Turning Point Brands Inc (TPB) 2024 Q4 法說會逐字稿

Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Turning Point Brands fourth-quarter and fiscal-year 2024 conference call. (Operator Instructions)

感謝您的支持。我叫凱瑟琳，今天我將擔任您的會議主持人。現在，我歡迎大家參加 Turning Point Brands 第四季和 2024 財年電話會議。（操作員指令）

And now I would like to turn the call over to Andrew Flynn, CFO, Turning Point Brands. Please go ahead.

現在我想將電話轉給 Turning Point Brands 的財務長 Andrew Flynn。請繼續。

Good morning, everyone. A short while ago, we issued a press release covering our Q4 results. This release is located in the IR section of our website at www.turningpointbrands.com. As you're aware, this release followed an 8-K issued February 10 that included some preliminary financial metrics.

大家早安。不久前，我們發布了一份關於第四季業績的新聞稿。本新聞稿位於我們網站 www.turningpointbrands.com 的 IR 部分。如您所知，此版本是在 2 月 10 日發布的 8-K 之後發布的，其中包含一些初步財務指標。

During this call, we will discuss our consolidated and segment operating results and provide some perspective on the operating environment and progress against our strategic plan. As a brief reminder, we deconsolidated our CDS segment and is now classified as discontinued ops. This change is reflected in our financials and the consolidated results that we will be discussing today.

在本次電話會議中，我們將討論我們的合併和分部經營業績，並對經營環境和戰略計劃的進展提供一些看法。簡單提醒一下，我們已將 CDS 部門拆分，並將其歸類為已停止營運的業務。這項變更反映在我們的財務狀況和我們今天將要討論的綜合業績中。

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. 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.

按照慣例，我請您注意今天的新聞稿中關於前瞻性和警告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。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。這些措施和與 GAAP 的對帳都包含在今天的收益報告中，同時也附有管理層認為它們提供有用資訊的原因。

I will now turn the call over to our CEO, Graham Purdy.

現在我將電話轉給我們的執行長 Graham Purdy。

Thanks, Andrew. Good morning, everyone, and thank you for joining our call. Our consolidated fourth-quarter results were better than expected and demonstrated continued progress against our plan. Revenue increased 13% to $93.7 million for the quarter. Adjusted EBITDA increased 5% to $26.2 million for the quarter.

謝謝，安德魯。大家早安，感謝大家參加我們的電話會議。我們的第四季綜合業績優於預期，顯示我們的計劃繼續取得進展。本季營收成長 13% 至 9,370 萬美元。本季調整後 EBITDA 成長 5% 至 2,620 萬美元。

Recall that in early January, we announced the divestiture of our CDS business. These results are now classified as discontinued and excluded from our consolidated financials and any guidance going forward. We think the transaction best positions management to focus on the exciting growth opportunities in our core business.

回想一下，1月初，我們宣布剝離CDS業務。這些結果現在被歸類為已停止，並被排除在我們的合併財務報表和任何未來指引之外。我們認為，此交易最有利於管理層專注於核心業務中令人興奮的成長機會。

Adjusted EBITDA for the full year increased 12% to $104.5 million, at the high end of the preliminary range of $103.5 million to $104.5 million provided on February 10, and above our prior increased range of $101 million to $103 million provided with third-quarter results. We are pleased with our results for both Q4 and full year 2024, and we are excited about the momentum we are seeing across the organization.

全年調整後 EBITDA 成長 12%，至 1.045 億美元，處於 2 月 10 日提供的 1.035 億美元至 1.045 億美元的初步範圍高端，且高於我們先前根據第三季業績提供的 1.01 億美元至 1.03 億美元的上調範圍。我們對 2024 年第四季和全年的業績感到滿意，並對整個組織所看到的勢頭感到興奮。

We are initiating 2025 adjusted EBITDA guidance of $108 million to $113 million. This reflects continued growth of our Zig-Zag and Stoker's businesses as well as significant acceleration of growth of our modern oil brands FRE and ALP, which we expect to generate $60 million to $80 million of combined revenue in 2025. Our EBITDA guidance includes meaningful sales and marketing investments to support our ambitious growth plans.

我們預計 2025 年調整後 EBITDA 將達到 1.08 億美元至 1.13 億美元。這反映了我們 Zig-Zag 和 Stoker 業務的持續成長以及我們現代石油品牌 FR​​E 和 ALP 成長的顯著加速，我們預計到 2025 年這兩個品牌將產生 6,000 萬至 8,000 萬美元的總收入。我們的 EBITDA 指引包括有意義的銷售和行銷投資，以支持我們雄心勃勃的成長計劃。

Going forward, we will discuss our modern oral business on a combined basis for financial reporting and guidance purposes. Our adjusted EBITDA guidance reflects our pro rata 50% share of ALP's economics. We expect both brands to play key roles in achieving our long-term goal of 10% market share of the modern oral category.

