Full Press Release Details
Tilray, Inc. Reports Fourth Quarter and Full Fiscal Year 2019 Financial
Revenue Increased 287% to $167.0 (C$217.4) Million in Full Fiscal Year 2019 Compared to the Prior Year
Adult-Use Revenue Increased Over Three-Fold in the Fourth Quarter Compared to the Prior Year Period; 7%
Sequential Quarterly Revenue Growth
Signed and Closed $60 Million Senior Credit Facility
NANAIMO, BRITISH COLUMBIA
Tilray, Inc. ( Tilray or the Company ) (Nasdaq: TLRY), a global pioneer in cannabis production, research, cultivation and distribution, reports financial results for the fourth quarter and full fiscal year ended
December 31, 2019. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
Our full year results demonstrate strong sales growth momentum, which we expect to continue in 2020, said Brendan Kennedy, Tilray s Chief Executive Officer. Like our peers, we have faced industry challenges,
but we remain committed to driving long-term value for our shareholders. Tilray has a diversified business model comprised of global medical, Canada adult-use and hemp products which positions us well in the
current volatile market environment. We are still in the early days of this emerging growth industry and will continue being good stewards of shareholder capital as we aim to build the world s most trusted and valued cannabis and hemp
2019 Financial Highlights
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||||||||||||||||
| 2019 | 2018 | $ Change | % Change | 2019 | 2018 | $ Change | % Change | |||||||||||||||||||||||||
| Cannabis | ||||||||||||||||||||||||||||||||
| Adult-use | $ | 17,007 | $ | 4,660 | $ | 12,347 | 265% | $ | 55,763 | $ | 3,521 | $ | 52,242 | N/A | ||||||||||||||||||
| Canada - medical | 3,332 | 2,845 | 487 | 17% | 12,556 | 18,052 | (5,496) | (30)% | ||||||||||||||||||||||||
| International - medical | 4,008 | 1,056 | 2,952 | 280% | 13,378 | 2,912 | 10,466 | 359% | ||||||||||||||||||||||||
| Bulk | 3,924 | 6,970 | (3,046) | (44)% | 25,450 | 18,645 | 6,805 | 36% | ||||||||||||||||||||||||
| Total cannabis revenue | 28,271 | 15,531 | 12,740 | 82% | 107,147 | 43,130 | 64,017 | 148% | ||||||||||||||||||||||||
| Hemp | 18,665 | 18,665 | N/A | 59,832 | 59,832 | N/A | ||||||||||||||||||||||||||
| Total revenue | $ | 46,936 | $ | 15,531 | $ | 31,405 | 202% | $ | 166,979 | $ | 43,130 | $ | 123,849 | 287% | ||||||||||||||||||
| Excise tax included in revenue | $ | 4,429 | $ | 1,203 | $ | 3,226 | 268% | $ | 13,136 | $ | 1,200 | $ | 11,936 | N/A |
N/A: Not a meaningful percentage.
Fourth Quarter 2019 Financial Highlights
| Three months ended | ||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | |||||||||||||
| Cannabis | ||||||||||||||||
| Adult-use | $ | 7,881 | $ | 15,041 | $ | 15,834 | $ | 17,007 | ||||||||
| Canada - medical | 2,997 | 2,328 | 3,899 | 3,332 | ||||||||||||
| International - medical | 1,812 | 1,850 | 5,708 | 4,008 | ||||||||||||
| Bulk | 4,766 | 6,750 | 10,010 | 3,924 | ||||||||||||
| Total cannabis revenue | 17,456 | 25,969 | 35,451 | 28,271 | ||||||||||||
| Hemp | 5,582 | 19,935 | 15,650 | 18,665 | ||||||||||||
| Total revenue | $ | 23,038 | $ | 45,904 | $ | 51,101 | $ | 46,936 | ||||||||
| Excise tax included in revenue | $ | 1,914 | $ | 3,862 | $ | 2,931 | $ | 4,429 |
Senior Credit Facility
The Company closed a $60 million senior credit facility on February 28, 2020 that bears interest at prime plus 8% and has
a two year term. The Company ended 2019 with $97 million in cash.
2019 Business Highlights
1 Announced January 14, 2020
The Company 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 877-489-6528 from the U.S. and 629-228-0736 internationally. A
telephone replay will be available approximately two hours after the call concludes through Monday, March 16, 2020, by dialing 855-859-2056 from the U.S., or 404-537-3406 from international locations, and entering confirmation code 8197352.
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 (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.
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, 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 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 2, 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,
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 inventory valuation
adjustments; interest expenses, net; other income, net; deferred income tax (recoveries) expenses, current income tax expenses; foreign exchange gain (loss), net; depreciation and amortization expenses; stock-based compensation expenses; other
stock-based compensation related expenses; loss from equity method investments; finance income from ABG; loss on disposal of property and equipment; acquisition-related (income) expense; and amortization of inventory
step-up. 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. The Company
believes Adjusted EBITDA provides 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 Adjusted EBITDA to
compare the Company s performance to that of prior periods for trend analyses and planning purposes. Adjusted EBITDA is 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.
