Tilray Brands Reports Record Financial Results, Achieves 26% Net Revenue Growth

Jul 29, 2024

Record Fiscal 2024 Gross Profit

Reduced Net Convertible Debt by ~$300 Million in Fiscal 2024

Fiscal 2024 Net Revenue Reaches $789 Million, Led by Cannabis Net Revenue of $273 Million and Beverage-Alcohol Net Revenue of $202 Million

Successfully Executing on Diversified Lifestyle Business Strategy;
Tilray Cannabis, Tilray Beverages, Tilray Spirits and Tilray Wellness

NEW YORK and LEAMINGTON, Ontario, and NEÜMUNSTER, Germany, July 29, 2024 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. (“Tilray”, “our”, “we” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a global lifestyle consumer packaged goods company elevating lives through moments of connection, today reported financial results for its fourth quarter and fiscal year ended May 31, 2024.

Irwin D. Simon, Chairman and Chief Executive Officer, stated, “Tilray Brands is leading the convergence of cannabis, beverages, and wellness on a global scale. In Fiscal 2024, the Company achieved remarkable growth across its businesses, with a 26% increase in net revenue over the prior year, record-breaking performance in gross profit and adjusted EBITDA, and generated positive adjusted free cash flow for the fiscal year. We have also significantly reduced our net convertible debt by ~$300 million and surpassed our cost-savings synergy target, which has strengthened our balance sheet. These results were driven by our successful execution of our diversification strategy, which we started in 2020, and the hard work of our team.”

Mr. Simon continued, “Tilray Brands also successfully completed three acquisitions - the eight iconic craft brands from Anheuser-Busch Companies, LLC., HEXO Corp., and Truss Beverage Co. These acquisitions were strategic in fortifying Tilray’s house of brands, strengthening our operations, and positioning the Company as a leader across several industries and regions. In the U.S., Tilray Beverages is the 5th1 largest craft brewer and Tilray Wellness is the leader in hemp products. In Canada, Tilray Cannabis holds the #1 recreational cannabis market share, while in Europe, it is the market leader in medical cannabis. Leading the convergence of cannabis, beverages, and wellness, Tilray Brands is poised to continue to disrupt the CPG industry globally.”

Financial Highlights – 2024 Fiscal Fourth Quarter

  • Net revenue increased 25% to $229.9 million in the fourth quarter compared to $184.2 million in the prior year quarter.
  • Gross profit was $82.4 million in the fourth quarter compared to $67.2 million in the prior year quarter. Gross margin and adjusted gross margin2 were both 36%.
  • Beverage-alcohol net revenue increased 137% to $76.7 million in the fourth quarter from $32.4 million in the prior year quarter. The increase was led by new product innovation and contributions from our Craft Acquisition brands.
    • Beverage-alcohol gross profit increased 146% to $40.8 million in the fourth quarter from $16.6 million in the prior year quarter. Adjusted beverage-alcohol gross profit increased 130% to $41.0 million from $17.8 million in the prior year quarter.
    • Beverage-alcohol gross margin increased to 53% in the fourth quarter compared to 51% in the prior year quarter and adjusted gross beverage alcohol margin2 was 53% in the fourth quarter compared to 55% in the prior year quarter.
  • Cannabis net revenue increased 12% to $71.9 million in the fourth quarter compared to $64.4 million in the prior year quarter, driven in part by the acquisitions of HEXO and Truss.
    • Cannabis gross profit and adjusted gross profit2 decreased to $28.8 million in the fourth quarter from $39.5 million in the prior year quarter.
    • Cannabis gross margin and adjusted gross margin2 were 40% in the fourth quarter compared to 61% in the prior year quarter. A substantial portion of the decrease is a result of the completion of the HEXO advisory services agreement in Q1 fiscal 2024.
  • Distribution net revenue was $65.6 million in the fourth quarter compared to $72.6 million in the prior year quarter. The decrease was driven by management’s focus on discontinuing less profitable product lines demonstrated by Distribution’s gross margin increasing to 12% in the fourth quarter compared to 9% in the prior year quarter.
  • Wellness net revenue increased 6% to $15.7 million in the fourth quarter from $14.8 million in the prior year quarter.
  • Net loss narrowed to ($15.4) million in the fourth quarter compared to net loss of ($119.8) million in the prior year quarter, almost all of which is a result of non-cash expenses. Adjusted net income2 was $35.1 million in the fourth quarter compared to a loss of ($11.8) million in the prior year quarter
  • Net loss per share narrowed to ($0.04) compared to ($0.15) in the prior year quarter. Adjusted net income (loss) per share2 was $0.04 compared to a loss of ($0.02) in the prior year quarter.
  • Adjusted EBITDA2 increased 37% to $29.5 million in the fourth quarter compared to $21.5 million in the prior year quarter.

