# Turning Point Brands, Inc. (TPB) Informational only - not investment advice. CIK: 0001290677 SIC: 2100 Tobacco Products SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 21](/major-group/21/) > [SIC 2100 Tobacco Products](/industry/2100/) Latest 10-K filed: 2026-03-02 SEC page: https://www.sec.gov/edgar/browse/?CIK=1290677 Filing source: https://www.sec.gov/Archives/edgar/data/1290677/000143774926006405/tpb20251231_10k.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 463062000 | USD | 2025 | 2026-03-02 | | Net income | 58165000 | USD | 2025 | 2026-03-02 | | Assets | 763750000 | USD | 2025 | 2026-03-02 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001290677.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 206,228,000 | 285,777,000 | 332,683,000 | 361,989,000 | 405,111,000 | 445,471,000 | 321,229,000 | 325,064,000 | 360,660,000 | 463,062,000 | | Net income | | 26,913,000 | 20,209,000 | 25,289,000 | 16,233,000 | 38,192,000 | 52,059,000 | 11,641,000 | 38,462,000 | 39,809,000 | 58,165,000 | | Operating income | | 43,919,000 | 49,680,000 | 48,484,000 | 27,230,000 | 64,427,000 | 90,321,000 | 74,008,000 | 82,960,000 | 80,832,000 | 95,327,000 | | Gross profit | | 100,545,000 | 124,970,000 | 142,559,000 | 137,117,000 | 189,990,000 | 217,834,000 | 177,830,000 | 182,942,000 | 201,565,000 | 264,314,000 | | Diluted EPS | | 1.49 | 1.04 | 1.28 | 0.78 | 1.85 | 2.52 | 0.64 | 2.01 | 2.14 | 3.11 | | Operating cash flow | | 9,128,000 | 29,690,000 | 13,090,000 | 37,795,000 | 43,678,000 | 68,217,000 | 30,273,000 | 66,881,000 | 67,062,000 | 57,374,000 | | Capital expenditures | | 3,207,000 | 2,021,000 | 2,267,000 | 4,815,000 | 6,135,000 | 6,156,000 | 7,834,000 | 5,707,000 | 4,623,000 | 13,529,000 | | Dividends paid | | 0.00 | 768,000 | 2,318,000 | 3,531,000 | 3,802,000 | 4,096,000 | 4,250,000 | 4,497,000 | 4,905,000 | 5,519,000 | | Share buybacks | 0.00 | 0.00 | | 0.00 | 0.00 | 10,191,000 | 38,678,000 | 29,224,000 | 0.00 | 5,051,000 | 0.00 | | Assets | | 285,020,000 | 282,277,000 | 339,377,000 | 446,584,000 | 496,049,000 | 601,560,000 | 572,106,000 | 569,369,000 | 493,353,000 | 763,750,000 | | Liabilities | | 250,962,000 | 228,953,000 | 256,754,000 | 339,999,000 | 378,562,000 | 467,844,000 | 458,726,000 | 417,363,000 | 302,973,000 | 391,767,000 | | Stockholders' equity | | | 53,324,000 | 86,600,000 | 88,082,000 | 117,487,000 | 133,716,000 | 113,380,000 | 152,006,000 | 190,380,000 | 371,983,000 | | Cash and cash equivalents | | 2,865,000 | 2,607,000 | 3,306,000 | 95,250,000 | 41,765,000 | 128,320,000 | 106,403,000 | 117,886,000 | 48,941,000 | 222,760,000 | | Free cash flow | | 5,921,000 | 27,669,000 | 10,823,000 | 32,980,000 | 37,543,000 | 62,061,000 | 22,439,000 | 61,174,000 | 62,439,000 | 43,845,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | 13.05% | 7.07% | 7.60% | 4.48% | 9.43% | 11.69% | 3.62% | 11.83% | 11.04% | 12.56% | | Operating margin | | 21.30% | 17.38% | 14.57% | 7.52% | 15.90% | 20.28% | 23.04% | 25.52% | 22.41% | 20.59% | | Return on equity | | | 37.90% | 29.20% | 18.43% | 32.51% | 38.93% | 10.27% | 25.30% | 20.91% | 15.64% | | Return on assets | | 9.44% | 7.16% | 7.45% | 3.63% | 7.70% | 8.65% | 2.03% | 6.76% | 8.07% | 7.62% | | Liabilities / equity | | | 4.29 | 2.96 | 3.86 | 3.22 | 3.50 | 4.05 | 2.75 | 1.59 | 1.05 | | Current ratio | | 1.90 | 2.08 | 1.75 | 3.39 | 2.89 | 6.18 | 6.23 | 2.67 | 4.42 | 5.56 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001290677.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q1 | 2022-03-31 | | | 0.55 | reported discrete quarter | | 2022-Q2 | 2022-06-30 | | | 0.30 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.60 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.41 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 105,595,000 | 9,925,000 | 0.53 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 101,722,000 | 10,831,000 | 0.58 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 97,120,000 | 10,109,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 97,058,000 | 12,010,000 | 0.63 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 108,512,000 | 13,004,000 | 0.68 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 105,617,000 | 12,375,000 | 0.68 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 49,473,000 | 2,420,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 106,436,000 | 14,395,000 | 0.79 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 116,634,000 | 14,480,000 | 0.79 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 118,979,000 | 21,080,000 | 1.13 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 121,013,000 | 8,210,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 124,278,000 | 11,667,000 | | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1290677/000143774926015910/tpb20260331_10q.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-08 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion of the historical financial conditions and results of operations in conjunction with our consolidated financial statements and accompanying notes, which are included elsewhere in this Quarterly Report on Form 10-Q. In addition, this discussion includes forward-looking statements which are subject to risks and uncertainties that may result in actual results differing from statements we make. See “Cautionary Note Regarding Forward-Looking Statements.” Factors that could cause actual results to differ include those risks and uncertainties discussed in “Risk Factors” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.  The following Management’s Discussion and Analysis (“MD&A”) relates to the unaudited financial statements of Turning Point Brands, Inc., included elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to enable the reader to understand the Company’s financial condition and results of operations, including any material changes in the Company’s financial condition and results of operations since December 31, 2025, and as compared with the three months ended March 31, 2025. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”). In this MD&A, unless the context requires otherwise, references to “our Company” “we,” “our,” or “us” refer to Turning Point Brands, Inc., and its consolidated subsidiaries. References to “TPB” refer to Turning Point Brands, Inc., without any of its subsidiaries. Many of the amounts and percentages in this discussion have been rounded for convenience of presentation. Overview Turning Point Brands, Inc. 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 our next-generation products to fulfill evolving consumer preferences. Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries. The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S. and Canada and positively evolving consumer perception and acceptance in North America. The OTP industry, which consists of non-cigarette tobacco products, exhibited flat consumer unit annualized growth during the full year period ended 2025 as reported by MSAi a third-party analytics and information company. Our segments are led by our core proprietary and iconic brands: Zig-Zag® in the Zig-Zag products segment and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment. Our businesses generate solid cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position. We currently ship to approximately 900 distributors with an additional approximately 600 secondary, indirect wholesalers in the U.S. that carry and sell our products. Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions and acquisitions while concurrently improving operational efficiency. We believe there are meaningful opportunities to expand through investing in organic growth via acquisitions and joint ventures across all product categories. Our products are currently available in approximately 220,000 retail locations in North America. Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business. Recent Developments On February 20, 2026, the U.S. Supreme Court issued a ruling regarding tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the United States, concluding that such tariffs were unauthorized. As of the date of this report, the Company has paid approximately $17.9 million in tariffs subject to the ruling. The ruling did not address the availability, timing, or amount of any potential refunds. The U.S. Court of International Trade (“CIT”) has ordered the U.S. Customs and Border Protection (“CBP”) to refund the collected IEEPA tariffs. The administrative process for seeking refunds of IEEPA tariffs previously paid remains under development and the CIT’s order may be subject to U.S. government challenge. On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries (CAPE) system for IEEPA refunds, which the CBP plans to implement through a phased development approach. There can be no guarantee that a refund, if received, will equal the full amount of IEEPA tariffs paid, and any refund may be subject to taxes and other adjustments or further legal, regulatory, or administration developments. Given these uncertainties, the Company has not recognized any benefit or asset related to potential IEEPA tariff refunds as of this filing date. Following the U.S. Supreme Court's decision, the U.S. administration announced additional tariffs under Section 122 of the Trade Act of 1974 and could take action to implement additional tariffs in the future. Accordingly, any recovery of amounts paid remains uncertain, and management has concluded that recognition of a receivable or recovery asset is not appropriate at this time. The Company continues to monitor developments related to this ruling, as well as changes in U.S. and foreign trade, import, and export policies, which could have a material impact on the Company’s financial position, results of operations, and cash flows. Products We operate in two segments: Zig-Zag products and Stoker’s products segments. In our Zig-Zag products segment, we principally market and distribute (i) rolling papers, tubes and related products; (ii) finished cigars and make-your-own (“MYO”) cigar wraps; and (iii) lighters and other accessories. In addition, we have a majority stake in Turning Point Brands Canada which is a specialty marketing and distribution firm focused on building brands in the Canadian cannabis accessories, tobacco and alternative products categories. In our Stoker’s products segment, we (i) manufacture and market moist snuff tobacco (“MST”); (ii) contract for and market modern oral products; and (iii) contract for and market loose-leaf chewing tobacco products.  28 Table of Contents Operations Our Zig-Zag products and Stoker’s products segments primarily generate revenues from the sale of our products to wholesale distributors who, in turn, resell the products to retail operations. Our net sales, which include federal excise taxes, consist of gross sales net of cash discounts, returns, and selling and marketing allowances. We rely on long-standing relationships with high-quality, established manufacturers to provide the majority of our produced products. Approximately 75% of our production, as measured by net sales, is outsourced to suppliers. The remaining production consists primarily of our moist snuff tobacco operations located in Dresden, Tennessee and Louisville, Kentucky. Our principal operating expenses include the cost of raw materials used to manufacture the limited number of our products which we produce in-house; the cost of finished products, which are generally purchased goods; federal excise taxes; legal expenses; and compensation expenses, including benefits and costs of salaried personnel. Key Factors Affecting Our Results of Operations We consider the following to be the key factors affecting our results of operations: ● Our ability to further penetrate markets with our existing products; ● Our ability to introduce new products and product lines that complement our core business; ● Decreasing interest in some tobacco products among consumers; ● Competition; ● Price sensitivity in our end-markets; ● Marketing and promotional initiatives, which cause variability in our results; ● Cost related to increasing regulation of promotional and advertising activities; ● General economic conditions, including consumer access to disposable income and other conditions affecting purchasing power such as inflation and the interest rate environment; ● Labor and production costs; ● Cost of complying with regulation, including the “deeming regulation”, as well as the unpredictable nature of the regulatory regimes; ● Changes to U.S. trade policies, including tariffs; ● Counterfeit and other illegal products in our end-markets; ● Currency fluctuations; ● Our ability to identify attractive acquisition opportunities; and ● Our ability to successfully integrate acquisitions. Critical Accounting Policies and Uses of Estimates There have been no material changes to our critical accounting policies and estimates from the information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K. Recent Accounting Pronouncements See Item 1 of Part I, “Notes to Consolidated Financial Statements - Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements.” 29 Table of Contents Results of Operations Summary The table and discussion set forth below relates to our consolidated results of continuing operations: (in thousands) Three Months Ended March 31, 2026 2025 % Change Consolidated Results of Operations Data: Net sales Zig-Zag products $ 36,669 $ 47,265 -22.4 % Stoker’s products 87,609 59,171 48.1 % Total net sales 124,278 106,436 16.8 % Cost of sales 55,983 46,826 19.6 % Gross profit Zig-Zag products 20,945 25,565 -18.1 % Stoker’s products 47,350 34,045 39.1 % Total gross profit 68,295 59,610 14.6 % Selling, general, and administrative expenses 55,811 36,421 53.2 % Operating income Zig-Zag products 11,231 16,930 -33.7 % Stoker’s products 19,771 24,134 -18.1 % Total segment operating income 31,002 41,064 -24.5 % Corporate unallocated (18,518 ) (17,875 ) 3.6 % Total operating income 12,484 23,189 -46.2 % Other expense, net 63 - NM Interest expense, net 4,423 4,414 0.2 % Investment gain (151 ) (141 ) 7.1 % Income from equity method investments (2,983 ) (150 ) NM Loss on extinguishment of debt - 1,235 NM Income from continuing operations before income taxes 11,132 17,831 -37.6 % Income tax (benefit) expense (2,810 ) 2,040 -237.7 % Consolidated net income from continuing operations 13,942 15,791 -11.7 % Net income attributable to non-controlling interest 2,275 1,396 63.0 % Net income from continuing operations attributable to Turning Point Brands, Inc. $ 11,667 $ 14,395 -19.0 % 30 Table of Contents Comparison of the Three Months Ended March 31, 2026, to the Three Months Ended March 31, 2025 Net Sales: For the three months ended March 31, 2026, consolidated net sales increased $17.8 million, or 16.8% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.  For the three months ended March 31, 2026, net sales in the Zig-Zag products segment decreased $10.6 million, or 22.4% compared to the prior year period. The decrease in net sales was driven primarily by declines of $7.4 million in U.S. papers and wraps, $1.7 million in the Clipper li [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to help the reader understand the results of operations and financial condition of the Company. The discussion is provided as a supplement to, and should be read in conjunction with our historical consolidated financial statements and accompanying notes, which are included elsewhere in this Annual Report on Form 10-K and incorporated herein by reference. In addition, this discussion includes forward-looking statements subject to risks and uncertainties that may result in actual results differing from statements we make. See “Cautionary Note Regarding Forward-Looking Statements.” Factors that could cause actual results to differ include those risks and uncertainties discussed in Item 1A “Risk Factors.” The following discussion relates to the audited financial statements of Turning Point Brands, Inc., included elsewhere in this Annual Report on Form 10-K. In this discussion, unless the context requires otherwise, references to “the Company” “we,” “our,” or “us” refer to Turning Point Brands, Inc., and its consolidated subsidiaries. References to “TPB” refer to Turning Point Brands, Inc., without any of its subsidiaries. We were incorporated in 2004 under the name North Atlantic Holding Company, Inc. On November 4, 2015, we changed our name to Turning Point Brands, Inc. Many of the amounts and percentages in this discussion have been rounded for convenience of presentation. Overview Turning Point Brands, Inc. 