Tilray, Inc. Reports Full Year 2018 Financial Results
Revenue Rises 110.0% to $43.1 (C$56.4) Million in 2018
Strategic Partnerships and Acquisitions Position Tilray to Accelerate Global Sales Growth and Drive Long-Term Shareholder Value
NANAIMO, BRITISH COLUMBIA – Tilray, Inc., (“Tilray” or the “Company”) (Nasdaq: TLRY) a global leader in cannabis research, cultivation, production and distribution, today reported financial results for the fourth quarter and year ended December 31, 2018. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.
“2018 was a very successful year for Tilray with many corporate milestones. Our team made significant progress on our long-term initiatives including increasing production capacity, expanding and strengthening strategic partnerships, and acquiring complementary businesses to accelerate our future growth and leadership position in medical and adult-use cannabis,” commented Brendan Kennedy, President and Chief Executive Officer of Tilray. “Looking ahead, we remain committed to pursuing global growth opportunities and will be disciplined in deploying capital, particularly in the United States and Europe, where we believe we have multiple paths for value creation.”
2018 Financial Highlights
Revenue increased to $43.1 (C$56.4) million, up 110.0% compared to last year. The increase in revenue was driven by bulk sales, the inaugural sales for the Canadian adult-use market and accelerated wholesale distribution in export markets.
Total kilogram equivalents sold increased over two-fold to 6,478 kilograms from 3,024 kilograms in the prior year.
Average net selling price per gram increased to $6.61 (C$8.59) compared to $6.52 (C$8.42) in the prior year. In 2018, there was significant revenue growth for extract products compared to dried flower, where extracts represented 49% of the sales mix in 2018 compared to 20% in 2017.
Net loss for the year was $67.7 million, or $0.82 per share, compared to $7.8 million, or $0.10 per share, for 2017. Net loss includes non-cash stock-based compensation charges of $21.0 million compared to a $0.1 million charge in the prior-year. Adjusted EBITDA was a loss of $33.1 million compared to a loss of $5.5 million the prior year. The increased net loss and Adjusted EBITDA declines were primarily due to the increase in operating expenses related to continued growth, expansion of international teams, and costs related to financings and the initial public offering (“IPO”). See “Use of Non-U.S. GAAP Financial Measures.”
Fourth Quarter 2018 Financial Highlights
Revenue increased to $15.5 (C$20.9) million, up 203.8% compared to the fourth quarter of last year, driven by bulk sales, inaugural sales in the Canadian adult-use market and accelerated wholesale distribution in export markets.
Total kilogram equivalents sold increased almost three-fold to 2,053 kilograms from 694 kilograms in the prior year period.
Average net selling price per gram increased to $7.52 (C$10.05) compared to $7.13 (C$9.12) in the prior year period.
Net loss for the quarter was $31.0 million or $0.33 per share compared to $3.0 million or $0.04 per share for the prior year period. Net loss includes non-cash stock-based compensation charges of $4.1 million compared to $34 thousand in the prior year period. Adjusted EBITDA was a loss of $17.8 million compared to a loss of $2.1 million the prior year period. The increased net loss and Adjusted EBITDA declines were primarily due to the increase in operating expenses related to growth initiatives, expansion of international teams and costs related to financings and M&A activities.
Expanded strategic alliance with Sandoz, a Novartis Division, globally to increase access to medical cannabis products to patients in need across the world.
Announced research and development partnership with AB InBev focused on non-alcohol THC and CBD beverages. Each company intends to invest up to $50 million, for a total of up to $100 million.
Announced a long-term revenue sharing agreement with Authentic Brands Group (“ABG”) to leverage their portfolio of brands and develop, market and distribute consumer cannabis products across the world. This global partnership will focus on CBD products in the United States and THC/CBD products in Canada, and elsewhere as regulations permit.
Acquired Manitoba Harvest, a hemp and natural foods producer in Winnipeg, Manitoba, for up to $317 (C$419) million, subject to certain revenue milestones. Manitoba Harvest distributes its products to over 16,000 retail locations in the United States and Canada.
Acquired Natura Naturals Holdings Inc., a licensed cannabis cultivation facility in Leamington, Ontario, for up to $53.4 (C$70.0) million, subject to certain cultivation milestones.
Invested $5.7 (C$7.5) million in Quebec-based cannabis producer ROSE Lifescience Inc. and entered into a sale, supply, distribution, and marketing agreement for ROSE to deliver adult-use cannabis products in Québec.
Acquired Alef Biotechnology SpA, a licensed cannabis company in Chile, which will allow Tilray to import, produce and distribute Tilray branded medical cannabis throughout Latin America.
Signed Supply Agreement for Hemp-Derived CBD from LiveWell Canada, which will be sourced from the United States and Canada and be used for wellness and medical products across North America.
Partnered with researchers at the Lambert Initiative for Cannabinoid Therapeutics at the University of Sydney to complete a study examining the effects of cannabis on driving and cognitive function.
Formed an International Advisory Board to provide guidance to the Company’s executive team and Board of Directors on global expansion.
Expanded global senior leadership team with six strategic hires: Andrew Pucher as Chief Corporate Development Officer; Greg Christopher as EVP of Operations; Rita Seguin as EVP of Human Resources; Dara Redler as General Counsel; Charlie Cain as VP of Retail; and Sascha Mielcarek as Managing Director Europe.
Completed a successful harvest of medical cannabis at the Company’s European Union campus in Portugal and expect multiple harvests in the coming months.
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 United States and 629-228-0736 internationally. A telephone replay will be available approximately two hours after the call concludes through Monday, April 1, 2019, by dialing 855-859-2056 from the United States, or 404-537-3406 from international locations and entering confirmation code 6093459.
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.