展望未來，我們將以綜合的方式討論我們的現代口腔業務，以用於財務報告和指導目的。我們調整後的 EBITDA 指引反映了我們在 ALP 經濟中所佔的 50% 比例。我們希望這兩個品牌能夠在我們實現現代口腔領域 10% 市場份額的長期目標中發揮關鍵作用。

During the fourth quarter, Zig-Zag revenue was up 2%. Excluding Clipper, it was up 4%. We have a promising lineup of Zig-Zag growth initiatives for 2025, that should help deliver another year of solid segment growth. We remain bullish on the convergence of distribution channels for smoking accessories, which provides an opportunity for us to leverage our diverse SKU portfolio to offer customers a one-stop shop for all their needs.

第四季度，Zig-Zag 營收成長了 2%。若不計 Clipper，其股價上漲了 4%。我們為 2025 年制定了一系列前景光明的「之字形」成長計劃，這些計劃將有助於實現該領域又一年的穩健成長。我們仍然看好吸煙配件分銷管道的融合，這為我們提供了一個機會，讓我們能夠利用多樣化的SKU組合為客戶提供滿足其所有需求的一站式購物服務。

It's also worth reiterating the valuable cross-selling opportunities across our ecosystem as customers onboard modern oral products alongside the Zig-Zag portfolio. Nearly 75% of all Americans now live in a legal regulated medical cannabis or adult-use state. And over the past year, we've seen another green wave emerge with the adoption of Farm Bill compliant hemp, which has significantly expanded the TAM.

隨著客戶開始使用現代口腔產品和 Zig-Zag 產品組合，我們生態系統中寶貴的交叉銷售機會也值得重申。目前，近 75% 的美國人生活在醫用大麻或成人大麻合法監管的州。在過去的一年裡，隨著符合農業法案的大麻的採用，我們看到了另一股綠色浪潮的出現，這大大擴大了 TAM。

As an illustration, there are estimated to be 7,000 retail outlets in Texas that now sell hemp-derived products in a state without a regulated cannabis marketplace. This secular tailwind should continue to benefit picks and shovels businesses with must-carry brands like Zig-Zag.

舉例來說，據估計，德州目前有 7,000 家零售店在沒有受監管的大麻市場的州銷售大麻衍生產品。這種長期的順風勢頭應會繼續使 Zig-Zag 等必備品牌的鎬和鏟子企業受益。

And as mentioned, many of these stores don't sell traditional tobacco products like combustible cigarettes or MST, but they do carry modern oral nicotine pouches. This dynamic should give us a valuable cross-selling advantage in modern oral over time as we continue to build our Zig-Zag distribution and vice versa.

如上所述，許多商店不出售可燃香菸或 MST 等傳統菸草產品，但他們確實提供現代口服尼古丁袋。隨著我們繼續建立我們的之字形分銷，反之亦然，這種動態將為我們在現代口語領域帶來寶貴的交叉銷售優勢。

Moving to Stoker's. During the quarter, Stoker's revenue increased 26% to $47.8 million, reflecting flat loose leaf, a 1% decline in MST and $11.2 million in modern oral revenue. Our modern oral business included a 419% increase in free sales off of a low base to approximately $6.3 million for the quarter, which represented both sequential and year-over-year acceleration in sales growth. The balance of the modern oral revenue was from the very successful launch of ALP.

搬到 Stoker's。本季度，Stoker 的營收成長 26% 至 4,780 萬美元，其中反映出平散葉煙收入、MST 收入下降 1% 以及現代口服菸收入 1,120 萬美元。我們的現代口服業務包括免費銷售額在低基數的基礎上增長 419% 至本季度的約 630 萬美元，這代表著銷售額增長的連續和同比加速。現代口頭收入的平衡來自於 ALP 的非常成功的推出。

A quick note on MST. As we called out previously, Stoker's MST had very strong quarters in Q4 2023 and Q2 2024. So we anticipated a flat quarter as we lapped a tough comparable of roughly 20% in Q4 last year. Summer will talk more about our modern oral brand shortly, but I will offer the following high-level commentary.

關於 MST 的簡短說明。正如我們之前所說，Stoker 的 MST 在 2023 年第四季和 2024 年第二季表現非常強勁。因此，我們預計本季業績將持平，因為去年第四季我們的業績僅為 20% 左右。Summer 很快就會談論更多我們的現代口服品牌，但我將提供以下高級評論。

We are very pleased with the launch of ALP Supply Company, our joint venture with the Tucker Carlson Network. There has been significant excitement around the brand and strong reason for optimism. We are somewhat limited in what we can disclose due to our confidentiality obligations.