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 our next-generation products to fulfill evolving consumer preferences. Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries. The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S. and Canada and positively evolving consumer perception and acceptance in North America. The OTP industry, which consists of non-cigarette tobacco products, exhibited flat consumer unit annualized growth during the full year period ended 2025 as reported by MSAi a third-party analytics and information company. Our segments are led by our core proprietary and iconic brands: Zig-Zag® in the Zig-Zag products segment and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment. Our businesses generate solid cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position. We currently ship to approximately 900 distributors with an additional 600 secondary, indirect wholesalers in the U.S. that carry and sell our products. Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions and acquisitions while concurrently improving operational efficiency. We believe there are meaningful opportunities to expand through investing in organic growth via acquisitions and joint ventures across all product categories. Our products are currently available in approximately 220,000 retail locations in North America. Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business. Recent Developments As a result of the U.S. trade policies beginning in 2025, we incurred tariff charges on certain products we import from overseas manufacturers.  Certain of these tariffs were imposed by the administration utilizing the International Emergency Economic Powers Act(IEEPA).   In February 2026, the United States Supreme Court held that the International Emergency Economic Powers Act does not authorize the president to impose tariffs and the government immediately ceased collecting such tariffs.  While this ruling prohibits the imposition of tariffs under IEEPA it does not provide for a refund mechanism, and we cannot assure as to when or how much of the tariffs the Company previously paid under IEEPA will be refunded. In addition, the ruling does not prohibit the imposition of tariffs pursuant to other statutes.   For instance, in response to the ruling the administration imposed a blanket 10% on all products importers pursuant to section 122 of the Trade Act of 1974. Products We operate in two segments: Zig-Zag products and Stoker’s products segments. In our Zig-Zag products segment, we principally market and distribute (i) rolling papers, tubes, and related products; (ii) finished cigars and make-your-own (“MYO”) cigar wraps; and (iii) lighters and other accessories.  In addition, we have a majority stake in Turning Point Brands Canada which is a specialty marketing and distribution firm focused on building brands in the Canadian cannabis accessories, tobacco and alternative products categories. In our Stoker’s products segment, we (i) manufacture and market moist snuff tobacco (“MST”) and (ii) contract for and market FRE®, our modern oral product; and (iii) contract for and market loose-leaf chewing tobacco products.  38 Table of Contents Our portfolio of brands includes some of the most widely recognized names in the alternative smoking accessories and OTP industries such as Zig-Zag® and Stoker’s®. The following table sets forth the market share and category rank of our core products and demonstrates their industry positions within measured distribution channels: Brand Product TPB Segment Market Share(1) Category Rank(1) Zig-Zag® Cigarette Papers Zig-Zag Products 32.7 % #1 premium, #1 overall Zig-Zag® MYO Cigar Wraps Zig-Zag Products 34.3 % #1 overall Stoker’s® Moist Snuff Stoker’s Products 8.1 % #2 discount, #5 overall Stoker’s® Chewing Tobacco Stoker’s Products 34.1 % #1 discount, #1 overall (1) Market share and category rank data for all products are derived from MSAi data for the 52 week period ended December 27, 2025. We subscribe to a sales tracking system from MSAi that records all OTP product shipments (ours as well as those of our competitors) from approximately 600 wholesalers to over 265,000 traditional retail stores in the U.S. This system enables us to understand individual product share and volume trends across multiple categories down to the individual retail store level, allowing us to allocate field salesforce coverage to the highest opportunity stores. Our sales and marketing group of approximately 257 professionals utilize the MSAi system to efficiently target markets and sales channels with the highest sales potential. Our Zig-Zag products and Stoker’s products segments primarily generate revenues from the sale of our products to wholesale distributors who, in turn, resell the products to retail operations. Our net sales, which include federal excise taxes, consist of gross sales net of cash discounts, returns, and selling and marketing allowances. We rely on long-standing relationships with high-quality, established manufacturers to provide the majority of our produced products. Approximately 75% of our production, as measured by net sales, is outsourced to suppliers. The remaining production consists primarily of our moist snuff tobacco operations located in Dresden, Tennessee, and Louisville, Kentucky. Our principal operating expenses include the cost of raw materials used to manufacture the limited number of our products which we produce in-house; the cost of finished products, which are generally purchased goods; federal excise taxes; legal expenses; and compensation expenses, including benefits and costs of salaried personnel. Key Factors Affecting Our Results of Operations We consider the following to be the key factors affecting our results of operations: • Our ability to further penetrate markets with our existing products; • Our ability to introduce new products and product lines that complement our core business; • Decreasing interest in some tobacco products among consumers; • Competition; • Price sensitivity in our end-markets; • Marketing and promotional initiatives, which cause variability in our results; • Cost related to increasing regulation of promotional and advertising activities; • General economic conditions, including consumer access to disposable income and other conditions affecting purchasing power such as inflation and the interest rate environment; • Labor and production costs; • Cost of complying with regulation as well as the unpredictable nature of the regulatory regimes; • Changes to U.S. trade policies, especially related to import tariffs; • Counterfeit and other illegal products in our end-markets; • Currency fluctuations; • Our ability to identify attractive acquisition opportunities; and • Our ability to successfully integrate acquisitions. 