Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY;
TSX: TLRY), a leading global cannabis-lifestyle and consumer
packaged goods company inspiring and empowering the worldwide
community to live their very best life, today reported financial
results for the first fiscal quarter ended August 31, 2022. All
financial information in this press release is reported in U.S.
dollars, unless otherwise indicated.
Financial Highlights – First Quarter
Fiscal 2023
- Reported net revenue was $153.2
million. On a constant currency basis, net revenue remained strong
at $166.5 million for the quarter.
- Maintained #1 position in Canada
with 8.5% cannabis market share, driven by Tilray’s comprehensive
portfolio of adult-use brands.
- International cannabis revenue was
$10.4 million. On a constant currency basis, international cannabis
revenue was $11.9 million.
- Achieved $108 million in annualized
cash cost-savings since the closing of the Tilray – Aphria
transaction in May 2021, up from $85 million as of May 31,
2022.
- Net loss was $66 million. Adjusted
EBITDA of $13.5 million, marking the 14th consecutive quarter of
positive adjusted EBITDA and second highest achieved in the
Company’s history.
Irwin D. Simon, Tilray’s Chairman and Chief
Executive Officer, stated, “Tilray Brands’ top and bottom-line
results during the first quarter reflect successful realignment of
the business to maximize revenue and market share gains across core
business segments and geographies. Most notably, we are now the
leader in net cannabis revenue worldwide, highlighted by medical
cannabis leadership globally and adult-use cannabis market share
primacy in Canada. These achievements affirm that, amid market
disruption and macroeconomic challenges, we have leveraged our
scale, marketing acumen and CPG expertise to deliver strong –
and sustainable – top line growth.”
He continued, “We have also optimized our
performance through an ambitious and expanded cost savings across
the platform. Through the end of the first quarter, we have
realized $95 million of our revised and increased $100 million goal
of annualized cost savings. In addition, we realized an additional
$13 million of cost savings from our recently launched $30 million
cost optimization plan for our existing cannabis business. In
aggregate, we expect to remove $130 million of costs from the
business. We also plan to realize an additional $40 million in
revenue and interest payments from the strategic HEXO transaction.
These initiatives, combined with our market share and revenue
gains, should position Tilray Brands extraordinarily well for the
future, allowing us to reconfirm our guidance of $70 - $80 million
of adjusted EBITDA and be free cash flow positive.”
Leading Position in Global Cannabis
Markets
#1 in Global Cannabis Revenue –
Excluding the U.S., Tilray Brands now has the leading cannabis
revenue in federally legal markets across the global cannabis
industry – uniquely enviable positioning as legal cannabis
continues to take hold globally.
#1 Market Position in Canada and
Strategic Initiatives Underway to Accelerate Growth –
Tilray Brands has implemented strategic price adjustments, expanded
distribution through its coast-to-coast agreements with Rose Life
Sciences and Great North Distributors, and accelerated product
innovation.
Strategic Expansion Across Europe and
Leading Market Share in Germany – Germany is poised to
lead the European cannabis market and Tilray Medical already leads
in medical cannabis within Germany with market share of
approximately 20%1 with whole flower, extracts and Dronabinol
products. Based on Tilray’s unparalleled production capability and
investments in brands and people, the Company is positioned
exceptionally well for adult-use cannabis legalization. Tilray’s
sales arrangements through major distribution channels in Germany,
the UK, and other key markets, coupled with strong relationships
with local governments and patient trust, helps ensure the
infrastructure and platform to drive accelerated growth across
Europe.
A Leading U.S. CPG and Craft-Beverage
Portfolio Provides Growth Platform – In the U.S.,
Tilray’s businesses include SweetWater Brewing Company, the 10th
largest craft brewer in the nation and leading lifestyle brand,
Breckenridge Distillery, and Manitoba Harvest, a pioneer in hemp,
CBD, and wellness products. The Company is focused on driving
revenue gains across each of these businesses, which will
ultimately create a strong channel for additional revenue in
adult-use cannabis, pending federal legalization.
