Aphria (APHA) Reports Q2 Net Revenues of $120.6M; Provides FY20 Net Revenue Outlook

Aphria (NYSE: APHA) reported Q2 rnet revenue for the quarter came in at $120.6 million, versus $21.67 million reported last year.

"We are very pleased with our strong growth and execution in Canada demonstrated by our increase in adult-use cannabis revenue and positive adjusted EBITDA as a result of our compelling brands and market positioning," stated Irwin D. Simon, Chairman and Chief Executive Officer. "We are continuing to expand our capabilities internationally with solid progress during the quarter in Germany and South America and look to monetize non-core assets. We are confident in our market position and our ability to generate sustainable profit growth. I am honoured to continue to work closely with our tremendous team around the world to fuel growth and value for all of our stakeholders. Going forward, we believe our brands, cultivation expertise, cash position and balance sheet will continue to differentiate us in the cannabis industry, and we remain focused on the highest return opportunities for growth."

Key Operating Highlights

• Revenue for adult-use cannabis of $29.0 million in the second quarter, an increase of 46% from prior quarter.
• Net cannabis revenue of $33.7 million in the second quarter, an increase of 9% from prior quarter.
• Net revenue of $120.6 million in the second quarter, an increase of 457% from prior year quarter and decrease of 4% from prior quarter.
• Net loss of $7.9 million, however reported positive adjusted EBITDA of $1.9 million in the second quarter.
• Adjusted EBITDA from cannabis operations of $3.4 million in the second quarter, an increase of 155% from the prior quarter.
• Ended quarter with a strong balance sheet and liquidity, including $497.7 million of cash and cash equivalents, to fund planned Canadian and International growth.
• Received cultivation license for its subsidiary Aphria Diamond, featuring 1.3 million square feet of greenhouse production.
• Recognized for seven awards at the 6th Annual Canadian Cannabis Awards with all five of Aphria's medical and recreational brands receiving awards, as well as Broken Coast's Master Grower, Kevin Anderson, winning 'Master Grower' accolades and Aphria's Solei's CBN Renew oil 'Innovation of the Year'.
• Elected Jodi Butts to the Board of Directors.
• Strengthened executive leadership team with key appointments and promotions.
• Secured an $80 million senior secured credit facility for Aphria Diamond, strengthening the balance sheet without being dilutive to shareholders.

GUIDANCE:

Aphria sees FY2020 revenue of $575-625 million.

Carl Merton, Aphria's Chief Financial Officer commented, "We are updating our annual outlook with a little over four months left in our fiscal year to reflect certain market dynamics that have evolved relative to our initial expectations. We look forward to generating an acceleration in our revenue and profit growth in the second half of the fiscal year and continue to believe the Canadian and international cannabis industry outlook remains robust. Aphria is well positioned for long-term sustainable growth as we continue to manage the controllable aspects of our business."

For fiscal year 2020, the Company is updating its guidance to primarily reflect certain market dynamics including a slower than expected retail location rollout in Ontario with more than 40 store openings still pending, the temporary banning of vape products in the Province of Alberta while it studies the impact of vape products, the higher costs of third-party supply as a result of the timing of the receipt of Aphria Diamond's license, and a slowing in CC Pharma's growth arising from recent changes in the German government's medical reimbursement model. The Company expects the following for fiscal year 2020:

• Net revenue of approximately $575 million to $625 million, with distribution revenue representing slightly more than half of the total net revenue
• Adjusted EBITDA of approximately $35 million to $42 million

For earnings history and earnings-related data on Aphria (APHA) click here.

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