Fourth Quarter Pro Forma Revenue of $32.8 million1
Fiscal
2018 Pro Forma Revenue of $98.0 million2
CAMBRIDGE, Mass.–(BUSINESS WIRE)–
TILT Holdings Inc. (“TILT” or the “Company”) (CSE: TILT) (OTCQB: SVVTF),
a leading business to business company in the cannabis industry, today
released its audited consolidated financial statements and accompanying
management discussion and analysis for the year ended December 31, 2018.
The Company intends to hold a conference call with investors in
conjunction with its first quarter 2019 financial results, which will be
reported on or before May 30, 2019. All financial information presented
in this release is in U.S. dollars, unless otherwise noted.
“The completion of our first annual consolidated audited financial
results since TILT was formed and became listed on the CSE represents
another significant milestone for the Company,” said Alex Coleman,
Chairman and CEO of TILT. “These financial results reflect the four way
merger that formed TILT and the corresponding balance sheet adjustments.
Overall, we are extremely encouraged by the pro forma results and
streamlining of operations and expenses as we integrate these businesses
in 2019.”
Fourth Quarter and Fiscal 2018 Financial Highlights
Fourth Quarter 2018 Operational and Financial Highlights
Full Year 2018 Operational and Financial Highlights
2019 Year-to-Date Operational Highlights
“The fourth quarter of 2018, in particular, was an important period for
TILT, as we completed a $119 million capital raise, merged four leading
businesses and announced key acquisitions. TILT continues to emerge as a
leading industry partner and provider of B2B services, positioning the
Company to benefit from capturing value across the entire cannabis
supply chain. The business was officially formed during this past
calendar year and, in spite of being at the front end of a long-term
growth phase, we are already generating significant revenue on a pro
forma basis. As the complementary businesses we have acquired and
merged continue to integrate, we look forward to realizing further
growth and improved margins,” continued Coleman.
(1) Represents the pro forma unaudited gross
revenue generated by TILT in the fourth quarter of fiscal 2018 assuming
the closing of the business combination (the “Business Combination”)
between Sea Hunter Therapeutics LLC, Briteside Holdings, LLC, Baker
Technologies, Inc. and Santé Veritas Holdings Inc., and the acquisitions
of Jupiter, Blackbird and Standard Farms occurred on October 1,
2018.
(2) Represents the pro forma unaudited gross
revenue generated by TILT in fiscal 2018 assuming the closing of the
Business Combination and the acquisitions of Jupiter, Blackbird and
Standard Farms occurred on January 1, 2018.
Full Year 2018 Results
For the full year 2018, revenue was $5.7 million, up from $0.0 million
in the prior year, with $98.0 million2 in pro forma
revenue for the year. Reported revenue includes revenue of Sea Hunter
for the full year and approximately one month of revenue contribution
from the merged businesses of Baker Technologies, Briteside and Santé
Veritas. Pro forma revenue includes a full year contribution from
the merged businesses as well as the contribution of business
acquisitions closed in January 2019.
Gross profit for the full year 2018 was $2.4 million, compared to $0.0
million in the prior year. Gross margin for the full year 2018 reflects
the start-up costs associated with beginning cultivation operations in
Massachusetts during the year. On a pro forma basis, including a
full year contribution from the merged businesses as well as the
contribution of business acquisitions closed in January 2019, pro
forma gross profit was $21.8 million2.
Total operating expenses were $56.6 million, compared to $4.1 million in
the prior year. The operating expenses reflect significant levels of
non-cash stock compensation expense and professional fees associated
with the transition to a public company and capital raising activities.
Loss from operations was $54.1 million, compared to $4.1 million in the
prior year, reflecting the operating expense levels noted above and the
early stage of operations for most of fiscal 2018. The reported net loss
for the full year 2018 was $552.1 million, compared to $4.1 million in
the prior year. The net loss included a $496.4 million one-time,
non-cash goodwill impairment taken at the end of fiscal 2018 related to
the Company’s reverse takeover of SVH. Excluding the goodwill
impairment, net loss for fiscal 2018 was $55.7 million.
