised (33,851 ) 13.30 4.24 Forfeited (69,931 ) 27.51 9.11 Outstanding, December 31, 2023 656,951 $ 29.79 $ 9.18 |
Assumptions for Options Granted Under 2015 and 2021 Plan | The following table outlines the assumptions for options granted under the 2015 Plan. February 10, May 17, March 7, March 20, October 24, March 18, February 18, May 3, 2017 2017 2018 2019 2019 2020 2021 2021 Number of options granted 40,000 93,819 98,100 155,780 25,000 155,000 100,000 12,000 Options outstanding at December 31, 2023 20,000 39,183 51,567 125,514 25,000 79,675 89,021 12,000 Number exercisable at December 31, 2023 20,000 39,183 51,567 125,514 25,000 79,675 63,394 8,040 Exercise price $ 13.00 $ 15.41 $ 21.21 $ 47.58 $ 20.89 $ 14.85 $ 51.75 $ 47.76 Remaining lives 3.12 3.38 4.19 5.22 5.82 6.22 7.14 7.34 Risk free interest rate 1.89 % 1.76 % 2.65 % 2.34 % 1.58 % 0.79 % 0.56 % 0.84 % Expected volatility 27.44 % 26.92 % 28.76 % 30.95 % 31.93 % 35.72 % 28.69 % 29.03 % Expected life 6.000 6.000 6.000 6.000 6.000 6.000 6.000 6.000 Dividend yield – – 0.83 % 0.42 % 0.95 % 1.49 % 0.55 % 0.59 % Fair value at grant date $ 3.98 $ 4.60 $ 6.37 $ 15.63 $ 6.27 $ 4.41 $ 13.77 $ 13.06 The following table outlines the assumptions for options granted under the 2021 Plan. May 17, March 14, April 29, May 12, 2021 2022 2022 2023 Number of options granted 7,500 100,000 14,827 77,519 Options outstanding at December 31, 2023 7,500 71,451 14,827 77,519 Number exercisable at December 31, 2023 5,100 24,741 5,042 58,139 Exercise price $ 45.05 $ 30.46 $ 31.39 $ 20.71 Remaining lives 7.38 8.21 8.33 9.37 Risk free interest rate 0.84 % 2.10 % 2.92 % 3.41 % Expected volatility 31.50 % 35.33 % 35.33 % 34.51 % Expected life 6.000 6.000 6.000 5.186 Dividend yield 0.63 % 1.01 % 0.98 % 1.61 % Fair value at grant date $ 13.23 $ 10.23 $ 11.07 $ 6.45 |
PRSU Activity | The following table outlines the PRSUs granted and outstanding as of December 31, 2023. March 20, March 18, December 28, February 18, March 14, May 4, 2019 2020 2020 2021 2022 2023 Number of PRSUs granted 92,500 94,000 88,169 100,000 49,996 133,578 PRSUs outstanding at December 31, 2023 76,430 83,560 31,040 84,690 41,550 132,520 Fair value as of grant date $ 47.58 $ 14.85 $ 46.42 $ 51.75 $ 30.46 $ 22.25 Remaining lives – 1.00 – 2.00 3.00 2.00 |
RSU Activity | The following table outlines the RSUs granted and outstanding as of December 31, 2023. March 14, March 14, April 29, May 5, May 5, May 8, 2022 2022 2022 2023 2023 2023 Number of RSUs granted 50,004 28,726 4,522 130,873 22,472 20,101 RSUs outstanding at December 31, 2023 40,592 18,961 4,522 128,406 5,618 20,101 Fair value as of grant date $ 30.46 $ 30.46 $ 31.39 $ 22.25 $ 22.25 $ 21.77 Remaining lives 3.00 1.00 3.00 2.25 – 0.35 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income per Share | T he following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations of net income: December 31, 2023 December 31, 2022 December 31, 2021 Per Per Per Income Shares Share Income Shares Share Income Shares Share Basic EPS: Numerator Net income attributable to Turning Point Brands, Inc. $ 38,462 $ 11,641 $ 52,059 Denominator Weighted average 17,578,270 $ 2.19 17,899,794 $ 0.65 18,917,570 $ 2.75 Diluted EPS: Numerator Net income attributable to Turning Point Brands, Inc. $ 38,462 $ 11,641 $ 52,059 Interest expense related to Convertible Senior Notes, net of tax 2,667 – 4,317 Diluted consolidated net income $ 41,129 $ 11,641 $ 56,376 Denominator Basic weighted average 17,578,270 17,899,794 18,917,570 Convertible Senior Notes (1) 2,533,201 – 3,208,172 Stock options and restricted stock units 355,935 155,221 256,252 20,467,406 $ 2.01 18,055,015 $ 0.64 22,381,994 $ 2.52 (1) For 2022, the effect of 3,208,172 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information [Abstract] | |
Financial Information of Reportable Segments | The tables below present financial information about reportable segments: For the year ended December 31, 2023 2022 2021 Net sales Zig-Zag products $ 180,455 $ 190,403 $ 176,491 Stoker’s products 144,609 130,826 124,280 Total Zig-Zag and Stoker’s products 325,064 321,229 300,771 Creative Distribution Solutions 80,329 93,784 144,700 Total $ 405,393 $ 415,013 $ 445,471 Gross profit Zig-Zag products $ 101,055 $ 106,576 $ 102,739 Stoker’s products 81,887 71,254 68,084 Total Zig-Zag and Stoker’s products 182,942 177,830 170,823 Creative Distribution Solutions 20,299 27,708 47,011 Total $ 203,241 $ 205,538 $ 217,834 Operating income (loss) Zig-Zag products $ 68,280 $ 73,342 $ 77,109 Stoker’s products 62,208 53,331 52,073 Corporate unallocated (1)(2) (47,528 ) (52,665 ) (41,124 ) Total Zig-Zag and Stoker’s products 82,960 74,008 88,058 Creative Distribution Solutions (383 ) 1,506 2,263 Total $ 82,577 $ 75,514 $ 90,321 Interest expense, net 14,645 19,524 20,500 Investment loss 11,914 13,303 6,673 Other income (4,000 ) – – Goodwill and intangible impairment loss – 27,566 – Gain on extinguishment of debt (1,664 ) (885 ) (2,154 ) Income before income taxes $ 61,682 $ 16,006 $ 65,302 Capital expenditures Zig-Zag products $ 1,112 $ 4,641 $ 141 Stoker’s products 4,595 3,044 5,960 Total Zig-Zag and Stoker’s products 5,707 7,685 6,101 Creative Distribution Solutions – – 55 Total $ 5,707 $ 7,685 $ 6,156 Depreciation and amortization Zig-Zag products $ 1,077 $ 412 $ 388 Stoker’s products 3,041 2,972 2,565 Total Zig-Zag and Stoker’s products 4,118 3,384 2,953 Creative Distribution Solutions 2,240 1,915 2,059 Total $ 6,358 $ 5,299 $ 5,012 (1) Includes corporate costs that are not allocated to any of the three reportable segments. (2) Includes costs related to PMTA of $2.1 million, $4.6 million and $2.6 million in 2023, 2022, and 2021, respectively. December 31, December 31, 2023 2022 Assets Zig-Zag products $ 177,135 $ 225,893 Stoker’s products 174,994 151,241 Corporate unallocated (1) 190,223 155,348 Total Zig-Zag and Stoker’s products 542,352 532,482 Creative Distribution Solutions 27,004 39,624 Total $ 569,356 $ 572,106 (1) Includes assets not assigned to the three reportable segments. All goodwill has been allocated to the reportable segments. |
Revenue Disaggregation - Sales Channel | Revenues of the Zig-Zag Products and Stoker’s Products segments are primarily comprised of sales made to wholesalers while Creative Distribution Solutions sales are made business to business and business to consumer, both online and through our corporate retail stores. Creative Distribution Solutions net sales are broken out by sales channel below. Creative Distribution Solutions For the year ended December 31, 2023 2022 2021 Business to Business $ 71,104 $ 76,462 $ 107,235 Business to Consumer - Online 8,761 16,836 37,069 Other 464 486 396 Total $ 80,329 $ 93,784 $ 144,700 |
Net Sales - Domestic and Foreign | The following table shows a breakdown of consolidated net sales between domestic and foreign. For the year ended December 31, 2023 2022 2021 Domestic $ 374,352 $ 381,723 $ 415,514 Foreign 31,041 33,290 29,957 Total $ 405,393 $ 415,013 $ 445,471 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Selected Quarterly Financial Information (Unaudited) [Abstract] | |
Quarterly Operating Results | The following table presents the quarterly operating results: 1st 2nd 3rd 4th 2023 Net sales $ 100,956 $ 105,595 $ 101,722 $ 97,120 Gross profit 48,617 52,478 51,622 50,524 Net income attributable to Turning Point Brands, Inc. 7,597 9,925 10,831 10,109 Basic net income attributable to Turning Point Brands, Inc. per share 0.43 0.56 0.62 0.57 Diluted net income attributable to Turning Point Brands, Inc. per share $ 0.41 $ 0.53 $ 0.58 $ 0.53 2022 Net sales $ 100,894 $ 102,925 $ 107,802 $ 103,392 Gross profit 51,794 51,469 52,712 49,563 Net income attributable to Turning Point Brands, Inc. 10,998 5,424 11,536 (16,317 ) Basic net income attributable to Turning Point Brands, Inc. per share 0.60 0.30 0.65 (0.93 ) Diluted net income attributable to Turning Point Brands, Inc. per share $ 0.55 $ 0.30 $ 0.60 $ (0.93 ) (1) (1) The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Additional Information with R_2
Additional Information with Respect to Unrestricted Subsidiary (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Additional Information with Respect to Unrestricted Subsidiary [Abstract] | |
Income Statements | Income Statement for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 2022 Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Net sales $ 325,063 $ 80,330 $ 405,393 $ 321,229 $ 93,784 $ 415,013 Cost of sales 142,121 60,031 202,152 143,399 66,076 209,475 Gross profit 182,942 20,299 203,241 177,830 27,708 205,538 Selling, general, and administrative expenses 104,327 20,682 125,009 129,900 124 130,024 Other operating income, net (4,345 ) – (4,345 ) – – – Operating income (loss) 82,960 (383 ) 82,577 47,930 27,584 75,514 Interest expense, net 14,645 – 14,645 19,524 – 19,524 Investment loss 11,914 – 11,914 13,303 – 13,303 Other income (4,000 ) – (4,000 ) – – – Goodwill and intangible impairment loss – – 1,488 26,078 27,566 Gain on extinguishment of debt (1,664 ) – (1,664 ) (885 ) – (885 ) Income (loss) before income taxes 62,065 (383 ) 61,682 14,500 1,506 16,006 Income tax expense 24,049 (148 ) 23,901 4,393 456 4,849 Consolidated net income (loss) 38,016 (235 ) 37,781 10,107 1,050 11,157 Net loss attributable to non-controlling interest (681 ) – (681 ) (484 ) – (484 ) Net income (loss) attributable to Turning Point Brands, Inc. $ 38,697 $ (235 ) $ 38,462 $ 10,591 $ 1,050 $ 11,641 Year Ended December 31, 2021 Company and Restricted Subsidiaries Unrestricted Subsidiaries Consolidated Net sales $ 300,771 $ 144,700 $ 445,471 Cost of sales 129,948 97,689 227,637 Gross profit 170,823 47,011 217,834 Selling, general, and administrative expenses 82,765 44,748 127,513 Operating income 88,058 2,263 90,321 Interest expense, net 20,500 – 20,500 Investment loss 6,673 – 6,673 Gain on extinguishment of debt (2,154 ) – (2,154 ) Income before income taxes 63,039 2,263 65,302 Income tax expense 13,553 487 14,040 Consolidated net income 49,486 1,776 51,262 Net loss attributable to non-controlling interest (797 ) – (797 ) Net income attributable to Turning Point Brands, Inc. $ 50,283 $ 1,776 $ 52,059 |
