Tilray Brands Reports Q3 Fiscal 2025 Financial Results
Tilray Confirms No Current Impact of Tariffs
Generated Net Revenue of $186 Million in the Third Quarter, $193 Million in Constant Currency; Strategic Initiatives and SKU Rationalization Impacted Revenue by $13 Million
Tilray Beverage Expands U.S. Distribution of Hemp-Derived THC Drinks Across 10 States, Increases Project 420 Cost Savings Plan to $33 Million
Tilray Cannabis Increased Gross Margins by 800 bps, Remains the Leader in Canada by Sales Performance, and Generates Strong Sales Growth in Germany
Strengthens Balance Sheet with Convertible Note Reduction of $58 Million and Total Debt Reduction of $71 Million, $248 Million Available in Cash and Marketable Securities
NEW YORK and LEAMINGTON, Ontario, April 08, 2025 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. ("Tilray", "our", "we" or the "Company") (Nasdaq: TLRY; TSX: TLRY), a global lifestyle and consumer packaged goods company at the forefront of beverage, cannabis and wellness industries, today reported financial results for its third quarter ended February 28, 2025. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
In response to the recently announced tariffs on international trade, Tilray conducted an analysis of the potential implications on its business. The analysis concluded that these tariffs should not impact sales. In the United States, Tilray's American beverage brands are solely manufactured and distributed within the U.S. market. In Canada, Tilray's cannabis brands are produced domestically for Canadian consumers. In Europe, Tilray manufactures medical cannabis brands and products for distribution across Europe and Australia. Regarding Tilray's wellness business, Manitoba Harvest is currently exempt from the new tariffs.
Irwin D. Simon, Chairman and Chief Executive Officer of Tilray Brands, stated, "Tilray Brands is shaping the future of consumer markets with a robust global infrastructure spanning the beverage, cannabis, and wellness industries. We are meeting the needs of today's consumers while preparing for the demands of tomorrow. In the third quarter, we prioritized sales quality and revenue, protected margins, reduced debt, and improved our capital structure. With a strong balance sheet and a clear vision for the future, Tilray is well positioned to capitalize on emerging opportunities and ensure long-term success."
Mr. Simon continued, "We see opportunities in the alcohol, cannabis, and wellness industries and believe these sectors are here to stay. Tilray is relentlessly focused on building strong brands and developing innovative products to seize growth opportunities across all our businesses. At Tilray, we are laser-focused on building a sustainable global business platform by emphasizing profitable sales growth, improving profit margins and cash flow generation, and maintaining a solid balance sheet to navigate market challenges and capitalize on strategic opportunities. In Q3, we delivered our highest cannabis gross margins in almost two years, and as of today our net debt is now less than 1x EBITDA on a trailing twelve-month basis. We will not seek sales growth merely for the sake of sales if it does not add to the bottom line and benefit our shareholders."
Strategic Growth Initiatives -- Third Quarter Fiscal Year 2025
Tilray Beverage Project 420: Tilray Beverage completed $20.6 million of an expanded Project 420 cost-savings plan of $33 million. Project 420 aims to reduce costs to improve efficiency and profitability by rationalizing SKUs, geographies and distribution and is expected to be completed in the third quarter of fiscal 2026.
Hemp-Derived THC Drinks in the U.S: Tilray Brands is strategically positioned to utilize the expertise of its hemp wellness and cannabis businesses to responsibly formulate beverages infused with 5mg and 10mg of hemp-derived THC. During the fiscal year to date, Tilray generated $1.4 million in revenue from hemp-derived THC beverage sales and expanded the distribution of these drinks across over 1,000 points of distribution in 10 states including Florida, Alabama, Georgia, North Carolina, South Carolina, Tennessee, Louisiana, and New Jersey, as well as through online direct-to-consumer channels. In addition to our existing mocktail and seltzer brands Happy Flower, Fizzy Jane, and Herb & Bloom, we are pleased to introduce 420 Fizz, a low-calorie, soda beverage infused with hemp-derived THC. Tilray also leverages its established national beverage distribution network, which spans independent retailers, convenience stores, and package stores, including multi-state retailers such as Total Wine and ABC who have expressed strong interest in this category and new growth opportunity.
Tilray Cannabis Profitability Initiatives: Tilray's Cannabis segment is focused on profitability and margin protection. In the third fiscal quarter, Tilray Canada redirected inventories to international cannabis markets to capitalize on higher margins expected in these markets in the upcoming fourth fiscal quarter. Tilray's global cannabis supply chain is in Phase II of its accelerated growth plan, and the cultivation footprint is expanding to meet increasing demand in both Canadian and international markets. The Cannabis segment is concentrating on preserving gross margins and maintaining higher average selling prices in categories such as vapes and infused pre-rolls, which have experienced significant price compression and are margin dilutive. Growth in these categories is expected to resume later in the upcoming fourth fiscal quarter due to capital expenditures improving our operational efficiencies.
