TPB 10-K & 10-Q changes, risk factors and insider trading

Pursuant to agreements with certain suppliers, we have agreed to store tobacco inventory purchased on our behalf and generally maintain a 12- to 24-month supply of our various tobacco products at their facilities. We cannot guarantee our supply of these products will be adequate to meet the demands of our customers. Further, a major fire, violent weather conditions or other disasters that affect us or any of our key suppliers or producers, including RTI or Swedish Match, as well as those of our other suppliers and vendors, could have a material adverse effect on our operations. For example, in December 2023, a third-party warehouse in Tennessee used to store some ofby the Company’s leaf tobaccoCompany incurred significant tornado damage including damage to the Company’s leaf tobacco.property. Although we have insurance coverage for these events, including Company’s stock throughput insurance, a prolonged interruption in our operations, as well as those of our producers, suppliers or vendors could have a material adverse effect on our business, results of operations, and financial condition. In addition, we do not know whether we will be able to renew any or all of our agreements on a timely basis, on terms satisfactory to us, or at all.

We have a number of License Agreements with RTI. The first of these governs licensing, sourcing and the use of the Zig-Zag® name with respect to cigarette papers, cigarette tubes, and cigarette injector machines, the second governs licensing, sourcing and the use of the Zig-Zag® name with respect to e-cigarettes, vaporizers, and e-liquids, and the third governs the licensing, sourcing and use of the Zig-Zag trademark on paper cones. In 2024,2025, we generated approximately $192.4$178.5 million in the net sales of Zig-Zag® products,product segment, of which approximately $131.6$84.7 million was generated from products sold through the License Agreements. In the event that one or more of these License Agreements are not renewed, the terms of the agreements bind us under a five-year non-compete clause, under which we cannot engage in direct or indirect manufacturing, selling, distributing or otherwise promoting cigarette papers of a competitor to Zig-Zag® without RTI’s consent, except in limited instances. We do not know whether we will renew these agreements on a timely basis, on terms satisfactory to us or at all. As a result of these restrictions, if our License Agreements with respect to the Zig-Zag® trademark are terminated, we may not be able to access the markets with recognizable brands that would be positioned to compete in these segments.

Our market position may be affected through the contamination of our tobacco supply or products during the manufacturing process or at different points in the entire supply chain. We keep significant amounts of inventory of our products in warehouses and it is possible that this inventory could become contaminated or damaged during the storage period. For example, in December 2023, a third-party warehouse in Tennessee used to store some ofby the Company’s leaf tobaccoCompany incurred significant tornado damage including damage to all the Company’s leaf tobaccoproperty stored in that warehouse. Although we have alternative sources of tobacco to ensure we meet all demand, if another event were to occur we may not have sufficient supply. In addition, our suppliers generally keep significant amounts of our inventory on hand and it is probable that such inventory could become contaminated or damaged even prior to arrival at our premises. If contamination or damage of our inventory or packaged products occurs, whether as a result of a failure in quality control by us or by one of our suppliers, we may incur significant costs in replacing the inventory and recalling products. We may be unable to meet customer demand and may lose customers who purchase alternative brands or products. In addition, consumers may lose confidence in the affected product.

We may encounter difficulties or liabilities arising from investments in joint ventures, acquisitions or divestitures.businesses.

We have made substantial investments acquisitions,in joint ventures and strategic initiativesbusinesses, and we expect that we will continue to do so in the foreseeable future. For instance, in January 2025, we contributed our interest in our former CDS segment to GWO, an entity owned by us and affiliates of Standard General, L.P., and now have a 49% interest in GWO. We are continually evaluating acquisitions, divestitures and strategic investments that are significant to our business both in the United States and in Canada.internationally. However, these activities involve numerous risks. Key challenges include the difficulty of identifying suitable acquisition targets, negotiating acquisitions on favorable terms, retaining essential customers, employees, and contracts, and successfully integrating new businesses without significant disruptions. Additionally, there may be unforeseen costs associated with integration, liabilities that exceed expectations, or operating results that fall short of projections. There is also a risk that anticipated synergies and value may not materialize as expected. For example, we recently entered into a joint venture with ALP to further our presence in the modern oral nicotine space. While we are optimistic about its potential success, we recognize the possibility of encountering difficulties, including strategic differences that could impact performance lead to business losses.