Balance Sheets | Balance Sheet as of December 31, 2023: ASSETS Company and Restricted Subsidiaries Unrestricted Subsidiaries Eliminations Consolidated Current assets: Cash $ 116,725 $ 1,161 $ – $ 117,886 Accounts receivable, net 9,989 – – 9,989 Inventories, net 91,679 7,281 – 98,960 Other current assets 36,937 3,844 – 40,781 Total current assets 255,330 12,286 – 267,616 Property, plant, and equipment, net 25,142 158 – 25,300 Deferred income taxes 1,468 – – 1,468 Right of use assets 11,359 121 – 11,480 Deferred financing costs, net 2,450 – – 2,450 Goodwill 136,250 – – 136,250 Other intangible assets, net 66,490 14,452 – 80,942 Master Settlement Agreement (MSA) escrow deposits 28,684 – – 28,684 Other assets 15,166 – – 15,166 Investment in unrestricted subsidiaries 48,229 – (48,229 ) – Total assets $ 590,568 $ 27,017 $ (48,229 ) $ 569,356 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,781 $ 626 $ – $ 8,407 Accrued liabilities 32,052 1,583 – 33,635 Current portion of long-term debt 58,294 – – 58,294 Total current liabilities 98,127 2,209 – 100,336 Notes payable and long-term debt 307,064 – – 307,064 Lease liabilities 9,898 52 – 9,950 Total liabilities 415,089 2,261 – 417,350 Commitments and contingencies Stockholders’ equity: Total Turning Point Brands Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries 174,449 24,756 (48,229 ) 150,976 Non-controlling interest 1,030 – – 1,030 Total stockholders’ equity 175,479 24,756 (48,229 ) 152,006 Total liabilities and stockholders’ equity $ 590,568 $ 27,017 $ (48,229 ) $ 569,356 Balance Sheet as of December 31, 2022: ASSETS Company and Restricted Subsidiaries Unrestricted Subsidiaries Eliminations Consolidated Current assets: Cash $ 103,990 $ 2,413 $ – $ 106,403 Accounts receivable, net 7,374 1,003 – 8,377 Inventories, net 104,883 15,032 – 119,915 Other current assets 18,828 4,131 – 22,959 Total current assets 235,075 22,579 – 257,654 Property, plant, and equipment, net 22,261 527 – 22,788 Deferred income taxes 8,443 – – 8,443 Right of use assets 12,328 137 – 12,465 Deferred financing costs, net 282 – – 282 Goodwill 136,253 – – 136,253 Other intangible assets, net 67,241 16,351 – 83,592 Master Settlement Agreement (MSA) escrow deposits 27,980 – – 27,980 Other assets 22,619 30 – 22,649 Investment in unrestricted subsidiaries 60,120 – (60,120 ) – Total assets $ 592,602 $ 39,624 $ (60,120 ) $ 572,106 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,628 $ 727 $ – $ 8,355 Accrued liabilities 31,118 1,883 – 33,001 Other current liabilities 20 – – 20 Total current liabilities 38,766 2,610 – 41,376 Notes payable and long-term debt 406,757 – – 406,757 Lease liabilities 10,593 – – 10,593 Total liabilities 456,116 2,610 – 458,726 Commitments and contingencies Stockholders’ equity: Total Turning Point Brands Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries 134,751 37,014 (60,120 ) 111,645 Non-controlling interest 1,735 – – 1,735 Total stockholders’ equity 136,486 37,014 (60,120 ) 113,380 Total liabilities and stockholders’ equity $ 592,602 $ 39,624 $ (60,120 ) $ 572,106 |
Organizations and Basis of Pr_3
Organizations and Basis of Presentation (Details) Outlet in Thousands | 12 Months Ended |
Dec. 31, 2023 Segment Outlet | |
Organizations and Basis of Presentation [Abstract] | |
Number of reportable segments | Segment | 3 |
Number of retail outlets in North America | Outlet | 217 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Consolidation (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Turning Point Brands Canada [Member] | |
Consolidation [Abstract] | |
Ownership interest | 65% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Derivative Instruments (Details) - Maximum [Member] | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments [Abstract] | |
Percentage of anticipated purchases of inventory that may be hedged | 100% |
Term of hedge | 12 months |
Percentage of non-inventory purchases that may be hedged | 100% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Shipping Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shipping Costs [Abstract] | |||
Shipping costs | $ 23.5 | $ 24.2 | $ 27.6 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Research and Development and Quality Assurance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and Development and Quality Assurance Costs [Abstract] | |||
Research and development costs and quality assurance costs | $ 0.6 | $ 0.6 | $ 1.1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Property, Plant and Equipment (Details) | Dec. 31, 2023 |
Machinery, Equipment and Furniture [Member] | Minimum [Member] | |
Property, Plant and Equipment [Abstract] | |
Estimated useful lives of assets | 4 years |
Machinery, Equipment and Furniture [Member] | Maximum [Member] | |
Property, Plant and Equipment [Abstract] | |
Estimated useful lives of assets | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Abstract] | |
Estimated useful lives of assets | 10 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Abstract] | |
Estimated useful lives of assets | 15 years |
Buildings and Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Abstract] | |
Estimated useful lives of assets | 15 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Goodwill and Other Intangible Assets (Details) | Dec. 31, 2023 |
Minimum [Member] | |
Goodwill and Other Intangible Assets [Abstract] | |
Estimated useful lives of definite-lived intangible assets | 3 years 6 months |
Maximum [Member] | |
Goodwill and Other Intangible Assets [Abstract] | |
Estimated useful lives of definite-lived intangible assets | 15 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies, Advertising and Promotion (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Advertising and Promotion [Abstract] | |||
Advertising and promotion costs | $ 9.2 | $ 9.3 | $ 12.1 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies, Master Settlement Agreement (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) State Counterparty | Dec. 31, 2022 USD ($) | |
Master Settlement Agreement [Abstract] | ||
Number of states that are parties to the Master Settlement Agreement and the Smokeless Tobacco Master Settlement Agreement | State | 46 | |
Number of MSA cigarette manufacturers and/or distributors | Counterparty | 49 | |
Term for restricted withdrawal of principal from MSA escrow account | 25 years | |
Deposit made in MSA escrow account | $ 0 | |
Fair Value of MSA Escrow Account, More than 12 Months [Abstract] | ||
Estimated fair value, more than 12 months | 6,750 | $ 7,820 |
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 32,073 | 32,073 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (3,389) | (4,093) |
Estimated fair value | 28,684 | 27,980 |
Maturities of U.S. Governmental Agency Obligations [Abstract] | ||
Less than one year | 4,200 | |
One to five years | 10,735 | |
Five to ten years | 13,254 | |
Greater than ten years | 1,955 | |
Total | 30,144 | |
Master Settlement Agreement Escrow Account by Sales Year [Abstract] | ||
1999 | 211 | 211 |
2000 | 1,017 | 1,017 |
2001 | 1,673 | 1,673 |
2002 | 2,271 | 2,271 |
2003 | 4,249 | 4,249 |
2004 | 3,714 | 3,714 |
2005 | 4,553 | 4,553 |
2006 | 3,847 | 3,847 |
2007 | 4,167 | 4,167 |
2008 | 3,364 | 3,364 |
2009 | 1,619 | 1,619 |
2010 | 406 | 406 |
2011 | 193 | 193 |
2012 | 199 | 199 |
2013 | 173 | 173 |
2014 | 143 | 143 |
2015 | 101 | 101 |
2016 | 91 | 91 |
2017 | 82 | 82 |
Total | 32,073 | 32,073 |
Cash and Cash Equivalents [Member] | ||
Fair Value of MSA Escrow Account [Abstract] | ||
Cost | 1,929 | 1,929 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 1,929 | 1,929 |
U.S. Governmental Agency Obligations [Member] | ||
Fair Value of MSA Escrow Account, Less than 12 Months [Abstract] | ||
Cost, less than 12 months | 0 | 10,226 |
Gross unrealized gains, less than 12 months | 0 | 0 |
Gross unrealized losses, less than 12 months | 0 | (1,251) |
Estimated fair value, less than 12 months | 0 | 8,975 |
Fair Value of MSA Escrow Account, More than 12 Months [Abstract] | ||
Cost, more than 12 months | 30,144 | 19,918 |
Gross unrealized gains, more than 12 months | 0 | 0 |
Gross unrealized losses, more than 12 months | (3,389) | (2,842) |
Estimated fair value, more than 12 months | $ 26,755 | $ 17,076 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies, Concentration of Credit Risk (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Customer | Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 Customer | |
Concentration of Credit Risk [Abstract] | |||
Bank deposits, including MSA escrow accounts, in excess of federally insured limits | $ | $ 119 | $ 105.2 | |
Gross Sales [Member] | Customer Concentration Risk [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Number of customers accounting for more than 10% of sales | Customer | 0 | 0 | 0 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies, Accounts Receivable (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in Valuation Allowance [Roll Forward] | ||
Balance at beginning of period | $ 114 | $ 262 |
Additions to allowance account during period | 38 | 191 |
Deductions of allowance account during period | (74) | (339) |
Balance at end of period | $ 78 | $ 114 |
Acquisitions, Unitabac (Details
Acquisitions, Unitabac (Details) - Unitabac [Member] $ in Millions | 1 Months Ended |
Jul. 31, 2021 USD ($) | |
Acquisitions [Abstract] | |
Total consideration transferred | $ 10.7 |
Cash paid for assets acquisition | 9.6 |
Capitalized transaction costs | 1.1 |
Inventory acquired | 0.7 |
Intellectual Property [Member] | |
Acquisitions [Abstract] | |
Finite-lived intangible asset acquired | $ 10 |
Acquisitions, Direct Value Whol
Acquisitions, Direct Value Wholesale (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Apr. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions [Abstract] | ||||
Goodwill | $ 136,250 | $ 136,253 | $ 162,333 | |
Direct Value Wholesale [Member] | ||||
Acquisitions [Abstract] | ||||
Equity interest | 100% | |||
Consideration transferred | $ 3,900 | |||
Cash paid for acquisition | 3,500 | |||
Accrued consideration | 500 | |||
Goodwill | $ 2,500 |
Acquisitions, Turning Point Bra
Acquisitions, Turning Point Brands Canada (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Dec. 31, 2021 | |
Acquisitions [Abstract] | ||
