Delaware	001-37763	20-0709285
(State or other jurisdiction of  incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	TPB	New York Stock Exchange

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02.

Results of Operations and Financial Condition.

Item 9.01.

Financial Statements and Exhibits.

	TURNING POINT BRANDS, INC.
Dated: July 28, 2020	By:	/s/ James Dobbins
		James Dobbins
		Senior Vice President, General Counsel and Secretary

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✔	Net sales increased 12.5% to $105.0 million;

✔	Gross profit increased 16.8% to $48.1 million;

✔	Net income decreased $4.0 million to $9.2 million, reflecting the inclusion of expensing PMTA costs incurred during the current quarter compared to the net gain related to a settlement from the V2 winddown in the previous year’s quarter;

✔	Adjusted EBITDA increased 24.8% to $22.8 million (see Schedule A for a reconciliation to net income);

✔	Diluted EPS of $0.47 and Adjusted Diluted EPS of $0.71 as compared to $0.66 and $0.52 in the year-ago period, respectively (see Schedule B for a reconciliation to Diluted EPS);

•

$3.3 million of FDA PMTA-related expenses as compared to $0.0 million in the year-ago period; and

•

$0.3 million of transaction expenses principally related to M&A activity as compared to $0.2 million in the year-ago period.

•	declining sales of tobacco products, and expected continuing decline of sales, in the tobacco industry overall;

•	our dependence on a small number of third-party suppliers and producers;

•	the possibility that we will be unable to identify or contract with new suppliers or producers in the event of a supply or product disruption;

•	our business may be damaged by events outside of our suppliers’ or our control, such as the impact of epidemics (e.g., coronavirus), political upheavals, or natural disasters;

•	the possibility that our licenses to use certain brands or trademarks will be terminated, challenged or restricted;

•	failure to maintain consumer brand recognition and loyalty of our customers;

•	substantial and increasing U.S. regulation;

•	regulation of our products by the FDA, which has broad regulatory powers;

•	our products are subject to developing and unpredictable regulation, including impacts related to litigation around that regulation;

•	some of our products contain nicotine which is considered to be a highly addictive substance;

•	uncertainty related to the regulation and taxation of our NewGen products;

•	possible significant increases in federal, state and local municipal tobacco- and vapor-related taxes;

•	possible increasing international control and regulation;

•	our reliance on relationships with several large retailers and national chains for distribution of our products;

•	our amount of indebtedness;

•	the terms of our credit facilities, which may restrict our current and future operations;

•	intense competition and our ability to compete effectively;

•	uncertainty and continued evolution of markets containing our NewGen products;

•	significant product liability litigation;

•	the scientific community’s lack of information regarding the long-term health effects of certain substances contained in some of our products;

•	requirement to maintain compliance with master settlement agreement escrow account;

•	competition from illicit sources;

•	our reliance on information technology;

•	security and privacy breaches;

•	contamination of our tobacco supply or products;

•	infringement on our intellectual property;

•	third-party claims that we infringe on their intellectual property;

•	failure to manage our growth;

•	failure to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions;

•	fluctuations in our results;

•	exchange rate fluctuations;

•	adverse U.S. and global economic conditions;

•	sensitivity of end-customers to increased sales taxes and economic conditions;

•	failure to comply with certain regulations;

•	departure of key management personnel or our inability to attract and retain talent;

•	imposition of significant tariffs on imports into the U.S.;

•	reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors, potentially decreasing our stock price;

•	failure to maintain our status as an emerging growth company before the five-year maximum time period a company may retain such status;

•	our principal stockholders will be able to exert significant influence over matters submitted to our stockholders and may take certain actions to prevent takeovers;

•	our certificate of incorporation and bylaws, as well as Delaware law and certain regulations, could discourage or prohibit acquisition bids or merger proposals, which may adversely affect the market price of our common stock;

•

our certificate of incorporation limits the ownership of our common stock by individuals and entities that are Restricted Investors. These restrictions may affect the liquidity of our common stock and may result in Restricted Investors being required to sell or redeem their shares at a loss or relinquish their voting, dividend and distribution rights;

•	future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us; and

•	we may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

		Three Months Ended June 30,
		2020				2019
Net sales		$	104,963			$	93,339
Cost of sales			56,871				52,156
Gross profit			48,092				41,183
Selling, general, and administrative expenses			30,756				21,242
Operating income			17,336				19,941
Interest expense, net			4,980				3,736
Investment income			(34	)			(118	)
Loss on extinguishment of debt			-				150
Net periodic income, excluding service cost			(104	)			(11	)
Income before income taxes			12,494				16,184
Income tax expense			3,267				2,979
Consolidated net income			9,227				13,205
Basic income per common share:
Consolidated net income		$	0.47			$	0.67
Diluted income per common share:
Consolidated net income		$	0.47			$	0.66
Weighted average common shares outstanding:
Basic			19,507,874				19,621,695
Diluted			19,834,345				20,131,980
Supplemental disclosures of statement of income information:
Excise tax expense		$	4,678			$	5,105
FDA fees		$	134			$	155

ASSETS		(unaudited) June 30, 2020				December 31, 2019
Current assets:
Cash		$	64,192			$	95,250
Accounts receivable, net of allowances of $271 in 2020 and $280 in 2019			5,112				6,906
Inventories			75,556				70,979
Other current assets			16,701				16,115
Total current assets			161,561				189,250
Property, plant, and equipment, net			13,343				13,816
Right of use assets			13,243				12,130
Deferred financing costs, net			789				890
Goodwill			154,282				154,282
Other intangible assets, net			80,414				33,469
Master Settlement Agreement (MSA) escrow deposits			32,074				32,074
Other assets			11,512				10,673
Total assets		$	467,218			$	446,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	14,361			$	14,126
Accrued liabilities			25,593				26,520
Current portion of long-term debt			12,000				15,240
Total current liabilities			51,954				55,886
Notes payable and long-term debt			284,624				268,951
Deferred income taxes			2,422				1,572
Lease liabilities			11,813				11,067
Other long-term liabilities			4,663				2,523
Total liabilities			355,476				339,999
Commitments and contingencies
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; 19,724,027 issued shares, 19,467,164 outstanding shares at June 30, 2020, and 19,680,673 issued and outstanding shares at December 31, 2019			197				197
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0-			-				-
Additional paid-in capital			126,928				125,469
Cost of repurchased common stock (256,863 shares at June 30, 2020 and 0 shares at December 31, 2019)			(5,289	)			-
Accumulated other comprehensive loss			(5,299	)			(3,773	)
Accumulated deficit			(4,795	)			(15,308	)
Total stockholders’ equity			111,742				106,585
Total liabilities and stockholders’ equity		$	467,218			$	446,584

		Six Months Ended June 30,
		2020				2019
Cash flows from operating activities:
Consolidated net income		$	12,502			$	19,765
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on extinguishment of debt			-				150
Impairment loss			149				-
Loss on sale of property, plant, and equipment			12				22
Depreciation expense			1,673				1,163
Amortization of other intangible assets			827				723
Amortization of debt discount and deferred financing costs			4,483				478
Deferred income taxes			1,445				(109	)
Stock compensation expense			1,213				1,412
Noncash lease expense			18				-
Changes in operating assets and liabilities:
Accounts receivable			1,794				(3,663	)
Inventories			(4,577	)			(3,346	)
Other current assets			(253	)			(3,534	)
Other assets			(766	)			(359	)
Accounts payable			235				12,927
Accrued postretirement liabilities			(54	)			(83	)
Accrued liabilities and other			(1,167	)			(3,848	)
Net cash provided by operating activities		$	17,534			$	21,698
Cash flows from investing activities:
Capital expenditures		$	(1,956	)		$	(1,964	)
Acquisitions, net of cash acquired			(37,772	)			-
Restricted cash, MSA escrow deposits			-				1,677
Net cash used in investing activities		$	(39,728	)		$	(287	)
Cash flows from financing activities:
Payments of 2018 first lien term loan		$	(5,000	)		$	(4,000	)
Payments of 2018 second lien term loan			-				(4,489	)
Payments of 2018 revolving credit facility			-				(11,000	)
Payment of IVG note			(4,240	)			-
Proceeds from unsecured loan			7,485
Payment of dividends			(1,872	)			(1,762	)
Payments of financing costs			(194	)			(179	)
Exercise of options			246				610
Surrender of restricted stock			-				(81	)
Redemption of options			-				(12	)
Common stock repurchased			(5,289	)			-
Net cash used in financing activities		$	(8,864	)		$	(20,913	)
Net increase (decrease) in cash		$	(31,058	)		$	498
Cash, beginning of period:
Unrestricted			95,250				3,306
Restricted			32,074				2,361
Total cash at beginning of period			127,324				5,667
Cash, end of period:
Unrestricted			64,192				2,127
Restricted			32,074				4,038
Total cash at end of period		$	96,266			$	6,165

