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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tilray Brands Inc | NASDAQ:TLRY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.02 | -0.98% | 2.03 | 2.03 | 2.04 | 199,213 | 12:16:21 |
Total Revenue of $51.4 Million was Flat Versus Q3 2019 and Up 2.0% Compared to Q2 2020 - Excluding Bulk Sales in the Prior Year Period, Total Revenue Increased 25%
Total Annualized Savings of Approximately $55 Million to be Achieved by Q4 2020
Net Loss of $(2.3) Million Versus Net Loss of $(36.4) Million in Q3 2019 and $(81.7) Million in Q2 2020
Adjusted EBITDA Loss Narrowed to $(1.5) Million Compared to $(12.3) Million in Q2 2020
Q3 2020 Ending Cash Balance of $155.2 Million with $209 Million Remaining Available on ATM
Tilray, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY), a global pioneer in cannabis research, cultivation, production and distribution, reports financial results for the third quarter ended September 30, 2020. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
“Our third quarter results demonstrate the significant progress we have made throughout the organization despite the unprecedented challenges presented by the COVID-19 pandemic. We realized solid year over year revenue growth in our core businesses and have achieved a significantly more focused, efficient and competitive cost structure, all of which position Tilray for future success. We look forward to building on these accomplishments and remain focused on our goal of achieving break-even or positive Adjusted EBITDA in the fourth quarter,” said Brendan Kennedy, Tilray’s Chief Executive Officer.
Third Quarter 2020 Financial Highlights
Three months ended September 30,
Nine months ended September 30,
2020
2019
$ Change
% Change
2020
2019
$ Change
% Change
Cannabis
Adult-use
$
19,926
$
15,835
$
4,091
26
%
$
58,466
$
38,758
$
19,708
51
%
Canada - medical
3,399
3,898
(499
)
(13
)%
11,285
9,222
2,063
22
%
International - medical
8,101
5,708
2,393
42
%
22,220
9,370
12,850
137
%
Bulk
—
10,010
(10,010
)
(100
)%
402
21,526
(21,124
)
(98
)%
Total Cannabis revenue
$
31,426
$
35,451
$
(4,025
)
(11
)%
$
92,373
$
78,876
13,497
17
%
Hemp
19,980
15,650
4,330
28
%
61,549
41,167
20,382
50
%
Total
$
51,406
$
51,101
$
305
1
%
$
153,922
$
120,043
$
33,879
28
%
Excise duties included in revenue
$
4,213
$
2,931
$
1,282
44
%
$
13,325
$
8,707
$
4,618
53
%
Recent Business Developments
Outlook
Given the broad based improvements we have achieved through the third quarter of 2020, we believe we are poised to deliver positive or break even Adjusted EBITDA in the fourth quarter of 2020. Looking to 2021 we are optimistic about the prospects for our core businesses including:
Our diversified product offerings and geographical footprint set Tilray apart. These strategic advantages provide us a foundation from which we see ample and continued opportunity to strengthen our position as the most trusted cannabis and hemp company during 2021.
COVID-19 As COVID-19 continues to spread around the world, and governments and businesses take unprecedented measures in response, the actions taken, or that may be taken, have or may materially adversely affect our business, results of operations, financial condition and stock price. Due to COVID-19, governments have imposed restrictions on travel and business operations, temporarily closed businesses, and implemented quarantines and shelter-in-place orders. Consequently, the COVID-19 pandemic has negatively impacted global economic activity, caused significant volatility and disruption in global financial markets, and generally introduced significant uncertainty and unpredictability throughout the world.
Our business has been negatively impacted during 2020, due to the restrictions on, or temporary closure of, retail outlets, and the challenges faced by patients accessing clinics and doctors for prescriptions for our products and due to the vast majority of our employees working remotely. We continue to operate our manufacturing facilities at normal production levels while our administrative offices remain closed. We have taken all recommended actions to protect public health and the health and safety of employees and continue to work on safely re-opening our offices, subject to local rules and regulations.
We are unable to predict the future impacts of COVID-19 on our operational and financial performance. The nature and extent of any impacts are very uncertain and depend on many factors outside our control, including, the timing, extent, and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for our products.
Conference Call Tilray will host a conference call to discuss these results today at 5:00 p.m. ET. Investors interested in participating in the live call can dial 877-407-0792 from the U.S. and 201-689-8263 internationally.
There will also be a simultaneous, 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® Tilray (Nasdaq: TLRY) is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of thousands of patients and consumers in 15 countries spanning five continents.