我們與塔克卡爾森網路 (Tucker Carlson Network) 合資成立了 ALP Supply Company，對此我們感到非常高興。人們對該品牌的熱情十分高漲，並且有充分的理由保持樂觀。由於保密義務，我們可以揭露的資訊受到一定限制。

FRE sales increased 26% sequentially for the quarter. This progress provides further evidence that FRE is winning in the marketplace. Positive consumer feedback has consistently reinforced the brand's positioning, pouch size, flavor, mouth feel and a range of nicotine strengths.

本季 FRE 銷售額較上季成長 26%。這項進展進一步證明 FRE 在市場上取得了勝利。消費者的正向回饋不斷強化品牌的定位、包裝尺寸、口味、口感和一系列尼古丁強度。

This feedback and strong sales growth, along with initial retail acceptance and reorders have given us increased confidence to further invest in expanding our chain store footprint. This will likely involve investment to secure competitive placement, execute our desired in-store look and feel and participate in loyalty and promotional programs. In Q3, we launched 6-milligram FRE on our website to complement our 9, 12 and 15-milligram offerings. In Q4, we began to expand 6-milligram distribution to retail stores.

這些反饋和強勁的銷售成長，以及最初的零售接受和重新訂購，使我們更有信心進一步投資擴大我們的連鎖店足跡。這可能涉及投資以確保競爭性地位，實現我們期望的店內外觀和感覺，並參與忠誠度和促銷計劃。在第三季度，我們在網站上推出了 6 毫克 FRE，以補充我們的 9、12 和 15 毫克產品。在第四季度，我們開始將 6 毫克的分銷擴展到零售店。

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

說完這些，讓我把電話交給 Summer，來介紹一下我們的一些行銷舉措的進展。

Thank you, Graham. As he mentioned, we made exciting progress in the modern oral category throughout 2024 and during Q4 in particular. Pertaining to FRE, continued positive consumer feedback, strong trade receptivity from prominent chains of which we have long-standing and broad-reaching retail partnerships and increasing reorder and repeat purchase rates at wholesale and online give us confidence to invest behind the brand.

謝謝你，格雷厄姆。正如他所說，我們在 2024 年全年，尤其是第四季度，在現代口腔領域取得了令人興奮的進展。對於 FRE，持續的積極消費者反饋、來自我們擁有長期和廣泛零售合作夥伴關係的知名連鎖店的強大貿易接受度以及批發和網上不斷增加的重新訂購和重複購買率，使我們有信心投資該品牌。

During Q4, we accelerated our investment with chain partners, like our regional introduction to 7-Eleven and began testing expanded sales and marketing initiatives in key markets. As previously discussed, we also expanded our SKU assortment to broaden retail distribution of 6-milligram. We look forward to sharing the ongoing progress throughout this year and beyond.

在第四季度，我們加快了與連鎖合作夥伴的投資，例如對 7-Eleven 的區域介紹，並開始在主要市場測試擴大銷售和行銷計劃。如前所述，我們也擴大了 SKU 種類，以拓展 6 毫克的零售分銷。我們期待分享今年及以後不斷取得的進展。

Turning to Stoker's. We continue to broaden our distribution across the MSG segment and see opportunities to expand the brand and grow with the consumer base looking for a great value. Stoker's continues to benefit from the value offering of a great dip at a fair price, along with our initiatives to drive consumer awareness and loyalty.

轉向斯托克。我們將繼續擴大味精領域的分銷範圍，並尋找擴大品牌和隨著尋求巨大價值的消費者群體一起成長的機會。Stoker's 持續受惠於以合理價格提供優質沾醬的價值，以及我們提升消費者認知與忠誠度的措施。

With regards to Zig-Zag, we continue to build upon Zig-Zag's 145-year history and celebrated with the launch of our vintage paper booklets line this past quarter. We are continuing to partner with influencers that resonate with our existing and new Gen Z consumers. Further, we will continue to win in the back street with nontraditional customers who are looking to build their Zig-Zag portfolio while also leveraging the opportunity to further ALP's growth, as Graham mentioned.

關於 Zig-Zag，我們將繼續繼承和發揚 Zig-Zag 145 年的歷史，並於上個季度推出了復古紙質小冊子系列。我們將繼續與能引起現有和新 Z 世代消費者共鳴的有影響力的人合作。此外，正如 Graham 所提到的，我們將繼續在後街贏得非傳統客戶，這些客戶希望建立自己的 Zig-Zag 投資組合，同時也利用機會進一步促進 ALP 的發展。

We continue to see healthy increases in average order sizes while expanding valuable shelf space and merchandising within these stores. In summary, for Zig-Zag, we 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.

我們繼續看到平均訂單規模的健康成長，同時擴大了這些商店內寶貴的貨架空間和商品銷售。總而言之，對於 Zig-Zag 而言，隨著大麻和相關產品變得越來越主流，我們在這個管道中擁有很長的路要走，並且我們將繼續鞏固我們作為值得信賴的高價值合作夥伴的地位。

Lastly, all of our brands will benefit from our evolving sales organization, which we are scaling to enable enhanced geographical coverage and to support growth for the modern oral category.

