Category: Financial

  • Charlie’s Holdings Releases 3Q 2020 Results

    Charlie’s Holdings Releases 3Q 2020 Results

    Charlie’s Holdings, parent to Charlie’s Chalk Dust (CCD), announced yesterday its financial results for the third quarter ended September 30, 2020. Charlie’s Holdings, a premium, nicotine-only, e-cigarette and the hemp-derived, CBD wellness manufacturer, states that revenue for the three months ended September 30, 2020 was $3,894,000, a decrease of $1,696,000, or 30 percent, compared to $5,590,000 for the three months ended September 30, 2019.

    The decrease was due to a $1,181,000 decrease in Charlie’s nicotine-based product sales and a $515,000 decrease in sales of its CBD wellness products, according to a press release.

    “Gross profit for the three months ended September 30, 2020 was $2,228,000, a decrease of $837,000, or 27 percent, compared to $3,065,000 for the three months ended September 30, 2019. The resulting gross margin was 57 percent for the three months ended September 30, 2020, compared to 55 percent for the three months ended September 30, 2019,” the release states. “For the three months ended September 30, 2020, cost of goods sold, as a percent of revenue, decreased 200 basis points due to a favorable mix of higher margin sales for both Charlie’s and Don Polly, but was slightly offset by the effects of distributors and retailers participating in volume incentive rebate programs, as well as lower fixed cost absorption.”

    On August 31, 2020, CCD announced the filing of its initial premarket tobacco product application (PMTA) submission with the U.S. Food and Drug Administration (FDA). The submission marks the first of these applications that CCD intends to take through FDA’s approval process as it seeks to create a long-term, robust product portfolio, according to the release.

    The FDA’s Center for Tobacco Products informed CCD that its PMTA had received a valid submission tracking number, passed the filing review phase, and recently entered the substantive review phase. To date, Charlie’s has invested over $5 million for its initial PMTA submission.

    “We have engaged a team of more than 200 professionals, including doctors, scientists, biostatisticians, data analysts, and numerous contract research organizations to create our comprehensive PMTA submission,” the release states. “This news highlights our progress toward achieving full regulatory compliance and our goal of providing customers with a trusted product portfolio. We are confident that during the substantive review phase of the PMTA process, the FDA will recognize that our submission is both distinguished and suitable for approval.”

    Brandon Stump, CEO of Charlie’s Holdings, said the company has always been at the forefront of change creating innovative products, helping to shape regulation, and acting as industry stewards.

    “Charlie’s has been able to find creative ways to work with our customers and help them to find continued success during these trying times,” he said. “We believe it is incumbent upon us as an industry leader to work with our customers to help shoulder the burden of economic uncertainty. The team at Charlie’s has been diligently working to ensure its customers will have access to high quality, safe products for decades to come. We took the premium, rather than the discounted approach, having already invested $5 million on the highest quality application available to us.”

    Operating loss for the three months ended September 30, 2020 was $921,000, a decrease of $269,000, or 23 percent, compared to $1,190,000 for the three months ended September 30, 2019, the release states. Net loss for the three months ended September 30, 2020 was $6,824,000, compared to net income of $1,557,000 for the three months ended September 30, 2019.

  • Turning Point Declares Stock Dividend

    Turning Point Declares Stock Dividend

    Photo: Alexsander-777 from Pixabay

    Turning Point Brands (TPB) has declared a regular quarterly dividend of $0.05 per common share. The dividend is payable on Jan. 8, 2021, to shareholders of record on the close of business on Dec. 18, 2020, the company announced in a statement.

    TPB manufactures, markets and distributes branded consumer products with active ingredients through its Zig-Zag and Stoker’s core brands and its emerging brands within the NewGen segment.

    The company’s products are available in more than 210,000 retail outlets in North America and on various websites.

  • Juul Labs Shrinks Valuation to $10 Billion

    Juul Labs Shrinks Valuation to $10 Billion

    Juul starter kit

    Juul Labs has cut its valuation to about $10 billion from $12 billion at the end of last year, reports Reuters.