39 Table of Contents Results of Operations Summary The table and discussion set forth below relates to our consolidated results of continuing operations for the years ended: (in thousands) For the years ended December 31, 2025 2024 % Change Consolidated Results of Operations Data: Net sales Zig-Zag products $ 178,478 $ 192,394 -7.2 % Stoker’s products 284,584 168,266 69.1 % Total net sales 463,062 360,660 28.4 % Cost of sales 198,748 159,095 24.9 % Gross profit Zig-Zag products 95,901 106,585 -10.0 % Stoker’s products 168,413 94,980 77.3 % Total gross profit 264,314 201,565 31.1 % Selling, general, and administrative expenses 168,987 122,407 38.1 % Other operating income - (1,674 ) -100.0 % Operating income Zig-Zag products $ 58,941 $ 66,697 -11.6 % Stoker's products 109,105 68,272 59.8 % Total segment operating income $ 168,046 $ 134,969 24.5 % Corporate unallocated (72,719 ) (54,137 ) 34.3 % Total operating income $ 95,327 $ 80,832 17.9 % Other income (6,616 ) - 100.0 % Interest expense, net 17,466 13,983 24.9 % Investment (gain) loss (1,060 ) 1,968 -153.9 % (Income) losses from equity method investment 1,159 (75 ) -1645.3 % Loss on extinguishment of debt 1,235 - 100.0 % Income from continuing operations before income taxes 83,143 64,956 28.0 % Income tax expense 14,991 16,929 -11.4 % Consolidated net income from continuing operations 68,152 48,027 41.9 % Net income attributable to non-controlling interest 9,987 701 1324.7 % Net income from continuing operations attributable to Turning Point Brands, Inc. $ 58,165 $ 47,326 22.9 % Comparison of Year Ended December 31, 2025, to Year Ended December 31, 2024 Net Sales: For the year ended December 31, 2025, consolidated net sales increased $102.4 million, or 28.4%, compared to the prior year period, primarily driven by an increase in net sales in the Stoker's segment mainly relating to modern oral growth. For the year ended December 31, 2025, net sales in the Zig-Zag products segment decreased $13.9 million, or 7.2%, compared to the prior year period. The decrease in net sales was driven primarily by $15.2 million decline in U.S. papers, wraps, as well as $1.7 million decline in cigars, which was anticipated with expected opportunity costs associated with our focus on oral expansion. This decline was partially offset by $2.9 million of growth in our Canadian business. For the year ended December 31, 2025, net sales in the Stoker’s products segment increased $116.3 million, or 69.1%, compared to the prior year period. The increase in net sales was driven primarily by $107.7 million of growth in modern oral products while the remaining growth is attributable to MST and loose-leaf chewing tobacco. Gross Profit: For the year ended December 31, 2025, consolidated gross profit increased $62.7 million, or 31.1%, compared to the prior year period. Gross profit as a percentage of net sales increased to 57.1% of net sales for the year ended December 31, 2025, from 55.9% of net sales for the year ended December 31, 2024. The overall increase in gross profit margin was driven primarily by improved margin contribution from modern oral products and MST in the Stoker’s products segment. For the year ended December 31, 2025, gross profit in the Zig-Zag products segment decreased $10.7 million, or 10.0%, compared to the prior year period. Gross profit as a percentage of net sales decreased to 53.7% of net sales for the year ended December 31, 2025, from 55.4% of net sales for the year ended December 31, 2024, driven primarily by Zig-Zag cigar wraps margins due to imposed tariffs and a shift in product mix with an increase in products with lower margins in the segment. For the year ended December 31, 2025, gross profit in the Stoker’s products segment increased $73.4 million, or 77.3%, compared to the prior year period. Gross profit as a percentage of net sales increased to 59.2% of net sales for the year ended December 31, 2025 from 56.4% of net sales for the year ended December 31, 2024, driven primarily by the growth in net sales of modern oral products generating higher margin contributions than the previous year. Selling, General and Administrative Expenses: For the year ended December 31, 2025, selling, general and administrative expenses increased $46.6 million, or 38.1%, compared to the prior year period primarily due to increased shipping and selling costs related to the increase in modern oral sales in the period compared to prior period. Selling, general and administrative expenses for the year ended December 31, 2025, included $6.9 million of stock options, restricted stock and incentives expense, $1.2 million of expense related to corporate restructuring, $4.8 million of expense related to PMTA, a $0.8 million increase in non-recurring outbound freight costs related to our ERP transition, $0.9 million of legal expenses incurred in connection with litigation related to an insurance claim for the tobacco damaged in a tornado, $2.0 million related to transaction costs and $0.2 million of expense related to the implementation of the new ERP and CRM systems. Selling, general and administrative expenses for the year ended December 31, 2024, included $7.2 million of stock options, restricted stock and incentives expense, $4.6 million of expense related to corporate restructuring, $3.6 million of expense related to PMTA, $2.1 million related to transaction costs and $0.9 million of expense related to the implementation of the new ERP and CRM systems.  Other Operating Income:  For the year ended December 31, 2025, other operating income decreased $1.7 million compared to the prior year period due to a federal excise tax refund of $1.7 million received in 2024. 40 Table of Contents Operating Income: For the year ended December 31, 2025, consolidated operating income increased $14.5 million, or 17.9%, compared to the prior year period. Operating income as a percentage of net sales decreased to 20.6% of net sales for the year ended December 31, 2025 from 22.4% of net sales for the year ended December 31, 2024, primarily due to an increase in unallocated corporate expenses. For the year ended December 31, 2025, operating income in the Zig-Zag products segment decreased $7.8 million, or 11.6%, compared to the prior year period. Operating income as a percentage of net sales decreased to 33.0% of net sales for the year ended December 31, 2025 from 34.7% of net sales for the year ended December 31, 2024, primarily due to a federal excise tax refund of $1.7 million received in 2024 which increased operating income which did not recur in 2025. For the year ended December 31, 2025, operating income in the Stoker’s products segment increased $40.8 million, or 59.8%, compared to the prior year period. Operating income as a percentage of net sales decreased to 38.3% of net sales for the year December 31, 2025 from 40.6% of net sales for the year ended December 31, 2024, primarily from increased sales and marketing expenses for the segment relating to modern oral growth. Included in consolidated operating income are costs of the Company which are not assigned to one of the two reportable segments and includes: (i) corporate overhead expense, including executive management, finance, legal and information technology salaries and professional services, such as audit, external legal costs and information technology services; as well as (ii) costs related to the FDA premarket tobacco product application.  For the year ended December 31, 2025, unallocated costs were $72.7 million compared to $54.1 million in the prior year period, an increase of $18.6 million or 34.3%, primarily driven by joint venture related expenses. Other Income: For the year ended December 31, 2025, other income was $6.6 million stemming from a $5.5 million employee retention credit refund received and $1.8 million received for management fees in the current year. We recognized no other income in 2024.  Interest Expense, net: For the year ended December 31, 2025, interest expense, net increased $3.5 million compared to the prior year period as a result of the issuance of the 2032 Notes in February 2025 which bear interest at a higher rate and have a higher outstanding principal amount than the 2026 Notes which were repaid with proceeds from the issuance of the 2032 Notes partially offset by interest income generated by the employee retention credit received in the current year. (Income) Losses from Equity Method Investment: For the year ended December 31, 2025, (income) losses from investments in equity method investments decreased $1.2 million compared to the prior year period as a result of a $5.5 million loss from GWO partially offset by $4.2 million of net income from its distribution business.  