Tilray Brands (TSX: TLRY) this morning announced its fourth quarter and fiscal year 2022 financial results. The results were highlighted by a slowdown in quarterly growth, as well as significant writedowns that resulted in a large net loss.
Revenue for the quarter was $153.3 million, marking quarter-over-quarter growth of 0.96%. During the quarter, the corporate cannabis segment fell 35% of revenue to $53.3 million, while distribution revenue fell 39% to $61.2 million. Meanwhile, alcoholic beverages increased to 15% of revenue at $22.7 million, while the rest 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 highest cost here being a $378.2 million impairment related to inventory, goodwill and other intangible assets. Commenting on the significant write-downs, the company said: “The impact was related to changes in market opportunities, resulting in a shift in our strategic priorities.”
Excluding these massive write-downs, expenses for the quarter totaled $82.4 million, compared to $59.6 million in the third quarter. Despite this, the company told a story of cost reduction synergies resulting from the recent merger with Aphria Inc, which reportedly hit $85 million, $5.0 million more than expected.
Additional savings of $20 million should now be realized as a result of this transaction, while the recent agreement with Hexo (TSX:HEXO) should generate additional savings of $80 million. Whether these savings are sufficient to achieve profitability is another question.
Overall, the company reported 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 reported revenue of $628.4 million, compared to $513.1 million in 2021. Gross profit was $116.8 million, while operating expenses operations totaled $727.2 million. The company posted a net loss of $434.1 million for the full year and adjusted EBITDA of $48.0 million.
In terms of balance sheet, the company ended the year with $415.9 million in cash and total current assets of $803.5 million. Total current liabilities amount to $280.3 million.
Tilray Brands last traded at $4.18 on the Toronto Stock Exchange.
Information for this briefing was found via Sedar and Hexo Corp. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.
As founder of The deep dive, Jay focuses on all aspects of the business. This includes operations, as well as serving as lead writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay writes freelance for a number of companies and has been published on Stockhouse.com and Canna Investor Magazine among others.
