Tilray Misses Revenue Expectations For 2021

Tilray, Inc. (Nasdaq: TLRY) reported financial results for the full fiscal year and fourth quarter ending May 31, 2021. In the fourth quarter, net revenue increased 25% to $142.2 million from $113.5 million for the same time period last year. Cowen & Co. had estimated revenue to be $163 million for the quarter making this a fairly large earnings miss. Investors though seemed pleased with the results as the stock was trading higher by over 10% in early trading to lately sell at $14. Cowen’s price target is $23.

Tilray said the increase was driven by 36% growth in net cannabis revenue to $53.7 million, which included four weeks of contribution from legacy-Tilray, a 10% decline in distribution revenue, net beverage alcohol revenue of $15.9 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $5.8 million from Manitoba Harvest. The net income of $33.6 million during the fourth quarter was a big improvement over last year’s net loss of $84.3 million.

Full Year Results

Tilray reported that its fiscal 2021 full-year net revenue increased 27% to $513.1 million from $405.3 million in 2020. This also missed the Cowen & Co. estimate for a full fiscal year of revenue at $685 million. The company said the increase was driven by 55% growth in net cannabis revenue to $201.4 million, which included four weeks of contribution from legacy-Tilray, 1% growth in distribution revenue to $277.3 million, net beverage alcohol revenue of $28.6 million following the SweetWater acquisition on November 25, 2020, and wellness revenue of $5.8 million from Manitoba Harvest due to the Tilray reverse acquisition on April 30, 2021. The net loss of $336.0 million in 2021 was much higher than the net loss of $100.8 million in 2020. The company said this was driven by $63.6 million of transaction costs related to out-of-pocket fees to consummate the business combinations and $170.5 million of non-cash unrealized loss on our convertible debentures.

“Early results from the new Tilray affirm that, while the global cannabis market remains in its early stages, our vision, scale, access to resources, and operational excellence position us optimally to capitalize on the opportunity,” said Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer. “In a very short period of time since our business combination was finalized, we transformed and strengthened Tilray, delivered solid results amid continued COVID-19 lockdowns and restrictions, and achieved $35 million in synergies to date – well on our way to delivering $80 million in cost savings over the next 16 months.”

Since the Quarter Ended

The company has made progress with its SweetWater brand. In July, it announced the launch of 420 Imperial IPA, the first line extension off of its flagship 420 brand. The company also announced its West Coast expansion including a new Colorado Brewery and the opening of SweetWater Mountain Taphouse at Denver International Airport. In June, the company announced the first cross-brand product collaboration between Canadian craft-cannabis brand Broken Coast and SweetWater to launch U.S. distribution of “Broken Coast BC Lager” and introduce the cannabis brand to consumers across the country.

Tilray completed and shipped its first successful EU GMP-certified medical cannabis harvest grown in Germany for German distribution. In Canada, Tilray launched its new medical cannabis brand, Symbios. Symbios is the inaugural brand from the ‘new’ Tilray developed to offer patients a broader spectrum of medical cannabis formats and cannabinoid ratios at a better price point.

Looking Ahead

Looking ahead, Tilray said it expects to deliver significant cost synergies totaling approximately $80 million within eighteen months of closing the Aphria Tilray business combination and plans to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales, and marketing, and corporate expenses. To date, Tilray said it has achieved $35 million in synergies.

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.

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