TILT's Third Quarter 2024 Update: Financial Overview and Changes

TILT Holdings Report for Third Quarter 2024

In a recent announcement, TILT Holdings Inc. is sharing its financial and operational performance for the third quarter of 2024. The company is focusing on a review of strategic alternatives within its plant-touching business as it navigates challenges and opportunities in the cannabis industry.

Financial Performance Summary

During the three months ending September 30, 2024, TILT Holdings recorded revenues of $27.0 million. This figure reflects a significant decline from the $44.6 million earned during the same period last year. The primary reasons for this decrease stem from operational delays affecting their hardware business and a shift in customer agreements.

Profit Margins and Expenditures

The company's gross profit amounted to $3.8 million, leading to a gross margin of 14%, a drop from 18% in the same quarter of the previous year. This reduction in profit margins is attributed to increased logistical costs and a less favorable product mix. Additionally, TILT reported a net loss of $12.6 million for the quarter, a larger loss compared to the $8.7 million reported in the prior year.

Adjusted EBITDA was reported at $(1.6) million, a decrease from $2.2 million year-over-year, primarily influenced by the aforementioned revenue decline and margin contraction.

Operational Highlights

TILT Holdings has made notable adjustments in management to support its long-term vision. Tim Conder, the Chief Executive Officer, emphasized that Ken Yuan, who serves as Chief Operating Officer for Jupiter, is pivotal in enhancing operational efficiency. Furthermore, the addition of Khalid Al Naser to lead TILT's commercial efforts is seen as a strategic move, given his extensive experience in the cannabis sector.

New Initiatives in Q3 2024

Recent developments include the successful launch of Edie Parker Flower in Pennsylvania and the installation of Marshall Horowitz as a new board director, complementing the recent leadership reorganization. These initiatives aim to bolster TILT Holdings' market presence and operational effectiveness.

Strategic Alternatives and Future Directions

The company has embarked on a structured review to explore strategic alternatives for its plant-touching assets. These alternatives may encompass divestitures or partnerships aimed at optimizing TILT’s portfolio and raising necessary capital. Conder stated that these considerations would facilitate a refined focus on inhalation technology, enhancing growth potential and improving operational alignment.

A comprehensive review of these strategic options is ongoing, with no specific timeline for completion. The company remains committed to its existing business plans while evaluating how best to serve its customers in a continuously evolving market.

Upcoming Earnings Call

TILT is set to conduct a conference call on the afternoon of November 14, 2024, at 5:00 p.m. Eastern Time. This call will provide a platform for further discussion of its financial and operational results.

Contact Information

For investor relations inquiries, TILT encourages contacting Lynn Ricci, VP of Investor Relations & Corporate Communications, at lricci@tiltholdings.com or Sean Mansouri, CFA at TILT@elevate-ir.com.

Frequently Asked Questions

What were the key financial results for TILT Holdings in Q3 2024?

TILT Holdings reported revenues of $27.0 million and a net loss of $12.6 million in the third quarter of 2024.

What strategic actions is TILT considering?

TILT is evaluating strategic alternatives for its plant-touching assets, including potential divestitures and partnerships.

What changes were made in TILT's management team?

Ken Yuan was recognized for enhancing operational efficiency as COO of Jupiter, and Khalid Al Naser was appointed to lead commercial efforts for the company.

What is the expectation for TILT's product strategy moving forward?

The company plans to focus on refining its inhalation technology offerings while optimizing its portfolio based on customer needs.

How can investors reach TILT Holdings for more information?

Investors can contact Lynn Ricci or Sean Mansouri via email for inquiries regarding financial reports and operations.

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