Financial Highlights  2024 Fiscal Year

  • Net revenue increased 26% to $788.9 million in fiscal 2024 compared to $627.1 million in the prior fiscal year.
  • Gross profit was $223.4 million, while adjusted gross profit2 increased 14% to $235.6 million in fiscal 2024. Gross margin was 28% and adjusted gross margin2 was 30%.
  • Beverage-alcohol net revenue increased 113% to $202.1 million in fiscal 2024 from $95.1 million in the prior fiscal year.
    • Beverage-alcohol gross profit increased 91% to $88.6 million in fiscal 2024 from $46.3 million in the prior fiscal year. Adjusted beverage-alcohol gross profit2 increased to $93.2 million from $50.8 million in the prior fiscal year.
    • Beverage-alcohol gross margin was 44% in fiscal 2024 compared to 49% in the prior fiscal year and adjusted gross beverage alcohol margin2 was 46% in fiscal 2024 compared to 53% in the prior fiscal year, reflecting lower contribution margins from the acquired brands.
  • Cannabis net revenue increased 24% to $272.8 million in fiscal 2024 compared to $220.4 million in the prior fiscal year, reflecting the acquisitions of HEXO and Truss as well as growth across international markets.
    • Cannabis gross profit increased to $90.2 million in fiscal 2024 from $57.7 million in the prior fiscal year. Adjusted gross profit2 was $97.8 million compared to $112.7 million in the prior fiscal year as a result of the advisory service agreement concluding in Q1 fiscal 2024.
    • Cannabis gross margin was 33% in fiscal 2024 compared to 26% in the prior fiscal year. Adjusted cannabis gross margin2 was 36% compared to 51% in the prior fiscal year.
  • Distribution net revenue and gross margin remained consistent at ~$259 million and 11% in fiscal 2024 compared to the prior fiscal year.
  • Wellness net revenue increased 5% to $55.3 million in fiscal 2024 from $52.8 million in the prior fiscal year.
    • Wellness gross margin was 30% in fiscal 2024 compared to 29% in the prior fiscal year.
  • Net loss decreased to ($222.4) million in fiscal 2024 compared to net loss of $(1.4) billion in the prior fiscal year, almost all of which is a result of non-cash expenses. Net loss per share narrowed to $(0.33) and improved compared to a net loss of $(2.35) in the prior fiscal year.
  • Adjusted net income2 increased to $6.2 million in fiscal 2024 compared to adjusted net income2 of $0.4 million in the prior fiscal year. Adjusted net income per share2 narrowed to $0.01 compared to $0.00 in the prior fiscal year.
  • Adjusted EBITDA2 increased to $60.5 million in fiscal 2024 compared to $58.7 million in the prior fiscal year.
  • Strong financial liquidity position of ~$260.5 million, consisting of $228.3 million in cash and $32.2 million in marketable securities.
  • Reduced outstanding principal of the net convertible debt by $291.0 million compared to the previous fiscal year.
  • Net cash used in operating activities was $(30.9) million in fiscal 2024 compared to $7.9 million net cash from operating activities in the prior year.
  • Adjusted free cash flow2 of $6.6 million in fiscal 2024 compared to $19.1 million in the prior year.

Live Audio Webcast

Tilray Brands will host a webcast to discuss these results today at 4:30 p.m. Eastern Time. Investors may join the live webcast available on the Investors section of the Company’s website at www.Tilray.com. A replay will be available and archived on the Company’s website.

About Tilray Brands

Tilray Brands, Inc. (“Tilray”) (Nasdaq: TLRY; TSX: TLRY), is a leading global lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection. Tilray’s mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy, wellness and create memorable experiences. Tilray’s unprecedented platform supports over 40 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.

For more information on how we are elevating lives through moments of connection, visit Tilray.com and follow @Tilray on all social platforms.

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 a leading lifestyle consumer packaged goods company; the Company’s ability to become a leading beverage alcohol Company; the Company’s ability to achieve long term profitability; the Company’s ability to achieve operational scale, market share, distribution, profitability and revenue growth in particular business lines and markets; the Company’s ability to successfully achieve revenue growth, margin and profitability improvements, production and supply chain efficiencies, synergies and cost savings; the Company’s expected revenue growth, sales volume, profitability, synergies and accretion related to any of its acquisitions; expected opportunities in the U.S., including upon U.S. federal cannabis legalization or rescheduling; the Company’s anticipated investments and acquisitions, including in organic and strategic growth, partnership efforts, product offerings and other initiatives; and the Company’s ability to commercialize new and innovative products.

