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TILT Holdings Reports Third Quarter 2020 Financial Results Including Record Adjusted EBITDA, Enters into Definitive Agreement for the Sale of Blackbird Subsidiary | ![]() |
Wednesday, 18. November 2020 22:30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue of $40.4 million, driven in part by a 24% sequential increase in the cannabis segment compared to the second quarter of 2020 Gross margin of 30.3%, a 193-basis point improvement from the second quarter of 2020, driven by margin expansion in the cannabis segment Record adjusted EBITDA of $2.8 million, an increase of 134% from the second quarter of 2020 Upon closing, Blackbird divestiture reduces cash burn, improves third quarter 2020 PHOENIX, Nov. 18, 2020 (GLOBE NEWSWIRE) -- TILT Holdings Inc. (“TILT” or the “Company”) (CSE: TILT) (OTCQB: TLLTF), a provider of business solutions to the global cannabis industry, reported its financial and operating results for the three and nine-months ended September 30, 2020. All financial information is unaudited and provided in U.S. dollars except where otherwise indicated. “In the third quarter we saw sequential growth across our core Jupiter and plant-touching operations reflecting our diversified position within the growing U.S. cannabis industry,” said Mark Scatterday, CEO of TILT. “We also reported record adjusted EBITDA that was positive for the third consecutive quarter, a result of our actions to right size the business while strengthening our platform to scale as a preferred B2B partner to the cannabis industry.” Scatterday continued: “We are encouraged by the continuing trends that we see in our businesses, supported by recent regulatory tailwinds in the U.S. that we believe will continue to create more opportunities for TILT to deliver value to our shareholders.” Financial Summary for the Quarter Ended September 30, 2020
Operational Highlights for the Quarter Ended September 30, 2020
Blackbird Divestiture Earlier today, Baker Technologies, Inc. (“Baker”), an indirect wholly owned subsidiary of TILT, entered into a securities purchase agreement (the “Agreement”) for the sale (the “Blackbird Sale”) of all of the membership interests of Yaris Acquisition, LLC (“Yaris”) (dba. Blackbird) to Slam Dunk, LLC (the “Buyer”), a Nevada limited liability corporation controlled by Tim Conder, TILT’s Chief Operating Officer and a member of the board of directors of the Company. “We continue to believe that the Blackbird platform offers a comprehensive technology solution capable of bringing cannabis brands, retailers and consumers together on a single platform,” said Gary Santo, President of TILT. “Unfortunately, the marketplace for such solutions is fragmented and hyper-competitive with multiple players offering disparate systems at irrational prices and creating headwinds for sustained profitability.” “Blackbird is effectively a start-up company contributing 4% to our revenue year-to-date while requiring additional capital and resources in order to achieve scale,” continued Santo. “Given the growth potential within Jupiter and our cannabis operations, we believe the opportunity costs associated with continuing to invest in the platform are not in our shareholder’s best interests. Upon closing, we expect this transaction to significantly improve profitability and free up cash flow that can be redeployed to grow our core businesses, while the proposed structure will allow TILT to participate in Blackbird’s future success.” Key Transaction Terms
The Agreement is subject to standard closing conditions and termination provisions. The parties anticipate closing the Blackbird Sale on or prior to December 31, 2020; however the Blackbird Sale may close within twenty-one days of the date hereof provided that closing conditions are satisfied prior to that time. Details of the Blackbird Sale were settled on the date hereof and the Company wishes to close the Blackbird Sale on an expedited basis for sound business reasons. The Agreement, including the form of Promissory Note will be available on the Company’s SEDAR profile at www.sedar.ca. Cormark Securities Inc. is acting as financial advisor to TILT for this transaction. Selected Financials
Earnings Call and Webcast The Company will host a webcast later today at 5:00 PM EST 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 at http://public.viavid.com/index.php?id=142183. 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. About TILT TILT helps cannabis businesses build brands. Through a portfolio of companies providing hardware, software, logistics, cultivation and production, TILT services more than 2,000 brands and cannabis retailers across 33 states in the U.S., as well as Canada, Israel, Mexico, South America and the European Union. TILT’s core businesses include Jupiter Research, a wholly owned subsidiary and leader in the vaporization segment focused on hardware design, research, development and manufacturing; Blackbird Holdings Corp., a software and operations solutions provider for wholesale and retail distributors; and cannabis operations Commonwealth Alternative Care, Inc. in Massachusetts and Standard Farms, LLC in Pennsylvania. TILT is headquartered in Phoenix, Arizona. For more information, visit www.tiltholdings.com. Forward-Looking Information This news release contains forward-looking information based on current expectations. Forward-looking information is provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward looking information may include, without limitation, the anticipated development and timing of a new, medically certified inhalation device, expected global testing trends for medical inhalation device certification, the expected European markets for a new medical inhalation device, the opinions or beliefs of management, prospects, opportunities, priorities, targets, goals, ongoing objectives, milestones, strategies and outlook of TILT, and includes statements about, among other things, future developments, the future operations, strengths and strategy of TILT. Generally, forward looking information can be identified by the use of forward looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. These statements should not be read as guarantees of future performance or results. These statements are based upon certain material factors, assumptions and analyses that were applied in drawing a conclusion or making a forecast or projection, including TILT’s experience and perceptions of historical trends, the ability of TILT to maximize shareholder value, current conditions and expected future developments, as well as other factors that are believed to be reasonable in the circumstances. Although such statements are based on management’s reasonable assumptions at the date such statements are made, there can be no assurance that it will be completed on the terms described above and that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on the forward-looking information. TILT assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law. By its nature, forward-looking information is subject to risks and uncertainties, and there are a variety of material factors, many of which are beyond the control of TILT, and that may cause actual outcomes to differ materially from those discussed in the forward-looking statements. For additional information regarding forward-looking statements and their related risks, please refer to the “Risk Factors and Uncertainties” section in the Management Discussion and Analysis of the Company for the quarter ended on September 30, 2020, which is available on the Company’s SEDAR profile at www.sedar.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 Selected Financial Results Table 1: Income Statement:
Table 2: Reconciliation of Non-IFRS Measures:
Table 4: Condensed Consolidated Statements of Financial Position (Select Items)
Investor Relations Contact: Media Contact: The CSE has neither approved nor disapproved the contents of this news release. |
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