Shareholders Meeting Call transcript--->>>Aphria Inc. (APHA) CEO Irwin Simon on Shareholders Meeting - Call Transcript
Apr. 14, 2021 9:25 PM ET
Aphria Inc. (APHA)
Q3: 2021-04-12 Earnings Summary
EPS of -$0.91 misses by $0.87
Revenue of $122.28M (19.34% Y/Y) misses by $6.59M
Aphria Inc. (NASDAQ:APHA) Shareholders Meeting Conference Call April 14, 2021 4:00 PM ET
Company Participants
Irwin Simon - Chairman & Chief Executive Officer
Carl Merton - Chief Financial Officer
Christelle Gedeon - Chief Legal Officer and Corporate Secretary
Jim Meiers - Chief Operating Officer, Aphria Leamington
Denise Faltischek - Chief Strategy Officer
Lloyd Brathwaite - Senior Vice President Information Technology
Renah Persofsky - Vice Chairman
Jodi Butts - Independent Director
John Herhalt - Independent Director
David Hopkinson - Independent Director
Tom Looney - Independent Director
Walter Robb - Independent Director
Conference Call Participants
Operator
Good afternoon. Welcome to the Special Meeting of Holders of common shares of Aphria, Inc. It is now my pleasure to turn the meeting over to Irwin Simon, Chief Executive Officer and Chairperson. The floor is yours.
Irwin Simon
Thank you very much operator and good afternoon everybody. And welcome to the special meaning of holders of common shares of Aphria. To which I will refer to as the company for the duration of this meeting, I will now call this meeting to order. My name is I said, Irwin Simon, I am the Chief Executive Officer and Chairman of the Board of Aphria. In accordance with the company's bylaws, I will chair today's meeting.
It is my pleasure to welcome all our shareholders and thank you very much for being shareholders and thank you for those that are with us today. Also with us are certain directors and officers of the company and various guests that are present and I want to thank you guys for attending today also.
The person entitled to attend and vote at this meeting are the holders of common shares of the company or their validity appointed proxy nominee as at the record date. In attendance today, from Aphria are Carl Merton, the Chief Financial Officer, Christelle Gedeon, Chief Legal Officer, Jim Meiers, Chief Operating Officer, Aphria Leamington, Denise Faltischek, Chief Strategy Officer and Lloyd Brathwaite, Senior Vice President Information of Technology. Also in attendance today, from our board is Renah Persofsky, our Vice Chairman, Jodi Butts, John Herhalt, David Hopkinson, Tom Looney, and Walter Robb, Members of the Board of Directors of the company.
As you probably heard this before, because of COVID in order to proactively deal with the unprecedented public health impact of COVID and to mitigate risks to the health and safety of our employees, shareholders, community's other stakeholders, and to ensure compliance with local laws or orders restricting the size of public gatherings in response to COVID-19 this meeting is being held as a virtual meeting.
As this meeting is being held virtually through a live audio cast, we think it is necessary to set out a few rules for the orderly conduct of this meeting. First of all, for the purpose of this meeting, voting on all matters will be conducted by electronic ballot through the virtual shareholder meeting platform you have logged on to today. Only registered shareholders validate appointed proxy nominees are able to vote by electronic ballots. Voting on each business item will occur after the presentation of that business item.
Note that any votes cast by electronic ballots during the meeting will be superseded by any votes previously submitted by proxy. Therefore, we recommend that shareholders that have already voted by proxy and do not wish to change their vote do not vote on polls taken during this meeting. Those in attendance who have registered as guests are only able to listen to the meeting are not able to move motions, vote or ask questions.
When you're asked to vote, please click on vote here button on the right hand side of your screen. A voting ballot will appear on the virtual interface. Following your selection, please click submit button and votes will be submitted. We will provide you with the voting results at the end of the meeting. For a specific vote tabulation please see a free as report a voting results which will be posted to a free Sedar profile at www sedar.com, shortly after the meeting is over.
Questions or objections in respect to a motion can be submitted by any registered shareholder as [indiscernible] or any validity pointed proxy nominee using the Ask a Question box on the bottom left hand side of your screen by clicking Submit. Please note that there may be a delay of approximately 15 seconds before the moderator will be able to see a submitted question.
Therefore, at various intervals throughout the meeting, we will pause and provide you with a 15 seconds to ask your question using Ask the Question Box. If you feel 15 seconds is not enough, please indicate that you have a question using the messaging interface. We will pause the meeting until you have an opportunity to submit your question.
Although questions can be submitted through the meeting, they will be addressed at the appropriate time during the meeting. Please limit your question to topics relating to today's subject matter and keep your questions short and to the point. Thank you.
For each question we answer we will read the questions and provide our oral response. Any questions which are already answered, or that are redundant or repetitive will not be answered.
For the sake of expediency, the company has arranged for certain shareholders, namely Carl Merton, Renah Persofsky to move and second motions today respectively.
We will now proceed with the formal part of this meeting. Unless there is any objections, Carl Merton, Chief Financial Officer will act as a secretary of the meeting, and Broadridge representative, Leah Branston [ph] and [indiscernible] Fernandez will act as the scrutineer of the meeting. If you have any objections regarding the appointee of the secretary, or the scrutineer, you'll now have 15 seconds to submit your objection via Ask a Question Box.
Okay, since there was no objections, the purpose of today's meeting is set out in the joint proxy statement of the Management Information circular of the company, and Tilray Inc. dated March 12, 2021, which I'll refer to as the circular, following the documents that were sent to shareholders on March 18, and 19, 2021. Notice calling this meeting and I will free refer to as a notice, the circular and the former proxy or voting instruction form as applicable. In addition, a letter of transmittal was sent to the registered shareholders. The circular and other meeting material have been posted on the company's website at a aphriainc.com/investors and the company's profile at www.sedar.com.