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 (consolidated and for each of our reporting segments), Adjusted gross profit (consolidated and for each of our reporting segments), Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (loss) per share , free cash flow, adjusted free cash flow, constant currency presentations of revenue and cash and marketable securities. 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 benefits, net; interest expense, net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; purchase price accounting step-up; impairments; inventory valuation allowance; Other than temporary change in fair value of convertible notes receivable; facility start-up and closure costs; litigation costs; restructuring costs, transaction (income) costs and (Gain) loss on sale of capital assets – non-operating facility. 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. Historically, we have included lease expenses for leases that were treated differently under IFRS 16 and ASC 842 in the calculation of adjusted EBITDA, aiming to align our definition with industry peers reporting under IFRS. The decision to include these lease expenses in the Company's definition of adjusted EBITDA was based on our efforts to maintain comparability with peers. However, as the Company has continued to diversify, particularly with strategic acquisitions such as the newly acquired beverage alcohol business portfolio, this comparison is no longer relevant, accordingly, we are no longer including this adjustment. Had the Company continued to include lease expenses that were treated differently under IFRS 16 and ASC 842, the impact to adjusted EBITDA would have been $4.6 million for the year ended May 31, 2024. In comparison, under the previous reconciliation, the impact to adjusted EBITDA would have been $2.8 million and $3.1 for the years ended May 31, 2023, and May 31, 2022, respectively.

Adjusted net income (loss) is calculated as net loss attributable to stockholders of Tilray Brands, Inc., less; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; impairments; inventory valuation allowance; Other than temporary change in fair value of convertible notes receivable, attributable to stockholders of Tilray Brands, Inc. facility start-up and closure costs; litigation costs; restructuring costs and transaction (income) costs. A reconciliation of Adjusted net income (loss) to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release.

Adjusted net income (loss) per share is calculated as net loss attributable to stockholders of Tilray Brands, Inc., net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; facility start-up and closure costs; litigation costs; restructuring costs and transaction (income) costs, divided by weighted average number of common shares outstanding. A reconciliation of Adjusted net income (loss) per share to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release. Adjusted net income (loss) per share is not calculated in accordance with GAAP and should not be considered an alternative for GAAP net income (loss) per share or as a measure of liquidity.

Adjusted gross profit (consolidated and for each of our reporting segments), is calculated as gross profit adjusted to exclude the impact of purchase price accounting valuation step-up and inventory valuation adjustments. A reconciliation of Adjusted gross profit, excluding purchase price accounting valuation step-up and inventory valuation adjustments, to gross profit, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release. Adjusted gross margin (consolidated and for each of our reporting segments), excluding purchase price accounting valuation step-up and inventory valuation adjustments, is calculated as revenue less cost of sales adjusted to add back amortization of inventory step-up and inventory valuation adjustments, divided by revenue. A reconciliation of Adjusted gross margin, excluding purchase price accounting valuation step-up and inventory valuation allowance, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.

Free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net. 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 above in this press release. Adjusted free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net, and the exclusion of growth CAPEX from investments in capital and intangible assets, net, which excludes the amount of capital expenditures that are considered to be associated with growth of future operations rather than to maintain the existing operations of the Company, and excludes our integration costs related to HEXO and the Craft Acquisition and the cash income taxes related to Aphria Diamond to align with management’s prescribed guidance. A reconciliation of net cash flow provided by (used in) operating activities to adjusted free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.

Constant currency presentations of revenue are used to normalize the effects of foreign currency. 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. A reconciliation of prior year revenue to constant currency revenue the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.

Cash and marketable securities are comprised of two GAAP measures, cash and cash equivalents added to marketable securities. The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its short-term liquidity position by combing these two GAAP metrics.

Contacts:
Media:
news@tilray.com

Investors:
Investors@tilra.com

1 Circana volume sales L26W ending 7/7/24
2 Adjusted EBITDA, Adjusted gross margin, Adjusted net income, adjusted gross profit and adjusted gross margin for each of our segments, and Adjusted net income (loss) are non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” below for a reconciliation of these Non-GAAP Measures to our most comparable GAAP measure.