For further information:
Media, Global: Chrissy Roebuck,
+1-833-206-8161, news@tilray.com
Investors: Rachel Perkins, +1-646-277-1221, rachel.perkins@icrinc.com
Consolidated Statements of Net Loss and Comprehensive Loss
(in thousands of U.S. dollars, except for share and per share data)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue (inclusive of excise duties of $4,429, $1,203, $13,136, and $1,200, respectively) | $ | 46,936 | $ | 15,531 | $ | 166,979 | $ | 43,130 | ||||||||
| Cost of sales | ||||||||||||||||
| Product costs | 35,870 | 8,117 | 121,892 | 24,294 | ||||||||||||
| Inventory valuation adjustments | 68,073 | 4,280 | 68,583 | 4,561 | ||||||||||||
| Gross (loss) profit | (57,007 | ) | 3,134 | (23,496 | ) | 14,275 | ||||||||||
| General and administrative expenses | 32,462 | 12,973 | 81,968 | 29,461 | ||||||||||||
| Sales and marketing expenses | 21,923 | 6,305 | 61,084 | 15,366 | ||||||||||||
| Research and development expenses | 1,667 | 1,848 | 6,558 | 4,264 | ||||||||||||
| Stock-based compensation | 9,539 | 4,111 | 31,842 | 20,988 | ||||||||||||
| Depreciation and amortization expenses | 4,150 | 566 | 11,607 | 1,598 | ||||||||||||
| Impairment of assets | 112,070 | 112,070 | ||||||||||||||
| Acquisition-related (income) expenses, net | (24,861 | ) | 239 | (31,427 | ) | 248 | ||||||||||
| Loss from equity method investments | 2,667 | 4,504 | ||||||||||||||
| Operating loss | (216,624 | ) | (22,908 | ) | (301,702 | ) | (57,650 | ) | ||||||||
| Foreign exchange (gain) loss, net | (7,097 | ) | 6,321 | (5,944 | ) | 7,234 | ||||||||||
| Interest expenses, net | 8,685 | 7,717 | 34,690 | 9,110 | ||||||||||||
| Finance income from ABG | (207 | ) | (764 | ) | ||||||||||||
| Loss on disposal of property and equipment | 2,436 | 190 | 2,436 | 190 | ||||||||||||
| Other income, net | 3,572 | (1,588 | ) | (2,501 | ) | (2,010 | ) | |||||||||
| Loss before income taxes | (224,013 | ) | (35,548 | ) | (329,619 | ) | (72,174 | ) | ||||||||
| Deferred income tax recoveries | (4,860 | ) | (4,485 | ) | (8,847 | ) | (4,485 | ) | ||||||||
| Current income tax (recoveries) expenses | (5 | ) | (53 | ) | 397 | 34 | ||||||||||
| Net loss | (219,148 | ) | (31,010 | ) | (321,169 | ) | (67,723 | ) | ||||||||
| Net loss per share - basic and diluted | $ | (2.14 | ) | $ | (0.33 | ) | $ | (3.20 | ) | $ | (0.82 | ) | ||||
| Weighted average shares used in computation of net loss per share - basic and diluted | 102,405,646 | 93,169,688 | 100,455,677 | 83,009,656 | ||||||||||||
| Net loss | (219,148 | ) | (31,010 | ) | (321,169 | ) | (67,723 | ) | ||||||||
| Foreign currency translation gain, net | 7,588 | 127 | 5,174 | 662 | ||||||||||||
| Unrealized loss on investments | (101 | ) | (765 | ) | (21 | ) | (765 | ) | ||||||||
| Other comprehensive income (loss) | 7,487 | (638 | ) | 5,153 | (103 | ) | ||||||||||
| Comprehensive loss | $ | (211,661 | ) | $ | (31,648 | ) | $ | (316,016 | ) | $ | (67,826 | ) |
In the fourth quarter of 2019, the Company adopted ASU 2016-01, ASC 842, ASC 606 and ASU 2018-07. Each
interim period in 2019 has been recast to reflect the effects of this adoption.
