Turning Point Brands, Inc.

Previous wording

The following Management’s Discussion and Analysis (“MD&A”) relates to the unaudited financial statements of Turning Point Brands, Inc., included elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to enable the reader to understand the Company’s financial condition and results of operations, including any material changes in the Company’s financial condition and results of operations since December 31, 2024, and as compared with the three and six months ended June 30, 2024. * The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly report on Form 10-Q, as well as*“Management’s Discussion and Analysis of Financial Condition and Results of Operations”* contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the*“2024 Annual Report”).

Current wording

The following Management’s Discussion and Analysis (“MD&A”) relates to the unaudited financial statements of Turning Point Brands, Inc., included elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to enable the reader to understand the Company’s financial condition and results of operations, including any material changes in the Company’s financial condition and results of operations since December 31, 2024, and as compared with thethree and nine months ended September 30, 2024*.* The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly report on Form 10-Q, as well as“Management’s Discussion and Analysis of Financial Condition and Results of Operations”* contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the*“2024 Annual Report”).

Previous wording

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company's former Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc. (“GWO”) in exchange for 49% of the issued and outstanding GWO common stock. GWO is a joint venture between the Company and Standard General, LP entered into in December 2018. CDS marketed and distributed liquid nicotine and ancillary products without tobacco and/or nicotine primarily through non-traditional retail and B2C online platforms, and included widely recognized names such as Vapor Beast® and VaporFi®.

Current wording

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company's former Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc. (“GWO”) in exchange for 49% of the issued and outstanding GWO common stock. GWO is a joint venture between the Company and Standard General, LP entered into in December 2018. CDS marketed and distributed liquid nicotine and ancillary products without tobacco and/or nicotine.

Previous wording

We rely on long-standing relationships with high-quality, established manufacturers to provide the majority of our produced products. Approximately 70% of our production, as measured by net sales, is outsourced to suppliers. The remaining production consists primarily of our moist snuff tobacco operations located in Dresden, Tennessee and Louisville, Kentucky. Our principal operating expenses include the cost of raw materials used to manufacture the limited number of our products which we produce in-house; the cost of finished products, which are generally purchased goods; federal excise taxes; legal expenses; and compensation expenses, including benefits and costs of salaried personnel.

Current wording

We rely on long-standing relationships with high-quality, established manufacturers to provide the majority of our produced products. Approximately 75% of our production, as measured by net sales, is outsourced to suppliers. The remaining production consists primarily of our moist snuff tobacco operations located in Dresden, Tennessee and Louisville, Kentucky. Our principal operating expenses include the cost of raw materials used to manufacture the limited number of our products which we produce in-house; the cost of finished products, which are generally purchased goods; federal excise taxes; legal expenses; and compensation expenses, including benefits and costs of salaried personnel.

Previous wording

Net Sales: For the three months ended June 30, 2025, consolidated net sales increased $23.4 million, or 25.1% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.

Current wording

Net Sales: For the three months ended September 30, 2025, consolidated net sales increased $28.3 million, or 31.2% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.

Previous wording

For the three months ended June 30, 2025, net sales in the Zig-Zag products segment decreased $3.5 million, or 6.9% compared to the prior year period. The decrease in net sales was driven primarily by declines of $3.6 million in our cigar products, $2.7 million in U.S. papers and wraps, and $1.4 million in our Canadian products, partially offset by a $4.3 million increase in the Clipper lighter business. Clipper has not been a focus area for the Company over the past several quarters and the Company was able to sell the majority of its inventory at a discounted rate with extended payment terms. We do not expect meaningful additional revenue from Clipper in future periods.

Current wording

For the three months ended September 30, 2025, net sales in the Zig-Zag products segment decreased $5.2 million, or 10.5% compared to the prior year period. The decrease in net sales was driven primarily by declines of $5.5 million in U.S. papers and wraps, and $1.8 million in the Clipper lighter business, partially offset by a $2.4 million increase in our Canadian products. Clipper has not been a focus area for the Company over the past several quarters and the Company was able to sell the majority of its inventory at a discounted rate with extended payment terms. We do not expect meaningful additional revenue from Clipper in future periods.