             
Consolidated Statements of Financial Position            
    May 31,   May 31,    
(in thousands of US dollars)   2024   2023    
Assets            
Current assets            
Cash and cash equivalents   $ 228,340     $ 206,632      
Marketable securities     32,182       241,897      
Accounts receivable, net     101,695       86,227      
Inventory     252,087       200,551      
Prepaids and other current assets     31,332       37,722      
Assets held for sale     32,074            
Total current assets     677,710       773,029      
Capital assets     558,247       429,667      
Operating lease, right-of-use assets     16,101       5,941      
Intangible assets     915,469       973,785      
Goodwill     2,008,884       2,008,843      
Interest in equity investees           4,576      
Long-term investments     7,859       7,795      
Convertible notes receivable     32,000       103,401      
Other assets     5,395       222      
Total assets   $ 4,221,665     $ 4,307,259      
Liabilities            
Current liabilities            
Bank indebtedness   $ 18,033     $ 23,381      
Accounts payable and accrued liabilities     241,957       190,682      
Contingent consideration     15,000       16,218      
Warrant liability     3,253       1,817      
Current portion of lease liabilities     5,091       2,423      
Current portion of long-term debt     15,506       24,080      
Current portion of convertible debentures payable     330       174,378      
Total current liabilities     299,170       432,979      
Long - term liabilities            
Contingent consideration           10,889      
Lease liabilities     60,422       7,936      
Long-term debt     158,352       136,889      
Convertible debentures payable     129,583       221,044      
Deferred tax liabilities, net     130,870       167,364      
Other liabilities     90       215      
Total liabilities     778,487       977,316      
Stockholders' equity            
Common stock ($0.0001 par value; 1,198,000,000 common shares authorized; 831,925,373 and 656,655,455 common shares issued and outstanding, respectively)     83       66      
Preferred shares ($0.0001 par value; 10,000,000 preferred shares authorized; nil and nil preferred shares issued and outstanding, respectively)                
Additional paid-in capital     6,146,810       5,777,743      
Accumulated other comprehensive loss     (43,499 )     (46,610 )    
Accumulated Deficit     (2,660,488 )     (2,415,507 )    
Total Tilray Brands, Inc. stockholders' equity     3,442,906       3,315,692      
Non-controlling interests     272       14,251      
Total stockholders' equity     3,443,178       3,329,943      
Total liabilities and stockholders' equity   $ 4,221,665     $ 4,307,259      
             

 

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)           
  For the three months
ended May 31,
  Change  
Change
  For the twelve months
ended May 31,
  Change  
Change
(in thousands of U.S. dollars, except for per share data)   2024       2023     2024 vs. 2023     2024       2023     2024 vs. 2023
Net revenue $ 229,882     $ 184,188     $ 45,694     25%   $ 788,942     $ 627,124     $ 161,818     26%
Cost of goods sold   147,532       117,025       30,507     26%     565,591       480,164       85,427     18%
Gross profit   82,350       67,163       15,187     23%     223,351       146,960       76,391     52%
Operating expenses:                              
General and administrative   43,589       47,774       (4,185 )   (9)%     167,358       165,159       2,199     1%
Selling   12,796       9,048       3,748     41%     37,233       34,840       2,393     7%
Amortization   19,052       21,617       (2,565 )   (12)%     84,752       93,489       (8,737 )   (9)%
Marketing and promotion   12,999       7,800       5,199     67%     41,933       30,937       10,996     36%
Research and development   394       180       214     119%     635       682       (47 )   (7)%
Change in fair value of contingent consideration   1,000       292       708     242%     (15,790 )     855       (16,645 )   (1,947)%
Impairments                   NM           934,000       (934,000 )   (100)%
Other than temporary change in fair value of convertible notes receivable          64,954       (64,954 )   (100)%     42,681       246,330       (203,649 )   (83)%
Litigation costs, net of recoveries   (188 )     1,465       (1,653 )   (113)%     8,251       (505 )     8,756     (1,734)%
Restructuring costs   6,833       (1,482 )     8,315     (561)%     15,581       9,245       6,336     69%
Transaction costs (income), net   2,401       5,495       (3,094 )   (56)%     15,462       1,613       13,849     859%
Total operating expenses   98,876       157,143       (58,267 )   (37)%     398,096       1,516,645       (1,118,549 )   (74)%
Operating loss   (16,526 )     (89,980 )     73,454     (82)%     (174,745 )     (1,369,685 )     1,194,940     (87)%
Interest expense, net   (9,456 )     (5,027 )     (4,429 )   88%     (36,433 )     (13,587 )     (22,846 )   168%
Non-operating income (expense), net   (17,022 )     (16,680 )     (342 )   2%     (37,842 )     (66,909 )     29,067     (43)%
Loss before income taxes   (43,004 )     (111,687 )     68,683     (61)%     (249,020 )     (1,450,181 )     1,201,161     (83)%
Income tax (recovery) expense   (27,629 )     8,132       (35,761 )   (440)%     (26,616 )     (7,181 )     (19,435 )   271%
Net loss $ (15,375 )   $ (119,819 )   $ 104,444     (87)%   $ (222,404 )   $ (1,443,000 )     1,220,596     (85)%
Net loss per share - basic and diluted $ (0.04 )   $ (0.15 )   $ 0.11     (73)%   $ (0.33 )   $ (2.35 )   $ 2.02     (86)%
                               