Acquisition of additional ownership interest | $ (2,250) | |
Non-Controlling Interest [Member] | ||
Acquisitions [Abstract] | ||
Acquisition of additional ownership interest | $ (1,100) | (1,123) |
Additional Paid-In Capital [Member] | ||
Acquisitions [Abstract] | ||
Acquisition of additional ownership interest | (1,100) | $ (1,127) |
Turning Point Brands Canada [Member] | ||
Acquisitions [Abstract] | ||
Payment for investment | $ 2,300 | |
Ownership interest | 65% |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Thousands, € in Millions | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 EUR (€) | |
Derivative Instruments [Abstract] | ||||||||
Settlement of interest rate swaps | $ 0 | $ 0 | $ 3,573 | |||||
Maximum [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Percentage of anticipated purchases of inventory that may be hedged | 100% | 100% | ||||||
Term of hedge | 12 months | 12 months | ||||||
Percentage of purchase price of non-inventory purchases that may be hedged | 100% | 100% | ||||||
Foreign Currency [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Gain (loss) reclassified from accumulated other comprehensive loss | $ 900 | $ (100) | ||||||
Derivative Instrument, Loss Reclassified from AOCI into Income, Statement of Income [Extensible Enumeration] | Cost of sales | Cost of sales | Cost of sales | Cost of sales | ||||
Foreign Currency [Member] | Other Current Assets [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Fair value, asset | $ 300 | $ 1,200 | ||||||
Foreign Currency [Member] | Accrued Liabilities [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Fair value, liability | $ 100 | $ 0 | ||||||
Foreign Currency [Member] | Purchase [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Notional amount of contracts executed | € | € 20.1 | € 28.9 | ||||||
Notional amount | € | € 15.2 | € 18.5 | ||||||
Foreign Currency [Member] | Sale [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Notional amount of contracts executed | € | € 15.2 | € 28.9 | ||||||
Notional amount | € | € 15.2 | € 18.5 | ||||||
Interest Rate Swaps [Member] | ||||||||
Derivative Instruments [Abstract] | ||||||||
Gain (loss) reclassified from accumulated other comprehensive loss | $ 100 | |||||||
Derivative Instrument, Loss Reclassified from AOCI into Income, Statement of Income [Extensible Enumeration] | Interest Income (Expense), Nonoperating, Net | |||||||
Settlement of interest rate swaps | $ 3,600 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value of Financial Instruments [Abstract] | ||
Carrying value of long-term debt | $ 368,541 | $ 412,500 |
Senior Secured Notes [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Interest rate | 5.625% | |
Carrying value of long-term debt | $ 250,000 | 250,000 |
Convertible Senior Notes [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Interest rate | 2.50% | |
Carrying value of long-term debt | $ 118,541 | 162,500 |
Fair Value [Member] | Senior Secured Notes [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Fair value of long-term debt | 234,900 | 226,400 |
Fair Value [Member] | Convertible Senior Notes [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Fair value of long-term debt | $ 114,700 | $ 139,200 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Inventories [Abstract] | |||
Raw materials and work in process | $ 5,201 | $ 5,201 | $ 7,283 |
Leaf tobacco | 34,894 | 34,894 | 43,468 |
Other | 1,711 | 1,711 | 1,787 |
Inventories | 98,960 | 98,960 | 119,915 |
Movement in Valuation Allowance [Roll Forward] | |||
Insurance recovery receivable | 15,181 | 15,181 | 0 |
Refund claim for overpayment of federal excise taxes | 4,300 | ||
Other Operating Income [Member] | |||
Movement in Valuation Allowance [Roll Forward] | |||
Refund for overpayment of federal excise taxes | 4,300 | ||
Other Current Assets [Member] | |||
Movement in Valuation Allowance [Roll Forward] | |||
Insurance recovery receivable | 15,200 | 15,200 | |
Inventory Valuation Allowance [Member] | |||
Movement in Valuation Allowance [Roll Forward] | |||
Balance at beginning of period | (4,533) | (7,668) | |
Charged to cost and expense | (17,275) | (987) | |
Deductions for inventory disposed | 1,215 | 4,122 | |
Balance at end of period | (20,593) | (20,593) | (4,533) |
Zig-Zag Products [Member] | |||
Inventories [Abstract] | |||
Finished goods | 41,783 | 41,783 | 42,279 |
Stoker's Products [Member] | |||
Inventories [Abstract] | |||
Finished goods | 8,090 | 8,090 | 9,667 |
Creative Distribution Solutions [Member] | |||
Inventories [Abstract] | |||
Finished goods | $ 7,281 | 7,281 | $ 15,431 |
Leaf Tobacco Inventory [Member] | Other Operating Income [Member] | |||
Movement in Valuation Allowance [Roll Forward] | |||
Charged to cost and expense | $ (15,200) |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Current Assets [Abstract] | ||
Inventory deposits | $ 5,707 | $ 6,395 |
Insurance deposit | 3,000 | 3,000 |
Prepaid taxes | 153 | 448 |
Settlement receivable | 4,000 | 0 |
Insurance recovery receivable | 15,181 | 0 |
Other | 12,740 | 13,116 |
Total | $ 40,781 | $ 22,959 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 47,560 | $ 43,618 |
Accumulated depreciation | (22,260) | (20,830) |
Net property, plant and equipment | 25,300 | 22,788 |
Land [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 22 | 22 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 3,956 | 3,096 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 5,440 | 5,404 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | 29,751 | 25,832 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment | $ 8,391 | $ 9,264 |
Deferred Financing Costs, Net_2
Deferred Financing Costs, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Financing Costs, Net [Abstract] | ||
Deferred financing costs, net of accumulated amortization of $104 and $200, respectively | $ 2,450 | $ 282 |
Deferred financing costs, accumulated amortization | $ 104 | $ 200 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 136,253 | $ 162,333 | |
Impairment | 0 | (25,585) | $ 0 |
Cumulative translation adjustment | (3) | (495) | |
Balance at end of period | 136,250 | 136,253 | 162,333 |
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 50,798 | 69,932 | |
Amortized Intangible Assets [Abstract] | |||
Intangible asset impairment | 0 | 1,981 | 0 |
Annual Amortization Expense [Abstract] | |||
2024 | 3,000 | ||
2025 | 2,400 | ||
2026 | 2,400 | ||
2027 | 2,400 | ||
2028 | $ 2,400 | ||
Minimum [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 3 years 6 months | ||
Maximum [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 15 years | ||
Zig-Zag [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 103,663 | 104,158 | |
Impairment | 0 | ||
Cumulative translation adjustment | (3) | (495) | |
Balance at end of period | 103,660 | 103,663 | 104,158 |
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 42,245 | 52,217 | |
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 15,910 | 5,489 | |
Accumulated amortization | 1,956 | 915 | |
Stoker's [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 32,590 | 32,590 | |
Impairment | 0 | ||
Cumulative translation adjustment | 0 | 0 | |
Balance at end of period | 32,590 | 32,590 | 32,590 |
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 8,553 | 8,553 | |
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 2,372 | 2,372 | |
Accumulated amortization | 633 | 475 | |
CDS [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 0 | 25,585 | |
Impairment | (25,585) | ||
Cumulative translation adjustment | 0 | 0 | |
Balance at end of period | 0 | 0 | $ 25,585 |
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 9,162 | |
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 22,999 | 14,974 | |
Accumulated amortization | 8,548 | 7,785 | |
Asset impairment charge | 300 | ||
Trade Names [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 8,500 | 17,662 | |
Trade Names [Member] | Zig-Zag [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Trade Names [Member] | Stoker's [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 8,500 | 8,500 | |
Trade Names [Member] | CDS [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 9,162 | |
Formulas [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 42,298 | 52,270 | |
Formulas [Member] | Zig-Zag [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 42,245 | 52,217 | |
Formulas [Member] | Stoker's [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 53 | 53 | |
Formulas [Member] | CDS [Member] | |||
Unamortized Indefinite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 0 | 0 | |
Customer Relationships [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 8 years | ||
Customer Relationships [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 10 years | ||
Customer Relationships [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Customer Relationships [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Customer Relationships [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 6,936 | 6,936 | |
Accumulated amortization | $ 5,596 | 4,768 | |
Trade Names [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 15 years | ||
Trade Names [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 449 | 0 | |
Accumulated amortization | 10 | 0 | |
Trade Names [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 2,372 | 2,372 | |
Accumulated amortization | 633 | 475 | |
Trade Names [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 16,063 | 7,158 | |
Accumulated amortization | $ 2,952 | 2,137 | |
Intangible asset impairment | 1,600 | ||
Formulas [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 15 years | ||
Formulas [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 9,972 | 0 | |
Accumulated amortization | 665 | 0 | |
Formulas [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Formulas [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | $ 0 | 0 | |
Master Distribution Agreement [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 15 years | ||
Master Distribution Agreement [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 5,489 | 5,489 | |
Accumulated amortization | 1,281 | 915 | |
Master Distribution Agreement [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Master Distribution Agreement [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | $ 0 | 0 | |
