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PresentationIrwin SimonPresident, CEO & Chairman Thank you, operator. Good morning, everyone. Good afternoon for those listening internationally, and thank you for joining today's conference call. I'm excited to discuss the strategic acquisition of BrewDog, an iconic global brand in the beer business that will join Tilray's portfolio. The acquisition included BrewDog's worldwide brand intellectual property, certain assets from its profitable U.K. operations, including the scaled brewing facility in Ellon, w ...

Summary of Tilray Brands Conference Call Company and Industry - **Company**: Tilray Brands (NasdaqGS:TLRY) - **Industry**: Beverage industry, specifically focusing on craft beer and consumer packaged goods Core Points and Arguments 1. **Acquisition of BrewDog**: Tilray Brands announced the strategic acquisition of BrewDog for GBP 33 million, which includes BrewDog's global brand intellectual property and assets from its U.K. operations, including a brewing facility and 11 bars in the U.K. and Ireland [2][3] 2. **Growth and Transformation**: Since 2019, Tilray has transformed from a $50 million business to a global consumer packaged goods platform with over $1 billion in revenue, operating more than 40 brands in over 21 countries [3] 3. **Projected Revenue**: The beverage business, with the addition of BrewDog, is projected to generate approximately $500 million in annual revenue [3][10] 4. **BrewDog's Brand Value**: BrewDog was valued over $2 billion in 2021, and the acquisition is seen as a disciplined capital allocation with a clear pathway to value creation [4][5] 5. **Operational Expertise**: The acquisition provides BrewDog with operational expertise, capital, and stability to refocus and return to sustainable growth, with plans to invest additional working capital [5][12] 6. **Brewing Capacity**: BrewDog's Ellon facility has an annual production capacity of 800,000 hectoliters, with potential to expand to 2.4 million hectoliters, enhancing Tilray's international footprint [6][9] 7. **Financial Expectations**: BrewDog is expected to generate approximately $200 million in annual revenue in fiscal year 2027, with an EBITDA of $6 million to $8 million, becoming cash flow positive in the first quarter of 2027 [10][40] 8. **Market Strategy**: Tilray plans to leverage BrewDog's existing infrastructure to introduce U.S. craft brands into Europe and expand distribution in international markets [9][32] 9. **Focus on Core Values**: The company aims to preserve BrewDog's entrepreneurial spirit and unique brand identity while improving operational efficiency and expanding international distribution [12][14] Additional Important Content 1. **Challenges and Opportunities**: BrewDog faced challenges with its previous business model, including an overextension with brewpubs, which will be reduced to 13 from 60. The focus will shift to off-premise sales and partnerships with major retailers [18][36] 2. **International Expansion**: There are plans to explore opportunities in markets like the Middle East, Asia, and Asia Pacific, where demand for premium craft beer is growing [14] 3. **Franchise Opportunities**: Tilray is considering franchising BrewDog in various international markets, including Dubai, India, and Japan [26][36] 4. **Future M&A Strategy**: The company remains open to further mergers and acquisitions to expand its alcohol business, emphasizing profitability over size [30] This summary encapsulates the key points discussed during the Tilray Brands conference call, highlighting the strategic acquisition of BrewDog and its implications for the company's growth and market positioning.

Core Insights - Tilray Brands, Inc. has completed the acquisition of strategic assets from BrewDog for £33 million, which includes BrewDog's global brand, UK brewing operations, and eleven brewpubs [1][5][6] - The acquisition is expected to generate approximately $200 million in annual net revenue and $6 to $8 million in adjusted EBITDA by fiscal 2027 [1][5] - Tilray's total global beverage platform revenue is projected to grow to around $500 million annually, contributing to an expected consolidated net revenue of approximately $1.2 billion [1][3][4] Company Overview - BrewDog is recognized as a leading craft beer brand, known for its innovative and mission-driven approach, with a strong portfolio of craft, premium, and low & no alcohol beers [2] - The acquisition allows Tilray to leverage BrewDog's established international distribution network and brewing capacity, enhancing its growth potential in the UK and other international markets [4][5] Strategic Goals - The management of Tilray aims to refocus BrewDog on its core craft beer excellence and invest strategically to return operations to profitable growth [3] - The integration of BrewDog's assets is expected to create significant growth opportunities through broader distribution and innovation, while also introducing Tilray's complementary beverage brands into new markets [3][4] Financial Projections - The acquired BrewDog assets are anticipated to become cash flow positive starting in fiscal 2027 as operational efficiencies are realized [6] - Initial brewing revenues may be affected by licensing transfer timelines, with no significant EBITDA contribution expected in the fourth quarter of fiscal 2026 [7]

