Tilray Brands Reports Second Quarter Fiscal Year 2023 Financial Results
Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported financial results for the second fiscal quarter ended November 30, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
Financial Highlights
Strong financial position with $433.5 million in cash and marketable securities.
Maintained #1 leadership position in Canada with 8.3% cannabis market share.
Beverage-alcohol sales increased 56% to $21.4 million, over the prior year quarter, including revenue from acquisitions.
Gross profit rose to $40.1 million, a 22% increase, year over year. Adjusted gross margin held at 29% compared to the year ago quarter.
Cannabis gross profit increased 37% to $18.6 million from $13.5 million in the prior year quarter, while the gross margin percentage increased to 37% from 23%. This was driven by our success in implementing numerous cost-savings programs, offset in part by our allocated overhead from intentionally reducing production, coupled with the revenue realized from our strategic alliance with HEXO in the current year and in inventory provision in the prior year.
Achieved $119.6 million in annualized cash cost-savings since the closing of the Tilray-Aphria transaction in May 2021, up from $108 million as of August 31, 2022.
Adjusted EBITDA of $11.7 million, marking the 15th consecutive quarter of positive adjusted EBITDA.
Irwin D. Simon, Tilray Brands’ Chairman and Chief Executive Officer, stated, “During the second quarter, Tilray Brands took decisive, effective actions to manage operating cash flow and focus the business on accretive acquisitions and a path to long term profitability. And we have certainly done so – even amid an evolving retail environment – by removing costs and driving efficiencies across the platform in supply chain, procurement, packaging, and labor. We are close to achieving our increased annualized cost savings target of $130 million, consistent with our commitment to building a lean, efficient, and dynamic business that will realize tangible and immediate benefits as the market improves.”
Mr. Simon continued, “Tilray Brands’ re-positioning as a global diversified portfolio of brands will drive our ability to seize top-line opportunities across geographies and business lines. In the U.S., this includes investing in, acquiring or building compelling and profitable lifestyle CPG brands across craft beverage-alcohol and wellness consumer products that are cannabis adjacent, resonate powerfully with consumers, and are strongly positioned in key markets. In Europe, we believe that we are extremely well-positioned overall in a cannabis market. And, in Canada, we will be patient and strategic in building our competitive positioning amid the price compression and difficult operating conditions that we expect will, inevitably, consolidate the oversupply of licensed producers. These efforts will be supported and enhanced by one of the strongest balance sheets in the industry with close to $433.5 million in cash and marketable securities on-hand.”
Operating Highlights
Maintained #1 Market Share Leadership in Canada; Positioned for Long-Term Growth in the Market – Against the backdrop of challenging cannabis market operating conditions, Tilray was able to maintain its top market share position due to the strength of its sought-after brands and products. This reflects the strength of the Company’s product innovation, including with respect to both strains and potencies. Looking ahead, Tilray’s focus on using data and consumer insights coupled with ongoing budtender and consumer education is expected to enable the acceleration of both sales and market share growth.
Well-Positioned to Capitalize on Growing Acceptance and Legalization of Cannabis across Europe – Even as Europe contends with a difficult economic climate that has negatively impacted the cannabis industry, the positive trends towards greater acceptance of medical cannabis and legalization of adult-use continue. We believe we are exceptionally well situated to benefit from the meaningful economic growth that will come to our industry as a result of these positive changes, given our ability to provide the most sought-after, consistent and sustainable cannabis products for the medical and adult-use markets. In Germany, we are in a win-win position regardless of whether in-country cultivation is exclusively permitted or whether imports are also allowed given our domestic footprint with our Aphria RX facility located in Germany along with our facility in Portugal. In addition to our supply-chain footprint, we are also uniquely positioned to take advantage of the insights and learnings we have developed through our participation in the Canadian adult-use market. This experience, paired with our competitively advantaged supply-chain footprint, gives us great confidence in our ability to lead the European medical market and German adult-use market in the future.
