Turning Point Brands, Inc. Segments Disclosure

Note 21. Segment Information

 

In accordance with ASC 280, Segment Reporting, the Company has two reportable segments, Zig-Zag products and Stoker’s products. The Zig-Zag products segment markets and distributes (a) rolling papers, tubes, and related products; (b) finished cigars and MYO cigar wraps; and (c) lighters and other accessories. The Stoker’s products segment (a) manufactures and markets moist snuff, (b) contracts for and markets loose-leaf chewing tobacco products, and (c) FRE, its modern oral product. The Company's products are distributed primarily through wholesale distributors in the U.S. and Canada. Corporate unallocated includes the costs and assets of the Company not assigned to one of the two reportable segments and includes 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 costs related to the FDA premarket tobacco product application. The Company did not have any customers that accounted for more than 10% of net sales in 2025. The Company had one customer that accounted for 10.2% of net sales in 2024, of which 54% was in the Stoker's product segment and 46% was in the Zig-Zag products segment in 2024.  There were no customers that accounted for more than 10% of net sales in 2023.

 

The Company’s CODM is its President and Chief Executive Officer and uses segment operating income as the measure of earnings to evaluate the performance of each segment and to make decisions about allocating resources, including employees, property, plant and equipment, as well as financial and capital resources. On a quarterly basis, the CODM reviews segment operating income budget-to-actual variances to assess segment performance and make resource allocation decisions. For both reportable segments, cost of sales is the significant segment expense that is regularly provided to the CODM. 

 

The accounting policies of these segments are the same as those of the Company. Corporate costs are not directly charged to the two reportable segments in the ordinary course of operations. 

 

The tables below present financial information about reportable segments:

 

		For the years ended December 31,
		2025				2024				2023
Net sales
Zig-Zag products		$	178,478			$	192,394			$	180,455
Stoker’s products			284,584				168,266				144,609
Total		$	463,062			$	360,660			$	325,064
Cost of sales
Zig-Zag products		$	82,577			$	85,809			$	79,400
Stoker’s products			116,171				73,286				62,722
Total		$	198,748			$	159,095			$	142,122
Gross profit
Zig-Zag products		$	95,901			$	106,585			$	101,055
Stoker’s products			168,413				94,980				81,887
Total		$	264,314			$	201,565			$	182,942
Other segment items (1)
Zig-Zag products		$	36,960			$	39,888			$	32,775
Stoker’s products			59,308				26,708				19,679
Total		$	96,268			$	66,596			$	52,454
Operating income (loss)
Zig-Zag products		$	58,941			$	66,697			$	68,280
Stoker’s products			109,105				68,272				62,208
Total segment operating income			168,046				134,969				130,488
Corporate unallocated (2)(3)			(72,719	)			(54,137	)			(47,528	)
Total		$	95,327			$	80,832			$	82,960
Other income			(6,616	)			-				(4,000	)
Interest expense, net			17,466				13,983				14,645
Investment (gain) loss			(1,060	)			1,968				9,601
(Income) losses from equity investments			1,159				(75	)			2,313
Loss (gain) on extinguishment of debt			1,235				-				(1,664	)
Income from continuing operations before income taxes		$	83,143			$	64,956			$	62,065
Capital expenditures
Zig-Zag products		$	348			$	2,342			$	1,112
Stoker’s products			13,181				2,271				4,595
Total		$	13,529			$	4,613			$	5,707
Depreciation and amortization
Zig-Zag products		$	1,011			$	1,469			$	1,077
Stoker’s products			6,405				4,193				3,041
Total		$	7,416			$	5,662			$	4,118

 

(1)	Includes primarily selling and marketing costs

(2)	Includes corporate costs that are not allocated to any of the two reportable segments

(3)   Includes costs related to PMTA of $4.8 million, $3.6 million and $2.1 million in 2025, 2024, and 2023, respectively.

 

		December 31,				December 31,
		2025				2024
Assets
Zig-Zag products		$	256,762			$	224,052
Stoker’s products			268,305				197,038
Assets held for sale			-				15,329
Corporate unallocated (1)			238,683				56,934
Total		$	763,750			$	493,353

 

(1)	Includes assets not assigned to the two reportable segments. All goodwill has been allocated to the reportable segments.

 

Net Sales:  Domestic and Foreign

 

The following table shows a breakdown of consolidated net sales between domestic and foreign.

 

		For the years ended December 31,
		2025				2024				2023
Domestic		$	427,385			$	330,690			$	294,296
Foreign			35,677				29,970				30,768
Total		$	463,062			$	360,660			$	325,064