Previous wording

For the three months ended June 30, 2025, net sales in the Stoker’s products segment increased $26.9 million, or 62.9% compared to the prior year period. For the three months ended June 30, 2025, sales volume of Stoker’s products increased 48.3% compared to the prior year period, which contributed $20.7 million to the increase, and price/product mix increased 14.5% compared to the prior year period, which contributed $6.2 million to the increase. The increase in net sales was primarily driven by $26.1 million of growth in modern oral products and $1.1 million of growth ofStoker’s® MST.

Current wording

For the three months ended September 30, 2025, net sales in the Stoker’s products segment increased $33.4 million, or 80.8% compared to the prior year period. For the three months ended September 30, 2025, sales volume of Stoker’s products increased 69.0% compared to the prior year period, which contributed $28.5 million to the increase, and price/product mix increased 11.8% compared to the prior year period, which contributed $4.9 million to the increase. The increase in net sales was primarily driven by $31.6 million of growth in modern oral products and $1.4 million of growth ofStoker’s® MST.

Previous wording

Gross Profit: For the three months ended June 30, 2025, consolidated gross profit increased $16.2 million, or 32.2% compared to the prior year period. Gross profit as a percentage of net sales increased to 57.1% for the three months ended June 30, 2025, compared to 54.1% for the three months ended June 30, 2024. The overall increase in gross profit was driven by increases in net sales in the Stoker's products segment.

Current wording

Gross Profit: For the three months ended September 30, 2025, consolidated gross profit increased $20.0 million, or 39.7% compared to the prior year period. Gross profit as a percentage of net sales increased to 59.2% for the three months ended September 30, 2025, compared to 55.6% for the three months ended September 30, 2024. The overall increase in gross profit was driven by increases in net sales in the Stoker's products segment and improved margin contribution from modern oral products.

Previous wording

For the three months ended June 30, 2025, gross profit in the Stoker’s products segment increased $20.0 million, or 85.0% compared to the prior year period. Gross profit as a percentage of net sales increased to 62.5% of net sales for the three months ended June 30, 2025, from 55.0% of net sales for the three months ended June 30, 2024, primarily driven by improved margin contribution from modern oral products.

Current wording

For the three months ended September 30, 2025, gross profit in the Stoker’s products segment increased $22.0 million, or 95.2% compared to the prior year period. Gross profit as a percentage of net sales increased to 60.2% of net sales for the three months ended September 30, 2025, from 55.8% of net sales for the three months ended September 30, 2024, primarily driven by improved margin contribution from modern oral products.

Previous wording

Selling, General, and Administrative Expenses: For the three months ended June 30, 2025, selling, general, and administrative expenses increased $11.1 million, or 38.0% compared to the prior year period, primarily due to increased shipping and selling costs related to the increase in modern oral sales in the quarter compared to the prior year period. Selling, general and administrative expenses in the three months ended June 30, 2025, included $1.7 million of expense related to PMTA, $1.6 million of stock options, restricted stock and incentives expense, $0.8 million of elevated non-recurring outbound freight costs due to the ERP transition, $0.5 million of legal expenses incurred in connection with litigation related to an insurance claim and $0.6 million of transaction costs. Selling, general and administrative expenses in the three months ended June 30, 2024, included $1.9 million of stock options, restricted stock and incentives expense, $1.0 million of expense related to PMTA, $0.5 million of expense related to the implementation of the new ERP and CRM systems, $0.3 million of expense related to corporate restructuring and $0.1 million of transaction costs.

Current wording

Selling, General, and Administrative Expenses: For the three months ended September 30, 2025, selling, general, and administrative expenses increased $15.0 million, or 50.5% compared to the prior year period, primarily due to increased shipping and selling costs related to the increase in modern oral sales in the quarter compared to the prior year period. Selling, general and administrative expenses in the three months ended September 30, 2025, included $0.5 million of expense related to PMTA, $1.9 million of stock options, restricted stock and incentives expense, $0.4 million of legal expenses incurred in connection with litigation related to an insurance claim, $0.8 million of transaction costs and $0.2 million of expense related to corporate restructuring. Selling, general and administrative expenses in the three months ended September 30, 2024, included $1.8 million of stock options, restricted stock and incentives expense, $1.2 million of expense related to PMTA, $0.9 million of transaction costs, $0.2 million of expense related to the implementation of the new ERP and CRM systems, and $0.2 million of expense related to corporate restructuring.