Debt Reduction; $248 Million Cash and Marketable Securities: As of April 8, 2025, Tilray reduced our outstanding total debt by $71 million with convertible note reduction of $58 million, strengthening the balance sheet. As a result, net debt to trailing twelve months EBITDA is less than 1.0x. Our $248 million cash balance, including marketable securities, provides Tilray with great flexibility for strategic opportunities.
AI and Cryptocurrency Business Strategy: Tilray Brands is dedicated to leveraging advanced technologies to align with our shareholder interests, the consumer of tomorrow, enhancing efficiency and driving growth. We are implementing AI across our global operations to enhance our expertise, optimize processes, achieve substantial improvements, and advance our business objectives. In the cultivation sector, we are utilizing advanced horticulture automation technology throughout our global greenhouse operations. By integrating this technology with AI-driven data insights, we can manage greenhouse conditions in real-time, leading to more efficient operations, increased output, superior quality, and reduced costs for resources such as labor, water, and energy. Additionally, Tilray plans to accept cryptocurrency as a payment method within the Company's online operations. The Company is also exploring strategic initiatives related to cryptocurrency that align with our business goals.
Financial Highlights -- Third Quarter Fiscal Year 2025
-- Net revenue of $185.8 million in the third quarter compared to $188.3
million in the prior year quarter. On a constant currency basis, net
revenue in the current third quarter, increased to $193 million. The
prior year quarter included revenue of $6 million of now discontinued
SKUs. Strategic initiatives and SKU rationalization impacted revenue by
$13.2 million in the current year quarter.
-- Gross profit increased by 5% to $52.0 million in the third quarter
compared to $49.4 million in the prior year quarter. Gross margin
increased 200 bps to 28% in the third quarter compared to 26% in the
prior year quarter.
-- Net loss was $(793.5) million in the third quarter, due to $700 million
of non-cash impairment as a result of macroeconomic conditions and
declines in market capitalization, foreign exchange loss, amortization,
changes in fair value of convertible notes receivable, and stock-based
compensation as well as non-recurring transaction and restructuring
charges.
-- Adjusted net loss was $(2.9) million in the third quarter compared to an
adjusted net income of $0.9 million in the prior year quarter.
-- Adjusted EPS remained at $0.00 in both the third quarter and the
comparative period.
-- Adjusted EBITDA in the third quarter was $9.0 million compared to $10.2
million in the prior year quarter due to the beverage segment's SKU
rationalization impact of $1.0 million and $0.6 million related to the
prioritization of international cannabis markets.
-- Beverage alcohol net revenue increased to $55.9 million in the third
quarter up from $54.7 million in the prior year quarter, despite a $6.0
million impact from the strategic SKU rationalization.
-- Beverage alcohol gross margin increased to 36% in the third
quarter compared to 34% in the prior year quarter.
-- Cannabis net revenue was $54.3 million in the third quarter compared to
$63.4 million in the prior year quarter. On a constant currency basis,
Cannabis net revenue was $57.5 million. The strategic initiative to
redirect product from Canada to international markets resulted in a
timing impact on revenue of $3.2 million. Additionally, a strategic
decision to pause our presence in margin dilutive categories, such as
vapes and infused pre-rolls, led to a revenue decrease of $4.0 million
but prevented a potential loss exceeding $3 million.
-- Cannabis gross margin increased to 41% in the third quarter
compared to 33% in the prior year quarter resulting from our
strategic prioritization of the international business and the
reduction in our exposure to margin dilutive categories.
-- Distribution net revenue increased 8% to $61.5 million in the third
quarter compared to $56.8 million in the prior year quarter. On a
constant currency basis, Distribution net revenue was up 15% to $65.1
million.
-- Distribution gross margin was 9% in the third quarter compared to
10% in the prior year quarter.
-- Wellness net revenue increased 5% to $14.1 million and 8% on a constant
currency basis to $14.5 million in the third quarter compared to $13.4
million in the prior year quarter.
-- Wellness gross margin increased to 32% in the third quarter
compared to 30% in the prior year quarter.
Company's Fiscal Year 2025 Guidance
The Company revises fiscal year 2025 guidance for net revenue to $850 million to $900 million. Adjustments for constant currency and the impacts of the strategic initiatives and SKU rationalization, which total approximately $50 million, would have resulted in expected net revenue of $900 million to $950 million.
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. A replay will be available and archived on the Company's website.
About Tilray Brands
Tilray Brands, Inc. ("Tilray") (Nasdaq: TLRY; TSX: TLRY), is a leading global lifestyle and consumer packaged goods company at the forefront of beverage, cannabis and wellness industries with operations in Canada, the United States, Europe, Australia, and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection. Tilray's mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy, wellness and create memorable experiences. Tilray's unprecedented platform supports over 40 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.
For more information on how we are elevating lives through moments of connection, visit Tilray.com and follow @Tilray on all social platforms.
