Tilray Delivers $457 Million New Loss For Fourth Quarter

Tilray Brands, Inc.  (Nasdaq: TLRY) reported financial results for the fourth quarter and full fiscal year ending May 31, 2022, with net revenue growing 8% to $153.3 million during the fourth quarter from $142.2 million for the same period last year. This dramatically missed the Yahoo Finance average analyst estimate for revenues of $247 million and only barely grew over the third quarter’s revenue of $152 million.

The big news was that Tilray reported a net loss of $457.8 million during the fourth versus last year’s net income of $33.6 million. Tilray attributed the loss to changes in the market that caused a shift in our strategic priorities, and market conditions inclusive of higher rates of borrowing and lower foreign exchange rates. The net loss included a non-cash impairment of $395.0 million primarily impacting inventory, goodwill, and other intangible assets. exchange rates. Tilray Brands now believes it will be free cash flow positive in its business units in the fiscal year 2023.

Full Year Results

For the full year, net revenue increased 22% to $628.4 million for fiscal 2022, a nice improvement over last year’s $513.1 million. The company said the increase was driven by a 17.9% growth in cannabis net revenue to $237.5 million, a 150.0% increase in beverage alcohol net revenue of $71.5 million, and a 928.8% increase in wellness net revenue to $59.6 million. On a constant currency basis, net revenue increased by 29%.

The company’s fiscal year delivered a net loss of $434 million and that was mostly due to the non-cash impairment of $395.0 million in the fourth quarter. despite the large loss, Tilray ended the year with a hefty cushion of cash and cash equivalents totaling $415.9 million.

CEO Irwin D. Simon said, “Over the past year, we have accelerated the optimization of our operations and sharpened execution against our most profitable core business opportunities in medical, adult-use, wellness, and beverage-alcohol across Canada, Europe, and the U.S. At the same time, we accelerated our growth potential through tactical execution and strategic initiatives that enable accelerated revenue growth through improved cultivation, brand building, and distribution. These actions should also contribute to bottom-line performance improvement through production efficiencies and cost reductions. The outcome of this work is that we have driven top line growth across our markets, significantly improved our operating performance, and strengthened our balance sheet.”

Deal Updates

Following the closing of the Tilray-Aphria transaction, Tilray reported it had logged $85 million in cost synergies, exceeding its original target of delivering $80 million of cost savings by the end of the fiscal year 2023. The company attributed the savings to consolidation in key areas of cultivation and production, cannabis and product purchasing, sales and marketing, and corporate expenses. Tilray believes it can squeeze another $20 million of savings, and now expects to deliver a total of $100 million in cost synergies from the transaction by the end of the fiscal year 2023. Tilray said its acquisition of HEXO’s senior secured convertible note closed on July 12, 2022, bringing immediate accretion to the company and laying the groundwork for federal legalization in the U.S.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


One comment

  • michael mclaughlin

    August 1, 2022 at 12:18 pm

    The American mantra in the cannabis business is (was) go BIG. Why start with an acre of weed, do 100 acres and borrow millions to build large organizations, Pay the suits a million a year and spare no expense.
    Whta happens when the rpice of pot falls—-you know, supply and demand? Tilray says free cash by 2023? Really? Between the black markets and the taxing agencies bleeding dry the cannabis companies with taxes and more regulations, I really believe the entire industry is on the Titanic.

    Reply

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