Strategic Growth Actions
- On October 5, 2022 – Broken Coast
Ranks #1 at the Budtender’s Association Collector’s Cup
- On October 4, 2022 – Tilray Medical
Relaunches Cannabis Oral Solution Across Ireland
- On September 28, 2022 –
SweetWater Brewing Company Unveils New Fall Craft-Beer
Releases
- On September 22, 2022 – Tilray
Medical Receives Approval to Extend Market Authorization in
Italy
- On September 15, 2022 – RIFF
Cannabis Brand Launches New ‘Drumsticks’ Product
- On September 8, 2022 –
Breckenridge Distillery Announces Nationwide Alignment and Renewed
Distribution Agreement with Republic National Distributing
Company
- On September 1, 2022 – Good
Supply Launches New High-Potency Product Drop and Unveils Exclusive
Orange Frost Live Resin
- On August 26, 2022 – Tilray Medical
Launches New Products and ‘CannaPoints’ Program to Support Patients
Across Canada
- On August 23, 2022 – Tilray Medical
Receives Verification from the Natural Health Science Foundation in
Australia and New Zealand
- On August 17, 2022 – Tilray Medical
Bolsters Market Leading Position in Europe with Market
Authorization in Poland
- On August 4, 2022 – Breckenridge
Distillery and Denver Broncos Release Limited-Edition Mile High
Bourbon Blends
- On August 3, 2022 – Tilray Wellness
Announces U.S. Distribution Agreement with Southern Glazer’s Wine
& Spirits for CBD Beverages
- On July 19, 2022 – Tilray Medical
Launches Cannabis Education Platform ‘WeCare-MedicalCannabis’
Across Europe
- On July 14, 2022 – Tilray Brands’
Potently Canadian Cannabis Brand, CANACA Joins this Year’s Calgary
Stampede and Releases ‘Wild West’ Product Lineup
- On July 12, 2022 – Tilray Brands
Announces Closing of Transaction with HEXO, Laying Groundwork for
the Next Evolution of Canadian Cannabis
- On July 6, 2022 – Good Supply Brand
Expands its Cannabis Portfolio in Québec
- On June 29, 2022 – Tilray Medical
Expands Portfolio of Medical Cannabis Products in the UK
- On June 22, 2022 – Tilray Medical
Welcomes Government of Luxembourg Delegation Visit to European
Campus in Portugal
- On June 16, 2022 – Broken Coast
Cannabis Launches Full Spectrum ‘woah’
- On June 14, 2022 – Tilray Brands
Announces Enhancements to Accretive Strategic Transaction with
HEXO
- On June 7, 2022 – Tilray Medical
Launches Sleep-Oriented CBN Night Oil for Medical Cannabis Patients
in Canada
Live Conference Call and Audio
WebcastTilray Brands will host a webcast to discuss these
results today at 8:30 a.m. ET. Investors may join the live webcast
available on the Investors section of the Company’s website at
www.tilray.com. The webcast will also be archived after the call
concludes.
About Tilray BrandsTilray
Brands, Inc. (Nasdaq: TLRY; TSX: TLRY), is a leading global
cannabis-lifestyle and consumer packaged goods company with
operations in Canada, the United States, Europe, Australia, and
Latin America that is changing people’s lives for the better – one
person at a time. Tilray Brands delivers on this mission by
inspiring and empowering the worldwide community to live their very
best life, enhanced by moments of connection and wellbeing.
Patients and consumers trust Tilray Brands to be the most
responsible, trusted and market leading cannabis consumer products
company in the world with a portfolio of innovative, high-quality,
and beloved brands that address the needs of the consumers,
customers, and patients we serve. A pioneer in cannabis research,
cultivation, and distribution, Tilray Brands’ unprecedented
production platform supports over 20 brands in over 20 countries,
including comprehensive cannabis offerings, hemp-based foods, and
craft beverages.
For more information on Tilray Brands,
visit www.Tilray.com and follow @Tilray
Cautionary Statement Concerning
Forward-Looking StatementsCertain statements in this press
release constitute forward-looking information or forward-looking
statements (together, “forward-looking statements”) under Canadian
securities laws and within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that are intended to
be subject to the “safe harbor” created by those sections and other
applicable laws. Forward-looking statements can be identified by
words such as “forecast,” “future,” “should,” “could,” “enable,”
“potential,” “contemplate,” “believe,” “anticipate,” “estimate,”
“plan,” “expect,” “intend,” “may,” “project,” “will,” “would” and
the negative of these terms or similar expressions, although not
all forward-looking statements contain these identifying words.