 

Condensed Consolidated Statements of Cash Flows                  
    For the twelve months          
    Ended May 31,   Change   % Change  
(in thousands of US dollars)     2024       2023     2024 vs. 2023  
Cash provided by (used in) operating activities:                  
Net loss   $ (222,404 )   $ (1,443,000 )   $ 1,220,596     (85)%  
Adjustments for:                  
Deferred income tax recovery     (38,872 )     (31,953 )     (6,919 )   22%  
Unrealized foreign exchange (gain) loss     3,756       17,768       (14,012 )   (79)%  
Amortization     126,913       130,149       (3,236 )   (2)%  
Gain on sale of capital assets     (4,198 )     (48 )     (4,150 )   8,646%  
Accretion of convertible debt discount     14,459       3,848       10,611     276%  
Inventory valuation write down           55,000       (55,000 )   (100)%  
Impairments           934,001       (934,001 )   (100)%  
Other than temporary change in fair value of convertible notes receivable      42,681       246,330       (203,649 )   (83)%  
Other non-cash items     13,626       11,406       2,220     19%  
Stock-based compensation     31,769       39,595       (7,826 )   (20)%  
Loss on long-term investments & equity investments     4,855       2,190       2,665     122%  
(Gain) loss on derivative instruments     21,172       27,365       (6,193 )   (23)%  
Change in fair value of contingent consideration     (15,790 )     855       (16,645 )   (1,947)%  
Change in non-cash working capital:                  
Accounts receivable     (6,575 )     4,168       (10,743 )   (258)%  
Prepaids and other current assets     13,069       3,122       9,947     319%  
Inventory     (15,578 )     (12,934 )     (2,644 )   20%  
Accounts payable and accrued liabilities     212       20,044       (19,832 )   (99)%  
Net cash provided by (used in) operating activities     (30,905 )     7,906       (38,811 )   (491)%  
Cash provided by (used in) investing activities:                  
Investment in capital and intangible assets     (29,249 )     (20,800 )     (8,449 )   41%  
Proceeds from disposal of capital and intangible assets     8,509       4,304       4,205     98%  
Disposal (purchase) of marketable securities, net     209,715       (241,897 )     451,612     (187)%  
Business acquisitions, net of cash acquired     (60,626 )     (26,718 )     (33,908 )   127%  
Net cash provided by (used in) investing activities     128,349       (285,111 )     413,460     (145)%  
Cash provided by (used in) financing activities:                  
Share capital issued, net of cash issuance costs     8,619       129,593       (120,974 )   (93)%  
Shares effectively repurchased for employee withholding tax           (1,189 )     1,189     (100)%  
Proceeds from long-term debt     32,621       1,288       31,333     2,433%  
Repayment of long-term debt     (22,402 )     (21,336 )     (1,066 )   5%  
Proceeds from convertible debt     21,553       145,052       (123,499 )   (85)%  
Repayment of convertible debt     (107,330 )     (187,394 )     80,064     (43)%  
Repayment of lease liabilities     (2,900 )     (1,114 )     (1,786 )   160%  
Net increase (decrease) in bank indebtedness     (5,348 )     5,258       (10,606 )   (202)%  
Net cash provided by (used in) financing activities     (75,187 )     70,158       (145,345 )   (207)%  
Effect of foreign exchange on cash and cash equivalents     (549 )     (2,230 )     1,681     (75)%  
Net decrease in cash and cash equivalents     21,708       (209,277 )     230,985     (110)%  
Cash and cash equivalents, beginning of period     206,632       415,909       (209,277 )   (50)%  
Cash and cash equivalents, end of period   $ 228,340     $ 206,632     $ 21,708     11%  
                   

 

Net Revenue by Operating Segment                
                             
(In thousands of U.S. dollars)   For the three
months
ended
May 31, 2024
  % of Total Revenue   For the three
months
ended
May 31, 2023
  % of Total Revenue   For the
year ended
May 31, 2024
  % of Total Revenue   For the
year ended
May 31, 2023
  % of Total Revenue
Beverage alcohol business   $ 76,739     33%   $ 32,404     18%   $ 202,094     25%   $ 95,093     15%
Cannabis business     71,919     31%     64,413     35%     272,798     35%     220,430     35%
Distribution business     65,566     29%     72,612     39%     258,740     33%     258,770     41%
Wellness business     15,658     7%     14,759     8%     55,310     7%     52,831     9%
Total net revenue   $ 229,882     100%   $ 184,188     100%   $ 788,942     100%   $ 627,124     100%
                                 