最後，我們所有的品牌都將受益於我們不斷發展的銷售組織，我們正在擴大銷售組織規模以增強地理覆蓋範圍並支持現代口服產品類別的成長。

In closing, we continue building our brands for the long term, executing against the omnichannel plan we've established, 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.

最後，我們將繼續長期打造我們的品牌，執行我們已建立的全通路計劃，並贏得新的消費者來充實我們不斷​​增長的客戶群。我們將繼續最大限度地提升我們世界一流品牌的價值，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，讓他報告我們的財務結果。

Thank you, Summer. Sales were up 11% to $360.7 million for the year. For the quarter, revenue was up 13% to $93.7 million. On a full year basis, gross margin was down 39 basis points year-over-year to 55.9%. For the quarter, margin was 56% and down 108 basis points year-over-year. The change in margin is mix driven. As reported, SG&A was $122.4 million for the year and $34.5 million for the fourth quarter, including adjusted items.

謝謝你，Summer。全年銷售額成長 11%，達到 3.607 億美元。本季營收成長 13% 至 9,370 萬美元。全年毛利率年減39個基點至55.9%。本季利潤率為 56%，年減 108 個基點。利潤率的變化是由混合因素所驅動的。據報道，包括調整後項目在內，全年銷售、一般及行政開支為 1.224 億美元，第四季銷售、一般及行政開支為 3,450 萬美元。

For the year, there was an incremental $11.5 million of SG&A-related adjustments. In quarter, these adjustments were $4.4 million. The detail of these adjustments can be found in our press release and the net income to adjusted EBITDA reconciliation. Adjusted EBITDA was up 12% year-over-year to $104.5 million for the year. For the quarter, adjusted EBITDA was up 5% to $26.2 million.

全年銷售、一般及行政開支相關調整增量為 1,150 萬美元。本季度，這些調整為 440 萬美元。這些調整的詳細資訊可以在我們的新聞稿和淨收入與調整後的 EBITDA 對帳中找到。全年調整後 EBITDA 年增 12% 至 1.045 億美元。本季度，調整後的 EBITDA 上漲 5% 至 2,620 萬美元。

Going into segment performance. Zig-Zag sales increased 7% year-over-year to $192.4 million and up 2% to $45.9 million for the fourth quarter despite pressure from the unwind of the Clipper relationship and timing and FX-related issues in our Canadian business. Gross margins decreased 60 basis points year-over-year to 55.4% for the year and down 240 basis points year-over-year to 54.1% for the fourth quarter. This was driven primarily by product mix.

進入細分領域表現。儘管面臨 Clipper 關係解除以及加拿大業務中時間和外匯相關問題的壓力，Zig-Zag 銷售額仍同比增長 7% 至 1.924 億美元，第四季度增長 2% 至 4,590 萬美元。全年毛利率年減 60 個基點至 55.4%，第四季毛利率較去年同期下降 240 個基點至 54.1%。這主要受產品組合推動。

Stoker's net sales increased 16% year-over-year to $168.3 million in the year, and increased 26% year-over-year to $47.8 million for the fourth quarter. Net sales for the MST portfolio grew 6% year-over-year to $103.3 million in the year, and declined 1% year-over-year to $25.9 million for the fourth quarter. Stoker's MST volume was up 10 basis points despite category volume down 6.4%, with share growing by 50 basis points year-over-year to 7.6% during the year according to MSAi.

斯托克全年淨銷售額年增 16% 至 1.683 億美元，第四季淨銷售額年增 26% 至 4,780 萬美元。MST 投資組合的淨銷售額全年年增 6% 至 1.033 億美元，第四季年減 1% 至 2,590 萬美元。根據 MSAi 的數據，儘管類別銷量下降 6.4%，但 Stoker 的 MST 銷量仍上漲了 10 個基點，年內份額同比增長 50 個基點至 7.6%。

Share of in-store selling was up 50 basis points year-over-year to 11.2%, with Stoker's now in stores representing approximately two-thirds of industry volumes, which still provides a long runway for growth.

店內銷售份額年增 50 個基點至 11.2%，其中 Stoker's 目前店內銷售量約佔行業銷量的三分之二，仍然具有較長的成長空間。

Stoker's Chewing tobacco was the number-one chewing brand in the quarter, gaining 180 basis points of share to 32.9% according to MSAi. Overall, TPD loose leaf volume was down 1.8%, [beating] category volume declines of 4.4%. Category performance was driven by a larger decline in premium loose leaf with TPD's volumes benefiting from consumer trade down as Stoker's volumes grew from the previous year.

