Tilray(US:TLRY)2025-01-10 21:57Market Share and Revenue Growth - Tilray's market share in Canada decreased marginally from 9.8% to 9.4% in the quarter, reflecting efforts to preserve margins amid price compression[129] - Tilray acquired four craft brands and breweries on September 1, 2024, expected to enhance beverage segment revenues and market penetration[144] - Manitoba Harvest's US branded business grew 6.2% in multi-outlet consumption for the six months ended November 30, 2024, driven by value-added innovation[142] - Tilray's international cannabis business benefits from EU-GMP cultivation facilities in Portugal and Germany, along with a fully owned route-to-market infrastructure in key regions[131] Operational Efficiency and Product Innovation - Wellness gross margin increased to 31% for both the three and six months ended November 30, 2024, driven by operational efficiencies and higher-margin product sales[177] - Tilray's Breckenridge Distillery received Double Gold awards, including the World's best finished Bourbon at the 2024 World Whiskies Awards[126] - Tilray launched a lineup of Hemp Derived Delta-9 (HD-D9) products, Non-Alcoholic beverages, and Energy drinks as part of its innovation strategy[128] - In Germany, Tilray received the first license for domestic medical cannabis cultivation under the new MedCanG regulations, leading to increased prescription numbers and business growth[133] Financial Performance and Expenses - Operating expenses increased by $14.2 million (16%) to $103.4 million for the three months and by $32.0 million (19%) to $199.7 million for the six months ended November 30, 2024, primarily due to the inclusion of expenses from the Craft Acquisition II[179] - Selling costs increased by 113% to $16.2 million for the three months and by 93% to $27.9 million for the six months ended November 30, 2024, driven by higher freight costs and increased sales from the Craft Acquisition II[179][187] - Research and development costs increased by 7% to $60,000 for the three months and by 22% to $165,000 for the six months ended November 30, 2024, related to external costs for new product development[179][190] - Salaries and wages increased by 19% to $22.7 million for the three months and by 23% to $44.3 million for the six months ended November 30, 2024, due to the inclusion of employees from the Craft Acquisition II[181] - Office and general expenses increased by 17% to $9.5 million for the three months and by 15% to $18.7 million for the six months ended November 30, 2024, primarily due to the Craft Acquisition II[182] - Stock-based compensation decreased by 12% to $7.2 million for the three months and by 14% to $14.2 million for the six months ended November 30, 2024, due to fully vested stock options and RSUs[184] - Insurance expense increased by 26% to $3.2 million for the three months but decreased by 12% to $5.6 million for the six months ended November 30, 2024, driven by lower premiums and additional policies for the beverage business[185] - Rent expense decreased by 34% to $1.0 million for the three months and by 5% to $2.3 million for the six months ended November 30, 2024, due to the exit from the Truss Lease and reduced lease payments[186] - Marketing and promotion costs increased by 6% to $9.7 million for the three months and by 20% to $21.3 million for the six months ended November 30, 2024, due to the Craft Acquisition II and quarterly variability in discretionary expenses[189] - Change in fair value of contingent consideration was $nil for both the three and six months ended November 30, 2024, compared to a loss of $0.3 million and a gain of $10.8 million in the prior year period[191] - Net loss for the three months ended November 30, 2024, increased by 85% to $(85.275) million compared to $(46.183) million in the same period last year[206] - Adjusted EBITDA for the three months ended November 30, 2024, decreased by 11% to $9.017 million compared to $10.086 million in the same period last year[206] Cash Flow and Debt Management - Long-term investments decreased to $7.416 million as of November 30, 2024, from $7.859 million as of May 31, 2024[56] - The company has drawn down $10,000 from a $30,000 revolving credit facility as of November 30, 2024[59] - Net carrying amount of long-term debt decreased to $164.709 million as of November 30, 2024, from $173.858 million as of May 31, 2024[62] - The company issued 67,210,864 shares under the ATM program, generating gross proceeds of $114.3 million during the six months ended November 30, 2024[213] - Net cash used in operating activities increased to $(76.031) million for the six months ended November 30, 2024, compared to $(46.251) million in the same period last year[215] - Net cash used in investing activities increased to $(60.120) million for the six months ended November 30, 2024, compared to $55.207 million in the same period last year[215] - Cash and marketable securities totaled $252.249 million as of November 30, 2024, compared to $259.791 million as of November 30, 2023[215] - The company repaid the remaining principal of the APHA 24 Notes in cash upon maturity on June 1, 2024[68] - Cash flows from financing activities increased to $38.2 million for the three months ended November 30, 2024, compared to ($85.4) million in the prior year period[219] - Cash flows from financing activities increased to $98.8 million for the six months ended November 30, 2024, compared to ($71.3) million in the prior year period[219] - The company received $21.6 million from the overallotment issuance of TLRY 27 Notes in the prior period ended November 30, 2023[219] - The company repaid $107.3 million for the TLRY 23 and APHA 24 Notes in the prior period ended November 30, 2023[219] Legal and Accounting Matters - The company believes that the reasonably possible losses from litigation are not material and will not have a material adverse effect on its financial position[221] - Critical accounting estimates include revenue recognition, valuation of inventory, long-lived assets, goodwill, intangible assets, stock-based compensation, and deferred tax assets[222] - The company's financial statements are prepared in accordance with U.S. GAAP, requiring significant estimates and assumptions[222] - Recently issued accounting pronouncements may impact the company's financial position and results of operations[223] - There have been no material changes in market risk during the six months ended November 30, 2024[224] Business Expansion and Brand Promotion - The company operates 20 brew pubs across the U.S., including the Breckenridge Distillery restaurant, to promote craft beer brands and drive revenue growth[128] - The company incurred $2.0 million in transaction expenses for the six months ended November 30, 2024, related to acquisitions and strategic transactions[143]