                                 
Net Revenue by Operating Segment in Constant Currency              
                                 
    For the
three months
ended
May 31, 2024
      For the
three months
ended
May 31, 2023
      For the
year ended
May 31, 2024
      For the
year ended
May 31, 2023
   
(In thousands of U.S. dollars)   as reported
in
constant
currency
  % of
Total
Revenue
  as reported
in
constant
currency
  % of
Total
Revenue
  as reported
in
constant
currency
  % of
Total
Revenue
  as reported
in
constant
currency
  % of
Total
Revenue
Beverage alcohol business   $ 76,739     33%   $ 32,404     18%   $ 202,094     25%   $ 95,093     15%
Cannabis business     72,577     31%     64,413     35%     274,763     35%     220,430     35%
Distribution business     69,209     29%     72,612     39%     259,671     33%     258,770     41%
Wellness business     15,689     7%     14,759     8%     55,533     7%     52,831     9%
Total net revenue   $ 234,214     100%   $ 184,188     100%   $ 792,061     100%   $ 627,124     100%
                                 
                                 
Net Cannabis Revenue by Market Channel                
                             
(In thousands of U.S. dollars)   For the
three months
ended
May 31, 2024
  % of
Total
Revenue
  For the
three months
ended
May 31, 2023
  % of
Total
Revenue
  For the
year ended
May 31, 2024
  % of
Total
Revenue
  For the
year ended
May 31, 2023
  % of
Total
Revenue
Revenue from Canadian medical cannabis   $ 6,418     9%   $ 6,080     9%   $ 25,211     9%   $ 25,000     11%
Revenue from Canadian adult-use cannabis     61,496     86%     58,256     90%     266,846     98%     214,319     97%
Revenue from wholesale cannabis     12,992     18%     750     1%     25,340     9%     1,436     1%
Revenue from international cannabis     13,110     18%     15,725     24%     53,295     20%     43,559     20%
Less excise taxes     (22,097 )   (31)%     (16,398 )   (24)%     (97,894 )   (36)%     (63,884 )   (29)%
Total   $ 71,919     100%   $ 64,413     100%   $ 272,798     100%   $ 220,430     100%
                                 
                                 
Net Cannabis Revenue by Market Channel in Constant Currency
 
    For the
three months
ended
May 31, 2024
      For the
three months
ended
May 31, 2024
      For the
year ended
May 31, 2024
      For the
year ended
May 31, 2024
   
(In thousands of U.S. dollars)   as
reported
in
constant
currency
  % of
Total
Revenue
  as
reported
in
constant
currency
  % of
Total
Revenue
  as
reported
in
constant
currency
  % of
Total
Revenue
  as
reported
in
constant
currency
  % of
Total
Revenue
Revenue from Canadian medical cannabis   $ 6,447     9%   $ 6,080     9%   $ 25,441     10%   $ 25,000     11%
Revenue from Canadian adult-use cannabis     61,826     85%     58,256     90%     269,534     98%     214,319     97%
Revenue from wholesale cannabis     13,092     18%     750     1%     25,651     9%     1,436     1%
Revenue from international cannabis     13,427     19%     15,725     24%     53,036     19%     43,559     20%
Less excise taxes     (22,215 )   (31)%     (16,398 )   (24)%     (98,899 )   (36)%     (63,884 )   (29)%
Total   $ 72,577     100%   $ 64,413     100%   $ 274,763     100%   $ 220,430     100%
                                 

 

Other Financial Information: Gross Margin and Adjusted Gross Margin    
    For the three months ended May 31, 2024
(In thousands of U.S. dollars)   Beverage   Cannabis   Distribution   Wellness   Total
Net revenue   $ 76,739     $ 71,919     $ 65,566     $ 15,658     $ 229,882  
Cost of goods sold     35,907       43,087       57,750       10,788       147,532  
Gross profit     40,832       28,832       7,816       4,870       82,350  
Gross margin     53 %     40 %     12 %     31 %     36 %
Adjustments:                    
Purchase price accounting step-up     176                         176  
Adjusted gross profit     41,008       28,832       7,816       4,870       82,526  
Adjusted gross margin     53 %     40 %     12 %     31 %     36 %
                     
