Turning Point Brands Inc (TPB) 2024 Q3 法說會逐字稿

Good day, and welcome to the Turning Point Brands third quarter 2024 conference call. (Operator Instructions) And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Andrew Flynn, CFO, to begin the conference. Andrew, over to you.

美好的一天，歡迎參加轉折點品牌 2024 年第三季電話會議。（操作員說明）最後，我想告知所有參與者，本次通話正在錄音。謝謝。現在我歡迎財務長安德魯弗林 (Andrew Flynn) 開始會議。安德魯，交給你了。

Good morning, everyone. A short while ago, we issued a press release covering our Q3 results. This release is located in the IR section of our website at www.turningpointbrands.com. During this call, we will discuss our consolidated and segment operating results and provide perspective on the operating environment and progress against our strategic plan. As is customary, I direct your attention to the discussion of forward-looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission.

大家早安。不久前，我們發布了一份有關第三季業績的新聞稿。此新聞稿位於我們網站 www.turningpointbrands.com 的 IR 部分。在這次電話會議中，我們將討論我們的合併和分部經營業績，並根據我們的策略計劃提供對經營環境和進展的看法。按照慣例，我請您注意今天新聞稿中前瞻性和警示性聲明的討論以及我們向美國證券交易委員會提交的文件中的風險因素。

On the call today, we will reference certain non-GAAP financial measures. These measures and reconciliations to GAAP are in today's earnings release, along with reasons why management believes they provide useful information. I will now turn the call over to our CEO, Graham Purdy.

在今天的電話會議上，我們將參考某些非公認會計準則財務指標。這些措施和對公認會計準則的調整已包含在今天的收益報告中，並附有管理層認為它們提供有用資訊的原因。我現在將把電話轉給我們的執行長格雷厄姆·珀迪。

Thanks, Andrew. Good morning, everyone, and thank you for joining our call. Our consolidated third quarter results were better than expected and demonstrated continued progress against our plan. Adjusted EBITDA increased 11% to $27.2 million for the quarter. Ex CDS, EBITDA increased 12% to $26.9 million. Given strong performance across our business lines, we are increasing our guidance for full year 2024 adjusted EBITDA to $101 million to $103 million versus our prior guidance of $98 million to $102 million.

謝謝，安德魯。大家早安，感謝您加入我們的通話。我們的第三季綜合業績優於預期，並表明我們的計劃持續取得進展。本季調整後 EBITDA 成長 11%，達到 2,720 萬美元。扣除 CDS 後，EBITDA 成長 12%，達到 2,690 萬美元。鑑於我們各業務線的強勁表現，我們將 2024 年全年調整後 EBITDA 的指導上調至 1.01 億至 1.03 億美元，而先前的指引為 9,800 萬至 1.02 億美元。

Neither of these ranges include contributions from CDS. During the September quarter, Zig-Zag performed well with revenue up 6% to $49.3 million, driven by growth in all our subsegments except for one, and we experienced another strong showing from our cigar business, which we've leaned into more heavily in 2024. We continue to be excited about this business going forward.

這些範圍都不包括 CDS 的貢獻。在9 月的季度中，Zig-Zag 表現良好，收入成長6%，達到4,930 萬美元，這得益於我們除一個細分市場之外的所有細分市場的成長，我們的雪茄業務再次表現強勁，我們在雪茄業務上更重視這項業務。我們對這項業務的未來繼續感到興奮。

The loan segment that declined was the lighter category. Due to weaker-than-expected performance, we are assessing the go-forward strategy for this product line. We saw growth in Zig-Zag across our distribution channels, including a solid quarter within alternative channel, which experienced low double-digit growth both sequentially and year-to-date versus a year ago.

下降的貸款部分是較輕的類別。由於業績低於預期，我們正在評估該產品線的前進策略。我們看到整個分銷管道的鋸齒形增長，包括替代渠道內一個穩定的季度，與一年前相比，該渠道的環比和年初至今都經歷了兩位數的低增長。

We remain bullish on the continued emergence of this channel, which provides us an opportunity for us to leverage our diverse SKU portfolio to offer these customers a one-stop shop for all their accessory needs. As the category continues to grow and gain mainstream acceptance, we expect to see continued convergence of distribution channels as traditional C-store distributors that we've done business with for decades increasingly target the alt market.