The tobacco industry has been under public scrutiny for over 50 years. Industry critics include special interest groups, the U.S. Surgeon General and many legislators and regulators at the local, state and federal levels. A wide variety of federal, state, and local laws limit the advertising, sale and use of tobacco, and these laws have proliferated in recent years. For instance, on May 4, 2022, the FDA proposed two tobacco products standards related to combusted tobacco products: (1) a ban on menthol as a characterizing flavor of cigarettes; and (2) a ban on all characterizing flavors (including menthol) in cigars, and in May 2023, the FDA proposed additional requirements for tobacco product manufacturing practice regarding the manufacture, design, packing and storage of tobacco products. Together with changing public attitudes towards tobacco consumption, the constant expansion of regulations has been a major cause of the overall decline in the consumption of tobacco products since the early 1970s. These regulations relate to, among other things, the importation of tobacco products and shipping throughout the U.S. market, increases in the minimum age to purchase tobacco products, imposition of taxes, sampling and advertising bans or restrictions, flavor bans or restrictions, ingredient and constituent disclosure requirements and media campaigns and restrictions on where consumers may use tobacco products. Additional restrictions may be adopted or agreed to in the future. These limitations may make it difficult for us to maintain the value of any brand.

Marketing authorizations will be necessary in order for us to continue our distribution of certain of our cigar and other novel nicotine products, such as our nicotine pouches. The FDA has announced various compliance policies whereby it does not intend to prioritize enforcement for lack of premarket authorization against newly-deemed products, provided that such tobacco products were marketed as of August 8, 2016; are not marketed in certain manners likely to be attractive to youth; and for which premarket applications were timely submitted. As a result of recent litigation and subsequent FDA Guidance, marketing applications for newly-deemed products were required to have been submitted no later than September 9, 2020, with the exception of our “preexisting” products (products in commerce as of February 15, 2007) which are already authorized. Under the FDA’s compliance policy, such products could remain on the market until September 9, 2021, unless the FDA makesmade an adverse determination prior to that date. Subsequent to September 9, 2021, the FDA indicated its enforcement priority is those applicants who have received negative action on their application, such as a Marketing Denial Order (“MDO”) or Refuse to File notification and who continue to illegally sell those unauthorized products, as well as products for which manufacturers failed to submit a marketing application. Further, NTN Product manufacturers were required to file a PMTA by May 14, 2022, in order to continue selling products currently on the market. NTN Products subject of a timely-filed PMTA, and not in receipt of a negative action, were allowed to remain on the market until July 13, 2022, at which time these products became subject to enforcement, similar to tobacco-derived products remaining under review.

In addition, some states have begun collecting taxes on internet sales. These taxes apply to our online sales of FRE® products into those states and may result in reduced demand from the independent wholesalers who may not be able to absorb the increased taxes or successfully pass them onto the end-user without experiencing reduced demand. Further, as a result of recent court decisions related to the taxability of internet purchases, states are now able to impose sales tax on internet purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. Consequently, additional states are likely to seek or have begun to impose sales tax on our online sales. The requirement to collect, track and remit taxes may require us to increase our prices, which may affect demand for our products or conversely reduce our net profit margin, which could have a material adverse effect on our business, results of operations and financial condition.

As part of our strategy, we have begun to expand our business into key international locations, such as introducing our moist snuff tobacco products in South America. International expansion may subject us to additional international regulation, either by the countries that are the object of the strategic expansion or through international regulatory regimes, such as the FCTC, to which those countries may be signatories. While we are primarily engaged in business activities in the United States, we engage in certain international business activities that are subject to various U.S. and foreign laws and regulations, such as foreign privacy laws, the U.S. Foreign Corrupt Practices Act (“FCPA”) and other laws prohibiting bribery and corruption. On February 10, 2025, the President issued an executive order directing a pause in enforcement of the FCPA for an initial 180-day period while new enforcement guidelines are created. WhileOn June 10, 2025, the scopeU.S. and substanceDepartment of theJustice forthcomingissued new enforcement guidelines which set forth an approach to FCPA enforcement guidelines remains unclear, the executive order by itselfthat is notexplicitly expectedaimed toat producepromoting U.S. economic interests and national security. It is unclear how these new guidelines may affect our industry as a significantwhole or lastingour changebusiness in theparticular. FCPA compliance environment. As such, althoughAlthough we have a compliance system designed to prevent and detect violations of applicable law, no system can provide assurance that it will always protect against improper actions by employees, joint venture partners, investees or third parties. Violations of these laws, or allegations of such violations could result in reputational harm, legal challenges and significant penalties and other costs.