Franchise Agreements [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 8 years | ||
Franchise Agreements [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Franchise Agreements [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Franchise Agreements [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 780 | |
Accumulated amortization | $ 0 | 780 | |
Non-Compete Agreements [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Amortized intangible assets, useful life | 3 years 6 months | ||
Non-Compete Agreements [Member] | Zig-Zag [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | $ 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Non-Compete Agreements [Member] | Stoker's [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 0 | |
Accumulated amortization | 0 | 0 | |
Non-Compete Agreements [Member] | CDS [Member] | |||
Amortized Intangible Assets [Abstract] | |||
Gross carrying amount | 0 | 100 | |
Accumulated amortization | $ 0 | $ 100 |
Other Assets, Summary (Details)
Other Assets, Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Equity investments | $ 2,405 | $ 13,376 |
Debt security investment | 6,750 | 7,820 |
Capitalized software | 5,923 | 929 |
Other | 88 | 524 |
Total | $ 15,166 | $ 22,649 |
Other Assets, Equity Investment
Other Assets, Equity Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2021 | Oct. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Assets [Abstract] | ||||||
Payment for investment | $ 202 | $ 1,000 | $ 16,657 | |||
Equity investments | 2,405 | 13,376 | ||||
Accounts payable | 0 | 20 | ||||
Wild Hempettes [Member] | ||||||
Other Assets [Abstract] | ||||||
Impairment charge | 2,200 | |||||
Investment income (loss) | $ (2,300) | (100) | ||||
Dosist [Member] | ||||||
Other Assets [Abstract] | ||||||
Additional investment that can be made | $ 15,000 | |||||
Period to make additional investment | 12 months | |||||
CASH [Member] | ||||||
Other Assets [Abstract] | ||||||
Equity investments | 0 | |||||
Equity Investment [Member] | Docklight Brands, Inc. [Member] | ||||||
Other Assets [Abstract] | ||||||
Payment for investment | $ 8,700 | |||||
Gain (loss) on investment | $ (8,700) | |||||
Purchases of inventory | 0 | 100 | ||||
Accounts payable | 0 | 0 | ||||
Equity Investment [Member] | Wild Hempettes [Member] | ||||||
Other Assets [Abstract] | ||||||
Payment for investment | $ 2,500 | |||||
Purchases of inventory | 0 | 400 | ||||
Accounts payable | 0 | 0 | ||||
Ownership interest | 20% | |||||
Percentage interest that can be acquired | 100% | |||||
Accounts receivable | 200 | |||||
Equity Investment [Member] | Dosist [Member] | ||||||
Other Assets [Abstract] | ||||||
Payment for investment | $ 15,000 | |||||
Gain (loss) on investment | (7,900) | $ (7,100) | ||||
Purchases of inventory | 0 | 0 | ||||
Equity Investment [Member] | BOMANI [Member] | ||||||
Other Assets [Abstract] | ||||||
Payment for investment | $ 1,800 | |||||
Purchases of inventory | 0 | 0 | ||||
Accounts payable | 0 | 0 | ||||
Equity Investment [Member] | CASH [Member] | ||||||
Other Assets [Abstract] | ||||||
Gain (loss) on investment | (4,300) | |||||
Equity Investment [Member] | Real Brands [Member] | ||||||
Other Assets [Abstract] | ||||||
Purchases of inventory | 0 | 0 | ||||
Accounts payable | 0 | 0 | ||||
Equity Investment [Member] | RadioShack [Member] | ||||||
Other Assets [Abstract] | ||||||
Payment for investment | $ 400 | |||||
Accounts payable | $ 0 | $ 0 |
Other Assets, Debt Security Inv
Other Assets, Debt Security Investment (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2022 | Jul. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Assets [Abstract] | |||||
Payment for investment | $ 202 | $ 1,000 | $ 16,657 | ||
Debt security investment | $ 6,750 | 7,820 | |||
Old Pal Holding Company LLC [Member] | |||||
Other Assets [Abstract] | |||||
Payment for investment | $ 1,000 | $ 8,000 | |||
Accrued interest receivable | 200 | ||||
Debt security investment | $ 9,200 | ||||
Interest rate | 3% | ||||
Extension period for maturity date | 1 year | ||||
Weighted average interest rate | 3% | ||||
Allowance for credit losses | $ 1,300 | 1,400 | |||
Old Pal Holding Company LLC [Member] | Other Current Assets [Member] | |||||
Other Assets [Abstract] | |||||
Accrued interest receivable | 100 | 100 | |||
Old Pal Holding Company LLC [Member] | Level 3 [Member] | |||||
Other Assets [Abstract] | |||||
Debt security investment | $ 6,900 | $ 7,900 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities [Abstract] | ||
Accrued payroll and related items | $ 7,085 | $ 7,685 |
Customer returns and allowances | 5,239 | 7,291 |
Taxes payable | 3,821 | 1,867 |
Lease liabilities | 2,678 | 3,102 |
Accrued interest | 6,682 | 7,277 |
Other | 8,130 | 5,779 |
Total | $ 33,635 | $ 33,001 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt, Summary of Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Notes Payable and Long-Term Debt [Abstract] | ||
Gross notes payable and long-term debt | $ 368,541 | $ 412,500 |
Less deferred finance charges | (3,183) | (5,743) |
Less current maturities | (58,294) | 0 |
Notes payable and long-term debt | 307,064 | 406,757 |
Senior Secured Notes [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Gross notes payable and long-term debt | 250,000 | 250,000 |
Convertible Senior Notes [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Gross notes payable and long-term debt | 118,541 | $ 162,500 |
Notes payable and long-term debt | $ 60,000 |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt, Senior Secured Notes (Details) - Senior Secured Notes [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Feb. 11, 2021 | |
Notes Payable and Long-Term Debt [Abstract] | ||
Face amount | $ 250 | |
Interest rate | 5.625% | |
Maturity date | Feb. 15, 2026 | |
Guarantee threshold amount for obligations | $ 15 | |
Redemption price (expressed as a percentage of the principal amount to be redeemed) if the Company experiences a change in control | 101% | |
Debt issuance costs | $ 6.4 | |
On or after February 15, 2023 [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Redemption price (expressed as a percentage of the principal amount to be redeemed) | 102.813% | |
On or after February 15, 2024 [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Redemption price (expressed as a percentage of the principal amount to be redeemed) | 101.406% | |
On or after February 15, 2025 and thereafter [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Redemption price (expressed as a percentage of the principal amount to be redeemed) | 100% |
Notes Payable and Long-Term D_5
Notes Payable and Long-Term Debt, 2021 Revolving Credit Facility (Details) - Amended Revolving Credit Facility [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Feb. 11, 2021 | |
Notes Payable and Long-Term Debt [Abstract] | ||
Maximum borrowing capacity | $ 25 | |
Letters of credit outstanding | $ 1.4 | |
Debt issuance costs | 0.5 | |
Gain on debt extinguishment | $ 0.2 |
Notes Payable and Long-Term D_6
Notes Payable and Long-Term Debt, 2023 ABL Facility (Details) $ in Millions | 12 Months Ended | |
Nov. 07, 2023 USD ($) qtr | Dec. 31, 2023 USD ($) | |
2023 ABL Facility [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Maximum borrowing capacity | $ 75 | |
Accordion feature | $ 40 | |
Percentage used in calculation of borrowing base | 85% | |
Percentage used in calculation of LILO borrowing base | 10% | |
Fixed charge coverage ratio | 1 | |
Number of consecutive quarters to maintain minimum fixed charge coverage ratio | qtr | 4 | |
Percentage of line cap | 12.50% | |
Threshold excess availability | $ 9.4 | |
Period to maintain excess availability | 30 days | |
Period prior to maturity date of any material debt outstanding | 91 days | |
Excess availability threshold | $ 15 | |
Amount drawn under credit facility | $ 0 | |
Letters of credit outstanding | 1.4 | |
Available balance | 60 | |
Debt issuance costs | $ 2.6 | |
2023 ABL Facility [Member] | Minimum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Historical excess availability threshold | 33.33% | |
2023 ABL Facility [Member] | Maximum [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Historical excess availability threshold | 66.66% | |
SOFR Loans [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Interest rate margin | 2.25% | |
Applicable margin on variable rate, Level I | 1.75% | |
Applicable margin on variable rate, Level II | 2% | |
Applicable margin on variable rate, Level III | 2.25% | |
Base Rate Loans [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Interest rate margin | 1.25% | |
Applicable margin on variable rate, Level I | 0.75% | |
Applicable margin on variable rate, Level II | 1% | |
Applicable margin on variable rate, Level III | 1.25% | |
LILO Loans that are Base Rate Loans [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Interest rate margin | 2.25% | |
LILO Loans that are SOFR Loans [Member] | ||
Notes Payable and Long-Term Debt [Abstract] | ||
Interest rate margin | 3.25% |
Notes Payable and Long-Term D_7
Notes Payable and Long-Term Debt, Convertible Senior Notes (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) shares $ / shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 07, 2023 USD ($) | |
Notes Payable and Long-Term Debt [Abstract] | ||||||
Gain on extinguishment of debt | $ 1,664,000 | $ 885,000 | $ 2,154,000 | |||
Outstanding principal amount | $ 412,500,000 | 368,541,000 | 412,500,000 | |||
Notes payable and long-term debt | 406,757,000 | $ 307,064,000 | 406,757,000 | |||
Strike price (in dollars per share) | $ / shares | 53.45 | |||||
Cap price (in dollars per share) | $ / shares | 82.86 | |||||
Payment for cost of capped call transactions | $ 20,530,000 | |||||
Convertible Senior Notes [Member] | ||||||
Notes Payable and Long-Term Debt [Abstract] | ||||||
Face amount | 172,500,000 | |||||
Interest rate | 2.50% | |||||
Maturity date | Jul. 15, 2024 | |||||
Principal amount of convertible debt repurchased | 10,000,000 | $ 44,000,000 | 10,000,000 | |||
Gain on extinguishment of debt | 900,000 | 1,900,000 | ||||
Outstanding principal amount | $ 162,500,000 | $ 118,541,000 | $ 162,500,000 | |||