我們仍然看好這個管道的持續出現，這為我們提供了一個機會，利用我們多樣化的 SKU 產品組合，為這些客戶提供滿足其所有配件需求的一站式商店。隨著該類別的不斷增長並獲得主流接受，我們預計分銷管道將持續融合，因為與我們合作了數十年的傳統便利商店分銷商越來越多地瞄準另類市場。

At the same time, we've successfully onboarded new distributors and manufacturers who have emerged to specifically serve this market. They want to work with us because our deep diversified portfolio, strong brands and reputation as a reliable partner. Nearly 75% of all Americans now live in a legal medical or adult-use state. This secular tailwind should continue to benefit picks and shovels businesses like TPB with must-carry brands like Zig-Zag. Moving to Stoker's.

同時，我們成功地招募了專門服務這個市場的新經銷商和製造商。他們希望與我們合作，因為我們擁有深度多元化的產品組合、強大的品牌以及作為可靠合作夥伴的聲譽。近 75% 的美國人現在生活在合法醫療或成人使用的州。這種長期順風應該會繼續有利於TPB等擁有Zig-Zag等必備品牌的精選和鏟運企業。搬到斯托克家。

During the quarter, Stoker's revenue increased 12% to $41.4 million, reflecting a 3% decline in loose leaf, a 3% increase in MST and a 342% increase in FRE sales off a low base to approximately $5 million for the quarter. FRE sales increased 26% sequentially, which is more than double the industry's 11% growth per MSAI and even greater growth in sell-through to our end consumers. Through our disciplined test-and-learn approach, we believe that we have a strong product market fit.

本季度，Stoker 的營收成長了 12%，達到 4,140 萬美元，反映出活頁銷量下降 3%，MST 成長 3%，FRE 銷售額成長 342%，較本季的低基數成長至約 500 萬美元。FRE 銷售額環比增長了 26%，比 MSAI 計算的行業 11% 增長高出一倍多，而且最終消費者的銷量增長甚至更大。透過我們嚴格的測試和學習方法，我們相信我們的產品具有強大的市場適應性。

Positive consumer feedback has consistently reinforced features in the brand's positioning, pouch size, flavor, mouth feel and range of nicotine strengths. This consumer feedback and growth in purchases, along with initial retail acceptance and reorders have convinced us to invest in expanding our chain footprint, which requires investment to secure competitive placement, execute our desired in-store look and feel and participate in loyalty and promotional programs. We are particularly pleased with FRE's performance given many distributors and retailers allocated capital to restocking the market leader, which experienced widespread out of stocks in the second quarter.

正向的消費者回饋不斷強化了品牌的定位、袋裝尺寸、口味、口感和尼古丁強度範圍等特質。消費者的回饋和購買量的成長，加上最初的零售接受度和重新訂購，說服我們投資擴大我們的連鎖店足跡，這需要投資來確保競爭地位，執行我們想要的店內外觀和感覺，並參與忠誠度和促銷計劃。我們對 FRE 的表現特別滿意，因為許多經銷商和零售商都分配資金來補充市場領導者的庫存，該市場領導者在第二季度經歷了廣泛的缺貨。

It is also worth noting that we initially launched FRE at 9 milligrams, 12 milligram and 15 milligram strength in order to offer a unique selling proposition. Due to overwhelmingly positive consumer feedback about the mouthfeel and flavor profile, we are expanding into 3 milligram and 6 milligram as well, which currently represents over 70% of the category volumes. We started with 6 milligram online in two of our four flavor styles and have just recently started selling limited quantities in select retailers.