Core Viewpoint - Tilray Brands, Inc. announces the launch of Good Supply's spring product lineup, focusing on high-potency vapes, flower, and pre-rolls to drive growth in the Canadian cannabis market [1][4]. Product Offerings - Good Supply's new product lineup emphasizes approachable cannabis experiences with strong potency and consistent quality, catering to consumer preferences in the adult-use market [2][3]. - The spring portfolio includes high-potency vape cartridges, such as Berry Blurry and Cherry Lime Blast, both featuring THC content between 91% and 97% [5]. - The flower and pre-roll offerings include new strains like Blueberry Donuts, Façade, and Ice Cream Rntz, with THC levels ranging from 24% to 32% [6][7]. Market Strategy - The product launch aims to deepen consumer loyalty and enhance retail performance by introducing innovative and high-quality products that align with current market trends towards high-THC options [3][4]. - Good Supply's spring lineup is being rolled out across Canada, with availability varying by province, supporting retail performance [8]. Sustainability Efforts - Good Supply is committed to reducing environmental impact through sustainable packaging and initiatives like reforestation, having diverted over 925,000 kg of plastic from landfills and reforesting over 2,800 trees [9][14]. Company Overview - Tilray Brands operates as a global lifestyle and consumer packaged goods company, focusing on cannabis, beverages, and wellness, with a mission to inspire joy and create memorable experiences [10].

Core Insights - The Canadian cannabis sector is evolving with renewed investor interest, particularly in companies with U.S. exposure as regulatory discussions in the U.S. gain momentum [1][2][5] - Canadian cannabis companies are focusing on international revenue and operational discipline due to slowed growth in the domestic market [2][3] - Strategic partnerships and brand licensing are seen as alternative paths for growth amid challenges like oversupply and U.S. federal prohibition [4][5] Industry Overview - The Canadian recreational cannabis market is mature, but growth has decelerated compared to previous years, prompting companies to seek international opportunities [2] - Global cannabis reform is progressing, with countries like Germany expanding medical programs, which may benefit Canadian producers with international infrastructure [3] Company Profiles Tilray Brands Inc. (TLRY) - Tilray is a major Canadian cannabis producer with operations in Canada, Europe, Latin America, and the U.S., offering a diverse product portfolio [6][9] - The company has a strong U.S. presence through beverage alcohol brands and strategic partnerships, although it does not own THC dispensaries [7][9] - Recent quarterly revenue exceeded $200 million, showing modest year-over-year growth, with international sales contributing significantly [10] - Despite a net loss, the company has narrowed its losses and improved gross margins through operational efficiencies [11] Canopy Growth Corporation (CGC) - Canopy Growth is a well-known cannabis company producing a variety of products, including dried flower and beverages, with a broad brand portfolio [12][15] - The company has strategic arrangements for U.S. exposure but does not operate THC dispensaries [13][15] - Canopy has undergone restructuring to reduce costs and divest non-core assets, aiming for improved financial consistency [16][18] - Recent revenue trends have been mixed, but cost controls have helped reduce operating losses [17][18] Cronos Group Inc. (CRON) - Cronos focuses on branding and product innovation, operating in Canada, Israel, and select international markets [19][22] - The company relies on wholesale distribution and partnerships rather than a large dispensary network, with limited U.S. retail exposure [20][22] - Financially, Cronos has shown gradual improvement, with recent revenue growth driven by international demand, particularly from Israeli medical sales [23][24] - The company maintains a strong cash position, providing flexibility for future expansion, although overall revenue is smaller compared to competitors [24][25]