Shares issued upon conversion (in shares) | shares | 2,217,807 | |||||
Conversion rate | 18.7092 | |||||
Principal amount of notes to be converted | $ 1,000 | |||||
Conversion price (in dollars per share) | $ / shares | $ 53.45 | |||||
Pre-determined threshold value for adjusting conversion price as a result of dividends paid (in dollars per share) | $ / shares | $ 0.04 | |||||
Notes to be refinanced | $ 75,000,000 | |||||
Notes payable and long-term debt | $ 60,000,000 | |||||
Debt issuance costs | $ 5,900,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current [Abstract] | |||
Federal | $ 13,291 | $ 8,457 | $ 11,315 |
State and local | 3,602 | 2,815 | 4,210 |
Foreign | (16) | 83 | 0 |
Current | 16,877 | 11,355 | 15,525 |
Deferred [Abstract] | |||
Federal | 4,091 | (4,713) | (583) |
State and local | 2,166 | (1,291) | (637) |
Foreign | 767 | (502) | (265) |
Deferred | 7,024 | (6,506) | (1,485) |
Total [Abstract] | |||
Federal | 17,382 | 3,744 | 10,732 |
State and local | 5,768 | 1,524 | 3,573 |
Foreign | 751 | (419) | (265) |
Total | 23,901 | 4,849 | 14,040 |
Assets [Abstract] | |||
Inventory | 5,310 | 1,384 | |
Property, plant, and equipment | 0 | 0 | |
Goodwill and other intangible assets | 0 | 0 | |
Foreign NOL carryforward | 1,495 | 561 | |
State NOL carryforward | 2,398 | 2,483 | |
Unrealized loss on investments | 7,203 | 5,168 | |
Leases | 3,278 | 3,544 | |
Original issue discount | 426 | 1,604 | |
Stock compensation | 4,879 | 4,333 | |
Other | 4,536 | 4,281 | |
Gross deferred income taxes | 29,525 | 23,358 | |
Valuation allowance | (11,446) | (3,062) | |
Net deferred income tax assets | 18,079 | 20,296 | |
Liabilities [Abstract] | |||
Inventory | 0 | 0 | |
Property, plant, and equipment | 3,120 | 2,856 | |
Goodwill and other intangible assets | 3,182 | 2,812 | |
Leases | 2,978 | 3,222 | |
Original issue discount | 0 | 0 | |
Insurance receivable | 3,764 | 0 | |
Other | 3,567 | 2,963 | |
Deferred income tax liabilities | 16,611 | 11,853 | |
Uncertain Tax Positions [Abstract] | |||
Uncertain tax positions | 0 | ||
Interest and penalties recognized for uncertain tax positions | $ 0 | $ 0 | $ 0 |
Reconciliation of Effective Income Tax Rate [Abstract] | |||
Federal statutory rate | 21% | 21% | 21% |
Foreign rate differential | (0.10%) | (0.50%) | (0.10%) |
State taxes | 4.30% | 5.70% | 3.40% |
Permanent differences | (0.10%) | (0.20%) | (4.10%) |
Other | 0% | 1.70% | 0.70% |
Valuation allowance | 13.60% | 2.60% | 0.60% |
Effective income tax rate | 38.70% | 30.30% | 21.50% |
Income tax deduction related to forgiveness of debt | $ 7,500 | ||
Income tax benefit related to forgiveness of debt | 1,600 | ||
Income tax deduction related to exercise of stock options | 7,200 | ||
Income tax benefit related to exercise of stock options | 1,500 | ||
Unrealized Loss on Investments [Member] | |||
Assets [Abstract] | |||
Valuation allowance | $ (6,400) | ||
State [Member] | |||
Income Taxes [Abstract] | |||
Net operating loss carryforwards | 27,400 | ||
Net operating loss carryforwards with indefinite carryforward period | 25,700 | ||
Valuation allowance for NOL carryforwards | 2,900 | $ 2,400 | |
Foreign [Member] | |||
Income Taxes [Abstract] | |||
Valuation allowance for NOL carryforwards | $ 1,700 | ||
Unsecured Loan [Member] | |||
Income Taxes [Abstract] | |||
Forgiveness of debt | $ 7,500 |
401(k) Retirement Savings Plan
401(k) Retirement Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Voluntary 401(k) Retirement Savings Plan [Abstract] | |||
Maximum annual employee contribution percentage | 15% | ||
Employer contribution percentage for employee contributing 4% or greater | 4% | 4% | 4% |
Employer contribution percentage for employee contributing less than 4% | 4% | 4% | 4% |
Matching contribution percentage by employer | 100% | 100% | 100% |
Employer discretionary contribution percentage | 1% | 1% | 1% |
Employer matching contributions | $ 1.4 | $ 1.5 | $ 1.6 |
Defined Contribution Plan, Tax Status [Extensible Enumeration] | us-gaap:QualifiedPlanMember | ||
Maximum [Member] | |||
Voluntary 401(k) Retirement Savings Plan [Abstract] | |||
Employee contribution percentage matched by employer | 4% | 4% | 4% |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Operating Lease Cost [Abstract] | ||||
Variable lease cost | [1] | $ 1,183 | $ 765 | $ 1,182 |
Short-term lease cost | 24 | 37 | 48 | |
Sublease income | 0 | 0 | (60) | |
Total operating lease cost | 3,705 | 3,364 | 3,984 | |
Financing Lease Cost [Abstract] | ||||
Financing lease cost | 1,164 | 1,138 | 1,094 | |
Assets [Abstract] | ||||
Right of use assets - Operating | $ 8,950 | $ 10,967 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total lease assets | Total lease assets | ||
Right of use assets - Financing | $ 2,530 | $ 1,498 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total lease assets | Total lease assets | ||
Total lease assets | $ 11,480 | $ 12,465 | ||
Liabilities [Abstract] | ||||
Current lease liabilities - Operating | [2] | $ 1,991 | $ 2,007 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current | ||
Current lease liabilities - Financing | [2] | $ 687 | $ 1,095 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current | ||
Long-term lease liabilities - Operating | $ 8,374 | $ 10,243 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating and Finance Lease, Liability, Noncurrent | Operating and Finance Lease, Liability, Noncurrent | ||
Long-term lease liabilities - Financing | $ 1,576 | $ 350 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating and Finance Lease, Liability, Noncurrent | Operating and Finance Lease, Liability, Noncurrent | ||
Total lease liabilities | $ 12,628 | $ 13,695 | ||
Right of Use Assets Obtained in Exchange for Lease Obligations [Abstract] | ||||
Operating leases | 143 | 0 | ||
Finance leases | $ 2,169 | $ 494 | ||
Weighted-Average Remaining Lease Term and Discount Rate [Abstract] | ||||
Weighted-average remaining lease term - operating leases | 5 years 8 months 12 days | 6 years 6 months | ||
Weighted-average discount rate - operating leases | 5.17% | 5.19% | ||
Weighted-average remaining lease term - financing leases | 3 years 4 months 24 days | 1 year 9 months 18 days | ||
Weighted-average discount rate - financing leases | 6.48% | 3.42% | ||
Maturities of Operating Lease Liabilities [Abstract] | ||||
2024 | $ 2,471 | |||
2025 | 2,174 | |||
2026 | 2,084 | |||
2027 | 2,035 | |||
2028 | 1,046 | |||
Years thereafter | 2,263 | |||
Total lease payments | 12,073 | |||
Less: Imputed interest | 1,708 | |||
Total lease liabilities | 10,365 | |||
Maturities of Financing Lease Liabilities [Abstract] | ||||
2024 | 813 | |||
2025 | 741 | |||
2026 | 644 | |||
2027 | 327 | |||
2028 | 0 | |||
Years thereafter | 0 | |||
Total lease payments | 2,525 | |||
Less: Imputed interest | 262 | |||
Present value of lease liabilities | 2,263 | |||
Cost of Sales [Member] | ||||
Operating Lease Cost [Abstract] | ||||
Operating lease cost | 507 | $ 940 | 907 | |
Selling, General and Administrative [Member] | ||||
Operating Lease Cost [Abstract] | ||||
Operating lease cost | 1,991 | 1,622 | 1,907 | |
Financing Lease Cost [Abstract] | ||||
Financing lease cost | $ 1,164 | $ 1,138 | $ 1,094 | |
[1]Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying.[2]Reported within accrued liabilities on the balance sheet |
Share Incentive Plans, Equity I
Share Incentive Plans, Equity Incentive Plans (Details) - shares | Dec. 31, 2023 | Mar. 22, 2021 |
2021 Plan [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of shares authorized for issuance (in shares) | 1,290,000 | |
Number of shares available for future grant (in shares) | 981,274 | |
2021 Plan [Member] | RSUs [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of awards granted, net of forfeitures (in shares) | 271,662 | |
2021 Plan [Member] | Stock Options [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of awards granted, net of forfeitures (in shares) | 113,801 | |
2021 Plan [Member] | Performance-Based Restricted Stock Units [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of awards granted, net of forfeitures (in shares) | 23,315 | |
2015 Plan [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of shares authorized for issuance (in shares) | 100,052 | |
Number of shares available for future grant (in shares) | 0 | |
2006 Plan [Member] | ||
Share Incentive Plans [Abstract] | ||
Number of shares available for future grant (in shares) | 0 |
Share Incentive Plans, Stock Op
Share Incentive Plans, Stock Option Activity (Details) - 2006, 2015 and 2021 Plans [Member] - Stock Options [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Option Shares [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 683,214 | 619,835 | |
Granted (in shares) | 77,519 | 114,827 | |
Exercised (in shares) | (33,851) | (40,331) | |
Forfeited (in shares) | (69,931) | (11,117) | |
Outstanding, ending balance (in shares) | 656,951 | 683,214 | 619,835 |
Weighted Average Exercise Price [Abstract] | |||
Outstanding, beginning balance (in dollars per share) | $ 29.74 | $ 28.51 | |
Granted (in dollars per share) | 20.71 | 30.58 | |
Exercised (in dollars per share) | 13.3 | 12.49 | |
Forfeited (in dollars per share) | 27.51 | 32.6 | |
Outstanding, ending balance (in dollars per share) | 29.79 | 29.74 | $ 28.51 |
Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding, beginning balance (in dollars per share) | 9.24 | 8.7 | |
Granted (in dollars per share) | 6.45 | 10.34 | |
Exercised (in dollars per share) | 4.24 | 4.08 | |
Forfeited (in dollars per share) | 9.11 | 9.35 | |
Outstanding, ending balance (in dollars per share) | $ 9.18 | $ 9.24 | $ 8.7 |
Intrinsic value of options exercised | $ 0.3 | $ 0.7 | $ 7.9 |
Share Incentive Plans, Assumpti
Share Incentive Plans, Assumptions for Options Granted Under 2006 Plan (Details) - 2006 Plan [Member] - Stock Options [Member] - Exercise Price $3.83 [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share Incentive Plans [Abstract] | |
Number of options (in shares) | shares | 43,693 |
Exercise price (in dollars per share) | $ 3.83 |
Number of options exercisable (in shares) | shares | 43,693 |
Remaining lives | 7 months 6 days |
Expected life | 10 years |
Exercise price (in dollars per share) | $ 3.83 |