根據 MSAi 的數據，Stoker 嚼煙是本季排名第一的嚼煙品牌，市佔率成長了 180 個基點，達到 32.9%。總體而言，TPD 散葉銷量下降了 1.8%，[超過] 類別銷量 4.4% 的降幅。類別表現受到優質散葉煙銷售大幅下降的推動，TPD 的銷售量受益於消費者交易的減少，而 Stoker 的銷售量較上年有所增長。

Our FRE sales more than quadrupled year-over-year as we continue our national rollout. Gross margin decreased 20 basis points year-over-year to 56.4% for the year and increased 9 basis points year-over-year to 57.7% for the fourth quarter. This was driven primarily by product mix.

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。全年毛利率年減 20 個基點至 56.4%，第四季毛利率較去年同期上升 9 個基點至 57.7%。這主要受產品組合推動。

Moving on to the balance sheet. We ended the quarter with just over $46 million of cash. Free cash flow for the year was $56.3 million. Last month, we issued $300 million of seven-year senior secured notes due in 2032, and we called $250 million of notes maturing 2026 with no prepayment penalty. We are well within our previously disclosed net leverage range of 2 to 3 times. In the quarter, we repurchased $880,000 worth of shares as part of our previously announced share repurchase program.

繼續討論資產負債表。本季結束時，我們的現金餘額剛好超過 4,600 萬美元。本年度自由現金流為 5,630 萬美元。上個月，我們發行了 3 億美元的 2032 年到期的七年期優先擔保票據，並且我們贖回了 2.5 億美元的 2026 年到期的票據，且沒有提前還款罰金。我們完全處於先前揭露的2至3倍的淨槓桿範圍內。本季度，我們回購了價值 88 萬美元的股票，這是我們先前宣布的股票回購計畫的一部分。

On to guidance and other line items. As we previously noted, we are guiding to full-year 2025 adjusted EBITDA of $108 million to $113 million. We anticipate total modern oral sales of $60 million to $80 million. Our projections anticipate mid-single-digit growth, excluding our modern oral business despite headwinds from Clipper and Canadian exchange rates. Our total adjusted EBITDA range reflects increased sales and marketing investments that will somewhat constrain the rate of EBITDA growth in 2025.

繼續討論指導和其他項目。正如我們先前所指出的，我們預計 2025 年全年調整後 EBITDA 為 1.08 億美元至 1.13 億美元。我們預計現代口腔產品總銷售額將達到 6,000 萬至 8,000 萬美元。儘管受到 Clipper 和加拿大匯率的不利影響，但我們預計（不包括現代口服業務）仍將實現中等個位數成長。我們總調整後的 EBITDA 範圍反映了銷售和行銷投資的增加，這將在一定程度上限制 2025 年 EBITDA 的成長率。

For modeling purposes, the effective income tax range is 23% to 26%. CapEx for full year '24 was $4.6 million. Budgeted CapEx for full year 2025 is $4 million to $5 million, exclusive of any potential projects related to our modern oral business. We expect to spend $3 million to $6 million for the full year depending on the regulatory environment to supplement our modern oral PMTAs, which remain under review by the FDA.

為了建模目的，有效所得稅範圍是23％至26％。24年全年資本支出為460萬美元。2025 年全年預算資本支出為 400 萬至 500 萬美元，不包括與我們現代口腔業務相關的任何潛在項目。根據監管環境，我們預計全年將花費 300 萬至 600 萬美元來補充我們現代的口服 PMTA，這些 PMTA 仍在接受 FDA 的審查。

Now let me turn it back over to Graham.

現在讓我把話題轉回給葛拉漢。

To conclude, we are pleased with our 2024 performance, and I'll turn it over to questions now.

最後，我們對 2024 年的表現感到滿意，現在我將開始提問。

(Operator Instructions) Eric Des Lauriers, Craig-Hallum Capital Group.

(操作員指示) Eric Des Lauriers，Craig-Hallum Capital Group。

Congrats on the very strong results. In terms of modern oral, could you just talk about the outlook for getting into national C-store chains this year, maybe expectation of number of C-store chains or timing?

恭喜您取得如此優異的成績。從現代口語的角度來說，您能否談談今年進入全國便利商店連鎖的前景，例如對便利商店連鎖的數量或時間的預期？

Eric, this is Summer. As you know, about 70% or so of the category is sold through chain convenience. And that's where the majority of the business is done. And as you know, that particular set of stores moves a bit slower in terms of their scheduled planogram cycles and that thing. So we are currently in discussions with many of those partners have long-standing relationships with them.

艾瑞克，這是夏天。如你所知，大約 70% 左右的這類商品是透過連鎖便利商店銷售的。大部分的業務都是在這裡完成。如您所知，這組特定的商店在預定的規劃圖週期等方面的移動速度會稍微慢一些。因此，我們目前正在與許多與他們有長期合作關係的合作夥伴進行討論。

And as you heard in the call, we recently rolled out a regional partnership with 7-Eleven. We're encouraged by those early results and plan to continue that progress throughout the year and are making great traction there.