Consolidated Balance Sheets
(in thousands of U.S. dollars, except for share and par value data)
| December 31, 2019 | December 31, 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 96,791 | $ | 487,255 | ||||
| Short-term investments | 30,335 | |||||||
| Accounts receivable, net of allowance for doubtful accounts of $2,015 and $292, respectively | 36,202 | 16,525 | ||||||
| Inventory | 87,861 | 16,211 | ||||||
| Prepayments and other current assets | 38,173 | 3,976 | ||||||
| Total current assets | 259,027 | 554,302 | ||||||
| Property and equipment, net | 184,217 | 80,214 | ||||||
| Operating lease, right-of-use assets | 17,514 | |||||||
| Intangible assets, net | 228,828 | 4,486 | ||||||
| Goodwill | 163,251 | |||||||
| Equity method investments | 11,448 | |||||||
| Other investments | 24,184 | 16,911 | ||||||
| ABG finance receivable and other assets | 7,861 | 754 | ||||||
| Total assets | $ | 896,330 | $ | 656,667 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 39,125 | 10,649 | ||||||
| Accrued expenses and other current liabilities | 50,829 | 14,818 | ||||||
| Accrued obligations under finance lease | 470 | |||||||
| Accrued obligations under operating lease | 2,473 | |||||||
| Total current liabilities | 92,427 | 25,937 | ||||||
| Accrued obligations under finance lease | 14,152 | 8,286 | ||||||
| Accrued obligations under operating lease | 15,255 | |||||||
| ABG finance liability | 5,566 | |||||||
| Deferred tax liability | 53,363 | 4,424 | ||||||
| Convertible notes, net of issuance costs | 430,210 | 420,367 | ||||||
| Other liabilities | 86 | |||||||
| Total liabilities | $ | 611,059 | $ | 459,014 | ||||
| Commitments and contingent liabilities | ||||||||
| Stockholders equity | ||||||||
| Class 1 common stock ($0.0001 par value, 250,000,000 shares authorized; 16,666,667 shares issued and outstanding) | 2 | 2 | ||||||
| Class 2 common stock ($0.0001 par value; 500,000,000 shares authorized; 86,114,558 and 76,504,200 shares issued and outstanding, respectively) | 9 | 8 | ||||||
| Additional paid-in capital | 705,671 | 302,057 | ||||||
| Accumulated other comprehensive income | 9,719 | 3,763 | ||||||
| Accumulated deficit | (430,130 | ) | (108,177 | ) | ||||
| Total stockholders equity | $ | 285,271 | $ | 197,653 | ||||
| Total liabilities and stockholders equity | $ | 896,330 | $ | 656,667 |
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Adjusted EBITDA reconciliation: | ||||||||||||||||
| Net loss | $ | (219,148 | ) | $ | (31,010 | ) | $ | (321,169 | ) | $ | (67,723 | ) | ||||
| Inventory valuation adjustments | 68,073 | 4,280 | 68,583 | 4,561 | ||||||||||||
| Depreciation and amortization expenses | 5,421 | 1,009 | 15,849 | 3,562 | ||||||||||||
| Stock-based compensation expenses | 9,539 | 4,111 | 31,842 | 20,988 | ||||||||||||
| Other stock-based compensation related expenses | 8,411 | 8,411 | ||||||||||||||
| Impairment of assets | 112,070 | 112,070 | ||||||||||||||
| Acquisition-related (income) expenses, net | (24,861 | ) | 239 | (31,427 | ) | 248 | ||||||||||
| Loss from equity method investments | 2,667 | 4,504 | ||||||||||||||
| Foreign exchange (gain) loss, net | (7,097 | ) | 6,321 | (5,944 | ) | 7,234 | ||||||||||
| Interest expenses, net | 8,685 | 7,717 | 34,690 | 9,110 | ||||||||||||
| Finance income from ABG | (207 | ) | (764 | ) | ||||||||||||
| Loss on disposal of property and equipment | 2,436 | 190 | 2,436 | 190 | ||||||||||||
| Other income, net | 3,572 | (1,588 | ) | (2,501 | ) | (2,010 | ) | |||||||||
| Amortization of inventory step-up | 2,041 | |||||||||||||||
| Deferred income tax (recoveries) expenses | (4,860 | ) | (4,485 | ) | (8,847 | ) | (4,485 | ) | ||||||||
| Current income tax expenses | (5 | ) | (53 | ) | 397 | 34 | ||||||||||
| Adjusted EBITDA | $ | (35,304 | ) | $ | (13,269 | ) | $ | (89,829 | ) | $ | (28,291 | ) | ||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Adjusted net loss reconciliation: | ||||||||||||||||
| Net loss | $ | (219,148 | ) | $ | (31,010 | ) | $ | (321,169 | ) | $ | (67,723 | ) | ||||
| Inventory valuation adjustments | 68,073 | 4,280 | 68,583 | 4,561 | ||||||||||||
| Impairment of assets | 112,070 | 112,070 | ||||||||||||||
| Acquisition-related (income) expenses, net | (24,861 | ) | 239 | (31,427 | ) | |||||||||||
| Amortization of inventory step-up | 2,041 | |||||||||||||||
| Adjusted net loss | $ | (63,866 | ) | $ | (26,491 | ) | $ | (169,902 | ) | $ | (63,162 | ) | ||||
| Adjusted net loss per share - basic and diluted | (0.62 | ) | (0.28 | ) | (1.69 | ) | (0.76 | ) | ||||||||
| Weighted average shares used in computation of adjusted | ||||||||||||||||
| Net loss per share - basic and diluted | 102,405,646 | 93,169,688 | 100,455,677 | 83,009,656 |