LOUISVILLE, Ky.--(BUSINESS WIRE)--
Turning Point Brands, Inc. (NYSE:TPB), a leading provider of Other
Tobacco Products (“OTP”), today announced that it will retain ownership
of seven Vapor Shark branded stores by purchasing and canceling the
option granted to the former Vapor Shark owner. The action keeps those
seven stores under TPB ownership.
TPB agreed to pay the former Vapor Shark owner $1.5 million to purchase
and cancel the option to acquire the stores, with $1 million paid in
February 2018 and the remaining $0.5 million payable over 24 months.
“Shortly after acquiring Vapor Shark in June 2017, we implemented a
number of process improvements that resulted in stronger sales in the 35
Vapor Shark branded corporate and franchise stores,” said Larry Wexler,
TPB President and CEO. "As a result of the encouraging growth rates and
our desire to gain keener insight into consumer purchase behavior, we
elected to retain company ownership of these seven stores. We believe
that the improved sales trends and insights from data and direct
consumer interaction will drive performance across our NewGen segment.
Moving forward, we will continue to evaluate the benefits of owning
versus franchising those stores.”
Coincident with the Vapor Shark acquisition earlier in 2017, TPB
recorded a $0.6 million liability in the second quarter 2017 in relation
to the option granted to the former Vapor Shark owner to buy the Vapor
Shark branded stores. As a result of this agreement, TPB expects a
one-time fourth quarter 2017 charge of $0.9 million.
Fourth Quarter 2017 Tax Rate
TPB expects its fourth quarter 2017 effective tax rate to be
approximately 49% due to a number of factors including the Tax Cuts and
Jobs Act impact on tax expense as a result of revaluing our deferred
taxes.
About Turning Point Brands, Inc.
Louisville, Kentucky based Turning Point Brands, Inc. (NYSE: TPB) is a
leading U.S. provider of Other Tobacco Products. TPB, through its three
focus brands, Stoker’s® in Smokeless products, Zig-Zag®
in Smoking products and the VaporBeast® distribution engine
in NewGen products, generates solid cash flow which it uses to finance
acquisitions, increase brand support and strengthen its capital
structure. TPB does not sell cigarettes. More information about the
company is available at its corporate website, www.turningpointbrands.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements may
generally be identified by the use of words such as "anticipate,"
"believe," "expect," "intend," "plan" and "will" or, in each case, their
negative, or other variations or comparable terminology. These
forward-looking statements include all matters that are not historical
facts. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. TPB’s actual results may differ
materially from those contemplated by forward-looking statements. Actual
results could differ materially based upon factors disclosed from time
to time in TPB’s filings with the U.S. Securities and Exchange
Commission, including those factors set forth as “Risk Factors” in TPB’s
Annual Report on Form 10-K for the period ended December 31, 2016. TPB
undertakes no obligation to update any forward-looking statements. These
forward-looking statements are made only as of the date of this release.
New risks and uncertainties come up from time to time, and it is
impossible for TPB to predict these events or how they may affect it.
TPB has no obligation, and does not intend, to update any
forward-looking statements after the date hereof, except as required by
federal securities laws.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180222006577/en/
Investment Community:
Turning Point Brands, Inc.
Mark A.
Stegeman, 502-774-9238
Senior Vice President, CFO
ir@tpbi.com
or
Media:
Mozaic
Investor Relations, Inc.
Terry McWilliams, 502-774-9238
President
ir@tpbi.com
Source: Turning Point Brands, Inc.