Full Press Release Details
Tilray, Inc. Reports Second Quarter 2018 Earnings
NANAIMO, BRITISH COLUMBIA Tilray, Inc., ( Tilray or the Company ) (NASDAQ: TLRY) a global
pioneer in cannabis production and distribution, today reported financial results for second quarter and six months ended June 30, 2018. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
We are very pleased with our strong start to 2018. Tilray is well-positioned to continue to pioneer the development of the global medical cannabis
market and to become a leader in the adult-use cannabis market in Canada, said Brendan Kennedy, President and Chief Executive Officer of Tilray. In the second quarter, we generated significant
revenue growth as a result of our global strategy, our multinational distribution network and our commitment to research, innovation, quality and operational excellence.
Second Quarter 2018 Financial Highlights
Business Highlights in 2018 to date:
The Company will host a conference call
to discuss these results today at 4:30 p.m. ET. Investors interested in participating in the live call can dial 877-489-6528 from the U.S. and 629-228-0736 internationally. A telephone replay will be available approximately two hours after the call concludes through Tuesday, September 11, 2018, by dialing 855-859-2056 from the U.S., or 404-537-3406 from international locations, and entering
confirmation code 2259149.
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 be archived for 30 days.
Tilray is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of
thousands of patients in ten 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. 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 the final prospectuses for Tilray s initial public offering, which were filed with the Securities and Exchange Commission on July 19, 2018, for a discussion of the material
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.
of Non-U.S. GAAP Financial Measures
To supplement its financial statements, the Company provides investors
with information related to Adjusted EBITDA, which is not a financial measure calculated in accordance with generally accepted accounting principles in the United States ( U.S. GAAP ). Adjusted EBITDA is calculated as net
income (loss) before interest expense, net; other (income), net; tax expense; foreign exchange (gain) loss; depreciation and amortization; and stock-based compensation expense. The Company believes
non-U.S. 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 non-U.S. GAAP financial measures to compare the Company s performance to that of prior periods for trend analyses and planning
purposes. Non-U.S. GAAP financial measures are also presented to the Company s Board of Directors and Adjusted EBITDA is used in its credit agreements.
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
For further information:
Hutson, +1-415-534-5541, zack.hutson@tilray.com
Investors: Katie Turner,
+1-646-277-1228, katie.turner@icrinc.com
Condensed Consolidated Statements of Net Loss and Comprehensive Loss
(in thousands of U.S. dollars, except for per share data, unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue | $ | 9,744 | $ | 4,992 | $ | 17,552 | $ | 10,019 | ||||||||
| Cost of sales | 5,567 | 2,284 | 9,479 | 4,563 | ||||||||||||
| Gross margin | 4,177 | 2,708 | 8,073 | 5,456 | ||||||||||||
| Research and development expenses | 639 | 1,040 | 1,614 | 1,701 | ||||||||||||
| Sales and marketing expenses | 3,305 | 1,515 | 5,568 | 2,443 | ||||||||||||
| General and administrative expenses | 5,622 | 2,434 | 9,990 | 3,966 | ||||||||||||
| Stock-based compensation expense | 5,601 | 35 | 5,632 | 69 | ||||||||||||
| Operating loss | (10,990 | ) | (2,316 | ) | (14,731 | ) | (2,723 | ) | ||||||||
| Foreign exchange loss (gain), net | 1,359 | (361 | ) | 2,505 | (580 | ) | ||||||||||
| Interest expense, net | 497 | 500 | 913 | 996 | ||||||||||||
| Other (income) expense, net | (76 | ) | (20 | ) | (197 | ) | (6 | ) | ||||||||
| Loss before income taxes | (12,770 | ) | (2,435 | ) | (17,952 | ) | (3,133 | ) | ||||||||
| Income tax expense | (63 | ) | (63 | ) | ||||||||||||
| Net loss | $ | (12,833 | ) | $ | (2,435 | ) | $ | (18,015 | ) | $ | (3,133 | ) | ||||
| Basic and diluted net loss per share | (0.17 | ) | (0.01 | ) | (0.24 | ) | (0.01 | ) | ||||||||
| Shares used in computation of net loss per share, basic and diluted | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 | ||||||||||||
| Net loss | $ | (12,833 | ) | $ | (2,435 | ) | $ | (18,015 | ) | $ | (3,133 | ) | ||||
| Foreign currency translation gain (loss) | 86 | (208 | ) | 87 | (240 | ) | ||||||||||
| Comprehensive loss | $ | (12,747 | ) | $ | (2,643 | ) | $ | (17,928 | ) | $ | (3,373 | ) |
Condensed Consolidated Balance Sheets
(in thousands of U.S. dollars, except for per share data, unaudited)
| June 30, 2018 | December 31, 2017 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 25,331 | $ | 2,323 | ||||
| Accounts receivable, net | 1,757 | 983 | ||||||