正如您在電話會議中聽到的，我們最近與 7-Eleven 建立了區域合作夥伴關係。這些早期成果讓我們備受鼓舞，我們計劃全年繼續取得進展，並取得巨大進展。

All right. Great. That's helpful. And then just a follow-up for me. In terms of Stoker's MST, the one-third of stores by volume that remain for you guys, is there an opportunity to expedite the growth in distribution now that you have such a strong modern oral product here? And can you just talk about what overlap there might be in terms of that one-third of stores that you're not in and the stores that you're either targeting with modern oral or already in with Zig-Zag? Thank you.

好的。偉大的。這很有幫助。然後對我來說只是一個後續行動。就 Stoker's MST 而言，按數量計算，你們仍保留著三分之一的商店，既然你們現在擁有如此強大的現代口服產品，是否有機會加快分銷的增長？您能否談談您尚未涉足的三分之一商店與您使用現代口腔技術或已經使用 Zig-Zag 技術的商店之間可能存在的重疊之處？謝謝。

Yeah. So the -- we think that the portfolio of our oral nicotine products is going to be highly synergistic between MST as well as modern oral. And as Summer just mentioned, the chain accounts are really the thrust behind the modern oral category in the early days. I think that, that presents a great opportunity for us. And from a cross-selling standpoint as we hit the chains with modern oral to really backstop that with a discussion around MST.

是的。所以，我們認為，我們的口服尼古丁產品組合將在 MST 和現代口服之間產生高度的協同作用。正如薩默剛才提到的，連鎖帳戶實際上是早期現代口頭類別背後的推動力。我認為這對我們來說是一個很好的機會。從交叉銷售的角度來看，當我們用現代口語打入市場時，我們透過圍繞 MST 的討論來真正支持這一點。

Congrats again on the strong results.

再次恭喜您取得的優異成績。

Ian Zaffino, Oppenheimer.

伊恩·扎菲諾 (Ian Zaffino)，奧本海默。

Great visibility and guidance on the modern oral. So thank you for that. Maybe help us understand what's driving that guidance? How do we think about, let's just say, FRE versus ALP's? How do we think about 3s and 6s versus your higher nicotine level pouches? Maybe more of a general discussion on what's driving that?

對現代口語有很強的可視性和指導性。非常感謝你。也許可以幫助我們理解推動該指導的因素是什麼？比如說，我們如何看待 FRE 與 ALP 的對比？我們如何看待 3s 和 6 與尼古丁含量較高的煙袋相比？也許多討論一下推動這現象的原因？

Yeah. Look, I think the -- our guide is informed by two specific areas. We expect continued growth around FRE. And based on early reorder rates with our customer and the visibility that we have through our online B2B or B2C businesses. So I think we've taken the experience that we've learned from FRE, and we're thinking through ALP in terms of their route to market.

是的。看，我認為——我們的指南涉及兩個特定領域。我們預計 FRE 將繼續成長。並且基於我們客戶的早期重新訂購率以及我們透過線上 B2B 或 B2C 業務獲得的可見性。因此，我認為我們吸收了從 FRE 學到的經驗，並正在透過 ALP 思考其市場途徑。

And it's just early innings at this point in time. Obviously, we launched -- ALP launched in late Q4. And so it's really early to project exactly where we think that can be. But at the same time, we think the two products are highly synergistic for us and really speak to the entire market from a consumer standpoint. And so we're very bullish on our outlook to cast a wide net and gain consumers.

目前，這只是早期階段。顯然，我們在第四季末推出了 ALP。因此，現在預測這一目標的具體實現還為時過早。但同時，我們認為這兩款產品對我們來說具有高度的協同作用，並且從消費者的角度來看確實符合整個市場的需求。因此，我們對於廣撒網、贏得消費者的前景非常樂觀。

Okay. Great. And then can you maybe talk about the contribution margin on that revenues? And maybe what would be the components to get there? And what I mean by that is are there slotting fees that you're going to pay? I know there's obviously scale as the business starts scaling up, the contribution margin gets higher. But how do we think about that in general?

好的。偉大的。然後您可以談談該收入的貢獻利潤嗎？那麼也許需要哪些組件才能到達那裡呢？我的意思是您需要支付上架費用嗎？我知道，隨著業務規模的擴大，貢獻利潤率顯然會更高。但整體來說我們該如何看待這個問題呢？

And then when we think about your manufacturing footprint, is there a reason to maybe onshore some of the production? Does it make sense to keep it out of the country, just given that the political environment? Thanks.