Previous wording

Operating Income: For the three months ended June 30, 2025, consolidated operating income increased $3.5 million, or 15.1% compared to the prior year period. Operating income as a percentage of net sales decreased to 22.6% of net sales for the three months ended June 30, 2025 from 24.5% of net sales for the three months ended June 30, 2024, primarily driven by increased selling, general and administrative costs.

Current wording

Operating Income: For the three months ended September 30, 2025, consolidated operating income increased $5.1 million, or 24.4% compared to the prior year period. Operating income as a percentage of net sales decreased to 21.8% of net sales for the three months ended September 30, 2025 from 22.9% of net sales for the three months ended September 30, 2024, primarily driven by increased selling, general and administrative costs.

Previous wording

For the three months ended June 30, 2025, operating income in the Stoker’s products segment increased $12.2 million, or 68.4% compared to the prior year period. Operating income as a percentage of net sales increased to 43.2% of net sales for the three months ended June 30, 2025 from 41.8% of net sales for the three months ended June 30, 2024, primarily driven by higher margin contribution of modern oral products.

Current wording

For the three months ended September 30, 2025, operating income in the Stoker’s products segment increased $12.1 million, or 70.6% compared to the prior year period. Operating income as a percentage of net sales decreased to 39.1% of net sales for the three months ended September 30, 2025 from 41.5% of net sales for the three months ended September 30, 2024, primarily driven by higher margin contribution of modern oral products offset by higher marketing costs to drive sales.

Previous wording

Included in consolidated operating income are costs of the Company which are not assigned to one of the two reportable segments and include: (i) 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 (ii) costs related to the FDA premarket tobacco product application. For the three months ended June 30, 2025, unallocated costs were $18.5 million compared to $13.3 million in the prior year period, an increase of $5.2 million or 39.6%, primarily driven by joint venture related expenses.

Current wording

Included in consolidated operating income are costs of the Company which are not assigned to one of the two reportable segments and include: (i) 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 (ii) costs related to the FDA premarket tobacco product application. For the three months ended September 30, 2025, unallocated costs were $19.0 million compared to $13.7 million in the prior year period, an increase of $5.2 million or 38.1%, primarily driven by joint venture related expenses.

Previous wording

Income Tax Expense: ** **Our income tax expense of $4.2 million was 20.0% of income before income taxes for the three months ended June 30, 2025. Our effective income tax rate was 25.5% for the three months ended June 30, 2024. The decrease in tax rate compared to the prior year period is due to the inclusion of permanent tax differences related to stock options that were exercised in the second quarter 2025.

Current wording

Income Tax Expense:** **Our income tax expense of $6.5 million was 21.4% of income before income taxes for the three months ended September 30, 2025. Our effective income tax rate was 27.1% for the three months ended September 30, 2024. The decrease in tax rate compared to the prior year period is due to the inclusion of permanent tax differences related to stock options that were exercised in the third quarter 2025.

Previous wording

Net Income (Loss) Attributable to Non-Controlling Interest: ** **Net income (loss) attributable to non-controlling interest was $2.5 million and $(0.1) million, respectively, for the three months ended June 30, 2025 and 2024. The increase in non-controlling interest compared to the prior year period is due to the consolidation of a joint venture starting in December 2024.

Current wording

Net Income (Loss) Attributable to Non-Controlling Interest:** **Net income (loss) attributable to non-controlling interest was $2.7 million and $0.0 million, respectively, for the three months ended September 30, 2025 and 2024. The increase in non-controlling interest compared to the prior year period is due to the consolidation of a joint venture starting in December 2024.

Previous wording

Net Income Attributable to Turning Point Brands, Inc.: Due to the factors described above, net income attributable to Turning Point Brands, Inc. for the three months ended June 30, 2025 and 2024, was $14.5 million and $13.1 million, respectively.

Current wording

Net Income Attributable to Turning Point Brands, Inc.: Due to the factors described above, net income attributable to Turning Point Brands, Inc. for the three months ended September 30, 2025 and 2024, was $21.1 million and $12.5 million, respectively.