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 transform the CPG industry for cannabis, hemp, beverages and entertainment; the Company's ability to become a leading beverage alcohol Company; 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 achieve its revised FY 2025 guidance; the Company's ability to successfully achieve revenue growth, margin and profitability improvements, production and supply chain efficiencies, synergies and cost savings; the Company's expected revenue growth, sales volume, profitability, synergies and accretion related to any of its acquisitions; expected commercial opportunities and regulatory developments in the U.S., including upon U.S. federal cannabis legalization or rescheduling; the Company's anticipated investments and acquisitions, including in organic and strategic growth, partnership efforts, product offerings and other initiatives; the Company's ability to commercialize new and innovative products; market opportunities and regulatory risks for Hemp-Derived Delta-9 (HDD9) beverage products, and expected sales, distribution, margin, price and revenue generation projections; consumer sentiment regarding HDD9 beverage products; Tilray's strategy and anticipated offerings within the HDD9 beverage product segment, expected impacts of U.S. tariffs, and the Company's ability to leverage AI and cryptocurrency to enhance efficiency and drive growth.
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. Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include, but are not limited to, those identified and described in our most recent Annual Report on Form 10-K as well as our other filings made from time to time with the SEC and in our Canadian securities filings. 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 (consolidated and for each of our reporting segments), Adjusted gross profit (consolidated and for each of our reporting segments), Adjusted EBITDA, Adjusted net income (loss), Adjusted net income (loss) per share, free cash flow, adjusted free cash flow, constant currency presentations of revenue, cash and marketable securities and net debt. 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. A reconciliation of prior year revenue to constant currency revenue the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.
Adjusted EBITDA is calculated as net income (loss) before income tax benefits, net; interest expense, net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; purchase price accounting step-up; impairments, other than temporary change in fair value of convertible notes receivable, project 420 optimization costs facility start-up and closure costs; litigation costs; restructuring costs, and transaction (income) costs, net. 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 net income (loss) is calculated as net loss attributable to stockholders of Tilray Brands, Inc., less; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; impairments, other than temporary change in fair value of convertible notes receivable, project 420 optimization costs facility start-up and closure costs; litigation costs; restructuring costs and transaction (income) costs, net. A reconciliation of Adjusted net income (loss) to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release.
Adjusted net income (loss) per share is calculated as net loss attributable to stockholders of Tilray Brands, Inc., net; non-operating income (expense), net; amortization; stock-based compensation; change in fair value of contingent consideration; impairments, other than temporary change in fair value of convertible notes receivable, project 420 optimization costs facility start-up and closure costs; litigation costs; restructuring costs and transaction (income) costs, divided by weighted average number of common shares outstanding. A reconciliation of Adjusted net income (loss) per share to net loss attributable to stockholders of Tilray Brands, Inc., the most directly comparable GAAP measure, has been included below in this press release. Adjusted net income (loss) per share is not calculated in accordance with GAAP and should not be considered an alternative for GAAP net income (loss) per share or as a measure of liquidity.
Adjusted gross profit (consolidated and for each of our reporting segments), is calculated as gross profit adjusted to exclude the impact of purchase price accounting valuation step-up. A reconciliation of Adjusted gross profit, excluding purchase price accounting valuation step-up, to gross profit, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release. Adjusted gross margin (consolidated and for each of our reporting segments), excluding purchase price accounting valuation step-up, is calculated as revenue less cost of sales adjusted to add back amortization of inventory step-up, divided by revenue. A reconciliation of Adjusted gross margin, excluding purchase price accounting valuation step-up, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.
Free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net. 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 above in this press release. Adjusted free cash flow is comprised of two GAAP measures which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets, net, and the exclusion of growth CAPEX from investments in capital and intangible assets, net, which excludes the amount of capital expenditures that are considered to be associated with growth of future operations rather than to maintain the existing operations of the Company, and excludes our integration costs related to HEXO and the cash income taxes related to Aphria Diamond to align with management's prescribed guidance. A reconciliation of net cash flow provided by (used in) operating activities to adjusted free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included above in this press release.
Cash and marketable securities are comprised of two GAAP measures, cash and cash equivalents added to marketable securities. The Company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its short-term liquidity position by combing these two GAAP metrics.
Net debt is comprised of GAAP measures and reduces bank indebtedness, current and non-current portions of long-term debt, the principal balance of convertible debt by cash and cash equivalents and marketable securities. The company believes this metric provides useful information to management, analysts, and investors regarding its liquidity and the Company's ability to repay all of its debt.