另外值得注意的是，我們最初推出了 9 毫克、12 毫克和 15 毫克濃度的 FRE，以提供獨特的銷售主張。由於消費者對口感和風味特徵的正面回饋，我們也將業務擴展到 3 毫克和 6 毫克，目前佔該類別銷量的 70% 以上。我們的四種口味中的兩種口味從網上開始銷售 6 毫克，最近才開始在精選零售商中限量銷售。

We will be accelerating distribution of 6 milligram during Q4 and expect to launch 3 milligram in Q1 2025. As we've noted in previous quarters, this continues to be a large and rapidly growing category with a long runway for growth. Looking forward to 2025 planning, we are also working to enhance our commercial system and go-to-market strategy to maximize our success in this category.

我們將在第四季加快 6 毫克的銷售，並預計在 2025 年第一季推出 3 毫克。正如我們在前幾個季度所指出的，這仍然是一個龐大且快速成長的類別，並且有很長的成長空間。展望 2025 年規劃，我們也正在努力增強我們的商業系統和進入市場策略，以最大限度地提高我們在這一領域的成功。

With that, let me hand the call over to Summer to walk through some progress and results of some of our specific go-to-market initiatives.

接下來，讓我將電話轉交給薩默，介紹我們一些具體的市場推廣計畫的一些進展和結果。

Thank you, Graham. Throughout Q3, we continued to build upon Zig-Zag's iconic history while continuing our push toward ubiquity across all sales channels. As Graham noted, we are not only having success winning new untapped alternative customers but also increasing share with existing alt customers who are buying more of the Zig-Zag portfolio. We've seen healthy increases in average order sizes while expanding valuable shelf space and merchandising within these stores. In the quarter, we expanded our successful hemp wrap portfolio across all sales channels with four new offerings, which have been well received in the market.

謝謝你，格雷厄姆。在整個第三季度，我們繼續以 Zig-Zag 的標誌性歷史為基礎，同時繼續推動在所有銷售管道中的普及。正如格雷厄姆所指出的那樣，我們不僅成功贏得了新的未開發的另類客戶，而且還增加了與購買更多 Zig-Zag 投資組合的現有另類客戶的份額。我們看到平均訂單量健康成長，同時擴大了這些商店內寶貴的貨架空間和商品陳列。本季度，我們透過四種新產品將成功的大麻包裝產品組合擴展到所有銷售管道，這些產品在市場上廣受好評。

We also are in process of rolling out a new vibrant look of the Zig-Zag papers cartons. These vibrant orange cartons will create a consistent high-impact look that will increase visibility, thus making it easier to identify Zig-Zag rolling paper cartons on store shelves. For Q4 and beyond, we expect to continue introducing new products that build on this legacy while tapping into new innovation for today's evolving consumer.

我們也正在推出充滿活力的鋸齒形紙匣新外觀。這些充滿活力的橙色紙盒將營造出一致的高衝擊力外觀，從而提高可視性，從而更容易識別商店貨架上的鋸齒形捲紙紙盒。在第四季度及以後，我們預計將繼續推出基於此傳統的新產品，同時為當今不斷發展的消費者提供新的創新。

We continue to have a long runway in this channel as cannabis and related products become more mainstream, and we continue to solidify our position as a trusted high-value partner. For example, in legal dispensaries, now over 10,000 stores in 38 states, cannabis accessories currently represent a tiny fraction of sales, yet offer meaningful opportunities for both retailers and Zig-Zag.

隨著大麻和相關產品變得更加主流，我們在這個管道上繼續擁有很長的跑道，我們繼續鞏固我們作為值得信賴的高價值合作夥伴的地位。例如，在目前遍布 38 個州的 10,000 多家合法藥房中，大麻配件目前僅佔銷售額的一小部分，但為零售商和 Zig-Zag 提供了有意義的機會。

For Stoker's, we continue to be pleased with the brand's performance, which again posted over $40 million in revenue like we saw last quarter. We are focused on expanding distribution, especially with our tubs product and continue to see the brand's great fit at a fair price messaging resonate with today's consumer. Turning to FRE. After successfully expanding into the 6-milligram nicotine strength last quarter across D2C and select retail channels, we are encouraged by the initial incremental results. As these initiatives took place during the quarter, we didn't enjoy a full quarter's benefit.

