The Grass is Greener – Aphria Q4 Net Revenue Up 969% From Prior Year

Leamington, Ontario – August 1, 2019 – Aphria Inc. ("Aphria" or the "Company") (TSX: APHA and NYSE: APHA) today reported its results for the fourth quarter and fiscal year ended May 31, 2019. All amounts are expressed in thousands of Canadian dollars, unless otherwise noted and except for per gram, kilogram, kilogram equivalents, and per share amounts.


"It's a new day at Aphria. Our team's solid execution across key areas of our business resulted in strong adult-use revenue growth and a profitable fourth quarter."

– Irwin D. Simon.


"Over the last six months, our organization identified immediate priorities to help generate substantial progress near-term and long-term. We built upon existing business fundamentals and capabilities, streamlined processes, strengthened governance, and focused on building brand awareness. Together, we have nurtured an entrepreneurial culture of accountability through data-driven decision-making for value creation in the global medical and adult-use cannabis industry.  Today's Aphria has a stronger foundation for long-term growth and success."

Key Operating Highlights

  • Net revenue of $128.6 million in the fourth quarter, an increase of 75% from prior quarter and 969% from prior year.
  • Revenue for adult-use cannabis of $18.5 million in the fourth quarter, up 158% from prior quarter.
  • Net income of $15.8 million and adjusted EBITDA of $0.2 million in the fourth quarter.
  • Adjusted EBITDA from cannabis operations of $1.9 million in the fourth quarter.
  • Closed a 5.25% convertible senior notes offering for net proceeds of over US $335 million.
  • Ended quarter with a strong balance sheet and liquidity, including $571 million of cash, cash equivalents and liquid marketable securities, to fund planned Canadian and International growth.
  • Settlement of Green Growth Brands takeover bid resulting in $50 million cash received and an additional $39 million to be received in November.
  • Planted more than 200,000 plants in the new expanded area of Aphria One cultivation.
  • On-track for annual production capacity of 255,000 kilograms when all facilities are fully licensed.
  • Granted the maximum amount of lots within the German tender process, a total of five, and is the only licensed producer in Germany with the permission to grow all three strains of medical cannabis approved by the German Federal Institute for Drugs and Medical Devices.
  • Introduced a CBD-based nutraceutical product line for the German market.
  • Enhanced the executive team with appointment of several key positions.

 Subsequent Events 

  • Signed on as a PAX Era brand partner for the PAX Era device and platform.
  • Aphria's subsidiary Marigold Projects Jamaica Limited received a retail Herb House license from Jamaica's Cannabis Licensing Authority to open its first store at the Peter Tosh Square, Unit #51, Pulse Center, 38a Trafalgar Road, overlooking the Peter Tosh Museum in New Kingston, Jamaica.

Key Financial Highlights

Aphria Inc. Announces 158% Increase in Adult-Use Sales and Profitable Fourth Quarter

Net revenue for the three months ended May 31, 2019 was $128.6 million, compared to $73.6 million in the prior quarter and $12.0 million in the same period last year. Higher revenue in the quarter was driven by $99.2 million of distribution revenue from CC Pharma and other distribution companies and $33.5 million of revenue from cannabis produced. Net revenue includes over 3,228 kilogram equivalents sold for the adult-use market and 1,417 kilogram equivalents for medical cannabis sales.

The average retail selling price of medical cannabis (exclusive of wholesale), before excise tax, decreased to $7.66 per gram in the quarter, compared to $8.03 in the prior quarter, primarily related to a higher percentage of total medical sales coming from Aphria. The average selling price of adult-use cannabis, before excise tax, increased to $5.73 per gram in the quarter, compared to $5.14 per gram in the prior quarter.

Adjusted cannabis gross profit for the fourth quarter was $15.2 million, with an adjusted cannabis gross margin of 53.0%, compared to $7.6 million with an adjusted gross margin of 49.5% in the prior quarter. The increase in adjusted gross margin was primarily due to the increase in average selling price per gram in the quarter.

Adjusted distribution gross profit for the fourth quarter was $12.3 million, with an adjusted gross margin of 12.4%, compared to $7.8 million with an adjusted gross margin of 13.6% in the prior quarter.

Selling, general, and administrative costs in the quarter decreased to $62.4 million, from $106.6 million in the prior quarter and increased from $22.6 million in the prior year. The decrease from the prior quarter is mainly related to the decrease of $58 million in impairment expense and $11 million in share-based compensation, partially offset by $20 million in transaction costs primarily associated with the issuance of the senior convertible debenture.

Net income for the fourth quarter of 2019 was $15.8 million or $0.05 per share, compared to net loss of $108.2 million or $0.43 per share in the prior quarter, and net loss of $5.0 million or $0.04 per share for the same period last year. Excluding the non-cash impairment charges in the third quarter, adjusted net loss was $50.2 million, or $0.02 per share. The increase in net income was primarily due to the increase in sales and the net fair value adjustment for biological assets, and decrease in the impairment expense, offset by increase in SG&A related to G&A and transaction costs.

Adjusted EBITDA from cannabis operations for the fourth quarter was $1.9 million compared to a loss of $12.7 million in the prior quarter. The adjusted EBITDA loss from businesses under development for the fourth quarter was $5.5 million compared to a loss of $3.9 million in the prior quarter. Adjusted EBITDA from distribution operations for the fourth quarter was $3.9 million compared to $2.2 million in the prior quarter.  The increased adjusted EBITDA is primarily attributable to the increase in gross profit as explained above.

1 – In this press release, reference is made to adjusted cannabis gross profit, adjusted cannabis gross margin, adjusted distribution gross profit, adjusted distribution gross margin, adjusted net loss, adjusted EBITDA from cannabis operations, adjusted EBITDA from businesses under development, adjusted EBITDA from distribution operations, kilogram (or kilogram equivalents) sold, cash costs to produce dried cannabis per gram, "all-in" costs to produce dried cannabis per gram and investments in capital and intangible assets – wholly-owned subsidiaries, which are not measures of financial performance under International Financial Reporting Standards (IFRS).  These metrics and measures are not recognized measures under IFRS do not have meanings prescribed under IFRS and are as a result unlikely to be comparable to similar measures presented by other companies. These measures are provided as information complimentary to those IFRS measures by providing a further understanding of our operating results from the perspective of management. As such, these measures should not be considered in isolation or in lieu of review of our financial information reported under IFRS. Definitions and reconciliations for all terms above can be found in the Company's May 31, 2019 Management's Discussion and Analysis, filed on SEDAR and EDGAR.


For fiscal year 2020, the Company expects:

  • Net revenue of approximately $650 million to $700 million, with distribution revenue representing slightly more than half of the total net revenue
  • Adjusted EBITDA of approximately $88 million to $95 million


Disclaimer: Past performance is not an indicator of future performance.

About Aphria

Aphria Inc. is a leading global cannabis company driven by an unrelenting commitment to our people, the planet, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria Inc. has been a leader in low-cost production of high-quality cannabis at scale, grown in natural conditions. Focusing on untapped opportunities and backed by the latest technologies, Aphria Inc. is committed to bringing breakthrough innovation to the global cannabis market. The Company's portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment. Aphria Inc. drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than 10 countries across 5 continents.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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