Certain material factors, estimates, goals, projections, or
assumptions were used in drawing the conclusions contained in the
forward-looking statements throughout this communication.
Forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses
or current expectations concerning, among other things: the
Company’s ability to become the world’s leading cannabis-focused
consumer branded company and achieve $4B in revenue by the end of
fiscal 2024; the Company’s ability to generate $70-$80 million of
Adjusted EBITDA and expectation to be free-cash flow positive in
its operating business units in FY 2023; the Company’s ability to
achieve operational scale, market share, distribution,
profitability and revenue growth in particular markets, including
in Canada, the U.S. and the EU; and the Company’s ability to
successfully achieve the expected production efficiencies,
synergies and cost savings relating to the HEXO transactions and
agreed commercial arrangements; and the Company’s anticipated
investments, including in organic and strategic growth, partnership
efforts, product offerings and other initiatives.
Many factors could cause actual results,
performance, or achievement to be materially different from any
forward-looking statements, and other risks and uncertainties not
presently known to the Company or that the Company deems immaterial
could also cause actual results or events to differ materially from
those expressed in the forward-looking statements contained herein.
For a more detailed discussion of these risks and other factors,
see the most recently filed annual information form of the Company
and the Annual Report on Form 10-K (and other periodic reports
filed with the SEC) of the Company made with the SEC and available
on EDGAR. The forward-looking statements included in this
communication are made as of the date of this communication and the
Company does not undertake any obligation to publicly update such
forward-looking statements to reflect new information, subsequent
events or otherwise unless required by applicable securities
laws.
Use of Non-U.S. GAAP Financial
MeasuresThis press release and the accompanying tables
include non-GAAP financial measures, including adjusted gross
margin, Adjusted EBITDA, and free cash flow. Management believes
that the non-GAAP financial measures presented provide useful
additional information to investors about current trends in the
Company’s operations and are useful for period-over-period
comparisons of operations. These non-GAAP financial measures should
not be considered in isolation or as a substitute for the
comparable GAAP measures. In addition, these non-GAAP measures may
not be the same as similar measures provided by other companies due
to potential differences in methods of calculation and items being
excluded. They should be read only in connection with the Company’s
Consolidated Statements of Operations and Cash Flows presented in
accordance with GAAP.
Certain forward-looking non-GAAP financial
measures included in this press release are not reconciled to the
comparable forward-looking GAAP financial measures. The Company is
not able to reconcile these forward-looking non-GAAP financial
measures to their most directly comparable forward-looking GAAP
financial measures without unreasonable efforts because the Company
is unable to predict with a reasonable degree of certainty the type
and extent of certain items that would be expected to impact GAAP
measures but would not impact the non-GAAP measures. Such items may
include litigation and related expenses, transaction costs,
impairments, foreign exchange movements and other items. The
unavailable information could have a significant impact on the
Company’s GAAP financial results.
The Company believes presenting net sales at
constant currency provides useful information to investors because
it provides transparency to underlying performance in the Company’s
consolidated net sales by excluding the effect that foreign
currency exchange rate fluctuations have on period-to-period
comparability given the volatility in foreign currency exchange
markets. To present this information for historical periods,
current period net sales for entities reporting in currencies other
than the U.S. dollar are translated into U.S. dollars at the
average monthly exchange rates in effect during the corresponding
period of the prior fiscal year, rather than at the actual average
monthly exchange rate in effect during the current period of the
current fiscal year. As a result, the foreign currency impact is
equal to the current year results in local currencies multiplied by
the change in average foreign currency exchange rate between the
current fiscal period and the corresponding period of the prior
fiscal year.
