May 7th, 2026

The call highlights substantial and accelerating growth in the Modern Oral category (167% gross, 133% net YoY), a raised full‑year Modern Oral guidance, strong consolidated revenue and adjusted EBITDA that exceeded midpoint guidance, meaningful retail chain wins and considerable investment in commercial infrastructure and manufacturing to scale the business. Offsetting these positives are near‑term financial pressures: negative Q1 free cash flow (-$27.4M), higher SG&A and marketing spend, Zig‑Zag sales weakness (-22%), tariff‑driven margin pressure in legacy Stoker's, regulatory (PMTA) timing uncertainty and a wide EBITDA guidance range tied to execution and discretionary spend. On balance, management is prioritizing aggressive, front‑loaded investments to capture share in a nascent category and has the cash and operational plan to support that pivot, while acknowledging short‑term profitability and cash‑flow tradeoffs.

Company Guidance

Turning Point raised 2026 Modern Oral guidance to gross sales of $280–$300M (from $220–$240M) and net sales of $210–$225M (from $180–$190M), implying ~83.7% gross revenue growth at the midpoint, and introduced full‑year EBITDA guidance of $70–$90M with an expected effective tax rate of 23–26%; the company plans $80–$105M in sales & marketing spend, budgeted CapEx of $4–$5M (plus $3–$5M for PMTA work), expects chain store count to rise ~70% year‑over‑year by end‑2026, and believes Modern Oral margins could approach 70% at scale by the end of the decade. In Q1 consolidated sales were $124.3M, gross profit $68.3M (55% gross margin), adjusted EBITDA was $25.9M (20.8% margin), Modern Oral Q1 net sales were $52M (gross $69M, 42% of consolidated net sales), free cash flow was -$27.4M, ending cash was $192.4M, and management expects to be approximately cash‑flow breakeven for the remainder of 2026.