Continuing to Expand U.S. CPG and Craft-Beverage Portfolio, with Accretive Acquisition of Montauk Brewing Company – In the U.S., Tilray’s businesses include SweetWater Brewing Company, the 10th largest craft brewer in the nation; Breckenridge Distillery; and Manitoba Harvest, a pioneer in hemp, CBD and wellness products; as well as Montauk Brewing Company, the fastest growing craft beer brand and #1 craft brewer in Metro New York, which Tilray Brands acquired in the second quarter of fiscal 2023. The Montauk Brewing transaction was immediately accretive to EBITDA and the Company expects it will deliver strong revenue and adjusted EBITDA on a go-forward basis. This will be accomplished as a result of Tilray’s ability to leverage SweetWater’s excess capacity as well as its nationwide infrastructure to significantly expand Montauk Brewing’s distribution network beyond its concentrated presence in the Northeast, making it a true national brand.
The Company is focused on driving revenue gains across its diverse portfolio of businesses, which we believe will ultimately create a strong channel for additional revenue in adult-use cannabis, pending federal legalization.
Strategic Growth Actions
September 2022 – Good Supply Launches New High-Potency Product Drop and Unveils Exclusive Orange Frost Live Resin
September 2022 – Breckenridge Distillery Announces Nationwide Alignment and Renewed Distribution Agreement with Republic National Distributing Company
September 2022 – RIFF Cannabis Brand Launches New ‘Drumsticks’ Product
September 2022 – Tilray Medical Receives Approval to Extend Market Authorization in Italy
September 2022 – SweetWater Brewing Company Unveils New Fall Craft-Beer Releases
October 2022 – Tilray Medical Relaunches Cannabis Oral Solution Across Ireland
October 2022 – Broken Coast Ranks #1 at the Budtender’s Association Collector’s Cup
October 2022 – Green Flash Launches New Beers Across the U.S. and Unveils Refreshed Branding
October 2022 – Breckenridge Distillery Announces Ultimate Whiskey and Beer Collaboration with Breckenridge Brewery
October 2022 – Good Supply Cannabis Brand Reveals New Fall Flower Launches and Expands Distribution of Bestselling High-Potency Products
November 2022 – Tilray Brands and Charlotte’s Web Announce Strategic Alliance in Canada
November 2022 – Leading Independent Proxy Advisory Firms ISS And Glass Lewis Recommend Tilray Stockholders Vote “FOR” Tilray’s Proposal to Protect Stockholders and Promote Accountability
November 2022 – Tilray Brands Acquires Montauk Brewing Company
November 2022 – ‘Potently Canadian’ Cannabis Brand, CANACA, Launches New Products And #FeelTheBoost Campaign
November 2022 – Tilray Launches ‘Take Back Control’ Platform to Provide Women with Free Medical Cannabis Resources
December 2022 – Good Supply Cannabis Brand Launches ‘Peppermint Phatty’
December 2022 – RIFF Cannabis Brand Launches New Series of Limited-Edition Strains in ‘Joint Effort’ With Craft Growers
Live Conference Call and Audio Webcast
Tilray Brands will host a webcast to discuss these results today at 8:30 a.m. ET. Investors may join the live webcast available on the Investors section of the Company’s website at www.tilray.com. The webcast will also be archived after the call concludes.
About Tilray Brands
Tilray Brands, Inc. (Nasdaq: TLRY; TSX: TLRY), 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 Brands delivers on this mission by inspiring and empowering the worldwide community to live their very best life, enhanced by moments of connection and wellbeing. Patients and consumers trust Tilray Brands to be the most responsible, trusted and market leading cannabis consumer products company in the world with a portfolio of innovative, high-quality and beloved brands that address the needs of the consumers, customers and patients we serve. A pioneer in cannabis research, cultivation, and distribution, Tilray Brands’ unprecedented production platform supports over 20 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.