Adjusted EBITDA is calculated as net income
(loss) before income tax expense (recovery); interest expense, net;
non-operating income (expense), net; amortization; stock-based
compensation; change in fair value of contingent consideration;
purchase price accounting step-up; facility start-up and closure
costs; lease expense; litigation costs; and transaction costs. A
reconciliation of Adjusted EBITDA to net loss, the most directly
comparable GAAP measure, has been provided in the financial
statement tables included below in this press release. Gross
margin, excluding inventory valuation adjustments, is calculated as
revenue less cost of sales adjusted to add back inventory valuation
adjustments and amortization of inventory step-up, divided by
revenue. A reconciliation of Gross margin, excluding inventory
valuation adjustments, to gross margin, the most directly
comparable GAAP measure, has been provided in the financial
statement tables included below in this press release. Free cash
flow is comprised of two GAAP measures deducted from each other
which are net cash flow provided by (used in) operating activities
less investments in capital and intangible assets. A reconciliation
of net cash flow provided by (used in) operating activities to free
cash flow, the most directly comparable GAAP measure, has been
provided in the financial statement tables included below in this
press release.
For further information:
Media: Berrin Noorata, news@tilray.com
Investors: Raphael Gross, +1-203-682-8253,
Raphael.Gross@icrinc.com
1 Insight Health Sales Data
Consolidated Statements of Financial Position |
|
|
|
|
|
|
|
August
31, |
|
May
31, |
|
(in thousands of US dollars) |
|
|
2022 |
|
|
|
2022 |
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
490,643 |
|
|
$ |
415,909 |
|
|
Accounts receivable, net |
|
|
98,347 |
|
|
|
95,279 |
|
|
Inventory |
|
|
244,654 |
|
|
|
245,529 |
|
|
Prepaids and other current assets |
|
|
77,237 |
|
|
|
46,786 |
|
|
Total current assets |
|
|
910,881 |
|
|
|
803,503 |
|
|
Capital assets |
|
|
553,606 |
|
|
|
587,499 |
|
|
Right-of-use assets |
|
|
11,884 |
|
|
|
12,996 |
|
|
Intangible assets |
|
|
1,210,578 |
|
|
|
1,277,875 |
|
|
Goodwill |
|
|
2,617,696 |
|
|
|
2,641,305 |
|
|
Interest in equity investees |
|
|
4,764 |
|
|
|
4,952 |
|
|
Long-term investments |
|
|
8,879 |
|
|
|
10,050 |
|
|
Convertible notes receivable |
|
|
269,440 |
|
|
|
111,200 |
|
|
Other assets |
|
|
4,754 |
|
|
|
314 |
|
|
Total assets |
|
$ |
5,592,482 |
|
|
$ |
5,449,694 |
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Bank indebtedness |
|
$ |
18,282 |
|
|
$ |
18,123 |
|
|
Accounts payable and accrued liabilities |
|
|
154,663 |
|
|
|
157,431 |
|
|
Contingent consideration |
|
|
16,218 |
|
|
|
16,007 |
|
|
Warrant liability |
|
|
12,707 |
|
|
|
14,255 |
|
|
Current portion of lease liabilities |
|
|
7,290 |
|
|
|
6,703 |
|
|
Current portion of long-term debt |
|
|
64,098 |
|
|
|
67,823 |
|
|
Total current liabilities |
|
|
273,258 |
|
|
|
280,342 |
|
|
Long
- term liabilities |
|
|
|
|
|
Lease liabilities |
|
|
9,580 |
|
|
|
11,329 |
|
|
Long-term debt |
|
|
114,294 |
|
