22nd Century Group, Inc · NASDAQ:XXII
22nd Century — Investor Presentation (September 2024)
20 slides from 22nd Century's investor presentation, September 2024
Slide 1: Investor Presentation September 2024
Investor Presentation September 2024 XXII
Slide 2: Safe Harbor & Forward-looking Statement
Safe Harbor & Forward-looking Statement Except for historical information, all of the statements, expectations, and assumptions contained in this presentation are forward-looking statements, including but not limited to our business outlook Forward-looking statements typically contain terms such as
Slide 3: At a Glance
At a Glance ▪ NASDAQ – XXII – Headquartered in Mocksville, NC ▪ Pure Play Tobacco Company with a 26-year MISSION focused on Nicotine Harm Reduction with our branded VLN® Low Nicotine cigarette – The only Low Nicotine Cigarette ▪ NASCO Private Label Contract Manufacturing for others ▪ Supports compan
Slide 4: Nicotine = Addiction
Nicotine = Addiction XXII Mission: Lead the Nicotine Harm Reduction Movement ▪ Our Nicotine Harm Reduction Mission Started at XXII in 1998 – We were the Pioneer $ Billions are being spent on Nicotine Harm awareness campaigns and governance: ▪ TV commercials – Undo.org, CDC, American Heart Assoc, oth
Slide 5: VLN®
VLN® VLN® - Helps You Smoke Less ®
Slide 6: VLN® Strategy
VLN® Strategy VLN® is the only one - Low Nicotine cigarette with 95% less Nicotine - FDA authorized ▪ Goal ▪ Recognition for VLN® and create a separate category – Health related products seen as a better option for you ▪ Decaf Coffee ▪ Light Beer ▪ Diet Soda ▪ Strategy to create CMO flanker brands t
Slide 7: VLN® - The Math
VLN® - The Math For the Customer: For XXII: ▪ 1 pack of VLN® 95% less Nicotine Cigarettes = 1 ▪ The Original VLN® Cartons needed to standard cigarette for nicotine content breakeven – 223,000 (2.9% of NASCO Capacity) ▪ The math is why it helps you smoke less ▪ Current distribution 5,100 stores For t
Slide 8: VLN® The Gift from Big Tobacco
VLN® The Gift from Big Tobacco This sign is required by every retailer that sells tobacco in the US The Problem The Solution Simply Put – The Problem – The Solution – VLN® VLN - Helps You Smoke Less ®
Slide 9: VLN® Distribution
VLN® Distribution Diverse List of U.S., Retail Locations Carry VLN® Products Across Broad Geography Current Distribution: ▪ More than 5,100 retail stores across 26 states, including three largest state markets of Texas, California and Florida ▪ Secured distribution with top national and regional ret
Slide 10: VLN® - Outlook
VLN® - Outlook ▪ Current owned Inventory: ▪ Approx. 60,000 cartons of finished VLN® product ▪ Tobacco to support approx. 1.2 million cartons Original VLN® ▪ Tobacco to support approx. 250,000 carton of custom blend VLN® ▪ Product Strategy – Build out the Category: ▪ Original VLN® ▪ VLN® Flanker Bran
Slide 11: Contract Manufacturing and Operations
Contract Manufacturing and Operations
Slide 12: CMO Strategy
CMO Strategy Leading Provider of Manufacturing Solutions to the Tobacco Industry ▪ Services include: ▪ High Quality Private Label Production Services ▪ Turnkey or Consigned ▪ Leverage our Machine Capacity ▪ Supply Chain Management ▪ MSA Cigarette Producer ▪ Low-Cost advantage ▪ We handle the Front E
Slide 13: Operations Strategy
Operations Strategy Goal: Drive the Factory output to full capacity – VLN® + CMO ▪ Agnostic to the end product – Cigarettes or Filtered Cigars ▪ 35,000 cartons per day on one shift depending on mix ▪ Running at Full Capacity will drop DLOH per carton across the board ▪ Current capacity can be grown
Slide 14: Research & Development
Research & Development
Slide 15: R&D Goal: To ensure company IP assets are positioned to provide ongoing commercial value
R&D Goal: To ensure company IP assets are positioned to provide ongoing commercial value where viable, along with continuing to develop further advancement in tobacco. ▪ Key Areas Of Focus: ▪ Partnership with NCSU on various low nicotine tobacco improvements ▪ Low Nicotine Tobacco disease resistance
Slide 16: Financial
Financial
Slide 17: TTM Quarterly P&L (in 000's) – Q2 2024
TTM Quarterly P&L (in 000’s) – Q2 2024 Continuing Operations Q3 2023 Q4 2023 Q1 2023 Q2 2024 Q2 2024 earnings reflect Revenues, net $ 7,871 $ 7,357 $ 6,469 $ 7,947 improved trends in P&L Cost of goods sold 3,920 11,565 4,213 3,869 including: Excise taxes + fees on products 3,873 3,621 3,385 3,508 ▪
Slide 18: Non GAAP Financial Information
Non GAAP Financial Information The presentation contains certain financial information that is not presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), including earnings before interest, taxes, depreciation and amortization (EBITDA) and
Slide 19: Summary
Summary Key Initiatives & The Road Ahead: ▪ VLN® Strategy solidified and started ▪ Positive Cash Flow from Sales of Current VLN Inventory ▪ Increased Gross Profit through: ▪ VLN® volume and new placements ▪ Higher margin CMO volume and further DLOH absorption ▪ Price increases to negative margin cus
Slide 20: Thank You
Thank You Q A Questions + Answers
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