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Tilray Inc
Symbol TLRY
Shares Issued 446,156,841
Close 2022-04-06 C$ 9.10
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Tilray earns $52.47-million (U.S.) in fiscal Q3 2022

2022-04-06 09:27 ET - News Release

Mr. Irwin Simon reports

TILRAY BRANDS, INC. REPORTS THIRD QUARTER FISCAL YEAR 2022 FINANCIAL RESULTS

Tilray Inc. (Tilray Brands) has released its financial results for the third fiscal quarter ended Feb. 28, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Irwin D. Simon, Tilray's chairman and chief executive officer, stated: "Our third quarter results reflect progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4-billion in revenue by the end of fiscal 2024. Tilray Medical -- which now operates under a cohesive strategy and mission -- has a near 20-per-cent share in Germany, providing clear benefits in its own right as well as a first-mover advantage that we will leverage as Germany and the EU move towards broader adult-use and medical use legalization. In Canada, we maintained our leading market share position amid intense competition -- and believe that our strong capital position, operational excellence, and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters. This effort will gain further support from the fundamental appeal of our brands and product innovation which, as stores continue reopening, will resonate powerfully with consumers. In the U.S., our SweetWater Brewing, Breckenridge Distillery and Manitoba Harvest businesses are profitable, growing and emerging as nationwide, iconic brands with loyal followings that will be home to THC-based products upon U.S. federal legalization."

Mr. Simon continued: "We also continued sourcing and executing strategic and shareholder-friendly transactions that provide value with notable upside. Our most recent example is the proposed agreement to purchase the HEXO senior secured convertible notes, which provides a path for meaningful future equity ownership of HEXO as it executes on its transformation. The proposed HEXO transaction is also expected to facilitate complementary commercial and product innovation and drive production and operating efficiencies. As the global economy reopens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands' value proposition will deliver sustained and tangible shareholder value."

Financial highlights -- third quarter fiscal 2022

  • Net revenue increased 23 per cent to $152-million during the third quarter from $124-million in the prior-year quarter. The increase was driven by 32-per-cent growth in cannabis revenue to $55-million, 64-per-cent growth in beverage alcohol revenue of $20-million and wellness revenue of $15-million.
  • Gross profit increased 31 per cent to $40-million from $30-million in the prior-year quarter. Gross margin increased to 26 per cent from 25 per cent in the prior-year quarter.
  • Significant growth in international cannabis with revenue up over 4,000 per cent from the prior-year quarter and 37-per-cent increase in revenue in EMEA (Europe, Middle East and Africa) when compared with the previous quarter.
  • Maintained No. 1 leadership position in Canada1 with 10.2-per-cent cannabis market share driven by Tilray's comprehensive portfolio of adult-use brands, and growth in preroll and vape product categories.
  • Cost synergies from Aphria-Tilray combination of $76-million achieved on a run-rate basis to date. Expect to reach $80-million synergy target by May 31, 2022, five months ahead of schedule and to generate an additional $20-million in synergies in fiscal 2023.
  • Distribution revenue decreased 11 per cent to $63-million during the third quarter from $70-million in the prior year quarter. The decrease was driven by the impact of changes in the exchange rate between the euro and U.S. dollar, which led to a $7-million reduction.

Growth and high potential across key markets

No. 1 market-leading position in Germany and poised to accelerate strategic growth initiatives upon adult-use legalization: Today, Germany remains the largest medical cannabis market in Europe and is expected to also be one of the largest adult-use markets as well upon legalization. The company is already the leader in medical cannabis within Germany with a market share of approximately 20 per cent with its whole flower, extracts and Dronabinol products and this, together with the company's investments in infrastructure, brands and people, positions it exceptionally well for adult-use cannabis legalization.

Strategic expansion across the EU: Tilray Brands' 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 (good manufacturing practice) certified pharmaceutical-grade medical cannabis across the region. This unparalleled production capability coupled with Tilray Brands' sales arrangements through major distribution channels in Germany, the United Kingdom and other key markets, coupled with the strong relationships with local governments and the trust of the company's patients, gives Tilray Brands the ability to drive accelerated growth.

No. 1 leading cannabis market share in Canada: Amid an intensely competitive and oversaturated market, Tilray Brands remains the market leader in the $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 Brands has implemented strategic price adjustments, expanded distribution through its coast-to-coast agreement with Rose Life Sciences and Great North Distributors, and increased the company's focus on and accelerated product innovation. Proposed alliance with Hexo Corp. would bring together Canada's top two cannabis market share leaders to strengthen operational efficiencies and product innovation to benefit consumers, shareholders and the cannabis industry.

A leading U.S. consumer packaged goods platform with operational strength, leadership expertise and optionality to be immediately leveraged for cannabis products upon federal legalization: In the United States, Tilray Brands' operating businesses include SweetWater Brewing Company, the 11th-largest craft brewer in the nation and leading lifestyle brand, Breckenridge Distillery, and Manitoba Harvest, a pioneer in hemp, cannabidiol and wellness products. Together, they generate approximately $100-million in revenue, and are EBITDA (earnings before interest, taxes, depreciation and amortization) 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. -- which marked a critical step toward delivering on its objective of leading the U.S. cannabis market upon federal legalization.

Live conference call and audio webcast

Tilray Brands will host a live conference call and audio webcast to discuss these results today at 8:30 a.m. Eastern Time, details of which are provided herein.

Call-in number: 877-407-0792 from Canada and the United States, or 201-689-8263 from international locations. Please dial in at least 10 minutes prior to the start time.

A telephone replay will be available approximately two hours after the call concludes through April 22, 2022. To access the recording dial 844-512-2921 from Canada and the United States, or 412-317-6671 from international locations and use the pass code 13728025.

There will be a simultaneous live webcast available on the investors section of Tilray Brands' website. The webcast will also be archived. Additionally, Tilray's third quarter earnings call will be syndicated live to retail investors on the Public.com app.

About Tilray Inc.

Tilray 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 delivers on this mission by inspiring and empowering the worldwide community to live their very best life and providing access to products that meet the needs of their mind, body and soul while invoking well-being. Patients and consumers trust Tilray to deliver a cultivated experience and health and well-being 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 craft beverages.

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