|
|
117,879 |
|
|
Convertible debentures |
|
|
444,275 |
|
|
|
401,949 |
|
|
Deferred tax liability |
|
|
187,714 |
|
|
|
196,638 |
|
|
Other liabilities |
|
|
179 |
|
|
|
191 |
|
|
Total liabilities |
|
|
1,029,300 |
|
|
|
1,008,328 |
|
|
Commitments and contingencies (refer to Note
18) |
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
Common stock ($0.0001 par value; 990,000,000 shares authorized;
600,954,939 and 532,674,887 shares issued and outstanding,
respectively) |
|
|
60 |
|
|
|
53 |
|
|
Additional paid-in capital |
|
|
5,641,348 |
|
|
|
5,382,367 |
|
|
Accumulated other comprehensive loss |
|
|
(79,732 |
) |
|
|
(20,764 |
) |
|
Accumulated Deficit |
|
|
(1,036,333 |
) |
|
|
(962,851 |
) |
|
Total Tilray Brands, Inc. stockholders'
equity |
|
|
4,525,343 |
|
|
|
4,398,805 |
|
|
Non-controlling interests |
|
|
37,839 |
|
|
|
42,561 |
|
|
Total stockholders' equity |
|
|
4,563,182 |
|
|
|
4,441,366 |
|
|
Total liabilities and stockholders' equity |
|
$ |
5,592,482 |
|
|
$ |
5,449,694 |
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Net Income (Loss) and Comprehensive
Income (Loss) |
|
|
|
|
|
|
|
For the
three months |
|
|
|
|
|
|
ended August 31, |
|
Change |
|
% Change |
(in
thousands of U.S. dollars, except for per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
2022 vs. 2021 |
Net revenue |
|
$ |
153,211 |
|
|
$ |
168,023 |
|
|
$ |
(14,812 |
) |
|
(9 |
)% |
Cost of
goods sold |
|
|
104,597 |
|
|
|
117,068 |
|
|
|
(12,471 |
) |
|
(11 |
)% |
Gross
profit |
|
|
48,614 |
|
|
|
50,955 |
|
|
|
(2,341 |
) |
|
(5 |
)% |
Operating
expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
40,508 |
|
|
|
49,487 |
|
|
|
(8,979 |
) |
|
(18 |
)% |
Selling |
|
|
9,671 |
|
|
|
7,432 |
|
|
|
2,239 |
|
|
30 |
% |
Amortization |
|
|
24,359 |
|
|
|
30,739 |
|
|
|
(6,380 |
) |
|
(21 |
)% |
Marketing and promotion |
|
|
7,248 |
|
|
|
5,465 |
|
|
|
1,783 |
|
|
33 |
% |
Research and development |
|
|
166 |
|
|
|
785 |
|
|
|
(619 |
) |
|
(79 |
)% |
Change in fair value of contingent consideration |
|
|
211 |
|
|
|
837 |
|
|
|
(626 |
) |
|
(75 |
)% |
Litigation costs |
|
|
445 |
|
|
|
1,194 |
|
|
|
(749 |
) |
|
(63 |
)% |
Transaction (income) costs |
|
|
(12,816 |
) |
|
|
24,385 |
|
|
|
(37,201 |
) |
|
(153 |
)% |
Total
operating expenses |
|
|
69,792 |
|
|
|
120,324 |
|
|
|
(50,532 |
) |
|
(42 |
)% |
Operating
loss |
|
|
(21,178 |
) |
|
|
(69,369 |
) |
|
|
48,191 |
|
|
(69 |
)% |
Interest expense, net |
|
|
(4,413 |
) |
|
|
(10,170 |
) |
|
|
5,757 |
|
|
(57 |
)% |
Non-operating (expense) income, net |
|
|
(32,992 |
) |
|
|
49,697 |
|
|
|
(82,689 |
) |
|
(166 |
)% |
Income
(loss) before income taxes |
|
|
(58,583 |
) |
|
|
(29,842 |
) |
|
|
(28,741 |
) |
|
96 |
% |
Income taxes (recovery) |
|
|
7,211 |
|
|
|
4,762 |
|
|
|
2,449 |
|
|
51 |
% |
Net income
(loss) |
|
$ |
(65,794 |
) |
|
$ |
(34,604 |
) |
|
$ |
(31,190 |
) |
|
90 |
% |
Net loss per
share - basic and diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.05 |
) |
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue by Operating Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
|
|
|
Three
months ended |