Risk free interest rate | 3.57% |
Expected volatility | 40% |
Dividend yield | 0% |
Fair value at grant date (in dollars per share) | $ 2.17 |
Share Incentive Plans, Assump_2
Share Incentive Plans, Assumptions for Options Granted Under 2015 Plan (Details) - 2015 Plan [Member] - Stock Options [Member] - $ / shares | 12 Months Ended | ||||||||
May 03, 2021 | Feb. 18, 2021 | Mar. 18, 2020 | Oct. 24, 2019 | Mar. 20, 2019 | Mar. 07, 2018 | May 17, 2017 | Feb. 10, 2017 | Dec. 31, 2023 | |
February 10, 2017 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 40,000 | ||||||||
Options outstanding (in shares) | 20,000 | ||||||||
Number exercisable (in shares) | 20,000 | ||||||||
Exercise price (in dollars per share) | $ 13 | ||||||||
Remaining lives | 3 years 1 month 13 days | ||||||||
Risk free interest rate | 1.89% | ||||||||
Expected volatility | 27.44% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0% | ||||||||
Fair value at grant date (in dollars per share) | $ 3.98 | ||||||||
May 17, 2017 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 93,819 | ||||||||
Options outstanding (in shares) | 39,183 | ||||||||
Number exercisable (in shares) | 39,183 | ||||||||
Exercise price (in dollars per share) | $ 15.41 | ||||||||
Remaining lives | 3 years 4 months 17 days | ||||||||
Risk free interest rate | 1.76% | ||||||||
Expected volatility | 26.92% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0% | ||||||||
Fair value at grant date (in dollars per share) | $ 4.6 | ||||||||
March 7, 2018 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 98,100 | ||||||||
Options outstanding (in shares) | 51,567 | ||||||||
Number exercisable (in shares) | 51,567 | ||||||||
Exercise price (in dollars per share) | $ 21.21 | ||||||||
Remaining lives | 4 years 2 months 8 days | ||||||||
Risk free interest rate | 2.65% | ||||||||
Expected volatility | 28.76% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0.83% | ||||||||
Fair value at grant date (in dollars per share) | $ 6.37 | ||||||||
March 20, 2019 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 155,780 | ||||||||
Options outstanding (in shares) | 125,514 | ||||||||
Number exercisable (in shares) | 125,514 | ||||||||
Exercise price (in dollars per share) | $ 47.58 | ||||||||
Remaining lives | 5 years 2 months 19 days | ||||||||
Risk free interest rate | 2.34% | ||||||||
Expected volatility | 30.95% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0.42% | ||||||||
Fair value at grant date (in dollars per share) | $ 15.63 | ||||||||
October 24, 2019 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 25,000 | ||||||||
Options outstanding (in shares) | 25,000 | ||||||||
Number exercisable (in shares) | 25,000 | ||||||||
Exercise price (in dollars per share) | $ 20.89 | ||||||||
Remaining lives | 5 years 9 months 25 days | ||||||||
Risk free interest rate | 1.58% | ||||||||
Expected volatility | 31.93% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0.95% | ||||||||
Fair value at grant date (in dollars per share) | $ 6.27 | ||||||||
March 18, 2020 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 155,000 | ||||||||
Options outstanding (in shares) | 79,675 | ||||||||
Number exercisable (in shares) | 79,675 | ||||||||
Exercise price (in dollars per share) | $ 14.85 | ||||||||
Remaining lives | 6 years 2 months 19 days | ||||||||
Risk free interest rate | 0.79% | ||||||||
Expected volatility | 35.72% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 1.49% | ||||||||
Fair value at grant date (in dollars per share) | $ 4.41 | ||||||||
February 18, 2021 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 100,000 | ||||||||
Options outstanding (in shares) | 89,021 | ||||||||
Number exercisable (in shares) | 63,394 | ||||||||
Exercise price (in dollars per share) | $ 51.75 | ||||||||
Remaining lives | 7 years 1 month 20 days | ||||||||
Risk free interest rate | 0.56% | ||||||||
Expected volatility | 28.69% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0.55% | ||||||||
Fair value at grant date (in dollars per share) | $ 13.77 | ||||||||
May 3, 2021 [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of options granted (in shares) | 12,000 | ||||||||
Options outstanding (in shares) | 12,000 | ||||||||
Number exercisable (in shares) | 8,040 | ||||||||
Exercise price (in dollars per share) | $ 47.76 | ||||||||
Remaining lives | 7 years 4 months 2 days | ||||||||
Risk free interest rate | 0.84% | ||||||||
Expected volatility | 29.03% | ||||||||
Expected life | 6 years | ||||||||
Dividend yield | 0.59% | ||||||||
Fair value at grant date (in dollars per share) | $ 13.06 |
Share Incentive Plans, Assump_3
Share Incentive Plans, Assumptions for Options Granted Under 2021 Plan (Details) - 2021 Plan [Member] - Stock Options [Member] - $ / shares | 12 Months Ended | ||||
May 12, 2023 | Apr. 29, 2022 | Mar. 14, 2022 | May 17, 2021 | Dec. 31, 2023 | |
May 17, 2021 [Member] | |||||
Share Incentive Plans [Abstract] | |||||
Number of options granted (in shares) | 7,500 | ||||
Options outstanding (in shares) | 7,500 | ||||
Number exercisable (in shares) | 5,100 | ||||
Exercise price (in dollars per share) | $ 45.05 | ||||
Remaining lives | 7 years 4 months 17 days | ||||
Risk free interest rate | 0.84% | ||||
Expected volatility | 31.50% | ||||
Expected life | 6 years | ||||
Dividend yield | 0.63% | ||||
Fair value at grant date (in dollars per share) | $ 13.23 | ||||
March 14, 2022 [Member] | |||||
Share Incentive Plans [Abstract] | |||||
Number of options granted (in shares) | 100,000 | ||||
Options outstanding (in shares) | 71,451 | ||||
Number exercisable (in shares) | 24,741 | ||||
Exercise price (in dollars per share) | $ 30.46 | ||||
Remaining lives | 8 years 2 months 15 days | ||||
Risk free interest rate | 2.10% | ||||
Expected volatility | 35.33% | ||||
Expected life | 6 years | ||||
Dividend yield | 1.01% | ||||
Fair value at grant date (in dollars per share) | $ 10.23 | ||||
April 29, 2022 [Member] | |||||
Share Incentive Plans [Abstract] | |||||
Number of options granted (in shares) | 14,827 | ||||
Options outstanding (in shares) | 14,827 | ||||
Number exercisable (in shares) | 5,042 | ||||
Exercise price (in dollars per share) | $ 31.39 | ||||
Remaining lives | 8 years 3 months 29 days | ||||
Risk free interest rate | 2.92% | ||||
Expected volatility | 35.33% | ||||
Expected life | 6 years | ||||
Dividend yield | 0.98% | ||||
Fair value at grant date (in dollars per share) | $ 11.07 | ||||
May 12, 2023 [Member] | |||||
Share Incentive Plans [Abstract] | |||||
Number of options granted (in shares) | 77,519 | ||||
Options outstanding (in shares) | 77,519 | ||||
Number exercisable (in shares) | 58,139 | ||||
Exercise price (in dollars per share) | $ 20.71 | ||||
Remaining lives | 9 years 4 months 13 days | ||||
Risk free interest rate | 3.41% | ||||
Expected volatility | 34.51% | ||||
Expected life | 5 years 2 months 7 days | ||||
Dividend yield | 1.61% | ||||
Fair value at grant date (in dollars per share) | $ 6.45 |
Share Incentive Plans, Compensa
Share Incentive Plans, Compensation Expense Related to Options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation Expense [Abstract] | |||
Compensation expense (income) related to options | $ 0.7 | $ 1.1 | $ 2.3 |
Unrecognized compensation expense related to options | $ 0.1 | ||
Period over which unrecognized compensation expense will be expensed | 1 year |
Share Incentive Plans, Performa
Share Incentive Plans, Performance-Based Restricted Stock Units (Details) - Performance-Based Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||||
May 04, 2023 | Mar. 14, 2022 | Feb. 18, 2021 | Dec. 28, 2020 | Mar. 18, 2020 | Mar. 20, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Incentive Plans [Abstract] | |||||||||
Period between performance period and measurement date | 65 days | ||||||||
PRSUs outstanding (in shares) | 449,790 | ||||||||
Compensation expense | $ 3 | $ 2.9 | $ 5 | ||||||
Unrecognized compensation expense | $ 4.1 | ||||||||
Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Performance period | 5 years | ||||||||
March 20, 2019 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 92,500 | ||||||||
PRSUs outstanding (in shares) | 76,430 | ||||||||
Fair value as of grant date (in dollars per share) | $ 47.58 | ||||||||
March 18, 2020 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 94,000 | ||||||||
PRSUs outstanding (in shares) | 83,560 | ||||||||
Fair value as of grant date (in dollars per share) | $ 14.85 | ||||||||
Remaining lives | 1 year | ||||||||
December 28, 2020 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 88,169 | ||||||||
PRSUs outstanding (in shares) | 31,040 | ||||||||
Fair value as of grant date (in dollars per share) | $ 46.42 | ||||||||
February 18, 2021 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 100,000 | ||||||||
PRSUs outstanding (in shares) | 84,690 | ||||||||
Fair value as of grant date (in dollars per share) | $ 51.75 | ||||||||
Remaining lives | 2 years | ||||||||
March 14, 2022 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 49,996 | ||||||||
PRSUs outstanding (in shares) | 41,550 | ||||||||
Fair value as of grant date (in dollars per share) | $ 30.46 | ||||||||
Remaining lives | 3 years | ||||||||
May 4, 2023 [Member] | Employees [Member] | |||||||||
Share Incentive Plans [Abstract] | |||||||||
Number of PRSUs granted (in shares) | 133,578 | ||||||||
PRSUs outstanding (in shares) | 132,520 | ||||||||
Fair value as of grant date (in dollars per share) | $ 22.25 | ||||||||
Remaining lives | 2 years |
Share Incentive Plans, Restrict
Share Incentive Plans, Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
May 08, 2023 | May 05, 2023 | Apr. 29, 2022 | Mar. 14, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Period over which unrecognized compensation expense will be expensed | 1 year | ||||||
RSUs [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
RSUs outstanding (in shares) | 218,200 | ||||||
Compensation expense | $ 2.9 | $ 1.3 | $ 0.3 | ||||
Unrecognized compensation expense | $ 2.5 | ||||||
Period over which unrecognized compensation expense will be expensed | 2 years 3 months 18 days | ||||||
RSUs [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Vesting period | 1 year | ||||||