For more information on Tilray Brands, visit www.Tilray.com and follow @Tilray
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release constitute forward-looking information or forward-looking statements (together, “forward-looking statements”) under Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the “safe harbor” created by those sections and other applicable laws. Forward-looking statements can be identified by words such as “forecast,” “future,” “should,” “could,” “enable,” “potential,” “contemplate,” “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “project,” “will,” “would” and the negative of these terms or similar expressions, although not all forward-looking statements contain these identifying words. Certain material factors, estimates, goals, projections or assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this communication.
Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the Company’s ability to become the world’s leading cannabis-focused consumer branded company; the Company’s ability to achieve annualized cost savings of $130 million; the Company’s ability to generate $70-$80 million of Adjusted EBITDA; the Company’s expectation to be free-cash flow positive in its operating business units; the Company’s ability to achieve long term profitability; the Company’s ability to achieve operational scale, market share, distribution, profitability and revenue growth in particular business lines and markets; the Company’s ability to successfully achieve production and supply chain efficiencies, synergies and cost savings; expansion of medical and recreational sales legalization across the global cannabis industry, including in Europe; and the Company’s anticipated investments and acquisitions, including in organic and strategic growth, partnership efforts, product offerings and other initiatives.
Many factors could cause actual results, performance or achievement to be materially different from any forward-looking statements, and other risks and uncertainties not presently known to the Company or that the Company deems immaterial could also cause actual results or events to differ materially from those expressed in the forward-looking statements contained herein. For a more detailed discussion of these risks and other factors, see the most recently filed annual information form of the Company and the Annual Report on Form 10-K (and other periodic reports filed with the SEC) of the Company made with the SEC and available on EDGAR. The forward-looking statements included in this communication are made as of the date of this communication and the Company does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
Use of Non-U.S. GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including adjusted gross margin, Adjusted gross profit, Adjusted EBITDA, Adjusted net income and free cash flow. Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company’s operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company’s Consolidated Statements of Operations and Cash Flows presented in accordance with GAAP.
Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include litigation and related expenses, transaction costs, impairments, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company’s GAAP financial results.
The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company’s consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
Adjusted EBITDA is calculated as net income (loss) before income tax expense (recovery); interest expense, net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; purchase price accounting step-up; facility start-up and closure costs; lease expense; litigation costs; and transaction costs. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Adjusted gross profit, is calculated as gross profit adjusted to exclude the impact of inventory valuation adjustment and purchase price accounting valuation step-up. A reconciliation of Adjusted gross profit, excluding inventory valuation adjustments and purchase price accounting valuation step-up, to gross profit, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Adjusted gross margin, excluding inventory valuation adjustments and purchase price accounting valuation step-up, is calculated as revenue less cost of sales adjusted to add back inventory valuation adjustments and amortization of inventory step-up, divided by revenue. A reconciliation of Adjusted gross margin, excluding inventory valuation adjustments and purchase price accounting valuation step-up, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Adjusted net income is calculated as net (loss) income plus (minus) non-operating income (expense), net, change in fair value of contingent consideration, inventory write down, litigation costs, and transaction (income) costs. A reconciliation of Adjusted net income, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Free cash flow is comprised of two GAAP measures deducted from each other which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets. A reconciliation of net cash flow provided by (used in) operating activities to free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release.