For further information:
Media Contact: news@tilray.com
Investor Contact: investors@tilray.com
Consolidated Statements of
Financial Position
February 28, May 31,
(in thousands of US dollars) 2025 2024
Assets
Current assets
Cash and cash equivalents $ 199,956 $ 228,340
Marketable securities 48,458 32,182
Accounts receivable, net 103,367 101,695
Inventory 263,398 252,087
Prepaids and other current
assets 40,138 31,332
Assets held for sale 30,972 32,074
Total current assets 686,289 677,710
Capital assets 537,800 558,247
Operating lease, right-of-use
assets 16,994 16,101
Intangible assets 847,215 915,469
Goodwill 1,299,781 2,008,884
Long-term investments 10,035 7,859
Convertible notes receivable -- 32,000
Other assets 5,032 5,395
Total assets $ 3,403,146 $ 4,221,665
========== ==========
Liabilities
Current liabilities
Bank indebtedness $ 10,740 $ 18,033
Accounts payable and accrued
liabilities 216,567 241,957
Contingent consideration 15,000 15,000
Warrant liability 357 3,253
Current portion of lease
liabilities 6,606 5,091
Current portion of long-term
debt 12,904 15,506
Current portion of convertible
debentures payable -- 330
Total current liabilities 262,174 299,170
Long - term liabilities
Lease liabilities 60,188 60,422
Long-term debt 149,401 158,352
Convertible debentures payable 104,071 129,583
Deferred tax liabilities, net 123,938 130,870
Other liabilities 1,271 90
Total liabilities 701,043 778,487
Stockholders' equity
Common stock ($0.0001 par value;
1,416,000,000 common shares
authorized; 983,372,617 and
831,925,373 common shares
issued and outstanding,
respectively) 99 83
Preferred shares ($0.0001 par
value; 10,000,000 preferred
shares authorized; nil and nil
preferred shares issued and
outstanding, respectively) -- --
Treasury Stock (9,619,421 and
nil treasury shares issued and
outstanding, respectively) -- --
Additional paid-in capital 6,357,039 6,146,810
Accumulated other comprehensive
loss (52,935) (43,499)
Accumulated deficit (3,574,431) (2,660,488)
Total Tilray Brands, Inc.
stockholders' equity 2,729,772 3,442,906
Non-controlling interests (27,669) 272
Total stockholders' equity 2,702,103 3,443,178
Total liabilities and stockholders'
equity $ 3,403,146 $ 4,221,665
========== ==========
Condensed Consolidated Statements of Net Income (Loss)
and Comprehensive Income (Loss)
For the three months ended For the nine months ended
February 28, February 29, Change % Change February 28, February 29, Change % Change
(in thousands of
U.S. dollars, except
for per share data) 2025 2024 2025 vs. 2024 2025 2024 2025 vs. 2024
----------- ----------- ------------------------- ----------- ----------- -------------------------
Net revenue $ 185,780 $ 188,340 $ (2,560) (1)% $ 596,774 $ 559,060 $ 37,714 7%
Cost of goods sold 133,769 138,944 (5,175) (4)% 423,837 418,059 5,778 1%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Gross profit 52,011 49,396 2,615 5% 172,937 141,001 31,936 23%
Operating expenses:
General and
administrative 39,246 39,940 (694) (2)% 129,356 123,769 5,587 5%
Selling 13,905 9,995 3,910 39% 41,757 24,437 17,320 71%
Amortization 23,182 21,558 1,624 8% 67,913 65,700 2,213 3%
Marketing and
promotion 6,793 11,191 (4,398) (39)% 28,079 28,934 (855) (3)%
Research and
development 85 106 (21) (20)% 250 241 9 4%
Change in fair
value of
contingent
consideration -- (5,983) 5,983 (100)% -- (16,790) 16,790 (100)%
Impairments 699,235 -- 699,235 NM 699,235 -- 699,235 NM
Other than
temporary change
in fair value of
convertible
notes
receivable 20,000 42,681 (22,681) (53)% 20,000 42,681 (22,681) (53)%
Litigation costs,
net of
recoveries 2,758 3,363 (605) (18)% 5,254 8,439 (3,185) (38)%
Restructuring
costs 6,133 5,178 955 18% 17,249 8,748 8,501 97%
Transaction costs
(income), net 605 3,465 (2,860) (83)% 2,563 13,061 (10,498) (80)%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Total operating
expenses 811,942 131,494 680,448 517% 1,011,656 299,220 712,436 238%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Operating loss (759,931) (82,098) (677,833) 826% (838,719) (158,219) (680,500) 430%
Interest expense,
net (8,378) (8,517) 139 (2)% (25,986) (26,977) 991 (4)%
Non-operating
income
(expense), net (24,022) (17,239) (6,783) 39% (44,631) (20,820) (23,811) 114%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Loss before income
taxes (792,331) (107,854) (684,477) 635% (909,336) (206,016) (703,320) 341%
Income tax
expense
(recovery), net 1,203 (2,871) 4,074 (142)% 4,125 1,013 3,112 307%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Net loss $ (793,534) $ (104,983) $ (688,551) 656% $ (913,461) $ (207,029) $ (706,432) 341%
=========== =========== =========== ====== =========== =========== =========== ======
Total net (loss)
income attributable
to:
Stockholders of
Tilray Brands,