然後，當我們考慮您的製造足跡時，是否有理由將部分生產轉移到國內？考慮到目前的政治環境，將其排除在外是否有意義？謝謝。

Hi Ian, Andrew here. So first off, as it relates to modern oral, what we're seeing is gross profit margins in the mid-30s. And our plan is to reinvest some of those profits back into the business to help support the sales and marketing team to broaden our reach, not only for the benefit of modern oral, but also for the other products that we carry.

嗨，Ian，我是 Andrew。首先，就現代口腔而言，我們看到的毛利率在 30% 左右。我們的計劃是將部分利潤重新投資到業務中，以幫助支持銷售和行銷團隊擴大我們的業務範圍，這不僅有利於現代口腔，也有利於我們攜帶的其他產品。

In terms of slotting fees and getting into some of these chain convenience, that is something that we are attuned to, and we're looking at multiple different opportunities around that. And so that's the story on modern oral.

就上架費和進入一些連鎖便利商店而言，這是我們所關注的事情，並且正在尋找有關該方面的多種不同機會。這就是現代口語的故事。

And as it relates to US manufacturing, we're considering all options in terms of how we grow this business, which includes enhancing our supply chain and also considering US manufacturing.

就美國製造業而言，我們正在考慮發展這項業務的所有選擇，其中包括增強我們的供應鏈以及考慮美國製造業。

Nick Anderson, ROTH Capital Partners.

尼克·安德森（Nick Anderson），羅仕證券資本合夥公司（ROTH Capital Partners）。

First one for me, just on the FDA and the potential rule capping nicotine levels for combustion products. It seems like the regulators are focused on the harm reduction initiative more and more here. How do you view that playing out? And what do you think this means in general, just for the future in terms of regulatory landscape around nicotine-based products? Thank you.

對我來說，第一個問題是關於 FDA 以及限制燃燒產品尼古丁含量的潛在規則。看起來監管機構越來越關注減少危害的措施。您如何看待這項結果？就尼古丁產品的監管環境而言，您認為這對未來整體而言意味著什麼？謝謝。

Yeah. Look, I think the only certainty that we have at this moment in time is that the agency has taken a stance on a product in the category. We see that as a very bullish sign, frankly, with ZYN receiving the marketing authorization. I think it's very interesting to point out that it was a full range of products that were approved to include flavored products. So I think that we're excited about the way that the agency appears to be viewing this particular category.

是的。看，我認為我們目前唯一可以確定的是該機構已經對該類別的某個產品採取了立場。坦白說，我們認為 ZYN 獲得行銷授權是一個非常樂觀的訊號。我認為指出這一點非常有趣，即獲準的全系列產品包括調味產品。因此我認為，我們對該機構看待這一特定類別的方式感到興奮。

We don't have any perspective right now on the nicotine strengths. We maintain that we've done our work with our filings. We continue to be invested behind the wide range of nicotine strengths. So at this point in time, we're -- that's not a particular concern of ours.

我們目前還不清楚尼古丁的強度。我們堅持認為我們已經完成了提交文件的工作。我們將繼續投資於各種尼古丁濃度的產品。因此目前為止，這並不是我們特別關心的問題。

Okay. I appreciate that color. Second one for me. I just wanted to follow up on modern oral. Wondering if you could provide your sense just for the direct-to-consumer opportunity within the nicotine patch category? Just from an overall market standpoint, given the strength within the millennial demographic and just their tendency to shop online, how do you view the brick-and-mortar mix versus online playing out as the category grows here?

好的。我很欣賞那個顏色。對我來說是第二個。我只是想跟進現代口語。想知道您是否可以針對尼古丁貼片類別中的直接面向消費者的機會提供您的看法？僅從整體市場角度來看，考慮到千禧世代的人口實力及其在線購物的傾向，您如何看待隨著該類別的增長，實體店和線上相結合的方式會如何發展？

Yeah. To me, that's a great question. I think that there's a level of dependency on route to market relative to our two brand properties. As you can imagine, the core of Turning Point Brands is bricks and mortar and our ability to get into convenience stores throughout the country. That's -- we've certainly been on that product line with FRE throughout 2024.

是的。對我來說，這是一個很好的問題。我認為，相對於我們的兩個品牌而言，市場路線存在一定程度的依賴性。你可以想像，Turning Point Brands 的核心是實體店和我們進入全國各地便利商店的能力。那是 — — 我們在 2024 年肯定會與 FRE 合作推出該產品線。

As it relates to the ALP opportunity, for confidentiality purposes, we can't speak too specifically about their route to market. But as you can imagine, given the audience size and the demographic that you had mentioned that we feel very strongly that there may be an outsized opportunity from an online perspective based on some of the underlying dynamics with that brand and how it's being marketed.

由於它與 ALP 機會相關，出於保密目的，我們不能太具體地談論他們的市場途徑。但你可以想像，考慮到你提到的受眾規模和人口統計數據，我們強烈地感覺到，從在線角度來看，基於該品牌的一些潛在動態和營銷方式，可能存在巨大的機會。

Great. Congrats on the quarter.