For further information:
Media: Berrin Noorata, news@tilray.com
Investors: Raphael Gross, +1-203-682-8253, Raphael.Gross@icrinc.com
Consolidated Statements of Financial Position
November 30,
May 31,
(in thousands of US dollars)
2022
2022
Assets
Current assets
Cash and cash equivalents
$
190,218
$
415,909
Marketable Securities
243,286
–
Accounts receivable, net
89,705
95,279
Inventory
240,946
245,529
Prepaids and other current assets
50,550
46,786
Total current assets
814,705
803,503
Capital assets
539,124
587,499
Right-of-use assets
11,351
12,996
Intangible assets
1,214,842
1,277,875
Goodwill
2,621,401
2,641,305
Interest in equity investees
4,638
4,952
Long-term investments
8,211
10,050
Convertible notes receivable
255,310
111,200
Other assets
4,797
314
Total assets
$
5,474,379
$
5,449,694
Liabilities
Current liabilities
Bank indebtedness
$
15,304
$
18,123
Accounts payable and accrued liabilities
162,900
157,431
Contingent consideration
26,463
16,007
Warrant liability
12,670
14,255
Current portion of lease liabilities
6,976
6,703
Current portion of long-term debt
20,681
67,823
Current portion of convertible debentures payable
181,511
–
Total current liabilities
426,505
280,342
Long – term liabilities
Lease liabilities
8,999
11,329
Long-term debt
152,150
117,879
Convertible debentures payable
223,295
401,949
Deferred tax liabilities
180,099
196,638
Other liabilities
185
191
Total liabilities
991,233
1,008,328
Commitments and contingencies (refer to Note 18)
Stockholders’ equity
Common stock ($0.0001 par value; 990,000,000 shares authorized; 613,181,559 and 532,674,887 shares issued and outstanding, respectively)
61
53
Additional paid-in capital
5,697,466
5,382,367
Accumulated other comprehensive loss
(121,455
)
(20,764
)
Accumulated Deficit
(1,105,796
)
(962,851
)
Total Tilray Brands, Inc. stockholders’ equity
4,470,276
4,398,805
Non-controlling interests
12,870
42,561
Total stockholders’ equity
4,483,146
4,441,366
Total liabilities and stockholders’ equity
$
5,474,379
$
5,449,694
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
For the three months
For the six months
ended November 30,
Change
% Change
ended November 30,
Change
% Change
(in thousands of U.S. dollars, except for per share data)
2022
2021
2022 vs. 2021
2022
2021
2022 vs. 2021
Net revenue
$
144,136
$
155,153
$
(11,017
)
(7
)%
$
297,347
$
323,176
$
(25,829
)
(8
)%
Cost of goods sold
104,012
122,387
(18,375
)
(15
)%
208,609
239,455
(30,846
)
(13
)%
Gross profit
40,124
32,766
7,358
22
%
88,738
83,721
5,017
6
%
Operating expenses:
General and administrative
41,672
33,469
8,203
25
%
82,180
82,956
(776
)
(1
)%
Selling
9,669
9,210
459
5
%
19,340
16,642
2,698
16
%
Amortization
23,995
29,016
(5,021
)
(17
)%
48,354
59,755
(11,401
)
(19
)%
Marketing and promotion
8,535
7,120
1,415
20
%
15,783
12,585
3,198
25
%
Research and development
165
515
(350
)
(68
)%
331
1,300
(969
)
(75
)%
Change in fair value of contingent consideration
—
845
(845
)
(100
)%
211
1,682
(1,471
)
(87
)%
Litigation costs
2,815
1,080
1,735
161
%
3,260
2,274
986
43
%
Transaction (income) costs
5,064
7,040
(1,976
)
(28
)%
(7,752
)
31,425
(39,177
)
(125
)%
