Tilray, Inc. Reports First Quarter Fiscal Year 2022 Financial Results

Net Revenue and Gross Profit Increased 43% and 46%, Respectively, for Largest Global Cannabis Cultivator

10th Consecutive Quarter of Positive Adjusted EBITDA

$55 Million in Cost-Savings Achieved On a Run-Rate Basis To Date; On-track for at Least $80 Million in Cost-Savings from Aphria and Tilray Synergies

#1 Leading Market Share in Canada1 with Comprehensive Portfolio of Medical and Adult-Use Cannabis Brands, International Market Leader and #1 in Germany2 with Medical Cannabis ExtractsOctober 07, 2021 07:00 AM Eastern Daylight Time

Tilray, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company, today reported financial results for the first fiscal quarter ended August 31, 2021. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated, and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, stated, “Tilray’s first quarter 2022 results affirm that, amid the paradigm shift towards global cannabis legalization, we are unquestionably executing against two key objectives. The first is maximizing near-term profitability through leadership in both higher-margin international medical markets and in Canada, complemented by incremental growth at SweetWater and Manitoba Harvest in the U.S. These efforts are augmented by the cost benefits of our increased scale that we are realizing through our integration process. The tangible results include our tenth consecutive quarter of positive adjusted EBITDA and meaningful net revenue growth despite continued impacts from COVID-19 in Canada as retail cannabis stores only began opening in mid-June.”

Mr. Simon continued, “The second objective is to fully realize the promise and potential of Tilray by capitalizing on the nearly $200 billion global cannabis market opportunity. We believe we are ideally-positioned to succeed due to our global consumer-packaged goods expertise and scale, our diverse portfolio of brands, our reputation as a trusted supplier of high-quality cannabis, battle-tested leadership and a relentless focus on driving sustainable shareholder value. We look forward to accelerating our momentum as we build the leading CPG business in the global cannabis industry.”

Financial Highlights – First Quarter Fiscal 2022

  • Net revenue increased 43% to $168 million during the first quarter from $117 million in the prior year quarter. The increase was driven by 38% growth in net cannabis revenue to $70 million, net beverage alcohol revenue of $15 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $15 million from Manitoba Harvest.
  • Maintained #1 market share in Canada3 with leading portfolio of comprehensive medical cannabis and adult-use brands, including top position in cannabis flower and pre-rolls; five Tilray brands rank in top five brands across all adult-use product categories.
  • International market leader and #1 in Germany4 with medical cannabis extracts.
  • Net loss of $34.6 million during the first quarter compared to net loss of $21.7 million in the prior year quarter.
  • Adjusted EBITDA of $12.7 million in the first quarter 2022, 58% growth compared to the prior year quarter, and the tenth consecutive quarter of positive Adjusted EBITDA. If Adjusted EBITDA were normalized for Aphria’s production costs, metric would have been closer to $17 million.
  • Gross profit increased 46% to $51 million from $35 million in the prior year quarter.
  • Adjusted gross margin in the cannabis segment has remained strong at 43%.
  • Cost-saving synergies of $55 million achieved on a run-rate basis to date, with actual cash-savings close to $20 million. On-track for at least $80 million in cost-savings from Aphria and Tilray business combination synergies.

Strong First Quarter Momentum Across Segments

  • On August 19, 2021, Tilray completed the acquisition of amended convertible notes in MedMen, a premier retailer in the $80 billion U.S. cannabis market – a potentially transformative step towards Tilray’s objective of leading the U.S. market when legalization allows.
  • On August 17, 2021, Tilray launched medical cannabis edibles in Canada.
  • On July 19, 2021, Tilray’s wholly owned subsidiary, SweetWater Brewing Company, announced the launch of 420 Imperial IPA, the first line extension of its flagship 420 brand.
  • On July 12, 2021, SweetWater announced its West Coast expansion including a new Colorado Brewery and the opening of SweetWater Mountain Taphouse at Denver International Airport.
  • On July 7, 2021, Tilray announced the completion and shipment of the first successful EU GMP-certified medical cannabis harvest grown in Germany for German distribution.
  • On June 30, 2021, Tilray announced the launch of “Broken Coast BC Lager” – the first cross-brand product collaboration between Canadian craft-cannabis brand Broken Coast and SweetWater.
  • On June 29, 2021, Tilray launched a new medical cannabis brand in Canada, Symbios, the inaugural brand developed to offer patients a broader spectrum of medical cannabis formats and cannabinoid ratios at a better price point.
  • On June 25, 2021, Tilray’s leading Canadian cannabis brand, RIFF, launched new multi-pack of cannabis pre-rolls.

Ongoing Global Growth and Opportunity

The confluence of global cannabis legalization and the global economy’s emergence from COVID-19 lockdowns signal a period of enormous potential for Tilray – a leading cannabis company with the scale, reach and organic growth and M&A firepower to take full advantage of the massive global opportunity in cannabis. The Company’s business planning and integration are built around four key competitive differentiators:

  • The industry’s broadest geographic footprint and operational scale – Tilray’s unparalleled and growing presence positions the Company to lead the global cannabis market including Europe, Latin America and Asia. As the largest cannabis cultivator in the world, Tilray remains to be one of the few companies with the capabilities to consistently supply high-quality cannabis to the global cannabis market.
  • Leading market share in Canada, with a comprehensive portfolio of product offerings and carefully curated brands – Tilray plans to continue growing and strengthening its position as the #1 Canadian LP in total sales on a consolidated basis and to leverage its position, brands and new product innovation to expand its current cannabis retail market share in Canada of approximately 16% to its goal of 30% share by the end of fiscal year 2024.
  • Tremendous international growth opportunities from a strong base – The European Union, which has nearly twice the population of the U.S. and where Tilray already has a very meaningful presence, represents a powerful growth market, and could potentially be a $1 billion business for the Company. With its operational and regulatory strengths, Tilray continues to unlock new opportunities across global geographies at a faster pace than competitors based on leadership, partnerships and operational scale.
  • A leading U.S. CPG platform to be immediately leveraged for cannabis products upon federal legalization – In the U.S., Tilray has a strong consumer packaged goods presence and infrastructure with two strategic pillars: SweetWater, the 11thlargest craft brewer in the nation5 and leading lifestyle brand, and Manitoba Harvest, a pioneer in hemp, CBD and wellness products, with access to 17,000 stores in North America. Further, the investment the Company announced in August in the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF), is a critical step towards delivering on its objective of leading the U.S. cannabis market upon federal legalization.

Conference Call

Tilray will host a conference call to discuss these results today at 8:30 a.m. ET. Investors interested in participating in the live call can dial (877) 407-0792 from Canada and the U.S. or (201) 689-8263 from international locations.

There will also be a simultaneous, live webcast available on the Investors section of the Company’s website at www.tilray.com. The webcast will be archived after the conference call.

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