                     
    For the three months ended May 31, 2023
(In thousands of U.S. dollars)   Beverage   Cannabis   Distribution   Wellness   Total
Net revenue   $ 32,404     $ 64,413     $ 72,612     $ 14,759     $ 184,188  
Cost of goods sold     15,838       24,955       65,866       10,366       117,025  
Gross profit     16,566       39,458       6,746       4,393       67,163  
Gross margin     51 %     61 %     9 %     30 %     36 %
Adjustments:                    
Purchase price accounting step-up     1,259                         1,259  
Adjusted gross profit     17,825       39,458       6,746       4,393       68,422  
Adjusted gross margin     55 %     61 %     9 %     30 %     37 %
                     
                     
    For the twelve months ended May 31, 2024
(In thousands of U.S. dollars)   Beverage   Cannabis   Distribution   Wellness   Total
Net revenue   $ 202,094     $ 272,798     $ 258,740     $ 55,310     $ 788,942  
Cost of goods sold     113,522       182,594       230,596       38,879       565,591  
Gross profit     88,572       90,204       28,144       16,431       223,351  
Gross margin     44 %     33 %     11 %     30 %     28 %
Adjustments:                    
Purchase price accounting step-up     4,602       7,628                   12,230  
Adjusted gross profit     93,174       97,832       28,144       16,431       235,581  
Adjusted gross margin     46 %     36 %     11 %     30 %     30 %
                     
                     
    For the twelve months ended May 31, 2023
(In thousands of U.S. dollars)   Beverage   Cannabis   Distribution   Wellness   Total
Net revenue   $ 95,093     $ 220,430     $ 258,770     $ 52,831     $ 627,124  
Cost of goods sold     48,770       162,755       231,309       37,330       480,164  
Gross profit     46,323       57,675       27,461       15,501       146,960  
Gross margin     49 %     26 %     11 %     29 %     23 %
Adjustments:                    
Inventory valuation adjustments           55,000                   55,000  
Purchase price accounting step-up     4,482                         4,482  
Adjusted gross profit     50,805       112,675       27,461       15,501       206,442  
Adjusted gross margin     53 %     51 %     11 %     29 %     33 %
                     

 

                                 
Other Financial Information: Adjusted Earnings Before Interest, Taxes and Amortization             
    For the three months
ended May 31,
Change   % Change   For the year
ended May 31,
Change % Change  
(In thousands of U.S. dollars)     2024       2023     2024 vs. 2023     2024       2023     2024 vs. 2023  
Net loss   $ (15,375 )   $ (119,819 )   $ 104,444     (87)%   $ (222,404 )   $ (1,443,000 )   $ 1,220,596   (85)%  
Income tax (recovery) expense     (27,629 )     8,132       (35,761 )   (440)%     (26,616 )     (7,181 )     (19,435 ) 271%  
Interest expense, net     9,456       5,027       4,429     88%     36,433       13,587       22,846   168%  
Non-operating income (expense), net     17,022       16,680       342     0,002%     37,842       66,909       (29,067 ) (43)%  
Amortization     31,730       28,993       2,737     9%     126,913       130,149       (3,236 ) (2)%  
Stock-based compensation     7,252       9,829       (2,577 )   (26)%     31,769       39,595       (7,826 ) (20)%  
Change in fair value of contingent consideration     1,000       292       708     0,242%     (15,790 )     855       (16,645 ) (1,947)%  
Impairments                     NM           934,000       (934,000 ) (100)%  
Other than temporary change in fair value of convertible notes receivable            64,954       (64,954 )   (100)%     42,681       246,330       (203,649 ) (83)%  
Inventory valuation adjustments                     NM           55,000       (55,000 ) (100)%  
(Gain) loss on sale of capital assets - non-operating facility     (3,987 )           (3,987 )   NM     (3,987 )           (3,987 ) NM  
Purchase price accounting step-up     176       1,259       (1,083 )   (86)%     12,230       4,482       7,748   173%  
Facility start-up and closure costs     800       700       100     14%     2,100       7,600       (5,500 ) (72)%  
Litigation costs, net of recoveries     (188 )     1,465       (1,653 )   (113)%     8,251       (505 )     8,756   (1734)%  
Restructuring costs     6,833       (1,482 )     8,315     (561)%     15,581       9,245       6,336   69%  
Transaction costs (income), net     2,401       5,495       (3,094 )   (56)%     15,462       1,613       13,849   859%  
Adjusted EBITDA   $ 29,491     $ 21,525     $ 7,966     37%   $ 60,465     $ 58,679     $ 1,786   3%  
                                 