Total operating expenses
91,915
88,295
3,620
4
%
161,707
208,619
(46,912
)
(22
)%
Operating loss
(51,791
)
(55,529
)
3,738
(7
)%
(72,969
)
(124,898
)
51,929
(42
)%
Interest expense, net
(3,107
)
(9,940
)
6,833
(69
)%
(7,520
)
(20,110
)
12,590
(63
)%
Non-operating income (expense), net
(18,450
)
65,595
(84,045
)
(128
)%
(51,442
)
115,292
(166,734
)
(145
)%
(Loss) income before income taxes
(73,348
)
126
(73,474
)
(58,313
)%
(131,931
)
(29,716
)
(102,215
)
344
%
Income taxes (benefit) expense
(11,713
)
(5,671
)
(6,042
)
107
%
(4,502
)
(909
)
(3,593
)
395
%
Net (loss) income
$
(61,635
)
$
5,797
$
(67,432
)
(1,163
)%
(127,429
)
(28,807
)
(98,622
)
342
%
Net loss per share – basic and diluted
$
(0.11
)
$
0.00
$
(0.11
)
(11,456
)%
$
(0.24
)
$
(0.09
)
$
(0.15
)
164
%
Condensed Consolidated Statements of Cash Flows
For the six months
ended November 30,
Change
% Change
(in thousands of US dollars)
2022
2021
2022 vs. 2021
Cash used in operating activities:
Net loss
$
(127,429
)
$
(28,807
)
$
(98,622
)
342
%
Adjustments for:
Deferred income tax recovery
(12,941
)
(11,228
)
(1,713
)
15
%
Unrealized foreign exchange loss
2,261
(6,530
)
8,791
(135
)%
Amortization
67,387
76,804
(9,417
)
(12
)%
Loss on sale of capital assets
2,208
230
1,978
860
%
Inventory valuation write down
–
12,000
(12,000
)
(100
)%
Other non-cash items
8,177
3,739
4,438
119
%
Stock-based compensation
20,136
17,670
2,466
14
%
Loss on long-term investments & equity investments
1,918
2,197
(279
)
(13
)%
Loss (gain) on derivative instruments
18,997
(133,436
)
152,433
(114
)%
Change in fair value of contingent consideration
211
1,682
(1,471
)
(87
)%
Change in non-cash working capital:
Accounts receivable
6,690
2,734
3,956
145
%
Prepaids and other current assets
(7,780
)
(6,299
)
(1,481
)
24
%
Inventory
5,046
3,409
1,637
48
%
Accounts payable and accrued liabilities
(1,941
)
(44,513
)
42,572
(96
)%
Net cash used in operating activities
(17,060
)
(110,348
)
93,288
(85
)%
Cash used in investing activities:
Investment in capital and intangible assets
(7,537
)
(23,856
)
16,319
(68
)%
Proceeds from disposal of capital and intangible assets
2,160
8,264
(6,104
)
(74
)%
Purchase of marketable securities
(243,186
)
–
(243,186
)
0
%
Net cash paid for business acquisition
(24,372
)
–
(24,372
)
0
%
Net cash used in investing activities
(272,935
)
(15,592
)
(257,343
)
1650
%
Cash provided by (used in) financing activities:
Share capital issued, net of cash issuance costs
129,593
–
129,593
0
%
Shares effectively repurchased for employee withholding tax
(1,189
)
(3,927
)
2,738
(70
)%
Proceeds from long-term debt
1,288
–
1,288
0
%
Repayment of long-term debt and convertible debt
(59,395
)
(20,779
)
(38,616
)
186
%
Repayment of lease liabilities
(1,114
)
(3,360
)
2,246
(67
)%
Net (decrease) increase in bank indebtedness
(2,819
)
19
(2,838
)
(14937
)%
Net cash provided by (used in) financing activities
66,364
(28,047
)
94,411
(337
)%
Effect of foreign exchange on cash and cash equivalents
(2,060
)
(2,696
)
636
(24
)%
Net increase (decrease) in cash and cash equivalents
(225,691
)
(156,683
)
(69,008
)
44
%
Cash and cash equivalents, beginning of period