Previous wording

Comparison of the Six Months Ended June 30, 2025, to the Six Months Ended June 30, 2024

Current wording

Comparison of the Nine Months Ended September 30, 2025, to the Nine Months Ended September 30, 2024

Previous wording

Net Sales: For the six months ended June 30, 2025, consolidated net sales increased $46.8 million, or 26.5% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.

Current wording

Net Sales: For the nine months ended September 30, 2025, consolidated net sales increased $75.1 million, or 28.1% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.

Previous wording

For the six months ended June 30, 2025, net sales in the Zig-Zag products segment decreased $2.9 million, or 3.0% compared to the prior year period. The decrease in net sales was driven primarily by declines of $3.5 million in U.S. papers and wraps, $2.1 million in our cigar products and $0.8 million in our Canadian products, partially offset by a $3.8 million increase in the Clipper lighter business. Clipper has not been a focus area for the Company over the past several quarters and the Company was able to sell the majority of its inventory at a discounted rate with extended payment terms.

Current wording

For the nine months ended September 30, 2025, net sales in the Zig-Zag products segment decreased $8.1 million, or 5.5% compared to the prior year period. The decrease in net sales was driven primarily by declines of $8.9 million in U.S. papers and wraps, $2.5 million in our cigar products, partially offset by an increase of $2.0 million in the Clipper lighter business and a $1.6 million increase in our Canadian products. Clipper has not been a focus area for the Company over the past several quarters and the Company was able to sell the majority of its inventory at a discounted rate with extended payment terms.

Previous wording

For the six months ended June 30, 2025, net sales in the Stoker’s products segment increased $49.7 million, or 62.8% compared to the prior year period. For the six months ended June 30, 2025, sales volume of Stoker’s products increased 59.8% compared to the prior year period, which contributed $47.3 million to the increase, and price/product mix increased 3.0% compared to the prior year period, which contributed $2.4 million to the increase. The increase in net sales was primarily driven by $46.1 million of sales in modern oral products and $3.5 million of growth ofStoker’s® MST.

Current wording

For the nine months ended September 30, 2025, net sales in the Stoker’s products segment increased $83.1 million, or 69.0% compared to the prior year period. For the nine months ended September 30, 2025, sales volume of Stoker’s products increased 62.9% compared to the prior year period, which contributed $75.8 million to the increase, and price/product mix increased 6.1% compared to the prior year period, which contributed $7.3 million to the increase. The increase in net sales was primarily driven by $77.7 million of sales in modern oral products and $5.0 million of growth ofStoker’s® MST.

Previous wording

Gross Profit: For the six months ended June 30, 2025, consolidated gross profit increased $27.5 million, or 27.8% compared to the prior year period. Gross profit as a percentage of net sales increased slightly to 56.6% for the six months ended June 30, 2025, compared to 56.0% for the six months ended June 30, 2024. The overall increase in gross profit was driven by increases in net sales in the Stoker's products segment.

Current wording

Gross Profit: For the nine months ended September 30, 2025, consolidated gross profit increased $47.5 million, or 31.9% compared to the prior year period. Gross profit as a percentage of net sales increased to 57.5% for the nine months ended September 30, 2025, compared to 55.9% for the nine months ended September 30, 2024. The overall increase in gross profit was driven by increases in net sales in the Stoker's products segment as a result of improved contribution margin from modern oral products.

Previous wording

For the three months ended June 30, 2025, gross profit in the Zig-Zag products segment decreased $3.8 million, or 14.0% compared to the prior year period. Gross profit as a percentage of net sales decreased to 49.1% of net sales for the three months ended June 30, 2025, from 53.2% of net sales for the three months ended June 30, 2024, driven primarily by sales of Clipper lighters at a discounted rate.

Current wording

For the nine months ended September 30, 2025, gross profit in the Zig-Zag products segment decreased $7.7 million, or 9.4% compared to the prior year period. Gross profit as a percentage of net sales decreased to 53.5% of net sales for the nine months ended September 30, 2025, from 55.8% of net sales for the nine months ended September 30, 2024, driven primarily by sales of Clipper lighters at a discounted rate.

