Turning Point ended the quarter with $167 million cash and $189 million available liquidity
For a company that mostly sells papers, Turning Point Brands (NYSE: TPB) is turning into a behemoth in the cannabis industry. The company announced during its recent earnings results that it was increasing its guidance for 2021 net sales to a range of $422 million to $440 million. This is up from the previous guidance of $412 million to $432 million. This increase includes net sales of $103 million to $109 million in the second quarter. Adjusted EBITDA for the full year is now expected to be $103 million to $108 million, up from previous guidance of $99 million to $105 million.
Breaking Down The Growth
Most of the cannabis companies that are turning in triple-digit quarterly sales figures tend to be those selling actual cannabis, whereas Turning Point is mostly due to sales of its rolling papers and chewing tobacco. The company’s vape business may end up declining for the year as the PACT Act begins to affect vape distribution. The newly acquired Docklight will bring on brands like Marley Natural, but those cannabis sales haven’t hit the books yet.
When it comes Zig-Zag papers and cones, the company said it now expects strong double-digit sales growth, up from double digits previously. In the company’s earnings call Chief Business Development Officer Louis Reformina said “As a reminder, in 2020, our cigar wraps business was impacted by $5 million from manufacturing-related disruptions in the second quarter of last year, which we made up for in the fourth quarter. So the manufacturing impact was a wash for the year, but we will have an impact in comparisons in the upcoming quarter. We estimate that the net benefit from COVID on the overall Zig-Zag segment last year was $7 million.”
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