    Juul was valued at $38 billion in December 2018, when Altria Group took a 35 percent stake in the company.

    The latest write down follows recent decisions to exit certain markets and related restructuring costs, according to the memo sent to Juul employees by chief executive officer K.C. Crosthwaite.

    “Today’s valuation does not surprise me, and I expect other investors to also arrive at lower valuation marks that factor in our recent restructuring,” he reportedly said.

    Juul has faced heightened regulatory scrutiny following a rise in teenage vaping and a ban on the sale of popular flavors.

    In September, the company said it would make a significant cut to its global workforce and explore pulling out of some European and Asia-Pacific markets to save cash.

    Earlier this month, the company announced its exit from Germany.

  • Turning Point Brands Announces 3rd Quarter Results

    Turning Point Brands Announces 3rd Quarter Results

    Turning Point Brands (TPB) increased its net sales 7.6 percent to $104.2 million. The manufacturer, marketer and distributor of branded consumer products today announced financial results for its third quarter ended September 30, 2020.

    “While we still expect short-term disruption related to the [premarket tobacco product application] PMTA process to impact our fourth quarter, the extensive portfolio of products submitted through the PMTA process has us increasingly optimistic about our outlook going forward as the market consolidates,” said Larry Wexler, TPB president and CEO.

    Highlights from the report include gross profit increase of 12.8 percent to $48.3 million and a net income increase of $1.5 million to $7.8 million, despite costs associated with PMTA submissions.

    “Streamlining and repositioning the business at the end of 2019 has paid dividends throughout 2020. The NewGen [next generation tobacco products] segment navigated admirably through significant market disruption caused by the PMTA application deadline,” said Wexler. “Overall, we are seeing ongoing benefits from re-shaping our business towards a more growth-oriented mindset and are able to raise our outlook once again for the remainder of the fiscal year.”

  • Analysts Supporting Turning Point Brands’ Stock Upside

    Analysts Supporting Turning Point Brands’ Stock Upside

    Financial analysts are now falling in love with Turning Point Brands (TPB). The company’s stock, TPB, now has at least three analysts covering the stock and the consensus rating is “Buy.” The company has submitted premarket tobacco product applications (PMTA) for 250 products.

    The target price ranges between 50 and 39 calculating the mean target price of 42.67, according to data from seekingalpha.com. TPB’s share price reflects a potential upside of approximately 30 percent based on the underlying business with additional “upside optionality” from each of the opportunities noted above.

    Reasons for the growth include recent U.S. Food and Drug Administration (FDA) regulatory intervention that “creates multiple market share ‘land grab’ opportunities for TPB as non-compliant competitors are forced to exit the marketplace. There are also new growth initiatives for the smokable CBD segment through product introductions (e.g., cones, hemp paper) and entry into alternative growth channels (e.g., headshops, dispensaries and e-commerce) in both US and Canadian markets,” according to seekingalpha.

    “The NewGen division represents TPB’s growth engine and platform focusing on developing, testing, acquiring and investing in high-growth new proprietary businesses,” writes the author. ” While it is the largest revenue segment, it currently includes mostly lower margin third-party products sold through online distribution channels. As the product mix shifts towards proprietary products, the gross margins will rise to proprietary standard margins of 50%+ without impacting costs.”

  • Republic Technologies Buys French E-Liquid Maker

    Republic Technologies Buys French E-Liquid Maker

    Photo: Manfred Schindler from Pixabay

    Republic Technologies International (RTI) has bought Innovative – So Good to expand the scope of its business. The acquisition bolsters RTI’s presence in the e-cigarette segment and establishes the company as a major player in premium certified French origin e-liquids.

    Based in Angouleme, France, Innovative – So Good manufacturers e-liquids and distributes equipment exclusively available through the tobacconists’ network.

