Record Q2 Revenue up 33% YoY to
Record Q2 Adjusted EBITDA up 2.7x to
Reiterates 2021 Guidance of Revenue Between
“We generated another quarter of record results by continuing to execute our B2B strategy and driving synergies across our business segments,” said
“Earlier today we announced a historic partnership with the Shinnecock Indian Nation to develop vertical cannabis operations in
“We remain committed to delivering shareholder value through growth and profitability. We are on track to deliver strong organic results in 2021, and given our recently awarded provisional licenses in
Q2 2021 Financial Summary (vs. Q2 2020, where applicable)
- Revenue increased 33% to
$48.5 million driven by growth in both cannabis and inhalation and accessory revenue. Cannabis revenue increased 31% to$10.0 million and inhalation and accessory revenue increased 34% to$38.5 million . - Gross profit before fair value adjustments increased 25% to
$13.1 million or 27% of revenue, compared to$10.5 million or 28.9% of revenue. Gross margins were impacted by supply chain expenses related to freight costs for the Company’s inhalation and accessory business. - Adjusted EBITDA was up 2.7x to
$6.5 million compared to$2.4 million . As a percentage of revenue, Adjusted EBITDA increased 680 basis points to 13.5% compared to 6.7%. - At
June 30, 2021 , cash and cash equivalents increased 29% to$9.6 million compared to$7.4 million atDecember 31, 2020 .
Q2 2021 Operational Highlights
- TILT’s inhalation and accessory business generated record monthly sales in April.
- Generated record quarterly flower sales in
Pennsylvania . - Launched exclusive partnership with Old Pal to bring select products to
Massachusetts . - Expanded exclusive partnership with
Airo Brands to bring select products toPennsylvania . - Secured local approval by the
City Council of Brockton for adult use cannabis sales at the Company’sBrockton dispensary. - Appointed
Gary Santo to CEO;Mark Scatterday continues serving as Chairman of the Board.
Operational Highlights Subsequent to Quarter End
- Announced partnership with the Shinnecock Indian Nation to enter New York’s cannabis market.
- Received four new provisional adult-use licenses in
Massachusetts and final medical dispensary license for the Company’sBrockton location. - Expanded partnership with Old Pal to bring select products to market in
Pennsylvania . - Announced partnership with 1906 to launch various products in three key markets:
Massachusetts ,Pennsylvania andOhio . - Commenced trading of TILT’s common shares on the more senior NEO Exchange in
Canada . - Entered into a new
$10 million revolving credit facility that bears interest at Prime plus 3.5%. - Deepened talent pool with several key new hires, including a new Chief Operating Officer, Head of Cannabis Operations and Head of Cultivation.
Earnings Call and Webcast
The Company will host a conference call today at
The live webcast may be accessed from the Events and Presentations menu in the Investor Relations section of the Company’s website as well as through this link. To access the conference call via telephone, please dial 1-877-705-6003. Please register at least 10 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 technology, hardware, cultivation and production, TILT services brands and cannabis retailers across 36 states in the
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, expectations regarding 2021 revenue and Adjusted EBITDA guidance, expected success of
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 Annual Information Form of the Company for the year ended on
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 three and six months ended on
Selected Financial Results
Table 1: Condensed Interim Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||
(in US$ thousands, unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
($ thousands) | ||||||||||||||||||||
Revenue | $ | 48,506 | $ | 46,780 | $ | 36,436 | $ | 95,286 | $ | 77,061 | ||||||||||
Cost of Goods Sold | 35,389 | 33,327 | 25,907 | 68,716 | 53,907 | |||||||||||||||
Gross Profit, Before FV Adj. | 13,117 | 13,453 | 10,529 | 26,570 | 23,154 | |||||||||||||||
Gross Margin %, Before FV Adj. | 27 | % | 29 | % | 29 | % | 28 | % | 30 | % | ||||||||||
Gain on FV of Bio. Assets | 11,807 | 14,720 | 3,200 | 26,527 | 19,171 | |||||||||||||||
FV of Bio. Assets in Inventory Sold | (10,219 | ) | (13,400 | ) | (7,008 | ) | (23,619 | ) | (13,081 | ) | ||||||||||
Gross Profit, After FV Adj. | 14,705 | 14,773 | 6,721 | 29,478 | 29,244 | |||||||||||||||
Gross Margin %, After FV Adj. | 30 | % | 32 | % | 18 | % | 31 | % | 38 | % | ||||||||||
Total Operating Expenses | 15,045 | 13,108 | 15,182 | 28,153 | 29,397 | |||||||||||||||
Income (Loss) from Continuing Operations | (340 | ) | 1,665 | (8,461 | ) | 1,325 | (153 | ) | ||||||||||||
