EBITDA increases 181% in the quarter, exceeding …...1 EBITDA increases 181% in the quarter,...

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EBITDAincreases181%inthequarter,exceeding$2.8millionCashcoststoproducedriedcannabispergramdecreases35%frompriorquarter

Leamington,Ontario–July12,2017–AphriaInc.(“Aphria”orthe“Company”)(TSX:APHorUSOTCQB:APHQF)todayreporteditsresults,forthefourthquarterandyearendedMay31,2017.AllamountsareexpressedinCanadiandollars.

ThreemonthsendedMay31, TwelvemonthsendedMay31,2017 2016 2017 2016

$5,717,866 $2,776,316 Revenue $20,438,483 $8,433,9295,826,311 2,106,394 Grossprofit 17,297,533 5,977,4284,902,960 2,069,700 Adjustedgrossprofit1 15,853,608 5,982,074

85.7% 74.5% Adjustedgrossmargin1 77.6% 70.9%(2,592,742) 1,302,164 Netincome(loss) 4,198,455 397,9612,826,667 520,685 EBITDA1 6,082,546 572,888

Q4-2017 Q3-2017738.3 Kilograms(orkilogramequivalents)sold 652.7

$5,717,866 Revenue $5,118,516$2,826,667 EBITDA1 $1,005,073

$0.79 Cashcosttoproducedriedcannabis/gram–usingcompetitors’definition1 $1.42$1.11 Cashcosttoproducedriedcannabis/gram–usingAphria’sdefinition1 $1.73$1.67 “All-in”costofgoodssold/gram1 $2.23

$167,257,202 Cashandcashequivalents&marketablesecurities $122,029,195$169,051,562 Workingcapital $123,144,983$31,955,214 Investmentincapitalandintangibleassets $23,419,877

Operatinghighlights

• SeventhconsecutivequarterofpositiveEBITDA.$2.8millioninEBITDAinthequarter,a181%increasefromthepriorquarter,and$6.1millionfortheyear,a962%increaseyear-over-year.

• IncreasedourannualproductioncapacityexpectationsforPartII(to9,000kgs),PartIII(to30,000kgs)&toPartIV(100,000kgs)expansionprojects.

• ReceivedHealthCanadaapprovalforourPartIIexpansion.FirstharvestinthenewexpansionwilloccurinthemiddleofJuly.Firstsale,fromtheplantsgrownintheexpansion,isexpectedinmid-August2017(lateinQ1).

• Improved “all-in” costs to produce dried cannabis per gram from $2.23 to $1.67 in the quarter, adecreaseof25%.

• Improvedcashcoststoproducedriedcannabispergramfrom$1.73to$1.11inthequarter,adecreaseof36%,basedonAphria’sdefinition. Someofourcompetitorsareusingadefinitiondifferent fromAphria’sforcashcoststoproduce.Applyingtheirdefinitiontoourresults,Aphria’scashcosttoproducepergramdecreasedfrom$1.42to$0.79,adecreaseof44%.

• Exercisedourconversion rightson theunsecuredconvertibledebenturesofSecureComMobile Inc.(“SecureCom”)inexchangefor4,000,000sharesandexercisedourwarrant,purchasinganadditional

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4,000,000shares@$0.08persharebringingourtotalinvestmentinSecureComto8,000,000sharesatacostof$520,000.AsatMay31,2017,thefairvalueoftheSecureComshareswas$1,664,000.

• Licensed the use of the Aphria Know-How System, as further detailed in the MD&A being filedconcurrentlywiththisrelease,toDFMMJInvestments,Ltd.(“DFMMJ”), inexchangefor192,400,000sharesinDFMMJ.

• Investedapproximately$25millioninDFMMJ,whichDFMMJused,alongwithothermoniesraisedviaaprivateplacement, toacquireall or substantially all of theassetsofChestnutHill TreeFarmLLC, inexchangeforinexcessof120,000,000sharesofDFMMJ,inadditiontoourexistingDFMMJshares.

• ReceivedfinalapprovaltolistontheTorontoStockExchange(“TSX”).SharescommencedtradingontheTSXandweredelistedfromtheTSX-VentureExchangeonMarch22,2017.

• ClosedMayboughtdealanddebtfinancingraisingover$105millioninadditionalproceedstofullyfundourPartIVexpansionproject,fullyfundourworkingcapitalneedsaftercompletionoftheexpansionprojectandraisedfundsforadditionalstrategicinvestments.