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
August 31, 2022 |
|
% of Total Revenue |
|
August 31, 2021 |
|
% of Total Revenue |
|
|
|
Cannabis
business |
|
$ |
58,570 |
|
|
|
38 |
% |
|
$ |
70,449 |
|
|
|
42 |
% |
|
|
|
Distribution
business |
|
|
60,585 |
|
|
|
40 |
% |
|
|
67,186 |
|
|
|
40 |
% |
|
|
|
Beverage
alcohol business |
|
|
20,654 |
|
|
|
13 |
% |
|
|
15,461 |
|
|
|
9 |
% |
|
|
|
Wellness
business |
|
|
13,402 |
|
|
|
9 |
% |
|
|
14,927 |
|
|
|
9 |
% |
|
|
|
Total net
revenue |
|
$ |
153,211 |
|
|
|
100 |
% |
|
$ |
168,023 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by Operating Segment in Constant
Currency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
|
|
|
Three
months ended |
|
|
|
|
|
|
|
August 31,
2022 |
|
|
|
August 31,
2021 |
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
as reported in constant currency |
|
% of Total Revenue |
|
as reported in constant currency |
|
% of Total Revenue |
|
|
|
Cannabis
business |
|
$ |
61,579 |
|
|
|
38 |
% |
|
$ |
70,449 |
|
|
|
42 |
% |
|
|
|
Distribution
business |
|
|
70,580 |
|
|
|
42 |
% |
|
|
67,186 |
|
|
|
40 |
% |
|
|
|
Beverage
alcohol business |
|
|
20,654 |
|
|
|
12 |
% |
|
|
15,461 |
|
|
|
9 |
% |
|
|
|
Wellness
business |
|
|
13,685 |
|
|
|
8 |
% |
|
|
14,927 |
|
|
|
9 |
% |
|
|
|
Total net
revenue |
|
$ |
166,498 |
|
|
|
100 |
% |
|
$ |
168,023 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cannabis Revenue by Market Channel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
|
|
|
Three
months ended |
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
August 31, 2022 |
|
% of Total Revenue |
|
August 31, 2021 |
|
% of Total Revenue |
|
|
|
Revenue from
Canadian medical cannabis products |
|
$ |
6,520 |
|
|
|
11 |
% |
|
$ |
8,374 |
|
|
|
12 |
% |
|
|
|
Revenue from Canadian adult-use cannabis products |
|
58,355 |
|
|
|
99 |
% |
|
|
69,593 |
|
|
|
99 |
% |
|
|
|
Revenue from
wholesale cannabis products |
|
|
392 |
|
|
|
1 |
% |
|
|
1,700 |
|
|
|
2 |
% |
|
|
|
Revenue from
international cannabis products |
|
|
10,422 |
|
|
|
18 |
% |
|
|
10,266 |
|
|
|
15 |
% |
|
|
|
Less excise
taxes |
|
|
(17,119 |
) |
|
|
-29 |
% |
|
|
(19,484 |
) |
|
|
-28 |
% |
|
|
|
Total |
|
$ |
58,570 |
|
|
|
100 |
% |
|
$ |
70,449 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cannabis Revenue by Market Channel in Constant
Currency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
|
|
|
Three
months ended |
|
|
|
|
|
|
|
August 31,
2022 |
|
|
|
August 31,
2022 |
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
as reported in constant currency |
|
% of Total Revenue |
|
as reported in constant currency |
|
% of Total Revenue |
|
|
|
Revenue from
Canadian medical cannabis products |
|
$ |
6,831 |
|
|
|
11 |
% |
|
$ |
8,374 |
|
|
|
12 |
% |
|
|
|
Revenue from Canadian adult-use cannabis products |
|
60,421 |
|
|
|
98 |
% |
|
|
69,593 |
|
|
|
99 |
% |
|
|
|
Revenue from
wholesale cannabis products |
|
|
412 |
|
|
|
1 |
% |
|
|
1,700 |
|
|
|
2 |
% |
|
|
|
Revenue from
international cannabis products |
|
|
11,869 |
|
|
|
19 |
% |
|
|
10,266 |
|
|
|
15 |
% |
|
|
|
Less excise
taxes |
|
|
(17,954 |