對於 Stoker's，我們仍然對該品牌的業績感到滿意，該品牌的收入再次超過上季度的 4000 萬美元。我們專注於擴大分銷，特別是我們的浴缸產品，並繼續看到品牌以合理的價格傳達的完美貼合與當今消費者的共鳴。轉向 FRE。上個季度在 D2C 和精選零售通路成功擴展到 6 毫克尼古丁濃度後，我們對最初的增量結果感到鼓舞。由於這些措施是在本季實施的，因此我們沒有享受到整個季度的收益。

That being said, our D2C site continues to show consistent revenue increases, strong engagement and solid repeat customer orders. We launched both rewards and subscription programs on our D2C site in the quarter. Since these introductions, while early growth engagement and number of repeat customers have increased further. We look forward to sharing additional progress as we accelerate go-to-market strategies in 2025.

話雖如此，我們的 D2C 網站繼續顯示出持續的收入成長、強勁的參與度和穩定的回頭客訂單。本季我們在 D2C 網站上推出了獎勵和訂閱計劃。自這些推出以來，早期成長參與度和回頭客數量進一步增加。我們期待在 2025 年加速實施上市策略時分享更多進展。

In summary, we continue building our brands for the long term, executing against the plan we've established, growing our omnichannel business and winning new consumers to add to our growing customer base. We will continue to maximize the value of our world-class brands and strengthen our extensive distribution capabilities.

總而言之，我們將繼續長期打造我們的品牌，執行我們已製定的計劃，發展我們的全通路業務並贏得新消費者，以增加我們不斷增長的客戶群。我們將繼續最大化我們的世界級品牌的價值，並加強我們廣泛的分銷能力。

Let me now turn the call back over to Andrew to go through our financial results.

現在讓我將電話轉回給安德魯，以了解我們的財務表現。

Thank you, Summer. Starting with our consolidated quarterly results. Q3 sales were up 3.8% to $105.6 million. Excluding CDS, overall revenue was up 8.4% year-over-year. Gross margin was up 10 basis points year-over-year to 50.8%. As reported, SG&A for the quarter was $33.2 million, which includes nonrecurring items. PMTA expense was up $900,000 year-over-year and transaction-related costs were up $800,000 year-over-year. Adjusted EBITDA was up 11.3% year-over-year to $27.2 million.

謝謝你，夏天。從我們的綜合季度業績開始。第三季銷售額成長 3.8%，達到 1.056 億美元。不包括CDS，整體營收年增8.4%。毛利率年增10個基點至50.8%。據報道，本季的 SG&A 為 3,320 萬美元，其中包括非經常性項目。PMTA 費用年增 90 萬美元，交易相關成本年增 80 萬美元。調整後 EBITDA 年成長 11.3%，達到 2,720 萬美元。

Going into segment performance. Zig-Zag sales increased 5.5% year-over-year to $49.3 million due to the strength in all of our categories, with the exception of the lighters category, as mentioned. Gross margins decreased 180 basis points year-over-year to 55.4% during the quarter. This was driven primarily by product mix.

進入細分市場表現。由於我們所有類別（如上所述，打火機類別除外）的強勁表現，Zig-Zag 銷售額年增 5.5% 至 4,930 萬美元。本季毛利率年減 180 個基點至 55.4%。這主要是由產品組合所驅動的。

Stoker's net sales increased 12.1% year-over-year to $41.4 million in the quarter with a 2.9% volume increase and a 9.2% price mix increase. Net sales for the MST portfolio grew 3% year-over-year. Stoker's MST volume was down 3% despite category volume down 8%, with share growing 40 basis points year-over-year to 7.3% during the quarter according to MSAI.

本季 Stoker 的淨銷售額年增 12.1%，達到 4,140 萬美元，銷售量成長 2.9%，價格組合成長 9.2%。MST 產品組合的淨銷售額較去年同期成長 3%。根據 MSAI 的數據，儘管類別銷量下降了 8%，但 Stoker 的 MST 銷量仍下降了 3%，本季市佔率年增 40 個基點至 7.3%。

Share of in-store selling was up 90 basis points year-over-year to 11.3%, with Stoker's now in stores representing approximately two-third of industry volumes, which still provides a long runway for growth. Chewing tobacco sales were down approximately 40 basis points from the previous year. Stoker's chewing tobacco was the number one chewing brand in the quarter, gaining 230 basis points of share to 32.9% according to MSAI. Overall, TPB loose leaf volume was down 0.4%, beating category volume declines of 7.1%.