We are required to purchase all our cigarette papers, cigarette tubes and cigarette injector machines under the Distribution Agreements from the supplier in France. Additionally, a substantial portion of the Creative Distribution Solutions joint venture’s products are sourced from China. In 2018, the U.S. imposed significant additional tariffs on certain goods imported from outside the U.S. by executive administrative action, and these tariffs remain in place. These additional tariffs apply to a significant portion of the Creative Distribution Solutions joint venture’s products and may result in increased prices for its customers and in turn, reduced demand where customers are unable to absorb the increased prices or successfully pass them onto the end-user. If the U.S. were to impose additional tariffs on goods we import, it is likely to make it more costly for us to import goods from other countries. As a result, our business, financial condition and results of operations could be materially adversely affected.

While the PresidentU.S. and his administration havehas taken steps to impose tariffs on a number of countries, most notably Canada, India, Mexico and China, there is little visibility into how U.S. trade policies will be affected by these actions. For instance, tariffs initially placed on goods from Mexico and Canada were immediately paused for further consideration. While we do not anticipate any impact on our business from these tariffs as we do not import any raw materials or finished goods from Canada, Mexico or China, we cannot predict whether the current administration may impose additional tariffs on goods imported from other countries, such as those in the European Union. If the U.S. were to impose additional tariffs on goods we import, it is likely to make it more costly for us to import goods from other countries. While the future administrations may have a desire to repeal some or all of these tariffs, no assurance can be given that they will do so. As a result, our business, financial condition and results of operations could be materially adversely affected.

The scientific community has not yet studied extensively the long-term health effects of certain substances contained in some of the products we previously sold and some products sold by joint venturesbusinesses in which we have invested.

We have a substantial amount of indebtedness that could affect our financial condition.

In February 2025, we issued $300.0 million of our 7.625% senior secured notes due 2032 (the “2032 Notes”), the proceeds of which were used to repay our existing 5.625% senior secured notes due 2026. The 2032 Notes are senior secured obligations of the Company and guarantors and currently comprise all of our outstanding debt. We have the ability to borrow up to $75.0 million under our new asset-backed revolving credit facility entered into in November 2023 (the “2023 ABL Facility”), subject to borrowing base compliance, under which only letters of credit of $2.3 million were outstanding as of December 31, 2024.2025. The 2023 ABL Facility bears interest at a floating rate. If we cannot generate sufficient cash flow from operations to service our debt, we may need to further refinance our debt, dispose of assets or issue equity to obtain necessary funds. We do not know whether we will be able to do any of this on a timely basis or on terms satisfactory to us or at all.

Our 2023 ABL Facility also requires us to maintain certain financial ratios under certain limited circumstances. A failure by us to comply with the covenants or financial ratios in our debt instruments could result in an event of default under the facility, which could adversely affect our ability to respond to changes in our business and manage our operations. In the event of any default under our debt instruments, the lenders under the facility could elect to declare all amounts outstanding under such instruments to be due and payable and require us to apply all of our available cash to repay these amounts. If the indebtedness under one of our debt instruments were to be accelerated, it could cause an event of default and/or a cross-acceleration of our obligations under our other debt instruments and there can be no assurance that our assets would be sufficient to repay this indebtedness in full, which could have a material adverse effect on our business, results of operations, and financial condition. Even though the Federal Reserve cut interest rates by 100 basis points in 2024, it remains more expensive for us to borrow under the floating rate in our 2023 ABL Facility than it was historically for us to borrow under our previous revolving credit facility.

We may sell additional shares of common stock in public or private offerings and may also sell securities convertible to common stock. We may also be required to issue common stock at the exercise or vesting of certain of our incentive equity awards of which 616,270719,309 shares remain outstanding and unvested. Further, on December 13, 2024, theThe Company entered into an at-the-market offering program (the “"ATM Program”") on December 13, 2024, with B. Riley Securities Inc. and Barclays Capital Inc. TheOn November 5, 2025, the Company mayincreased sellthe upaggregate todollar $100.0amount millionof shares of common stock that it may sell under the ATM Program.Program by an additional $200,000,000. See Note 14,22, “NotesDividends, PayableShare Issuances and Long-TermShare Debt,Repurchases” of our Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