RSUs [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Vesting period | 5 years | ||||||
RSUs [Member] | March 14, 2022 [Member] | Vest in Five Years [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 50,004 | ||||||
RSUs outstanding (in shares) | 40,592 | ||||||
Fair value as of grant date (in dollars per share) | $ 30.46 | ||||||
Remaining lives | 3 years | ||||||
RSUs [Member] | March 14, 2022 [Member] | Vest in Three Years [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 28,726 | ||||||
RSUs outstanding (in shares) | 18,961 | ||||||
Fair value as of grant date (in dollars per share) | $ 30.46 | ||||||
Remaining lives | 1 year | ||||||
RSUs [Member] | April 29, 2022 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 4,522 | ||||||
RSUs outstanding (in shares) | 4,522 | ||||||
Fair value as of grant date (in dollars per share) | $ 31.39 | ||||||
Remaining lives | 3 years | ||||||
RSUs [Member] | May 5, 2023 [Member] | Vest in Five Years [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 130,873 | ||||||
RSUs outstanding (in shares) | 128,406 | ||||||
Fair value as of grant date (in dollars per share) | $ 22.25 | ||||||
Remaining lives | 2 years 3 months | ||||||
RSUs [Member] | May 5, 2023 [Member] | Vest in Three Years [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 22,472 | ||||||
RSUs outstanding (in shares) | 5,618 | ||||||
Fair value as of grant date (in dollars per share) | $ 22.25 | ||||||
RSUs [Member] | May 8, 2023 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||||
Number of RSUs granted (in shares) | 20,101 | ||||||
RSUs outstanding (in shares) | 20,101 | ||||||
Fair value as of grant date (in dollars per share) | $ 21.77 | ||||||
Remaining lives | 4 months 6 days |
Contingencies (Details)
Contingencies (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) Subsidiary Arbitration | Dec. 31, 2022 USD ($) | |
Contingencies [Abstract] | ||
Settlement receivable | $ 4,000 | $ 0 |
Number of franchisor subsidiaries | Subsidiary | 2 | |
Number of remaining former franchisee arbitrations | Arbitration | 1 | |
Complaint Related to Merger of SDI [Member] | Other Income [Member] | ||
Contingencies [Abstract] | ||
Gain on settlement | $ 4,000 | |
Complaint Related to Merger of SDI [Member] | Other Current Assets [Member] | ||
Contingencies [Abstract] | ||
Settlement receivable | $ 4,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Numerator [Abstract] | |||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ 10,109 | $ 10,831 | $ 9,925 | $ 7,597 | $ (16,317) | $ 11,536 | $ 5,424 | $ 10,998 | $ 38,462 | $ 11,641 | $ 52,059 | ||
Denominator [Abstract] | |||||||||||||
Basic weighted average shares (in shares) | 17,578,270 | 17,899,794 | 18,917,570 | ||||||||||
Basic EPS (in dollars per share) | $ 0.57 | $ 0.62 | $ 0.56 | $ 0.43 | $ (0.93) | $ 0.65 | $ 0.3 | $ 0.6 | $ 2.19 | $ 0.65 | $ 2.75 | ||
Numerator [Abstract] | |||||||||||||
Net income attributable to Turning Point Brands, Inc. | $ 10,109 | $ 10,831 | $ 9,925 | $ 7,597 | $ (16,317) | $ 11,536 | $ 5,424 | $ 10,998 | $ 38,462 | $ 11,641 | $ 52,059 | ||
Interest expense related to Convertible Senior Notes, net of tax | 2,667 | 0 | 4,317 | ||||||||||
Diluted consolidated net income | $ 41,129 | $ 11,641 | $ 56,376 | ||||||||||
Denominator [Abstract] | |||||||||||||
Basic weighted average shares (in shares) | 17,578,270 | 17,899,794 | 18,917,570 | ||||||||||
Convertible Senior Notes (in shares) | 3,213,796 | 2,533,201 | 0 | [1] | 3,208,172 | ||||||||
Stock options and restricted stock units (in shares) | 355,935 | 155,221 | 256,252 | ||||||||||
Diluted weighted average shares (in shares) | 20,467,406 | 18,055,015 | 22,381,994 | ||||||||||
Diluted EPS (in dollars per share) | $ 0.53 | $ 0.58 | $ 0.53 | $ 0.41 | $ (0.93) | [2] | $ 0.6 | $ 0.3 | $ 0.55 | $ 2.01 | $ 0.64 | $ 2.52 | |
[1]For 2022, the effect of 3,208,172 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive.[2]The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Segment Information, Financial
Segment Information, Financial Information of Reportable Segments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) Customer Segment | Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 USD ($) Customer | ||
Segment Information [Abstract] | ||||||||||||
Number of reportable segments | Segment | 3 | |||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 | |
Gross profit | 50,524 | $ 51,622 | $ 52,478 | $ 48,617 | 49,563 | $ 52,712 | $ 51,469 | $ 51,794 | 203,241 | 205,538 | 217,834 | |
Operating income (loss) | 82,577 | 75,514 | 90,321 | |||||||||
Interest expense, net | 14,645 | 19,524 | 20,500 | |||||||||
Investment loss | 11,914 | 13,303 | 6,673 | |||||||||
Other income | (4,000) | 0 | 0 | |||||||||
Goodwill and intangible impairment loss | 0 | 27,566 | 0 | |||||||||
Gain on extinguishment of debt | (1,664) | (885) | (2,154) | |||||||||
Income before income taxes | 61,682 | 16,006 | 65,302 | |||||||||
Capital expenditures | 5,707 | 7,685 | 6,156 | |||||||||
Depreciation and amortization | 6,358 | 5,299 | 5,012 | |||||||||
Assets | 569,356 | 572,106 | 569,356 | 572,106 | ||||||||
Zig- Zag and Stoker's Products [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | 325,064 | 321,229 | 300,771 | |||||||||
Gross profit | 182,942 | 177,830 | 170,823 | |||||||||
Operating income (loss) | 82,960 | 74,008 | 88,058 | |||||||||
Capital expenditures | 5,707 | 7,685 | 6,101 | |||||||||
Depreciation and amortization | 4,118 | 3,384 | 2,953 | |||||||||
Assets | 542,352 | 532,482 | 542,352 | 532,482 | ||||||||
Creative Distribution Solutions [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | 80,329 | 93,784 | 144,700 | |||||||||
Reportable Segments [Member] | Zig-Zag Products [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | 180,455 | 190,403 | 176,491 | |||||||||
Gross profit | 101,055 | 106,576 | 102,739 | |||||||||
Operating income (loss) | 68,280 | 73,342 | 77,109 | |||||||||
Capital expenditures | 1,112 | 4,641 | 141 | |||||||||
Depreciation and amortization | 1,077 | 412 | 388 | |||||||||
Assets | 177,135 | 225,893 | 177,135 | 225,893 | ||||||||
Reportable Segments [Member] | Stoker's Products [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | 144,609 | 130,826 | 124,280 | |||||||||
Gross profit | 81,887 | 71,254 | 68,084 | |||||||||
Operating income (loss) | 62,208 | 53,331 | 52,073 | |||||||||
Capital expenditures | 4,595 | 3,044 | 5,960 | |||||||||
Depreciation and amortization | 3,041 | 2,972 | 2,565 | |||||||||
Assets | 174,994 | 151,241 | 174,994 | 151,241 | ||||||||
Reportable Segments [Member] | Creative Distribution Solutions [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Net sales | 80,329 | 93,784 | 144,700 | |||||||||
Gross profit | 20,299 | 27,708 | 47,011 | |||||||||
Operating income (loss) | (383) | 1,506 | 2,263 | |||||||||
Capital expenditures | 0 | 0 | 55 | |||||||||
Depreciation and amortization | 2,240 | 1,915 | 2,059 | |||||||||
Assets | 27,004 | 39,624 | 27,004 | 39,624 | ||||||||
Corporate Unallocated [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Operating income (loss) | [1],[2] | (47,528) | (52,665) | (41,124) | ||||||||
Operating costs related to PMTA | 2,100 | 4,600 | 2,600 | |||||||||
Assets | [3] | $ 190,223 | $ 155,348 | 190,223 | 155,348 | |||||||
Reconciling Items [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Interest expense, net | 14,645 | 19,524 | 20,500 | |||||||||
Investment loss | 11,914 | 13,303 | 6,673 | |||||||||
Other income | (4,000) | 0 | 0 | |||||||||
Goodwill and intangible impairment loss | 0 | 27,566 | 0 | |||||||||
Gain on extinguishment of debt | $ (1,664) | $ (885) | $ (2,154) | |||||||||
Revenues [Member] | Customer Concentration Risk [Member] | ||||||||||||
Segment Information [Abstract] | ||||||||||||
Number of customers accounting for more than 10% of sales | Customer | 0 | 0 | 0 | |||||||||
[1]Includes corporate costs that are not allocated to any of the three reportable segments.[2]Includes costs related to PMTA of $2.1 million, $4.6 million and $2.6 million in 2023, 2022, and 2021, respectively.[3] Includes assets not assigned to the three reportable segments. All goodwill has been allocated to the reportable segments. |
Segment Information, Revenue Di
Segment Information, Revenue Disaggregation - Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Sales by Sales Channel [Abstract] | |||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 |
Creative Distribution Solutions [Member] | |||||||||||
Net Sales by Sales Channel [Abstract] | |||||||||||
Net sales | 80,329 | 93,784 | 144,700 | ||||||||
Creative Distribution Solutions [Member] | Business to Business [Member] | |||||||||||
Net Sales by Sales Channel [Abstract] | |||||||||||
Net sales | 71,104 | 76,462 | 107,235 | ||||||||
Creative Distribution Solutions [Member] | Business to Consumer - Online [Member] | |||||||||||
Net Sales by Sales Channel [Abstract] | |||||||||||
Net sales | 8,761 | 16,836 | 37,069 | ||||||||
Creative Distribution Solutions [Member] | Other [Member] | |||||||||||
Net Sales by Sales Channel [Abstract] | |||||||||||
Net sales | $ 464 | $ 486 | $ 396 |
Segment Information, Net Sales
Segment Information, Net Sales - Domestic and Foreign (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information [Abstract] | |||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 |
Reportable Geographical Component [Member] | Domestic [Member] | |||||||||||
Segment Information [Abstract] | |||||||||||
Net sales | 374,352 | 381,723 | 415,514 | ||||||||
Reportable Geographical Component [Member] | Foreign [Member] | |||||||||||
Segment Information [Abstract] | |||||||||||
Net sales | $ 31,041 | $ 33,290 | $ 29,957 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Selected Quarterly Financial Information (Unaudited) [Abstract] | |||||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 | ||
Gross profit | 50,524 | 51,622 | 52,478 | 48,617 | 49,563 | 52,712 | 51,469 | 51,794 | 203,241 | 205,538 | 217,834 | ||
Net income attributable to Turning Point Brands, Inc. | $ 10,109 | $ 10,831 | $ 9,925 | $ 7,597 | $ (16,317) | $ 11,536 | $ 5,424 | $ 10,998 | $ 38,462 | $ 11,641 | $ 52,059 | ||