Adjusted EBITDA was $(20.7) million compared to $(4.1) million. Pro
forma adjusted EBITDA, including a full year contribution from the
merged businesses as well as the contribution of business acquisitions
closed in January 2019, was $(39.6) million.
Cash Balance
The Company’s cash and cash equivalents at December 31, 2018 were $97.2
million, compared to $0.1 million on December 31, 2017. There was no
debt as of December 31, 2018.
About TILT
TILT is a leading provider of products and services to businesses
operating in the cannabis industry. The Company offers the contract
manufacturing of marijuana in a variety of form factors, vaporizer and
inhalation devices, business and consumer delivery services, and a broad
suite of software products for over 1,500 retailers and brands
throughout the U.S., Canada and Europe. The majority of TILT’s products
are customized to client specifications and branding, all enabling them
to operate their businesses more efficiently and connect with their
customers more effectively. The Company is organized in two main
business units, Software & Services and Consumer Devices & Packaged
Goods, designed to augment competencies across the organization in
research, manufacturing, packaging and technology to deliver end-to-end
services and customer solutions. All of TILT’s products are supported by
an extensive research process led by scientists and engineers, using
data analytics and discovery to produce new products helping shape the
industry. Headquartered in Cambridge, MA, with offices throughout the
U.S., Toronto and London, TILT has over 500 employees and has sales in
40 U.S. states, Canada and Europe. For more information, please 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 receipt of the
Certificate of Operation by Standard Farms, the operational date of the
Facility, the expected growth of the Ohio cannabis market, 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, 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 they it 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.
The CSE has neither approved nor disapproved the contents of this
news release.
Pro Forma Presentation
The pro forma information (“Pro Forma Information”) presented herein
is not necessarily indicative of the operating results or financial
condition that would have been achieved if the proposed acquisitions to
which the Pro Forma Information relates had been completed on the dates
or for the periods presented, nor do they purport to project the results
of operations or financial position of the combined entities for any
future period or as of any future date. Actual amounts recorded upon
consummation of the acquisitions to which the Pro Forma Information
relates would likely differ from those recorded in the Pro Forma
Information. The Pro Forma Information does not reflect any special
items such as integration costs or operating synergies that may be
realized as a result of the acquisitions to which the Pro Forma
Information relates.
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 Adjusted EBITDA and Pro Forma 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
Adjusted EBITDA and Pro Forma 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 excludes 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) interest expense (income), plus depreciation and amortization
expense. Adjusted EBITDA excludes certain one-time non-operating
expenses, as determined by management, including stock compensation
expense, goodwill impairment, loss (gain) on disposal of asset and
business combination expense.
Reconciliations of Non-IFRS Financial and Performance Measures
Adjusted EBITDA is reconciled to Net Loss in the Management
Discussion and Analysis of the Company for the year ended on December
31, 2018, which is available on the Company’s SEDAR profile at www.sedar.com.
Pro Forma Adjusted EBITDA is reconciled to [Net Loss] in the table that
follows:
Reconciliations of Non-IFRS Financial and Performance Measures
The table below reconciles Net Loss to EBITDA and Adjusted EBITDA for
the periods indicated.
Year Ended
Dec. 31,
Period from
Sep. 20 (Inception)
to Dec. 31,
Quarter Ended
Dec. 31,
$
(552,119,036
)
$
(4,133,202
)
$
(534,039,414
)
$
(4,133,202
)
$
(550,228,588
)
$
(4,133,202
)
$
(532,854,919
)
$
(4,133,202
)
$
(550,228,588
)
$
(4,133,202
)
$
(532,854,919
)
$
(4,133,202
)
$
(20,659,546
)
$
(4,133,202
)
$
(3,285,877
)
$
(4,133,202
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20190501006121/en/
Contact Information:
Joel Milton
SVP of Business
Development
Phone: 303-872-7255
Investor Contact:
Scott Van Winkle
ICR
Phone:
617-956-6736
investors@tiltholdings.com
Media Contact:
Cory Ziskind
ICR
Phone: 646-277-1232
tiltholdings@icrinc.com
Source: TILT Holdings Inc.
Released May 1, 2019