Previous wording

For the six months ended June 30, 2025, gross profit in the Stoker’s products segment increased $33.2 million, or 74.9% compared to the prior year period. Gross profit as a percentage of net sales increased to 60.2% of net sales for the six months ended June 30, 2025, from 56.0% of net sales for the six months ended June 30, 2024, primarily driven by improved contribution margin from modern oral products.

Current wording

For the nine months ended September 30, 2025, gross profit in the Stoker’s products segment increased $55.2 million, or 81.9% compared to the prior year period. Gross profit as a percentage of net sales increased to 60.2% of net sales for the nine months ended September 30, 2025, from 55.9% of net sales for the nine months ended September 30, 2024, primarily driven by improved contribution margin from modern oral products.

Previous wording

Selling, General, and Administrative Expenses: For the six months ended June 30, 2025, selling, general, and administrative expenses increased $18.4 million, or 31.6% compared to the prior year period, primarily due to increased shipping and selling costs related to the increase in modern oral sales in the period compared to the prior year period. Selling, general and administrative expenses in the six months ended June 30, 2025, included $3.3 million of stock options, restricted stock and incentives expense, $3.2 million of expense related to PMTA, $0.8 million of elevated non-recurring outbound freight costs due to the ERP transition, $0.7 million of transaction costs, $0.5 million of legal expenses incurred in connection with litigation related to an insurance claim and $0.2 million of expense related to the implementation of the new ERP and CRM systems. Selling, general and administrative expenses in the six months ended June 30, 2024, included $4.0 million of stock options, restricted stock and incentives expense, $1.9 million of expense related to PMTA, $1.5 million of expense related to corporate restructuring, $0.7 million of expense related to the implementation of the new ERP and CRM systems and $0.1 million related to transaction costs.

Current wording

Selling, General, and Administrative Expenses: For the nine months ended September 30, 2025, selling, general, and administrative expenses increased $33.4 million, or 38.0% compared to the prior year period, primarily due to increased shipping and selling costs related to the increase in modern oral sales in the period compared to the prior year period. Selling, general and administrative expenses in the nine months ended September 30, 2025, included $5.2 million of stock options, restricted stock and incentives expense, $3.7 million of expense related to PMTA, $0.8 million of elevated non-recurring outbound freight costs due to the ERP transition, $1.6 million of transaction costs, $0.9 million of legal expenses incurred in connection with litigation related to an insurance claim and $0.2 million of expense related to the implementation of the new ERP and CRM systems. Selling, general and administrative expenses in the nine months ended September 30, 2024, included $5.7 million of stock options, restricted stock and incentives expense, $3.1 million of expense related to PMTA, $1.7 million of expense related to corporate restructuring, $1.0 million related to transaction costs and $0.8 million of expense related to the implementation of the new ERP and CRM systems.

Previous wording

**Other Operating Income:**For the three months ended June 30, 2025, other operating income decreased $1.7 million compared to the prior year period due to a federal excise tax refund received in the prior year period that did not repeat in the current year period.

Current wording

Other Operating Income: For the nine months ended September 30, 2025, other operating income decreased $1.7 million compared to the prior year period due to a federal excise tax refund received in the prior year period that did not repeat in the current year period.

Previous wording

Operating Income: For the six months ended June 30, 2025, consolidated operating income increased $7.4 million, or 17.5% compared to the prior year period. Operating income as a percentage of net sales decreased to 22.2% of net sales for the six months ended June 30, 2025 from 23.9% of net sales for the six months ended June 30, 2024, primarily driven by increased selling, general and administrative costs.

Current wording

Operating Income: For the nine months ended September 30, 2025, consolidated operating income increased $12.5 million, or 19.8% compared to the prior year period. Operating income as a percentage of net sales decreased to 22.0% of net sales for the nine months ended September 30, 2025 from 23.6% of net sales for the nine months ended September 30, 2024, primarily driven by increased selling, general and administrative costs.

Previous wording

For the six months ended June 30, 2025, operating income in the Stoker’s products segment increased $21.0 million, or 63.0% compared to the prior year period. Operating income as a percentage of net sales increased slightly to 42.1% of net sales for the six months ended June 30, 2025 from 42.0% of net sales for the six months ended June 30, 2024, primarily driven by higher margin contribution of modern oral products.