Inc. (789,436) (92,701) (696,735) 752% (913,943) (213,234) (700,709) 329%
Non-controlling
interests (4,098) (12,282) 8,184 (67)% 482 6,205 (5,723) (92)%
Other comprehensive
gain (loss), net of
tax
Foreign currency
translation gain
(loss) (5,389) (4,696) (693) 15% (10,195) 3,716 (13,911) (374)%
Total other
comprehensive gain
(loss), net of tax (5,389) (4,696) (693) 15% (10,195) 3,716 (13,911) (374)%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Comprehensive loss $ (798,923) $ (109,679) $ (689,244) 628% $ (923,656) $ (203,313) $ (720,343) 354%
=========== =========== =========== ====== =========== =========== =========== ======
Total comprehensive
(loss) income
attributable to:
Stockholders of
Tilray Brands,
Inc. (794,414) (97,521) (696,893) 715% (923,379) (209,811) (713,568) 340%
Non-controlling
interests (4,509) (12,158) 7,649 (63)% (277) 6,498 (6,775) (104)%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Weighted average
number of common
shares - basic 908,342,792 754,439,331 153,903,461 20% 860,793,723 725,346,952 135,446,771 19%
Weighted average
number of common
shares - diluted 908,342,792 754,439,331 153,903,461 20% 860,793,723 725,346,952 135,446,771 19%
----------- ----------- ----------- ------ ----------- ----------- ----------- ------
Net loss per share -
basic $ (0.87) $ (0.12) $ (0.75) 607% $ (1.06) $ (0.29) $ (0.77) 261%
Net loss per share -
diluted $ (0.87) $ (0.12) $ (0.75) 607% $ (1.06) $ (0.29) $ (0.77) 261%
=========== =========== =========== ====== =========== =========== =========== ======
Condensed
Consolidated
Statements of Cash
Flows
For the nine months
ended
February February
28, 29, Change % Change
(in thousands of
US dollars) 2025 2024 2025 vs. 2024
-------- -------- ----------------------
Cash provided by
(used in)
operating
activities:
Net loss $(913,461) $(207,029) $(706,432) 341%
Adjustments for:
Deferred income
tax expense
(recovery),
net 2,686 (7,399) 10,085 (136)%
Unrealized
foreign
exchange loss
(gain) 30,725 (6,622) 37,347 $(564.SI)$%
Amortization 99,410 95,183 4,227 4%
Accretion of
convertible
debt discount 8,751 11,463 (2,712) (24)%
Impairments 699,235 -- 699,235 NM
Other than
temporary
change in fair
value of
convertible
notes
receivable 20,000 42,681 (22,681) (53)%
Other non-cash
items 1,503 13,297 (11,794) (89)%
Stock-based
compensation 18,189 24,517 (6,328) (26)%
Loss (gain) on
long-term
investments &
equity
investments 5,540 4,255 1,285 30%
(Gain) loss on
derivative
instruments (2,896) 13,717 (16,613) (121)%
Change in fair
value of
contingent
consideration -- (16,790) 16,790 (100)%
Change in non-cash
working capital:
Accounts
receivable 321 5,578 (5,257) (94)%
Prepaids and
other current
assets (8,258) 1,148 (9,406) (819)%
Inventory (5,577) (4,629) (948) 20%
Accounts
payable and
accrued
liabilities (37,960) (30,982) (6,978) 23%
Net cash used in
operating
activities (81,792) (61,612) (20,180) 33%
-------- -------- -------- ------
Cash provided by
(used in)
investing
activities:
Investment in
capital and
intangible
assets (26,586) (19,539) (7,047) 36%
Proceeds from
disposal of
capital and
intangible
assets 833 1,166 (333) (29)%
(Purchase)
disposal of
marketable
securities,
net (16,276) 162,292 (178,568) (110)%
Business
acquisitions,
net of cash
acquired (18,210) (60,626) 42,416 (70)%
Net cash (used in)
provided by
investing
activities (60,239) 83,293 (143,532) (172)%
-------- -------- -------- ------
Cash provided by
(used in)
financing
activities:
Share capital
issued, net of
cash issuance
costs 139,738 -- 139,738 NM
Proceeds from
long-term
debt 3,450 32,621 (29,171) (89)%
Repayment of
long-term
debt (16,115) (17,978) 1,863 (10)%
Proceeds from
convertible
debt -- 21,553 (21,553) (100)%
Repayment of
convertible
debt (330) (107,330) 107,000 (100)%
Repayment of
lease
liabilities (2,586) (2,771) 185 (7)%
Net decrease in
bank
indebtedness (7,293) (8,352) 1,059 (13)%
Net cash provided
by (used in)
financing
activities 116,864 (82,257) 199,121 (242)%
-------- -------- -------- ------
Effect of foreign
exchange on cash
and cash
equivalents (3,217) 197 (3,414) (1733)%
-------- -------- -------- ------
Net decrease in
cash and cash
equivalents (28,384) (60,379) 31,995 (53)%
Cash and cash
equivalents,
beginning of
period 228,340 206,632 21,708 11%
Cash and cash
equivalents, end
of period $ 199,956 $ 146,253 $ 53,703 37%
======== ======== ======== ======
Net Revenue by Operating Segment
For the three months ended For the three months ended For the nine months ended For the nine months ended
(In thousands
of U.S. February 28, % of Total February 29, % of Total February 28, % of Total February 29, % of Total
dollars) 2025 Revenue 2024 Revenue 2025 Revenue 2024 Revenue
------------- ----------- ------------- ----------- ------------- ----------- ------------- -----------
