Aphria Reports Revenue of $21.7 Million and Shakes Up Executive Team

  • Net revenue of $21.7 million up 63 percent from prior quarter on initial sales to Canadian adult-use market; adjusted gross profit of $10.2 million
  • To accelerate the production ramp-up post-Health Canada approvals, yields were lowered to build stockpiles for expanded facilities and to implement highly automated cultivation and harvesting
  • Licence applications submitted for facilities expansions; annualized harvest expected to increase 255,000 kilograms by the end of calendar 2019
  • Successfully advanced international growth strategy with significant strategic alliances and investments in Europe and Latin American
  • Co-founder Cole Cacciavillani and CEO Vic Neufeld will transition from roles over the coming months, now working with Aphria independent Chair Irwin D. Simon and President Jakob Ripshtein to plan succession and ensure orderly transition
  • Aphria Inc. (TSX: APHA andNYSE: APHA) today reported its results, for its second quarter ended November 30, 2018, and the conclusion by its Chief Executive Officer, Vic Neufeld, and Co-founder Cole Cacciavillani, to transition from their executive roles within the coming months. Mr. Neufeld and Mr. Cacciavillani will remain in their current roles until such time.

    Key Operating Highlights

    • 92% increase in kilogram equivalents1 sold, representing partial period sales from the opening of the Canadian adult-use market, along with continued sales of medical cannabis to new and existing patients
    • Adjusted gross margins of 47 percent of net revenue, compared to 64% in previous quarter, as anticipated, due to lower effective selling prices in adult-use market, as well as temporarily lowered yields and higher production costs related to facilities expansion and implementation of automation
    • Part IV and V expansions of Aphria One awaiting Health Canada approval; program for cultivation licence at Aphria Diamond filed and also awaiting Health Canada pre-cultivation review
    • Announced and closed following to quarter-end of the acquisition of CC Pharma, a leading distributor to pharmacies in Germany
    • Closed acquisition of key operations and licenses in tactical Latin America and Caribbean authorities; then established additional strategic alliances in the region to expand the Company’s medical cannabis operations and distribution
    • Listed on the NYSE, providing shareholders greater liquidity
    • Appointed new independent Chair of Board of Directors, Irwin D. Simon, subsequent to quarter-end
    • Ended quarter with strong balance sheet and liquidity, including $152.1 million of cash and $32.7 million of liquid marketable securities, to finance announced Canadian and Global growth and facilities expansion

    Executive Transition

    Aphria Chief Executive Officer Vic Neufeld, and Co-founder Cole Cacciavillani, are both nearing the end of the five-year journey with the organization and will transition from the executive jobs within the coming months but remain on the Board. Working closely with Irwin D. Simon, Aphria’s recently appointed independent Chair, and President Jakob Ripshtein, Mr. Neufeld and Mr. Cacciavillani plan to complete a smooth and responsible transition into a globally-minded executive leadership team for its long-term benefit of the business’s patients, shareholders, customers, and employees.

    Thanks to their vision, energy and fire, Aphria is now a global player in an industry that didn’t even exist five years back. On behalf of the entire Aphria team, I wish to express my gratitude to both. I look forward to working together to further build Aphria’s leadership team and keep driving long-term value for our patients, customers and employees to the future.”

    “When the Canadian medical cannabis market opened five years back, Cole was growing millions of potted flowers in Leamington, and he understood that cannabis was a natural product extension for the founding group’s years of experience as greenhouse growers in Leamington,” stated Mr. Neufeld. “Now with legalization and globalization, including a huge market opportunity with positive developments in the U.S., Aphria’s next generation of leadership may take the reins. Building and leading a Company like Aphria, which exploded from an idea in late 2013 to our many successes to-date, has been an incredible journey, despite the toll it’s taken on health, personal and family priorities.”

    “Vic and I have worked tirelessly for decades, building great businesses, but now in our sixties, it is time for both of us to step back from the demands of leading a world-class organization. Endless meetings, travel, deadlines, ability search – the list of executive responsibilities will only continue to grow,” stated Mr. Cacciavillani.

    “Succession is the plan. Cole and I have informed the Board, and they’ve agreed, that we will begin the transition process immediately, and at the proper time, we will both step down from executive positions at Aphria. We continue to have the best pride in what Aphria has achieved, and its future has never looked brighter. From continued technology advancements, to continued support of scientific developments, to amazing adult-use brands, to globalization strategies, and most of all, the countless dedicated passionate team members that have joined Aphria, we’re well positioned to be a dominant player,” concluded Mr. Neufeld.

    The Board has asked that, following the transition, Mr. Neufeld and Mr. Cacciavillani continue to apply their knowledge and expertise as special advisors to both the Chair and the President, ensuring a smooth transition of institutional expertise and strategic guidance before a new CEO is appointed.

    READ THE FULL RELEASE

    Published at Fri, 11 Jan 2019 15:51:32 +0000

    Posted in: News

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