) |
|
|
-29 |
% |
|
|
(19,484 |
) |
|
|
-28 |
% |
|
|
|
Total |
|
$ |
61,579 |
|
|
|
100 |
% |
|
$ |
70,449 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Information: Key Operating
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months |
|
|
|
|
|
|
|
|
|
ended August 31, |
|
|
|
|
|
|
|
(in
thousands of U.S. dollars) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Net cannabis
revenue |
|
$ |
58,570 |
|
|
$ |
70,449 |
|
|
|
|
|
|
|
|
Net beverage
alcohol revenue |
|
|
20,654 |
|
|
|
15,461 |
|
|
|
|
|
|
|
|
Distribution
revenue |
|
|
60,585 |
|
|
|
67,186 |
|
|
|
|
|
|
|
|
Wellness
revenue |
|
|
13,402 |
|
|
|
14,927 |
|
|
|
|
|
|
|
|
Cannabis
costs |
|
|
28,861 |
|
|
|
40,190 |
|
|
|
|
|
|
|
|
Beverage
alcohol costs |
|
|
10,849 |
|
|
|
6,663 |
|
|
|
|
|
|
|
|
Distribution
costs |
|
|
54,984 |
|
|
|
59,290 |
|
|
|
|
|
|
|
|
Wellness
costs |
|
|
9,903 |
|
|
|
10,925 |
|
|
|
|
|
|
|
|
Adjusted
gross profit (excluding PPA step-up) (1) |
|
|
49,721 |
|
|
|
50,955 |
|
|
|
|
|
|
|
|
Cannabis
gross margin |
|
|
51 |
% |
|
|
43 |
% |
|
|
|
|
|
|
|
Beverage
alcohol adjusted gross margin (excluding PPA step-up) (1) |
|
|
47 |
% |
|
|
57 |
% |
|
|
|
|
|
|
|
Distribution
gross margin |
|
|
9 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
Wellness
gross margin |
|
|
26 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
Adjusted
EBITDA (1) |
|
$ |
13,531 |
|
|
$ |
12,697 |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
490,643 |
|
|
|
376,297 |
|
|
|
|
|
|
|
|
Working
capital |
|
|
637,623 |
|
|
|
317,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Information: Gross Margin and Adjusted
Gross Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended August 31,
2022 |
|
(In
thousands of U.S. dollars) |
|
Cannabis |
|
Beverage |
|
Distribution |
|
Wellness |
|
Total |
|
Net
revenue |
|
$ |
58,570 |
|
|
$ |
20,654 |
|
|
$ |
60,585 |
|
|
$ |
13,402 |
|
|
$ |
153,211 |
|
|
Cost of
goods sold |
|
|
28,861 |
|
|
|
10,849 |
|
|
|
54,984 |
|
|
|
9,903 |
|
|
|
104,597 |
|
|
Gross
profit |
|
|
29,709 |
|
|
|
9,805 |
|
|
|
5,601 |
|
|
|
3,499 |
|
|
|
48,614 |
|
|
Gross
margin |
|
|
51 |
% |
|
|
47 |
% |
|
|
9 |
% |
|
|
26 |
% |
|
|
32 |
% |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Purchase
price accounting step-up |
|
|
- |
|
|
|
1,107 |
|
|
|
- |
|
|
|
- |
|
|
|
1,107 |
|
|
Adjusted
gross profit |
|
|
29,709 |
|
|
|
10,912 |
|
|
|
5,601 |
|
|
|
3,499 |
|
|
|
49,721 |
|
|
Adjusted
gross margin |
|
|
51 |
% |
|
|
53 |
% |
|
|
9 |
% |
|
|
26 |
% |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended August 31,
2021 |
|
(In
thousands of U.S. dollars) |
|
Cannabis |
|
Beverage |
|
Distribution |
|
Wellness |
|
Total |
|
Net
revenue |
|
$ |
70,449 |
|
|
$ |
15,461 |
|
|
$ |
67,186 |
|
|
$ |
14,927 |
|
|
$ |
168,023 |
|
|
Cost of
goods sold |
|
|
40,190 |
|
|
|
6,663 |
|
|
|
59,290 |
|
|
|
10,925 |
|
|
|
117,068 |
|
|
Gross
profit |
|
|
30,259 |
|
|
|
8,798 |
|
|
|
7,896 |
|
|
|
4,002 |
|
|
|
50,955 |
|
|
Gross
margin |
|
|
43 |
% |
|
|
57 |
% |
|
|
12 |
% |
|
|
27 |
% |
|
|
30 |
% |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Purchase