		Three Months Ended June 30,
		2020				2019
Consolidated net income		$	9,227			$	13,205
Add:
Interest expense, net			4,980				3,736
Loss on extinguishment of debt			-				150
Income tax expense			3,267				2,979
Depreciation expense			822				632
Amortization expense			402				364
EBITDA		$	18,698			$	21,066
Components of Adjusted EBITDA
Other (a)			(260	)			(97	)
Stock options, restricted stock, and incentives expense (b)			760				1,198
Transaction expenses (c)			290				187
New product launch costs (d)			-				1,270
Corporate and vapor restructuring (e)			-				150
FDA PMTA (f)			3,290				-
Vendor settlement (g)			-				(5,522	)
Adjusted EBITDA		$	22,778			$	18,252

(a) Represents LIFO adjustment, non-cash pension/postretirement expense (income) and foreign exchange hedging.

(b) Represents non-cash stock options, restricted stock, incentives expense and Solace PRSUs.

(c) Represents the fees incurred for transaction expenses.

(d) Represents product launch costs of our new product lines.

(e) Represents costs associated with corporate and vapor restructuring including severance and inventory reserves.

(f)  Represents costs associated with applications related to FDA PMTA.

(g) Represents net gain associated with the settlement of a vendor contract.

		Three Months Ended June 30,
		2020				2019
GAAP EPS		$	0.47			$	0.66
Other (a)			(0.01	)			0.00
Stock options, restricted stock, and incentives expense (b)		$	0.03				0.05
Transaction expenses (c)		$	0.01				0.01
New product launch costs (d)		$	-				0.05
Corporate and vapor restructuring (e)		$	-				0.01
FDA PMTA (f)		$	0.12				-
Amortization of debt discount (g)		$	0.07				-
Vendor settlement (h)		$	-				(0.22	)
Tax benefit (i)		$	0.03				(0.02	)
Adjusted diluted EPS		$	0.71			$	0.52

Totals may not foot due to rounding

(a) Represents LIFO adjustment, non-cash pension/ postretirement expense (income), foreign exchange hedging reporting tax effected and Loss on Extinguishment of Debt at the quarterly tax rate.

(b) Represents non-cash stock options, restricted stock, incentives expense and Solace PRSUs tax effected at the quarterly tax rate.

(c) Represents the fees incurred for transaction expenses tax effected at the quarterly tax rate.

(d) Represents product launch costs of our new product lines tax effected at the quarterly tax rate.

(e) Represents costs associated with corporate and vapor restructuring including severance and inventory reserves tax effected at the quarterly tax rate.

(f)  Represents costs associated with applications related to the FDA PMTA tax effected at the quarterly tax rate.

(g) Represents non-cash amortization of debt discount tax effected at the quarterly tax rate.

(h) Represents net gain associated with the settlement of a vendor contract tax effected at the quarterly tax rate.

(i)  Represents adjustment from quarterly tax rate to annual projected tax rate of 23% in 2020 and 22% in 2019.

		Consolidated								Smokeless								Smoking								NewGen
		2nd Quarter 2020				2nd Quarter 2019				2nd Quarter 2020				2nd Quarter 2019				2nd Quarter 2020				2nd Quarter 2019				2nd Quarter 2020				2nd Quarter 2019
Net sales		$	104,963			$	93,339			$	30,822			$	26,176			$	27,403			$	25,363			$	46,738			$	41,800
Gross profit		$	48,092			$	41,183			$	16,664			$	14,063			$	15,671			$	13,738			$	15,757			$	13,382
Adjustments:
LIFO adjustment			(156	)			(112	)			(156	)			(112	)			-				-				-				-
Adjusted gross profit		$	47,936			$	41,071			$	16,508			$	13,951			$	15,671			$	13,738			$	15,757			$	13,382
Operating income		$	17,336			$	19,941			$	12,240			$	9,731			$	12,227			$	10,374			$	3,271			$	7,451
Adjustments:
LIFO adjustment			(156	)			(112	)			(156	)			(112	)			-				-				-				-
Transaction expenses			290				187				-				-				-				-				-				-
New product launch costs			-				1,270				-				-				-				-				-				1,270
Corporate and vapor restructuring			-				150				-				-				-				-				-				-
FDA PMTA			3,290				-				-				-				-				-				-				-
Supplier contract settlement			-				(5,522	)			-				-				-				-				-				(5,522	)
Adjusted operating income		$	20,760			$	15,914			$	12,084			$	9,619			$	12,227			$	10,374			$	3,271			$	3,199

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