Beverage
business $ 55,921 30% $ 54,688 29% $174,974 29% $125,355 22%
Cannabis
business 54,274 29% 63,432 34% 181,175 31% 200,879 36%
Distribution
business 61,493 33% 56,794 30% 197,175 33% 193,174 35%
Wellness
business 14,092 8% 13,426 7% 43,450 7% 39,652 7%
Total net
revenue $185,780 100% $188,340 100% $596,774 100% $559,060 100%
======= === === ===== ======= === === ===== ======= === === ===== ======= === === =====
Net Revenue by Operating
Segment in Constant Currency
For the three months ended For the three months ended For the nine months ended For the nine months ended
February 28, February 29, February 28, February 29,
2025 2024 2025 2024
(In thousands as reported as reported as reported as reported
of U.S. in constant % of Total in constant % of Total in constant % of Total in constant % of Total
dollars) currency Revenue currency Revenue currency Revenue currency Revenue
------------- ----------- ------------- ----------- ------------- ----------- ------------- -----------
Beverage
business $ 55,921 29% $ 54,688 29% $174,974 29% $125,355 22%
Cannabis
business 57,475 30% 63,432 34% 186,120 31% 200,879 36%
Distribution
business 65,054 33% 56,794 30% 204,861 33% 193,174 35%
Wellness
business 14,499 8% 13,426 7% 44,068 7% 39,652 7%
Total net
revenue $192,949 100% $188,340 100% $610,023 100% $559,060 100%
======= === === ===== ======= === === ===== ======= === === ===== ======= === === =====
Net Cannabis
Revenue by
Market
Channel
For the three months ended For the three months ended For the nine months ended For the nine months ended
(In thousands
of U.S. February 28, % of Total February 29, % of Total February 28, % of Total February 29, % of Total
dollars) 2025 Revenue 2024 Revenue 2025 Revenue 2024 Revenue
------------- ----------- ------------- ----------- ------------- ----------- ------------- -----------
Revenue from
Canadian
medical
cannabis $ 5,839 11% $ 6,363 10% $ 18,773 10% $ 18,793 9%
Revenue from
Canadian
adult-use
cannabis 49,315 91% 62,107 98% 165,627 91% 205,350 102%
Revenue from
wholesale
cannabis 3,893 7% 2,764 4% 15,993 9% 12,348 6%
Revenue from
international
cannabis 13,935 26% 14,002 22% 40,991 23% 40,185 20%
Less excise
taxes (18,708) (35)% (21,804) (34)% (60,209) (33)% (75,797) (37)%
Total $ 54,274 100% $ 63,432 100% $181,175 100% $200,879 100%
======= === === ===== ======= === === ===== ======= === === ===== ======= === === =====
Net Cannabis Revenue by Market
Channel in Constant Currency
For the three months ended For the three months ended For the nine months ended For the nine months ended
February 28, February 29, February 28, February 29,
2025 2024 2025 2024
(In thousands as reported as reported as reported as reported
of U.S. in constant % of Total in constant % of Total in constant % of Total in constant % of Total
dollars) currency Revenue currency Revenue currency Revenue currency Revenue
------------- ----------- ------------- ----------- ------------- ----------- ------------- -----------
Revenue from
Canadian
medical
cannabis $ 6,259 11% $ 6,363 10% $ 19,398 10% $ 18,793 9%
Revenue from
Canadian
adult-use
cannabis 52,815 92% 62,107 98% 170,967 92% 205,350 102%
Revenue from
wholesale
cannabis 4,170 7% 2,764 4% 16,525 9% 12,348 6%
Revenue from
international
cannabis 14,264 25% 14,002 22% 41,411 22% 40,185 20%
Less excise
taxes (20,033) (35)% (21,804) (34)% (62,181) (33)% (75,797) (37)%
Total $ 57,475 100% $ 63,432 100% $186,120 100% $200,879 100%
======= === === ===== ======= === === ===== ======= === === ===== ======= === === =====
Other Financial
Information:
Key Operating
Metrics
For the three months ended For the nine months ended
February 28, February 29, February 28, February 29,
(in thousands
of U.S.
dollars) 2025 2024 2025 2024
Net beverage
revenue $ 55,921 $ 54,688 $174,974 $125,355
Net cannabis
revenue 54,274 63,432 181,175 200,879
Distribution
revenue 61,493 56,794 197,175 193,174
Wellness revenue 14,092 13,426 43,450 39,652
Beverage costs 35,986 35,836 106,961 77,615
Cannabis costs 32,275 42,518 111,804 139,507
Distribution
costs 55,936 51,231 175,281 172,846
Wellness costs 9,572 9,359 29,791 28,091
Adjusted gross
profit
(excluding PPA
step-up) 52,070 51,643 174,547 153,055
Beverage
adjusted gross
margin
(excluding PPA
step-up) 36% 38% 40% 42%
Cannabis
adjusted gross
margin
(excluding PPA
step-up) 41% 33% 38% 34%
Distribution
gross margin 9% 10% 11% 11%
Wellness gross
margin 32% 30% 31% 29%
Adjusted EBITDA $ 9,040 $ 10,154 $ 27,391 $ 30,974
Cash and
marketable
securities as
at the period
ended: 248,414 225,858 248,414 225,858
Working capital
as at the
period ended: $424,115 $302,111 $424,115 $302,111
Other Financial Information: Gross Margin
and Adjusted Gross Margin
For the three months ended February 28, 2025
(In thousands
of U.S.
