U.S. markets closed
  • S&P 500

    4,070.56
    +10.13 (+0.25%)
     
  • Dow 30

    33,978.08
    +28.67 (+0.08%)
     
  • Nasdaq

    11,621.71
    +109.30 (+0.95%)
     
  • Russell 2000

    1,911.46
    +8.39 (+0.44%)
     
  • Crude Oil

    79.38
    -1.63 (-2.01%)
     
  • Gold

    1,943.90
    -2.80 (-0.14%)
     
  • Silver

    23.73
    -0.30 (-1.23%)
     
  • EUR/USD

    1.0874
    -0.0018 (-0.16%)
     
  • 10-Yr Bond

    3.5180
    +0.0250 (+0.72%)
     
  • GBP/USD

    1.2395
    -0.0012 (-0.10%)
     
  • USD/JPY

    129.8000
    -0.3530 (-0.27%)
     
  • BTC-USD

    23,006.29
    -158.64 (-0.68%)
     
  • CMC Crypto 200

    526.66
    +9.65 (+1.87%)
     
  • FTSE 100

    7,765.15
    +4.04 (+0.05%)
     
  • Nikkei 225

    27,382.56
    +19.81 (+0.07%)
     

Tilray Brands’ First Quarter Fiscal Year 2023 Performance Affirms Global Cannabis Leadership

Tilray Brands, Inc.
Tilray Brands, Inc.

Reported Net Revenue at $153.2 Million; On a Constant Currency Basis, Net Revenue Remained Strong at $166.5 Million

Cannabis Gross Margin Increased to 51% from 43% in the Prior Year Quarter

Delivered $108 Million in Annualized Cash Savings to Date, Expects to Deliver $130 Million Across Corporate Optimization Plans

Second Highest Adjusted EBITDA in Company’s History Marking the 14th Consecutive Quarter of Positive Adjusted EBITDA

Strong Balance Sheet with ~$500 Million in Cash

Company Reconfirms Guidance to Generate $70-$80 Million of Adjusted EBITDA and be Free-Cash Flow Positive in Its Operating Business Units this Fiscal Year

Tilray Brands Maintains #1 Cannabis Market Share in Canada and Germany

LEAMINGTON, Ontario and NEW YORK, Oct. 07, 2022 (GLOBE NEWSWIRE) -- 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 Webcast
Tilray 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 Brands
Tilray 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 Statements
Certain 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 Measures
This 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

)