                                 
    For the three months
ended May 31,
Change   % Change   For the year
ended May 31,
Change % Change  
(In thousands of U.S. dollars)     2024       2023     2024 vs. 2023     2024       2023     2023 vs. 2022  
Net loss attributable to stockholders of Tilray Brands, Inc.   $ (31,747 )   $ (138,713 )   $ 106,966     (77)%   $ (244,981 )   $ (1,452,656 )   $ 1,207,675   (83)%  
Non-operating income (expense), net     17,022       16,680       342     0,002%     37,842       66,909       (29,067 ) (43)%  
Amortization     31,730       28,993       2,737     9%     126,913       130,149       (3,236 ) (2)%  
Stock-based compensation     7,252       9,829       (2,577 )   (26)%     31,769       39,595       (7,826 ) (20)%  
Change in fair value of contingent consideration     1,000       292       708     0,242%     (15,790 )     855       (16,645 ) (1,947)%  
Impairments                     NM           934,000       (934,000 ) (100)%  
Other than temporary change in fair value of convertible notes receivable, attributable to stockholders of Tilray Brands, Inc.           64,954       (64,954 )   (100)%     29,023       208,641       (179,618 ) (86)%  
Inventory valuation adjustments                     NM           55,000       (55,000 ) (100)%  
Facility start-up and closure costs     800       700       100     14%     2,100       7,600       (5,500 ) (72)%  
Litigation costs, net of recoveries     (188 )     1,465       (1,653 )   (113)%     8,251       (505 )     8,756   (1,734)%  
Restructuring costs     6,833       (1,482 )     8,315     (561)%     15,581       9,245       6,336   69%  
Transaction costs (income), net     2,401       5,495       (3,094 )   (56)%     15,462       1,613       13,849   859%  
Adjusted net income (loss)   $ 35,103     $ (11,787 )   $ 46,890     (398)%   $ 6,170     $ 446     $ 5,724   1,283%  
Adjusted net income (loss) per share - basic and diluted   $ 0.04     $ (0.02 )   $ 0.06     (321)%   $ 0.01     $     $ 0.01   NM  
                                 
                                 
Other Financial Information: Free Cash Flow                           
    For the three months
ended May 31,
Change   % Change   For the year
ended May 31,
Change % Change  
(In thousands of U.S. dollars)     2024       2023     2024 vs. 2023     2024       2023     2023 vs. 2022  
Net cash provided by (used in) operating activities   $ 30,707     $ 43,598     $ (12,891 )   (30)%   $ (30,905 )   $ 7,906     $ (38,811 ) (491)%  
Less: investments in capital and intangible assets, net     (2,367 )     (10,277 )     7,910     (77)%     (20,740 )     (16,496 )     (4,244 ) 26%  
Free cash flow   $ 28,340     $ 33,321     $ (4,981 )   (15)%   $ (51,645 )   $ (8,590 )   $ (43,055 ) 501%  
Add: growth CAPEX     2,596       9,850       (7,254 )   (74)%     16,243       9,850       6,393   65%  
Add: cash income taxes related to Aphria Diamond           5,085       (5,085 )   (100)%     16,333       17,855       (1,522 ) (9)%  
Add: integration costs related to HEXO     (325 )           (325 )   NM     25,630               NM  
Adjusted free cash flow   $ 30,611     $ 48,256     $ (17,645 )   (37)%   $ 6,561     $ 19,115     $ (12,554 ) (66)%  
                                 

 

Other Financial Information: Key Operating Metrics                
    For the three months
ended, May 31,
  For the year ended
May 31,
(in thousands of U.S. dollars)     2024       2023       2022       2023  
Net beverage alcohol revenue   $ 76,739     $ 32,404     $ 202,094     $ 95,093  
Net cannabis revenue     71,919       64,413       272,798       220,430  
Distribution revenue     65,566       72,612       258,740       258,770  
Wellness revenue     15,658       14,759       55,310       52,831  
Beverage alcohol costs     35,907       15,838       113,522       48,770  
Cannabis costs     43,087       24,955       182,594       162,755  
Distribution costs     57,750       65,866       230,596       231,309  
Wellness costs     10,788       10,366       38,879       37,330  
Adjusted gross profit (excluding PPA step-up)     82,526       68,422       235,581       206,442  
Beverage alcohol adjusted gross margin (excluding PPA step-up)     53 %     55 %     46 %     53 %
Cannabis adjusted gross margin (excluding PPA step-up)     40 %     61 %     36 %     51 %
Distribution gross margin     12 %     9 %     11 %     11 %
Wellness gross margin     31 %     30 %     30 %     29 %
Adjusted EBITDA     29,491       21,525       60,465       58,679  
Cash and marketable securities as at the period ended:     260,522       448,529       260,522       448,529  
Working capital as at the year ended:     378,540       340,050       378,540       340,050  
                 

 


Primary Logo

Source: Tilray Brands, Inc.

Print

Email Page

RSS Feeds

Email Alerts

Investor Contact

Media Contact