Investment (Income) Loss: For the year ended December 31, 2025, investment (income) loss increased to $1.1 million income compared to $2.0 million loss for the year ended December 31, 2024. The change is primarily the result of impairment charges recognized on our investment in Old Pal for $0.9 million for the year ended December 31, 2025 that were offset by gains on marketable available-for-sale securities of $1.4 million, compared to impairment charges recognized on our investments in Bomani for $1.8 million and Old Pal for $0.8 million for the year ended December 31, 2024. Loss on Extinguishment of Debt: For the year ended December 31, 2025, loss on extinguishment of debt was $1.2 million as a result of the redemption of the 2026 Notes in February 2025. We had no loss on extinguishment of debt in 2024. Income Tax Expense: The Company’s income tax expense was $15.0 million, or 18.0% of income from continuing operations before income taxes for the year ended December 31, 2025. The Company's income tax expense was $16.9 million, or 26.1% of income from continuing operations before income taxes for the year ended December 31, 2024. The decrease in tax rate compared to the prior year is due to the inclusion of permanent tax differences related to the Company's restricted stock units that were issued and stock options that were exercised in the year ended December 31, 2025.  Net Income Attributable to Non-Controlling Interest: Net income attributable to non-controlling interest was $10.0 million for the year ended December 31, 2025, compared to a net loss of $0.7 million for the year ended December 31, 2024. The increase in income from non-controlling interest compared to the prior year period is due to the consolidation of a joint venture starting in December 2024. Net Income from Continuing Operations Attributable to Turning Point Brands, Inc.: Due to the factors described above, net income from continuing operations attributable to Turning Point Brands, Inc. for the years ended December 31, 2025 and 2024, was $58.2 million and $47.3 million, respectively. Comparison of Year Ended December 31, 2024, to Year Ended December 31, 2023 For a discussion of the comparison of the year ended December 31, 2024 to the year ended December 31, 2023, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Loss from Discontinued Operations, net of tax On January 2, 2025, the Company contributed 100% of its interest in SBB, the subsidiary that owned and operated the Company’s CDS segment, to GWO in exchange for 49% of the issued and outstanding GWO common stock on a fully-diluted basis. GWO is majority owned by Standard General, LP.  The assets and liabilities associated with the CDS business were classified as held for sale as of December 31, 2024, and its financial results are classified as discontinued operations and reported separately for all periods presented herein. Upon meeting the criteria for held for sale classification, the Company recorded a non-cash charge of $8.8 million with an equivalent valuation allowance against net assets held for sale to reduce the carrying value of the disposal group to fair value. Loss from discontinued operations, net of tax for the years ended December 31 are as follows:  (in thousands) For the years ended December 31, 2025 2024 Loss from discontinued operations, net of tax $ - $ (7,517 ) Comparison of Year Ended December 31, 2025, to Year Ended December 31, 2024 For the year ended December 31, 2025, net loss from discontinued operations was $0, compared to a loss of $7.5 million for the year ended December 31, 2024. This prior year loss related to operations that were classified as discontinued in 2024 and no such activity occurred in 2025. Comparison of Year Ended December 31, 2024, to Year Ended December 31, 2023 For a discussion of the comparison of the year ended December 31, 2024 to the year ended December 31, 2023, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 41 Table of Contents EBITDA and Adjusted EBITDA To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures including EBITDA and Adjusted EBITDA. We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA is used by management to compare our performance to that of prior periods for trend analyses and planning purposes and is presented to our Board of Directors. We believe that EBITDA and Adjusted EBITDA are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to operating performance. In addition, our debt instruments contain covenants which use Adjusted EBITDA calculations. We define “EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, and amortization. We define “Adjusted EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items, and other items we do not consider the ordinary course in our evaluation of ongoing operating performance noted in the reconciliation below. Among other items that we adjust Adjusted EBITDA for is FDA PMTA expense. The Company believes it is appropriate to adjust for this spend as the costs are incurred in connection with what it views as a non-traditional regulatory process that requires applications be submitted for covered products that are already on the market. As a result, Company’s management believes it is most appropriate to assess the performance of the Company’s business – the sale of its various products - without regard to these costs and believes that adjusting for these costs provides investors and the public markets with the most meaningful metrics to assess performance of the business. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. Adjusted EBITDA excludes significant expenses required to be recorded in our financial statements by U.S. GAAP and is subject to inherent limitations. Other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure. The tables below provide reconciliations between net income and Adjusted EBITDA. (in thousands) Years ended December 31, 2025 2024 2023 Net income attributable to Turning Point Brands, Inc. $ 58,165 $ 39,809 $ 38,462 Loss from discontinued operations, net of tax - 7,517 285 Add: Interest expense, net 17,767 13,983 14,645 Loss (Gain) on extinguishment of debt 1,235 - (1,664 ) Income tax expense 15,456 16,929 23,999 Depreciation expense 3,298 3,329 2,780 Amortization expense 4,225 2,333 1,338 EBITDA $ 100,146 $ 83,900 $ 79,845 Components of Adjusted EBITDA Corporate restructuring (a) 1,260 4,634 199 ERP/CRM implementation (b) 211 993 552 Stock based compensation (c) 6,974 7,243 6,561 Transactional expenses and strategic initiatives (d) 2,004 2,107 165 Non-recurring freight (e) 837 - - Non-recurring legal (f) 941 - - FDA PMTA (g) 4,816 3,592 2,098 Mark-to-market gain on Canadian inter-company note (h) (513 ) 942 - Non-cash asset impairment (i) 6,738 2,722 12,177 Gain on investment (j) (1,392 ) - - ERC refund (k) (5,451 ) - - Honorarium (l) 318 - - Manufacturing start-up costs (m) 642 - - Tariff adjustment (n) 1,991 - - FET refund (o) - (1,674 ) (4,345 ) Legal settlement (p) - - (4,000 ) Adjusted EBITDA $ 119,522 $ 104,459 $ 93,252 (a) Represents costs associated with corporate restructuring, including severance and early retirement. (b) Represents cost associated with scoping and mobilization of new ERP and CRM systems and temporary cost of duplicative ERP licenses. (c) Represents non-cash stock options, restricted stock, PSRUs, etc. (d) Represents fees incurred for transaction expenses. (e) Represents elevated non-recurring outbound freight costs due to ERP transition.  (f) Represents legal expenses incurred in connection with litigation related to an insurance claim. (g) Represents costs associated with applications related to FDA premarket tobacco production application ("PMTA").The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a onetime resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the pending two are complete. (h) Represents a mark to market loss attributable to foreign exchange fluctuation. (i) Represents impairment of goodwill, intangible and investment assets. (j) Represents gain on investments. (k) Represents an employee retention credit refund received which is included in other income, net. (l) Represents an honorarium gift included in other income, net. (m) Represents non-recurring expenses incurred during the start-up of manufacturing lines.  (n) Represents adjustment to costs of goods sold to reflect prevailing tariff rates. (o) Represents a federal excise tax refund included in other operating income. (p) Represents other income from litigation settlement. 42 Table of Contents Liquidity and Capital Resources Our principal uses for cash are working capital, debt service and capital expenditures and other growth initiatives. As of December 31, 2025, we had $222.8 million cash on hand and as of December 31, 2024 we had $46.2 million (excluding CDS segment cash of $2.8 million). As of December 31, 2025, we had up to $65.8 million of availability under the 2023 ABL Facility. After giving effect to the issuance of the 2032 Notes and redemption of the 2026 Notes in February 2025, our cash on hand would have been $90.2 million as of December 31, 2024, and borrowing availability under the ABL would have remained the same. We have no borrowings outstanding under our ABL as of December 31, 2025. Our Convertible Senior Notes matured on July 15, 2024, and were retired with cash. Our adjusted working capital which we define as current assets less cash and current liabilities, increased $21.6 million compared to the prior year end. This amount excludes CDS segment assets and liabilities held for sale in 2024.  As of (in thousands) December 31, December 31, 2025 2024 Current assets $ 194,390 $ 140,577 Current liabilities 75,007 42,771 Adjusted working capital $ 119,383 $ 97,806 The increase in adjusted working capital is primarily a result of increased other current assets from inventory deposits relating to growth. For the years ended December 31, 2025 and 2024, we invested $13.5 million and $4.6 million, respectively, in capital expenditures. We had restricted assets of $29.9 million and $28.7 million as of December 31, 2025 and 2024, respectively. Restricted assets consist of escrow deposits under the MSA and insurance deposits. On the 25th anniversary of each annual deposit, we are entitled to receive reimbursement of the principal amount of escrow remaining for that year. See “Master Settlement Agreement” below for details. Cash Flows from Continuing Operations  Our cash flows from continuing operations as reflected in the Consolidated Statements of Cash Flows are summarized as follows: (in thousands) For the years ended December 31, 2025 2024 Cash provided by (used in) Operating activities $ 57,374 $ 60,958 Investing activities $ (31,671 ) $ (10,509 ) Financing activities $ 148,274 $ (128,284 ) Cash Flows from Operating Activities For the year ended December 31, 2025, net cash provided by operating activities was $57.4 million, a decrease of $3.6 million compared to the prior year period. The decrease is primarily due to unfavorable changes of $27.9 million in working capital partially offset by an increase of $27.6 million in net income, net of non-cash items of $5.8 million. The primary drivers of non-cash items were $8.4 million increase in deferred tax expenses. $1.7 million increase in depreciation and amortization and $1.2 million increase in losses from equity method investments, partially offset by $1.2 million increase in noncash lease income and $3.2 million decrease in loss on investments.  Cash Flows from Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $31.7 million, an increase of $21.2 million compared to 2024, primarily due to $13.5 million in capital expenditures, including to build U.S. manufacturing for our modern oral brands, the net purchases of an additional $7.4 million in investments by our captive insurance subsidiary, the purchases of non-marketable equity securities of $2.8 million, and $8.0 million paid by TPB Canada for the option to purchase the distribution business. 43 Table of Contents Cash Flows from Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $148.3 million, an increase of $276.6 million compared to the prior year period, primarily due to a net increase in cash of $42.8 million related to the February 2025 issuance of the 2032 Notes, an increase of $11.0 million from Interchange subscription agreement proceeds, $97.5 million increase related to ATM Program proceeds, and $2.2 million related to stock compensation activity, as well as $5.1 million of common stock repurchases in the prior year period that did not repeat in 2025. Long-Term Debt Notes payable and long-term debt consisted of the following at December 31, 2025 and 2024, in order of preference: December 31, December 31, 2025 2024 2032 Notes $ 300,000 $ - 2026 Notes - 250,000 Gross notes payable and long-term debt 300,000 250,000 Less deferred financing costs (6,375 ) (1,396 ) Notes payable and long-term debt $ 293,625 $ 248,604 2032 Notes On February 19, 2025, we entered into an indenture relating to the issuance and sale of $300.0 million aggregate principal amount of its 7.625% Senior Secured Notes due 2032 (the “2032 Notes”), by and among the Company, the guarantors party thereto and GLAS Trust Company LLC, as trustee and notes collateral agent. The 2032 Notes incur interest at a rate of 7.625%, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2025. Proceeds from the offering were approximately $293.0 million and were used to redeem the 2026 Notes and for general corporate purposes The 2032 Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by certain existing and future wholly-owned domestic restricted subsidiary of the Company (collectively, the “Guarantors” as defined in the indenture governing the 2032 Notes or the “2032 Notes Indenture”). The 2032 Notes and the related guarantees are secured by first-priority liens on substantially all of the existing and future assets of the Company and the Guarantors that do not secure the 2023 ABL Facility (as defined below), subject to certain exceptions. The 2032 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 several limitations and exceptions set forth in the 2032 Notes Indenture. For instance, the Company is generally permitted to make restricted payments, including the payment of dividends to shareholders, provided that, at the time of payment, or as a result of payment, the Company is not in default on its covenants; however, there are earnings and market capitalization requirements that if not met could limit the aggregate amount of quarterly dividends payable during a fiscal year. The 2032 Notes Indenture provides for customary events of default. We incurred debt issuance costs attributable to the 2032 Notes of $7.3 million which are amortized to interest expense using the straight-line method over the expected life of the 2032 Notes. 2026 Notes  On February 11, 2021, we closed a private offering of $250.0 million aggregate principal amount of our 5.625% senior secured notes due 2026 (the “2026 Notes”). The 2026 Notes incurred interest at a rate of 5.625%. Interest on the 2026 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2021.We 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. On February 20, 2025 (the “Redemption Date”), we used a portion of the proceeds from the issuance and sale of the 2032 Notes to redeem all $250.0 million of its outstanding 2026 Notes at a redemption price equal to 100% of the aggregate principal amount of the 2026 Notes, plus accrued and unpaid interest thereon to, but excluding the Redemption Date. Upon redemption of the 2026 Notes, the indenture governing the 2026 Notes was satisfied and discharged in accordance with its terms. We incurred debt issuance costs attributable to the issuance of the 2026 Notes of $6.4 million, with the remaining $1.2 million written off to loss on debt extinguishment upon termination. 44 Table of Contents 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, certain existing inventory was contributed 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. Applicable Margin Applicable Margin Level Historical Excess Availability for SOFR Loans or 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 is 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 with the $9.4 million level automatically increased in proportion to the amount of any increase in the aggregate revolving credit commitments thereunder in connection with any accordion facility. 