Aphria Inc. - Revenue Growth and Sub $1.00 Cash Cost per Gram Metric Highlight Quarter
Source: PR Newswire (Canada)
Tenth consecutive quarter of positive adjusted EBITDA2
Significant levels of cash available for deployment in attractive investment opportunities
LEAMINGTON, ON, April 16, 2018 /CNW/ - Aphria Inc. ("Aphria" or the "Company") (TSX: APH or USOTCQB: APHQF) today reported its results, for the third quarter ended February 28, 2018. All amounts are expressed in thousands of Canadian dollars, except for per gram, square foot and per share amounts.
Q3–2018
(000's)
Q3–2017
(000's)
$ 10,267
Revenue
$ 5,119
$ 8,570
Gross profit
$ 3,569
$ 7,912
Gross profit before fair value adjustments2
$ 3,583
77.1%
Adjusted gross margin2
70.0%
$ 12,945
Net income (loss)
$ 4,950
$ 2,940
Adjusted EBITDA2
$ 871
Q3–2018
(000's)
Q2–2018
(000's)
1,428.1
Kilograms (or kilogram equivalents) sold1
1,237.0
$ 10,267
Revenue
$ 8,504
$ 2,940
Adjusted EBITDA2
$ 1,621
$ 0.96
Cash cost to produce dried cannabis / gram2
$ 1.45
$ 1.56
"All-in" cost of sales of dried cannabis / gram2
$ 2.13
$ 173,683
Cash and cash equivalents & marketable securities
$ 171,942
$ 234,589
Working capital
$ 178,782
$ 35,427
Investment in capital and intangible assets – wholly-owned subsidiaries2
$ 35,319
Operating highlights
Tenth consecutive quarter of positive adjusted EBITDA2. $2.9 million in adjusted EBITDA2 in the quarter, a 238% increase from the prior year. Adjusted EBITDA2 of $8.7 million in the trailing twelve months.
Focus shifts to inventory build for adult-use pipeline fill in Canada, to ensure ample product availability on Day 1 of adult-use, and international opportunities to allocate supply to higher margin medical opportunies.
Continued progress on expansion projects
Aphria One – 700,000 square foot Part IV expansion project remains on-time, first sale continues to be expected in January 2019;
Aphria Diamond – 1,300,000 square foot retrofit project remains on-time, first sale continues to be expected in January 2019; and,
Broken Coast – Phase III expansion complete and awaiting Health Canada. Phase IV expansion project modified to increase capacity but moves first sale expectations to Fall 2019
Completed acquisition of 99.86% of Broken Coast Cannabis Ltd. in the quarter
Announced acquisition of Nuuvera Ltd. in the quarter, closed acquisition subsequent to quarter-end
Announced divestiture process for US passive assets
$10,000 additional investment in Hiku Brands Company Ltd.
$2,500 additional investment in Althea Company Pty Ltd., bringing total investment to 33%
Closed bought deal financing generating net proceeds of $109,000
"We had another incredible quarter, with year-over-year revenue having more than doubled, cash costs back under $1, and our 10th consecutive quarter of positive adjusted EBITDA," said Vic Neufeld, CEO of Aphria. "After the end of the quarter, we brought additional production capacity online with our Part III expansion at Aphria One and established a worldwide presence through our acquisition of Nuuvera. We continue to hold a strong cash position that will give us the flexibility to puruse attractive investment opportunities both domestically and around the world."
"Looking ahead, our focus remains on exploring strategic opportuntites and partneships globally while continuing our extensive prepartions for the coming legalization of the adult-use market in Canada. Backed by expertly-researched consumer insights, we will begin to introduce our diverse portfoilio of adult-use brands, while continuing to support our extensive product mix and patient base on the medical side. Our Part IV expansion at Aphria One is on schedule for completion in early 2019 along with our Aphria Diamond facility, ensuring we will have ample campacity to meet the expected demand in Canada and across our international markets. All told, Aphria continues to solidify its standing as a market leader in Canada and as a leading player on the international stage."
Financial highlights
For the tenth consecutive quarter, the Company reported positive adjusted EBITDA2. In the quarter, the Company reported $2,940 in adjusted EBITDA2, a 238% increase over the prior year. The Company continues to remain focused on product innovation for both the medical and recreational market, build on its expansion plans in both domestic and international markets, and execute on our strategic plan to drive shareholder value.
Revenue for the three months ended February 28, 2019 was $10,267 versus $5,119 in the same period of the prior year, an increase of over 100% and $8,504 in the second quarter of fiscal 2018, an increase of over 20%. The increase in revenue from the same period in the prior year is related to (i) continued growth of both wholesale shipments and sales to existing patients (ii) Broken Coast's sales from Feburary 1st to 28th, as well as continued acceleration of patient onboarding and an increased average selling price.
Gross profit for the second quarter was $8,570, compared to $3,569 in the same quarter in the prior year and $6,202 in the previous quarter. The increase in gross profit from the prior year is consistent with the much larger patient base over the prior year, improvement in our cost per gram metrics, the one month of sales from Broken Coast offset and the increase in the fair value adjustment for biological assets.
Net income for the three months ended February 28, 2018 was $12,945 or $0.08 per share as opposed to a net income of $4,950 or $0.04 per share in the same period of the prior year, an increase of more than 161%. The increase in net income relates to the continued strength of Aphria's investment portfolio, including its realized gain on sale of its non-escrowed shares in Liberty Health Sciences, Ltd. in the quarter.
Adjusted EBITDA2 for the quarter was $2,940 compared to $871 in the same quarter in the prior year, an increase of over 237%.
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