Core Viewpoint - Tilray Brands is transitioning from a marijuana company to a broader "global lifestyle and consumer packaged goods company" by expanding into CBD products and alcohol, amidst challenges in the marijuana market [1][4]. Industry Overview - The marijuana market has not met Wall Street's high expectations, with fierce competition leading to a lack of profitability despite increased sales due to legalization [2]. - Legal marijuana sellers face competition from illegal drug sales, which remain prevalent and often cheaper due to the absence of taxes and regulatory costs [3]. Company Strategy - Tilray's diversification into CBD and alcoholic beverages is a logical move given the stagnation in its core marijuana business [4]. - The company has rapidly acquired 19 brands since 2021, which raises concerns about the ability to effectively integrate these acquisitions [5]. Financial Implications - The company's share count has increased by over 300% since the beginning of 2021, primarily due to funding acquisitions through stock sales, leading to dilution for existing shareholders [6]. - Write-downs across all business lines indicate potential missteps in the acquisition strategy, which could have significant costs for shareholders [6]. Management Focus - There are concerns that Tilray's management may be overly focused on empire building through acquisitions, which could lead to mistakes and unsustainable profits [7].

Core Viewpoint - Tilray Brands has experienced significant stock declines, with a 16% drop over the past year, 74% over the past three years, and 97% over the past five years, raising concerns about its future growth potential and investment viability [1]. Group 1: Company Background - Tilray was an early mover in the cannabis legalization market in North America, aiming for rapid growth through partnerships and acquisitions after going public [2]. - The company is now one of the largest cannabis firms globally, reporting annual sales exceeding $837 million, with a product range that includes cannabis flower, beverages, and medicinal products [3]. Group 2: Financial Performance and Challenges - Despite its growth, Tilray has consistently burned cash and has not executed its business strategy effectively, facing challenges from illicit markets that pressure pricing and profit margins [4]. - The company has significantly diluted its shares, with a 495% increase in share count since its U.S. market debut in July 2018, contributing to poor stock performance [5]. Group 3: Future Outlook - Tilray's total net revenue grew by only 3% in Q2 of fiscal year 2026, with Wall Street projecting low-to-mid single-digit growth through the end of the next fiscal year, indicating limited growth potential [6]. - Given the substantial decline in stock value, there are sentiments that holding or buying more Tilray shares may not be prudent, suggesting that it may be better to divest until the company demonstrates improved performance [7].

Core Viewpoint - Tilray Brands is struggling to achieve profitability despite its diverse product offerings in the beverage, cannabis, and wellness industries, with significant competition and ongoing losses impacting its financial performance [1][4]. Group 1: Financial Performance - Tilray Brands' stock price has decreased by 99% from its all-time high, reflecting investor fatigue over the company's inability to generate profits [4]. - The company has been expanding aggressively into other areas, particularly alcohol, but this strategy has not yet resulted in positive earnings [4]. Group 2: Revenue Growth and Strategy - Tilray is focusing on revenue growth through aggressive brand acquisitions since 2021, which has led to increased revenue and potential synergies [5]. - However, the rising share count due to stock sales for cash or acquisitions is diluting existing shareholders and complicating profit generation [6]. Group 3: Investment Risks - The ongoing losses and aggressive acquisition strategy present high risks for investors, with the company having to take write-downs across all divisions [7]. - Investors are advised to be cautious and may benefit from observing the company's performance before committing capital [7].

Company Performance - Tilray Brands, Inc. (TLRY) closed at $7.75, reflecting a -1.77% change from the previous day, underperforming the S&P 500's gain of 0.69% [1] - Over the past month, shares of Tilray have decreased by 13.58%, while the Medical sector gained 0.77% and the S&P 500 lost 1% [1] Upcoming Earnings - The upcoming earnings release is anticipated, with an expected EPS of -$0.14, indicating an 86% growth compared to the same quarter last year [2] - Revenue is projected at $205.93 million, reflecting a 10.85% increase from the equivalent quarter last year [2] Annual Forecast - For the entire year, the Zacks Consensus Estimates forecast an EPS of -$0.56 and revenue of $871.99 million, indicating changes of -660% and +6.17% respectively compared to the previous year [3] Analyst Estimates - Recent modifications to analyst estimates for Tilray reflect shifting short-term business dynamics, with positive revisions indicating optimism about the business outlook [4] - The Zacks Rank system, which assesses estimate changes, currently ranks Tilray Brands, Inc. at 3 (Hold) [6] Industry Context - The Medical - Products industry, part of the Medical sector, has a Zacks Industry Rank of 148, placing it in the bottom 40% of over 250 industries [7] - Research indicates that top-rated industries outperform the bottom half by a factor of 2 to 1 [7]