Turning Point Brands, Inc. (“TPB” or “the Company”) (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, today announced financial results for the second quarter ended June 30, 2026.

Q2 2026 Financial Highlights

(All results reflect comparisons to prior-year period)

  • Total Consolidated Net Sales increased 22.6% to $142.9 million

    • Stoker’s segment Net Sales increased 54.5%

    • Zig-Zag segment Net Sales decreased 24.8%

  • Gross Profit increased 40.6% to $93.7 million driven by Modern Oral growth and a tariff refund; adjusting for the out of period COGS related to the tariff refund, gross profit was $81.5 million

  • Net Income decreased 75.2% to $3.6 million

  • Adjusted EBITDA decreased 50.0% to $15.2 million inclusive of strategic sales and marketing investments (see Schedule A for a reconciliation to Net Income)

  • Diluted EPS of $0.18 and Adjusted Diluted EPS of $0.23 compared to $0.79 and $0.98 respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS)

“We delivered another strong quarter, highlighted by continued growth in Modern Oral,” said Graham Purdy, President and CEO. “We believe our investments in retail distribution, commercial capabilities and brand development are translating into stronger consumer adoption and expanding market access for both FRE and ALP. The progress we’re making today positions us to capitalize on the continued shift in nicotine consumption toward modern oral to maximize long-term shareholder value.”

Stoker’s Products Segment (75% of total net sales in the quarter)

For the second quarter, Stoker’s segment net sales increased 54.5% from the prior year to $107.6 million, driven by triple-digit growth in Modern Oral net sales.

For the quarter, Stoker’s segment gross profit increased 63.3% from the prior year to $71.1 million. Adjusting for the out of period COGS related to a tariff refund, gross profit increased 40.7% to $61.2 million year-over-year. Adjusted gross profit as a percentage of net sales decreased to 56.9% for the three months ended June 30, 2026, from 62.5% for the three months ended June 30, 2025, due to higher chain penetration.

Zig-Zag Products Segment (25% of total net sales in the quarter)

For the second quarter, Zig-Zag segment net sales decreased 3.5% to $35.4 million compared to the first quarter 2026.

For the quarter, Zig-Zag segment gross profit decreased 2.1% from the prior year to $22.6 million. Adjusting for the out of period COGS related to the tariff refund, gross profit was $20.3 million. Adjusted gross profit as a percentage of net sales increased to 57.3% for the three months ended June 30, 2026, from 49.1% for the three months ended June 30, 2025, driven primarily by product mix.

Performance Measures in the Second Quarter

Investment in the quarter focused on sales and marketing efforts to support distribution and brand building. In the second quarter, consolidated selling, general and administrative (“SG&A”) expenses increased 91.1% from the prior year to $76.9 million, inclusive of Modern Oral-related sales and marketing investments and increased outbound freight costs.

As of June 30, 2026, ending cash was $268.3 million and net debt was $31.7 million, inclusive of approximately $59.6 million of equity raised during the quarter to support long term strategic objectives. The company’s total liquidity is $339.0 million, which includes $70.7 million of availability on an asset backed revolving credit facility.

2026 Outlook

  • Projected full year Modern Oral Gross Sales of $330-$350 million up from $280-$300 million

  • Projected full year Modern Oral Net Sales of $260-$270 million up from $210-$225 million

  • Projected full Year Adjusted EBITDA of $70-90 million, inclusive of investment in Modern Oral sales, marketing, and trade promotions

Earnings Conference Call

As previously disclosed, a conference call with the investment community to review TPB’s financial results has been scheduled for 9:00 a.m. Eastern on Tuesday, August 4, 2026. Investment community participants should dial in 10 minutes ahead of time using the toll-free number (833) 461-5787 (International Dial-Ins) and follow the audio prompts after typing in the event ID: 335968790. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website (www.turningpointbrands.com). A replay of the webcast will be available on the site two hours following the call.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss). A reconciliation of these non-GAAP financial measures accompanies this release. Also note that a reconciliation of forward-looking non-GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be necessary for such reconciliation.

About Turning Point Brands, Inc.

Turning Point Brands, Inc. (NYSE: TPB) is a manufacturer, marketer and distributor of branded consumer products including alternative smoking accessories and consumables with active ingredients through its iconic brand portfolio, including Zig-Zag®, Stoker’s®, FRE®, and ALP®. TPB’s products are available in more than 220,000 retail outlets in North America and on sites such as www.zigzag.com, www.frepouch.com, and www.alppouch.com. For the latest news and information about TPB and its brands, please visit 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. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the “SEC”) and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such 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. Factors that could cause these differences include, but are not limited to, those included in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

This press release contains TPB’s preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB’s customary quarter-end closing and review procedures and third-party review. As a result, TPB’s reported information in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB’s financial condition and results of operations for the quarter ending June 30, 2026 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB’s full second quarter 2026 results when such results are disclosed by TPB in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.