Current wording

For the nine months ended September 30, 2025, operating income in the Stoker’s products segment increased $33.1 million, or 65.6% compared to the prior year period. Operating income as a percentage of net sales decreased slightly to 41.0% of net sales for the nine months ended September 30, 2025 from 41.8% of net sales for the nine months ended September 30, 2024, primarily driven by higher margin contribution of modern oral products offset by higher marketing costs to drive sales.

Previous wording

Included in consolidated operating income are costs of the Company which are not assigned to one of the two reportable segments and include: (i) 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 (ii) costs related to the FDA premarket tobacco product application. For the six months ended June 30, 2025, unallocated costs were $36.4 million compared to $27.4 million in the prior year period, an increase of $9.0 million, or 32.9%, primarily driven by joint venture related expenses.

Current wording

Included in consolidated operating income are costs of the Company which are not assigned to one of the two reportable segments and include: (i) 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 (ii) costs related to the FDA premarket tobacco product application. For the nine months ended September 30, 2025, unallocated costs were $55.4 million compared to $41.1 million in the prior year period, an increase of $14.3 million, or 34.7%, primarily driven by joint venture related expenses.

Previous wording

Interest Expense, net: For the three months ended June 30, 2025, interest expense, net increased $2.1 million compared to the prior year period as a result of the issuance of the 2032 Notes in February 2025 which bear interest at a higher rate and have a higher outstanding principal amount than the 2026 Notes which were repaid with proceeds from the issuance of the 2032 Notes.

Current wording

Interest Expense, net: For the nine months ended September 30, 2025, interest expense, net increased $2.7 million compared to the prior year period as a result of the issuance of the 2032 Notes in February 2025 which bear interest at a higher rate and have a higher outstanding principal amount than the 2026 Notes which were repaid with proceeds from the issuance of the 2032 Notes partially offset by interest income generated by the employee retention credit received in the period.

Previous wording

Investment Gain (Loss): For the six months ended June 30, 2025, investment gain was $0.3 million compared to a loss of $2.3 million in the prior year period. The $0.3 million investment gain for the six months ended June 30, 2025 is primarily due to gains on marketable securities of $0.7 million, offset by a $0.9 million impairment charge related to our investment in Old Pal. In the prior year period, we recognized $2.5 million of impairment charges on our investments in Old Pal and Bomani.

Current wording

Investment Gain (Loss): For the nine months ended September 30, 2025, investment gain was $0.9 million compared to a loss of $2.3 million in the prior year period. The $0.9 million investment gain for the nine months ended September 30, 2025, is primarily due to gains on available-for-sale marketable securities of $1.4 million, offset by a $0.9 million impairment charge related to our investment in Old Pal. In the prior year period, we recognized impairment charges on our investments of $1.8 million for Bomani and $0.8 million for Old Pal.

Previous wording

Loss on Extinguishment of Debt: Loss on extinguishment of debt for the six months ended June 30, 2025 increased $1.2 million compared to the prior year period as a result of the redemption of the 2026 Notes in February 2025.

Current wording

**Loss on Extinguishment of Debt:**Loss on extinguishment of debt for the nine months ended September 30, 2025 increased $1.2 million compared to the prior year period as a result of the redemption of the 2026 Notes in February 2025.

Previous wording

Income Tax Expense: ** **Our income tax expense of $6.3 million was 16.1% of income before income taxes for the six months ended June 30, 2025. Our effective income tax rate was 24.5% for the six months ended June 30, 2024. The decrease in tax rate compared to the prior year period is due to the inclusion of permanent tax differences related to the Company's restricted stock units that were issued and stock options that were exercised in the six months ended June 30, 2025.

Current wording

Income Tax Expense:** **Our income tax expense of $12.8 million was 18.4% of income before income taxes for the nine months ended September 30, 2025. Our effective income tax rate was 25.4% for the nine months ended September 30, 2024. The decrease in tax rate compared to the prior year period is due to the inclusion of permanent tax differences related to the Company's restricted stock units that were issued and stock options that were exercised in the nine months ended September 30, 2025.