    “So Good is a recognized brand and customers appreciate the high quality of its liquids,” said RTI Managing Director Olivier Partouche, who oversaw the purchase. “Thanks to the work of Cedric Lacouture and his teams, it has become a major premium brand available through the tobacconist network. The complementary nature of our E-CG liquids was obvious to us and this merger will help us further expand our product offering and enable us to support tobacconists as they grow this new segment.”

    “Our joining forces with Republic Technologies through the E-CG brand is excellent news for our customers,” said Lacouture, So Good’s founder. “In the short term, they’ll get access to a comprehensive offering of e-liquids, e-cigarettes and items for smokers. Of all the acquisition proposals that we received, [RTI’s] was the most persuasive as far as So Good’s future and its development are concerned.”

    For more than 150 years, the Republic Technologies group has been developing and manufacturing cigarette paper under the OCB, Job and Zig-Zag brands. Building on its industrial experience, the group has been selling e-liquids and vaping accessories under the E-CG brand since 2015.

  • Juul to Cut Jobs, Considers Exit From Asia and Europe

    Juul to Cut Jobs, Considers Exit From Asia and Europe

    Juul starter kit

    Juul Labs has said it is planning another significant round of layoffs and considering halting sales across Europe and Asia. That could mean pulling out of as many as 11 countries and shrinking the company’s footprint to its core markets of the U.S., Canada and the U.K., according to a story in the Wall Street Journal.

    Juul cut about one-third of its 3,000 workers earlier this year and already has halted sales of its vaporizers in several countries. The once fast-growing company has been scaling back its operations to combat a sharp drop in sales. It currently has about 2,200 employees, the story states.

    It’s the third major shakeup since September as Juul attempts to revamp its strategy in the face of heightened scrutiny of vaping.

    The bulk of the cuts will hit Juul’s marketing department. Juul said it would cut 150 jobs and phase out the position of chief marketing officer, adding to 500 reductions announced in October. In total, the company is slashing 650 jobs, or 15 percent of its global workforce.

    “As the vapor category undergoes a necessary reset, this reorganization will help Juul Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world,” Juul CEO KC Crosthwaite was quoted as saying.

    The company’s future advertising efforts will focus on direct marketing. It’s still enforcing its strategy of avoiding TV, print and online marketing.

    Juul said it will continue to invest in its product team as the company explores new technologies to combat underage use. The company has reportedly submitted to the U.S. Food and Drug Administration a new version of its vaporizer designed to unlock only for users at least 21 years old.

    Juul’s value has deteriorated as concerns mounted about the health risks of vaping and U.S. regulators pushed for a crackdown on e-cigarettes. Juul was also criticized for selling flavored pods that became popular with teens. Altria, which invested $12.8 billion for a 35 percent stake in Juul in 2018, recently wrote down its investment by $4.5 billion.

  • Smoore Posts 40 Percent Jump in Profits Over 2019

    Smoore Posts 40 Percent Jump in Profits Over 2019

    Smoore’s Chairman and CEO Chen Zhiping

    Smoore International is defying numerous challenges. The world’s most-valuable vapor company has overcome a pandemic, a trade war and tightening regulations to report a huge increase in profit.

    Smoore International Holdings, based in Shenzhen, China, posted a 40 percent year-on-year jump in underlying net profit on Monday for the first half of 2020, to 1.3 billion yuan, according to the South China Morning Post. Revenue rose 18.5 percent to 3.88 billion yuan. Last year Smoore posted a 16.5 percent share of the $763 billion global vaping devices market, up from 10 percent in 2018, according to Smoore’s chief financial officer Wang Guisheng

    “In the year’s first quarter, our sales dropped 8.8 per cent year-on-year, as the pandemic curtailed our production capacity for a month,” said Wang Guisheng on Tuesday. “We quickly resumed normal operation, with second-quarter revenue doubling from the first-quarter, and rising 38.9 per cent year-on-year.”