Financial Statements Follow on Subsequent Pages

 

Turning Point Brands, Inc.

Consolidated Statements of Income

(dollars in thousands except share data)

(unaudited)

 

 

Three Months Ended June 30,

 

 

 

2026

 

 

2025

 

Net sales

 

$

142,960

 

 

$

116,634

 

Cost of sales

 

 

49,256

 

 

 

50,011

 

Gross profit

 

 

93,704

 

 

 

66,623

 

Selling, general, and administrative expenses

 

 

76,991

 

 

 

40,296

 

Operating income

 

 

16,713

 

 

 

26,327

 

Other expense, net

 

 

63

 

 

 

–

 

Interest expense, net

 

 

4,251

 

 

 

5,140

 

Investment loss (gain)

 

 

1,089

 

 

 

(78

)

(Income) loss from equity method investment

 

 

(2,674

)

 

 

61

 

Income before income taxes

 

 

13,984

 

 

 

21,204

 

Income tax expense

 

 

3,683

 

 

 

4,244

 

Consolidated net income

 

 

10,301

 

 

 

16,960

 

Net income attributable to non-controlling interest

 

 

6,703

 

 

 

2,480

 

Net income attributable to Turning Point Brands, Inc.

 

$

3,598

 

 

$

14,480

 

 

 

 

 

 

 

 

 

 

Basic income per common share:

 

 

 

 

 

 

 

 

Net income attributable to Turning Point Brands, Inc.

 

$

0.18

 

 

$

0.81

 

Diluted income per common share:

 

 

 

 

 

 

 

 

Net income attributable to Turning Point Brands, Inc.

 

$

0.18

 

 

$

0.79

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

19,890,588

 

 

 

17,920,567

 

Diluted

 

 

20,160,795

 

 

 

18,321,913

 

Turning Point Brands, Inc.

Consolidated Balance Sheets

(dollars in thousands except share data)

(unaudited)

 

 

June 30,

 

 

December 31,

 

ASSETS

 

2026

 

 

2025

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

268,307

 

 

$

222,760

 

Accounts receivable, net of allowances of $244 in 2026 and $206 in 2025

 

 

22,698

 

 

 

25,726

 

Inventories, net

 

 

133,434

 

 

 

107,989

 

Other current assets

 

 

75,695

 

 

 

60,675

 

Total current assets

 

 

500,134

 

 

 

417,150

 

Property, plant, and equipment, net

 

 

39,703

 

 

 

36,247

 

Right of use assets

 

 

15,689

 

 

 

14,480

 

Deferred financing costs, net

 

 

858

 

 

 

1,180

 

Goodwill

 

 

135,830

 

 

 

136,097

 

Other intangible assets, net

 

 

63,419

 

 

 

64,042

 

Master Settlement Agreement (MSA) escrow deposits

 

 

29,684

 

 

 

29,887

 

Other assets

 

 

69,879

 

 

 

64,667

 

Total assets

 

$

855,196

 

 

$

763,750

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

35,292

 

 

$

20,420

 

Accrued liabilities

 

 

52,924

 

 

 

54,587

 

Total current liabilities

 

 

88,216

 

 

 

75,007

 

Deferred tax liabilities, net

 

 

7,851

 

 

 

8,289

 

Notes payable and long-term debt

 

 

294,145

 

 

 

293,625

 

Other long-term liabilities

 

 

–

 

 

 

4,138

 

Lease liabilities

 

 

10,960

 

 

 

10,708

 

Total liabilities

 

 

401,172

 

 

 

391,767

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0-

 

 

–

 

 

 

–

 

Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,833,181 issued shares and 20,048,922 outstanding shares at June 30, 2026, and 20,589,527 issued shares and 19,132,384 outstanding shares at December 31, 2025

 

 

225

 

 

 

216

 

Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0-

 

 

–

 

 

 

–

 

Additional paid-in capital

 

 

241,320

 

 

 

203,627

 

Cost of repurchased common stock (784,259 shares at June 30, 2026 and 1,457,143 shares at December 31, 2025)

 

 

(21,171

)

 

 

(47,637

)

Accumulated other comprehensive loss

 

 

(1,975

)

 

 

(1,563

)

Accumulated earnings

 

 

211,699

 

 

 

199,661

 

Non-controlling interest

 

 

23,926

 

 

 

17,679

 

Total stockholders’ equity

 

 

454,024

 

 

 

371,983

 

Total liabilities and stockholders’ equity

 

$

855,196

 

 

$

763,750

 

Turning Point Brands, Inc.

Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Consolidated net income

 

$

24,243

 

 

$

32,751

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

–

 

 

 

1,235

 

Loss on sale of property, plant, and equipment

 

 

–

 

 

 

45

 

(Income) loss from equity method investment

 

 

(5,657

)

 

 

211

 

Loss (gain) on investments, net

 

 

1,224

 

 

 

(17

)

Depreciation and other amortization expense

 

 

3,808

 

 

 

2,893

 

Amortization of other intangible assets

 

 

627

 

 

 

612

 

Amortization of deferred financing costs

 

 

842

 

 

 

872

 

Deferred income tax expense

 

 

(398

)

 

 

2,716

 

Stock compensation expense

 

 

5,639

 

 

 

3,292

 

Noncash lease income

 

 

(1,623

)

 

 

(728

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

2,671

 

 

 

(20,504

)

Inventories

 

 

(25,701

)

 

 

(8,604

)

Other current assets

 

 

(15,060

)

 

 

(5,486

)

Other assets

 

 

(46

)

 

 

(4,087

)

Accounts payable

 

 

13,564

 

 

 

14,187

 

Accrued liabilities and other

 

 

(65

)

 

 

9,842

 

Net cash provided by operating activities

 

$

4,068

 

 

$

29,230

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

$

(5,227

)

 

$

(6,176

)

Payment for equity investments

 

 

(1,450

)

 

 

(2,783

)

Purchases of investments

 

 

(3,833

)

 

 

(4,079

)

Proceeds from sale of investments

 

 

3,850

 

 

 

4,460

 

MSA escrow deposits, net

 

 

5

 

 

 

(48

)

Purchase of option agreement

 

 

(4,940

)

 

 

–

 

Net cash used in investing activities

 

$

(11,595

)

 

$

(8,626

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Redemption of 2026 Notes

 

$

–

 

 

$

(250,000

)

Proceeds from 2032 Notes

 

 

–

 

 

 

300,000

 

Equity offering proceeds

 

 

59,549

 

 

 

–

 

Tax distribution

 

 

(2,500

)

 

 

–

 

Payment of dividends

 

 

(3,270

)

 

 

(2,731

)

Payment of financing costs

 

 

–

 

 

 

(7,251

)

Exercise of options

 

 

324

 

 

 

4,921

 

Redemption of options

 

 

–

 

 

 

(33

)

Redemption of restricted stock units

 

 

(330

)

 

 

(1,970

)

Redemption of performance based restricted stock units

 

 

(1,014

)

 

 

(2,624

)

Net cash provided by financing activities

 

$

52,759

 

 

$

40,312

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

$

45,232

 

 

$

60,916

 

Effect of foreign currency translation on cash

 

$

292

 

 

$

20

 

 

 

 

 

 

 

 

 

 

Cash, beginning of period:

 

 

 

 

 

 

 

 

Unrestricted

 

$

222,760

 

 

$

48,941

 

Restricted

 

 

1,914

 

 

 

1,961

 

Total cash at beginning of period

 

$

224,674

 

 

$

50,902

 

 

 

 

 

 

 

 

 

 

Cash, end of period:

 

 

 

 

 

 

 

 

Unrestricted

 

$

268,307

 

 

$

109,925

 

Restricted

 

 

1,891

 

 

 

1,913

 

Total cash at end of period

 

$

270,198

 

 

$

111,838

 

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss). We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Adjusted Operating Income (Loss) are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance.

We define “EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization. We define “Adjusted EBITDA” as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Net Income” as net income excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Diluted EPS” as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define “Adjusted Operating Income (Loss)” as operating income (loss) excluding other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance.

Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income (Loss) exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure

In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures. Note that a reconciliation of forward-looking non-GAAP measures, including EBITDA, to the most directly comparable GAAP measures is not provided because comparable GAAP measures for such measures are not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be necessary for such reconciliation.

Schedule A

 

 

Turning Point Brands, Inc.

Reconciliation of GAAP Net Income to Adjusted EBITDA

(dollars in thousands)

(unaudited)

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2026

 

 

2025

 

Net income attributable to Turning Point Brands, Inc.

 

$

3,598

 

 

$

14,480

 

Add:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

4,388

 

 

 

5,140

 

Income tax expense

 

 

3,974

 

 

 

4,244

 

Depreciation expense

 

 

939

 

 

 

842

 

Amortization expense

 

 

1,429

 

 

 

1,048

 

EBITDA

 

$

14,328

 

 

$

25,754

 

Components of Adjusted EBITDA

 

 

 

 

 

 

 

 

Corporate restructuring (a)

 

 

133

 

 

 

–

 

Stock based compensation (b)

 

 

2,701

 

 

 

1,628

 

Transactional expenses and strategic initiatives (c)

 

 

94

 

 

 

569

 

Non-recurring legal (d)

 

 

667

 

 

 

504

 