price accounting step-up |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Adjusted
gross profit |
|
|
30,259 |
|
|
|
8,798 |
|
|
|
7,896 |
|
|
|
4,002 |
|
|
|
50,955 |
|
|
Adjusted
gross margin |
|
|
43 |
% |
|
|
57 |
% |
|
|
12 |
% |
|
|
27 |
% |
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Information: Adjusted Earnings before
Interest, Taxes, and Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months |
|
|
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
ended August 31, |
|
Change |
|
% Change |
|
|
|
Adjusted EBITDA reconciliation: |
|
|
2022 |
|
|
|
2021 |
|
|
2022 vs. 2021 |
|
|
|
Net
loss |
|
$ |
(65,794 |
) |
|
$ |
(34,604 |
) |
|
$ |
(31,190 |
) |
|
|
90 |
% |
|
|
|
Income
taxes |
|
|
7,211 |
|
|
|
4,762 |
|
|
|
2,449 |
|
|
|
51 |
% |
|
|
|
Interest
expense, net |
|
|
4,413 |
|
|
|
10,170 |
|
|
|
(5,757 |
) |
|
|
(57 |
)% |
|
|
|
Non-operating income (expense), net |
|
|
32,992 |
|
|
|
(49,697 |
) |
|
|
82,689 |
|
|
|
(166 |
)% |
|
|
|
Amortization |
|
|
34,069 |
|
|
|
39,333 |
|
|
|
(5,264 |
) |
|
|
(13 |
)% |
|
|
|
Stock-based
compensation |
|
|
9,193 |
|
|
|
9,417 |
|
|
|
(224 |
) |
|
|
(2 |
)% |
|
|
|
Change in
fair value of contingent consideration |
|
|
211 |
|
|
|
837 |
|
|
|
(626 |
) |
|
NM |
|
|
|
|
Purchase
price accounting step-up |
|
|
1,107 |
|
|
|
— |
|
|
|
1,107 |
|
|
NM |
|
|
|
|
Facility
start-up and closure costs |
|
|
1,800 |
|
|
|
6,200 |
|
|
|
(4,400 |
) |
|
|
(71 |
)% |
|
|
|
Lease
expense |
|
|
700 |
|
|
|
700 |
|
|
|
— |
|
|
|
0 |
% |
|
|
|
Litigation
costs |
|
|
445 |
|
|
|
1,194 |
|
|
|
(749 |
) |
|
|
(63 |
)% |
|
|
|
Transaction
(income) costs |
|
|
(12,816 |
) |
|
|
24,385 |
|
|
|
(37,201 |
) |
|
|
(153 |
)% |
|
|
|
Adjusted
EBITDA |
|
$ |
13,531 |
|
|
$ |
12,697 |
|
|
$ |
834 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months |
|
|
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
ended August 31, |
|
|
|
|
|
|
|
Adjusted net loss reconciliation: |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(65,794 |
) |
|
$ |
(34,604 |
) |
|
|
|
|
|
|
|
Non-operating income (expense), net |
|
|
32,992 |
|
|
$ |
(49,697 |
) |
|
|
|
|
|
|
|
Change in
fair value of contingent consideration |
|
|
211 |
|
|
|
837 |
|
|
|
|
|
|
|
|
Litigation
costs |
|
|
445 |
|
|
|
1,194 |
|
|
|
|
|
|
|
|
Transaction
(income) costs |
|
|
(12,816 |
) |
|
|
24,385 |
|
|
|
|
|
|
|
|
Adjusted net
loss |
|
$ |
(44,962 |
) |
|
$ |
(57,885 |
) |
|
|
|
|
|
|
|
Adjusted net
loss per share - basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free
Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months |
|
|
|
|
|
|
|
(In
thousands of U.S. dollars) |
|
ended August 31, |
|
|
|
|
|
|
|
Free
cash flow |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Net cash
provided by (used in) operating activities |
|
$ |
(46,269 |
) |
|
$ |
(93,227 |
) |
|
|
|
|
|
|
|
Less:
investments in capital and intangible assets, net |
|
|
(1,537 |
) |
|
|
(8,620 |
) |
|
|
|
|
|
|
|
Free cash
flow |
|
$ |
(47,806 |
) |
|
$ |
(101,847 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tilray Brands (NASDAQ:TLRY)
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