Basic net income attributable to Turning Point Brands, Inc. per share (in dollars per share) | $ 0.57 | $ 0.62 | $ 0.56 | $ 0.43 | $ (0.93) | $ 0.65 | $ 0.3 | $ 0.6 | $ 2.19 | $ 0.65 | $ 2.75 | ||
Diluted net income attributable to Turning Point Brands, Inc. per share (in dollars per share) | $ 0.53 | $ 0.58 | $ 0.53 | $ 0.41 | $ (0.93) | [1] | $ 0.6 | $ 0.3 | $ 0.55 | $ 2.01 | $ 0.64 | $ 2.52 | |
Convertible Senior Notes (in shares) | 3,213,796 | 2,533,201 | 0 | [2] | 3,208,172 | ||||||||
[1]The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive.[2]For 2022, the effect of 3,208,172 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive. |
Additional Information with R_3
Additional Information with Respect to Unrestricted Subsidiary, Income Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||||||||||
Net sales | $ 97,120 | $ 101,722 | $ 105,595 | $ 100,956 | $ 103,392 | $ 107,802 | $ 102,925 | $ 100,894 | $ 405,393 | $ 415,013 | $ 445,471 |
Cost of sales | 202,152 | 209,475 | 227,637 | ||||||||
Gross profit | 50,524 | 51,622 | 52,478 | 48,617 | 49,563 | 52,712 | 51,469 | 51,794 | 203,241 | 205,538 | 217,834 |
Selling, general, and administrative expenses | 125,009 | 130,024 | 127,513 | ||||||||
Other operating income, net | (4,345) | 0 | 0 | ||||||||
Operating income | 82,577 | 75,514 | 90,321 | ||||||||
Interest expense, net | 14,645 | 19,524 | 20,500 | ||||||||
Investment loss | 11,914 | 13,303 | 6,673 | ||||||||
Other income | (4,000) | 0 | 0 | ||||||||
Goodwill and intangible impairment loss | 0 | 27,566 | 0 | ||||||||
Gain on extinguishment of debt | (1,664) | (885) | (2,154) | ||||||||
Income before income taxes | 61,682 | 16,006 | 65,302 | ||||||||
Income tax expense | 23,901 | 4,849 | 14,040 | ||||||||
Consolidated net income | 37,781 | 11,157 | 51,262 | ||||||||
Net loss attributable to non-controlling interest | (681) | (484) | (797) | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ 10,109 | $ 10,831 | $ 9,925 | $ 7,597 | $ (16,317) | $ 11,536 | $ 5,424 | $ 10,998 | 38,462 | 11,641 | 52,059 |
Company and Restricted Subsidiaries [Member] | |||||||||||
Income Statement [Abstract] | |||||||||||
Net sales | 325,063 | 321,229 | 300,771 | ||||||||
Cost of sales | 142,121 | 143,399 | 129,948 | ||||||||
Gross profit | 182,942 | 177,830 | 170,823 | ||||||||
Selling, general, and administrative expenses | 104,327 | 129,900 | 82,765 | ||||||||
Other operating income, net | (4,345) | 0 | |||||||||
Operating income | 82,960 | 47,930 | 88,058 | ||||||||
Interest expense, net | 14,645 | 19,524 | 20,500 | ||||||||
Investment loss | 11,914 | 13,303 | 6,673 | ||||||||
Other income | (4,000) | 0 | |||||||||
Goodwill and intangible impairment loss | 0 | 1,488 | |||||||||
Gain on extinguishment of debt | (1,664) | (885) | (2,154) | ||||||||
Income before income taxes | 62,065 | 14,500 | 63,039 | ||||||||
Income tax expense | 24,049 | 4,393 | 13,553 | ||||||||
Consolidated net income | 38,016 | 10,107 | 49,486 | ||||||||
Net loss attributable to non-controlling interest | (681) | (484) | (797) | ||||||||
Net income attributable to Turning Point Brands, Inc. | 38,697 | 10,591 | 50,283 | ||||||||
Unrestricted Subsidiary [Member] | |||||||||||
Income Statement [Abstract] | |||||||||||
Net sales | 80,330 | 93,784 | 144,700 | ||||||||
Cost of sales | 60,031 | 66,076 | 97,689 | ||||||||
Gross profit | 20,299 | 27,708 | 47,011 | ||||||||
Selling, general, and administrative expenses | 20,682 | 124 | 44,748 | ||||||||
Other operating income, net | 0 | 0 | |||||||||
Operating income | (383) | 27,584 | 2,263 | ||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Investment loss | 0 | 0 | 0 | ||||||||
Other income | 0 | 0 | |||||||||
Goodwill and intangible impairment loss | 26,078 | ||||||||||
Gain on extinguishment of debt | 0 | 0 | 0 | ||||||||
Income before income taxes | (383) | 1,506 | 2,263 | ||||||||
Income tax expense | (148) | 456 | 487 | ||||||||
Consolidated net income | (235) | 1,050 | 1,776 | ||||||||
Net loss attributable to non-controlling interest | 0 | 0 | 0 | ||||||||
Net income attributable to Turning Point Brands, Inc. | $ (235) | $ 1,050 | $ 1,776 |
Additional Information with R_4
Additional Information with Respect to Unrestricted Subsidiary, Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||||
Cash | $ 117,886 | $ 106,403 | $ 128,320 | $ 41,765 |
Accounts receivable, net | 9,989 | 8,377 | ||
Inventories, net | 98,960 | 119,915 | ||
Other current assets | 40,781 | 22,959 | ||
Total current assets | 267,616 | 257,654 | ||
Property, plant, and equipment, net | 25,300 | 22,788 | ||
Deferred income taxes | 1,468 | 8,443 | ||
Right of use assets | 11,480 | 12,465 | ||
Deferred financing costs, net | 2,450 | 282 | ||
Goodwill | 136,250 | 136,253 | 162,333 | |
Other intangible assets, net | 80,942 | 83,592 | ||
Master Settlement Agreement (MSA) escrow deposits | 28,684 | 27,980 | ||
Other assets | 15,166 | 22,649 | ||
Investment in unrestricted subsidiaries | 0 | 0 | ||
Total assets | 569,356 | 572,106 | ||
Current liabilities: | ||||
Accounts payable | 8,407 | 8,355 | ||
Accrued liabilities | 33,635 | 33,001 | ||
Current portion of long-term debt | 58,294 | 0 | ||
Other current liabilities | 0 | 20 | ||
Total current liabilities | 100,336 | 41,376 | ||
Notes payable and long-term debt | 307,064 | 406,757 | ||
Lease liabilities | 9,950 | 10,593 | ||
Total liabilities | 417,350 | 458,726 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Total Turning Point Brands Inc. Stockholders' Equity/Net parent investment in unrestricted subsidiaries | 150,976 | 111,645 | ||
Non-controlling interest | 1,030 | 1,735 | ||
Total stockholders' equity | 152,006 | 113,380 | $ 133,716 | $ 117,487 |
Total liabilities and stockholders' equity | 569,356 | 572,106 | ||
Eliminations [Member] | ||||
Current assets: | ||||
Cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property, plant, and equipment, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Right of use assets | 0 | 0 | ||
Deferred financing costs, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Master Settlement Agreement (MSA) escrow deposits | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investment in unrestricted subsidiaries | (48,229) | (60,120) | ||
Total assets | (48,229) | (60,120) | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Current portion of long-term debt | 0 | |||
Other current liabilities | 0 | |||
Total current liabilities | 0 | 0 | ||
Notes payable and long-term debt | 0 | 0 | ||
Lease liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Total Turning Point Brands Inc. Stockholders' Equity/Net parent investment in unrestricted subsidiaries | (48,229) | (60,120) | ||
Non-controlling interest | 0 | 0 | ||
Total stockholders' equity | (48,229) | (60,120) | ||
Total liabilities and stockholders' equity | (48,229) | (60,120) | ||
Company and Restricted Subsidiaries [Member] | ||||
Current assets: | ||||
Cash | 116,725 | 103,990 | ||
Accounts receivable, net | 9,989 | 7,374 | ||
Inventories, net | 91,679 | 104,883 | ||
Other current assets | 36,937 | 18,828 | ||
Total current assets | 255,330 | 235,075 | ||
Property, plant, and equipment, net | 25,142 | 22,261 | ||
Deferred income taxes | 1,468 | 8,443 | ||
Right of use assets | 11,359 | 12,328 | ||
Deferred financing costs, net | 2,450 | 282 | ||
Goodwill | 136,250 | 136,253 | ||
Other intangible assets, net | 66,490 | 67,241 | ||
Master Settlement Agreement (MSA) escrow deposits | 28,684 | 27,980 | ||
Other assets | 15,166 | 22,619 | ||
Investment in unrestricted subsidiaries | 48,229 | 60,120 | ||
Total assets | 590,568 | 592,602 | ||
Current liabilities: | ||||
Accounts payable | 7,781 | 7,628 | ||
Accrued liabilities | 32,052 | 31,118 | ||
Current portion of long-term debt | 58,294 | |||
Other current liabilities | 20 | |||
Total current liabilities | 98,127 | 38,766 | ||
Notes payable and long-term debt | 307,064 | 406,757 | ||
Lease liabilities | 9,898 | 10,593 | ||
Total liabilities | 415,089 | 456,116 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Total Turning Point Brands Inc. Stockholders' Equity/Net parent investment in unrestricted subsidiaries | 174,449 | 134,751 | ||
Non-controlling interest | 1,030 | 1,735 | ||
Total stockholders' equity | 175,479 | 136,486 | ||
Total liabilities and stockholders' equity | 590,568 | 592,602 | ||
Unrestricted Subsidiary [Member] | ||||
Current assets: | ||||
Cash | 1,161 | 2,413 | ||
Accounts receivable, net | 0 | 1,003 | ||
Inventories, net | 7,281 | 15,032 | ||
Other current assets | 3,844 | 4,131 | ||
Total current assets | 12,286 | 22,579 | ||
Property, plant, and equipment, net | 158 | 527 | ||
Deferred income taxes | 0 | 0 | ||
Right of use assets | 121 | 137 | ||
Deferred financing costs, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 14,452 | 16,351 | ||
Master Settlement Agreement (MSA) escrow deposits | 0 | 0 | ||
Other assets | 0 | 30 | ||
Investment in unrestricted subsidiaries | 0 | 0 | ||
Total assets | 27,017 | 39,624 | ||
Current liabilities: | ||||
Accounts payable | 626 | 727 | ||
Accrued liabilities | 1,583 | 1,883 | ||
Current portion of long-term debt | 0 | |||
Other current liabilities | 0 | |||
Total current liabilities | 2,209 | 2,610 | ||
Notes payable and long-term debt | 0 | 0 | ||
Lease liabilities | 52 | 0 | ||
Total liabilities | 2,261 | 2,610 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Total Turning Point Brands Inc. Stockholders' Equity/Net parent investment in unrestricted subsidiaries | 24,756 | 37,014 | ||
Non-controlling interest | 0 | 0 | ||
Total stockholders' equity | 24,756 | 37,014 | ||
Total liabilities and stockholders' equity | $ 27,017 | $ 39,624 |
Dividends and Share Repurchase
Dividends and Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Feb. 24, 2022 | Oct. 25, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 25, 2020 | |
Dividends and Share Repurchase [Abstract] | ||||||
Cash dividends paid per common share (in dollars per share) | $ 0.26 | |||||
Cash dividends paid | $ 4,497 | $ 4,250 | $ 4,096 | |||
Share repurchase program authorized amount | $ 50,000 | $ 50,000 | $ 50,000 | |||
Increase in share repurchase program authorized amount | $ 24,600 | $ 30,700 | ||||
Remaining share repurchase program authorized amount | $ 27,200 | |||||
Number of shares repurchased (in shares) | 0 |