dollars) Beverage Cannabis Distribution Wellness Total
------------ ------------ ---------------- ----------- ------------
Net revenue $ 55,921 $ 54,274 $ 61,493 $14,092 $185,780
Cost of goods
sold 35,986 32,275 55,936 9,572 133,769
------- ------- -------- ------ -------
Gross profit 19,935 21,999 5,557 4,520 52,011
------- ------- -------- ------ -------
Gross margin 36% 41% 9% 32% 28%
------- ------- -------- ------ -------
Adjustments:
Purchase
price
accounting
step-up 59 -- -- -- 59
------- ------- -------- ------ -------
Adjusted gross
profit 19,994 21,999 5,557 4,520 52,070
Adjusted gross
margin 36% 41% 9% 32% 28%
======= ======= ======== ====== =======
For the three months ended February 29, 2024
(In thousands
of U.S.
dollars) Beverage Cannabis Distribution Wellness Total
------------ ------------ ---------------- ----------- ------------
Net revenue $ 54,688 $ 63,432 $ 56,794 $13,426 $188,340
Cost of goods
sold 35,836 42,518 51,231 9,359 138,944
------- ------- -------- ------ -------
Gross profit 18,852 20,914 5,563 4,067 49,396
------- ------- -------- ------ -------
Gross margin 34% 33% 10% 30% 26%
------- ------- -------- ------ -------
Adjustments:
Purchase
price
accounting
step-up 2,073 174 -- -- 2,247
------- ------- -------- ------ -------
Adjusted gross
profit 20,925 21,088 5,563 4,067 51,643
Adjusted gross
margin 38% 33% 10% 30% 27%
======= ======= ======== ====== =======
For the nine months ended February 28, 2025
(In thousands
of U.S.
dollars) Beverage Cannabis Distribution Wellness Total
------------ ------------ ---------------- ----------- ------------
Net revenue $174,974 $181,175 $ 197,175 $43,450 $596,774
Cost of goods
sold 106,961 111,804 175,281 29,791 423,837
------- ------- -------- ------ -------
Gross profit 68,013 69,371 21,894 13,659 172,937
------- ------- -------- ------ -------
Gross margin 39% 38% 11% 31% 29%
------- ------- -------- ------ -------
Adjustments:
Purchase
price
accounting
step-up 1,610 -- -- -- 1,610
------- ------- -------- ------ -------
Adjusted gross
profit 69,623 69,371 21,894 13,659 174,547
Adjusted gross
margin 40% 38% 11% 31% 29%
======= ======= ======== ====== =======
For the nine months ended February 29, 2024
(In thousands
of U.S.
dollars) Beverage Cannabis Distribution Wellness Total
------------ ------------ ---------------- ----------- ------------
Net revenue $125,355 $200,879 $ 193,174 $39,652 $559,060
Cost of goods
sold 77,615 139,507 172,846 28,091 418,059
------- ------- -------- ------ -------
Gross profit 47,740 61,372 20,328 11,561 141,001
------- ------- -------- ------ -------
Gross margin 38% 31% 11% 29% 25%
------- ------- -------- ------ -------
Adjustments:
Purchase
price
accounting
step-up 4,426 7,628 -- -- 12,054
------- ------- -------- ------ -------
Adjusted gross
profit 52,166 69,000 20,328 11,561 153,055
Adjusted gross
margin 42% 34% 11% 29% 27%
======= ======= ======== ====== =======
Other Financial Information: Adjusted Earnings Before
Interest, Taxes and Amortization
For the three months For the nine months
ended ended
February February February February
28, 29, Change % Change 28, 29, Change % Change
(In thousands
of U.S.
