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MOCKSVILLE, N.C. - 22nd Century Group, Inc. (NASDAQ:XXII), a company focused on reducing nicotine dependence, announced today it has repaid $1 million in debt to its senior lender, bringing its total outstanding debt principal down to approximately $3.9 million. This marks a significant reduction from the $20 million in total debt obligations reported when CEO Larry Firestone joined the company in December 2023. According to InvestingPro data, the company’s debt-to-equity ratio stands at 2.15, highlighting the importance of this debt reduction initiative. Despite recent challenges reflected in a -99.48% one-year return, the stock has shown signs of recovery with a 40% gain over the past week.
The repayment is part of the company’s broader strategy to eliminate debt and allocate more resources toward growth opportunities in its contract manufacturing business and its reduced nicotine content and branded products. The company’s flagship product, VLN® cigarettes, contains 95% less nicotine compared to traditional cigarettes, aligning with its mission to offer smokers control over their nicotine intake. InvestingPro analysis indicates potential growth ahead, with analysts forecasting sales growth of 42% and a return to profitability this year, though the company currently operates with negative gross profit margins of -9.84%.
22nd Century Group’s efforts reflect its commitment to financial health and its strategic focus on harm reduction in the tobacco industry. The company’s Mocksville facility boasts the capacity to produce over 45 million cartons of tobacco products annually, with room for further expansion. Its proprietary tobacco blends and extensive patent portfolio enable it to offer the only low-nicotine combustible cigarette in the United States and key international markets.
The company is set to report its first-quarter results on May 13, 2025, with a conference call scheduled on the same day. These recent developments are based on a press release statement from 22nd Century Group.
In other recent news, 22nd Century Group reported its financial results for the fourth quarter of 2024, revealing a decline in net revenue to $4 million from $5.9 million in the previous quarter. The company also experienced a reduction in total cartons sold, decreasing from 439,000 to 338,000. Despite these setbacks, 22nd Century Group successfully reduced its total liabilities by approximately $18 million year-over-year and improved its net working capital. Looking ahead, the company plans to relaunch its VLN branded products in the second quarter of 2025, with new SKUs including Gold, Red, and Green (Menthol). Additionally, 22nd Century Group announced an expansion in its production of filtered cigars, projecting an annual volume of 500,000 cartons or more starting in 2025. The company has also streamlined operations and reduced debt as part of its strategy to focus on profitable growth. CEO Larry Firestone highlighted the company’s aim to achieve EBITDA breakeven by the fourth quarter of 2025. These developments are part of 22nd Century Group’s efforts to strengthen its position in the evolving tobacco industry.
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