Tilray Brands Sees Fourth Quarter Impacted By Massive Impairments, Negative Gross Profit

Tilray Brands (TSX: TLRY) this morning reported its fourth quarter and full year fiscal 2022 financial results. The results were highlighted by slowing quarterly growth, as well as major impairments that resulted in a significant net loss.

Revenue for the quarter amounted to $153.3 million, marking growth of 0.96% on a quarter over quarter basis. The quarter saw the firms cannabis segment slide to 35% of revenues at $53.3 million, while distribution revenue fell to 39% at $61.2 million. Beverage alcohol meanwhile increased to 15% of revenues at $22.7 million, while the remainder came from the wellness segment, at 11%, or $16.2 million.

Gross profit for the quarter meanwhile was negative $6.7 million.

Operating expenses for the quarter totaled $460.7 million, with the massive expensive here being a $378.2 million impairment related to inventory, goodwill and other intangible assets. Commenting on the significant writedowns, the company stated, “The impact was related to changes in market opportunities causing a shift in our strategic priorities.”

Excluding these massive impairments, expenses for the quarter totaled $82.4 million, versus $59.6 million in the third quarter. Despite this, the company told a story of cost-saving synergies that came as a result of the recent merger with Aphria Inc, which are said to have hit $85 million, $5.0 million more than the forecasted figure.

A further $20 million in savings are now expected to be realized as a result of that transaction, while the recent arrangement with Hexo (TSX: HEXO) is expected to deliver an additional $80 million in savings. Whether those savings are enough to reach profitability however is another question.

Overall, the company posted a net loss of $457.8 million for the three month period, along with adjusted EBITDA of $11.5 million.

For the full fiscal year, the company posted revenues of $628.4 million, versus $513.1 million in 2021. Gross profit came in at $116.8 million, while operating expenses totaled $727.2 million. The firm posted a net loss of $434.1 million for the full fiscal year, and adjusted EBITDA of $48.0 million.

In terms of its balance sheet, the company ended the year with $415.9 million in cash on hand, and total current assets of $803.5 million. Total current liabilities meanwhile sit at $280.3 million.

Tilray Brands last traded at $4.18 on the TSX.

Information for this briefing was found via Sedar and Hexo Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply