Tilray Stock Rises In After Market Trading On Earnings

Tilray Inc. (TLRY) delivered its full year and fourth quarter results on Monday after the closing bell. The stock initially dipped, but then reversed course to move higher by 3% to lately trade at $74.50.

Fourth Quarter

Revenue increased to $15.5(C$20.9) million, up 203.8% compared to the fourth quarter of last year and beating the Yahoo! Finance analyst average estimate for $14.15 million. The company said that revenue was driven by bulk sales, inaugural sales in the Canadian adult-use market and accelerated wholesale distribution in export markets.

Estimates were all over the map with lows at $12 million and highs at $18 million. The company was facing criticism over inventory issues for the fourth quarter as demand for adult use cannabis surprised most cannabis companies in Canada. Tellingly, the company sent out a tweet right before the earnings were released saying that its inventory levels were all stocked up.

“2018 was a very successful year for Tilray with many corporate milestones. Our team made significant progress on our long-term initiatives including increasing production capacity, expanding and strengthening strategic partnerships, and acquiring complementary businesses to accelerate our future growth and leadership position in medical and adult-use cannabis,” commented Brendan Kennedy, President and Chief Executive Officer of Tilray.

Net loss for the quarter was $31.0 million or $0.33 per share compared to $3.0 million or $0.04 per share for the prior year period. Net loss includes non-cash stock-based compensation charges of $4.1 million compared to $34 thousand in the prior year period. Adjusted EBITDA was a loss of $17.8 million compared to a loss of $2.1 million the prior year period. The increased net loss and Adjusted EBITDA declines were primarily due to the increase in operating expenses related to growth initiatives, expansion of international teams and costs related to financings and M&A activities.

Total kilogram equivalents sold increased almost three-fold to 2,053 kilograms from 694 kilograms in the prior year period.  The average net selling price per gram increased to $7.52(C$10.05) compared to $7.13(C$9.12) in the prior year period.

Full Year Results

The company’s revenue for 2018 increased to $43.1(C$56.4) million, up 110.0% compared to last year. The increase in revenue was driven by bulk sales, the inaugural sales for the Canadian adult-use market (which began on Oct. 17) and accelerated wholesale distribution in export markets.

The net loss for the year was $67.7 million, or $0.82 per share, compared to $7.8 million, or $0.10 per share, for 2017. Net loss includes non-cash stock-based compensation charges of $21.0 million compared to a $0.1 million charge in the prior year.

Adjusted EBITDA was a loss of $33.1 million compared to a loss of $5.5 million the prior year. The increased net loss and Adjusted EBITDA declines were primarily due to the increase in operating expenses related to continued growth, expansion of international teams, and costs related to financings and the initial public offering (“IPO”).

Total kilogram equivalents sold increased over two-fold to 6,478 kilograms from 3,024 kilograms in the prior year. Average net selling price per gram increased to $6.61(C$8.59) compared to $6.52(C$8.42) in the prior year. In 2018, there was significant revenue growth for extract products compared to dried flower, where extracts represented 49% of the sales mix in 2018 compared to 20% in 2017.

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief 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 Masters degree in Business Journalism from New York University.


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