We have manufacturing operations in Tennessee and Kentucky. Additionally, we have critical suppliers of raw materials and finished products in other regions of the U.S. and in other countries. Events may impact our ability to manufacture products or prevent critical suppliers from performing their obligations to us, through no fault of any party. Examples of such events could include the effect of epidemics; political upheavals including violent changes in government, regional conflicts, such as the war in Ukraine, and the reaction of the governments throughout the world to those conflicts such as the implementation of sanctions, widespread labor unrest, or breakdowns in civil order; and natural disasters, such as hurricanes, tornados, earthquakes or floods. In December 2023, a third-party warehouse in Tennessee used to store some ofby the Company’s leaf tobaccoCompany incurred significant tornado damage including damage to the Company’s leaf tobacco,property, which resulted in us recording a $15.2 million inventory reserve related to our leaf tobacco inventory. If such events were to occur or reoccur and disrupt our manufacturing capabilities or supply arrangements, there can be no assurance that we could quickly remedy the impact and there could be a material adverse impact on our business, financial position, results of operations, and cash flows.

We have expanded over our history and intend to grow in the future. We acquired the Stoker’s® brand in 2003 and have continued to develop it through the introduction of new products, such as moist snuff. In 2024,2024 and 2025, we accelerated our national roll-out and expanded manufacturing of our white nicotine pouch brand FRE and on behalf of our joint venture, ALP Supply Co, LLC (“ALP”), furthering our entry into the modern oral nicotine space. The acquisition of certain tobacco assets and distribution rights from Durfort and BluntWrap USA secured long-term control of our Zig-Zag MYO cigar wrap products and provided us access to a portfolio of tobacco products with significant strategic value, and the acquisition of certain tobacco assets from Unitabac expanded our capabilities in the growing cigar market. However, any future growth will place additional demands on our resources, and we cannot be sure we will be able to manage our growth effectively. If we are unable to manage our growth while maintaining the quality of our products and profit margins, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our business, financial position, results of operations and cash flows could be adversely affected. We may not be able to support, financially or otherwise, future growth, or hire, train, motivate and manage the required personnel. Our failure to manage growth effectively could also limit our ability to achieve our goals as they relate to streamlined sales, marketing and distribution operations and the ability to achieve certain financial metrics.

Turning Point Brands, Inc. is a leading manufacturer, marketer and distributor of branded consumer products. We sell a wide range of products to adult consumers consisting of staple products with our iconic brands Zig-Zag® and Stoker’s® and our next-generation products to fulfill evolving consumer preferences. Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries. The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S. and Canada and positively evolving consumer perception and acceptance in North America. The OTP industry, which consists of non-cigarette tobacco products, exhibited low-single-digitflat consumer unit annualized growth overduring the four-yearfull year period ended 20242025 as reported by Management Science Associates, Inc.MSAi a third-party analytics and information company. Our segments are led by our core proprietary and iconic brands: Zig-Zag® in the Zig-Zag products segment and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment. Our businesses generate solid cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position. We currently ship to approximately 900 distributors with an additional 600 secondary, indirect wholesalers in the U.S. that carry and sell our products. Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions and acquisitions while concurrently improving operational efficiency.

We believe there are meaningful opportunities to expand through investing in organic growth via acquisitions and joint ventures across all product categories. Our products are currently available in approximately 200,000 U.S.220,000 retail locations, which, with the addition of retail storeslocations in Canada, bring our total North American retail presence to an estimated 220,000 points of distribution.America. Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business.

Our core Zig-Zag products and Stoker’s products segments primarily generate revenues from the sale of our products to wholesale distributors who, in turn, resell the products to retail operations. Our net sales, which include federal excise taxes, consist of gross sales net of cash discounts, returns, and selling and marketing allowances.

We rely on long-standing relationships with high-quality, established manufacturers to provide the majority of our produced products. Approximately 70%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, TennesseeTennessee, 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.

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, 2025, and as compared with the three and six months ended MarchJune 31,30, 2025. 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, 2025 (the “2025 Annual Report”).

On February 20, 2026, the U.S. Supreme Court issued a ruling regarding tariffs imposed under the International Emergency Economic Powers Act (“"IEEPA”") on goods imported into the United States, concluding that such tariffs were unauthorized. As of the date of this report, theThe Company has paid approximately $17.9 million in tariffsIEEPA subject to the ruling.tariffs.

The Company continues to monitor developments related to thisthe ruling, asincluding wellany asongoing changeslegal, regulatory, or administrative actions. In addition, following the U.S. Supreme Court's decision, the U.S. administration announced additional tariffs under Section 122 of the Trade Act of 1974 and could implement additional tariffs in the future. Changes in U.S. and foreign trade, import, and export policies, whichpolicies could have a material impact on the Company’sCompany's financial position, results of operations, and cash flows.