“WecappedoffanotherexceptionalyearatAphria,withincreasedearningsandloweredall-inproductioncashcosts thatprovidesuswithaconsiderablecompetitiveadvantage,” saidVicNeufeld,ChiefExecutiveOfficer,Aphria.“Weincreasedourcapacityexpectations,continuedtolicensetheuseoftheAphriaKnow-HowSystemtoexpandourprovenoperationalexpertise,madeprogressonourexpansion intotheUSmarket–allwhilemaintainingourcommitmenttodeliveringcleanandsafecannabis.Theinvestmentsandprogresswemadein2017havepositionedAphriaforcontinuedprofitablegrowth,inboththeshortandlongterm.”“As the medical marijuana industry rapidly expands, we believe there is a need to establish a consistent,responsibleandtransparentdefinitionforlicensedproducerstocalculatetheircoststoproducedriedcannabisper gram. To ensure an accurate peer to peer comparison of this importantmetric, we are proposing theestablishmentofan industrystandarddefinitionforcosts that includesallcostsrelatedtotheproductionofcannabis,includingqualitycontrolcosts.”FinancialhighlightsFor the seventh consecutivequarter, theCompany reportedpositive EBITDA. In thequarter, theCompanyreported$2.8millioninEBITDA,a181%increaseoverthepriorquarterandfortheyearendedMay31,2017,reported$6.1millioninEBITDA,a961%increaseovertheprioryear.TheCompanyremainscommittedtotheresponsibleuseofourshareholders’investmentinAphria.TheCompanycontinuestoinvestinitsrecreationalbrand, continues to proceed diligently on its capital investment plans and continues to explore otheropportunitiestoincreaseshareholdervalue,whileensuringappropriateliquidityriskmitigationstrategiesareinplace.RevenueforthethreemonthsendedMay31,2017was$5,717,866,representinga11.7%increaseoverthepriorquarter’srevenueof$5,188,516,inaquarterinwhichtheCompanywascapacityconstrained.TheCompany’sexceptionalMarchandMayharvests,alongwithitsinventorylevels,allowedtheCompanytosellmorethanitsexpectedquarterlyproductionof650kgs.Cannabisoilsales,asapercentageofallrevenue,continuedtogrowinthequarter,increasingto32%ofrevenue.FortheyearendedMay31,2017,revenuewas$20,438,483versus$8,433,929intheyearendedMay31,2016,anincreaseof142%.

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Adjustedgrossprofitforthefourthquarterwas$4,902,960withanadjustedgrossmarginof85.7%,generatedfrombothretailandwholesaleshipmentsofmedicalcannabis.Theincreaseintheadjustedgrossmarginfromthepriorquarterisconsistentwiththeincreaseinrevenuescombinedwithimprovedcoststructures.Adjustedgrossprofitfortheyearwas$15,853,608,withanadjustedgrossmarginof77.6%.Duringthequarter,our“all-in”costsofdriedcannabispergramdecreasedfrom$2.23to$1.67.ThedecreaselargelyrelatedtoimprovedgrowingtechniquesandbettercooperationfromMotherNature.Similarly,ourcashcostsofdriedcannabispergramdecreasedfrom$1.73to$1.11,usingAphria’sstandarddefinition.WhiletheCompanybelievesstronglyinitsdefinitionofcashcoststoproducedriedcannabispergram,certainofitspubliclytradedcompetitorsaredisclosingasimilarlytitledmetricbut forwhichtheyareusingadifferentdefinitionofcashcosts.TheprimarydifferencesbetweenAphria’sdefinitionandcertaincompetitors’definitionisthatAphria’sdefinitionincludesthecostsrelatedtoindirectlabourexpensesandqualitycontrolcosts.Aphriabelievesthatbothof theseexpensesshouldbe included inanycashcostcalculation. However, for thesolepurposeofpresentingafigurewhichiscomparabletothisotherdefinition,were-calculatedourcashcoststoproducedriedcannabispergrambydeductingso-calledpostproductioncostsfromourcashcosttoproducedriedcannabisanddividedthatsumbygramequivalentssoldinthequarter.Usingthisdefinitionofcashcoststoproducedriedcannabis,Aphria’sfourthquarterfigureis$0.79pergram.NetlossforthethreemonthsendedMay31,2017was$2,592,742or$0.02pershareasopposedtoanetincomeof$1,302,164or$0.02pershareinthesamequarterinthepreviousyearandanincomebeforetaxof$4,950,250or$0.04pershareinthepreviousquarter.ThedecreaseinnetincomeforAphriainthequarterisdirectlyrelatedtothemorethan$5.5millionnetlossontheCompany’sstrategicinvestmentsinthequarter.NetincomefortheyearendedMay31,2017was$4,198,455or$0.04pershareversusnetincomeof$397,961or$0.01intheprioryear.Includedinthenetincomeforthe2017yearwasagainontheCompany’sinvestmentportfolioofalmost$3.6millionandawrite-offoftheCompany’sintangibleasset,relatedtoitsCannWaybrand,of$3.5million.EBITDAforthefourthquarterwas$2,826,667,comparedtoanEBITDAof$520,685inthesameperiodoftheprioryearandEBITDAof$1,005,516inthepreviousquarter.EBITDAfortheyearendedMay31,2017was$6,082,546comparedtoEBITDAof$572,888intheprioryear.WehaveAGoodThingGrowing.