    While only half its production capacity was used in the first six months, the company is undergoing phase one expansion that it says will double it next year. Phase two expansion will boost production by a further two thirds by 2023. Smoore just recently joined the Stock Exchange of Hong Kong. 

    “The expansion will further drive down our unit production cost through automation,” said chairman Chen Zhiping, according to the release.

    Smoore recently had a premarket tobacco product application (PMTA) accepted by the U.S. Food and Drug Administration (FDA) for its flagship brand, Vaporesso. The regulatory agency requires all manufacturers and distributors to submit PMTA data by September 9. 

    The US made up around half of Smoore’s sales, while 18.6 percent came from mainland China and 12.5 percent came from each of Japan and Europe. Chen said the company had made a filing to the FDA for one of its self-branded products, and has been assisting with its US customers’ filings.

    Since 2018, its US customers have had to pay a 25 percent additional import tariff as part of the fallout from the trade spat between Washington and Beijing. The firm said the tariff has not stopped US demand from growing since its products are “technologically superior”.

  • Pyxus Emerges Healthy After Filing Chapter 11

    Pyxus Emerges Healthy After Filing Chapter 11

    Pieter Sikkel
    Photo: Pyxus International

    Pyxus International has successfully completed its financial restructuring and emerged from Chapter 11 with its debt reduced by more than $400 million and maturities extended. The company announced that the Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Pyxus International and its Affiliated Debtors confirmed by the U.S. Bankruptcy Court for the District of Delaware on Aug. 21, 2020, has become effective.

    “Over the last two months, we have been keenly focused on enhancing the company’s financial flexibility, and the completion of our financial restructuring process is a significant step forward,” said Pieter Sikkel, Pyxus’ president and CEO. “We are now a stronger and more competitive company with a foundation that bolsters our position in targeted markets and enables us to drive long-term value for all of our stakeholders. I want to thank our exceptional team at Pyxus for their commitment and continued focus through this process. We are also grateful for the support of our vendors, suppliers, customers and partners, and we look forward to working together for years to come.”

    Under the terms of the plan, Pyxus has completed a comprehensive balance sheet restructuring that includes but is not limited to extending the maturity of its existing first lien debt, eliminating $635 million in principal amount of existing second lien debt, while adding a $213 million exit term loan, which replaced the debtor-in-possession financing incurred in connection with the Chapter 11 cases, and a $75 million exit asset based revolving facility. The elimination of the second lien debt and access to new working capital lines of credit, including foreign credit facilities, substantially strengthens the company’s balance sheet.

    A series of corporate transactions resulted in the company being a new corporation renamed Pyxus International, which through its subsidiaries continues to operate the company’s businesses, while the corporation formerly known as Pyxus International has changed its name to Old Holdco All outstanding shares of Old Holdco were canceled.

  • Flavour Warehouse Acquires Premier Retail Limited

    Flavour Warehouse Acquires Premier Retail Limited

    Credit: Frederick Warren

    Flavour Warehouse, parent of the Vampire Vape brand, today announced the acquisition of Premier Retail Limited. The deal is expected to expand Flavour Warehouse’s UK footprint.

    Established in 2012, Flavour Warehouse operates in over 80 countries via a network of franchises, distributors and resellers. The acquisition of Premier Vaping strengthens the company’s international expansion and builds on the brand’s growth plans for the future according to a press release.

    Premier Vaping, based in Stockport, is part of the Premier Retail Group, established in 2008. The brand has formed distribution partnerships with leading hardware and e-Liquid manufacturers around the world and stocks an extensive range of products in addition to its own brand of E-Liquids, according to the release.

    “Premier Vaping is a natural fit for us, due to the brand’s firmly established position in the market and the wide range of products they offer,” said Kanesh Khilosia, director at Flavour Warehouse. “The acquisition of this business is the next step in the development of our extended growth strategy.”

    Within the next five years, directors at Flavour Warehouse plan to significantly grow the company via an organic and acquisitive growth strategy, expanding its reach through a multi-channel, global approach.