Forward Looking Statements This press release contains “forward-looking statements”, which may be identified by the use of words such as, “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe, “intend”, “plan”, “forecast”, “project”, “estimate”, “outlook” and other similar expressions, including statements regarding our growth potential, the sustainability of growth, the optimization of our facilities and estimated net savings, our ability to become Adjusted EBITDA positive by the end of 2020, demand for our products and the medical and Adult-Use cannabis markets, anticipated plans for strategic partnerships and acquisitions, and future sales of our common stock. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, including assumptions in respect of current and future market conditions. Actual results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking statements in this press release, and, accordingly, you should not place undue reliance on any such forward-looking statements and they are not guarantees of future results. Forward-looking statements involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements. Please see the heading “Risk Factors” in Tilray’s Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission on November 9, 2020, for a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information. Tilray does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.
Use of Non-U.S. GAAP Financial Measures To supplement its financial statements, the Company provides investors with information related to Adjusted EBITDA and Adjusted Gross Margin, both of which exclude inventory valuation adjustments, which are financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).
Adjusted EBITDA is calculated as net income (loss) before inventory valuation adjustments; interest expenses, net; other expenses (income), net; deferred income tax (recoveries) expenses, current income tax expenses (benefit); foreign exchange gain (loss), net; depreciation and amortization expenses; stock-based compensation expenses; loss from equity method investments; finance income from ABG; loss on disposal of property and equipment; amortization of inventory step-up; severance costs; impairment of assets; and change in fair value of warrant liability. 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. Gross margin, excluding inventory valuation adjustments, 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 Gross margin, excluding inventory valuation adjustments, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release.
The Company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. Management uses these non-GAAP financial measures to compare the Company's performance to that of prior periods for trend analyses and planning purposes. These non-GAAP financial measures are also presented to the Company’s Board of Directors.
Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. Non-U.S. GAAP measures exclude significant expenses that are required by U.S. GAAP to be recorded in the Company's financial statements and are subject to inherent limitations.
TILRAY, INC.
Condensed Consolidated Statements of Net Loss and Comprehensive Loss
(in thousands of United States dollars, except for share and per share data, unaudited)
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Revenue
$
51,406
$
51,101
$
153,922
$
120,043
Cost of sales Product costs
34,224
35,047
108,616
85,806
Inventory valuation adjustments
13,443
201
36,116
726
Gross profit
3,739
15,853
9,190
33,511
General and administrative expenses
12,665
20,122
49,030
49,618
Sales and marketing expenses
10,000
16,974
40,709
39,161
Research and development expenses
921
2,315
2,831
4,891
Stock-based compensation expenses
8,080
8,644
23,404
22,303
Depreciation and amortization expenses
3,425
3,200
10,353
7,457
Impairment of assets
—
—
58,210
—
Acquisition-related expenses (income), net
—
(13,454
)
—
(6,566
)
Loss from equity method investments
1,420
1,837
4,495
1,837
Operating loss
(32,772
)
(23,785
)
(179,842
)
(85,190
)
Foreign exchange (gain) loss, net
(9,319
)
2,585
5,424
1,153
Change in fair value of warrant liability
(31,913
)
—
51,275
—
Interest expenses, net
10,437
8,680
30,147
26,005
Finance income from ABG
—
(210
)
—
(557
)
Other expense (income), net
(38
)
(1,116
)
4,944
(6,185
)
Loss before income taxes
(1,939
)
(33,724
)
(271,632
)
(105,606
)
Deferred income tax expenses (recoveries)
134
2,432
(4,013
)
(3,987
)
Current income tax expenses (benefit)
243
195
505
402
Net loss
$
(2,316
)
$
(36,351
)
$
(268,124
)
$
(102,021
)
Net loss per share - basic and diluted
(0.02
)
(0.37
)
(2.23
)
(1.05
)
Weighted average shares used in computation of net loss per share - basic and diluted
129,100,909
98,130,507
120,128,856
96,742,626
Net loss
$
(2,316
)
$
(36,351
)
$
(268,124
)
$
(102,021
)
Foreign currency translation gain (loss), net
2,265
(4,863
)
(7,184
)
(2,414
)
Unrealized gain on available-for-sale debt securities
193
11
154
80
Other comprehensive income (loss)
2,458
(4,852
)
(7,030
)
(2,334
)
Comprehensive income (loss)$
142
$
(41,203
)
$
(275,154
)
$
(104,355
)
TILRAY, INC.