415,909
488,466
(72,557
)
(15
)%
Cash and cash equivalents, end of period
$
190,218
$
331,783
$
(141,565
)
(43
)%
Net Revenue by Operating Segment
For the three months
% of Total Revenue
For the three months
% of Total Revenue
For the six months
% of Total Revenue
For the six months
% of Total Revenue
(In thousands of U.S. dollars)
November 30, 2022
November 30, 2021
November 30, 2022
November 30, 2021
Cannabis business
$
49,898
34
%
$
58,775
38
%
$
108,468
36
%
$
129,224
40
%
Distribution business
60,188
42
%
68,869
44
%
120,773
41
%
136,055
42
%
Beverage alcohol business
21,395
15
%
13,707
9
%
42,049
14
%
29,168
9
%
Wellness business
12,655
9
%
13,802
9
%
26,057
9
%
28,729
9
%
Total net revenue
$
144,136
100
%
$
155,153
100
%
$
297,347
100
%
$
323,176
100
%
Net Revenue by Operating Segment in Constant Currency
For the three months
For the three months
For the six months
For the six months
November 30, 2022
November 30, 2021
November 30, 2022
November 30, 2021
(In thousands of U.S. dollars)
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
Cannabis business
$
52,160
33
%
$
58,775
38
%
$
113,739
35
%
$
129,224
40
%
Distribution business
70,952
45
%
68,869
44
%
141,532
44
%
136,055
42
%
Beverage alcohol business
21,395
14
%
13,707
9
%
42,049
13
%
29,168
9
%
Wellness business
13,074
8
%
13,802
9
%
26,759
8
%
28,729
9
%
Total net revenue
$
157,581
100
%
$
155,153
100
%
$
324,079
100
%
$
323,176
100
%
Net Cannabis Revenue by Market Channel
For the three months
% of Total Revenue
For the three months
% of Total Revenue
For the six months
% of Total Revenue
For the six months
% of Total Revenue
(In thousands of U.S. dollars)
November 30, 2022
November 30, 2021
November 30, 2022
November 30, 2021
Revenue from Canadian medical cannabis products
$
6,365
13
%
$
7,929
13
%
$
12,885
12
%
$
16,303
13
%
Revenue from Canadian adult-use cannabis products
52,390
106
%
49,535
85
%
110,745
101
%
119,128
91
%
Revenue from wholesale cannabis products
236
0
%
2,259
4
%
628
1
%
3,959
3
%
Revenue from international cannabis products
7,705
15
%
13,706
23
%
18,127
17
%
23,972
19
%
Less excise taxes
(16,798
)
-34
%
(14,654
)
-25
%
(33,917
)
-31
%
(34,138
)
-26
%
Total
$
49,898
100
%
$
58,775
100
%
$
108,468
100
%
$
129,224
100
%
Net Cannabis Revenue by Market Channel in Constant Currency
For the three months
For the three months
For the six months
For the six months
November 30, 2022
November 30, 2021
November 30, 2022
November 30, 2021
(In thousands of U.S. dollars)
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
as reported in constant currency
% of Total Revenue
Revenue from Canadian medical cannabis products
$
6,820
13
%
$
7,929
13
%
$
13,651
12
%
$
16,303
13
%
Revenue from Canadian adult-use cannabis products
53,635
103
%
49,535
85
%
114,056
100
%
119,128
91
%
Revenue from wholesale cannabis products
252
0
%
2,259
4
%
664
1
%
3,959
3
%
Revenue from international cannabis products
9,489
18
%
13,706
23
%
21,358
19
%
23,972
19
%
Less excise taxes
(18,036
)
-35
%
(14,654
)
-25
%
(35,990
)
-32
%
(34,138
)
-26
%
Total
$
52,160
100
%
$
58,775
100
%
$
113,739
100
%
$
129,224
100
%
