Tilray(TLRY) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income rose to $33.6 million compared to a net loss of$84.3 million in the prior year [56][71] - Net revenue increased 25.3% to $142.2 million in Q4 over the prior year period [61] - Adjusted EBITDA increased to$40.8 million compared to $5.8 million in 2020, reflecting an improvement of 603$3.3 million was generated in Q4, marking a significant milestone for the company [56][73] Business Line Data and Key Metrics Changes - Cannabis revenue in Q4 was $53.7 million, up from$39.6 million in the same period of the prior year [61] - SweetWater's net revenues were $15.9 million, while Manitoba Harvest generated$5.8 million in essentially one month of activity [61] - Adjusted cannabis gross profit increased to $23.9 million in Q4 compared to$18.9 million in the prior year [64] - Adjusted beverage alcohol gross profit was $10.6 million in Q4, with a gross margin of 66.5$2.98 per gram in Q4 from $3.90 per gram in the prior year [62] - The average gross selling price of medical cannabis decreased to$4.54 per gram in Q4 from $4.95 in the prior year [63] - The Canadian market share is currently at 16$4 billion in revenue by 2024, driven by growth in adult-use, medical cannabis, and new product offerings [8][84] - Strategic partnerships and strong relationships with provincial boards and retail partners are emphasized to drive brand loyalty and growth in Canada [19] - The company plans to leverage its international presence, particularly in Europe, to grow its medical cannabis business [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute on growth opportunities despite challenges posed by COVID-19 [10][11] - The reopening of markets is expected to improve sales dynamics, particularly for SweetWater [100] - Management highlighted the importance of consumer education and marketing changes in Canada to drive market share growth [95] Other Important Information - The company has a strong cash position of $488 million as of May 31, 2021, to support working capital and business plans [11][75] - The company has already achieved$35 million in synergies from the business combination, ahead of the anticipated pace [57][45] - The company is positioned to benefit from potential U.S. federal legalization, with plans to explore acquisitions in the consumer goods sector [84][104] Q&A Session Summary Question: Will there be permits issued to Tilray for continued growth and production in Germany? - Management confirmed that there are opportunities for additional tenders and production in Germany, especially with potential legalization from the Green Party [82] Question: Will SweetWater THC drinks be available in Canada, and are there plans to expand SweetWater to California? - Management stated that THC drinks will be available in Canada and that expansion into California is planned with a new facility in Fort Collins, Colorado [83] Question: How will Tilray benefit from pending federal legalization in the U.S.? - Management highlighted plans to grow through adult-use and medical cannabis, aiming for significant sales growth in the U.S. market post-legalization [84] Question: How is the company thinking about U.S. assets moving forward? - Management indicated a focus on acquiring consumer goods assets and MSOs, with a goal of achieving $1 billion to$1.5 billion in sales in the U.S. market [89][90] Question: What underpins the logic behind the 30% market share aspiration for 2024? - Management emphasized the need for increased consumer awareness, store openings, and innovation in products to achieve the market share goal [92][94]