Previous wording

Net Income Attributable to Non-Controlling Interest: ** **Net income attributable to non-controlling interest was $3.9 million and $0.1 million, respectively, for the six months ended June 30, 2025 and 2024. The increase in non-controlling interest compared to the prior year period is due to the consolidation of a joint venture starting in December 2024.

Current wording

Net Income Attributable to Non-Controlling Interest:** **Net income attributable to non-controlling interest was $6.6 million and $0.1 million, respectively, for the nine months ended September 30, 2025 and 2024. The increase in non-controlling interest compared to the prior year period is due to the consolidation of a joint venture starting in December 2024.

Previous wording

Net Income Attributable to Turning Point Brands, Inc.: Due to the factors described above, net income attributable to Turning Point Brands, Inc. for the six months ended June 30, 2025 and 2024, was $28.9 million and $25.1 million, respectively.

Current wording

Net Income Attributable to Turning Point Brands, Inc.: Due to the factors described above, net income attributable to Turning Point Brands, Inc. for the nine months ended September 30, 2025 and 2024, was $50.0 million and $37.6 million, respectively.

Previous wording

As of June 30, 2025, we have $109.9 million of cash on hand and $66.5 million of availability under the 2023 ABL Facility. We have no borrowings outstanding under our 2023 ABL Facility as of June 30, 2025. Our principal uses for cash are working capital, debt service, and capital expenditures.

Current wording

As of September 30, 2025, we have $201.2 million of cash on hand and $66.6 million of availability under the 2023 ABL Facility. We have no borrowings outstanding under our 2023 ABL Facility as of September 30, 2025. Our principal uses for cash are working capital, debt service, and capital expenditures.

Previous wording

Our adjusted working capital, which we define as current assets less cash and current liabilities, increased $0.6 million compared to the prior year end. Excluding assets and liabilities held for sale at December 31, 2024, our adjusted working capital increased $10.0 million for the quarter ended June 30, 2025. The increase in working capital is primarily the result of a $20.4 million increase in accounts receivable, an $8.8 million increase in inventory and a $5.5 million increase in other current assets, partially offset by an increase of $14.5 million in accounts payable and a $10.2 million increase in accrued liabilities. With our strong cash balance, free cash flow generation and borrowing availability under the 2023 ABL Facility, we expect to have ample liquidity to satisfy our operating cash requirements for the foreseeable future.

Current wording

Our adjusted working capital, which we define as current assets less cash and current liabilities, increased $16.7 million compared to the prior year end. Excluding assets and liabilities held for sale at December 31, 2024, our adjusted working capital increased $26.1 million for the quarter ended September 30, 2025. The increase in working capital is primarily the result of a $18.2 million increase in accounts receivable, an $16.5 million increase in inventory and a $20.0 million increase in other current assets, partially offset by an increase of $12.9 million in accounts payable and a $15.6 million increase in accrued liabilities. With our strong cash balance, free cash flow generation and borrowing availability under the 2023 ABL Facility, we expect to have ample liquidity to satisfy our operating cash requirements for the foreseeable future.

Previous wording

For the six months ended June 30, 2025, net cash provided by operating activities was $29.2 million, a decrease of $1.8 million compared to the prior year period. The decrease is primarily due to unfavorable changes of $6.0 million in working capital and $3.8 million in other assets, partially offset by an increase in net income, net of non-cash items of $8.0 million. The primary drivers of non-cash items were a $2.4 million increase in deferred tax expense, a $1.2 million increase in depreciation and amortization and a $1.2 million increase in loss on extinguishment of debt compared to the prior year period. The decrease in cash from working capital compared to the prior year period was primarily driven by the timing of payments.

Current wording

For the nine months ended September 30, 2025, net cash provided by operating activities was $32.5 million, a decrease of $12.4 million compared to the prior year period. The decrease is primarily due to unfavorable changes of $20.6 million in working capital and $10.2 million in other assets, partially offset by an increase in net income, net of non-cash items of $18.3 million. The primary drivers of non-cash items were a $4.3 million increase in deferred tax expense, a $1.3 million increase in depreciation and amortization, a $3.2 million decrease in loss on investments, a $2.3 million decrease in income from equity method investment and a $1.2 million increase in loss on extinguishment of debt compared to the prior year period. The decrease in cash from working capital compared to the prior year period was primarily driven by the timing of payments.

