TILT Holdings Reports Fourth Quarter and Full-Year 2020 Financial Results Including First Full-Year of Positive Adjusted EBITDA
- Full-year 2020 Adjusted EBITDA of $16.9 million compared to Adjusted EBITDA loss of $0.8 million in 2019
- Full-year 2020 cash from operating activities improved $34.2 million compared to 2019
- Full-year 2020 cannabis revenue increased 41% compared to 2019
- Full-year cash expenses decreased 30% compared to 2019
PHOENIX, April 15, 2021 (GLOBE NEWSWIRE) — TILT Holdings Inc. (“TILT” or the “Company”) (CSE: TILT) (OTCQB: TLLTF) a provider of business solutions to the global cannabis industry that includes inhalation technologies, cultivation, manufacturing, processing, brand development and retail, reported its financial and operating results for the three and twelve-months ended December 31, 2020. All financial information is provided in U.S. dollars except where otherwise indicated. Results of Yaris Acquisition, LLC and its subsidiaries (together, “Blackbird”) have been reclassified as discontinued operations on the income statement and statement of cash flows. All periods have been updated to reflect this change.
The primary focus in 2020 was for TILT to become profitable, putting in place the pieces necessary to achieve scale and engage in a steady and sustainable growth trajectory.
Gary Santo, President of TILT
We made a number of key decisions throughout the year that have already started to pay off, allowing the Company to have a strong finish to 2020, producing $16.9 million in Adjusted EBITDA and $16.7 million in cash from operating activities for the year.
“We look to carry that momentum into 2021 and are already off to a great start across all business units, supporting management’s previously announced full-year 2021 revenue guidance of $205 million to $210 million and Adjusted EBITDA guidance of $30 million to $32 million,” added Santo.
TILT underwent significant changes in 2020. Through the tireless efforts of our team we were able to stabilize our foundation, solidify our strategy and focus on how best to deploy available resources towards our high-growth plant touching assets, allowing TILT to provide a differentiated B2B platform capable of supporting independent brands, U.S. MSOs and Canadian LPs.
Mark Scatterday, CEO of TILT
We expect 2021 to be an exciting year as we continue our transition from being a holding company possessing a disparate collection of subsidiaries to an integrated operating company capable of benefitting from economies of scale and cross-selling opportunities.
Financial Highlights from Continuing Operations for the Quarter Ended December 31, 2020
- Revenue of $42.3 million, an 8.1% increase from the third quarter of 2020 and an increase of 35.4% from the prior year period.
- Gross margin before fair value adjustments of 26.7%, down 460 basis points (“bps”) from the third quarter of 2020 and up 200 bps from the prior year period.
- Operating expenses less non-cash adjustments for stock compensation, depreciation/ amortization and one-time charges was $8.3 million, flat compared to the third quarter and a 17.7% decline from the prior year period.
- Positive Adjusted EBITDA for the fourth consecutive quarter at $4.5 million.
- Cash and cash equivalents of $7.4 million, a $3.1 million increase from the previous quarter, due to robust cashflow from operations.
- Working Capital of $57.4 million, an $8.5 million increase from the previous quarter.
Operational Highlights for the Quarter Ended December 31, 2020
- Jupiter Research LLC’s (“Jupiter”) power supply revenue doubled from Q3 2020 to Q4 2020.
- Standard Farms, LLC (“Standard Farms”) posted record revenue for the quarter, including the two highest sales months in Company history.
- Standard Farms doubled extraction processing capacity during the quarter.
- Commonwealth Alternative Care, Inc.’s (“CAC”) lab and kitchen production capacity increased 100% during the quarter; cultivation expansion approved October 2020 planted during Q4 2020 and yielded first harvest in March 2021.
- Completed sale of Blackbird.
Operational Highlights Subsequent to Quarter End
- Closed acquisition of Standard Farms Ohio LLC.
- Jupiter saw record cartridge shipments in January and record orders in February.
- Jupiter received ISO 13485:2016 Medical Device Certification.
- Launch of Her Highness NYC branded products in Massachusetts within 30 days of signing manufacturing and distribution contract.
- CAC completed planting in its eight additional grow rooms in Massachusetts during the quarter.
- Standard Farms had its highest flower sales during the month of March.
Earnings Call and Webcast
The Company will host a webcast at 8:00 AM EDT to discuss financial and operational results for the reported quarter.
The live webcast may be accessed from the Events and Presentations menu in the Investor Relations section of the Company’s website at https://investors.tiltholdings.com/ir-calendar or to access the conference call via telephone, please dial, 1-877-705-6003. Please register at least 15 minutes prior to the scheduled start to download and install any necessary audio software.
A replay of the webcast will be available in the Past Events section of the Company’s Investor Relations website approximately 2 hours after the live event and will be archived for 30 days.
TILT helps cannabis businesses build brands. Through a portfolio of companies providing technology, hardware, cultivation and production, TILT services brands and cannabis retailers across 35 states in the U.S., as well as Canada, Israel, Mexico, South America and the European Union. TILT’s core businesses include Jupiter, a wholly owned subsidiary and leader in the vaporization segment focused on hardware design, research, development and manufacturing; and cannabis operations, CAC in Massachusetts, Standard Farms in Pennsylvania and Standard Farms Ohio, LLC. TILT is headquartered in Phoenix, Arizona. For more information, visit www.tiltholdings.com.
Non-IFRS Financial and Performance Measures
In addition to providing financial measurements based on International Financial Reporting Standards (“IFRS”), the Company provides additional financial metrics that are not prepared in accordance with IFRS. Management uses non-IFRS financial measures, in addition to IFRS financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate the Company’s financial performance. These non-IFRS financial measures are EBITDA and Adjusted EBITDA.
Management believes that these non-IFRS financial measures reflect the Company’s ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparing financial results across accounting periods and to those of peer companies. Management also believes that these non-IFRS financial measures enable investors to evaluate the Company’s operating results and future prospects in the same manner as management. These non-IFRS financial measures may also exclude expenses and gains that may be unusual in nature, infrequent or not reflective of the Company’s ongoing operating results.
As there are no standardized methods of calculating these non-IFRS measures, the Company’s methods may differ from those used by others, and accordingly, the use of these measures may not be directly comparable to similarly titled measures used by others.
Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are financial measures that are not defined under IFRS. The Company uses these non-IFRS financial measures, and believes they enhance an investor’s understanding of the Company’s financial and operating performance from period to period, because they exclude certain material non-cash items and certain other adjustments management believes are not reflective of the Company’s ongoing operations and performance. The Company calculates EBITDA as net income (loss), plus (minus) income taxes (recovery), plus (minus) finance expense (income), plus depreciation and amortization expense. Adjusted EBITDA excludes certain one-time, non-cash or non-operating expenses, as determined by management, including stock compensation expense, business acquisition expense, debt issuance costs, severance, unrealized (gain) loss on changes in fair value of biological assets and fair value changes in biological assets included in inventory sold.
Reconciliations of Non-IFRS Financial and Performance Measures
Adjusted EBITDA is reconciled to Net Loss below as well as the section labelled “Reconciliation of Net Income (Loss) to Non-IFRS Measures” in the Management Discussion and Analysis of the Company for the quarter and year ended on December 31, 2020, which is available on the Company’s SEDAR profile at www.sedar.com.
Selected Financial Results