The following is a summary of the TILT Holdings Inc. (TLLTF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• TILT Holdings reported a decrease in Q1 2024 revenue to $37.5 million, primarily due to lower sales volume and price compression.

• Gross margin decreased to 17.9% from 20.8% in Q1 2023, primarily due to lower average pricing.

• TILT posted a net loss of $9.7 million, higher than the $4.9 million loss in the previous year due to lower gross profit and an $8.4 million gain on asset sales in Q1 2023.

• Adjusted EBITDA was positive $38,000 in Q1 2024 as opposed to negative $79,000 in the same period the previous year, driven by improved operating cost controls.

• Cash flow was negative $2.4 million compared to positive $3.8 million in the previous year. By end of March 2024, the company had cash and cash equivalents of $3.5 million.

Business Progress:

• TILT Holdings is strategically maximizing margins through product portfolio optimization, contract renegotiation, increased throughput in plant-touching businesses, and an overhaul of people, processes, and technology at Jupiter.

• The company embarks on strengthening its customer relationships across plant-touching and Jupiter hardware businesses.

• They are investing in maintenance CapEx for improved cannabis yields, potency, and cannabinoid profiles in Massachusetts, while preparing for adult-use sales in Ohio.

• TILT refined and re-focused its strategy on cannabis brand partnerships in 2023 to align better with their inhalation strategy, adding strong brands to their portfolio.

• Lastly, the company has begun receiving shipments from their manufacturing partner, Smoore's Indonesian facility, which it believes will positively affect the business.

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