| Other receivables | 3,696 | 1,131 | ||||||
| Inventory | 6,750 | 7,421 | ||||||
| Prepaid expenses and other current assets | 1,210 | 545 | ||||||
| Total current assets | 38,744 | 12,403 | ||||||
| Property, plant and equipment, net | 65,707 | 39,985 | ||||||
| Intangible assets, net | 1,395 | 934 | ||||||
| Deposits and other assets | 632 | 626 | ||||||
| Total assets | $ | 106,478 | $ | 53,948 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 13,209 | $ | 5,563 | ||||
| Accrued expenses and other current liabilities | 3,295 | 2,021 | ||||||
| Accrued obligations under capital lease | 199 | 379 | ||||||
| Current portion of long-term debt | 9,128 | 9,432 | ||||||
| Privateer Holdings debt facilities | 37,015 | 32,826 | ||||||
| Total current liabilities | 62,846 | 50,221 | ||||||
| Accrued obligations under capital lease | 8,398 | 8,579 | ||||||
| Total liabilities | $ | 71,244 | $ | 58,800 | ||||
| Commitments and contingencies (Note 10) | ||||||||
| Stockholders equity (deficit) | ||||||||
| Preferred stock, $0.0001 par value, 8,000,000 shares authorized; 7,794,042 issued and outstanding at June 30, 2018; none issued at December 31, 2017 | $ | 1 | $ | |||||
| Common stock, $0.0001 par value, 215,000,000 shares authorized, 75,000,000 shares issued and outstanding at June 30, 2018; none issued at December 31, 2017 | 8 | |||||||
| Capital stock (no shares authorized, issued or outstanding at June 30, 2018; 1 share authorized, issued and outstanding at December 31, 2017) | ||||||||
| Additional paid-in capital | 89,915 | 31,736 | ||||||
| Accumulated other comprehensive income | 3,778 | 3,866 | ||||||
| Accumulated deficit | (58,468 | ) | (40,454 | ) | ||||
| Total stockholders equity (deficit) | 35,234 | (4,852 | ) | |||||
| Total liabilities and stockholders equity | $ | 106,478 | $ | 53,948 |
Condensed Consolidated Statements of Cash Flows
(in thousands of U.S. dollars, except for per share data, unaudited)
| Six months ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (18,015 | ) | $ | (3,133 | ) | ||
| Adjusted for the following items: | ||||||||
| Foreign currency loss (gain) | 2,451 | (579 | ) | |||||
| Provision for doubtful accounts | (9 | ) | ||||||
| Inventory write-downs | 227 | 53 | ||||||
| Depreciation and amortization | 1,148 | 955 | ||||||
| Stock-based compensation expense | 5,632 | 69 | ||||||
| Non-cash interest expense | 509 | 481 | ||||||
| Deferred Income Tax expense | 63 | |||||||
| Loss on disposal of property, plant and equipment | (2 | ) | 7 | |||||
| Changes in non-cash working capital: | ||||||||
| Accounts receivable | (840 | ) | (430 | ) | ||||
| Other receivable | (2,701 | ) | (85 | ) | ||||
| Inventory | 48 | (1,055 | ) | |||||
| Prepaid expenses and other current assets | (1,033 | ) | (704 | ) | ||||
| Accounts payable | 8,019 | 591 | ||||||
| Accrued expenses and other current liabilities | 1,589 | 1,029 | ||||||
| Net cash used in operating activities | (2,905 | ) | (2,810 | ) | ||||
| Investing activities | ||||||||
| Increase in deposits and other assets | (23 | ) | ||||||
| Purchases of short-term investments | (29,394 | ) | ||||||
| Proceeds from sales of short-term investments | 29,257 | |||||||
| Proceeds from maturities of short-term investments | 136 | |||||||
| Purchases of property, plant and equipment | (28,237 | ) | (835 | ) | ||||
| Dispositions of property, plant and equipment | 11 | 22 | ||||||
| Purchases of intangible assets | (703 | ) | (103 | ) | ||||
| Net cash used in investing activities | (28,953 | ) | (916 | ) | ||||
| Financing activities | ||||||||
| Advances (payments) under Privateer Holdings credit facility | 2,250 | 3,271 | ||||||
| Advances under Privateer Holdings construction facility | 1,560 | 8 | ||||||
| Minimum lease payments under capital lease | (339 | ) | ||||||
| Proceeds from issuance of convertible preferred stock, net | 52,557 | |||||||
| Net cash provided by financing activities | 56,028 | 3,279 | ||||||
| Effect of foreign currency translation on cash | (1,162 | ) | 239 | |||||
| Cash and cash equivalents | ||||||||
| Increase (decrease) in cash | 23,008 | (208 | ) | |||||
| Cash, beginning of year | 2,323 | 7,531 | ||||||
| Cash, end of year | $ | 25,331 | $ | 7,323 | ||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for interest | 573 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Adjusted EBITDA reconciliation: | ||||||||||||||||
| Net loss | $ | (12,833 | ) | $ | (2,435 | ) | $ | (18,015 | ) | $ | (3,133 | ) | ||||
| Interest expense, net | 497 | 500 | 913 | 996 | ||||||||||||
| Other (income) expense, net | (76 | ) | (20 | ) | (197 | ) | (6 | ) | ||||||||
| Tax expense | 63 | 63 | ||||||||||||||
| Foreign exchange (gain) loss | 1,359 | (361 | ) | 2,505 | (580 | ) | ||||||||||
| Depreciation and amortization | 670 | 409 | 1,148 | 955 | ||||||||||||
| Stock-based compensation expense | 5,601 | 35 | 5,632 | 69 | ||||||||||||
| Adjusted EBITDA | $ | (4,719 | ) | $ | (1,872 | ) | $ | (7,951 | ) | $ | (1,699 | ) |