店內銷售份額年增 90 個基點，達到 11.3%，目前 Stoker's 的店內銷售量約佔行業銷量的三分之二，這仍然為增長提供了漫長的道路。嚼煙銷量較上年下降約 40 個基點。根據 MSAI 的數據，Stoker 的咀嚼煙草是本季排名第一的咀嚼品牌，市佔率增加了 230 個基點，達到 32.9%。總體而言，TPB 散葉銷量下降了 0.4%，超過了類別銷量 7.1% 的降幅。

Category performance was driven by a larger decline in premium loose leaf with TPB's volumes benefiting from consumer trade down as Stoker's volumes grew from the previous year. Our FRE sales more than quadrupled year-over-year as we continue our national rollout. Gross margin was flat versus a year ago at 55.8%. Moving to CDS. Sales were $15 million, gross margin was 22.1%. Adjusted EBITDA was approximately $270,000. Moving on to the balance sheet. We ended the quarter with just over $33 million of cash. Free cash flow for the quarter was $12.6 million. Year-to-date free cash flow is $45.8 million.

品類表現受到優質活頁大幅下降的推動，TPB 的銷售量受惠於消費者貿易下降，而 Stoker 的銷售量較前一年成長。隨著我們繼續在全國推廣，我們的 FRE 銷售額比去年同期增長了四倍多。毛利率為 55.8%，與一年前持平。轉向 CDS。銷售額為 1500 萬美元，毛利率為 22.1%。調整後的 EBITDA 約為 27 萬美元。繼續看資產負債表。本季結束時，我們的現金略高於 3,300 萬美元。該季度的自由現金流為 1260 萬美元。年初至今的自由現金流為 4,580 萬美元。

On July 15, we retired our $118.5 million convertible note with cash on hand. With our projected free cash flow generation this year, we are well within our previously disclosed leverage range of 2 to 3 times and are comfortable with our liquidity position. In the quarter, we repurchased $1.1 million worth of shares. In addition, the Board has authorized a share repurchase program that has a capacity of $100 million.

7 月 15 日，我們用手頭現金註銷了 1.185 億美元的可轉換票據。根據我們今年預計的自由現金流產生情況，我們完全處於先前披露的 2 至 3 倍的槓桿範圍內，並且對我們的流動性狀況感到滿意。本季度，我們回購了價值 110 萬美元的股票。此外，董事會也批准了一項規模為1億美元的股票回購計畫。

On to guidance and other line items. As previously noted, we are increasing our guidance for full year 2024 adjusted EBITDA to $101 million to $103 million versus our prior guidance of $98 million to $102 million. Neither of these ranges include contributions from CDS. For modeling purposes, the effective income tax range is 23% to 26%. We revised our CapEx expectation from $11 million to under $10 million for the year.

關於指導和其他行項目。如前所述，我們將 2024 年全年調整後 EBITDA 的指引上調至 1.01 億至 1.03 億美元，而先前的指引為 9,800 萬至 1.02 億美元。這些範圍都不包括 CDS 的貢獻。出於建模目的，有效所得稅範圍為 23% 至 26%。我們將今年的資本支出預期從 1,100 萬美元下調至 1,000 萬美元以下。

Our investment plans have not changed and reductions are timing driven. We expect to spend approximately $4 million for the full year to supplement our PMTAs that are related to our modern oral products, which remain under review by the FDA.

我們的投資計畫沒有改變，削減是時間驅動的。我們預計全年花費約 400 萬美元來補充與我們的現代口腔產品相關的 PMTA，這些產品仍在接受 FDA 的審查。

Now let me turn it back over to Graham.

現在讓我把它轉回給格雷厄姆。

To conclude, we're pleased with our progress nine months into 2024. Now I'll turn it over to questions.

總而言之，我們對 2024 年 9 個月以來的進展感到滿意。現在我將把它轉為提問。

(Operator Instructions)

（操作員說明）

Eric Des Lauriers, Craig-Hallum Capital Group.