###1–Inthispressrelease,referenceismadeto“all-in”coststoproducedriedcannabispergram,cashcoststoproducedriedcannabis,cashcosts

toproducedriedcannabispergram,adjustedgrossprofit,adjustedgrossmarginandEBITDA,whicharenotmeasuresoffinancialperformanceunderInternationalFinancialReportingStandards.DefinitionsforalltermsabovecanbefoundintheCompany’sMay31,2017Management’sDiscussionandAnalysis,filedonSEDAR.

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AboutAphria

AphriaInc.,oneofCanada’slowestcostproducers,produces,suppliesandsellsmedicalcannabis.LocatedinLeamington,Ontario,thegreenhousecapitalofCanada.Aphriaistrulypoweredbysunlight,allowingforthemostnaturalgrowingconditionsavailable.Wearecommittedtoprovidingpharma-grademedicalcannabis,superiorpatientcarewhilebalancingpatienteconomicsandreturnstoshareholders. Wearethe first public licenced producer to report positive cash flow from operations and the first to reportpositiveearningsinconsecutivequarters.Formoreinformation,visitwww.Aphria.com.Forfurtherinformationpleasecontact:

NinaGodardEdelmanNina.godard@edelman.com416-455-6324VicNeufeldPresident&CEO1-844-427-4742CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this newsreleaseconstitutesforward-lookingstatementsunderapplicablesecuritieslaws.Anystatementsthatarecontainedinthisnewsreleasethatarenotstatementsofhistoricalfactmaybedeemedtobeforward-lookingstatements.Forward-lookingstatementsareoften identifiedby termssuchas“may”, “should”,“anticipate”, “expect”, “potential”, “believe”, “intend” or the negative of these terms and similarexpressions.Forward-lookingstatementsinthisnewsreleaseinclude,butarenotlimitedto,statementswith respect to internal expectations, estimatedmargins, expectations for future growing capacity andcosts,thecompletionofanycapitalprojectorexpansions,anycommentaryrelatedtothelegalizationofcannabisandthetimingrelatedthereto,expectationsofHealthCanadaapprovalsandexpectationswithrespecttofutureproductioncosts.Forward-lookingstatementsnecessarilyinvolveknownandunknownrisks, including,without limitation, risks associatedwith general economic conditions; adverse industryevents;marketingcosts;lossofmarkets;futurelegislativeandregulatorydevelopmentsinvolvingmedicalcannabisoradultuseofcannabis;inabilitytoaccesssufficientcapitalfrominternalandexternalsources,and/orinabilitytoaccesssufficientcapitalonfavourableterms;themedicalcannabisindustryinCanadagenerally, incometaxandregulatorymatters; theabilityofAphriato implement itsbusinessstrategies;competition;cropfailure;currencyandinterestratefluctuationsandotherrisks.Readersarecautionedthattheforegoinglistisnotexhaustive.Readersarefurthercautionednottoplaceunduerelianceonforward-lookingstatementsastherecanbenoassurancethattheplans,intentionsorexpectationsuponwhichtheyareplacedwilloccur.Suchinformation,althoughconsideredreasonablebymanagementatthetimeofpreparation,mayprovetobeincorrectandactualresultsmaydiffermateriallyfromthoseanticipated.Forward-lookingstatementscontainedinthisnewsreleaseareexpresslyqualifiedbythiscautionarystatement.

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