45 Table of Contents The 2023 ABL Facility will 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) will 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. We have not drawn any borrowings under the 2023 ABL Facility but has letters of credit of approximately $2.3 million outstanding under the facility and has an available balance of $65.8 million based on the borrowing base as of December 31, 2025. We 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. Additional Information with Respect to our Unrestricted Subsidiaries Under the terms of the 2032 Notes, the Company designated certain of its subsidiaries as “Unrestricted Subsidiaries”, including Interchange Partners LLC and Intrepid Brands, LLC. The Company is required under the terms of the indenture governing the 2032 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 for 2025 is presented below.  Income Statement for the year ended December 31, 2025: Year Ended December 31, 2025 Company and Restricted Unrestricted Subsidiaries Subsidiaries Consolidated Net sales $ 384,455 $ 78,607 $ 463,062 Cost of sales 167,411 31,337 198,748 Gross profit 217,044 47,270 264,314 Selling, general, and administrative expenses 140,562 28,425 168,987 Operating income 76,482 18,845 95,327 Other income, net (6,249 ) (367 ) (6,616 ) Interest expense, net 18,480 (1,014 ) 17,466 Investment (gain) loss (382 ) (678 ) (1,060 ) (Income) losses from equity method investment 1,268 (109 ) 1,159 Loss on extinguishment of debt 1,235 - 1,235 Income before income taxes 62,497 20,646 83,143 Income tax expense 14,991 - 14,991 Consolidated net income 47,506 20,646 68,152 Net income attributable to non-controlling interest 759 9,228 9,987 Net income attributable to Turning Point Brands, Inc. $ 46,747 $ 11,418 $ 58,165 46 Table of Contents Balance Sheet as of December 31, 2025: Company and Restricted Unrestricted Subsidiaries Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash $ 179,344 $ 43,416 $ - $ 222,760 Accounts receivable, net 23,335 2,391 - 25,726 Inventories, net 103,408 4,581 - 107,989 Other current assets 55,515 5,160 - 60,675 Total current assets 361,602 55,548 - 417,150 Property, plant, and equipment, net 36,107 140 - 36,247 Right of use assets 14,480 - - 14,480 Deferred financing costs, net 1,180 - - 1,180 Goodwill 136,097 - - 136,097 Other intangible assets, net 64,042 - - 64,042 Master Settlement Agreement (MSA) escrow deposits 29,887 - - 29,887 Other assets 48,810 15,857 - 64,667 Investment in unrestricted subsidiaries - 11,069 (11,069 ) - Total assets $ 692,205 $ 82,614 $ (11,069 ) $ 763,750 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 11,857 $ 8,563 $ - $ 20,420 Accrued liabilities 10,651 43,936 - 54,587 Total current liabilities 22,508 52,499 - 75,007 Deferred income tax liabilities, net 8,289 - - 8,289 Notes payable and long-term debt 293,625 - - 293,625 Other long-term liabilties 4,138 4,138 Lease liabilities 10,708 - - 10,708 Total liabilities $ 339,268 $ 52,499 $ - $ 391,767 Commitments and contingencies Stockholders’ equity: Total Turning Point Brands Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries 351,576 13,797 (11,069 ) 354,304 Non-controlling interest 1,361 16,318 - 17,679 Total stockholders’ equity 352,937 30,115 (11,069 ) 371,983 Total liabilities and stockholders’ equity $ 692,205 $ 82,614 $ (11,069 ) $ 763,750 Distribution Agreements For a description of our material distribution agreements, see Item 1. “Business - Distribution and Supply Agreements.” 47 Table of Contents Master Settlement Agreement On November 23, 1998, the major U.S. cigarette manufacturers, Philip Morris USA, Inc., Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company and R.J. Reynolds Tobacco Company, entered into the MSA with attorneys general representing states that agreed to settle certain recovery actions (the “Settling States”). In order to be in compliance with the MSA and subsequent states’ statutes, we were required to fund an escrow account with each of the Settling States based on the number of cigarettes or cigarette equivalents (which is measured by pounds of MYO cigarette smoking tobacco) sold in such state. We discontinued our generic category of MYO in 2019 and our Zig-Zag branded MYO cigarette smoking tobacco in 2017. Pending a change in MSA legislation, we have no remaining product lines covered by the MSA and will not be required to make future escrow deposits and, therefore, do not expect to accrue any loss contingencies subject to the MSA in the future.  The following table summarizes our escrow deposit balances (in thousands) by sales year as of: Deposits as of December 31, Sales Year 2025 2024 1999 $ 130 $ 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 $ 31,992 $ 32,073 Off-Balance Sheet Arrangements At December 31, 2025, we had no foreign currency contracts outstanding. During 2024, we executed various foreign exchange contracts for the purchase and sale of €3.6 million. At December 31, 2024, we had foreign currency contracts outstanding for the purchase and sale of €2.1 million. The fair value of the foreign currency contracts were based on quoted market prices and resulted in an asset of $0.0 million included in Other current assets and a liability of $0.1 million included in Accrued liabilities at December 31, 2024. Future Cash Requirements The Company’s primary future cash requirements will be to fund operations, lease payments, debt service and capital expenditures. The Company’s contractual obligations primarily include long-term debt and lease obligations. For information regarding our long-term debt obligations and cash payment obligations thereunder, please see above and Note 14, “Notes Payable and Long-Term Debt” in Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. For information regarding our lease obligations and cash payment obligations thereunder, please see Note 17, “Lease Commitments” in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. In 2025, we made no repurchases of our common stock. In 2024, we repurchased 154,945 shares of our common stock for a total cost of $5.1 million at an average price per share of $32.60, and have $200 million of authorization remaining under our Board approved repurchase program at December 31, 2025.  48 Table of Contents Regulation and Legislation While we are subject to several regulatory regimes and requirements, the following may meaningfully impact operations or resources: Federal Regulation Certain tobacco and nicotine products, cigarette papers, and cigarette tubes are subject to federal excise taxes. Any future increases in federal excise taxes on the Company’s products could have a material adverse effect on the results of operations or financial condition of the Company. The Company is unable to predict the likelihood of future increases in federal excise taxes. As of December 31, 2025, federal excise taxes are not assessed on certain novel nicotine products, including nicotine pouches, e-cigarettes and related products. Changes to these requirements could affect our results of operations. State and Local Regulation As of December 31, 2025, the states require excise tax payments on most of our products. These required taxes may increase over time or be expanded to cover additional product categories and may in some cases impact the consumer demand of the products. In addition, there are several local taxing jurisdictions requiring taxes and/or licensing. Several states have also implemented or are considering implementing additional regulations on our products, including sales restrictions. These requirements may impact which products we are allowed to offer for sale or may influence retailers’ likelihood of carrying regulated products more generally. FDA Regulation On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the FDA to immediately regulate the manufacture, sale, and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to also regulate all products made or derived from tobacco intended for human consumption, but excluding accessories of tobacco products (such as lighters). Accordingly, the FDA has since regulated our cigar and cigar wrap products.  