艾瑞克‧德斯‧勞裡爾斯 (Eric Des Lauriers)，克雷格-哈勒姆資本集團。

Great. Thank you for taking my questions. Congrats on a very nice quarter here. First question for me, just on the growth outlook for FRE. It sounds like you have some increased marketing initiatives underway. I'm wondering if you could just kind of help us understand the growth outlook for sort of expanded velocity or perhaps SKU counts in existing doors versus kind of the growth coming from new door penetration? And if you can sort of help us break that out between kind of near-term and longer-term opportunity, that would be helpful.

偉大的。感謝您回答我的問題。恭喜這裡度過了一個非常美好的季度。我的第一個問題是關於 FRE 的成長前景。聽起來您正在採取一些增加的行銷措施。我想知道您是否可以幫助我們了解現有門中的成長速度或 SKU 計數與新門滲透率帶來的成長的成長前景？如果你能幫助我們在短期和長期機會之間解決這個問題，那將會很有幫助。

Hey, Eric, this is Summer. Thanks for the question. So as you know, we launched with a focus on national distribution this year and continue to scale and add new independent retailers. As you also know, getting into chains is a little bit more of a longer runway and chains are the predominant place where OST is sold, about 67%, 70% of the category is sold through chain convenience stores. And larger chain stores take a little bit more time to get into.

嘿，艾瑞克，這是夏天。謝謝你的提問。如您所知，我們今年推出的重點是全國分銷，並繼續擴大規模和增加新的獨立零售商。大家也知道，進入連鎖店是一條更長的跑道，連鎖店是OST銷售的主要場所，大約67%、70%的品類是透過連鎖便利商店銷售的。而較大的連鎖店則需要更多的時間才能進入。

But as you know, we have relationships and long-standing relationships where our products are currently sold with those chain stores. And so we are in active conversations and expanding distribution. And with the expansion of our 6 milligram products and 3 milligram to come in Q1, we're really excited about continuing to expand the portfolio across that chain universe.

但如您所知，我們與這些連鎖店有著長期的合作關係，我們的產品目前在這些連鎖店銷售。因此，我們正在進行積極的對話並擴大分銷範圍。隨著我們在第一季度推出 6 毫克產品和 3 毫克產品，我們對繼續在整個連鎖領域擴展產品組合感到非常興奮。

All right. That's helpful. And then just for my follow-up, so this kind of new Alp brand, the Tucker Carlson affiliated brand has been reported by Wall Street Journal. Patents have been filed. Obviously, we haven't seen an official announcements from turning Point Brands just yet. But just wondering if you can kind of comment high level on your thoughts for the Alp brand for this partnership. Just kind of any color you may be able to provide would certainly be very helpful for us. Thank you.

好的。這很有幫助。然後就是我的後續，所以這種新的Alp品牌，Tucker Carlson附屬品牌已經被《華爾街日報》報道了。已申請專利。顯然，我們還沒有看到 Turning Point Brands 的官方公告。但只是想知道您是否可以對 Alp 品牌對於此次合作的想法發表高水準的評論。您能夠提供的任何顏色肯定對我們非常有幫助。謝謝。

Eric, it's Graham. I hope you're doing well. Look, at this point in time, we're not going to talk about Alp today, but we will have some updates in the near future.

艾瑞克，我是格雷厄姆。我希望你一切都好。聽著，在這個時間點上，我們今天不打算談論 Alp，但我們會在不久的將來有一些更新。

Fair enough. Thanks Graham.

很公平。謝謝格雷厄姆。

Thanks Eric.

謝謝埃里克。

Michael Legg, Benchmark.

邁克爾·萊格，基準。

Thanks, good morning. When you look at the FRE sales going forward with the introduction of the 3 and 6 milligram, what percent of your sales do you think will come from the new 3, 6 milligram versus the larger milligram down the road?