Comparison of the Three Months Ended MarchJune 31,30, 2026, to the Three Months Ended MarchJune 31,30, 2025

Net Sales: For the three months ended MarchJune 31,30, 2026, consolidated net sales increased $17.8$26.3 million, or 16.8%22.6% compared to the prior year period, driven primarily by an increase in the Stoker’s products segment.

For the three months ended MarchJune 31,30, 2026, net sales in the Zig-Zag products segment decreased $10.6$11.6 million, or 22.4%24.8% compared to the prior year period. The decrease in net sales was driven primarily by declines of $7.4$4.7 million in U.S. papers and wraps, $1.7$6.2 million in the Clipper lighter business, and $0.9$1.0 million in our Canadian products. We were able to sell the majority of the Clipper inventory in the prior year and do not expect meaningful additional revenue from Clipper in future periods.

For the three months ended MarchJune 31,30, 2026, net sales in the Stoker’s products segment increased $28.4$38.0 million, or 48.1%54.5% compared to the prior year period. The increase in net sales was primarily driven by $29.7$38.4 million of growth in modern oral products.

Gross Profit: For the three months ended MarchJune 31,30, 2026, consolidated gross profit increased $8.7$27.1 million, or 14.6%40.6% compared to the prior year period. Gross profit as a percentage of net sales decreasedincreased to 55.0%65.5% for the three months ended MarchJune 31,30, 2026, compared to 56.0%57.1% for the three months ended MarchJune 31,30, 2025. The overall increase in gross profit was driven by increases in net sales in the Stoker's products segment and driven bysegment, margin contribution from modern oral products.products, and $12.3 million reduction in cost of sales as a result of tariff refunds.

For the three months ended MarchJune 31,30, 2026, operatinggross incomeprofit in the Zig-Zag products segment decreased $5.7$0.5 million, or 33.7%2.1% compared to the prior year period. OperatingGross incomeprofit as a percentage of net sales decreasedincreased to 30.6%63.9% of net sales for the three months ended MarchJune 31,30, 20262026, from 35.8%49.1% of net sales for the three months ended MarchJune 31,30, 2025, driven primarily driven by improved margins on product mix offsetand by an$2.4 increasemillion reduction in cost of sales andas marketinga costs.result of tariff refunds.

For the three months ended MarchJune 31,30, 2026, operatinggross incomeprofit in the Stoker’s products segment decreasedincreased $4.4$27.6 million, or 18.1%63.3% compared to the prior year period. OperatingGross incomeprofit as a percentage of net sales decreasedincreased to 22.6%66.1% of net sales for the three months ended MarchJune 31,30, 20262026, from 40.8%62.5% of net sales for the three months ended MarchJune 31,30, 2025, primarily driven by margin contribution offrom modern oral products and higher$9.9 million reduction in cost of sales andas marketinga costsresult toof drivetariff sales.refunds.

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 MarchJune 31,30, 2026, unallocated costs were $18.5$22.0 million compared to $17.9$18.5 million in the prior year period, an increase of $0.6$3.5 million or 3.6%,18.8%, primarily driven by joint venture related corporate expenses.

Other Expense, net: For the three months ended MarchJune 31,30, 2026, other incomeexpense increased $0.1 million compared to the prior year period due to an honorarium gift in the current year period that was not applicablemade in the prior year period.

Interest Expense, net: For the three months ended MarchJune 31,30, 2026, interest expense, net wasdecreased $4.4$0.9 million,million consistentor with17.3% thedue priorto yearan period.increase Thein levelinterest income as a result of interest expenseof remained$0.6 stablemillion duereceived to no significant changes in average borrowings, interest rates or debt structure duringon the period.tariff refund.

Investment Loss (Gain): For the three months ended MarchJune 31,30, 2026, investment gainloss was $0.2$1.1 million, consistentcompared withto $0.1 million investment gain in the priorprior-year yearperiod, period.primarily Thedriven year-over-yearby stabilityhigher reflectsrealized comparableloss investmentfrom performancea andnon-cash anvaluation unchanged investment portfolio compositionadjustment during the period.

Income From Equity Method Investments: For the three months ended MarchJune 31,30, 2026, income from investments in equity securities increased $2.8$2.7 million compared to the prior year period as a result of GWO.