FDA PMTA (e)

 

 

3,170

 

 

 

1,651

 

Mark-to-market loss (gain) on Canadian inter-company note (f)

 

 

598

 

 

 

(665

)

Tariff adjustment (g)

 

 

(8,475

)

 

 

–

 

Manufacturing start-up costs (h)

 

 

657

 

 

 

–

 

Honorarium (i)

 

 

63

 

 

 

–

 

Non-cash asset impairment (j)

 

 

1,307

 

 

 

908

 

Gain on investment (k)

 

 

–

 

 

 

(714

)

Non-recurring freight (l)

 

 

–

 

 

 

837

 

Adjusted EBITDA

 

$

15,243

 

 

$

30,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Represents costs associated with corporate restructuring, including severance and early retirement.

(b)

Represents non-cash stock options, restricted stock, PRSUs, etc.

(c)

Represents the fees incurred for transaction expenses.

(d)

Represents legal expenses incurred in connection with litigation related to an insurance claim.

(e)

Represents costs associated with applications related to FDA premarket tobacco product application (“PMTA”). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete.

(f)

Represents a mark-to-market loss (gain) attributable to foreign exchange fluctuation.

(g)

Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund or refunded.

(h)

Represents non-recurring expenses incurred during the start-up of manufacturing lines.

(i)

Represents an honorarium gift included in other expense, net.

(j)

Represents impairment of investment assets.

(k)

Represents gain on investments.

(l)

Represents elevated non-recurring outbound freight costs due to ERP transition.

Schedule B

 

Turning Point Brands

Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted EPS to Adjusted Diluted EPS

(dollars in thousands except share data)

(unaudited)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2026

 

 

June 30, 2025

 

 

 

Adjusted Net Income

 

 

Adjusted Diluted EPS

 

 

Adjusted Net Income

 

 

Adjusted Diluted EPS

 

GAAP Net Income and Diluted EPS

 

$

3,598

 

 

$

0.18

 

 

$

14,480

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate restructuring (a)

 

 

98

 

 

 

0.00

 

 

 

–

 

 

 

–

 

Stock based compensation (b)

 

 

1,990

 

 

 

0.10

 

 

 

1,302

 

 

 

0.07

 

Transactional expenses and strategic initiatives (c)

 

 

69

 

 

 

0.00

 

 

 

455

 

 

 

0.02

 

Non-recurring legal (d)

 

 

491

 

 

 

0.02

 

 

 

403

 

 

 

0.02

 

FDA PMTA (e)

 

 

2,335

 

 

 

0.12

 

 

 

1,321

 

 

 

0.07

 

Mark-to-market gain on Canadian inter-company note (f)

 

 

441

 

 

 

0.02

 

 

 

(532

)

 

 

(0.03

)

Tariff adjustment (g)

 

 

(6,243

)

 

 

(0.31

)

 

 

–

 

 

 

–

 

Manufacturing start-up costs (h)

 

 

484

 

 

 

0.02

 

 

 

–

 

 

 

–

 

Honorarium (i)

 

 

46

 

 

 

0.00

 

 

 

–

 

 

 

–

 

Non-cash asset impairment (j)

 

 

963

 

 

 

0.05

 

 

 

726

 

 

 

0.04

 

Gain on investment (k)

 

 

–

 

 

 

–

 

 

 

(571

)

 

 

(0.03

)

Non-recurring freight (l)

 

 

–

 

 

 

–

 

 

 

669

 

 

 

0.04

 

Tax benefit (m)

 

 

400

 

 

 

0.02

 

 

 

(265

)

 

 

(0.01

)

Adjusted Net Income and Adjusted Diluted EPS

 

$

4,672

 

 

$

0.23

 

 

$

17,988

 

 

$

0.98

 

(a)

Represents costs associated with corporate restructuring, including severance and early retirement.

(b)

Represents non-cash stock options, restricted stock, PRSUs, etc.

(c)

Represents the fees incurred for transaction expenses.

(d)

Represents legal expenses incurred in connection with litigation related to an insurance claim.

(e)

Represents costs associated with applications related to FDA premarket tobacco product application (“PMTA”). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a one-time resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete.

(f)

Represents a mark-to-market loss (gain) attributable to foreign exchange fluctuation.

(g)

Represents adjustment to current period costs of goods sold to exclude tariffs subject to refund or refunded.

(h)

Represents non-recurring expenses incurred during the start-up of manufacturing lines.

(i)

Represents an honorarium gift included in other expense, net.

(j)

Represents impairment of investment assets.

(k)

Represents gain on investments.

(l)

Represents elevated non-recurring outbound freight costs due to ERP transition.

(m)

Represents adjustment from quarterly tax rate to quarterly projected tax rate of 22% in 2026 and 21% in 2025.

 

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