謝謝，早安。當您考慮推出 3 毫克和 6 毫克的 FRE 銷售情況時，您認為新的 3 毫克、6 毫克與未來更大的毫克將佔您銷售額的百分比是多少？

Hy, Mike. So as you know, the majority of the volume in the category is taken up by 3 and 6 milligram products, nearly 70% of the category. And so the fact that we've been as successful as we have been with 9, 12 and 15 has been very encouraging for us. We continue to hear consumers talk about our product differentiation, including mouth feel and flavor.

嘿，麥克。如您所知，該類別的大部分銷售量是 3 毫克和 6 毫克產品，佔該類別的近 70%。因此，我們在 9、12 和 15 上取得的成功對我們來說非常令人鼓舞。我們不斷聽到消費者談論我們的產品差異化，包括口感和風味。

And so as we get into where the majority of the category is, we're quite encouraged about the early comments that we've heard from consumers and getting into that 6 and 3 milligram category. And the early sales that we have for 6 milligram have also been very encouraging, incremental to our business, and we're continuing to get that really great consumer feedback. Reorders on our D2C site, for example, have been quite encouraging.

因此，當我們進入該類別的大多數類別時，我們對從消費者那裡聽到的早期評論感到非常鼓舞，並進入了 6 毫克和 3 毫克類別。我們 6 毫克的早期銷售也非常令人鼓舞，這對我們的業務來說是增量的，我們將繼續獲得非常好的消費者回饋。例如，我們的 D2C 網站上的重新訂購量就非常令人鼓舞。

Okay. And then just a follow-up on that. When you look at your supply chain for FRE and then the obviously growing demand within the retail space, can you talk about what may be the limiting factor? Is it getting new accounts to take the product? Or is it having enough product to get into the doors?

好的。然後是後續行動。當您審視 FRE 的供應鏈以及零售領域明顯成長的需求時，您能否談談可能的限制因素是什麼？是否有新的客戶來購買該產品？或是有足夠的產品進入市場？

Hi, Mike. Look, I think it's -- we've talked about this in the past, getting into chains is somewhat of a transactional event because of the process and no two chains are alike in terms of their planograms and the cycle times that it takes to get in there. We feel great about our manufacturing capacity at this point in time. And I think one of the other areas that we're looking at right now is given the results of the past election, exploring US manufacturing options may be of interest depending on what potential tariff environment looks like.

嗨，麥克。聽著，我認為這是- 我們過去已經討論過這一點，進入連鎖店在某種程度上是一個交易事件，因為這個過程，並且沒有兩個連鎖店在貨架圖和獲得所需的周期時間方面是相似的在那裡。目前我們對我們的製造能力感到非常滿意。我認為我們現在正在考慮的其他領域之一是考慮到過去選舉的結果，根據潛在的關稅環境，探索美國製造業的選擇可能會令人感興趣。

Okay. And then just one last question. When we look at the alt channel versus your traditional distribution, does an all channel unit offer larger revenue opportunity than a traditional convenience store? Or are they similar? How do you view the opportunities for sell-through in the alt channel per unit?

好的。最後一個問題。當我們比較替代通路與傳統分銷時，全通路部門是否比傳統便利商店提供更大的收入機會？或者說它們很相似？您如何看待替代管道中每單位的銷售機會？

That's a great question. Categorically, we believe the TAM for the alt space is as large, if not larger in some cases than the convenience store channel. And given the runway for growth, given that we're under-indexed in the alternative channel, the profit is quite significant for us as we think about that. That being said, the two channels are converging quite a bit. So we are definitely mindful of how those channels are playing together and making sure that we're tackling every opportunity that comes our way in a profitable manner.

這是一個很好的問題。明確地說，我們認為另類空間的 TAM 與便利商店通路一樣大，甚至在某些情況下不比便利商店通路大。考慮到成長的跑道，考慮到我們在替代管道中的指數較低，當我們考慮這一點時，利潤對我們來說是相當可觀的。話雖如此，這兩個頻道已經有相當多的融合。因此，我們絕對會留意這些管道如何協同運作，並確保我們以盈利的方式抓住每一個出現的機會。

Great. Thanks and congrats on the continued success. Look forward to more. Thanks.

偉大的。感謝並祝賀您不斷取得成功。期待更多。謝謝。

Thanks.

