Record Q2 Net Revenue of $194 Million, Increases 34% Over the Prior Year Period
- Global Cannabis Leader with #1 Market Share in Canada and 31% Growth in Canadian Cannabis Net Revenue, Medical Cannabis Leader in Europe with 55% Growth in International Cannabis Net Revenue
- 5th Largest Craft Beer Brewer in the U.S.1, Positioned to Become Top 12 Beverage-Alcohol Company with 117% Increase in Beverage Alcohol Net Revenue Over the Prior Year Period
- On Track to Achieve $30-$35 Million in Annual Savings related to Integration of HEXO Acquisition
- Reiterates Financial Guidance for Fiscal Year 2024
- Conference Call to be Held at 8:30 a.m. ET Today
NEW YORK and LEAMINGTON, Ontario, Jan. 09, 2024 (GLOBE NEWSWIRE) — Tilray Brands, Inc. (“Tilray”, “our”, “we” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company, today reported financial results for its second quarter of its fiscal year 2024 ended November 30, 2023. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
Financial Highlights – 2024 Fiscal Second Quarter
- Record net revenue of $194 million increased 34% in the second quarter compared to $144 million in the prior year quarter.
- Gross profit increased 11% to $47 million, while adjusted gross profit increased 18% to $52 million in the second quarter. Gross margin was 24% and adjusted gross margin was 27%.
- Cannabis net revenue increased 35% to $67 million in the second quarter compared to $50 million in the prior year quarter.
- Cannabis gross margin was 31% in the second quarter compared to 43% in the prior year quarter. Adjusted cannabis gross margin was 35% compared to 43% in the prior year quarter.
- Beverage alcohol net revenue increased 117% to $47 million in the second quarter from $21 million in the prior year quarter.
- Beverage alcohol gross margin was 34% in the second quarter compared to 47% in the prior year quarter and adjusted gross beverage alcohol margin was 38% in the second quarter compared to 52% in the prior quarter. Excluding the newly acquired brands, adjusted gross margin would have been 55% in the current quarter.
- Beverage alcohol gross profit increased to $16 million in the second quarter from $10 million in the prior year quarter. Adjusted beverage alcohol gross profit increased to $18 million from $11 million in the prior year quarter.
- Distribution net revenue increased 12% to $67 million in the second quarter compared to $60 million in the prior year quarter.
- Distribution gross margin was 11% in the second quarter compared to 13% in the prior year quarter, reflecting a change in product mix.
- Net loss decreased to $46 million in the second quarter compared to net loss of $62 million in the prior year quarter. Net loss per share narrowed to ($0.07) compared to ($0.11) in the prior year quarter.
- Adjusted net loss of $2.7 million in the second quarter. Adjusted loss per share of $(0.00).
- Adjusted EBITDA was $10.1 million in the second quarter compared to $11.0 million in the prior year quarter. The difference was primarily related to the HEXO advisory fee revenue in the prior year quarter along with timing differences in recognizing synergies from operating results after completing acquisitions.
- Achieved $22 million in annualized run-rate savings (and $14 million in actual cash cost savings) as part of the $30 million synergy plan related to the HEXO acquisition.
- Strong financial liquidity position of ~$261 million, consisting of $143 million in cash, including restricted cash of $1.5 million and $116 million in marketable securities.
- Reduced outstanding convertible debt by $127 million compared to the first quarter and a further $18 million subsequent to the end of our second quarter.
- Operating cash flow of $(30) million in the second quarter compared to $29 million in the prior year quarter. The increased cash use was primarily related to the settlement of pre-acquisition liabilities and exit costs assumed in connection with the HEXO acquisition. In addition, the prior year period included the cash collection of $18 million related to the purchase price derivative related to our acquisition of the HEXO convertible notes, which did not recur in the current year.
Irwin D. Simon, Tilray Brands’ Chairman and Chief Executive Officer, stated, “Tilray Brands is a major force at the forefront of innovation, disrupting the global CPG industry across medical and adult-use cannabis, wellness foods and snacks, and craft beverages. Our Q2 financial results demonstrate the strength of our brands, our global team, and our diversified growth strategy. We grew revenue, enhanced our capital structure, and realized operating synergies while strengthening Tilray Brands’ position as the #1 cannabis operation and brand portfolio in Canada by sales volume and market share, the European market leader in medical cannabis, and the leader in branded hemp products. We have also emerged as a disruptor in the craft beverage-alcohol industry by assembling a portfolio of highly sought-after brands that are dominating key regions across the U.S. in the Northeast, the Pacific Northwest, and the Southeast. Tilray is now uniquely positioned to become a top 12 beer and alcohol beverage company in the U.S.”
Having already demonstrated success in solidifying our brands through products that connect with consumers, we will continue to deploy successful playbooks for growth across our brand portfolio and key regions in the U.S., Canada, and Europe.
Irwin D. Simon
With each achievement and the support we have garnered from retailers, distributors, and consumers, I am confident that Tilray Brands will continue to lead and advance the global cannabis industry, disrupt the craft beer market, and fuel consumer needs in wellness foods.