Other Financial Information: Key Operating Metrics
For the three months
For the six months
ended November 30,
ended November 30,
(in thousands of U.S. dollars)
2022
2021
2022
2021
Net cannabis revenue
$
49,898
$
58,775
$
108,468
$
129,224
Distribution revenue
60,188
68,869
120,773
136,055
Net beverage alcohol revenue
21,395
13,707
42,049
29,168
Wellness revenue
12,655
13,802
26,057
28,729
Cannabis costs
31,335
45,259
60,196
85,450
Beverage alcohol costs
11,420
5,921
22,269
12,583
Distribution costs
52,495
61,237
107,479
120,527
Wellness costs
8,762
9,970
18,665
20,895
Adjusted gross profit (excluding PPA step-up and inventory valuation adjustments) (1)
41,231
44,766
90,952
95,721
Cannabis adjusted gross margin (excluding inventory valuation adjustments) (1)
37
%
43
%
45
%
43
%
Beverage alcohol adjusted gross margin (excluding PPA step-up) (1)
52
%
57
%
52
%
57
%
Distribution gross margin
13
%
11
%
11
%
11
%
Wellness gross margin
31
%
28
%
28
%
27
%
Adjusted EBITDA (1)
11,708
13,760
25,239
26,457
Cash and cash equivalents and marketable securities
433,504
331,783
433,504
331,783
Working capital
388,200
393,350
388,200
393,350
Other Financial Information: Gross Margin and Adjusted Gross Margin
For the three months ended November 30, 2022
(In thousands of U.S. dollars)
Cannabis
Beverage
Distribution
Wellness
Total
Net revenue
$
49,898
$
21,395
$
60,188
$
12,655
$
144,136
Cost of goods sold
31,335
11,420
52,495
8,762
104,012
Gross profit
18,563
9,975
7,693
3,893
40,124
Gross margin
37
%
47
%
13
%
31
%
28
%
Adjustments:
Purchase price accounting step-up
–
1,107
–
–
1,107
Adjusted gross profit
18,563
11,082
7,693
3,893
41,231
Adjusted gross margin
37
%
52
%
13
%
31
%
29
%
For the three months ended November 30, 2021
(In thousands of U.S. dollars)
Cannabis
Beverage
Distribution
Wellness
Total
Net revenue
$
58,775
$
13,707
$
68,869
$
13,802
$
155,153
Cost of goods sold
45,259
5,921
61,237
9,970
122,387
Gross profit
13,516
7,786
7,632
3,832
32,766
Gross margin
23
%
57
%
11
%
28
%
21
%
Adjustments:
Inventory valuation adjustments
12,000
–
–
–
12,000
Purchase price accounting step-up
–
–
–
–
–
Adjusted gross profit
25,516
7,786
7,632
3,832
44,766
Adjusted gross margin
43
%
57
%
11
%
28
%
29
%
For the six months ended November 30, 2022
(In thousands of U.S. dollars)
Cannabis
Beverage
Distribution
Wellness
Total
Net revenue
$
108,468
$
42,049
$
120,773
$
26,057
$
297,347
Cost of goods sold
60,196
22,269
107,479
18,665
208,609
Gross profit
48,272
19,780
13,294
7,392
88,738
Gross margin
45
%
47
%
11
%
28
%
30
%
Adjustments:
Purchase price accounting step-up
–
2,214
–
–
2,214
Adjusted gross profit
48,272
21,994
13,294
7,392
90,952
Adjusted gross margin
45
%
52
%
11
%
28
%
31
%
For the six months ended November 30, 2021
(In thousands of U.S. dollars)
Cannabis
Beverage
Distribution
Wellness
Total
Net revenue
$
129,224
$
29,168
$
136,055
$
28,729
$
323,176
Cost of goods sold
85,450
12,583
120,527
20,895
239,455
Gross profit
43,774
16,585
15,528
7,834
83,721
Gross margin
34
%
57
%
11
%
27
%
26
%
Adjustments:
Inventory valuation adjustments
12,000
–
–
–
12,000
Adjusted gross profit
55,774
16,585
15,528
7,834
95,721