謝謝。

Nick Anderson, ROTH MKM.

尼克·安德森，羅斯·MKM。

Yeah, good morning. Thanks for taking our questions and congrats on the quarter here. The first question for me, just on the FRE and the pricing strategy side. You've taken share within Stoker's as you've kind of priced that product competitively. Are you following a similar blueprint for FRE? Just your sense of the pricing strategy and how you're looking to capture share as you enter new stores there. Thank you.

是的，早安。感謝您提出我們的問題，並祝賀本季取得成功。我的第一個問題是關於 FRE 和定價策略方面的。您已經在 Stoker's 中獲得了份額，因為您對該產品的定價具有競爭力。您是否遵循類似的 FRE 藍圖？只是您對定價策略的感覺以及您在進入那裡的新商店時希望如何獲取份額。謝謝。

Yes, sure. Thanks for the question, Nick. As we think about the FRE brand, it is a premium brand that we believe can compete at a premium pricing level with the other major competitors in the marketplace, and our pricing strategy will reflect that.

是的，當然。謝謝你的提問，尼克。當我們考慮 FRE 品牌時，我們相信它是一個優質品牌，可以以優質定價水平與市場上其他主要競爭對手競爭，我們的定價策略將反映這一點。

Okay. I appreciate that color. And then second one for me, just on Zig-Zag and the cigar opportunity. That's the second quarter in a row where you've seen kind of solid cigar growth. Curious how much additional white space you're seeing there and just kind of what the expectation is for that segment going forward? Thank you.

好的。我很欣賞那種顏色。然後是我的第二個，就是之字形和雪茄機會。這是雪茄銷售連續第二季強勁成長。好奇您在那裡看到了多少額外的空白，以及對該細分市場未來的期望是什麼？謝謝。

Hey, Nick, Graham, welcome. The cigar category is a massive opportunity for this company. There's a lot of correlation with consumers in that channel with the rest of the Zig-Zag portfolio. We think about that opportunity, the runway there is a couple of billion dollars in manufacturer revenue. Obviously, we're in the extreme early innings of this process. But a couple of things that we think we really have going for us is we've got an incredible foundational brand in Zig-Zag to leverage against that space.

嘿，尼克，格雷厄姆，歡迎。雪茄類別對這家公司來說是一個巨大的機會。該通路中的消費者與之字形投資組合的其他部分有許多相關性。我們想到了這個機會，製造商的收入有數十億美元。顯然，我們正處於這個過程的最早階段。但我們認為我們真正擁有的幾件事是，我們在 Zig-Zag 中擁有一個令人難以置信的基礎品牌，可以利用這個空間。

And we've also got products that we purchased a number of years ago through one of our smaller acquisitions that give us runway vis-a-vis the regulatory environment. So it's a wonderful opportunity for us. Again, early innings, but we think that the size of that opportunity could be fairly substantial over the long run for the company.

我們也擁有多年前透過一項規模較小的收購購買的產品，這為我們應對監管環境提供了保障。所以這對我們來說是一個絕佳的機會。再說一遍，雖然還處於早期階段，但我們認為從長遠來看，對於公司來說，這個機會的規模可能相當大。

Great. That's good to hear. That's it for me. I appreciate the color.

偉大的。很高興聽到這個消息。對我來說就是這樣。我很欣賞它的顏色。

Thanks, Nick.

謝謝，尼克。

Thank you.

謝謝。

And due to the constraints of time, we do need to conclude our Q&A session there. I would like to hand back over to Graham Purdy for closing remarks.

由於時間限制，我們的問答環節確實需要到此結束。我想請格雷厄姆·珀迪（Graham Purdy）發表結束語。

Thanks, operator. I appreciate everybody joining the call today. We're excited about the results coming out of Q3, and we look forward to talking to you in a few months.

謝謝，接線生。我感謝今天大家加入電話會議。我們對第三季的結果感到興奮，並期待在幾個月後與您交談。

This does conclude today's conference call. Enjoy the rest of your day. You may now disconnect.

今天的電話會議到此結束。享受你一天剩下的時間。您現在可以斷開連線。