Condensed Consolidated Balance Sheets
(in thousands of United States dollars, except for share and par value data, unaudited)
September 30, 2020 December 31, 2019 Assets Current assets Cash and cash equivalents$
155,205
$
96,791
Accounts receivable, net of allowance for credit losses of $826 and provision for sales returns of $1,212 (December 31, 2019 - $615 and $1,400, respectively)
24,805
36,202
Inventory
89,917
87,861
Prepayments and other current assets
28,154
38,173
Assets held for sale
6,797
—
Total current assets
304,878
259,027
Property and equipment, net
187,630
184,217
Operating lease, right-of-use assets
18,460
17,514
Intangible assets, net
180,853
228,828
Goodwill
159,595
163,251
Equity method investments
8,911
11,448
Other investments
22,710
24,184
Other assets
4,324
7,861
Total assets
$
887,361
$
896,330
Liabilities Current liabilities Accounts payable
26,137
39,125
Accrued expenses and other current liabilities
32,526
50,829
Accrued lease obligations
3,230
2,473
Warrant liability
71,636
—
Total current liabilities
133,529
92,427
Accrued lease obligations
30,075
29,407
Deferred tax liability
48,090
53,363
Convertible notes, net of issuance costs
438,154
430,210
Senior Facility, net of transaction costs
45,944
—
Other liabilities
4,852
5,652
Total liabilities
$
700,644
$
611,059
Commitments and contingencies (refer to Note 18) Stockholders’ equity Class 1 common stock ($0.0001 par value, 233,333,333 and 250,000,000 shares authorized, respectively; 0 and 16,666,667 shares issued and outstanding, respectively)
—
2
Class 2 common stock ($0.0001 par value; 500,000,000 shares authorized; 133,289,944 and 86,114,560 shares issued and outstanding, respectively)
13
9
Additional paid-in capital
911,171
705,671
Accumulated other comprehensive income
2,689
9,719
Accumulated deficit
(727,156
)
(430,130
)
Total stockholders’ equity
186,717
285,271
Total liabilities and stockholders’ equity
$
887,361
$
896,330
(in thousands of United States dollars)
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Adjusted EBITDA reconciliation: Net loss
$
(2,316
)
$
(36,351
)
$
(268,124
)
$
(102,021
)
Inventory valuation adjustments
13,443
201
36,116
726
Severance costs
239
—
3,576
—
Depreciation and amortization expenses (1)
5,346
4,686
14,232
10,460
Stock-based compensation expenses
8,080
8,644
23,404
22,303
Impairment of assets
—
—
58,210
—
Loss from equity method investments
1,420
1,837
4,495
1,837
Foreign exchange (gain) loss, net
(9,319
)
2,585
5,424
1,153
Change in fair value of warrant liability
(31,913
)
—
51,275
—
Interest expenses, net
10,437
8,680
30,147
26,005
Finance income from ABG
—
(210
)
—
(557
)
(Gain) Loss from disposal of property and equipment
457
—
893
112
Other expense (income), net
2,202
(14,570
)
11,329
(12,751
)
Amortization of inventory step-up
—
—
—
2,041
Deferred income tax expenses (recoveries)
134
2,432
(4,013
)
(3,987
)
Current income tax expenses (benefit)
243
195
505
402
Adjusted EBITDA
$
(1,547
)
$
(21,871
)
$
(32,531
)
$
(54,277
)
(in thousands of United States dollars)
For the three months ended September 30,
2020
2019
2020
2019
2020
2019
Gross margin, excluding inventory valuation adjustments reconciliation: Cannabis Hemp Total Revenue
$
31,426
$
35,451
$
19,980
$
15,650
$
51,406
$
51,101
Cost of sales Product costs
22,825
26,102
11,399
8,945
34,224
35,047
Inventory valuation adjustments
13,318
124
125
77
13,443
201
Gross profit
(4,717
)
9,225
8,456
6,628
3,739
15,853
Inventory valuation adjustments
13,318
124
125
77
13,443
201
Gross profit, excluding inventory valuation adjustments
$
8,601
$
9,349
$
8,581
$
6,705
$
17,182
$
16,054
Gross margin, excluding inventory valuation adjustments
27
%
26
%
43
%
43
%
33
%
31
%
For the nine months ended September 30,
2020
2019
2020
2019
2020
2019
Gross margin, excluding inventory valuation adjustments reconciliation: Cannabis Hemp Total Revenue
$
92,373
$
78,876
$
61,549
$
41,167
$
153,922
$
120,043
Cost of sales Product costs
74,610
62,053
34,006
23,753
108,616
85,806
Inventory valuation adjustments
31,626
610
4,490
116
36,116
726
Gross profit
(13,863
)
16,213
23,053
17,298
9,190
33,511
Inventory valuation adjustments
31,626
610
4,490
116
36,116
726
Amortization of inventory step-up
—
—
—
2,041
—
2,041
Gross profit, excluding inventory valuation adjustments
$
17,763
$
16,823
$
27,543
$
19,455
$
45,306
$
36,278
Gross margin, excluding inventory valuation adjustments
19
%
21
%
45
%
47
%
29
%
30
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006102/en/
Media: Tilray Media Team, +1-833-206-8161, news@tilray.com Investors: Raphael Gross, +1-203-682-8253, Raphael.Gross@icrinc.com
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