Income Tax (Benefit) Expense: Our income tax benefitexpense of $2.8$3.7 million was (25.2%of26.3% of income before income taxes for the three months ended MarchJune 31,30, 2026. Our effective income tax rate was 11.4%20.0% for the three months ended MarchJune 31,30, 2025. The change in tax rate is primarily attributable to the release of a valuation allowance on deferred tax assets.assets in the current year period.

Net Income Attributable to Non-Controlling Interest: Net income attributable to non-controlling interest was $2.3$6.7 million and $1.4$2.5 million, respectively, for the three months ended MarchJune 31,30, 2026 and 2025. The increase in non-controlling interest compared to the prior year period is primarily due to higher sales volumes and improved net income.income of our joint venture.

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 MarchJune 31,30, 2026 and 2025, was $11.7$3.6 million and $14.4$14.5 million, respectively.

As of MarchJune 31,30, 2026, we have $192.4$268.3 million of cash on hand and $72.6$70.7 million of availability under the 2023 ABL Facility. We have no borrowings outstanding under our 2023 ABL Facility as of MarchJune 31,30, 2026. Our principal uses for cash are working capital, debt service, and capital expenditures.

Our adjusted working capital, which we define as current assets less cash and current liabilities, increased $35.1$24.2 million compared to the prior year end. The increase in working capital is primarily the result of a $1.7 million increase in accounts receivable, an $21.6$25.4 million increase in inventory and a $8.0$15.0 million increase in other current assets, partially offset by a decrease of $3.0 million in accounts receivable, an increase of $15.5$14.9 million in accounts payable and a $19.2$1.7 million decrease 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.

For the threesix months ended MarchJune 31,30, 2026, net cash usedprovided inby operating activities was $22.3$4.1 million, a increasedecrease of $39.7$25.2 million compared to the prior year period. The increasedecrease is primarily due to unfavorable changes of $34.5$14.0 million in working capital, $1.2 million in other assets, decrease in net income, net of non-cash items of $6.3$15.2 million.million, and partially offset by, $4.0 million in other assets. The primary drivers of non-cash items were a $1.6$3.1 million increase in deferred tax benefit, a $0.4 million increase in depreciation and amortization, a $2.8$5.9 million increase in income from equity method investmentinvestment, $1.2 million increase in gain on investments, $2.3 million increase in stock compensation expense and a $1.2 million decrease 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.

Cash Flows fromused Investing Activities

For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities was $5.1$11.6 million, aan decreaseincrease of $0.2$3.0 million compared to the prior year period, primarily due to payment on an increaseoption agreement of $4.9 million partially offset by a reduction in capital expenditures ofand $3.0 million offset by $2.8 million decreasepayments for equity investments.

For the threesix months ended MarchJune 31,30, 2026, net cash usedprovided inby financing activities was $2.7$52.8 million, aan decreaseincrease of $41.2$12.4 million compared to the prior year period, primarily due to an increase of equity offering proceeds of $59.6 million, offset by to a net decrease in cash of $43.4$42.7 million related to the February 2025 issuance of the 2032 Notes, $2.5 million decrease for tax distributions, and $2.5$1.3 million related to stock compensation activity.

A dividend of $0.08 per common share was paid on AprilJuly 10, 2026, to shareholders of record at the close of business on MarchJune 20,19, 2026.

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 threesix months ended MarchJune 31,30, 2026, there were no repurchases under the share repurchase program. As of MarchJune 31,30, 2026, there was $200.0 million in remaining repurchase authority under the plan.

The Company entered into an at-the-market offering program (the "ATM Program") on December 13, 2024, with B. Riley Securities Inc. and Barclays Capital Inc. BetweenDuring Augustthe 15,quarter 2025,ended andJune September30, 11, 2025,2026, the Company sold 1,014,262672,884 shares of our Common Stock under the ATM Program at an average selling price of $98.59$90.30 per share for gross proceeds of $100.0$60.8 million, less underwriter's commission and expenses of approximately $2.5$1.2 million, for net proceeds of $97.5$59.6 million. The shares were issued from repurchased common stock on a first in first out basis. The Company recorded the gain, corresponding to the difference in between the reacquisition cost of treasury stock and the value of treasury stock reissued, into APIC within the Consolidated Statements of Changes in Stockholders' Equity. As of MarchJune 31,30, 2026, there was $200.0$139.2 million of capacity remaining under the ATM Program.