dollars) 2025 2024 2025 vs. 2024 2025 2024 2025 vs. 2024
-------- -------- ---------------------- -------- -------- ----------------------
Net loss $(793,534) $(104,983) $(688,551) 656% $(913,461) $(207,029) $(706,432) 341%
Income tax
expense
(recovery),
net 1,203 (2,871) 4,074 (142)% 4,125 1,013 3,112 307%
Interest
expense, net 8,378 8,517 (139) (2)% 25,986 26,977 (991) (4)%
Non-operating
income
(expense),
net 24,022 17,239 6,783 39% 44,631 20,820 23,811 114%
Amortization 33,546 32,842 704 2% 99,410 95,183 4,227 4%
Stock-based
compensation 4,035 8,059 (4,024) (50)% 18,189 24,517 (6,328) (26)%
Change in fair
value of
contingent
consideration -- (5,983) 5,983 (100)% -- (16,790) 16,790 (100)%
Impairments 699,235 -- 699,235 NM 699,235 -- 699,235 NM
Other than
temporary
change in fair
value of
convertible
notes
receivable 20,000 42,681 (22,681) (53)% 20,000 42,681 (22,681) (53)%
Project 420
business
optimization 2,600 -- 2,600 NM 2,600 -- 2,600 NM
Purchase price
accounting
step-up 59 2,247 (2,188) (97)% 1,610 12,054 (10,444) (87)%
Facility
start-up and
closure costs -- 400 (400) (100)% -- 1,300 (1,300) (100)%
Litigation
costs, net of
recoveries 2,758 3,363 (605) (18)% 5,254 8,439 (3,185) (38)%
Restructuring
costs 6,133 5,178 955 18% 17,249 8,748 8,501 97%
Transaction
costs
(income), net 605 3,465 (2,860) (83)% 2,563 13,061 (10,498) (80)%
Adjusted EBITDA $ 9,040 $ 10,154 $ (1,114) (11)% $ 27,391 $ 30,974 $ (3,583) (12)%
======== ======== ======== ====== ======== ======== ======== =====
For the three months For the nine months
ended ended
February February February February
28, 29, Change % Change 28, 29, Change % Change
(In thousands
of U.S.
dollars) 2025 2024 Change 2025 2024 Change
-------- -------- ---------------------- -------- -------- ----------------------
Net loss
attributable
to
stockholders
of Tilray
Brands, Inc. $(789,436) $ (92,701) $(696,735) 752% $(913,943) $(213,234) $(700,709) 329%
Non-operating
income
(expense),
net 24,022 17,239 6,783 39% 44,631 20,820 23,811 114%
Amortization 33,546 32,842 704 2% 99,410 95,183 4,227 4%
Stock-based
compensation 4,035 8,059 (4,024) (50)% 18,189 24,517 (6,328) (26)%
Change in fair
value of
contingent
consideration -- (5,983) 5,983 (100)% -- (16,790) 16,790 (100)%
Impairments 699,235 -- 699,235 NM 699,235 -- 699,235 NM
Other than
temporary
change in fair
value of
convertible
notes
receivable,
attributable
to
stockholders
of Tilray
Brands, Inc. 13,600 29,023 (15,423) (53)% 13,600 29,023 (15,423) (53)%
Project 420
business
optimization 2,600 -- 2,600 NM 2,600 -- 2,600 NM
Facility
start-up and
closure costs -- 400 (400) (100)% -- 1,300 (1,300) (100)%
Litigation
costs, net of
recoveries 2,758 3,363 (605) (18)% 5,254 8,439 (3,185) (38)%
Restructuring
costs 6,133 5,178 955 18% 17,249 8,748 8,501 97%
Transaction
costs
(income) 605 3,465 (2,860) (83)% 2,563 13,061 (10,498) (80)%
------
Adjusted net
income (loss) $ (2,902) $ 885 $ (3,787) (428)% $ (11,212) $ (28,933) $ 17,721 (61)%
======== ======== ======== ====== ======== ======== ======== =====
Adjusted net
income (loss)
per share -
basic and
diluted $ -- $ -- $ -- NM $ (0.01) $ (0.04) $ 0.03 (75)%
======== ======== ======== ========== ======== ======== ======== =====
Other
Financial
Information:
Free Cash
Flow
For the three months For the nine months
ended ended
February February February February
28, 29, Change % Change 28, 29, Change % Change
(In thousands
of U.S.
dollars) 2025 2024 2025 vs. 2024 2025 2024 2025 vs. 2024
-------- -------- ---------------------- -------- -------- ----------------------
Net cash used
in operating
activities $ (5,761) $ (15,361) $ 9,600 (62)% $ (81,792) $ (61,612) $ (20,180) 33%
Less:
investments in
capital and
intangible
assets, net (14,212) (8,727) (5,485) 63% (25,753) (18,373) (7,380) 40%
Free cash flow $ (19,973) $ (24,088) $ 4,115 (17)% $(107,545) $ (79,985) $ (27,560) 34%
======== ======== ======== ====== ======== ======== ======== =====
Add: growth
CAPEX 1,808 8,802 (6,994) (79)% 6,318 13,647 (7,329) (54)%
Add: cash
income taxes
related to
Aphria
Diamond -- 2,117 (2,117) (100)% -- 16,333 (16,333) (100)%
Add:
integration
costs related
to HEXO -- 13,810 (13,810) (100)% -- 25,955 (25,955) (100)%
Adjusted free
cash flow $ (18,165) $ 641 $ (18,806) (2934)% $(101,227) $ (24,050) $ (77,177) 321%
======== ======== ======== ====== ======== ======== ======== =====
(END) Dow Jones Newswires
April 08, 2025 07:00 ET (11:00 GMT)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.