Total Other Income (Expense) | (2,622 | ) | (2,768 | ) | (2,024 | ) | (5,389 | ) | (4,236 | ) | ||||||||||
Income Tax (Expense) Recovery | (1,019 | ) | (477 | ) | 1,677 | (1,496 | ) | (631 | ) | |||||||||||
Net Income (Loss) from Continuing Operations | $ | (3,981 | ) | $ | (1,579 | ) | $ | (8,808 | ) | $ | (5,560 | ) | $ | (5,020 | ) | |||||
Net (Loss) from discontinued operations, net of tax | - | - | (236 | ) | - | (3,973 | ) | |||||||||||||
Net Income (Loss) | $ | (3,981 | ) | $ | (1,579 | ) | $ | (9,044 | ) | $ | (5,560 | ) | $ | (8,993 | ) | |||||
EBITDA, Non-IFRS | 5,101 | 6,421 | (2,859 | ) | 11,522 | 10,906 | ||||||||||||||
Adjusted EBITDA, Non-IFRS | $ | 6,532 | $ | 6,195 | $ | 2,427 | $ | 12,727 | $ | 7,230 |
Table 2: Reconciliation of Non-IFRS Measures | |||||||||||||||||
(in US$ thousands, unaudited) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
($ thousands) | |||||||||||||||||
Net (Loss) from Continuing Operations | $ | (3,981 | ) | $ | (1,579 | ) | $ | (8,808 | ) | $ | (5,560 | ) | $ | (5,020 | ) | ||
Add (Deduct) Impact of: | |||||||||||||||||
Interest (Income) | 16 | (603 | ) | (633 | ) | (587 | ) | (1,473 | ) | ||||||||
Finance Expense | 2,484 | 2,597 | 2,662 | 5,081 | 5,508 | ||||||||||||
Income Tax Expense (Recovery) | 1,019 | 477 | (1,677 | ) | 1,496 | 631 | |||||||||||
Depreciation and Amortization | 5,563 | 5,529 | 5,597 | 11,092 | 11,260 | ||||||||||||
Total Adjustments | 9,082 | 8,000 | 5,949 | 17,082 | 15,926 | ||||||||||||
| |||||||||||||||||
EBITDA (Non-IFRS) | $ | 5,101 | $ | 6,421 | $ | (2,859 | ) | $ | 11,522 | $ | 10,906 | ||||||
Add (Deduct) Impact of: | |||||||||||||||||
Share-based compensation | 675 | 882 | 1,310 | 1,557 | 1,927 | ||||||||||||
Severance | 17 | - | 155 | 17 | 207 | ||||||||||||
(Gain) Loss on Sale of Assets | (8 | ) | 67 | - | 59 | - | |||||||||||
Lease Restructuring Costs | - | (14 | ) | - | (14 | ) | 267 | ||||||||||
Deferred Rent Adjustment | - | (548 | ) | - | (548 | ) | - | ||||||||||
Legal Settlement | 2,325 | 2 | - | 2,327 | - | ||||||||||||
Unrealized (Gain) Loss on Investment in Equity Security | 53 | 705 | (91 | ) | 758 | (91 | ) | ||||||||||
Loss on Loan Receivable | - | - | 104 | - | 104 | ||||||||||||
One time operating expense adjustments | (43 | ) | - | - | (43 | ) | - | ||||||||||
Unrealized (Gain) on Changes in FV of Bio. Assets | (11,807 | ) | (14,720 | ) | (3,200 | ) | (26,527 | ) | (19,171 | ) | |||||||
FV Changes in Bio. Assets Included in Inventory Sold | 10,219 | 13,400 | 7,008 | 23,619 | 13,081 | ||||||||||||
Total Adjustments | 1,431 | (226 | ) | 5,286 | 1,205 | (3,676 | ) | ||||||||||
Adjusted EBITDA (Non-IFRS) | $ | 6,532 | $ | 6,195 | $ | 2,427 | $ | 12,727 | $ | 7,230 |
Table 3: Condensed Interim Consolidated Statements of Cash Flows | ||||||||||
(in US$ thousands, unaudited) | ||||||||||
2021 | 2020 | |||||||||
Cash provided by (used in) operating activities - continuing operations | $ | 2,345 | $ | 13,486 | ||||||
Cash (used in) operating activities - discontinuing operations | - | (3,271 | ) | |||||||
Net cash provided by operating activities | 2,345 | 10,215 | ||||||||
Cash (used in) provided by investing activities - continuing operations | 1,274 | 14 | ||||||||
Cash (used in) investing activities - discontinuing operations | - | (96 | ) | |||||||
Net cash (used in) provided by investing activities | 1,274 | (82 | ) | |||||||
Cash (used in) financing activities - continuing operations | (1,485 | ) | (1,312 | ) | ||||||
Cash (used in) financing activities - discontinuing operations | - | (145 | ) | |||||||
Net cash (used in) financing activities | (1,485 | ) | (1,457 | ) | ||||||
Effect of foreign exchange on cash and cash equivalents | 11 | (739 | ) | |||||||
Net change in cash and cash equivalents | 2,145 | 7,937 | ||||||||
Cash and cash equivalents, beginning of year | 7,427 | 2,580 | ||||||||
Cash and cash equivalents, end of year | $ | 9,572 | $ | 10,517 |
Table 4: Condensed Interim Consolidated Statements of Financial Position (Select Items) | |||||||||
(in US$ thousands, unaudited) | |||||||||
($ thousands) | |||||||||
Cash and Cash Equivalents | $ | 9,572 | $ | 7,427 | |||||
Biological Assets | 13,904 | 11,201 | |||||||
Inventory | 70,602 | 52,634 | |||||||
Total Current Assets | 115,741 | 101,889 | |||||||
Property, Plant & Equipment, Net | 65,804 | 66,795 | |||||||
Total Assets | 435,478 | 429,604 | |||||||
Total Current Liabilities | 53,881 | 44,488 | |||||||
Total Long-Term Liabilities | 102,390 | 102,069 | |||||||
Total Shareholders’ Equity | 279,207 | 283,047 | |||||||
Working Capital | 61,860 | 57,401 | |||||||
Investor Relations Contact:
investors@tiltholdings.com
Media Contact:
juliet@mattio.com
631.338.5343
Source:
2021 GlobeNewswire, Inc., source