Tilray, Inc. Reports Profitable Second Quarter Fiscal Year 2022 Financial Results

Published: January 13, 2022

Tilray, Inc. Reports Profitable Second Quarter Fiscal Year 2022 Financial Results

Tilray, Inc., 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 second fiscal quarter ended November 30, 2021. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated. The Company also announced a new parent name, Tilray Brands, Inc., reflecting the Company’s evolution from a Canadian LP to a global consumer packaged goods company powerhouse with a market leading portfolio of cannabis and lifestyle CPG brands.

Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, stated, “Our second quarter performance reflects notable success building high-quality and highly sought-after cannabis and lifestyle CPG brands which, coupled with our scale, operational excellence and broad global distribution, enabled us to increase sales and maintain profitability despite sector-specific and macro-economic headwinds.”

Mr. Simon continued, “Looking at performance highlights across key markets, we maintained our #1 cannabis market share position in Canada – despite market saturation and related competitive challenges — on the strength of our brands and adept pricing and marketing adjustments. Importantly, we believe these adjustments will enable us to aggressively recapture share when the market right-sizes. In Germany – Europe’s largest and most profitable medical cannabis market – our nearly 20% share leads the market.

Financial Highlights – Second Quarter Fiscal 2022

  • Net income increased to $6 million from a net loss of $89 million in the previous year quarter.

  • Net revenue increased ~20% to $155 million during the second quarter from $129 million in the prior year quarter. The increase was driven by 7% growth in cannabis revenue to $58.8 million, net beverage alcohol revenue of $13.7 million from SweetWater, and wellness segment revenue of $13.8 million from Manitoba Harvest.

  • Adjusted EBITDA of $13.8 million in the second quarter 2022, 8% growth compared to the preceding prior quarter, and the eleventh consecutive quarter of positive Adjusted EBITDA

  • Gross profit of $32.8 million, a 7% decrease from $35.3 million in the prior year quarter.

  • Adjusted gross margin in the cannabis segment remained strong at 43%.

  • Maintained #1 cannabis market share in Canada[1] with leading portfolio of comprehensive medical cannabis and adult-use brands, including top position in cannabis flower and pre-rolls.

  • International medical cannabis market leader and #1 in Germany[2] with ~20% market share.

  • Cost synergies from Aphria-Tilray combination of $70 million achieved on a run-rate basis to date, with actual cash-savings close to $36 million to date. Expect to reach $80 million synergy target, ahead of schedule, by May 31, 2022 and to generate an additional $20 million in synergies in fiscal 2023.

Strategic Growth Actions

  • On December 21, 2021 – SweetWater acquired award-winning craft-beer brands, Alpine Beer and Green Flash Brewing.

  • On December 8, 2021, Tilray acquired Breckenridge Distillery, strengthening its strategic position in the U.S.

  • On November 4, 2021, SweetWater entered the Spirits category with new ready-to-drink cocktail and cross-brand collaboration with Canadian cannabis brand, RIFF.

  • On October 26, 2021, Tilray announced European expansion with medical cannabis agreement in Luxembourg.

  • On October 20, 2021, Tilray announced an expanded distribution agreement with Great North Distributors for adult-use cannabis sales across Canada.

Growth and High Potential Across Key Markets

  •  #1 Market Leading Position in Germany and Poised to Benefit from Recreational Legalization –Tilray is also the only company currently supplying the German government with medical cannabis grown in-country. The Company’s state-of-the-art EU GMP certified cultivation facility in Germany has additional capacity to immediately support entry into the recreational market upon legalization, which the new German coalition government is accelerating.

  •  Ongoing Progress Across the EU – Tilray’s success across the EU, a powerful growth market worth potentially $1 billion for the Company, is backed by its two state-of-the-art cultivation facilities in Portugal and Germany that provide EU GMP certified pharmaceutical-grade medical cannabis across the region. Tilray is also the only Company with two EU GMP certified cannabis facilities in Europe. This unparalleled production capability coupled with Tilray’s sales arrangements through major distribution channels in Germany, the UK, and other key markets, and strong relationships with local governments and the trust of patients give Tilray the ability to drive accelerated growth.

  •  #1 Leading Cannabis Market Share in Canada – Amid an intensely competitive and over-saturated market, Tilray remains the market leader in the CAD$4.26 billion Canadian cannabis market, driven by a portfolio of carefully curated brands across all consumer segments; medical, wellness, innovative cannabis 2.0 products across concentrates, edibles, and drinks; processing capacity; and distribution. In order to address the saturated marketplace, Tilray has implemented strategic price adjustments, expanded distribution through its coast-to-coast agreement with Rose Life Sciences and Great North Distributors, and doubled-down on and accelerated product innovation.

  • A Leading U.S. CPG Platform that Generates Considerable Cash Flow Now and Will Be Immediately Leveraged for Cannabis Products Upon Federal Legalization – In the U.S., Tilray’s operating businesses include SweetWater, the 11th largest craft brewer in the nation[3] and leading lifestyle brand, and Manitoba Harvest, a pioneer in hemp, CBD and wellness products. Together, they generate approximately $100 million in revenue and are EBITDA and cash flow positive and will expand in the near term into CBD adjacencies and THC-based products upon legalization. Further, the Company continues to build its U.S. platform, including through its prior acquisition of a majority of the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) – which marked a critical step towards delivering on its objective of leading the U.S. cannabis market upon federal legalization.

About Tilray
Tilray, Inc. 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 – by inspiring and empowering the worldwide community to live their very best life by providing them with products that meet the needs of their mind, body, and soul and invoke a sense of wellbeing. Tilray’s mission is to be the trusted partner for its patients and consumers by providing them with a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. A pioneer in cannabis research, cultivation, and distribution, Tilray’s unprecedented production platform supports over 20 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and alcoholic beverages. For more information on how we open a world of wellbeing, visit www.Tilray.com.

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