偉大的。恭喜本季取得佳績。

Aaron Grey, Alliance Global Partners.

聯盟全球合作夥伴 (Alliance Global Partners) 的 Aaron Grey。

Congrats on the quarter, guys. First question for me, just wanted to -- of course, I just want to double back on modern oral. Instead on distribution, more so on the marketing between the two brands, FRE and ALP. Just any color you could provide in terms of how you're looking to market between the two? You just referenced now between maybe more of a focus for online for ALP, maybe implying more brick-and-mortar for FRE. So how exactly you're planning for the marketing that coincides with that and the investments you're planning to make? Thank you.

大家，恭喜本季取得佳績。對我來說第一個問題只是想——當然，我只是想再討論現代口語。不僅在於分銷，更重要的是 FRE 和 ALP 兩個品牌之間的行銷。就您希望如何在這兩者之間進行行銷而言，您能提供任何具體資訊嗎？您剛才提到，ALP 可能更專注於線上業務，這可能意味著 FRE 會更專注於實體業務。那麼您具體如何規劃與之相適應的行銷以及您計劃進行的投資呢？謝謝。

Yeah. Let me just double back really quickly on a point you just made. Look, I think that there's going to be a wide opportunity in bricks and mortar across all of our brand properties. I was really referencing the early innings launches of -- between the two properties where the strengths of the organization may lie. From our standpoint, ultimately, we see multiple brands underneath our portfolio of products as an opportunity to cast the widest net possible to speak to all consumers across modern oral.

是的。讓我快速回顧一下你剛才提出的觀點。我認為，我們所有品牌的實體店都將面臨廣闊的機會。我實際上指的是這兩個資產之間的早期啟動階段，而這正是該組織的優勢所在。從我們的角度來看，最終，我們將產品組合下的多個品牌視為一個機會，可以盡可能廣泛地與現代口腔領域的所有消費者進行交流。

And if you think aboutthe projected category growth over time, there will be more new consumers entering the category over the long haul than exist today. And we think having those multiple properties give us the best possible option to reach those consumers.

如果你考慮一下預期的品類隨時間的增長，那麼從長遠來看，進入該品類的新消費者數量將會比現在的消費者數量更多。我們認為，擁有這些多種設施為我們提供了接觸這些消費者的最佳選擇。

Okay. Great. Thanks for that commentary. Second question for me, just on Zig-Zag, right? So you talked about some of the drag that you had there from Clippers that shifted away. But as we think about the gross margin profile, it was down a little bit in the quarter. You called out mix. I just want to dive a little bit deeper into that in terms of how you're thinking about Zig-Zag for 2025, both in terms of sales?

好的。偉大的。謝謝你的評論。我的第二個問題是關於 Zig-Zag 的，對嗎？所以你談到了快艇隊離開後給你帶來的一些阻力。但當我們考慮毛利率狀況時，我們發現本季的毛利率略有下降。你喊出了混合。我只是想更深入地談談您對 2025 年 Zig-Zag 的看法，包括銷售方面嗎？

You alluded to growth for the brand despite the drag Clippers. And then also how we should think about the gross margin profile there?

您暗示，儘管快艇隊面臨壓力，但品牌仍會實現成長。那我們該如何看待那裡的毛利率狀況呢？

Yeah, sure thing. So in terms of growth, our thinking hasn't really changed. It's mid-single-digit growth. And like we said, we will be investing in the sales team to broaden our reach across all stores. In terms of the margin profile, what we've seen is a mix shift into some lower margin product categories. And I would anticipate that, that would continue as we -- and we will also be leveraging our fixed cost basis. So from an op income percent basis, we'll see somewhat moderated growth or margin impact in the next year.

是的，當然可以。因此從成長方面來看，我們的想法並沒有真正改變。這是中等個位數的成長。正如我們所說的，我們將投資銷售團隊，以擴大我們在所有商店的影響力。從利潤率狀況來看，我們看到產品組合正在轉向一些利潤率較低的產品類別。而且我預計這種情況將會持續下去——我們還將利用我們的固定成本基礎。因此，從營業收入百分比來看，我們將看到明年的成長或利潤率影響會有所緩和。

And that concludes our Q&A session. I will now turn the conference back over to Graham Purdy for closing remarks.

我們的問答環節到此結束。現在，我將會議交還給 Graham Purdy，請他致閉幕詞。

Thanks, operator. I appreciate everybody joining the call today. It's exciting 2024 for us, and we look forward to speaking to you all on the Q1 results here in the next couple of months.

謝謝，接線生。我感謝今天參加電話會議的各位。對我們來說，2024 年是令人興奮的一年，我們期待在接下來的幾個月與大家討論第一季的表現。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。