I would like to reiterate key strategic rationale for the transaction that are expected to unlock significant shareholder value as outlined in the circular. First, the combination of Aphria and Tilray will create the largest global cannabis company with a pro forma revenue of US$685 million, or C$874 million for the last 12 months, as reported by each company prior to the date of the announcement of the transaction on December 16, 2020, the highest in the global cannabis industry.
The combined company is expected to have a strategic footprint and operational scale necessary to compete more effectively in today's consolidated cannabis market, with strong flexible balance sheet, strong cash balance and access to capital which Aphria and Tilray believe will give us the ability to accelerate growth, deliver long term sustainable value for its shareholders.
The demand of the combined company will be supported by low costs state of the art cultivation, proceeding and manufacturing facilities and will have a complete profile of branded cannabis 2.0 products in order to strengthen its leadership position in Canada.
Internationally, we will be well positioned to pursue growth opportunities with the combined companies, a strong medical cannabis brands, distribution network in Germany, and end to end European Union Good Manufacturing Practices supply chain, which also includes its production facilities in Portugal and Germany.
In the US, the combined company will have a strong consumer packaged presence and infrastructure with two strategic pillars, including SweetWater Brewing Company, LLC, a leading cannabis lifestyle branded craft brewer, and Manitoba Harvest USA, LLC, a pioneer in the branded hemp, CBD and wellness products that will access 70,000 stores in North America.
In the event of federal permissibility we expect to be well positioned to compete in the US cannabis market, given its existing strong brands, distribution network, in addition to its track record of growth and consumer package goods, and cannabis and drink products.
And finally, the combination of Aphria and Tilray is expected to deliver approximately $100 million or $78 million - C$100 million or US$78 million of annual pre tax cost synergies within 24 months of the completion of the transaction.
We expect to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales and marketing and corporate expenses. We appreciate all our Aphria shareholders that have voted as part of today's special meeting. And again, I want to say thank you, and on behalf of the Aphria board members, that stand by our recommendation that vote for this transaction. And thank you to both you guys.
Before we begin the formal review of voting information, I have here and the test from Broadridge Investor Communication Corporation, indicating that proper notice of the meeting has been given in accordance with the Business Corporation Act of Ontario and the bylaws of the company. I direct that a copy of such proofs of surface, the annex to the minutes of this meeting as scheduled. Unless there is any objection, I will dispense with the reading of the notice. And we'll now move to the scrutineers report and the core of the meeting.
The scrutineer has provided me with a preliminary report regarding shareholder attendance at the meeting. Number of shareholders and proxy holders that represented today is 65,699, shares represented 109 million 082, 709, and outstanding shares is 316,795,419 million [ph] which represents 34.43% of all the outstanding shares. And again, I want to thank you it is the highest turnout at any of Aphria's meetings where shareholders have turned up which shows that shareholders really are excited about this proposal, this deal and very much are in favor of this.
I've been advised by the scrutineers the sufficient shareholders here in person, or represented by a proxy to constitute a quorum. I direct the formal scrutineers report to be annexed to the minutes of this meeting as a schedule.
This meeting has properly been constituted. Now I declare that the meeting has been duly called and properly constituted for the transaction of the business. The only item for business is to consider and is deemed advisable to pass with or without variation, a special resolution, the full text of which is set forth in Appendix C to the circular to approve an arrangement pursuant to Section 182 of Business Corporation Act of Ontario involving among other things, the acquisition by Tilray Inc, of all the outstanding shares of Aphria Inc., all as more particularly described in the circular. To be effective, the arrangement resolution must be passed by an affirmative vote of at least two thirds of the votes cast by shareholders present at this virtual meeting or by a proxy at this meeting on the basis of one vote per share held. May I have a motion on this matter?
Unidentified Company Representative
Mr. Chair, I move that the special resolution regarding the arrangement as set out in Appendix C to the circular of the company be approved.
Unidentified Company Representative
Mr. Chairperson I second that motion.
Irwin Simon
Thank you. Are there any questions? You have 15 seconds to submit your question via the Ask the Question Box starting now. I would now ask shareholders and proxy holders present to vote online, please click vote here button to make sure your selection and click submit. When you have finished, we will now pause for one minute while you record your votes on this motion.
Voting on this motion has now closed. I have now been advised that the scrutineer has completed the preliminary tabulation of votes for the arrangement resolution. Based on the preliminary tabulation, I can confirm that the requisite approvals have been obtained for the approval of the arrangements. The final voting results of this meeting will be posted on the company's sedar profile at www.sedar.com after this meeting.
The formal items of business as set out in the notice now have been dealt with. If there isn't any other business we'll proceed to terminate the formal part of the meeting. If you'd like to raise any business issues at this meeting, you can do so by using Ask a Question Box. You have 15 seconds to submit any further business using Ask the Business Box.
Unidentified Company Representative
Mr. Chair, I move that the meeting be concluded.
Unidentified Company Representative
Mr. Chairperson I second that motion.
Irwin Simon
Thank you Carl and Renah. Is there any objections to the meeting being terminated? On behalf of myself, my fellow employees, the Board of Directors, I'd like to thank each and every one of you for attending and participating today. It shows me how much you care about Aphria. I also would like to say each and every one of you stay safe out there. And now we'll turn it over to the informal part to hopefully answer any questions you have. Thank you very much for your turnout.
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