Subsequently, on April 14, 2022, the FDA Center for Tobacco Products also obtained jurisdiction over non-tobacco nicotine products (“NTN Products”), including synthetic nicotine. That law subjects NTN Products to the same requirements as tobacco-derived products. The FDA currently assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP,” also known as the “Tobacco Buyout”) assessment. First, the total, annual, congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers. Tobacco products regulated by FDA are subject to premarket filing requirements, most significantly Premarket Tobacco Product Applications (“PMTAs”) or Substantial Equivalence Reports (“SEs”). A successful PMTA must demonstrate that the subject product is “appropriate for the protection of public health,” taking into account the effect of the marketing of the product on all sub-populations while a Substantial Equivalence Report must demonstrate that a new product either has the same characteristics as its predicate product or different characteristics but does not raise different questions of public health. We submitted premarket filings for certain of our regulated products in order to continue selling these products while they remain under review. We have continued to supplement these applications with additional information and have responded to information requests from the FDA; however, there can be no guarantee that the FDA will accept such amendments and responses or that the applications will meet the standard of “appropriate for the protection of public health” or “substantially equivalent,” as appropriate. FDA’s interpretation and implementation of these standards likewise may change over time, which may negatively impact our existing or future premarket filings. Currently, the FDA has indicated its enforcement priority is those applicants who have received negative action on their application, such as a Marketing Denial Order or Refuse to File notification and who continue to illegally sell those unauthorized products, as well as products for which manufacturers failed to submit a premarket filing. Despite these stated enforcement priorities, given the FDA’s limited resources we expect that for a period of time there may be a lack of enforcement, which may adversely impact our ability to compete in the marketplace against those who continue to sell unauthorized products. This issue could grow worse should the federal government decrease the size of certain agencies or resources, including the U.S. Department of Justice or U.S. Customs and Border Protection. 49 Table of Contents On May 4, 2022, the FDA proposed two tobacco product standards related to combusted tobacco products: (1) a ban on menthol as a characterizing flavor in cigarettes; and (2) a ban on all characterizing flavors (including menthol) in cigars. On June 21, 2022, the FDA also issued a proposed product standard related to restricting the level of nicotine in traditional cigarettes. On March 8, 2023, the FDA proposed requirements for tobacco product manufacturing practice (“TPMPs”). Once finalized, TPMPs would establish requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of finished and bulk tobacco products. These regulations are required to go through the formal rulemaking process where we have had the opportunity to provide comments with regard to the impact such standards would have on our products. As of February 2025, these proposed rules were withdrawn or otherwise delayed. The FDA’s policy on these and other regulated products may change or expand over time in ways not yet known and may significantly impact our products or our premarket filings. Inflation Inflation in general and the continued increases in costs of goods and services, such as food and gas prices, have had a substantial negative effect on the purchasing power of consumers. While historically, we have been able to pass on most cost increases to our consumers, no assurance can be given that we will continue to be able to do so. In addition, we have been able to maintain a relatively stable variable cost structure for our products due, in part, to our successful procurement with regard to our tobacco products and, in part, to our existing contractual agreement for the purchase of our premium cigarette papers. Recent Accounting Pronouncements See Item 8 of Part II, “Financial Statements and Supplementary Data - Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements”. Critical Accounting Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. When more than one accounting principle, or the method of its application, is generally accepted, we select the principle or method that is appropriate in the specific circumstances. Application of these accounting principles requires us to make estimates about the future resolution of existing uncertainties. Actual results could differ from these estimates. We evaluate our estimates, including those related to intangibles, investments in debt security and the fair value of the Creative Distribution Solutions segment on an ongoing basis. We base these estimates on our historical experience and other assumptions we believe are appropriate under the circumstances. In preparing these consolidated financial statements, we have made our best estimates and judgments of the amounts and disclosures included in the consolidated financial statements. Our significant accounting policies are discussed in Note 2 of the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. Indefinite-lived Intangible Assets We follow the provisions of ASC 350, Intangibles – Goodwill and Other in accounting for indefinite-lived intangible assets. Indefinite-lived intangible assets are tested for impairment annually on December 31, or more frequently if certain indicators are present, in accordance with ASC 350-20-35 and ASC 350-30-35, respectively. Examples of such indicators could include but are not limited to a significant loss of market share, significant decline in operating results, change in management strategy or operations, economic decline, and other significant disruptions to the business. We estimate the fair value of our indefinite-lived assets using the relief from royalty valuation methodology. This methodology is based on what the Company would be willing to pay as a royalty in order to exploit the related benefits of the asset. The value of the asset is determined by discounting the inherent after-tax royalty savings associated with ownership or possession of the asset over the expected useful life. In 2024, based on quantitative assessments, the fair values of our Zig-Zag and Stokers’ indefinite-lived intangible assets exceeded their carrying values by a significant amount. We identified the estimate of the fair value of the Company’s indefinite lived assets as a critical estimate because of the significant assumptions used in these analyses including, but are not limited to, projected revenue, the weighted average cost of capital and royalty rate. We used modest growth rates in projecting the revenue related to these indefinite-lived intangible assets. As we do for each impairment assessment, for our future impairment assessments we will evaluate the reasonableness and relevance of our previous performance assumptions, considering both internal and external factors existing at the impairment test date, to determine if changes to those performance assumptions are warranted.   If actual results are not consistent with the Company’s estimates and/or other assumptions change, the Company may be exposed to future impairment charges that could materially and adversely impact its financial position and results of operations. 50 Table of Contents