Previous wording

For the six months ended June 30, 2025, net cash provided by financing activities was $40.3 million, an increase of $47.1 million compared to the prior year period, primarily due to a net increase in cash of $42.9 million related to the February 2025 issuance of the 2032 Notes and of $1.5 million related to stock compensation activity, as well as $3.1 million of common stock repurchases in the prior year period that did not repeat in 2025.

Current wording

For the nine months ended September 30, 2025, net cash provided by financing activities was $148.3 million, an increase of $275.8 million compared to the prior year period, primarily due to a net increase in cash of $42.8 million related to the February 2025 issuance of the 2032 Notes, an increase of $11.0 million from Interchange subscription agreement proceeds, $97.5 million increase related to ATM Program proceeds, and $2.2 million related to stock compensation activity, as well as $4.2 million of common stock repurchases in the prior year period that did not repeat in 2025.

Previous wording

On February 25, 2020, our Board of Directors approved a $50.0 million share repurchase program, which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board of Directors. On October 25, 2021, the Board of Directors increased the approved share repurchase program by $30.7 million, and by $24.6 million on February 24, 2022. On November 6, 2024, the Company's Board of Directors increased the Company’s share repurchase authorization by $77.9 million to an aggregate amount of $100.0 million. In the six months ended June 30, 2025, there were no repurchases under the share repurchase program. As of June 30, 2025, there was $100.0 million in remaining repurchase authority under the plan.

Current wording

On February 25, 2020, our Board of Directors approved a $50.0 million share repurchase program, which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board of Directors. On October 25, 2021, the Board of Directors increased the approved share repurchase program by $30.7 million, and by $24.6 million on February 24, 2022. On November 6, 2024, the Company's Board of Directors increased the Company’s share repurchase authorization by $77.9 million to an aggregate amount of $100.0 million. On November 4, 2025, the Company's Board of Directors increased the share repurchase authorization by $100.0 million to an aggregate amount of $200.0 million. For the nine months ended September 30, 2025, there were no repurchases under the share repurchase program. As of September 30, 2025, there was $100.0 million in remaining repurchase authority under the plan.

Previous wording

In February 2025, we closed a private offering of $300.0 million aggregate principal amount of 7.625% senior secured notes due to mature on March 15, 2032 (the “2032 Notes”). Interest on the 2032 Notes is payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2025. We used the proceeds from the offering (i) to repay all obligations under and terminate the 2026 Notes (as defined below), (ii) to pay related fees, costs and expenses and (iii) for general corporate purposes. The 2032 Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by each current and future wholly-owned domestic restricted subsidiary of the Company that guaranteed the 2026 Notes (collectively, the “Guarantors” as defined in the indenture governing the 2032 Notes or the “2032 Notes Indenture”). The 2032 Notes and the related guarantees are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions. Proceeds from the offering were approximately $293.0 million.

Current wording

In February 2025, the Company closed a private offering of $300.0 million aggregate principal amount of 7.625% senior secured notes due to mature on March 15, 2032 (the “2032 Notes”). Interest on the 2032 Notes is payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2025. We used the proceeds from the offering (i) to repay all obligations under and terminate the 2026 Notes (as defined below), (ii) to pay related fees, costs and expenses and (iii) for general corporate purposes. The 2032 Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by each current and future wholly-owned domestic restricted subsidiary of the Company that guaranteed the 2026 Notes (collectively, the “Guarantors” as defined in the indenture governing the 2032 Notes or the “2032 Notes Indenture”). The 2032 Notes and the related guarantees are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions. Proceeds from the offering were approximately $293.0 million.

Previous wording

The Company has not drawn any borrowings under the 2023 ABL Facility but has letters of credit of approximately $2.3 million outstanding under the facility and has an available balance of $66.5 million based on the borrowing base as of June 30, 2025.

Current wording

The Company has not drawn any borrowings under the 2023 ABL Facility but has letters of credit of approximately $2.3 million outstanding under the facility and has an available balance of $66.6 million based on the borrowing base as of September 30, 2025.