Adjusted gross margin
43
%
57
%
11
%
27
%
30
%
Other Financial Information: Adjusted Earnings Before Interest, Taxes and Amortization
For the three months
For the six months
ended November 30,
Change
% Change
ended November 30,
Change
% Change
(In thousands of U.S. dollars)
2022
2021
2022 vs. 2021
2022
2021
2022 vs. 2021
Net (loss) income
$
(61,635
)
$
5,797
$
(67,432
)
(1,163
)%
$
(127,429
)
$
(28,807
)
$
(98,622
)
342
%
Income taxes (benefit) expense
(11,713
)
(5,671
)
(6,042
)
107
%
(4,502
)
(909
)
(3,593
)
395
%
Interest expense, net
3,107
9,940
(6,833
)
(69
)%
7,520
20,110
(12,590
)
(63
)%
Non-operating income (expense), net
18,450
(65,595
)
84,045
(128
)%
51,442
(115,292
)
166,734
(145
)%
Amortization
33,318
37,471
(4,153
)
(11
)%
67,387
76,804
(9,417
)
(12
)%
Stock-based compensation
10,943
8,253
2,690
33
%
20,136
17,670
2,466
14
%
Change in fair value of contingent consideration
–
845
(845
)
(100
)%
211
1,682
(1,471
)
(87
)%
Purchase price accounting step-up
1,107
–
1,107
NM
2,214
–
2,214
NM
Facility start-up costs
3,000
1,700
1,300
76
%
4,800
2,900
1,900
66
%
Facility closure and exit costs
6,552
–
6,552
NM
6,552
5,000
1,552
31
%
Lease expense
700
900
(200
)
(22
)%
1,400
1,600
(200
)
(13
)%
Litigation costs
2,815
1,080
1,735
161
%
3,260
2,274
986
43
%
Inventory write down
–
12,000
(12,000
)
(100
)%
–
12,000
(12,000
)
(100
)%
Transaction (income) costs
5,064
7,040
(1,976
)
(28
)%
(7,752
)
31,425
(39,177
)
(125
)%
Adjusted EBITDA
$
11,708
$
13,760
$
(2,052
)
(15
)%
$
25,239
$
26,457
$
(1,218
)
(5
)%
Other Financial Information: Adjusted Net Loss
For the three months
For the six months
ended November 30,
Change
% Change
ended November 30,
Change
% Change
(In thousands of U.S. dollars)
2022
2021
2022 vs. 2021
2022
2021
2022 vs. 2021
Net (loss) income
$
(61,635
)
$
5,797
$
(67,432
)
(1,163
)%
$
(127,429
)
$
(28,807
)
$
(98,622
)
342
%
Non-operating income (expense), net
18,450
(65,595
)
84,045
(128
)%
51,442
(115,292
)
166,734
(145
)%
Change in fair value of contingent consideration
–
845
(845
)
(100
)%
211
1,682
(1,471
)
(87
)%
Inventory write down
–
12,000
(12,000
)
(100
)%
–
12,000
(12,000
)
(100
)%
Litigation costs
2,815
1,080
1,735
161
%
3,260
2,274
986
43
%
Transaction (income) costs
5,064
7,040
(1,976
)
(28
)%
(7,752
)
31,425
(39,177
)
(125
)%
Adjusted net loss
$
(35,306
)
$
(38,833
)
$
3,527
(9
)%
$
(80,268
)
$
(96,718
)
$
16,450
(17
)%
Adjusted net loss per share – basic and diluted
$
(0.06
)
$
(0.08
)
$
0.03
(32
)%
$
(0.14
)
$
(0.21
)
$
0.08
(36
)%
Other Financial Information: Free Cash Flow
For the three months
For the six months
ended November 30,
Change
% Change
ended November 30,
Change
% Change
(In thousands of U.S. dollars)
2022
2021
2022 vs. 2021
2022
2021
2022 vs. 2021
Net cash provided by (used in) operating activities
$
29,209
$
(17,121
)
$
46,330
(0,271
)%
$
(17,060
)
$
(110,348
)
$
93,288
-85
%
Less: investments in capital and intangible assets, net
(3,840
)
(6,972
)
3,132
(45
)%
(5,377
)
(15,592
)
10,215
(66
)%
Free cash flow
$
25,369
$
(24,093
)
$
49,462
(205
)%
$
(22,437
)
$
(125,940
)
$
103,503
(82
)%
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
